defendant's motion to dismiss third amended complaint... echeverria vs bank of america

7/23/2019 Defendant's Motion to Dismiss Third Amended Complaint... Echeverria vs Bank of America

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UNITED STATES DISTRICT COURT

MIDDLE DISTRICT OF FLORIDA

ORLANDO DIVISION

CASE NO. 6:10-CV-01933-JA-DAB

ABDIEL ECHEVERRIA &

ISABEL SANTAMARIA,

DISPOSITIVE MOTIONPlaintiffs,

vs.

BAC HOME LOANS SERVICING, LP, &

BANK OF AMERICA, N.A.

Defendants._ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ 1

BAC HOME LOANS SERVICING, LP & BANK OF AMERICA, N.A.'S

MOTION TO DISMISS ABDIEL ECHEVERRIA & ISABEL SANTAMARIA'S

THIRD AMENDED VERIFIED COMPLAINT WITH PREJUDICE

Defendants BAC Home Loans Servicing, LP (BAC) and Bank of America, N .A.

(BANA) hereby move to dismiss the Third Amended Verified Complaint (Doc. 49), filed by

plaintiffs Abdiel Echeverria and Isabel Santamaria.

I. INTRODUCTION

Plaintiffs' five-count Second Amended Verified Complaint was dismissed in its entirety

on March 30, 2012. (Doc. 43.) In its order, the Court encouraged Plaintiffs to file a Third

Amended Complaint "if they can, in good faith, state a claim for relief' on their remaining

counts.' Unfortunately, Plaintiffs have only remedied portions of their earlier pleading, and the

1 Plaintiffs' Second Amended Complaint asserted the following claims: (1) Count I - Violation of the Real Estate

Settlement Procedures Act (RESP A); (2) Count II - Breach of Contract - Promissory Note and Mortgage; (3) Count

III - Intentional Misrepresentation; (4) Count IV - Violations of the Fair Debt Collection Practices Act (FDCPA);

(5) Count V - Violations of the Racketeer Influenced and Corrupt Organizations Act (RICO). Counts II and IV

were dismissed with prejudice. Echeverria v. BAC Home Loans Servicing, LP, 2012 WL 1081176, *6 (M.D.Fla.

Mar. 30, 2012)

{24!28J33;5)



(iv) what the defendants "obtained as a consequence of the fraud." See Brooks v. Blue Cross and

Blue Shield of Florida, Inc., 116 F.3d 1364, 1371 (lIth Cir. 1997) (stating Rule 9(b)'s pleading

requirements) (citations omitted). The Rule 9(b) particularity requirement for fraud allegations

exists to put defendants on notice as to the exact misconduct with which they are charged and to

protect defendants against spurious charges. Ziemba v. Cascade Int'l, Inc., 256 F.3d 1194, 1202

(lIth Cir. 2001).10

1. Failure to Allege Reliance.

Plaintiffs' allegation of fraud fails for a number of reasons. They continue to allege

reliance on statements they claimed to have known, by their own admission, were false at the

time they were made. Plaintiffs' Third Amended Complaint once again contains references to

allegedly false statements made by Defendants concerning the balances of Plaintiffs' escrow

accounts and monies reported as owed on their monthly mortgage statements. However, the

Plaintiffs cannot establish reliance on these statements because they have repeatedly pled that

they were aware that these amounts were allegedly false. (See, e.g., TAC ~ 19 ("It became a

vicious web of lies. "); ~ 25 ("Plaintiffs realized many discrepancies with their mortgage

payments."); and ~ 27 ("Plaintiff Isabel Santamaria was told over the phone and via mail

communication several times that they owed more than they actually did."» Plaintiffs cannot

plead reliance on material facts that they themselves allege they knew to be false. See Oglesbee

v. IndyMac Fin. Servs., Inc., 2010 WL 475130, at *3 (S.D.Fla. Feb. 8, 2010) ("Plaintiff cannot

allege that he relied on any misrepresentations regarding his income nor can he allege that he

suffered an injury based on this reliance ... if the Plaintiff was unaware of the use of an inflated

10 Despite the Courts' clear instruction with respect to the applicable Rule 9(b) pleading standard under Ziemba,

Plaintiffs appear to insist on relying on Third Circuit authority for the proposition that they are "free to use

alternative means of injecting precision and some measure of substantiation into their allegation of fraud." (TAC 'I I48, quoting Seville Indus. Machinery Corp. v. Southmost Machinery Corp., 742 F.2d 786, 791 (3d Cir. 1984.»

{24128133;5} 10



income to qualify him for the loan, then he cannot possibly have relied on that misrepresentation

... [o]n the other hand, if Plaintiff did know that his income was falsified then he similarly could

not have relied on the misrepresentation.").

