Altier v. Fed. Nat'l Mortg. Ass'n
| Decision Date | 29 March 2017 |
| Docket Number | Case No. 1:16-cv-296-MW-GRJ |
| Parties | JOSEPH ALTIER, et al., Plaintiffs, v. FEDERAL NATIONAL MORTGAGE ASSOCIATION, Defendant. |
| Court | U.S. District Court — Northern District of Florida |
This matter is before the Court on ECF No. 6, Defendant's Motion to Dismiss. Plaintiffs have filed a response in opposition. (ECF No. 8.) The motion is therefore ripe for review. For the following reasons, it is recommended that the motion to dismiss be granted.1
Plaintiffs, husband and wife, initiated this action under 28 U.S.C. § 1331 purporting to allege claims for violations of the Truth in Lending Act ("TILA"), 15 U.S.C. § 1639, et seq. Plaintiffs allege they are residents of Orange County, Florida. Their claims stem from the execution of apromissory note and mortgage, which are the subject of a foreclosure action filed in the Alachua County Circuit Court. See Fed. Nat'l Mortgage Ass'n v. Altier, No. 01-2014-CA-002751 (Fla. Alachua County Ct. July 30, 2014).
This is not the first time Plaintiffs have attempted to void the same promissory note and mortgage. See Altier v. Fed. Nat'l Mortg. Ass'n, No. 1:13-cv-164-MW-GRJ, ECF No. 1 (N.D. Fla. Aug. 16, 2013). The previous case concerns a quiet title complaint Plaintiffs filed In 2013, in the Circuit Court for the Eighth Judicial Circuit in and for Alachua County, Florida. Id. There, Plaintiffs brought various claims to quiet title to the real property that is the subject of the mortgage. In the previous state court quiet title action Plaintiff purported to bring claims for fraud in the execution of the assignment of the mortgage, misrepresentation, and violation of TILA alleging the assignment of the mortgage was not timely recorded. In addition to the request to quiet title, Plaintiffs also requested the state court to enter an order voiding the mortgage, thus relieving Plaintiffs from the obligation to repay the loan secured by the mortgage. The defendants in that case (which included the Federal National Mortgage Association) removed the case to federal court. After the case was removed the Court on December 6, 2013, dismissed Plaintiffs claims on the grounds that Plaintiffs lacked standing to challenge the validity of the assignment, Plaintiffs' challenges to the validity of the mortgage and assignment failed as a matter of law, and Plaintiffs failed to state a claim for relief. Id., ECF Nos. 26-28.2 Defendant then initiated the foreclosure action in state court, which eventually resulted in the entry of final judgment and a certificate of sale in favor of Defendant.
The underlying mortgage and promissory note in this case were executed on November 3, 2005. As evidenced by the documents filed in the previous state court action Plaintiffs executed a promissory note in the amount of $166,000 in favor of SunTrust Mortgage, Inc. .3 Plaintiffs contemporaneously executed a mortgage securing real property located at 216 NE 10th Avenue, Gainesville, Florida, 32601, as collateral for the mortgage (Id., Ex. B ("Mortgage")).4 As evidenced by themortgage the property was Plaintiffs' second home.5 On September 6, 2012, SunTrust Mortgage Inc. assigned the mortgage to Federal National Mortgage Association ("FNMA". (Id., Ex. C ("Assignment")).6
On January 13, 2015, a final judgment of foreclosure was entered in favor of Defendant with respect to Plaintiffs' property. See Fed. Nat'l Mortg. Ass'n v. Altier, No. 01-2014-CA-002751 (Fla. Alachua County Ct. July 30, 2014).7 The foreclosure was scheduled for September 6, 2016. Id.
On August 22, 2016, however, Plaintiffs allege they sent a rescission notice to: (1) Defendant; (2) Suntrust Mortgage, Inc.; (3) Seterus, Inc.; (4) Rushmore Loan Management Services; and (5) the Consumer Financial Protection Bureau. (ECF No. 1 at 2, 8.) The notice asserted that Plaintiffswere rescinding the loan due to violations of TILA, including but not limited to the unlawful failure to give timely and proper notices required under TILA. (Id. at 8.) Plaintiffs further advised in the notice that they were rescinding the mortgage loan "due to recently discovered fraud, concealment, non-disclosure, white collar crime, R.I.C.O. crime and more at alleged closing." (Id.) Plaintiffs asserted in the notice that the note and security interest in the home were null and void and demanded that the parties terminate their security interest in the loan, return the cancelled note, and refund all payments. (Id.)
