Nucci v. PHH Mortgage Corp. ( 2017 )

16-1200-cv
Nucci v. PHH Mortgage Corp.
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
SUMMARY ORDER
RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A
SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED
BY FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1.
WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY
MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE
NOTATION “SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST SERVE A
COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.
At a stated term of the United States Court of Appeals for the Second Circuit, held
at the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New
York, on the 15th day of February, two thousand seventeen.
PRESENT: BARRINGTON D. PARKER,
REENA RAGGI,
CHRISTOPHER F. DRONEY,
Circuit Judges.
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NICOLA NUCCI,
Plaintiff-Appellant,
v. No. 16-1200-cv
PHH MORTGAGE CORPORATION,
Defendant-Appellee,
COMMERCE BANK, N.A.,
Defendant.
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FOR APPELLANT: Nicola Nucci, pro se, Brooklyn, New York.
APPEARING FOR APPELLEE: KEVIN P. POTERE, Duane Morris LLP,
New York, New York.
Appeal from a judgment of the United States District Court for the Eastern District
of New York (Nicholas G. Garaufis, Judge; Robert M. Levy, Magistrate Judge).
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Upon due consideration, it is hereby ORDERED, ADJUDGED, AND DECREED
that the March 16, 2016 judgment of the district court is AFFIRMED.
Appellant Nicola Nucci, proceeding pro se, appeals from the district court’s
dismissal of his quiet-title claim relating to a December 20, 2005 Consolidation,
Extension, and Modification Agreement (“CEMA”). That agreement—signed by
Nucci, defendant PHH Mortgage Corp. (“PHH”), and non-party Mortgage Electronic
Registration Systems, Inc. (“MERS”)—consolidated two existing mortgages and
associated promissory notes, whose validity Nucci does not dispute. The agreement
also incorporated by reference an annexed consolidated note and consolidated mortgage.
We review de novo the district court’s dismissal for lack of standing and failure to state a
claim. See Fed. R. Civ. P. 12(b)(6); Rajamin v. Deutsche Bank Nat’l Tr. Co., 757 F.3d
79, 84–85 (2d Cir. 2014) (standing); Biro v. Conde Nast, 807 F.3d 541, 544 (2d Cir.
2015) (failure to state claim). In so doing, we assume the parties’ familiarity with the
facts and record of prior proceedings, which we reference only as necessary to explain
our decision to affirm substantially for the reasons stated by the district court in adopting
the magistrate judge’s report & recommendation. See Nucci v. PHH Mortg. Corp., No.
14 CV 2683 (NGG) (RML), 2016 WL 1070815 (E.D.N.Y. Mar. 16, 2016).
1. Standing
“The question of standing is whether the litigant is entitled to have the court
decide the merits of the dispute or of particular issues” and implicates both constitutional
and prudential limits to jurisdiction. Rajamin v. Deutsche Bank Nat’l Tr. Co., 757 F.3d
at 84 (alteration and internal quotation marks omitted). To establish standing under
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Article III of the Constitution, a plaintiff must have suffered “an injury in fact . . . which
is (a) concrete and particularized, . . . and (b) actual or imminent, not conjectural or
hypothetical.” Id. at 85 (internal quotation marks omitted). Under the prudential
standing rule, a plaintiff “must assert his own legal rights and interests, and cannot rest
his claim to relief on the legal rights or interests of third parties.” Id. at 86 (internal
quotation marks omitted). Upon review, we conclude that the district court properly
dismissed Nucci’s challenge to the assignments of his consolidated mortgage for lack of
standing. Nucci’s mortgage payments, which he had agreed to make before the
consolidation, did not satisfy the injury requirement for constitutional standing. See id.
Moreover, Nucci was not a party to, or a third-party beneficiary of, the assignments of his
mortgage, and therefore did not have prudential standing to challenge those transactions.
See id. Glaski v. Bank of America National Association, 160 Cal. Rptr. 3d 449 (Cal. Ct.
App. 2013), cited by Nucci, does not control this court and, as the district court observed,
is against the overwhelming weight of case law. See Nucci v. PHH Mortg. Corp., 2016
WL 1070815, at *3.
2. Failure To State Claim
To survive a Rule 12(b)(6) motion to dismiss, a complaint must plead “enough
facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly,
550 U.S. 544, 570 (2007). Bare allegations amounting only to “legal conclusions”
cannot defeat a 12(b)(6) motion. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).
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New York Real Property Actions and Proceedings Law § 1515—under which
Nucci asserts he brought this action to quiet title1—does not require that a plaintiff
specifically plead the invalidity of an encumbering instrument. See West 14th St.
Commercial Corp. v. 5 W. 14th Owners Corp., 815 F.2d 188, 196 (2d Cir. 1987). It
does, however, require that a plaintiff adequately plead “the existence of a bona fide
justiciable controversy as to whether title to the subject property is wrongfully
encumbered.” Acocella v. Wells Fargo Bank, NA, 139 A.D.3d 647, 649, 32 N.Y.S.3d
187, 189 (2d Dep’t 2016). Nucci has not done so. First, as the district court correctly
observed, the documents Nucci attached to his complaint conclusively establish that the
CEMA he signed expressly incorporates the terms of the consolidated mortgage he
disputes as invalid for lack of a signature. See Nucci v. PHH Mortg. Corp., 2016 WL
1070815, at *3. In any event, the consolidated mortgage does not represent an
encumbrance independent from the two prior—and undisputed—mortgages that it
consolidates. See id. at *4–5 (citing Benson v. Deutsche Bank Nat’l Tr., Inc., 109
A.D.3d 495, 498, 970 N.Y.S.2d 794, 797 (2d Dep’t 2013)). As such, it cannot cloud
title to the property, and Nucci cannot state a claim under § 1515. See Acocella v. Wells
Fargo Bank, N.A., 139 A.D.3d at 649, 32 N.Y.S.3d at 189 (“[A] plaintiff must allege . . .
the existence of a removable cloud on the property . . . that is actually invalid or
inoperative.”).
1
Although Nucci’s complaint fails to comply with § 1515’s express requirement that a
complaint “state that the action is brought pursuant to” Article 15, we liberally construe
the claim to quiet title to arise under that section in accordance with his explanation.
See Sealed Plaintiff v. Sealed Defendant, 537 F.3d 185, 191 (2d Cir. 2008).
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Insofar as Nucci’s claim to quiet title might also be construed to arise under
common law based on fraud, Nucci fails to plead facts showing the requisite material
misrepresentation or omission by PHH and an injury caused by his reliance. See
Crigger v. Fahnestock & Co., Inc., 443 F.3d 230, 234 (2d Cir. 2006).
Because Nucci’s quiet-title claim fails in the first instance, his request to amend
his complaint to add or substitute Fannie Mae as a party in interest is futile, and we
decline to disturb the district court’s conclusion in that regard.
We have considered Nucci’s remaining arguments and find them to be without
merit. Accordingly, we AFFIRM the judgment of the district court.
FOR THE COURT:
Catherine O’Hagan Wolfe, Clerk of Court
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