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Bank of New York Mellon v. Worth

United States District Court, D. Connecticut

March 14, 2016

Bank of New York Mellon, Plaintiff,
v.
Keyin Worth, Defendant.

RULINGS AND ORDERS ON PENDING MOTIONS

Michael P. Shea, U.S.D.J.

Pending before the Court are several motions filed by the parties in this matter between Plaintiff Bank of New York Mellon (“BNYM”) and pro se Defendant Keyin Worth. I DENY Worth’s Motions to Open and Vacate the Judgment (and other orders) (ECF Nos. 90, 91, 128) and DENY Worth’s Motion to Dismiss (ECF No. 111) because the letters of rescission Worth purportedly sent to BNYM and other banks were untimely under the Truth in Lending Act. I DENY BNYM’s Motion to Dismiss (ECF No. 110) in part because this Court possesses diversity jurisdiction over Worth’s counterclaims and because I decline to dismiss those counterclaims simply due to Worth’s failure to comply with the Court’s instructions. I DENY as moot the remaining portion of BNYM’s Motion to Dismiss - arising under Rule 12(b)(6) - because, finding no genuine issue of material fact with regard to Worth’s counterclaims, I enter summary judgment on all counts asserted in the Second Amended Counterclaim Complaint in favor of BNYM. I DENY Worth’s Motion for Recusal (ECF No. 122) because she cites no evidence of partiality other than the Court’s previous rulings in this case. Finally, I DENY Worth’s Motion for Stay (ECF No. 129) because her Notice of Appeal (ECF No. 125) is premature.

I. Procedural History

On October 19, 2013, Worth removed this foreclosure action from Connecticut Superior Court. On March 18, 2015, the Court granted summary judgment in favor of BNYM, concluding that “BNYM has demonstrated it is the holder and owner of the Note and Mortgage at issue” and that Worth had defaulted on the mortgage agreement. (ECF No. 58.) Worth filed multiple motions to reconsider that order, which the Court denied on March 31, 2015. (ECF No. 66.) After an in-court hearing on April 9, 2015, the Court entered an order and judgment of strict foreclosure against Worth and denied her motions to recuse the undersigned, to quash, and to vacate the order granting summary judgment in favor of BNYM. (ECF Nos. 77, 78.) The Court ruled that its order and judgment of strict foreclosure was a final judgment “immediately appealable by the Defendant because there is no just reason for delay.” (ECF No. 77, at 2); see Fed. R. Civ. P. 54(b). Worth appealed to the Second Circuit. While that appeal was pending, Worth also filed two duplicate motions to open and vacate the judgment. (ECF Nos. 90, 91.) The Court did not act upon those motions while the appeal was pending. On October 15, 2015, the Second Circuit issued its mandate dismissing Worth’s appeal “because it lacks an arguable basis either in law or in fact.” (ECF No. 109 (quoting Neitzke v. Williams, 490 U.S. 319, 325 (1989); citing 28 U.S.C. § 1915(e)).

On March 22, 2015, more than a year and a half after she removed the case to this Court, Worth filed an answer to BNYM’s complaint, in which she asserted counterclaims. (ECF No. 62.) The Court concluded that most of the counterclaims listed in Worth’s answer were related to her claim that BNYM lacked standing to bring a foreclosure action against her, which had already been addressed and rejected in the summary judgment ruling. (ECF No. 66, at 3-4.) The Court construed the counterclaim to raise only one previously unaddressed, cognizable claim - a trespass counterclaim, which was unrelated to the argument challenging BNYM’s standing. (ECF No. 66.) Given the significant delay in her presentation of the counterclaim, however, and “because Ms. Worth [] failed to make any showing as to why it could not have been asserted earlier and, in particular, before the close of discovery, ” the Court refused to “reopen the discovery process while the [trespass] counterclaim remains pending.” (Id. at 4.)

