DEPENDING ON HOW YOU LOOK AT IT, IT MAY NOT BE PLAUSIBLE.
In a factually complicated series of financial transactions, a property owner alleged that when he apparently could not make his mortgage payments, his property was foreclosed in 2009.
Five years later, the mortgage servicer, Ocwen, force-placed "hazard" insurance on the property on behalf of Ocwen's principal, the lender, Bank of New York Mellon when the owner could not pay for homeowner's insurance on the property as the mortgage required. (Why a five-year gap in the facts here, between a judgment of foreclosure and the purchase of lender force-placed insurance? I can't figure it out, either.)
On the last day of 2014, and a while after the force-placed insurance policy was purchased from American Security Insurance Company, a fire destroyed the property.
Ocwen and BNY allegedly received the proceeds from ASIC but "Ocwen and/or BNY" did not record a satisfaction of judgment despite the fact that the insurance proceeds fully satisfied the balance of the mortgage, or so the owner alleged. Rather, Ocwen and BNY applied the insurance proceeds to other purposes, the owner further alleged. The owner tried to file these claims as an adversary proceeding in his bankruptcy case. In re Scott (Scott v. American Sec. Ins. Co., Ocwen Loan Servicing, Bank of New York Mellon, etc.), 572 B.R. 492 (Bankr. S.D.N.Y. 2017).
Ocwen, BNY, and ASIC all denied that they took the proceeds or that the mortgage loan was paid off with the proceeds.
So, the situation was that lender force-placed insurance proceeds were paid to the servicer/lender after a fire destroyed the mortgage collateral, the property. The lender or the servicer or both allegedly refused to file a Satisfaction even though the proceeds extinguished the remaining loan amount. The lender, the servicer, and the insurance company that provided the LFPI all denied both that they had received the proceeds and that the mortgage debt was paid off by the insurance proceeds. They supported their denials with affirmative declarations and other evidence. To their credit, besides dismissal they requested that summary judgment be entered in their favor.
In this situation, the Bankruptcy Judge dismissed certain of the claims and recommended as to the rest that the District Judge dismiss them, too.
The moral if any of this story? Perhaps it is wise not to rest on allegations alone to survive a motion to dismiss, but to put on proof that rebuts the proof which is put forward to deny those allegations. This is what comes of a "plausibility" standard that changes with the length of the judge's foot, so to speak.
Please Read The Disclaimer. ©2017 by Dennis J. Wall. All Rights Reserved.
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HEALTHCARE ENROLLMENT: "Simply genius!"
People who need healthcare may want to check out health insurance coverage under the Affordable Care Act but they may not know how or when because the money allocated under the ACA to let them know how, has been cut by 90% this year. Without taking sides whether it is a good thing or a bad thing not to tell people who need health insurance how they can get it themselves, there is a way to respond positively.
Maine Representative Chellie Pingree has shown how to respond positively. What Representative Pingree did is simply genius. She has recorded a Public Service Announcement or PSA that is running on TV stations in Maine right now.
In the PSA, Representative Pingree lets people know about the enrollment and direct them to the federal website. TV stations and radio stations are eager to run Public Service Announcements as a part of their licensing requirements to serve the public.
As Maine goes, so goes the nation, they say. I have already called my Member of Congress and urged her to do the same.
I have also contacted both of my Senator's offices and left messages urging them to do this. Both of your Senators work for you regardless of your party affiliation or theirs. Call your Representative and your Senators and let each of them know that they would be terrific in a PSA informing people that the enrollment period that began on November 1 doesn't end until December 15 and directing them to the federal website where people can check it out for themselves, https://www.healthcare.gov.
Watching each other's backs is what people in America have always done. It's what we do now. Call now!