Dauenhauer v. The Bank of New York Mellon, 041514 FED6, 13-5810

Docket Nº:13-5810
Opinion Judge:PER CURIAM.
Party Name:DOLORES-ROSE DAUENHAUER; HELEN E. CHAMBERLAIN, Plaintiffs-Appellants, v. THE BANK OF NEW YORK MELLON, as Trustee for the Certificate-Holders, CWALT, Inc., Alternative Loan Trust 2007 - 12T1 Mortgage Pass Through Certificates, Series 2007-12T1, fka The Bank of New York; BANK OF AMERICA, N.A.; MORTGAGE ELECTRONIC RESGISTRATION SYSTEMS, INC., (MERS) a
Judge Panel:BEFORE: SUHRHEINRICH, GRIFFIN and KETHLEDGE, Circuit Judges.
Case Date:April 15, 2014
Court:United States Courts of Appeals, Court of Appeals for the Sixth Circuit
 
FREE EXCERPT

DOLORES-ROSE DAUENHAUER; HELEN E. CHAMBERLAIN, Plaintiffs-Appellants,

v.

THE BANK OF NEW YORK MELLON, as Trustee for the Certificate-Holders, CWALT, Inc., Alternative Loan Trust 2007 - 12T1 Mortgage Pass Through Certificates, Series 2007-12T1, fka The Bank of New York; BANK OF AMERICA, N.A.; MORTGAGE ELECTRONIC RESGISTRATION SYSTEMS, INC., (MERS) and its parent company MERSCROP, Inc.; RECONTRUST COMPANY, N.A., as Alleged Successor Trustee; JOHN AND JANE DOES 1-100, as Unknown Claimants in interest in 514 Neilwood Drive, Nashville, TN 37205; MERSCROP HOLDINGS, INC., fka Merscrop, Inc. Defendants-Appellees.

No. 13-5810

United States Court of Appeals, Sixth Circuit

April 15, 2014

NOT RECOMMENDED FOR FULL-TEXT PUBLICATION

ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF TENNEESSEE

BEFORE: SUHRHEINRICH, GRIFFIN and KETHLEDGE, Circuit Judges.

PER CURIAM.

This is a civil case concerning claims against five institutions challenging foreclosure on residential property. Plaintiff-Appellants Dauenhauer and Chamberlain (collectively "Borrowers") brought the underlying action against Defendant-Appellees The Bank of New York Mellon ("BNYM"), Bank of America, N.A. ("BANA"), Mortgage Electronic Registration Systems, Inc. ("MERS"), MERSCORP Holdings, Inc. ("MERSCORP"), and ReconTrust Company, N.A. ("ReconTrust") (collectively "Defendants") after BNYM foreclosed on property Borrowers owned, bringing claims for quiet title, fraudulent misrepresentation, violation of the Tennessee Consumer Protection Act, violation of the Fair Debt Collection Practices Act, slander of title, and civil conspiracy. The district court granted Defendants' motion to dismiss and entered final judgment in their favor. We affirm.

I. Background

i. Facts

Dauenhauer and Chamberlain own property located at 514 Neilwood Drive in Nashville, Tennessee. Dauenhauer entered into a loan to finance the purchase of the Property, executing a promissory note ("Note"). Both Borrowers executed a Deed of Trust ("DOT")1 in favor of America's Wholesale Lender Company ("America's Wholesale") with MERS – an electronic mortgage recordation database – as beneficiary and nominee for the amount of $555, 000.00. Borrowers subsequently received letters indicating they were in default on their loan transaction, and that Defendants would conduct a non-judicial foreclosure sale of the Property.

Borrowers sought to challenge Defendants' foreclosure on their Property. Borrowers allege that their loan was securitized in that it was sold, along with other loans, to a pool of investors represented by BNYM, acting as the Trustee for the Securitized Trust. Borrowers claim that, due to the securitization of the loan, title to the Property had been clouded and that none of the Defendants hold any interest in the Property. Borrowers also maintain that the assignments of the Deed of Trust were invalid.

In turn, Borrowers allege six causes of action: (1) quiet title; (2) fraudulent misrepresentation; (3) violation of the Tennessee Consumer Protection Act; (4) violation of the Fair Debt Collection Practices Act; (5) slander of title; and (6) civil conspiracy. Borrowers also requested declaratory relief to prevent Defendants from asserting any interest in the Property or claims based on the loan. Borrowers allege that they have not received an accounting of their loan and, until they receive one, deny that they are in default.

ii. Procedure

Borrowers filed a complaint in the Davidson County Circuit Court, and later filed for a temporary restraining order, seeking to challenge Defendants' planned non-judicial foreclosure sale of their property on October 15, 2012. A state court judge issued a restraining order preventing the sale, pending a state court hearing.

Defendants removed the complaint to the U.S. District Court of the Middle District of Tennessee. Borrowers moved for a temporary restraining order, alleging that BNYM and ReconTrust had rescheduled the non-judicial foreclosure sale of their property for October 29, 2012. The district court denied the motion and dissolved the state court temporary restraining order. Borrowers filed a Motion to Reconsider, and Defendants filed a Response in Opposition.

Defendants filed a Motion to Dismiss along with supporting memorandum. Borrowers filed a Response in Opposition, and Defendants filed a Reply. The district court granted Borrowers leave to file a Sur-Reply, which Borrowers later filed. The district court entered an order finding that Borrowers' securitization theories failed as a matter of law, dismissing the Complaint for failure to state a claim upon which relief could be granted, and terminating as moot Borrowers' Motion to Reconsider. Borrowers appealed that Order.

I. Jurisdiction

The district court had federal question jurisdiction under 28 U.S.C. § 1331, which affords the district courts original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States, based on allegations by Borrowers that Defendants violated the Fair Debt Collection Practices Act. The district court had supplemental jurisdiction over the remaining state law claims pursuant to 28 U.S.C. § 1367. This Court has jurisdiction over this appeal under 28 U.S.C. § 1291, which provides the courts of appeals jurisdiction over appeals from all final decisions of the district courts. The district court issued its final order dismissing all claims against Defendants on May 29, 2013. Borrowers filed timely notice of appeal on June 14, 2013.

II. Standard of Review

We review de novo a district court's grant of a motion to dismiss based on Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief can be granted. Buck v. Thomas M. Cooley Law School, 597 F.3d 812, 816 (6th Cir. 2010). We construe the complaint in the light most favorable to the plaintiff and accept all well-pled factual allegations as true. LULAC v. Bredesen, 500 F.3d 523, 527 (6th Cir. 2007). However, we "need not accept as true legal conclusions or unwarranted factual inferences" and plaintiffs must plead "more than bare assertion[s] of legal conclusions." Bovee v. Coopers & Lybrand C.P.A., 272 F.3d 356, 360-61 (6th Cir. 2001) (quotations omitted).

A complaint fails to state a claim where it fails to comply with the pleading requirements of Federal Rule of Civil Procedure 8(a). Ashcroft v. Iqbal, 556 U.S. 662, 677-78 (2009); Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). Rule 8(a) requires a plaintiff to provide "a short and plain statement of the claim showing that [he] is entitled to relief, " but more than mere "labels and conclusions" or "a formulaic recitation of the elements of a cause of action." Twombly, 550 U.S. at 555. To survive a Rule 12(b)(6) motion, "[t]he factual allegations, assumed to be true, must do more than...

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