New among Plaintiffs' claims is the allegation that they were "induced ... into a default

position" by Defendants, having been informed that "they did not qualify [for a loan

modification because] they were not behind on their payments." (TAC ~ 17). This is contrary to

each and every earlier pleading in which Plaintiffs admit they were unable, due to their financial

circumstances, to make the November 2009 payment, and warned Defendants accordingly.!' As

such, Plaintiffs have not established their reliance on this or any other alleged misrepresentation

sufficient to satisfy the pleading requirements of9(b).

2. Failure to AllegeMateriality.

Plaintiffs' fraud claim rests on the basis of what they allege were a series of

misstatements regarding their loan modification process. While Plaintiffs allege that

"Defendant's (sic) misrepresentations to the Plaintiffs were material" (TAC ~ 51) there is little to

substantiate this claim. Plaintiffs claim that, for example, Defendants "[p]romise[d] to act upon

requests for mortgage modifications within a specific period of time" (TAC ~ 49(b»;

"misrepresent[ed] the eligibility criteria for modifications" (TAC ~ 49(c»; and inaccurately

represented that "corrections were made to the Plaintiffs' Payment History" (TAC ~ 49(g».

Plaintiffs allege having applied for a loan modification due to their "dire" financial situation,

(TAC ~ 24) but don't give any indication that they would have not applied for the modification,

or, for that matter, have done anything differently, if, for instance, the evaluation time or criteria

11 See. e.g.. Doc. 1124; Doc. 14124, and Doc. 31,124 ("Plaintiff advised that sadly she was not going to be able

to pay November 2009 because of their financial situation.") Plaintiffs make explicit reference to paragraph 24 oftheir Second Amended Complaint in paragraph 17 of the Third Amended Complaint, incorporating it for Fed. R.

Civ. P. 12(b)(6) purposes under Fed. R. Civ. P. 10(c).

{24128133;5} 11



they have alleged. Plaintiffs' fraudulent misrepresentation claim must be dismissed, with

prejudice, as a result.

C. Plaintiffs Fail to State a Claim Under RICO.

Nowhere is Plaintiffs' strain to adhere to the language in this Court's order dismissing the

Second Amended Complaint more apparent than in the tortured narrative that forms their

amended RICO allegations against Defendants. Plaintiffs completely ignore certain aspects of

the order, such as the requirement under 18 U.S.C. § 1962(c) that the "person" and "enterprise"

be identified and distinguished. Additionally, Plaintiffs have overlooked this Court's

incorporation of Genty v. Resolution Trust Corp., 937 F. 2d 899 (3d Cir. 1991) with respect to

the nature of compensable damages, and interpreted the requirement under 18 U.S.C. § 1964(c)

that a RICO complainant be "injured in his business or property" in such a way to suggest that

opening one's mail or answering one's telephone while in their home satisfies this criterion. As a

result, Plaintiffs' RICO allegations are baseless and wholly unsupported.

1. Failure to Differentiate Person and Enterprise.

In amending their complaint, Plaintiffs ignored all three of the Court's instructions with

respect to the deficiencies in their RICO claim, first among them the requirement that the RICO

complainant identify both the "person" and the "enterprise" at work in the alleged RICO

conspiracy. Echeverria, 2012 WL 1081176 at *5 (citing Dudley Enterprises, Inc. v. Palmer

Corp., 822 F. Supp. 496, 502 (N.D.IlI. 1993) ("Under both § 1962(c) and (d), the enterprise and

the person must be distinct. In other words, the corporation cannot be an enterprise and also be

liable as a person under these two sections of the statute.")." In their Third Amended

15 This is also the current law in the Eleventh Circuit. See U.S. v. Goldin Industries, Inc., 219 F.3d 1268, 1271 (11th

Cir. 2000) ("We now agree with our sister circuits that, for the purposes of 18U.S.C. § 1962(c), the indictment mustname a RICO person distinct from the RICO enterprise. The plain language of the statute requires that the entities

be distinct.").

{24128133;5} l3



Complaint, however, Plaintiffs once again fail to identify these distinct elements, alleging merely

that "Defendant BAC ('Bank of America') is an 'enterprise' and as an enterprise has a 'common'

goal and the Defendant participated in the operation or management of the enterprise itself."

(TAC ~ 57.) Aside from their bare recital of the definition of "person" under 18 U.S.C. §

1961(3), (TAC ~ 60) Plaintiffs have not, nor cannot, allege the identity of any "person''!" through

whom the acts they have alleged were committed, as a result, their RICO claim fails as a matter

of law.

