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HomeMy WebLinkAbout03-1054FEDERMAN AND PHELAN, LLP By: FRANK FEDERMAN, ESQ., Id. No. 12248 LAWRENCE T. PHELAN, ESQ., Id. No. 32227 FRANCIS S. HALLINAN, ESQ., Id. No. 62695 ONE PENN CENTER PLAZA, SUITE 1400 PHILADELPHIA, PA 19103 (215) 563-7000 CITIFINANCIAL MORTGAGE COMPANY, INC., F/K/A ASSOCIATES HOME EQUITY SERVICES, INC. 8333 RIDGE POINT DRIVE IRVING, TX 75063 Plaintiff Vo BLAIR W. TRUMP ANNA MAY TRUMP 627 HOOT OWL ROAD BOILING SPRINGS, PA 17007 ATTORNEY FOR PLAINTIFF COURT OF COMMON PLEAS CIVIL DIVISION TERM 03 - Io.cy CUMBERLAND COUNTY Defendant(s) CIVIL ACTION - LAW COMPLAINT IN MORTGAGE FORECLOSURE NOTICE **THIS FIRM IS A DEBT COLLECTOR ATTEMPTING TO COLLECT A DEBT AND ANY INFORMATION OBTAINED WlLL BE USED FOR THAT PURPOSE. IF YOU HAVE PREVIOUSLY RECEIVED A DISCHARGE IN BANKRUPTCY AND THIS DEBT WAS NOT REAFFIRMED, THIS CORRESPONDENCE IS NOT AND SHOULD NOT BE CONSTRUED TO BE AN ATTEMPT TO COLLECT A DEBT, BUT ONLY ENFORCEMENT OF A LIEN AGAINST PROPERTY. ** You have been sued in Court. If you wish to defend against the claims set forth in the following pages, you must take action within twenty (20) days after this Complaint and Notice are served, by entering a written appearance personally or by attorney and filing in writing with the court your defenses or objections to the claims set forth against you. You are warned that if you fail to do so the case may proceed without you and a judgment may be entered against you by the court without further notice for any money claimed in the Complaint or for any other claim or relief requested by the Plaintiff. You may lose money or property or other rights important to you. YOU SHOULD TAKE THIS PAPER TO YOUR LAWYER AT ONCE. IF YOU DO NOT HAVE A LAWYER OR CANNOT AFFORD ONE, GO TO OR TELEPHONE THE OFFICE SET FORTH BELOW TO FIND OUT WHERE YOU CAN GET LEGAL HELP. · CUMBERLAND COUNTY CUMBERLAND COUNTY BAR ASSOCIATION 2 LIBERTY AVENUE CARLISLE, PA 17013 (717) 249-3166 Loan#:0003679863 IF THIS IS THE FIRST NOTICE THAT YOU HAVE RECEIVED FROM THIS OFFICE, BE ADVISED THAT: PURSUANT TO THE FAIR DEBT COLLECTION PRACTICES ACT, 15 U.S.C. § 1692 et seq. (1977), DEFENDANT(S) MAY DISPUTE THE VALIDITY OF THE DEBT OR ANY PORTION THEREOF. IF DEFENDANT(S) DO SO IN WRITING WITHIN THIRTY (30) DAYS OF RECEIPT OF THIS PLEADING, COUNSEL FOR PLAINTIFF WILL OBTAIN AND PROVIDE DEFENDANT(S) WITH WRITTEN VERIFICATION THEREOF; OTHERWISE, THE DEBT WILL BE ASSUMED TO BE VALID. LIKEWISE, IF REQUESTED WITHIN THIRTY (30) DAYS OF RECEIPT OF THIS PLEADING, COUNSEL FOR PLAINTIFF WILL SEND DEFENDANT(S) THE NAME AND ADDRESS OF THE ORIGINAL CREDITOR, IF DIFFERENT FROM ABOVE. THE LAW DOES NOT REQUIRE US TO WAIT UNTIL THE END OF THE THIRTY (30) DAY PERIOD FOLLOWING FIRST CONTACT WITH YOU BEFORE SUING YOU TO COLLECT THIS DEBT. EVEN THOUGH THE LAW PROVIDES THAT YOUR ANSWER TO THIS COMPLAINT IS TO BE FILED IN THIS ACTION WITHIN TWENTY (20) DAYS, YOU MAY OBTAIN AN EXTENSION OF THAT TIME. FURTHERMORE, NO REQUEST WILL BE MADE TO THE COURT FOR A JUDGMENT UNTIL THE EXPIRATION OF THIRTY (30) DAYS AFTER YOU HAVE RECEIVED THIS COMPLAINT. HOWEVER, IF YOU REQUEST PROOF OF THE DEBT OR THE NAME AND ADDRESS OF THE ORIGINAL CREDITOR WITHIN THE THIRTY (30) DAY PERIOD THAT BEGINS UPON YOUR RECEIPT OF THIS COMPLAINT, THE LAW REQUIRES US TO CEASE OUR EFFORTS (THROUGH LITIGATION OR OTHERWISE) TO COLLECT THE DEBT UNTIL WE MAIL THE REQUESTED INFORMATION TO YOU. YOU SHOULD CONSULT AN ATTORNEY FOR ADVICE CONCERNING YOUR RIGHTS AND OBLIGATIONS IN THIS SUIT. 1. Plaintiff is CITIFINANCIAL MORTGAGE COMPANY, INC., F/K/A ASSOCIATES HOME EQUITY SERVICES, INC. 8333 RIDGE POINT DRIVE IRVING, TX 75063 The name(s) and last known address(es) of the Defendant(s) are: BLAIR W. TRUMP ANNA MAY TRUMP 627 HOOT OWL ROAD BOILING SPRINGS, PA 17007 who is/are the mortgagor(s) and real owner(s) of the property hereinafter described. On 05/26/01 mortgagor(s) made, executed and delivered a mortgage upon the premises hereinafter described to PLAINTIFF which mortgage is recorded in the Office of the Recorder of CUMBERLAND County, in Mortgage Book No. 1725, Page 2446. The premises subject to said mortgage is described as attached. The mortgage is in default because monthly payments of principal and interest upon said mortgage due 02/05/2002 and each month thereafter are due and unpaid, and by the terms of said mortgage, upon failure of mortgagor to make such payments after a date specified by written notice sent to Mortgagor, the entire principal balance and all interest due thereon are collectible forthwith. 6. The following amounts are due on the mortgage: o Principal Balance Interest 01/05/2002 through 03/10/2003 (Per Diem $19.81) Attorney's Fees Cumulative Late Charges 05/26/2001 to 03/10/2003 Cost of Suit and Title Search Subtotal $95,087.41 8,518.30 1,250.00 0.00 $ 550.00 $105,405.71 Escrow Credit 0.00 Deficit 1,276.90 Subtotal $ 1,276.90 TOTAL $106,682.61 The attorney's fees set forth above are in conformity with the mortgage documents and Pennsylvania law, and will be collected in the event of a third party purchaser at Sheriff's Sale. If the Mortgage is reinstated prior to the Sale, reasonable attorney's fees will be charged. Notice of Intention to Foreclose as set forth in Act 6 of 1974, Notice of Homeowner's Emergency Assistance Program pursuant to Act 91 of 1983, as amended in 1998, and/or Notice of Default as required by the mortgage document, as applicable, have been sent to the Defendant(s) on the date(s) set forth thereon, and the temporary stay as provided by said notice has terminated because Defendant(s) has/have failed to meet with the Plaintiff or an authorized consumer credit counseling agency, or has/have been denied assistance by the Pennsylvania Housing Finance Agency. This action does not come under Act 6 of 1974 because the original mortgage amount exceeds $50,000. WHEREFORE, PLAINTIFF demands an in rem Judgment against the Defendant(s) in the sum of $106,682.61, together with interest from 03/10/2003 at the rate of $19.81 per diem to the date of Judgment, and other costs and charges collectible under the mortgage and for the foreclosure and sale of the mortgaged property. FEDE ILMAN~..