The Court later provided Worth a final opportunity to amend her “counterclaim complaint” to add any allegations relevant to the trespass claim. (ECF No. 101.) Worth submitted a proposed amended counterclaim complaint on July 27, 2015. (ECF No. 102.) After reviewing the proposed amended counterclaim complaint, the Court permitted Worth to assert the following counterclaims: (1) trespass, (2) violation of CUTPA, (3) violation of the Connecticut Consumer Protection Act and related regulations, (4) breach of the obligation of good faith and fair dealing, and (5) negligent infliction of emotional distress. (ECF No. 105.) In doing so, the Court reiterated that these claims could not challenge BNYM’s possession of the Note and Mortgage because the Court had already entered judgment on that question. (Id. at 4.) The Court refused to allow Worth’s proposed claim under the Truth in Lending Act, which asserted that she had rescinded the mortgage agreement by sending a letter of rescission to BNYM, explaining that such a claim “attacks the enforceability of the Note and Mortgage.” (Id.) The Court invited Worth to file a second amended counterclaim complaint conforming to the Court’s ruling. She filed a second amended counterclaim on October 14, 2015. (ECF No. 106 (the “SACC”).) The following day, the Court dismissed BNYM’s then-pending motion to dismiss without prejudice, permitting BNYM to renew its motion by addressing the SACC. (ECF No. 107.) Further, noting that the discovery period had long concluded in this case, the Court instructed the parties that they could file a dispositive motion with regard to Worth’s counterclaims within 30 days. (ECF Nos. 108.) Both parties filed motions to dismiss. (ECF Nos. 110, 111.) Neither party filed a motion for summary judgment. On January 27, 2016, the Court indicated to the parties that it was considering granting summary judgment on all claims set forth in the SACC, and provided an additional 14 days for the parties to submit any evidence not already presented to the Court that was relevant to the counterclaims. (ECF No. 117.)

On February 6, 2016, Worth filed a motion for extension of time. (ECF No. 118.) With her motion, Worth attached documents indicating that she had filed requests for documents under the Connecticut and Federal Freedom of Information Acts. The Court denied Worth’s motion for extension of time, explaining that the discovery period had long ago concluded in this case. (ECF No. 119.) The following day, Worth moved for reconsideration of that order, seeking to reopen the discovery period. (ECF No. 120.) The Court denied that motion, explaining:

In the motion to reconsider, Defendant Worth argues that additional discovery is needed in order to pursue her trespass and trespass-related claims because “Under The Truth-In-Lending Act, Worth mailed out Letter of Rescission, in multiple times, to BNYM and to BNYM's legal counsel, ” and as a result, “[r]escission was effectuated in October of 2014.” As this Court stated in its September 30, 2015 Order (ECF No. 105), which specifically identified the claims she may and may not pursue, “Worth is not permitted to present . . . any facts or arguments relating to the assertion that BNYM does not hold the Note or Mortgage” because this Court has already ruled in favor of BNYM on that question. For that reason, this Court made clear that Defendant Worth's “Truth in Lending Act claim . . . is not allowed because it attacks the enforceability of the Note and Mortgage.” An extension for the purpose of allowing Worth to obtain discovery relating to any alleged rescission is therefore not warranted. Defendant Worth also makes reference to the Freedom of Information Act, a law that allows citizens to seek certain information from public agencies. The Court notes that Defendant Worth, like any other citizen, is free to make requests under federal and state freedom of information laws, and she has been free to do so throughout this litigation and before this case was begun. The fact that she may have freedom of information requests pending - over two years after this litigation was begun - is not a reason for the Court to reopen discovery, a process entirely independent of the freedom of information laws. Defendant Worth is free to submit any documents obtained through any Freedom of Information Act requests within the deadline already set by the Court, but the fact that such requests may be pending is not a reason to extend that deadline, for the reasons indicated above and because she has not shown that any such requests seek information related to the trespass claim. In short, because discovery will not be reopened, the Court finds no good cause to extend the deadline to respond to its January 27, 2016 Order.

(ECF No. 121.) Shortly after this ruling was entered, Worth filed a motion to recuse the undersigned and a notice of appeal. (ECF Nos. 122, 124, 125.) On March 1, 2016, Worth filed a “notice” to the Court informing it of a recent California Supreme Court case, Yvanova v. New Century Mortg. Corp., No. S-218973, 2016 WL 639526 (Cal. Feb. 18, 2016). (ECF No. 127.) Worth also filed a motion to vacate certain prior orders. (ECF No. 128.) On March 10, 2016, Worth filed a motion for a stay pending her most recent interlocutory appeal. (ECF No. 129.)

