Summary
affirming dismissal of fraud claim against AIG
Summary of this case from Hawkins-El v. First American Funding, LLCOpinion
No. 06-3534-cv.
February 27, 2007.
UPON DUE CONSIDERATION, it is hereby ORDERED, ADJUDGED, AND DECREED that the judgment of the district court is AFFIRMED.
Appearing for Plaintiffs-Appellants: JAMES S. HAWKINS-EL, pro se, Rockaway Beach, New York.
Appearing for Defendant-Appellee: JOY HARMON SPERLING, Pitney Hardin LLP, Morristown, New Jersey.
Present: HON. JOHN M. WALKER, Jr. HON. ROBERT D. SACK HON. RICHARD C. WESLEY Circuit Judges.
Plaintiffs-appellants appeal from the July 17, 2006 judgment of the United States District Court for the Eastern District of New York (Irizarry, J.) granting defendant-appellee's Federal Rule of Civil Procedure 12(b)(6) motion to dismiss their complaint for failure to state a claim on which relief can be granted. In that complaint, they asserted that agents of the appellee had made fraudulent statements inducing them to refinance their mortgage. We assume the parties' familiarity with the underlying facts of the case, its procedural history, and the arguments on appeal.
This Court reviews de novo a district court's dismissal of a complaint pursuant to Rule (b)(6), with all inferences drawn in favor of the plaintiff. Posr v. Court Officer Shield No. 207, 180 F.3d 409, 413 (2d Cir. 1999). "However inartfully pleaded, a pro se complaint may not be dismissed under Rule 12(b)(6) unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Id. (citation, internal quotation marks, and brackets omitted).
As a preliminary matter, the appellants unequivocally aver that their complaint does not assert any cause of action under the Constitution's Contract Clause or the UCC. Thus, we do not construe their complaint to contain any such claims.
Although the appellants also assert that the district court erred in considering a claim of fraud under New York common law, they nonetheless indicate that the basis for their suit is their allegation that the appellee's "agent," Corey M. Gindi, fraudulently induced them to enter into the loan agreement at issue here -- a common law claim. Because there are no other causes of action that this Court could construe the appellants' complaint to contain, we therefore examine only the issue of whether the appellants' complaint states a claim of fraudulent inducement.
"The District Court, exercising its diversity jurisdiction, was obliged to apply the substantive law of the state to which the forum state, New York, would have turned had the suit been filed in state court." Factors Etc., Inc. v. Pro Arts, Inc., 652 F.2d 278, 280 (2d Cir. 1981) (citations omitted). Because the appellees are New York citizens and the transaction at issue took place in the appellee's New York office, this district court properly applied New York law. See Clarkson Co. Ltd. v. Shaheen, 660 F.2d 506, 512 n. 4 (2d Cir. 1981).
In order to state a claim for fraud under federal or New York state common law a plaintiff must allege that the defendant made a material false representation, that the defendant knew of the falsity (scienter), that the defendant acted with intent to defraud, that the plaintiff reasonably relied on the false representation, and damages." Marcus v. ATT Corp., 138 F.3d 46, 63 (2d Cir. 1998) (citations omitted). In the present case, the appellants' complaint did not allege that Gindi's representations to them at the time of the hearing were either false or material to the loan agreement, or that they were statements upon which they had reasonably relied.
In their objections to the magistrate judge's report and recommendation before the district court, the appellants asserted for the first time that Gindi's statement, "I am the Bank," had led them to believe that he was the highest authority at AIG, and that that statement was false because he was not, in fact, the highest authority. It was plainly not reasonable for the appellants to believe that the primary authoritative figure at AIG was reviewing the documents related to their home loan. But even if it were reasonable for them to have such a belief, Gindi's statement was not material to the transaction. The appellants assert that they had a right to have AIG's highest authority figure inform them as to whether they could endorse the loan documents with the mark "All rights reserved." They have not demonstrated the existence of any such right. Neither have the appellants shown that Gindi's statement was a false representation. His statement — "I am the Bank" — could reasonably be interpreted to mean that he represented the bank, rather than to mean that he was its highest authority.
The appellants also contend that Gindi falsely indicated that they could not endorse the loan documents with the mark "All rights reserved." The documents submitted by the appellants, however, indicate that Gindi's assertion was correct. As the district court noted, the AIG closing instructions submitted by the appellants stated that "[e]ach borrower must sign all documents EXACTLY AS THEIR NAME IS TYPED ON THE DOCUMENT." This instruction indicates that the appellants were (unsurprisingly) not permitted by the rules of the bank to sign the loan documents in the manner in which they requested. The letter that the appellants received from Carl Lutz, AIG's Vice President of Mortgage Services, also confirmed that Gindi's position was correct.
Finally, the appellants failed to allege that they had been injured. To the extent that they contended that they were offended by Gindi's demeanor at the closing, such injury, standing alone, does not constitute legally cognizable damages under these circumstances. See Marcus, 138 F.3d at 64.
For the foregoing reasons, we hereby AFFIRM the district court's judgment.