2. Failure to AllegeDamages.

Plaintiffs have failed to identify the economic injury they attribute to Defendant BAC's

actions. See Ironworkers Local Union 68 v. AstraZeneca Pharmaceuticals, LP, 634 F.3d 1352,

1361 (lIth Cir. 2011) ("A plaintiff asserting a claim under § 1964(c) of RICO must allege

economic injury arising from the defendant's actions. "). Plaintiffs' procrustean attempt to plead

that "Plaintiffs, specifically Isabel Santamaria, was injured in her 'property' when bombarded

with threats via mail communication ('mail fraud') and harassing telephone calls made to her

home telephone number" and that "Plaintiff's emotional and physical symptoms were displayed

and initiated on her property" represents a creative, but nonetheless indefensible, attempt at

satisfying the requirements of 18 U.S.C. § 1964(c).

Rather than allege the economic injury required by this Court's order, Plaintiffs instead

claim that the Defendants' actions have "directly and proximately caused the Plaintiffs to suffer

specific monetary, emotional and physical damages." Plaintiffs have not, however, specified the

nature of the monetary damages, if any, they have suffered, and appear to insist, despite the

Court's holding to the contrary, that the physical and emotional injuries they are claiming are

16 Plaintiffs appear to be limiting the application of the "person" to that in 18U.S.C. § 1964(c) (i.e., the complainant

in a civil RICO action), while ignoring it for purposes of 18U.S.C. § 1962(c).

{24128133;5} 14



compensable under the RICO statutes.. See, e.g., Connor v. Halifax Hosp. Medical Center, 135

F.supp.2d 1198, 1209 (M.D.Fla. 2001) (Antoon, J.) ("The words "business or property" as used

in § 1964 are, in part, words of limitation . . .. The ordinary meaning of these words excludes

personal injuries and related pecuniary losses.") (citing Grogan v. Platt, 835 F.2d 844, 846-47

(1Ith Cir.1988» ..

D. Plaintiffs Fail to State a Claim Under Either Intentional or Negligent Infliction ofEmotional Distress.

1. Plaintiffs' Intentional Infliction Claim Fails.

To establish a cause of action for intentional infliction of emotional distress, the plaintiff

must show: (1) the defendant acted recklessly or intentionally; (2) the defendant's conduct was

extreme and outrageous; (3) the defendant's conduct caused the plaintiffs emotional distress; and

(4) plaintiffs emotional distress was severe. Johnson v. Thigpen, 788 So.2d 410, 412 (Fla. l"

DCA 2001). Valid claims for intentional infliction of emotional distress are rarely, if ever,

founded solely on verbal harassment or abuse. Id. at 413. Florida federal courts have repeatedly

held that repeated verbal abuse and physical contact are required to satisfy the "extreme and

outrageous" element. Id. at 413-414. In their Third Amended Complaint, Plaintiffs fail to allege

any act of physical contact that relates to their claims for intentional infliction of emotional

distress. Furthermore, there are no facts that rise to the level of "extreme and outrageous" that

the tort of intentional infliction of emotional distress requires.

In order for Plaintiffs to be successful, the Defendants' conduct would have to be extreme

and outrageous. "Whether the alleged conduct meets this exacting standard is a question for the

court to decide as a matter of law. . .. The Court finds that the facts as pleaded in the Amended

Complaint do not rise to the requisite degree of outrageousness. Accordingly, the ... motion ...

is granted, and Count IV is dismissed with prejudice." Scheibel v.Huckleberry, Sibley &Harvey

{24128133;5} 15



It is also worth noting that the prospect of a foreclosure against Plaintiffs based on the

terms of the mortgage does not give rise to an actionable claim for intentional infliction of

emotional distress. Metro. Life Ins. Co. v. McCarson, 467 So.2d 277, 279 (Fla. 1985) (stating

that an '''actor is never liable, for example, where he has done no more than to insist upon his

legal rights in a permissible way, even though he is well aware that such insistence is certain to

cause emotional distress. '" (quoting Restatement (Second) of Torts § 46 (1965»).

2. Plaintiffs' Negligent Infliction Claim Fails.

With respect to Plaintiffs' negligent infliction claim, the Florida Supreme Court

concluded that ''the price of death or significant discernible physical injury, when caused by

psychological trauma resulting from negligent injury imposed upon a close family member

within the sensory perception of the physically injured person, is too great a harm to require

direct physical contact before a cause of action exists." Champion v. Gray, 478 So.2d 17, 18-19

(Fla. 1985) (emphasis added). The court has emphasized that the physical impairment must

accompany or occur within a short time after the emotional distress, but it receded from the

requirement that the plaintiff contemporaneously witness the injury to another person in Zell v.

Meek, 665 So.2d 1048, 1053-54 (Fla. 1995). After relaxing the time requirement, the Zell court

reaffirmed the elements for negligent infliction of emotional distress:

(1) the plaintiff must suffer a physical injury; (2) the plaintiffs physical injury

must be caused by the psychological trauma; (3) the plaintiff must be involved in

some way in the event causing the negligent injury to another; and (4) the plaintiff

must have close personal relationship to the directly injured person.

Id at 1054 (emphasis added).