~LAN, LLP- FRANK FEDERMAN, ESQUIRE LAWRENCE T. PHELAN, ESQUIRE FRANCIS S. HALLINAN, ESQUIRE Attorneys for Plaintiff ~&t -~- THOSI~ TWO (2) CI~TAI~ mcsmsG~s, zctwn~.nts m~! trscU ot'hnd s~l;ua~e z~4n8 LM bci.8 in tho Towmhip of'Monroe, ~ or Odmberl--Ct S~I Comm~wu~ of'Pcnt~lvni,% tad mor~ I~flcuhrly bauad~ ~ud cbsm't~l ~ follows: CONT,4J~q~(3 0.6~ ~'~, mom or i~. CO~ffI'~::NI~G 2,~45 ac~ca, more or lear~ ADDRESS= 62-7 ttOOT OWL ROAD VERIFICATION TERESA SKINNER hereby states that she is NORTHEAST REGIONAL MANAGER of CITIFINANCIAL MORTGAGE COMPANY, INC., mortgage servicing agent for the plaintiff in this matter, that she is authorized to take this Verification, and that the statements made in the foregoing Civil Action in Mortgage Foreclosure are true and correct to the best of her knowledge, information and belief. The undersigned understands that this statement is made subject to the penalties of 18 Pa. C.S. Sec. 4904 relating to unsworn falsification to authorities DATE TERESA SKINNER SHERIFF'S RETURN - REGULAR 'CASE NO: 2003-01054 P COMMONWEALTH OF PENNSYLVANIA: COUNTY OF CUMBERLAND CITIFINANCIAL MORTGAGE CO INC VS TRUMP BLAIR W ET AL SHAWN HARRISON , Sheriff or Deputy Sheriff of Cumberland County, Pennsylvania, who being duly sworn according to law, says, the within COMPLAINT - MORT FORE was served upon TRUMP ANNA MAY the DEFENDANT , at 1743:00 HOURS, on the 12th day of March , 2003 at 627 HOOT OWL ROAD BOILING SPRINGS, PA 17007 by handing to ANNA TRUMP a true and attested copy of COMPLAINT - MORT FORE together with and at the same time directing Her attention to the contents thereof. Sheriff's Costs: Docketing Service Affidavit Surcharge 6 00 00 00 10 00 00 16 00 Sworn and Subscribed to before me this /~ day of So Answers: R. Thomas Kline 03/13/2003 FEDERMANBy: & PH/~~ ~/~Depugy Sheriff SHERIFF'S RETURN - NOT SERVED "CASE NO: 2003-01054 P COMMONWEALTH OF PENNSYLVANIA COUNTY OF CUMBERLAND CITIFINANCIAL MORTGAGE CO INC VS TRUMP BLAIR W ET AL R. Thomas Kline , Sheriff , who being duly sworn according to law, says, that he made a diligent search and inquiry for the within named DEFENDANT , to wit: TRUMP BLAIR W unable to locate Him COMPLAINT MORT FORE in his bailiwick. but was He therefore returns the the within named DEFENDANT , TRUMP BLAIR W NOT SERVED , as to DEFENDANT DIED NOVEMBER 2000. Sheriff's Costs: Docketing Service Affidavit Surcharge 10 39 18 00 11 04 00 00 00 04 SHERIFF OF CUMBERLAND COUNTY FEDERMAN & PHELAN 03/13/2003 Sworn and subscribed to before me this i ~& day of ~~ Jrothonot&~yg ~ FEDE1LMAN AND PHELAN, LLP BY: Francis S. Hallhmn, Esquirc Identification No. 62695 One Penn Center Plaza Suite 1400 Philadelphia, PA 19103 (215) 563-7000 Attorney For Plaintiff CITIFiNANCIAL MORTGAGE COMPANY, INC., F/K/A ASSOCIATES HOME EQUITY SERVICES, 1NC. V. BLAIR W. TRUMP ANNA MAY TRUMP COURT OF COMMON PLEAS CIVIL DIVISION CUMBERLAND COUNTY NO. 03-1054 SUGGESTION OF DEATH RE: DEFENDANT BLALR W. TRUMP AND RELEASE OF DEFENDANT'S LIABILITY COMMONWEALTH OF PENNSYLVANIA: FRANCIS S. HALLINAN, ESQUIRE, attorney for the Plaintiff, hereby certifies that, to the best of his knowledge, information and belief, the Defendant, BLAIR W. TRUMP is deceased -- date of death on or about 11/14/00. Plaintiff hereby releases BLAIR W. TRUMP from liability for the debt secured by the mortgage. As the, property was owned by defendants, BLAIR W. TRUMP AND ANNA MAY TRUMP as tenants by the entireties, upon the death of BLAIR W. TRUMP, ANNA MAY TRUMP became sole owner of the mortgaged premises as surviving tenant by the entirety. Dated: FEDERMAN AND PHELAN By7'''< ~ , ffrancis S. Hallinan, Esquire ~Attome¥ for Plaintiff FEDERMAN AND PHELAN, LLP By: FRANK FEDERMAN, ESQ., Id. No. 12248 LAWRENCE T. PHELAN, ESQ., Id. No. 32227 FRANCIS S. HALLINAN, ESQ., Id. No. 62695 ONE PENN CENTER PLAZA, SUITE 1400 PHILADELPHIA, PA 19103 (215) 563-7000 CITIFINANCIAL MORTGAGE COMPANY, INC. F/K/A ASSOCIATES HOME EQUITY SERVICES, INC. 8333 RIDGE POINT DRIVE IRVING, TX 75063 Plaintiff ATTORNEY FOR PLAINTIFF COURT OF COMMON PLEAS C1VIL DIVISION TERM NO. 03-1054 ANNA MAY TRUMP 627 HOOT OWL ROAD BOLLING SPR1NGS, PA 17007 Defendant(s) CUMBERLAND COUNTY CERTIFICATION OF gl~.RVICE I hereby certify a tree and correct copy of Plaint/frs Amended Civil Action Complaint was served by regular and certified mail on Defendant's counsel on the date listed below: Stephen K. Portko, Esquire 101 South U.S. Route 15 Dillsburg, PA 17019 · Davey,~'Esquire for Plaintiff IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CITIFINANCIAL MORTGAGE : COMPANY, INC. F/K/A ASSOCIATES : HOME EQUITY SERVICES, INC., : Plaintiff ANNA MAY TRUMP, Defendant : CIVIL ACTION NO. 03-1054 : : : (JURY TRIAL DEMANDED) NOTICE TO PLEAD TO: Frank Federman, Esquire, Lawrence T. Phelan, Esquire and Francis S. Hallinan, Esquire Attorneys for Plaintiff, Flagstar Bank, FSB You are hereby notified to file a written response to the enclosed DEFENDANT'S ANWER WITH NEW MATTER AND COUNTERLCAIMS within twenty (20) days from service hereof or a judgment may be entered against you. DATE: StephSn K. Portko, Esquire #3453'~ 101 South U.S. Route 15 Dillsburg, Pennsylvania 17019 (717) 432-9706 Attorney for Defendant IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA ClTIFINANCIAL MORTGAGE COMPANY, INC. F/K/A ASSOCIATES HOME EQUITY SERVICES, INC., Plaintiff ANNA MAY TRUMP, Defendant : CIVIL ACTION NO. 03-~1054 .. . : (JURY TRIAL DEMANDED) DEFENDANT'S ANSWER WITH NEW MATTER AND COUNTERCLAIM TO PLAINTIFF'S AMENDED COMPLAINT 1. Denied as after reasonable investigation Defendant is without knowledge or information sufficient to form a belief as to the truth of this averment. 