# Simmons v. Nationstar Mortgage, LLC

> District Court, E.D. New York · March 12, 2021

URL: https://www.frixlaw.com/law-library/cases/10305830

## Case

- **Court:** District Court, E.D. New York
- **Decided:** March 12, 2021
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

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## Opinion text

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
------------------------------------x

SYLVIA C. SIMMONS,

Plaintiff, MEMORANDUM & ORDER
20-CV-1066(EK)(SJB)
-against-

NATIONSTAR MORTGAGE, et al.,

Defendants.

------------------------------------x

ERIC KOMITEE, United States District Judge:
Sylvia C. Simmons filed this action pro se, alleging
that she was the victim of a scheme by the Defendants to evict
her from her cooperative apartment. Her first complaint
purported to bring civil claims under various criminal statutes.
On March 25, 2020, the Court granted Plaintiff’s in forma
pauperis application, but dismissed the complaint with leave to
amend. ECF No. 5. Plaintiff has now filed an amended
complaint.1 She asserts claims under 18 U.S.C. § 1344 (Bank
Fraud) and the Racketeer Influenced and Corrupt Organizations
(“RICO”) Act, 18 U.S.C. §§ 1962 et seq. See Am. Compl. at 7-

1 Plaintiff actually filed two amended complaints on November 30, 2020,
that were mostly identical. One of these is signed; the other is not. The
Court deems the signed amended complaint (“Am. Compl.”) to be the operative
pleading and directs the Clerk of Court to strike the unsigned complaint.
See Fed. R. Civ. P. 11(a) (“[E]very pleading . . . must be signed by . . . a
party personally if the party is unrepresented.”); Aljarah v. Citigroup Glob.
Mkt., No. 16-CV-812G, 2019 WL 1642442, at *7 (W.D.N.Y. Apr. 16, 2019) (“Rule
11 requires striking an unsigned paper filed with the Court.”).
8.2 For the reasons set forth below, the Court dismisses the
amended complaint.
Background

Plaintiff is a resident of Queens, New York.
Defendants are Franklin First Financial, Ltd. (“Franklin
First”); the law firm of Frenkel Lambert Weiss Weissman &
Gordon, LLP (“Frenkel”); Bank of America, N.A. (“Bank of
America”); 175-20 Wexford Terrace Owners, Inc. (“Wexford”) (her
co-op association); Northern Management LLC (“Northern
Management”); Nationstar Mortgage LLC (“Nationstar”), the
successor in interest to Seterus, Inc. (“Seterus”); and the
Federal National Mortgage Association (“Fannie Mae”). Plaintiff
claims that the Defendants “knowingly participated in a scheme
to defraud [Plaintiff] of her 517 shares in the cooperative
corporation known as the Wexford Terrace Owners, Inc.” Am.

Compl. at 9. The following facts are alleged in the amended
complaint, unless otherwise noted, and assumed to be true for
current purposes.
The events began “[s]ometime in . . . 2006,” when
Plaintiff “was approached by Franklin First[,] offering her a
loan on her cooperative apartment at 175-20 Wexford Terrace.”

2 Because the amended complaint is not paginated, the Court refers to
the page numbers assigned by the CM/ECF docketing system.
Id. at 11. Plaintiff held 517 shares in the Wexford Terrace
Owners association (the cooperative association for the
building) and was party to a proprietary lease. Id. Despite

the fact that Plaintiff’s name and signature appear in multiple
locations on the promissory note (the “Note”) for the loan dated
January 26, 2007, see Am. Compl., Ex. A at 38-42, the Amended
Complaint asserts that Plaintiff “believed . . . that she did
not sign the documents and [that] her name on the documents
[was] forged.” Am. Compl. at 11-12. Other than this qualified
recollection, the Amended Complaint includes no additional
factual content to suggest that any loan document was forged.
The Note indicates that the loan was to be secured by
the shares Plaintiff owned in the co-op, and Franklin First
ultimately did perfect its security interest in those shares.
See Am. Compl., Ex. A at 38-50; Ex. B at 51 (New York City

Registrar Recording and Endorsement). The Complaint also
alleges that Plaintiff never received the proceeds of the
loan. Am. Compl. at 11. Thus, she claims, the loan from
Franklin First was the product of fraud at inception.
In 2012, Franklin First assigned the loan to Bank of
America, as indicated in an amended UCC financing statement
filed by the law firm Frenkel. Id. at 12; Ex. E at 75-76. In
2013, Wexford (the co-op association) sued Plaintiff in New York
Civil Court for “maintenance arrears.” Am. Compl., Ex. D at 67-
73. In June 2016, Plaintiff “was contacted by Seterus” — a
loan-servicing company — “and told her apartment was going to be
sold in a foreclosure sale” because of non-payment of the
mortgage. Id. at 13; see also Ex. G at 80-81.

