Banks v. PNC Bank N.A.

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF OHIO

EASTERN DIVISION

CARLTON BANKS, ) Case No. 1:24-cv-818

)

Plaintiff, ) Judge J. Philip Calabrese

)

v. ) Magistrate Judge

) Jonathan D. Greenberg

PNC BANK N.A., )

)

Defendant. )

)

OPINION AND ORDER

Plaintiff Carlton Banks brings this suit against Defendant PNC Bank, alleging

breach of contract and civil rights violations. Defendant moves to dismiss the

complaint under Rule 12(b)(6). For the following reasons, the Court GRANTS the

motion.

STATEMENT OF FACTS

On Defendant’s motion to dismiss, the complaint alleges the following facts,

which the Court accepts as true and construes in the light most favorable to Plaintiff,

as it must in the present procedural posture.

A. The Property and the Short Sale

Mr. Banks is the successor-in-interest to a mortgage on property located at

13913 Svec Avenue in Cleveland, Ohio. (ECF No. 16, ¶¶ 1 & 3, PageID #364.)

Defendant PNC Bank holds the first mortgage on the property. (Id., ¶ 2.) In 2018,

the City of Cleveland’s Building Department issued code violations for the property,

and Mr. Banks faced misdemeanor charges for these violations. (ECF No. 16-1,

PageID #371.) PNC was aware of these violations and their potential penalties. (ECF

No. 16, ¶ 14, PageID #365.) Additionally, as of August 2023, the property was the

subject of condemnation proceedings, “sat vacant for years,” and lacked plumbing,

electricity, heating, and air conditioning. (ECF No. 16-1, PageID #374, #376 & #387.)

To support his claims, Mr. Banks attached roughly seventy pages of “emails

and other communications” to his complaint. (ECF No. 16, ¶ 6, PageID #365.) None

of these documents include Mr. Banks directly. After all, he alleges that he is the

successor-in-interest to the mortgage. (Id., ¶ 3, PageID #364.) But they do not

identify the relationship between Mr. Banks and many of the email participants.

Still, Mr. Banks claims that these email communications culminated in a settlement

agreement and establish the facts that lead to his claims. (Id., ¶ 6, PageID #365.)

Between July 28 and August 8, 2023, Catherine Cain—a real estate agent

contracting with Velocity REO—sought to photograph the property.

(ECF No. 16-1, PageID #383–84.) The allegations do not specify Cain’s relationship

to either party or allege whether she actually took photographs of the property. By

August 8, Cain or Velocity REO allegedly reported a broker price opinion to PNC

Bank on the property for $45,000 “as-is,” plus $28,000 in repairs, for a total of $73,000

after repairs. (Id., PageID #375.) Cain claimed that she did not create the opinion,

stating: “All I do is submit the photos.” (Id., PageID #374.)

Representatives of the Abandoned Homes Project told Cain by email that the

broker price opinion overvalued the property and underestimated its repair costs.

(Id., PageID #375.) The Abandoned Homes Project’s relationship with Mr. Banks is

not alleged in the second amended complaint or made clear in the attachments to it.

Further, Kevin Ra—chairman of Parcel Revenue—claimed the property was listed at

$45,000 for “several months” and reported that he received no offers over half that

price. (ECF No. 16, ¶¶ 15–17, PageID #366.) But the record does not make clear Ra’s

relationship with Mr. Banks either.

On August 11, 2023, Ra sent an email requesting approval from Gellie

Henegar, a client relations officer at PNC Bank, for a $10,000 short sale for the

property, on which PNC Bank held the mortgage. (ECF No. 16-1, PageID #373.) The

second amended complaint does not contain any further details on this offer, such as

the identity of the potential buyer. Ra’s use of the term “short sale” suggests that the

balance remaining on the mortgage exceeded $10,000, but the second amended

complaint does not specify the outstanding principal on the mortgage. Further, this

term suggests that PNC Bank’s acceptance of the offer would satisfy the mortgage

and eliminate the lien, but the communications attached to the second amended

complaint do not confirm this inference. Ra believed that an employee of his relayed

PNC Bank’s approval of the sale on August 11, 2023. (Id., PageID #388.) However,

in a subsequent email to Ra, that Henegar at PNC Bank did not respond when he

follow up with her to confirm the short sale. (Id., PageID #388.)