2. Admitted. 3. Admitted in part and denied in part. The technical information regarding the mortgage is admitted. Its enforceability is denied for the reasons set forth in Defendant's in the affirmative defenses and counterclaims. 4. Admitted. 5. Defendant admits that she is behind several payments but denies all allegations regarding default, as the note and mortgage are not enforceable. 6. Defendant denies that Plaintiff is entitled to any relief or to recover the amounts set forth in paragraph 6 of the Complaint. 7. Defendant denies that Plaintiff is entitled to any relief or to recover attorneys fees. 8. Admitted in part and denied in part. Admitted that notice was given. Denied that Defendant has taken no action pursuant to said notice. On the contrary, Defendant and Plaintiff communicated with each other regarding insurance that may cover the alleged default and regarding a workout. By way of further answer, Defendant denies that the mortgage is enforceable for the reasons set forth in Defendant's in the affirmative defenses and counterclaims. 9. Admitted. 10. Admitted. WHEREFORE, Defendant respectfully request judgment in her favor and against Plaintiff. NEW MATTER 11. Defendant repeats and realleges all paragraphs above as if fully set forth herein. 12. Defendant owns the home at 627 Hoot Owl Road, Boiling Springs, Cumberland County, Pennsylvania, which is her principal dwelling. 13. On May 26, 2000, employees of Associates Home Equity Services, Inc. [hereinafter referred to as "Associates"] came to Ms. Trump's home with mortgage documents for her and her husband, Blair Trump, to sign. This mortgage, in the principal amount of $96,443.55, was secured by their home of 8 years. A copy of this mortgage is attached to Plaintiffs Amended Complaint. 14. At the time Associates came to her home, Ms. Trump's husband, Blair Trump was bed ridden and dying of cancer. Ms. Trump's husband died less than 6 months thereafter on November 14, 2000. 15. Associates convinced Ms. Trump and her husband to refinance their current loan with Associates by telling them that it would reduce their interest rate and monthly mortgage payment, which would also save them money. Associates led Ms. Trump to believe that credit life insurance would remain in effect or be reissued with the new loan notwithstanding that Associates knew of her husband's terminal illness. 16. Among the settlement charges imposed by Associates was a disbursement to Associates in the amount of $10,325.64. Associates stated or implied that this sum included all fees, premiums or charges that Associates was entitled to collect to refinance the loan and to maintain credit life insurance. 2 17. On March 12, 2003, Ms. Trump sent a written demand for rescission of the loan, based on violations of the Truth and Lending Act, to Associates. Associates has refused to recognized Ms. Trumps rescission, and has not taken any steps to rescind the loan or mortgage on her home in accordance with its obligations under TILA. 18. The transaction upon which this claim is based was a consumer credit transaction subject to the federal Truth in Lending Act, 15 U.S.C. §§ 1601 et seq. ("TILA"), and Regulation Z thereunder, 12 C.F.R. § 226. 19. At all times relevant hereto Plaintiff was a creditor within the meaning of the TILA, 15 U.S.C. §§ 1601 et seq. COUNTERCLAIMS Count 1 (Violation of the CPL) 20. Defendant repeats and realleges all paragraphs above as if fully set forth herein. 21. At all times relevant hereto, Plaintiff was a "person" as defined in Section 201-2(2)of the Pennsylvania Unfair Trade Practices and Consumer Protection Law, 73. P.S. Section 201-1 et seq. (hereinafter "CPL"). 22. The Plaintiff has violated the provisions of the CPL with respect to Ms. Trump by engaging in consumer-oriented acts and practices which were deceptive or misleading in a material way, and which were unfair, deceptive, and contrary to public policy and generally recognized standards of business, including but not limited to: (a) Misrepresenting to Defendant -- or failing to inform Defendant about -- the terms of her loan, and the nature and details of the transaction she was entering into, including but not limited to: the amount of monthly payments, the interest rate on the loan, the costs of the loan, credit life insurance and the distribution of the loan proceeds; (b) Misrepresenting to Defendant that the mortgage loan transaction had benefits that they did not have, or failing to inform Defendant that said transaction had little or no benefits, which did not merit entering into the transaction given their padded costs and interest rates; 3 (c) Fraudulently inducing Defendant to enter into a mortgage loan transaction that she did not have the ability to pay; (d) Failing to provide Defendant with the appropriate and/or accurate pre- closing and closing disclosures and notices of rights to rescind, including but not limited to disclosures required by TILA and HOEPA; (e) Preventing Defendant from examining and reading the relevant documents at closing; (f) Misrepresenting to Defendant that there were no points and fees payable from the proceeds of the mortgage and that the disbursement to Associates was bona fide and reasonable and necessary for the extension of credit, or failing to inform Defendant that they were not; (g) Requiring Defendant to execute and/or executing on behalf of Defendant inaccurate documents in order to close her loan; (h) Effectively negating Defendant's statutory rights to