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Cichocki v. Bank of America

United States District Court, D. Massachusetts

July 21, 2016



          NATHANIEL M. GORTON United States District Judge.

         This case arises from allegations that a mortgagee bank and several representatives of a condominium association fraudulently imposed special assessment fees against plaintiffs.

         Pending before the Court are motions to dismiss by three sets of defendants and a motion for sanctions by one set of defendants. For the reasons that follow, the motions to dismiss will be allowed and the motion for sanctions will be denied.

         I. Background and procedural history

         Plaintiffs Timothy Cichocki (“Cichocki”) and Y. Dolly Hwang (“Hwang”) (collectively, “plaintiffs”) are a married couple who live at a condominium unit which they purchased at 31 Pinckney Street in Boston, Massachusetts. They appear in this case pro se.

         Defendant Bank of America (“Bank of America”) is a banking and financial services company which loaned plaintiffs $270, 000 secured by a 15-year mortgage. Plaintiffs refinanced and executed a new 15-year mortgage in 2008. They allege that Bank of America 1) misappropriated and transferred $6, 452 in funds from their mortgage escrow account to the condominium association, 2) increased the amount of their monthly mortgage payments to cover the deduction of those funds and 3) attempted to foreclose on their property after they objected.

         Defendant 31 Pinckney Street Condominium Trust & Association (“the Association”) is the manager of the condominium units at 31 Pinckney Street. Plaintiffs assert that it submitted a series of “false claim[s] of debt” to Bank of America for the purposes of extortion and retaliation.

         Defendant Vicky Oleskey (“Oleskey”) is a member of the Association who served for “almost three decades” as its secretary and treasurer. She allegedly conspired with the Association to lodge “false claims of debt” against plaintiffs.

         Walter Jung was a member of the Association and its treasurer until 2009. He died in 2011 and his estate (“Jung”) has been named as a defendant in this action.

         Defendant Elizabeth McCaan (“McCaan”) is the co-owner of multiple condominium units at 31 Pinckney Street and the current treasurer of the Association. Plaintiffs claim that she worked with Oleskey and an attorney, on behalf of the Association, to assess falsely claimed debts from plaintiffs’ account with Bank of America.

         Mark Keiser was married to McCaan and co-owned condominium units with her before his death in 2014. His estate (“Keiser”) has also been named as a defendant.

         Defendant Russo & Scolnick (“the law firm”) is the Massachusetts law firm representing Oleskey, McCann and the Association in Massachusetts Housing Court. Plaintiffs claim that the law firm filed false claims against them in the housing court and acted as a “collection agent” for the Association, all for the purpose of extortion.

         Defendant Robert Russo (“Attorney Russo”) is a partner at the law firm who allegedly filed the false claims against plaintiffs in the housing court.

         Defendant David Frye (“Attorney Frye”), whom the complaint purportedly misidentifies as “Davis Frye”, is an attorney who allegedly assisted with the filing of the false claims and made false representations in the housing court.

         Plaintiffs initiated this action in September, 2015 by filing a complaint alleging various violations of federal law, Massachusetts law, the Uniform Commercial Code and a Consent Judgment of another federal district court.

         The law firm and Attorneys Russo and Frye (collectively, “the attorney defendants”) moved to dismiss the claims against them in December, 2015. Oleskey, Jung, McCaan, Keiser and the Association (collectively, “the condominium defendants”) moved for dismissal of the claims against them, and for sanctions against plaintiffs, in January, 2016. Bank of America moved to dismiss the claims against it shortly thereafter.

         II. Bank of America’s motion to dismiss

         A. Legal standard

         To survive a motion to dismiss under Fed.R.Civ.P. 12(b)(6), a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). The court may consider documents incorporated by reference, matters of public record and other matters subject to judicial notice. Giragosian v. Ryan, 547 F.3d 59, 65 (1st Cir. 2008). In assessing the merits of the motion, the court must accept all factual allegations in the complaint as true and draw all reasonable inferences in the plaintiff's favor. Santiago v. Puerto Rico, 655 F.3d 61, 72 (1st Cir. 2011). Threadbare recitals of the legal elements, supported by mere conclusory statements, do not suffice to state a cause of action. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).

         B. Application

         1. Res judicata

         Under the doctrine of res judicata, a final judgment on the merits of a previously filed action precludes the parties from re-litigating issues that were, or could have been, raised in the prior action. Perez v. Volvo Car Corp., 247 F.3d 303, 311 (1st Cir. 2001). The doctrine applies if there is 1) a final judgment on the merits in the earlier action, 2) “sufficient identicality” between the causes of action asserted in the earlier and later actions and 3) “sufficient identicality” between the parties in the two actions. Id. A dismissal of all claims in the prior action for failure to state a claim constitutes a final judgment on the merits for such purposes. AVX Corp. v. Cabot Corp., 424 F.3d 28, 30-32 (1st Cir. 2005).

         The First Circuit Court of Appeals (“the First Circuit”) adopts a broad “transactional” approach to the term “cause of action” which it defines as

embrac[ing] all rights of the plaintiff to remedies against the defendant with respect to all or any part of the transaction, or series of connected transactions, out of which the action arose.

United States v. Cunan, 156 F.3d 110, 114 (1st Cir. 1998) (internal quotation marks omitted).

         A review of the pleadings in the public record confirms that res judicata prevents plaintiffs from asserting their claims ...

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