Six days elapsed without response from the parties to whom the notice had been sent. (Id. at 2.) Plaintiffs then filed the complaint in this case. Plaintiffs also filed a notice of lis pendens concerning the real property located at 216 NE 10th Avenue, Gainesville, Florida 32601. (ECF No. 3.)
As relief Plaintiffs seek a temporary and permanent injunction enjoining Defendant from taking any affirmative action or seeking any relief with respect to the loan. (ECF No. 1 at 3-4.) Plaintiffs claim Defendant is proceeding with a non-judicial sale and that Plaintiffs will be irreparably damaged should Defendant continue to pursue the wrongful foreclosure in violation of TILA. (Id. at 4.) Plaintiffs allege Defendant will likely fail or refuse to comply with its rescission duties under TILA. (Id. at 4-6.) Thus, Plaintiffs also seek a mandatory injunction, ordering Defendant to (1) return the cancelled note to Plaintiffs, (2) release any encumbrances or liens arising out of the loan contract, and (3) pay Plaintiffs all monies received from Plaintiffs, all monies earned by all parties paid as a commission, and all fees and interest thereon. (Id. at 5-6.)
In deciding a motion to dismiss, the Court must view the allegations of the complaint in the light most favorable to Plaintiffs, consider the allegations of the complaint as true, and accept all reasonable inferences therefrom. See, e.g., Jackson v. Okaloosa County, Fla., 21 F.3d 1532, 1534 (11th Cir.1994).
In Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009), the Supreme Court articulated a two-pronged approach for evaluating a motion to dismiss under Rule 12(b)(6): The court must first determine what factual allegations in the complaint are entitled to a presumption of veracity, and then assess whether these facts give rise to an entitlement for relief. In determining whether factual allegations are entitled to the presumption of truth, the Court stated that it was not whether the facts are "unrealistic or nonsensical" or even "extravagantly fanciful," but rather it is their conclusory nature that "disentitles them to the presumption of truth." Id. at 679. Once a claim has been stated adequately, it may be supported by showing any set of facts consistent with the allegations of the complaint. Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 546 (2007). "While the pleadings of pro se litigants are 'liberally construed,' they must still comply with procedural rules governing the proper form of pleadings." Hopkins v. Saint Lucie County School Bd., 2010 WL 3995824, **1 (11th Cir. 2010) (unpublished) (citations omitted) (applying pleading standards of Iqbal and Twombly to pro se complaint).8
On a motion to dismiss, the Court ordinarily must limit its consideration to the complaint and written instruments attached as exhibits. See U.S. ex rel. Osheroff v. Humana, 776 F.3d 805, 811 (11th Cir. 2015). Nonetheless, "a district court may consider an extrinsic document even on Rule 12(b)(6) review if it is (1) central to the [p]laintiff's claim, and (2) its authenticity is not challenged." Id. (); Day v. Taylor, 400 F.3d 1272, 1276 (11th Cir. 2005)."Courts may takejudicial notice of publicly filed documents, such as those in state court litigation, at the Rule 12(b)(6) stage." Humana, at 811 n.4.
Defendant requests the Court to dismiss Plaintiffs' complaint for failure to state a claim upon which relief can be granted. Specifically, Defendant contends Plaintiff has failed to state a claim for rescission under TILA. Further, Defendant argues that even if Plaintiff had stated a claim for rescission, Plaintiffs are not entitled to injunctive relief under TILA.
The purpose of TILA is "to assure a meaningful disclosure of credit terms so that the consumer will be able to compare more readily the various credit terms available to him and avoid the uninformed use of credit, and to protect the consumer against inaccurate and unfair credit billing and credit card practices." 15 U.S.C. § 1601(a); Beach v. Ocwen Fed. Bank, 523 U.S. 410, 412 (1998).
Plaintiffs' claim in this case is based upon the incorrect assumption that they are entitled to rescission of the mortgage and note under TILA. Based upon the plain language of TILA, Plaintiffs have no right of rescission because the rescission provisions of TILA do not apply to second homes and do not apply to residential mortgage transactions where the borrower uses the borrowed funds to purchase or construct the dwelling. Specifically, under 15 U.S.C. § 1635(a) of TILA the rescission provisions apply to "[a]ny property which is used as the principal dwelling of the person to whom credit is extended ... " Additionally, TILA does not apply to residential mortgages used to finance the initial acquisition or construction of the dwelling. Dunn v Bank of America, N.A., 844 F. 3d 1002, 1005 (8th Cir. 2017)("based on the plain language of the statute, an obligor to a loan which qualifies as a residential mortgage transaction is not entitled to the right of rescission under § 1635(a).") In short, a borrower has no right to rescission under TILA where the loan involves a purchase money mortgage or where the transaction involves a second home.
Plaintiffs' transaction falls into both categories. There is little...
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