rescind and failing to recognize Defendant's exercise of such right; (i) Failing to disclose to Defendant the true distribution of loan proceeds; (.i) Failing to disclose to Defendant that credit life insurance was not in effect or would not be maintained thereby placing her home in jeopardy of foreclosure upon the death of her husband; (k) Inducing Defendant to forego monthly payments on her pre-existing loan, and thereby effectively negating their statutory right to rescind; (I) Inducing Defendant to have the loan closing in their home and without an attorney who could explain to her the true nature and terms of her loan, and who could protect Defendant from Associates materially misleading and deceptive practices; (m) Including in the mortgages and notes provided to Defendant certain terms that are prohibited by federal law; (n) Extending credit to Defendant on the basis of the value of her Premises, rather than on the basis of her ability to pay, in violation of federal law; (o) Violating the provisions of the CPL, which requires certain disclosures in connection with mortgage loans; and (p) Engaging in high pressure sales tactics to induce Defendant to enter into deceptive, fraudulent and unconscionable transactions. 23. Ms. Trump reasonably relied on Associates above-identified deceptive acts and practices, and entered into the mortgage loan transaction that the Plaintiff otherwise would not have entered into but for those deceptive acts and practices. 24. Associates utilized artifice and deception to take advantage of Ms. Trump's confusion and lack of sophistication. More specifically, Associates knew or should have known that Ms. Trump had little idea how much she was borrowing or why; was unaware of the various charges imposed on her in the transactions and the fact that some of those charges were illegal under Pennsylvania law; and was unaware of the disadvantages and risks of refinancing and consolidating their pre-existing debt, particularly taking on more debt when her husband was terminally ill. Associates also knew or should have known that Ms. Trump would have difficulty repaying the loan and were, therefore, subjecting herself to the real likelihood of foreclosure. Associates nonetheless omitted information and explanations concerning these matters. 25. While representing to Ms. Trump that refinancing her mortgage would be advantageous, Associates omitted the material fact that it would charge substantial fees to refinance and more than what Ms. Trump was already paying. 26. Defendant suffered serious injury and damages as the proximate result of Associates' above-described deceptive and unfair practices, including but not limited to: excessive hidden loan fees and costs, absence of insurance on a known risk, and emotional distress concerning possible loss of her home. 27. Associates is liable to Defendant for actual and punitive damages under Pennsylvania common law, as well as treble damages, attorney fees and other appropriate relief, pursuant to 73 P.S. § 201-9.2. WHEREFORE, Defendant demands judgment against Plaintiff for punitive damages, or treble damages pursuant to 73. P.S. Section 201-9.2 plus reasonable attorney's fees and court costs and expenses incurred herein. 5 Count 2 (Unconscionability and Bad Faith) 28. Defendant repeats and realleges all paragraphs above as if fully set forth herein. 29. As described below, Associates systematically engaged in procedural and substantive unconscionability in violation of Pennsylvania's common law prohibiting unconscionability and bad faith in consumer transactions. 30. Prior to and during the time of the loan transaction, there existed a disparity in bargaining power between Ms. Trump (on the one had) and Associates (on the other hand). Ms. Trump is an unsophisticated consumer. Associates is a sophisticated lender providing loans since 1918 and having assets in excess of $55 billion. 31. Procedurally, Associates intentionally misrepresented, or failed to disclose, material information concerning the nature and terms of the Ms. Trump's loan, thereby depriving such individual of material information of which she was unaware, and also depriving this individual of information that might have reduced the disparity in bargaining power between the parties. 32. Procedurally, Associates also failed to provide to Ms. Trump certain notices of rights to rescind, thereby depriving this individual of her statutory rights to cancel their contracts, and also depriving her of a procedure that might have reduced the disparity in bargaining power between the parties. 33. Procedurally, Associates also completed a loan application for, or extended credit to Ms. Trump on the basis of the value of her home, rather than on the basis of her ability to pay. In so doing, the Plaintiff knew from information that they had obtained, especially Mr. Trump's terminal illness, that Ms. Trump was unlikely to be able to make their mortgage loan payments or the Plaintiff failed to obtain sufficient information to determine if Ms. Trump would be able to make her mortgage loan payments. 34. Procedurally, Associates also induced Ms. Trump to attend her closing without an attorney who could explain to the Ms. Trump the true nature and terms of her loan, protect such individual from the Plaintiff's unconscionable practices, 6 and who could have reduced the disparity in bargaining power between the parties. 35. Procedurally, Associates also induced Ms. Trump to execute inaccurate documents in order to obtain her loan. 36.Procedurally, Associates also prevented Ms. Trump from reviewing and thereby better understanding their loan documents at her closings. $7.Procedurally, Associates misrepresented, or failed to disclose, to Ms. Trump that their mortgage loan transactions contained padded charges and fees that were not reasonably related to the actual services rendered. Moreover, the Associates arranged for said charges and fees to be paid to themselves from Ms. Trump's proceeds obtained from their closings. 