United States District Court, M.D. Florida, Tampa Division
D. MERRYDAY UNITED STATES DISTRICT JUDGE
decade ago, the Treasury Department introduced the Home
Affordable Modification Program, which allegedly requires a
participating bank to use “reasonable efforts” to
modify the mortgage of a person in default or reasonably
likely to default. After an eligible mortgagor applies for a
modification, the program requires several “trial
payments” before the bank approves the modification.
October 2016, Edelso Carmenates and several dozen others sued
Bank of America in a single action in the Circuit Court for
Hillsborough County, and the bank invoked diversity
jurisdiction and removed the action. No.
8:16-cv-3384-SCB (M.D. Fla. Dec. 12, 2016). The 103-page
complaint, which copied swaths from a qui tam
complaint in the Eastern District of New York,  alleged that Bank
of America defrauded each plaintiff between 2009 and 2011 by,
among other things, misleading each plaintiff about the
eligibility requirement for a modification. For example, Bank
of America allegedly told Carmenates “to refrain from
making [his] regular mortgage payments because the only way
to get a loan modification was if the loan was in default or
had a past due balance.” (Doc. 2 at ¶ 248 in No.
8:16-cv-3384) Moving to dismiss the action, Bank of America
argued misjoinder of the plaintiffs' claims, failure to
plead fraud with particularity, failure to state a claim,
expiration of the four-year limitation, and the absence of a
private right to sue a bank for violating the requirements of
the Home Affordable Modification Program.
Carmenates and the other plaintiffs failed to respond timely
to the motion to dismiss, the presiding judge ordered the
plaintiffs to show good cause for the failure to respond. The
plaintiffs argued that their counsel never received the
motion to dismiss because of an “[e]lectronic [s]ervice
[e]rror.” (Doc. 15 in No. 8:16-cv-3384) Before the
presiding judge resolved the motion to dismiss, Carmenates
and the other plaintiffs voluntarily dismissed the action.
2017, Carmenates and 118 other plaintiffs again sued Bank of
America in a single action. No. 8:17-cv-1534-RAL
(M.D. Fla. June 27, 2017). The 292-page “shotgun”
complaint alleges fraud and the violation of Florida's
Deceptive and Unfair Trade Practices Act. In the part of the
complaint specific to him, Carmenates alleged that in June
2009 a Bank of America employee, “Christine, ”
told Carmenates that a modification requires a default. (Doc.
1 at ¶ 1188 in No. 17-cv-1534) Bank of America allegedly
omitted to mention that a reasonably foreseeable likelihood
of default might qualify a mortgagor for a modification.
Moving to dismiss the complaint, Bank of America repeated the
arguments from the first motion to dismiss.
resolving the motion to dismiss, the presiding judge observed
that the complaint, which alleged neither each
plaintiff's citizenship nor the amount in controversy
between each plaintiff and Bank of America, failed to invoke
diversity jurisdiction. (Doc. 15 in No. 17-cv-1534) Ordered
to amend the complaint to invoke diversity jurisdiction,
Carmenates and the other plaintiffs submitted a 403-page
complaint. (Doc. 16 in No. 17-cv-1534) For the third time,
Bank of America moved to dismiss the complaint and repeated
the arguments from the earlier motions. The presiding judge
in that action found misjoinder, severed the plaintiffs'
claims, and ordered the plaintiffs to sue separately.
plaintiffs heeded the presiding judge's command. Between
October 30, 2017, and November 3, 2017, more than a hundred
plaintiffs sued Bank of America in the Middle District of
Florida in eighty actions and alleged fraud under Florida
common law. Excepting names, dates, addresses, and the like,
the complaints are identical. The actions are distributed
among eight district judges in the Middle District of
Florida. In two actions, the presiding judges found the
claims barred by the four-year limitation.
Carmenates' fourth complaint (but the first complaint in
this case), Carmenates alleged four misrepresentations by
Bank of America. First, Bank of America allegedly failed to
mention that a reasonably foreseeable danger of default might
qualify a mortgagor for a modification; second, Bank of
America stated that the mortgagor failed to provide Bank of
America with the documents necessary to complete the
modification; third, Bank of America orally notified the
mortgagor that the bank approved the requested modification;
and fourth, Bank of America charged a
“fraudulent” inspection fee. For the fourth time,
Bank of America moved (Doc. 9) to dismiss the complaint.
Carmenates has not moved at any moment in this action for
leave to amend the complaint.
February 1, 2018 order (Doc. 12) dismisses each fraud claim
except the claim that Bank of America omitted to mention that
a reasonably foreseeable likelihood of default might qualify
a mortgagor for a modification. In this claim, the plaintiff
alleged that Bank of America instructed him on June 3, 2009,
to “refrain from making [his] regular mortgage
payments” in order to qualify for a modification. (Doc.
1 at ¶ 37) Bank of America allegedly omitted to mention
that a reasonably foreseeable likelihood of default can
qualify a mortgagor for a modification. Unaware of his option
not to default, Carmenates allegedly “refrained
from” paying his mortgage and, as a result, “fell
into default status.” (Doc. 1 at ¶ 39) As a
“direct result” of Bank of America's alleged
omission, Carmenates allegedly suffered the loss of both his
home and the equity in his home. (Doc. 1 at ¶ 39)
(Doc. 23) for summary judgment, Bank of America observed that
Carmenates defaulted in April 2009, two months before Bank of
America's alleged omission. In response to the motion for
summary judgment, Carmenates tacitly conceded that he
defaulted before the alleged misrepresentation, affirmed that
Bank of America advised him not to cure the default, and
argued that he suffered a foreclosure after relying on Bank
of America's advice. Objecting to Carmenates'
maintaining two putatively irreconcilable sets of factual
assertions (that is, “I was not in default” and
“I was in default”), Bank of America replied that
Carmenates cannot in effect amend his complaint by responding
to a motion for summary judgment with facts that conflict
with the allegations in the complaint.
the discrepancy between the allegations in the complaint and
the argument in the response, a May 18, 2018 order (Doc. 35)
permits Carmenates a final opportunity to amend the complaint
to clarify the facts that substantiate the fraud claim.
Although nothing in the May 18 order permits Carmenates to
assert a new claim, Carmenates attempted (Doc. 36) to allege
a new claim under Florida's Deceptive and Unfair Trade
Practices Act. Because Carmenates never received leave to
assert a FDUTPA claim, a June 5, 2018 order (Doc. 38) strikes
the fourth amended complaint and permits Carmenates a final
chance to clarify the fraud claim.
fifth amended complaint (Doc. 39), Carmenates tacitly
concedes that he defaulted before the misrepresentation. For
the sixth time, Bank of America moves to dismiss the
complaint. This order will not repeat or resolve all of the