A non-judicial foreclosure sale did occur some time
thereafter. See generally Am. Compl. Ex. G. In a December 6,
2018 letter to Elizabeth Diamond of the New York State
Department of Financial Services, Seterus wrote that the loan
had been transferred again, and that Fannie Mae became “the
beneficiary of the lien on the property.” Id. at 80. Seterus
went on to indicate that the loan had been delinquent since
August 2009, that the loan had been “referred for foreclosure
action on December 9, 2015,” and the co-op interest had been
“sold at a foreclosure sale on July 1, 2016.” Id.
In 2018, Plaintiff filed a lawsuit in New York State

Supreme Court, Queens County, against the purchaser in the non-
judicial foreclosure sale, as well as Frenkel, Northern
Management, and Wexford. See Am. Compl., Ex. I at 96-98
(Decision by Justice Laurence L. Love dated Feb. 14,
2019, Simmons v. Plotch, et al., Index No. 5371/18).
In the state Supreme Court action, Plaintiff alleged
that these defendants conspired to improperly transfer her co-op
shares and cancel her proprietary lease. Id. The state Supreme
Court, however, dismissed the action on February 14, 2019. Id.
Justice Love held that the “defendants . . . submitted proof
that proper procedures were observed regarding the underlying
non-judicial foreclosure.” Id. at 97. This proof, he noted,

included “a copy of a breach letter dated September 17, 2009,
informing plaintiff of her default and Bank of America’s
intention to accelerate the debt” and “an affidavit of service
showing that plaintiff was served with notice of the
auction.” Id. Contrary to Plaintiff’s position in this case,
see Am. C ompl. a
t 11-12, 19-20, Justice Love specifically noted
“that plaintiff does not deny entering into a Note and security
agreement with Franklin First Financial, Ltd, receiving the
funds described in the Note, defaulting on said Note, receiving
the September 17, 2009 acceleration letter, nor receiving notice
of the non-judicial foreclosure.” Id. at 98. “Instead,” he
went on, Ms. Simmons “objects to the form of the documents
submitted.” Id.
Plaintiff then filed another state-court lawsuit in
2019 seeking return of the 517 shares. See Am. Compl. at 15-17;
Ex. J. That action is currently pending against Nationstar (the
other defendants have since been dismissed). Am. Compl. at 15-
17; Ex. J.
In the action before this Court, Plaintiff disputes
the validity of the foreclosure sale, in addition to the
validity of the Note itself. She claims that because “Seterus
makes no reference to the 517 collateral shares” and instead
refers to a “‘lien on the property located at 17520 Wexford,
Apart. 14S, which secured the . . . Note[,]’ Seterus does not

seem to realize that coops are not real property and that it is
the 517 collateral shares that were in dispute.” Am. Compl. at
18-19. Given this purported mistake, Plaintiff alleges that it
is “unlikely that Seterus undertook any non-judicial foreclosure
procedures or even contacted Fannie Mae to see if . . . [it]
held the shares.” Id.
Legal Standard
Where, as here, a plaintiff proceeds pro se, courts
construe a complaint with “special solicitude” and interpret it
to raise the “strongest arguments that [it] suggest[s].”
Triestman v. Federal Bureau of Prisons, 470 F.3d 471, 474-76 (2d
Cir. 2006). Nevertheless, under 28 U.S.C. § 1915(e)(2)(B),
district courts are to dismiss an in forma pauperis complaint

that “(i) is frivolous or malicious; (ii) fails to state a claim
on which relief may be granted; or (iii) seeks monetary relief
from a defendant who is immune from such relief.” 28 U.S.C.
§ 1915(e)(2)(B).
The “special solicitude” in pro se cases “has its
limits”; pro se pleadings must still plead “enough facts to
state a claim to relief that is plausible on its face.”
Triestman, 470 F.3d at 474-76. A claim is facially plausible if
the plaintiff pleads enough factual detail to allow the Court to
draw the inference that the defendant is liable for the alleged
misconduct. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). In

reviewing the complaint, the Court must accept all well-pleaded
factual allegations as true. Id. at 679. But it need not
accept “[t]hreadbare recitals of the elements of a cause of
action,” which are essentially just legal conclusions. Id. at
678. After separating legal conclusions from well-pleaded
factual allegations, the Court must determine whether those
facts make it plausible – not merely possible – that the pleader
is entitled to relief.
The Court “has the power to dismiss a complaint sua
sponte for failure to state a claim on which relief can be
granted.” Thomas v. Scully, 943 F.2d 259, 260 (2d Cir. 1991).
Discussion