38.Procedurally, Associates also engaged in high pressure sale tactics that were designed to, and did, induce Ms. Trump to enter into fraudulent loan transactions. 39.Given the disparity of bargaining power between the parties, and the imbalance in acumen and understanding of the parties, the above identified procedural unconscionability was intended to, and did, cause Ms. Trump to have a lack of meaningful choice in connection with her mortgage loan transaction. 40.Substantively, the loan terms provided by the Plaintiff: a) skimmed off the equity in Ms. Trump's home; b) provided little or no economic benefit to such individual; c) were padded with excessive fees and charges that were paid to Associates and affiliated third parties, and that were not reasonably related to the services actually rendered by Plaintiff and those affiliated third parties; d) contained terms that were prohibited by HOEPA and TILA; and e) placed Ms. Trump in jeopardy of losing her home, which was the collateral for their loan. 41 .The above described substantive unconscionability rendered the mortgage loan contract that was entered into unreasonably favorable to the Plaintiff. 42.Ms. Trump reasonably relied on Plaintiff's above described unconscionable practices, which proximately caused her injury. 7 43.The above described unconscionable practices render void and unenforceable the mortgage loan transaction entered into between Associates and Ms. Trump. 44.As a result of the above described violations, Defendant hereby request that this Court: (a) Declare Ms. Trump's mortgage loan transactions with Associates void and unenforceable; (b) Grant whatever further monetary or equitable relief this Court deems appropriate to Ms. Trump and against the Plaintiff. WHEREFORE, Defendant request the following relief: An order (i) entering declaratory relief of rescission for the Defendant, (ii) voiding any lien and/or any security interest obtained by Associates against the property of the Defendant, (iii) providing actual, statutory and enhanced damages, attorneys' fees and costs to the Defendant, under HOEPA and TILA; B. An Order providing equitable and monetary damages to Defendant under the CPL, including treble damages, reasonable attorney's fees and costs; C. An Order declaring Defendant's mortgage loan transactions void and unenforceable due to their unconscionability under Pennsylvania state law; D. Such other relief at law or equity as this Court may deem just and proper. V. Demand for Jury Trial 45. Defendant respectfully demand trial by jury on all Counts to which she is so entitled. Dated: Respectfully submitted, Bratic & Portko 101 South U.S. Route 15 Dillsburg, Pennsylvania17019 (717) 432-9706 Attorneys for Defendant 8 IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA ClTIFINANClAL MORTGAGE COMPANY, INC. F/K/A ASSOCIATES HOME EQUITY SERVICES, INC., Plaintiff ANNA MAY TRUMP, Defendant : CIVIL ACTION NO. 03.1054 .. : (JURY TRIAL DEMANDED) CERTIFICATE OF SERVICE I HEREBY CERTIFY that a true and correct copy of the foregoing Defendant's Answer With New Matter and Counterclaim to Plaintiff's Amended Complaint was provided by U.S. Mail, postage prepaid, first class to the following: FEDERMAN AND PHELAN, LLP One Penn Center Plaza at Surburban Station 1617 J.F.K. Blvd.- Suite 1400 Philadelphia, Pennsylvania 19103-4491 Date: ~ ~ 20aL~ Stephen K. Portko, Esquire VERIFICATION I, Anna M. Trump, hereby acknowledge that I amDefendant~ the foregoing Answer With New Matter and Counterclaims , that I have read the foregoing, and the facts stated therein are true and correct to the best of my knowledge, information and belief. I understand that any false statements herein are made subject to penalties of 18 Pa.C.S. Section 4904, relating to unswom falsification to authorities. DATE: July 3, 2003 Anna M. Trump IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA CITIFINANCIAL MORTGAGE COMPANY, INC., F/K/A ASSOCIATES HOME EQUITY SERVICES, INC., Plaintiff V. ANNA MAY TRUMP, Defendant NO. 03-1054 CIVIL ACTION - LAW PLAINTIFF'S ANSWER TO DEFENDANT'S NEW MATTER Plaintiff Citifinancial Mortgage Company, Inc. ("Citifinancial" or "PlaintiW'), by and through its undersigned counsel, Reed Smith LLP, submits the following as its Answer to New Matter. Each paragraph of this Answer corresponds with the same numbered paragraph in Defendant's New Matter. ANSWER 11. This paragraph simply repeats and re,tlleges the averments made in Defendant's Answer to Plaintiff's Complaint, and as such is not New Matter and requires no response. 12. The allegations of paragraph 12 are admitted in part and denied in part. Plaintiff admits that Defendant "owns the home at 627 Hoot Owl Road, Boiling Springs, Cumberland County, Pennsylvania," though by way of further explanation Plaintiff notes that Defendant's ownership interest in the property is subject to Plaintiff's mortgage interest. After reasonable investigation, Plaintiff is without knowledge or information sufficient to form a belief as to Defendant's claim that the home at 627 Hoot Owl Road "is her principal dwelling," and said allegation is therefore denied. 13. The allegations of paragraph 13 are admitted in part and denied in part. After reasonable investigation, Plaintiff is without knowledge or information sufficient to form a belief as to the troth of the allegation that employees of Associates Home Equity Services, Inc. ("Associates"), went to Defendant's home on May 26, 2000, ~Io have her and her husband sign mortgage documents, and said allegation is therefore denied. Plaintiff admits that the mortgage executed by Defendant was executed on May 26, 2000, that the mortgage was in the principal amount of $96,443.55, and that the mortgage was secured by the home at 627 Hoot Owl Road. Plaintiff admits that a copy of the mortgage is attached to Plaintiff's Amended Complaint. 