Later, in an email on August 14, 2023, Henagar asked Ra if the short sale

buyer remained interested. (Id., PageID #377.) In response, Ra questioned whether

PNC Bank had “leverage…to dictate decisions” and stated that “we will tear down

this house” or ask the city to tear it down if PNC Bank did not approve the offer. (Id.,

PageID #381.) Also, Ra claimed that PNC Bank’s behavior throughout their dealings

on the property was racially discriminatory because its “tactics disproportionately

impact black and brown communities.” (Id., PageID #389.). Finally, Ra told Henegar

at PNC Bank, “If I were you, I’d get me that approval letter [for the short sale] ASAP.”

(Id., PageID #381.)

B. Further Disagreement and Alleged Agreement

On August 18, 2023, Henegar informed Ra that PNC Bank required more

documents, including a sales contract with wet (not electronic) signatures, a HUD-1

settlement statement, and articles of incorporation for buyers which were limited

liability companies, before PNC Bank would approve a short sale. (Id., PageID #398.)

On August 19, 2023, Ra claimed that these documents were previously faxed to PNC

Bank. (Id., PageID #403.) Nonetheless, on August 21, 2023, Henegar replied that

PNC Bank had not received the documents. (Id., PageID #414.) On August 30, 2023,

when Henegar at PNC Bank followed up asking whether Ra would submit the

documents, he replied that he would speak with his attorney within two weeks and

that Henegar could “reach back out after that.” (Id., PageID #420–21.) In this

correspondence, Ra did say whether he had a valid agreement for a short sale. Nor

does the record otherwise confirm that he did.

From these events and communications, Mr. Banks alleges that he had a

settlement agreement with PNC Bank to settle the mortgage. (ECF No. 16, ¶ 6,

PageID #365.) Although the second amended complaint is not entirely clear on the

point, the Court understands that it alleges an agreement to settle the outstanding

mortgage at the short sale price of $10,000. Further, Plaintiff alleges that the

agreement required a licensed appraisal of the property and that PNC Bank used an

automated valuation model in violation of the agreement’s appraisal provision. (Id.,

¶¶ 7–9, PageID #365.). As a result, the second amended complaint alleges that the

appraisal significantly overvalued the property, resulting in outstanding mortgage

debt in excess of the property’s worth. (Id., ¶ 12.) Specifically, Plaintiff alleges that

PNC Bank “push[ed] the Plaintiff to pay an inflated amount to settle the outstanding

mortgage debt” based on the automated valuation model and that PNC Bank “knew

[the amount] was far more than the Property was worth.” (Id., ¶ 12, PageID #365.)

Plaintiff alleges that automated valuation models are both inaccurate and

biased, particularly against African Americans owners like Mr. Banks and in

predominantly African American communities like the one where the property is

located. (Id., ¶¶ 10–13, PageID #365.) Further, he alleges that PNC Bank knew of

these reported problems with automated valuation models during the events at issue.

(Id., ¶¶ 10–11, PageID #365.)

STATEMENT OF THE CASE

Plaintiff first filed suit in April 2024 in State court asserting claims for breach

of contract and breach of the implied duty of good faith and fair dealing. (ECF

No. 1-1.) Defendant timely removed the action. After conducting an independent

review, the Court determined it lacked subject matter jurisdiction because the case

did not satisfy the jurisdictional amount in controversy for diversity jurisdiction.

(ECF No. 6, PageID #62.) On remand, Plaintiff filed an amended complaint that

added federal causes of action. (ECF No. 9, PageID #67.) Then, Defendant timely

removed in October 2024. (ECF No. 9.)

Eventually, with leave of court, Plaintiff filed a second amended complaint.

(ECF No. 16.) The second amended complaint asserts claims for breach of contract

(Count One) and violation of federal civil rights laws, specifically 42 U.S.C. §§ 1981

and 1982 (Count Two). (Id., ¶¶ 18–36, PageID #366–67.) Defendant moves to

dismiss. (ECF No. 19.) Fundamentally, and in short, Plaintiff asserts these claims

based on PNC Bank’s alleged failure to complete a short sale that would satisfy a

mortgage because the appraisal of the property subject to the mortgage gave it too

high a value.

ANALYSIS

In any civil action, a complaint must “state[] a claim for relief that is plausible,

when measured against the elements” of a cause of action. Darby v. Childvine, Inc.,

964 F.3d 440, 444 (6th Cir. 2020) (citing Binno v. American Bar Ass’n, 826 F.3d 338,

345–46 (6th Cir. 2016)). A complaint must “contain sufficient factual matter,

accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v.

Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570

(2007)). A claim is plausible “when the plaintiff pleads factual content that allows

the court to draw the reasonable inference that the defendant is liable for the

misconduct alleged.” Id. at 678 (citing Twombly, 550 U.S. at 556). To survive a

motion to dismiss, a complaint must “raise a right to relief above the speculative level”

into the “realm of plausible liability.” Twombly, 550 U.S. at 555, 557 n.5.

When analyzing a complaint under this standard, the Court construes factual

allegations in the light most favorable to the plaintiff, accepts them as true, and

draws all reasonable inferences in the plaintiff’s favor. Wilburn v. United States, 616

F. App’x 848, 852 (6th Cir. 2015). But a pleading must offer more than mere “labels

and conclusions,” because “a formulaic recitation of the elements of a cause of action

will not do.” Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 555). Nor is a

court required to accept “[c]onclusory allegations or legal conclusions masquerading

as factual allegations[.]” Eidson v. Tennessee Dep’t of Child.’s Servs., 510 F.3d 631,

634 (6th Cir. 2007).

Therefore, the Court must distinguish between “well-pled factual allegations,”

which must be treated as true, and “naked assertions,” which need not be. See Iqbal,

556 U.S. at 678 (“Nor does a complaint suffice if it tenders naked assertions devoid of

further factual enhancement.”) (cleaned up); see also, e.g., Center for Bio-Ethical

Reform, Inc. v. Napolitano, 648 F.3d 365, 375 (6th Cir. 2011) (determining that

because some of the plaintiff’s factual allegations were “not well-pleaded[,]” “their

conclusory nature ‘disentitles them to the presumption of truth’”). Rule 8 “does not

unlock the doors of discovery for a plaintiff armed with nothing more than

conclusions.” Iqbal, 556 U.S. at 678–79.

I. Breach of Contract

Plaintiff alleges that PNC Bank relied on automated valuation models, instead

of one by a licensed appraisal, in violation of the settlement agreement. (ECF No. 16,

¶¶ 7–9 & 18–30, PageID #365 & 366–67.) To establish a claim for breach of contract

under Ohio law, a plaintiff must prove: (1) the parties entered into a contract; (2) the

plaintiff performed; (3) the defendant breached a contractual duty; and (4) the breach

resulted in damage or loss to the plaintiff. V & M Star Steel v. Centimark Corp., 678

F.3d 459, 465 (6th Cir. 2012).

I.A.1. Contract Formation

To form a contract, Ohio law requires “offer, acceptance, contractual capacity,

consideration, manifestation of mutual assent, and legality of object and

consideration.” Bruzzese v. Chesapeake Expl., LLC, 998 F. Supp. 2d 663, 669 (S.D.

Ohio 2014) (citing Kostelnik v. Helper, 96 Ohio St.3d 1, 2002-Ohio-2985, 770 N.E.2d

58, ¶ 16). Additionally, there must be a meeting of the minds between the parties

who consent to essential terms, which are definite and certain. Episcopal Ret. Homes,

Inc. v. Ohio Dep’t of Indus. Relations, 61 Ohio St. 3d 366, 369, 575 N.E.2d 134;

Bruzzese, 998 F. Supp. 2d at 670. A contract’s essential terms include “the identity

of the parties to be bound, the subject matter of the contract, consideration, a quantity

term, and a price term.” GEM Indus., Inc. v. Sun Tr. Bank, 700 F. Supp. 2d 915, 921

(N.D. Ohio 2010) (citing Alligood v. Procter & Gamble Co., 72 Ohio App.3d 309, 311,

594 N.E.2d 668, 669 (1991)).

All parties must “manifest an intention to be bound by” the contract or

agreement. Bruzzese, 998 F. Supp. 2d at 673; Reedy v. The Cincinnati Bengals,

Inc., 143 Ohio App. 3d 516, 521, 758 N.E.2d 678, 682 (2001). Usually, this

manifestation comes in the form of an offer and acceptance. McSweeney v. Jackson,

117, Ohio App. 3d 623, 691 N.E.2d 303, 308 (1996). But it may result from each party

making a promise or beginning to perform. Advance Sign Grp., LLC v. Optec

Displays, Inc., 722 F.3d 778, 784 (6th Cir. 2013). Unless a statute or the contract

itself requires otherwise, the parties may manifest their mutual assent through

written or spoken words, or by actions or omissions, id., including by email, North

Side Bank & Tr. Co. v. Trinity Aviation, LLC, 2020-Ohio-1470, 153 N.E.3d 889, ¶ 18

(Ohio Ct. App. 2020).