A. Bank Fraud
Plaintiff alleges that Defendants committed bank fraud
pursuant to 18 U.S.C. § 1344. 18 U.S.C. § 1344 is a criminal
statute that creates no private right of action. E.g., Edmonds
v. Seavey, No. 08-CV-5646, 2009 WL 2949757, at *6 n.8 (S.D.N.Y.
Sept. 15, 2009) (“There is no private cause of action under
18 U.S.C. § 1344.”). Therefore, this claim is dismissed with
prejudice.
B. RICO
Plaintiff also alleges that the Defendants violated
RICO through a conspiracy to deprive her of her property. For

the reasons set forth below, Plaintiff’s RICO claims against all
parties are dismissed pursuant to 28 U.S.C. § 1915(e)(2)(B)(ii).
To establish a civil RICO claim, a plaintiff must
plausibly allege: “(1) conduct, (2) of an enterprise, (3)
through a pattern (4) of racketeering activity, as well as
injury to business or property as a result of the RICO
violation.” Lundy v. Catholic Health Sys. of Long Island, Inc.,
711 F.3d 106, 119 (2d Cir. 2013) (quotation marks omitted). The
“pattern of racketeering activity must consist of two or more
predicate acts of racketeering.” Id. Here, Plaintiff alleges

that Defendants committed — as predicate acts — mail fraud, wire
fraud and the collection of an unlawful debt. Am. Compl. at
21.
Plaintiff alleges the existence of an enterprise only
in conclusory terms. She identifies the Defendants’ roles in
the various transfers of the loan, but does not plausibly allege
the existence of an ongoing “association-in-fact” among the
various Defendants with the “purpose, relationships among those
associated with the enterprise, and longevity sufficient to
permit these associates to pursue the enterprise’s purpose.”
Boyle v. United States, 556 U.S. 938, 946 (2009). At most, she
alleges the Defendants’ “ongoing business relationships” with
one another, which is insufficient to establish a RICO
enterprise. Bonadio v. PHH Mortg. Corp., No. 12-CV-3421, 2014

WL 522784, at *3 (S.D.N.Y. Jan. 31, 2014).
Moreover, Plaintiff does not plausibly allege the
requisite predicate acts. To invoke mail or wire fraud as
predicates under RICO, a plaintiff must assert: “(1) the
existence of a scheme to defraud, (2) the defendant’s knowing or
intentional participation in the scheme, and (3) the use of
interstate mails or transmission facilities in furtherance of
the scheme.” Estate of Izzo v. Vanguard Funding, LLC, No. 15-
CV-7084, 2017 WL 1194464, at *8 (E.D.N.Y. Mar. 30, 2017)
(quotations omitted). These allegations are subject to the
heightened pleading standards of Rule 9(b), which require that
“[i]n alleging fraud or mistake, a party must state with

particularity the circumstances constituting fraud or
mistake.” Fed. R. Civ. P. 9(b); First Capital Asset Mgmt., Inc.
v. Satinwood, Inc., 385 F.3d 159, 178 (2d Cir. 2004) (plaintiffs
failed to plead predicate RICO acts with sufficient
particularity). Thus, to state a RICO claim, a plaintiff must
“delineate, with adequate particularity, the specific
circumstances constituting the overall fraudulent scheme.”
Calabrese v. CSC Holdings, Inc., 283 F. Supp. 2d 797, 808
(E.D.N.Y. 2003).
Plaintiff’s allegations do not plausibly describe a
mail or wire fraud scheme. Plaintiff alleges, based solely on
her own qualified recollection, that she “believe[s] . . . she

did not sign the documents and [that] her name on the documents
[was] forged.” Am. Compl. at 11-12. Given that Plaintiff’s
allegation of fraud is predicated almost entirely on the alleged
forgery of her signature on the operative loan documents, it is
incumbent on her to allege that fact without the qualification
as to her “belief.” Except in limited circumstances not present
here, “fraud pleadings generally cannot be based on . . .
belief.” Stern v. Leucadia Nat'l Corp., 844 F.2d 997, 1003 (2d
Cir. 1988).3 Put differently, Plaintiff’s “belief” does not
amount to a positive statement that fraud has occurred. On that
basis, therefore, she may not come forward with such “equivocal
allegations, and compel the [Defendants] to undergo the expense
and ordeal of a full trial.” Howard v. Koch, 575 F. Supp. 1299,

1304 (E.D.N.Y. 1982).
Thus, Plaintiff’s forgery allegation is insufficiently
definite on its face. And it is rendered additionally
implausible because of Plaintiff’s inconsistency on this

3 See also Granite Partners, L.P. v. Bear, Stearns & Co. Inc., 17 F.
Supp. 2d 275, 288 (S.D.N.Y. 1998) (fraud pleadings generally cannot be based
on information and belief); Estate of Izzo, 2017 WL 1194464, at *9 (same);
Wexner v. First Manhattan Co., 902 F.2d 169, 172 (2d Cir. 1990) (plaintiffs
pleading fraud cannot base their claims on “speculation”).
question. As noted above, Justice Love found that Plaintiff
“does not deny entering into a Note and security agreement with
Franklin First” – contrary to her position in this case. Am.