14. After reasonable investigation, Plaintiff is without knowledge or information sufficient to form a belief as to the truth of the allegations that Mr. Tromp "was bed ridden and dying of cancer" on May 26, 2000, and that he "died less than 6 months thereafter on November 14, 2000," and said allegations are therefore denied. By way of further explanation, Plaintiff's records indicate that Mr. Trump had "bone cancer," but there is no indication in said records that the cancer was described as terminal or that Mr. Trtunp was "bed ridden." Furthermore, the first information Plaintiff obtained about Mr. Trump's death is an entry in its logs dated December 7, 2000, indicating that Ms. Tromp called to inform Plaintiff of her husband's death and to request that the mortgage loan be transferred to her name alone. 15. After reasonable investigation, Plaintiff is without knowledge or information sufficient to form a belief as to the truth of the allegation that an unspecified employee of Associates told the Trumps that refinancing would "reduce their interest rate and monthly mortgage payment, which would also save them money," and said allegation is therefore denied. To the contrary, Plaintiff' s written records of the transaction do not contain that any indication that such representation was made. Moreover, even if such a representation was made, Defendant does not allege that it was false or misleading. Additionally, after reasonable investigation, Plaintiff is without knowledge or information sufficient to form a belief as to the truth of the allegation that unspecified employees of"Associates led Ms. Trump to believe that -2- credit life insurance would remain in effect or be reissued with the new loan notwithstanding that Associates knew of her husband's terminal illness," and said allegations are therefore denied. To the contrary, Plaintiffs records indicate that Mr. and Mrs. Trump signed a written waiver indicating that "at this time we do not wish to apply for mortgage life insurance." Those records contain no indication that Plaintiffwas aware of Mr. Trurnp's terminal illness. Plaintiff is without knowledge or information sufficient to enable it to admit or deny what Ms. Trump may have subjectively "believed." 16. The allegations of paragraph 16 are admitted in part and denied in part. Plaintiff admits that one of the settlement charges was a disbursement to Associates in the amount of $10,325.64. After reasonable investigation, Plaintiff is without knowledge or information sufficient to form a belief as to the troth of the allegation that unidentified employees of Associates "stated or implied that this sum included all fees, premiums or charges that Associates was entitled to collect to refinance the loan and to maintain credit life insurance," and said allegation is therefore denied. To the contrary, Plaintiff's records indicate that the $10,325.64 charge was applied, at least in part, to pay off the Tramps' preexisting debt to Associates. Additionally, Plaintiff's records indicate that Mr. am.d Mrs. Trump signed a written waiver indicating that "at this time we do not wish to apply for mortgage life insurance." 17. The allegations of paragraph 17 are admitl:ed in part and denied in part. After reasonable investigation, Plaintiff is without knowledge or information sufficient to form a belief as to the truth of the allegation that Defendant sent a written demand for recission of the loan on March 12, 2003, and said allegation is therefore denied. To the contrary, Plaintiff's records contain no evidence of receipt of such a written demand. Rather, Plaintiff's records indicate that Defendant received and signed a timely, proper notice of her right to rescind by May 31, 2000, and Defendant did not exercise her right to rescind[ within that timeframe. Plaintiff admits that it "has refused to recognize Ms. Trump's recission" since it did not receive any such recission during the timeframe allowed by law, and that it "has not taken any steps to -3- rescind the loan or mortgage on her home." Defendant's assertion that Plaintiff had an "obligation" to perform these acts is a legal conclusion to which no responsive pleading is required, but to the extent a response is necessary, Plaintiff avers that any purported demand for recission made by Defendant was untimely, without legal basis, and without legal effect, and Plaintiff was under no obligation to honor the demand. Defendant's assertion that there were violations of the Truth In Lending Act ("TILA") is a legal conclusion to which no responsive pleading is required, but to the extent a response is necessary, Plaintiff avers that it has complied with TILA in every respect and at all times. 18. The allegations in this paragraph are legal conclusions to which no responsive pleading is required. 