Nucci v. PHH Mortgage Corp.

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. ---------------------------------------------------------------------- NICOLA NUCCI, Plaintiff-Appellant,

v. No. 16-1200-cv

PHH MORTGAGE CORPORATION, Defendant-Appellee,

COMMERCE BANK, N.A., Defendant. ---------------------------------------------------------------------- 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).

1  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

2 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 .

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).

3  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 . 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 –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).

4  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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