Tuesday, May 31, 2016

foreclosure - lockout of owner - damage to property - insurance -

Davis v. Wells Fargo Bank – 3d Cir. – May  27, 2016


In this federal follow-up to a foreclosure case, Michael Earl Davis is pursuing a variety of claims against an entity 3 that he calls “Wells Fargo U.S. Bank National Association as Trustee for the Structured Asset Investment Loan Trust, 2005-11.” It is the purported holder of Davis’s mortgage, and we will refer to it as “Wells Fargo” or “the bank.”1 Davis has also sued Assurant, Inc., believing it to be the provider of insurance on his home. His claims against both Wells Fargo and Assurant arise from damage that occurred to his house after Wells Fargo had locked him out of it, damage that went unrepaired and worsened into severe structural problems.

The United States District Court for the Eastern District of Pennsylvania dismissed Davis’s claims against Wells Fargo, pursuant to Federal Rule of Civil Procedure 12(b)(6), on the grounds that claim preclusion and a statute of limitations barred recovery. We will affirm that portion of the District Court’s order.

The District Court also dismissed all of Davis’s claims against Assurant, pursuant to Federal Rule of Civil Procedure 12(b)(1), for lack of subject matter jurisdiction. The Court reasoned that Davis lacked standing to bring those claims because he sued the wrong corporate entity, namely Assurant, when he should have sued Assurant’s wholly-owned subsidiary, American Security Insurance Company (“ASIC”). That conclusion about standing was in error.

Standing is indeed a jurisdictional predicate, but, rightly understood, this case is not about standing at all.   An analysis of standing generally focuses on whether the plaintiff is the right party to bring particular claims, not on whether the plaintiff has sued the right party. The latter question goes not to standing and jurisdiction but to the merits of the claims themselves. Therefore, the District Court erred in considering the claims against Assurant under Rule 12(b)(1) rather than Rule 12(b)(6). That difference has important consequences here. In the end, the difference between those rules of procedure dictates that we vacate that portion of the District Court’s order dismissing Davis’s breach of contract claim against Assurant and remand for further proceedings.
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