19. The allegations in this paragraph are legal conclusions to which no responsive pleading is required. Wherefore, Plaintiff demands that judgment be entered in its favor and against Defendant with costs of suit and any other relief this Court deems appropriate. Jeremy D. Feinstein, Esquire REED SMITH LLP 213 Market ;Street, 9th Floor P.O. Box 11844 Harrisburg, PA 17108 (717)257-3057 Attorney for Plaintiff -4- CERTIFICATE OF SERVICE The undersigned hereby certifies that on this~l[ day of August, 2003, a tree and correct copy of the foregoing Plaintiff's Answer To Defenda:at's New Matter was caused to be served via first class mail, postage prepaid, on the following Pla'ties; Stephen K. Potko, Esq. 101 Office Center, Suite A 101 South U.S. Route 15 Dillsburg, PA 17019 Jeremy D. Feinstein -5- V~ERIFICATION I, Joseph Barbone, am authorized to make this 'verification on behalf of Citifinancial Mortgage Company, Inc. The averments of fact in the foregoing Answer to New Matter are true and correct to the best of my knowledge, information and belief. I make the foregoing statement subject to the penalties of 18 Pa. C.S. § 4904 relating to unsworn falsification to authorities. Joseph Barbone IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA CITIFINANCIAL MORTGAGE COMPANY, 1NC., F/K/A ASSOCIATES HOME EQUITY SERVICES, INC., Plaintiff V. ANNA MAY TRUMP, Defendant NO. 03-1054 CIVIL ACTION - LAW PRELIMINARY OBJECTIONS OF PLAINTIFF TO DEFENDANT'S COUNTERCLAIMS Plaintiff Citifinancial Mortgage Company, Inc. ("Citifinancial" or "Plaintiff"), by and through its undersigned counsel, hereby files the following preliminary objections to Defendant's counterclaims: Preliminary Objections To Count 1 Of Defendant's Counterclaims In The Nature Of A Motion To Strike For Failure To Conform To Law Or Rule Of Court, And For Insufficient Specificity Of Pleading 1. "Count 1" of Defendant's counterclaims alleges that Citifinancial has violated the provisions of the Pennsylvania Unfair Trade Practices and Consumer Protection Law, 73 PA. STAT. § 201-1 et seq. ("CPL"), by engaging in, among other things, "acts and practices which were deceptive or misleading in a material way." These allegations are, in essence, assertions of fraud. See Lindstrom v. Pennswood Village, 612 A.2d 1048, 1052-53 (Pa. Super. 1992). 2. A pleading must set forth the material facts in which a cause of action is based. Pa.R.C.P. 1019(a). Averments of fraud must be plead with particularity. Pa. R.C.P. 1019(b). See Lindstrom, 612 A.2d at 1052-53 (dismissing CPL claim under Rule 1019(b) due to failure of claimant to plead with particularity). 3. Defendant's averments of conduct in violation of the CPL are contained in Paragraph 22, which lists 16 different allegedly deceptive acts and practices engaged in by Plaintiff. But in the preamble to Paragraph 22, Defendant further states that Plaintiff's deceptive acts "include but are not limited to" these 16 acts. This qualifying phrase implies that there may be unstated allegations of fraud in addition to those stated in the counterclaim. This form of pleading fraud by implication rather than specific statement violates Rules 1019(b), and therefore the phrase "including but not limited to" should be stricken pursuant to Rule 1028(a)(2). 4. Similarly, each of the following averments contained in Paragraph 22 of Count 1 of Defendant's counterclaims asserts fraudulent conduct in a manner that is insufficiently specific to provide Plaintiff a fair opportunity to respond: (a) Misrepresenting to Defendant - or failing to inform Defendant about--the terms of her loan, and the nature and details of the transaction she was entering into, including but not limited to: the amount of monthly payments, the interest rate on the loan, the costs of the loan, credit life insurance and the distribution of loan proceeds; (b) Misrepresenting to Defendant that the mortgage loan transaction had benefits they did not have, or failing to inform Defendant that said transaction had little or no benefits, which did not merit entering into the transaction given their padded costs and interest rates; (c) Fraudulently inducing Defendant to enter into a mortgage loan transaction that she did not have the ability to pay; .... (i) Failing to disclose to Defendant the true distribution of loan proceeds; .... (m) Including in the mortgages and notes provided to Defendant certain terms that are prohibited by federal law;. (o) Violating the provisions of the CPL, which requires certain disclosures in connection with mortgage loans .... Defendant's Counterclaims, ¶ 22 (emphasis added). -2- 5. As indicated by the underlined phrases, each of these allegations contains matter insufficiently specific to provide Plaintiff a fair opportunity to respond. Moreover, to the extent that these sub-paragraphs allege affirmative misrepresentations, not one of them indicates who made the statement, when it was made, whether it was made verbally or in writing, or in what manner the statement turned out to be untrue. 6. In addition to alleging that the 16 acts in Paragraph 22 violated the CPL, Defendant further alleges that these acts were "contrary to public policy and generally recognized standards of business." These allegations are not elements ora claim under the CPL and should be stricken as impertinent material. Pa. R.C.P. 1028(a)(2). 7. In Paragraph 24 of the counterclaims, Defendant asserts as an example of Plaintiff's "artifice and deception" that "some" of the charges imposed on Defendant pursuant to her mortgage transaction "were illegal under Pennsylvania law." Defendant does not identify which charges she is referring to, nor does she indicate why they might be deemed to be "illegal." WHEREFORE, it is respectfully requested that the Court, pursuant to Rules 1028(a)(2) and 1028(a)(3) of the Pennsylvania Rules of Civil Procedure, strike the aforementioned allegations of Count 1 of Defendant's Counterclaims. Alternatively, Defendant should be required to file more specific averments such that Plaintiff can properly respond. Preliminary Objections To Count 2 Of Defendant's Counterclaims In The Nature Of A Demurrer, And For Insufficient Specificity Of Pleadin? 8. "Count 2" of Defendant's counterclaims asserts that Plaintiff committed "procedural and substantive unconscionability" and "bad faith." 9. "Unconscionability" is an affirmative defense, not a free-standing cause of action. See Witmer v. Exxon Corp., 394 A.2d 1276, 1286 (Pa. Super. 