Elliott Greenleaf recently won the dismissal of a national consumer class action against a publicly traded mortgage lender and several of its affiliates in the Court of Common Pleas of Philadelphia. The class alleged that the mortgage lender’s practice of requiring deeds in lieu of foreclosure in exchange for agreeing to forebear from foreclosing on consumer’s homes was an unfair lending practice. The class also alleged that the mortgage company’s practice of obtaining forced place insurance to protect its lien when the consumer failed to purchase homeowners insurance was also an unfair lending practice.
The class asserted claims for: violations of the Pennsylvania Fair Credit Extension Uniformity Act (“FCEUA”); violations of the Pennsylvania Unfair Trade Practices and Consumer Protection Law (“CPL”) ; breach of contract; unjust enrichment; equitable accounting; breach of fiduciary duty; and specific performance.
Elliott Greenleaf argued that all of Plaintiff’s claims must be dismissed as a matter of law because all of the counts are barred by a general release and the Filed Rate Doctrine. Additionally, Elliott Greenleaf argued that the class could not plead the elements of a cause of action for the statutory violations under the FCEUA or the CPL. Elliott Greenleaf clearly demonstrated that there is no fiduciary duty between a lender and a borrower as a matter of law. Elliott Greenleaf further argued that the breach of contract claim had to be dismissed because Plaintiff was admittedly the breaching party. Elliott Greenleaf showed that the named Plaintiff had not suffered any actual damages because he resided for free for almost three years, without paying any of the fees or charges of which the class complained. Therefore, the claims for unjust enrichment and an accounting were also not viable remedies. As a matter of law, neither plaintiff nor the class had standing or jurisdiction to assert a third-party claim under an agreement with the government.
After filing an initial complaint, and being forced to amend it twice in response to Elliott Greenleaf’s Preliminary Objections, class counsel voluntarily dismissed this national consumer class action, resulting in a significant victory for Elliott Greenleaf’ client.