Court Opinion

ID: 4671842
Source: CourtListenerOpinion
Date Created: 2021-03-26 15:00:29.727163+00
Date Added: 2024-06-11T08:02:48.870482
License: Public Domain

19-3912-cv
Bigsby v. Barclays Capital Real Estate Inc.

                                     UNITED STATES COURT OF APPEALS
                                        FOR THE SECOND CIRCUIT

                                              SUMMARY ORDER
Rulings by summary order do not have precedential effect. Citation to a summary order filed
on or after January 1, 2007, is permitted and is governed by Federal Rule of Appellate
Procedure 32.1 and this Court’s Local Rule 32.1.1. When citing a summary order in a
document filed with this Court, a party must cite either the Federal Appendix or an
electronic database (with the notation “summary order”). A party citing a summary order
must serve a copy of it on any party not represented by counsel.

       At a stated term of the United States Court of Appeals for the Second Circuit, held at
the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York,
on the 26thday of March, two thousand twenty-one.

PRESENT:             JOSÉ A. CABRANES,
                     REENA RAGGI,
                     RICHARD J. SULLIVAN,
                                   Circuit Judges.

LAMAR BIGSBY, JR. on behalf of himself and all others
similarly situated, HERMAN GRIMES, MARIA BRANDT,
KATHLEEN MURRY,

                                Plaintiffs-Appellants,                   19-3912-cv

                                v.

BARCLAYS CAPITAL REAL ESTATE, INC., DBA HOMEQ
SERVICING CORPORATION,

                                Defendant-Appellee,
JOHN DOES 1–20,

                                Defendants. *

FOR PLAINTIFFS-APPELLANTS:                                    PAUL S. GROBMAN, New York, NY.

     *
         The Clerk of Court is directed to amend the case caption as set forth above.

                                                         1
FOR DEFENDANT-APPELLEE:                                     SERRIN A.TURNER, (James E. Brandt,
                                                            New York, NY; Roman Martinez, Samir
                                                            Deger-Sen, Washington, D.C. on the brief),
                                                            Latham & Watkins LLP, New York, NY.

        Appeal from a March 28, 2018 order and a July 22, 2019 judgment of the United States
District Court for the Southern District of New York (John G. Koeltl, Judge).

       UPON DUE CONSIDERATION WHEREOF, IT IS HEREBY ORDERED,
ADJUDGED, AND DECREED that the order and judgment of the District Court be and hereby
are AFFIRMED.

         Plaintiffs-Appellants Lamar Bigsby, Jr., Herman Grimes, Maria Brandt, and Kathleen Murry
(“Plaintiffs”), borrowers on home loans serviced by Defendant-Appellee Barclays Capital Real
Estate Inc. (“Barclays”), appeal the District Court’s dismissal of their claims against Barclays for
breach of contract, unjust enrichment, and violation of California’s Unfair Competition Law
(“UCL”), Cal. Bus. & Prof. Code § 17200 et seq. and California Civil Code § 2924c. We assume the
parties’ familiarity with the underlying facts, the procedural history of the case, and the issues on
appeal.

         As relevant to this appeal, Plaintiffs’ Second Amended Complaint (“SAC”) asserted claims
arising out of three unlawful schemes Barclays allegedly perpetrated: (1) charging Plaintiffs more for
attorneys’ fees than the attorneys were allowed to charge in their agreements with Barclays (“Inflated
Fees Scheme”), (2) permitting the attorneys’ fees to be unethically split between attorneys and non-
attorneys (“Fee-Splitting Scheme”), and (3) charging Plaintiffs late fees after acceleration of
Plaintiffs’ loans, in violation of the loan agreements (“Late-Fees Scheme”).

         In its March 28, 2018 Opinion and Order granting in part Barclays’s motion to dismiss
under Fed. R. Civ. P. 12(b)(6) (“Motion to Dismiss Order”) the District Court dismissed Plaintiffs’
UCL claims based on the Inflated Fees Scheme (along with other claims not at issue in this appeal).
The District Court held that the alleged behavior constituting the Inflated Fees Scheme amounted at
most to a failure by Barclays to take advantage of an available discount, and was not, contrary to
Plaintiffs’ assertions, either “fraudulent” or “unlawful” under the UCL. 1

    1
      The UCL proscribes “any unlawful, unfair or fraudulent business act or practice.” Cal. Bus. &
Prof. Code § 17200. The District Court also dismissed Plaintiffs’ UCL claims based on the Fee-
Splitting Scheme, but, on reconsideration, reinstated the claim to the extent Plaintiffs argued that the
Fee-Splitting Scheme was “unlawful” under the UCL.