1978) (stating that "[u]nconscionability may only be asserted as a defense .... It is not a plaintiff's doctrine available for affirmative relief ...."). Accordingly, insofar as it alleges a cause of action based on "unconsionability," "Count 2" of the counterclaims should be stricken. 10. "Count 2" of the counterclaims also purports to assert a cause of action based on "bad faith." Pennsylvania has created a statutory cause of action sounding in "bad faith" for claims against insurers. See 42 PA. STAT. § 8371. Aside from this statutory provision, there is no free-standing common law cause of action for "bad faith" in Pennsylvania. See, e.g., D'Ambrosio v. Pennsylvania Nat'l Mut. Cas. Ins. Co., 494 Pa. 501, 507-09 (1981) (concluding, prior to the enactment of ~ 8371, that there was no cause of action against an insurer for "bad faith"). Because Citifinancial is not an insurer, and the mortgage transaction at issue in this case is not an insurance transaction, no counterclaim for "bad faith" can exist in this case. Thus, insofar as "Count 2" alleges a cause of action based on "bad faith," it should be stricken. 11. Even were there a valid legal basis for "Count 2," the allegations in Paragraph 31 therein are insufficiently particular to enable Plaintiff to respond. Defendant alleges that Defendant "intentionally misrepresented, or failed to disclose, material information concerning the nature and terms of Ms. Trump's loan, thereby depriving such individual of material information of which she was unaware, and also depriving this individual of information that might have reduced the disparity in bargaining power between the parties." This vague statement, omitting any reference to what "material information" was misrepresented or withheld, does not satisfy the requirement, discussed above, that fraud be pleaded with particularity. Pa. R.C.P. 1019(b). 12. Similarly, in Paragraph 40, Defendant baldly alleges that the loan contract between the parties "contained terms that were prohibited by HOEPA and TILA." Defendant -4- does not identify which terms, or which provisions of HOEPA or TILA those terms violated. This does not even satisfy the general requirement that "material facts" be pleaded, Pa. R.C.P. 1019(a), let alone the particularity requirement for fraud allegations, Pa. R.C.P. 1019(b). WHEREFORE, it is respectfully requested that the Court, pursuant to Rules 1028(a)(3) and 1028(a)(4) of the Pennsylvania Rules of Civil Procedure, strike the Count 2 of Defendant's Counterclaims in its entirety. Alternatively, Defendant should be required to file more specific averments in Paragraphs 31 and 40 such the Plaintiff can properly respond. Respectfully submitted, REED SMITH LLP eremy D Fe~nste~n 213 Market Street, 9th Floor P. O. Box 11844 Harrisburg, PA 17108 (717) 234-5988 (717) 236-3777 Facsimile -5- CERTIFICATE OF SERVICE ,d The undersigned hereby certifies that on thisa~[ay of August, 2003, a tree and correct copy of the foregoing Preliminary Objection of Plaintiff to Defendant's Counterclaims was caused to be served via first class mail, postage prepaid, on the following Parties; Stephen K. Potko, Esq. 101 Office Center, Suite A 101 SouthU.S. Route 15 Dillsburg, PA 17019 Jeremy D Feinstein -6- IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA CITIFINANCIAL MORTGAGE COMPANY, INC., F/K/A ASSOCIATES HOME EQUITY SERVICES, INC., Plaintiff V. ANNA MAY TRUMP, Defendant NO. 03-1054 CIVIL ACTION - LAW TO: THE PROTHONOTARY Please enter the appearance of the undersigned in the above-captioned matter as counsel for Plaintiff Citifinancial Mortgage Company, Inc., and send all matters to me at the address noted below. REED SMITH LLP Jeremy D. Feinstein Attorney I.D. No. 78730 213 Market Street, Ninth Floor P. O. Box 11844 Harrisburg, PA 17108 717/257-3057 CERTIFICATE OF SERVICE The undersigned hereby certifies that on this~'~da5 of August, 2003, a tree and correct copy of the foregoing notice of entry of appearance was caused to be served via first class mail, postage prepaid, on the following Parties; Stephen K. Potko, Esq. 101 Office Center, Suite A 101 South U.S. Route 15 Dillsburg, PA 17019 D. Feinstein -2- IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA CITIFINANCIAL MORTGAGE COMPANY, INC., F/K/A ASSOCIATES HOME EQUITY SERVICES, INC., Plaintiff V. ANNA MAY TRUMP, Defendant NO. 03-1054 CIVIL ACTION - LAW TO: THE PROTHONOTARY Please enter the attached notice of dismissal in the above-captioned matter, terminating the action, and kindly return a file stamped copy to :me in the attached, self- addressed stamped envelope. REED SMITH LLP Jeremy D. Feinstein Attorney I.D. No. 78730 213 Market Street, Ninth Floor P. O. Box 11844 Harrisburg, PA 17108 717/257-3057 IN THE COURT OF COMMON ]?LEAS CUMBERLAND COUNTY, PENNSYLVANIA CITIFINANCIAL MORTGAGE COMPANY, INC., F/K/A ASSOCIATES HOME EQUITY SERVICES, INC., Plaintiff, V. ANNA MAY TRUMP, Defendant. NO. 03-1054 CIVIL ACTION - LAW PLAINTIFF'S NOTICE OF DISMISSAl, Now Comes PlaintiffCitifinancial Mortgage Company, Inc., and dismisses with prejudice its above-captioned action against Anna May Trump, pursuant to a settlement agreement entered into by the parties. Plaintiff requests that thc.. Court close the case file for the above-captioned matter. Respectfully submitted, REED SMITH LLP Jeremy D. Feinstein Attorney I.D. No. 78730 213 Market Street, Ninth Floor P. O. Box 11844 Harrisburg, PA 17108 717/257-3057 -2- CERTIFICATE OF SERVICE The undersigned hereby certifies that on this 19th day of Augnst, 2004, a tree and correct copy of the foregoing notice of dismissal was caused to be served on the following Parties: Stephen K. Portko, Esq. 101 Office Center, Suite A 101 South U.S. Route 15 Dillsburg, PA 17019 -3-