The burden of establishing a contract rests on the party asserting its existence.

Guardian Alarm Co. v. Portentoso, 196 Ohio App. 3d 313, 2011-Ohio-5443, 963 N.E.2d

225, ¶ 17 (citation omitted). Acceptance of an offer creates a binding contract. MTD

Products Inc. v. Am. Honda Motor Co., Inc., 744 F. Supp. 3d 812, 825 (N.D. Ohio

2024). However, if a party communicates that “something remains to be done to

establish [a] contractual relationship, no contract has been made.” Id. Further,

acceptance has not occurred if the offeree places additional conditions on the offeror.

Ridge Stone Builders & Developers, Ltd. v. Gribbin, 2003-Ohio-5188, ¶ 25. Such

conditions or the proposal of additional terms not in the original offer constitutes a

counteroffer that “reject[s] and extinguish[es] all previous offers.” In re Halishak,

324 B.R. 641, 644 (Bankr. N.D. Ohio 2005).

I.A.2. The Settlement Agreement

Plaintiff alleges that he and Defendant entered into a valid settlement

agreement through emails and other communications as evidenced through emails

and other documents attached to the second amended complaint. (ECF No. 16, ¶ 6,

PageID #365.) Even construing the second amended complaint including the

documents attached to it in Plaintiff’s favor, Plaintiff fails to plead as a matter of law

any enforceable contract between the partis.

It is black-letter law that a contract requires offer and acceptance. Bruzzese,

998 F. Supp. 2d at 669. The only offer at issue might be Ra’s request on August 11,

2023 that PNC Bank approve a $10,000 short sale. (ECF No. 16-1, PageID #373.)

This email suggests that that assent to the offer would conclude the transaction and

form a contract containing the essential terms of the transaction with sufficient

definiteness (at least at the pleading stage). But the communications attached to the

second amended complaint demonstrate that PNC Bank did not accept the offer. On

August 14, 2023, through Henegar, it asked Ra if the proposed buyer remained

interested. (Id., PageID #389.) Ra responded with confusion and frustration,

supporting a determination that the parties had no contract. (Id.) Then, when Ra

followed up with an employee of his, that employee specifically told Ra that PNC

Bank did not accept the offer. (Id.) At the pleading stage, as a matter of law, these

facts and circumstances foreclose the formation of a contract between the parties.

Further communications confirm this determination. On August 18, 2023,

Henegar rejected the short sale offer. (Id., PageID #403.) Her email stated that PNC

Bank required additional documents before it would approve any such transaction.

Such a requirement sets conditions on PNC Bank’s approval and introduces terms

not in the original offer, creating a counteroffer under Ohio law. That counteroffer

rejected and extinguished Ra’s original offer. The second amended complaint does

not allege any other facts showing that there might be an enforceable contract.

Even if the parties somehow formed a contract, Plaintiff’s second amended

complaint suffers from another fatal flaw. None of the communications between Ra

and Henegar (or related to the transaction) include an appraisal provision. A core

allegation in the second amended complaint is that the settlement agreement

required an appraisal that does not rely on an automated valuation model. (ECF

No. 16, ¶¶ 6–9, PageID #365.) No such term appears in the documents included in

the pleadings. Indeed, the terms “appraisal” and “AVM” (and its variants) do not

appear in them. Ra and the Abandoned Homes Project allege that Cain created a

broker price opinion for the property (ECF No. 16-1, PageID #375), but that is as far

as the allegations go. Taking these facts as true, nothing suggests that the broker

price opinion resulted for an automated valuation model. Under Rule 8, these

allegations in the second amended complaint are simply conclusory and thread-bare.

Nothing in these communications or the pleadings suggests, even inferentially, that

the parties agreed to a contract term for an appraisal that did not use an automated

valuation model.

As a matter of law, Plaintiff cannot carry his burden of establish a contract

between the parties. The pleadings belie rather than support Plaintiff’s claims and

do not suffice to state a claim under basic Rule 8 principles. Iqbal, 556 U.S. at 678.