                                                   2
        Barclays moved for summary judgment on Plaintiffs’ surviving claims. In their opposition
papers, Plaintiffs asserted for the first time that Barclays had charged them for attorneys’ fees in
excess of the sums the attorneys had actually billed Barclays (the “Overcharging Scheme”) and had
collected from Plaintiffs certain fees prohibited by California Civil Code § 2924c (the “Improper
Collection Scheme”). Only Grimes opposed dismissal of the claims based on the Late-Fees Scheme.

         In a thoughtful and meticulous Opinion and Order of July 20, 2019 (the “Summary
Judgment Order”), the District Court granted Barclays’ motion for summary judgment and
dismissed Plaintiffs’ surviving claims. As to the Inflated Fees and Fee-Splitting Schemes, the District
Court held that Plaintiffs’ unjust enrichment claim failed because it was precluded by the express
contracts governing the subject matter of the claim and because Plaintiffs failed to show that
Barclays benefited unjustly at their expense. Plaintiffs’ surviving UCL claim based on the Fee-
Splitting Scheme also failed, primarily because Plaintiffs proffered no evidence that non-attorneys
collected money for anything other than nonlegal administrative fees. As to the Late-Fees Scheme,
the District Court held that Grimes’s breach of contract claim was time-barred and would in any
case not lie against Barclays, which was not a party to, or assignee under, the relevant contract.
Moreover, the court held, Grimes’s express contract with the loan owner precluded his claim for
unjust enrichment. Finally, the District Court declined to consider Plaintiffs’ claims based on the
Overcharging and Improper Collection Schemes because those schemes had been raised for the first
time in opposition to summary judgment.

         We review de novo both a district court’s dismissal of a complaint for failure to state a claim 2
and a grant of summary judgment. 3 At the outset, we note that Plaintiffs first raised some of their
arguments, at the earliest, as part of their motion to reconsider the Motion to Dismiss Order; we
deem those arguments waived. 4 Specifically, Plaintiffs have waived their contentions that (1)
Barclays was unjustly enriched because it retained a portion of attorneys’ fees it charged to
Plaintiffs, 5 (2) that the Inflated Fees scheme was “fraudulent” under the UCL because likely to
deceive consumers, (3) that the Inflated Fees Scheme was “unfair” under the UCL, and (4) that the
Inflated Fees Scheme was “unlawful” under the UCL because it violated the federal Fair Debt
Collection Practices Act, 15 U.S.C. §§ 1692 –1692p. Moreover, the District Court properly declined

    2
        Stratte-McClure v. Morgan Stanley, 776 F.3d 94, 99-–100 (2d Cir. 2015).
    3
        Flores v. United States, 885 F.3d 119, 122 (2d Cir. 2018).
    4
     “Generally, we will not consider an argument on appeal that was raised for the first time below
in a motion for reconsideration.” Official Comm. of Unsecured Creditors of Color Tile, Inc. v. Coopers &
Lybrand, LLP, 322 F.3d 147, 159 (2d Cir. 2003).
    5
      Plaintiffs have abandoned on appeal their argument below that Barclays was enriched because
the fees they collected from Plaintiffs relieved them of their debts to their attorneys.

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to consider Plaintiffs’ claims based on the tardily-asserted Overcharging and Improper Collection
Schemes, and we likewise decline to consider such claims on appeal.

        As to Plaintiffs’ preserved arguments, we conclude that they were properly rejected by the
District Court. We agree with the District Court that the SAC does not adequately allege that the
Inflated Fees Scheme violated the UCL, that Plaintiffs failed to raise a triable issue as to the UCL
and unjust enrichment claims based on the Fee-Splitting Scheme, that Grimes’s breach of contract
claim based on the Late-Fees Scheme does not lie against Barclays as a stranger to the contract, and
that the existence of an express contract precludes Grimes’s unjust enrichment claim. Therefore,
substantially for the reasons stated by the District Court in its Motion to Dismiss Order and
Summary Judgment Order, we affirm the District Court’s dismissal of all Plaintiffs’ claims.

                                         CONCLUSION

       We have reviewed the remaining arguments raised by Plaintiffs on appeal and find them to
be without merit. For the foregoing reasons, we AFFIRM the March 28, 2018 order and the July 22,
2019 judgment of the District Court.

                                                      FOR THE COURT:
                                                      Catherine O’Hagan Wolfe, Clerk

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