The following motions are currently pending before the Court: (1) Worth’s duplicate motions to open and vacate the judgment and dismiss BNYM’s foreclosure action (ECF Nos. 90, 91); (2) BNYM’s motion to dismiss (ECF No. 110); (3) Worth’s motion to dismiss (ECF No. 111); (4) Worth’s motion to recuse (ECF No. 122); (5) Worth’s motion to vacate (ECF No. 127); and (6) Worth’s motion for stay pending her appeal (ECF No. 129).

II. Discussion

A. Worth’s Motions to Open, Vacate, and Dismiss (ECF Nos. 90, 91, 128) and Motion to Dismiss (ECF No. 111)

Worth asks this Court to “open and vacate” Order Nos. 50 (granting in part and denying in part Worth’s motion to compel), 58 (granting BNYM’s motion for summary judgment as to foreclosure liability and denying Worth’s motion for summary judgment as to BNYM’s standing), 60 (referring BNYM’s motion for strict foreclosure to Magistrate Judge Donna F. Martinez), 61 (directing BNYM not to file a response to Worth’s motion for reconsideration, per the Court’s practice “to rule on such motions in the absence of a response unless one would be necessary or helpful”), 65 (vacating the referral of the motion for strict foreclosure), 66 (denying Worth’s motions for reconsideration), 73 (instructing parties to present evidence regarding the original note at the strict foreclosure hearing), 77 (entering judgment of strict foreclosure), 78 (denying Worth’s motions to recuse, vacate, and quash), 86 (denying motions for stay pending appeal and motion for a new trial), 101 (denying Worth leave to amend her counterclaim complaint and join additional defendants, without prejudice, because she failed to attach a proposed amended counterclaim complaint), and 105 (granting in part and denying in part Worth’s motion for leave to amend her counterclaim complaint, in which the Court permitted trespass-related claims, but not claims challenging BNYM’s interest in the mortgage agreement). Worth also seeks to dismiss BNYM’s foreclosure action against Worth, despite the fact that judgment was entered on that claim more than ten months ago. (See ECF No. 77.) Worth has also filed a motion to dismiss, which is apparently in response to this Court’s October 15, 2015 order providing BNYM 30 days to renew its motion to dismiss after it was denied without prejudice. (See ECF Nos. 111 (motion to dismiss), 108 (order).) I construe the motions to dismiss, which were filed after the Court entered judgment in favor of BNYM, as motions for relief from judgment under Fed.R.Civ.P. 60(b).

In her motions, Worth’s primary contention is that she rescinded the mortgage agreement at issue in this case by sending letters of rescission to various banks under the Truth in Lending Act (“TILA”). She also argues that BNYM’s counsel has engaged in fraudulent conduct by concealing evidence during discovery.

Rule 60 provides litigants an opportunity for relief from a court’s judgment. Rule 60(a) governs the process of correcting clerical mistakes made by a court. Worth makes no suggestion that the Court has made a clerical error; Rule 60(a) therefore does not apply. Rule 60(b) states:

On motion and just terms, the court may relieve a party or its legal representative from a final judgment, order, or proceeding for the following reasons: (1) mistake, inadvertence, surprise, or excusable neglect; (2) newly discovered evidence that, with reasonable diligence, could not have been discovered in time to move for a new trial under Rule 59(b); (3) fraud (whether previously called intrinsic or extrinsic), misrepresentation, or misconduct by an opposing party; (4) the judgment is void; (5) the judgment has been satisfied, released or discharged; it is based on an earlier judgment that has been reversed or vacated; or applying it prospectively is no longer equitable; or (6) any other reason that justifies relief.

Fed. R. Civ. P. 60(b).