In other words, Florida's "impact rule" has evolved into a dichotomy: if the plaintiff

suffers an impact, he or she is permitted recovery for the emotional distress flowing from the

incident in which the impact occurred; if the plaintiff has not suffered an impact, the mental

{24128133;5} 17



distress must be manifested by a discernible physical injury, the plaintiff must have been

involved in the incident which involved a closely-related person, and the plaintiff must suffer the

physical injury within a short time after the incident. See Willis v. Gami Golden Glades, LLC,

967 So.2d 846, 850 (Fla. 2007) (quoting Zell, 665 So.2d at 1050 n. 1);Elliott v . Elliott, 58 So.3d

878, 881 -882 (Fla. It DCA 2011).

In their complaint, Plaintiffs have alleged the former variety, as they have not alleged that

an accident, traumatizing event or impact that resulted in Ms. Santamaria's emotional and

physical injuries. While Plaintiffs allegations with respect to the nature and attribution of

physical and emotional injuries is purposefully vague, their contention appears to be that Ms.

Santamaria has suffered a physical or psychic injury due to the alleged conduct of Defendants.

However, to be compensable, such a negligent infliction claim requires the allegation of a

physical impact. See Willis 967 So.2d at 850 (Fla. 2007). While true that "[tjhe essence of

impact, then, it seems, is that the outside force or substance, no matter how large or small, visible

or invisible, and no matter that the effects are not immediately deleterious, touch or enter into the

plaintiffs body, n Eagle-Picher Industries, Inc. v. Cox, 481 So.2d 517 (Fla. 3d DCA 1985)

(approved in Zell, 665 So.2d at 1050 n. 1); Willis, 967 So.2d at 850-51 (Fla. 2007), some

physical impact is required. Plaintiffs have alleged none.

Because Ms. Santamaria' herself suffered no impact, for Plaintiffs' negligent infliction

claim to be valid, her distress must have been caused by an impact to a loved one that she

contemporaneously observed. As stated in Eagle-Picher Industries, Inc. v. Cox, 481 So.2d 517

(Fla. 3d DCA 1985) (approved inZell, 665 So.2d at 1050 n. 1):

In Florida, the prerequisites for recovery for negligent infliction of emotional

distress differ depending on whether the plaintiff has or has not suffered a

physical impact from an external force. If the plaintiff has suffered an impact,

Florida courts permit recovery for emotional distress stemming from the incident

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during which the impact occurred, and not merely the impact itself. If, however,

the plaintiff has not suffered an impact, the complained-of mental distress must be

"manifested by physical injury," the plaintiff must be "involved" in the incident

by seeing, hearing, or arriving on the scene as the traumatizing event occurs, and

the plaintiff must suffer the complained-of mental distress and accompanyingphysical impairment "within a short time" of the incident.

Eagle-Picher Indus., Inc., 481 So.2d at 526.

Plaintiffs have alleged no such traumatizing event. This is not, to the extent it can be

discerned, Plaintiffs' theory. The Florida cause of action simply does not fit the alleged facts of

this case. Plaintiffs' infliction of emotional distress claims necessarily fail as a matter of law and

must therefore be dismissed.

v. CONCLUSION

Plaintiffs' efforts at pleading colorable causes of action against Defendants have failed.

Where unable to satisfy the pleading standards for a particular cause of action, or allege

appropriate damages, they substitute legal conclusions and recitals of statute. For all of the

foregoing reasons, Defendants ask that Plaintiffs' Third Amended Complaint be dismissed, in its

entirety, with prejudice.

{24128133;5} 19



Dated: Orlando, Florida

April 30, 2012

AKERMAN SENTERFITT

lsi Paul EttoriWilliam P. Gray, Esq.

Fla. Bar No.: 0983993

[email protected]

Paul W. Ettori, Esq.

Fla. Bar No.: 084150

[email protected]

Post Office Box 231

420 South Orange Avenue, Suite 1200

Orlando, FL 32802-0231

Phone: (407) 423-4000

Fax: (407) 843-6610

and

William P. Heller, Esq.

Fla. Bar No.: 0987263

[email protected]

Las Olas Centre II

350 East Las Olas Boulevard, Suite 1600

Fort Lauderdale, FL 33301

Phone: (954) 463-2700

Fax: (954) 463-2224

Counselfor BAC Home Loans Servicing, L.P.

& Bank of America, N.A.

CERTIFICATE OF SERVICE

IHEREBY CERTIFY that on April 30, 2012, Ielectronically filed the foregoing

document with the Clerk of the Court by using the CMlECF system. Iurther certify that a true

and correct copy of the foregoing has been furnished via U.S. mail to Abdiel Echeverria and

Isabel Santamaria, 499 Cellini Avenue NE, Palm Bay, Florida 32907.

lsi Paul Ettori

Attorney

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mailto:[email protected]






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