Compl., Ex. I at 98 (Decision by Justice Laurence L. Love dated
Feb. 14, 2019, Simmons v. Plotch, et al., Index No. 5371/18).
This Court can take judicial notice of that finding. E.g., A.I.
Trade Fin., Inc. v. Centro Internationale Handelsbank AG, 926 F.
Supp. 378, 387 (S.D.N.Y. 1996) (courts may take judicial notice
of adjudicative facts and judgments issued by other courts).
Plaintiff’s complaint fails to meet the plausibility
and particularity standards for other reasons as well. She does
not assert with specificity how the Defendants neglected to
“observe proper procedures,” beyond her generic assertion that
that the procedures they observed were unlawful. Nor does she
set out any specific misrepresentation with particularity.

Again, she relies only on her unsubstantiated sense that the
Defendants failed to observe the required legal formalities in
foreclosure. See, e.g., Am. Compl. at 19 (Plaintiff alleges
that it is “unlikely that Seterus undertook any non-judicial
foreclosure procedures or even contacted Fannie Mae to see if
. . . [it] held the shares”). Without accompanying factual
content and the requisite particularity, these allegations
(concerning the validity of the loan and any default thereof)
cannot support a predicate assertion of fraud.
Plaintiff’s other alleged predicate act is the
collection of an unlawful debt. To establish a RICO violation

based on collection of unlawful debt, a plaintiff must show that
“(1) the debt was unenforceable under state or federal usury
laws; (2) the debt carried twice the enforceable interest rate;
and (3) that the debt was incurred in connection with the
defendants’ business of lending money at a usurious rate.”
Weisel v. Pischel, 197 F.R.D. 231, 241 (E.D.N.Y. 2000); see also
18 U.S.C. § 1961(6) (defining “unlawful debt”). Under New York
law, a loan to an individual with an annual interest rate higher
than sixteen percent is unenforceable. See N.Y. General
Obligations Law § 5–501(2);N.Y. Banking Law § 14-a(1).

Here, Plaintiff does not allege that the stated
interest rate on her loan (6.375%) was usurious.4 The Court
therefore need not analyze the remaining elements of the
purported RICO law violation predicated on a claim of unlawful
debt. Plaintiff does not plausibly allege that Defendants
attempted to collect an unlawful debt in violation of RICO.

4 See Am. Compl., Ex A at 38. As set forth above, Plaintiff challenges
the lawfulness of the loan on other grounds, such as whether she actually
executed the loan documents. See, e.g., Am. Compl. at 19. But these
allegations fall short of alleging a plausible claim for the collection of
unlawful debt for the same reason they fall short in the context of the fraud
allegation — namely, because they lack sufficient factual content to be
rendered plausible.
Plaintiff’s RICO claim based on unlawful debt
collection is also, therefore, dismissed for failure to state a
claim.
Conclusion
This action, filed in forma pauperis, is dismissed for

failure to state a claim upon which relief can be granted
against each of the Defendants: Franklin First Financial, Ltd.;
Frenkel Lambert Weiss Weissman & Gordon, LLP; Bank of America,
N.A.; 175-20 Wexford Terrace Owners, Inc.; Northern Management
LLC; Nationstar Mortgage LLC; and Federal National Mortgage
Association. 28 U.S.C. § 1915(e)(2)(B). Plaintiff’s cause of
action alleged to arise under 18 U.S.C. § 1344 (Bank Fraud) is
dismissed with prejudice.
The Court grants Plaintiff thirty days to amend her
complaint to properly state a claim. If Plaintiff fails to

plead sufficient facts in her second amended complaint, or if
she fails to file a second amended complaint within thirty days,
she will not have another opportunity to re-plead, and the Court
will enter judgment.
The Clerk of Court is directed to strike the unsigned
complaint at ECF No. 12.

SO ORDERED.

/s/ Eric Komitee
ERIC KOMITEE
United States District Judge

D ated: March 12, 2021
Brooklyn, New Y ork

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10305830. Public record. Not legal advice.