II. Discrimination Claims

Plaintiff claims discrimination under 42 U.S.C. §§ 1981 and 1982. (ECF

No. 16, ¶¶ 31–36, PageID #367.) Specifically, Plaintiff claims that “PNC’s actions

constitute the intent to discriminate against Plaintiff on the basis of race.” (Id., ¶ 33,

PageID #367.) Further, he points to PNC Bank’s “interfere[nce] with Plaintiff’s right

to make and enforce contracts and his right to convey real property without

discrimination.” (Id., ¶ 34, PageID #367.)

Section 1981 prohibits intentional racial discrimination by private and public

actors in the making and enforcing of contracts. Christian v. Wal-Mart Stores, Inc.,

252 F.3d 867-868 (6th Cir. 2001). The statute provides that all citizens “shall have

the same right . . . to make and enforce contracts . . . as is enjoyed by white citizens.”

42 U.S.C. § 1981(a). Further, the statute defines “make and enforce contracts” as

“the making, performance, modification, and termination of contracts.” 42 U.S.C.

§ 1981(b). To bring a claim under Section 1981, a plaintiff must show that (1) the

plaintiff belonged to a protected class; (2) the defendant intended to discriminate

against him on the basis of race; and (3) the defendant’s discriminatory conduct

abridged a right enumerated in the statute Inner City Contracting, LLC v. Charter

Twp. of Northville, Michigan, 87 F.4th 743, 755 (6th Cir. 2023) (citing Amini v.

Oberlin Coll., 440 F.3d 350, 358 (6th Cir. 2006)). Intentional discrimination can be

shown either through direct evidence or circumstantial evidence that would support

an inference of discrimination. Johnson v. University of Cincinnati, 215 F.3d 561,

572 (6th Cir. 2000).

Section 1982 states: “All citizens of the United States shall have the same

right . . . as is enjoyed by white citizens thereof to inherit, purchase, lease, sell, hold,

and convey real and personal property.” 42 U.S.C. § 1982. “Because § 1982 was also

first enacted as part of the Civil Rights Act of 1866 and uses nearly identical language

as § 1981,” courts interpret these claims in tandem. Comcast Corp. v. National Ass’n

of African American-Owned Media, 589 U.S. 327, 336 (2020) (citing CBOCS West, Inc.

v. Humphries, 553 U.S. 442, 447 (2008)).

“Broad and conclusory allegations of discrimination cannot be the basis of a

complaint and a plaintiff must state allegations that plausibly give rise to the

inference that a defendant acted as the plaintiff claims.” HDC, LLC v. City of Ann

Arbor, 675 F.3d 608, 614 (6th Cir.2012). “Although the plaintiff may survive a motion

to dismiss without pleading a prima facie case of discrimination, the complaint must

nevertheless allege sufficient ‘factual content’ from which a court could ‘draw the

reasonable inference’ of racial discrimination.” James v. Hampton, 592 F. App'x 449,

461 (6th Cir. 2015) (quoting Iqbal, 556 U.S. at 678). On this score, Plaintiff’s

allegations fail.

Construed in Plaintiff’s favor, the pleadings establish only that Mr. Banks

belongs to a protected class. Beyond that, the second amended complaint alleges that

PNC Bank used an automated valuation model systemically biased against homes in

predominantly African-American communities. Even if true, that model resulted in

a valuation that was allegedly too high—not too low—which forestalled a short sale.

Without more, these statutes do not provide a vehicle for a person to repudiate a

mortgage at a bargain-basement price. And Plaintiff’s conclusory allegations of

discrimination fail to show he is entitled to relief. See HDC, LLC, 675 F.3d at 613.

Additionally, in opposing dismissal of his discrimination claim, Plaintiff fails

to develop an argument at all, resulting in its waiver. This failure extends to arguing

that the statutes permit claims based on a disproportionate impact theory. Nothing

else in the pleadings suggests, directly or by inference, that PNC Bank had an intent

to discriminate against Mr. Banks on the basis of race. Accordingly, the second

amended complaint and its attached emails do not allow the Court to “draw the

reasonable inference of racial discrimination” under Sections 1981 and 1982. James,

592 F. App'x at 461.

CONCLUSION

For the foregoing reasons, the Court GRANTS Defendant’s motion to dismiss

the second amended complaint (ECF No. 19).

SO ORDERED.

Dated: July 2, 2025

J.PhilipCalabrese

United States District Judge

Northern District of Ohio

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