Worth does not identify under which provision of Rule 60(b) she seeks relief. Construing her arguments liberally, as this Court is obligated to do, Erickson v. Pardus, 551 U.S. 89, 94 (2007) (per curiam) (“A document filed pro se is to be liberally construed . . .” (citations and internal quotation marks omitted)), Worth’s arguments potentially invoke Rules 60(b)(3) and 60(b)(4). The claim applicable to Rule 60(b)(3) - fraud, misrepresentation, or misconduct - is Worth’s assertion that BNYM’s counsel concealed evidentiary materials during discovery: “During the various motions and responses, BNYM intentionally concealed and omitted evidentiary materials and, to this date, was and has never been in compliance to F.R.C.P. 26(a), the required initial disclosure.” (MTD, ECF No. 111, at ¶ 6.) Worth fails to indicate, however, what materials BNYM failed to disclose and how disclosure of those materials would have altered the Court’s judgment in favor of BNYM. Worth cannot obtain relief under this provision without showing how BNYM’s counsel’s alleged concealment “prevented [her] from fully and fairly presenting [her] case.” State Street Bank & Trust Co. v. Inersiones Errazuriz Limitada, 374 F.3d 158, 176 (2d Cir. 2004) (citations and internal quotation marks omitted). Without any indication of what BNYM’s counsel might have concealed from Worth or this Court, or how any such concealed evidence would have affected this Court’s decision to enter judgment against her, I cannot find that such alleged conduct affected Worth’s ability to prevail in this case. See, e.g., Manney v. Intergroove Media GMBH, No. 10-cv-4493 (SJF) (WDW), 2014 WL 1224171, at *5 (E.D.N.Y. March 24, 2014) (“Plaintiffs have not demonstrated that the aforementioned purported fraud by defendants and/or defense counsel in any way affected their ability to fully and fairly seek [relief] . . .”).

The claim potentially applicable to Rule 60(b)(4) - addressing “void” judgments - is Worth’s primary contention: that “all jurisdiction” regarding this case is “null and avoid by operation of law[].” (Def.’s Mtn., ECF No. 90, at 1; see United States v. Forma, 42 F.3d 759, 762 (2d Cir. 1994) (“[I]f there was no subject matter jurisdiction over the Formas’ counterclaim then the default judgment entered against the Government is void and must be vacated, see Fed. R. Civ. P. 60(b)(4) . . .”).) Worth asserts that this Court lacks jurisdiction over BNYM’s foreclosure action because she sent “qualified written requests and letters of resci[ssion]” to Quicken Loan Company, “CWALT, Inc. and Countrywide [] et al., ” BNYM, Shellpoint Servicing, and three different letters to Mortgage Electronic Registration Systems, Inc. (“MERS”), under TILA. (Id. at 2.) Worth submitted copies of those letters to the Court. (Def.’s MTD Exs. A-E.) Because the mortgage agreement was rescinded, Worth argues, BNYM lacked standing to bring the foreclosure action and, as a result, this Court lacked jurisdiction over the claim.

Worth’s letters of rescission had no effect on BNYM’s interest in the mortgage agreement because they were untimely. Even if the letters were substantively proper under TILA - an assertion I need not and do not address - Worth sent them after the expiration of the rescission period set forth in the statute. TILA provides the consumer in certain financial transactions a unilateral “right of rescission.” 15 U.S.C. § 1635. “This regime grants borrowers an unconditional right to rescind for three days, after which they may rescind only if the lender failed to satisfy the Act’s disclosure requirements.” Jesinoski v. Countrywide Home Loans, Inc., 135 S.Ct. 790, 792 (2015). If the lender fails to disclose the information required by TILA, the consumer’s right to rescind “shall expire three years after the date of consummation of the transaction or upon the sale of the property, whichever occurs first.” 15 U.S.C. § 1635(f).

Worth signed the note and mortgage agreement on February 13, 2007. (ECF Nos. 29-4, 29-5.) Thus, if the lender failed to make the requisite disclosures, the latest date on which she could have submitted a letter of rescission under TILA was February 13, 2010. Each letter referenced in Worth’s motions was sent after that (Def.’s Mtn. Ex. C at 7; Ex. D at 2; Ex. E at 2), and the Quicken Loans, third MERS, and CWALT letters were sent on November 6, 2014 (Def.’s Mtn. Ex. A at 7; Ex. B at 3). Thus, none of the letters of rescission had effect under TILA because they were all submitted more than three years after the “date of consummation of the transaction.”

Because Worth fails to satisfy the required showing of fraudulent conduct by BNYM under Rule 60(b)(3) and because her claim that the judgment of strict foreclosure in this case is “void” lacks merit, Worth’s Motions to Open, Vacate, and Dismiss ...


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