Bank of N.Y. Mellon Trust Co. N.A. v. Henderson

• Citation: 107 F.Supp.3d 41
• Decision Date: 28 May 2015
• Docket Number: Civ. Action No. 14–747
• Parties: Bank of New York Mellon Trust Co. N.A., Plaintiff, v. Perry M. Henderson, et al., Defendants.
• Court: U.S. District Court — District of Columbia

107 F.Supp.3d 41

Bank of New York Mellon Trust Co. N.A., Plaintiff,
v.
Perry M. Henderson, et al., Defendants.

Civ. Action No. 14–747

United States District Court, District of Columbia.

Signed May 28, 2015

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David Chen, Butler and Hosch, PA, Baltimore, MD, Matthew Daniel Cohen, Bww Law Group, LLC, Rockville, MD, Syed M. Reza, Troutman Sanders LLP, Tysons Corner, VA, for Plaintiff.

Oliver W. McDaniel, U.S. Attorney's Office, Washington, DC, for Defendants.

Perry M. Henderson, Washington, DC, pro se.

MEMORANDUM OPINION

RICHARD J. LEON, United States District Judge

Plaintiff Bank of New York Mellon Trust Co. N.A. f/k/a Bank of New York Trust Co. N.A. ("plaintiff")¹ brings this action against defendant Perry M. Henderson a/k/a Perry M. Bryant ("defendant") and the United States, seeking judicial foreclosure of the defendant's property located in the District of Columbia. See Compl. [Dkt. # 1–1]. Before this Court are plaintiff's Motion to Dismiss Defendant's Counterclaims [Dkt. # 4–1, at 34]² and Motion for Summary Judgment [Dkt. # 25] ("Mot. for Summ J."). For the following reasons, plaintiff's motions are GRANTED.

BACKGROUND

Defendant is the record owner of the Property located at 223 R Street, Southeast, Washington, District of Columbia 20020 (the "Property"). Compl. ¶ 1. On March 18, 2003, defendant encumbered the Property with a Deed of Trust securing a fixed rate balloon note ("Note") in the original principal amount of $191, 250.00. Compl. 6. Parties dispute whether plaintiff currently holds the Note and Deed of Trust and has the right to foreclose defendant's home. Plaintiff alleges that the original lender, SouthStar Funding, LLC, properly assigned to it the rights under the Note and Deed of Trust on June 13, 2013 and that it is the current holder of the Note and beneficiary of the Deed of Trust. Compl. ¶ 8–9. Defendant contends that the Note and Deed of Trust were not properly assigned. See generally Def.'s Resp. to Pl.s' Mot. for Summ. J. [Dkt. # 26] ("Def.'s Resp."). On March 1, 2012, defendant defaulted on the Note by failing to make the required payments and failed to cure the default despite being sent a demand letter stating the total amount needed to cure the default. Compl. ¶¶ 10–12.

On November 8, 2013, plaintiff filed this lawsuit in the Superior Court for the District of Columbia seeking judicial foreclosure, or, in the alternative, judicial sale. In his answer to plaintiff's complaint, defendant asserted six counterclaims against plaintiff, including claims for declaratory and injunctive relief based on plaintiff's failure to follow the proper procedures to foreclose a deed of trust in the District of

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Columbia, claims for violations of the Fair Debt Collection Practices Act ("FDCPA"), a claim to quiet title, a claim for violations of the Fair Credit Reporting Act ("FCRA"), and a claim for civil conspiracy. See Def.'s Answer [Dkt. # 4–1, at 133].³ Plaintiff filed a motion to dismiss defendant's counterclaims in Superior Court on April 8, 2014. While that motion was still pending, the Department of Treasury Internal Revenue Service ("IRS") removed the action to this Court.⁴ See Notice of Removal [Dkt. # 1]. On October 17, 2014, plaintiff filed a motion for summary judgment on Count I of the complaint that also re-iterated the arguments for why defendant's counterclaims should be dismissed. See generally Mot. Summ. J.

LEGAL STANDARD

A. Rule 12(b)(6)

To survive a motion to dismiss under Federal Rule of Civil Procedure 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." Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (internal quotation marks omitted). The Court "need not accept inferences drawn by plaintiff[ ] if such inferences are unsupported by the facts set out in the complaint. Nor must the court accept legal conclusions cast in the form of factual allegations." Kowal v. MCI Commc'ns Corp., 16 F.3d 1271, 1276 (D.C.Cir.1994). The Court may consider "any documents either attached to or incorporated in the complaint and matters of which [the court] may take judicial notice," EEOC v. St. Francis Xavier Parochial Sch., 117 F.3d 621, 624 (D.C.Cir.1997), as well as documents appended to a motion to dismiss whose authenticity is not disputed, if they are referred to in the complaint and integral to a claim. See Kaempe v. Myers, 367 F.3d 958, 965 (D.C.Cir.2004). Although pro se complaints are liberally construed, see Erickson v. Pardus, 551 U.S. 89, 94, 127 S.Ct. 2197, 167 L.Ed.2d 1081 (2007) (per curiam), the basic pleading rules must be met. See Budik v. Dartmouth–Hitchco c k Med. Ctr., 937 F.Supp.2d 5, 11 (D.D.C.2013).

B. Rule 56

Summary judgment is appropriate when, based on the record, there is no genuine issue as to any material fact, and the moving party is entitled to judgment as a matter of law. See Fed.R.Civ.P. 56(a). Summary judgment is not available, however, when there are factual disputes that may determine the outcome of the case under the governing law or when sufficient evidence exists such that a reasonable juror could return a verdict for the non-moving party. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). In considering a motion for summary judgment, the "evidence of the non-movant is to be believed, and all justifiable inferences are to be drawn in [her] favor." Id. at 255, 106 S.Ct. 2505.

The moving party has the initial burden of demonstrating that there is no genuine issue of material fact to be decided with respect to any essential element of the nonmoving party's claim. Id. at 263, 106 S.Ct. 2505. Once that burden is met, the nonmoving party must set forth specific

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facts, supported by affidavits or other competent evidence, showing that there is a genuine issue for trial. See Celotex Corp. v. Catrett, 477 U.S. 317, 324, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). Importantly though, the Court relies On the facts identified by the parties, does not accept factual assertions that are not supported with citations to the record, and does not scour the record for evidence that will support a party's claims. See United States ex rel. El – Amin v. George Wash. Univ., 533 F.Supp.2d 12, 19 (D.D.C.2008).

ANALYSIS

A. Summary Judgment as to Plaintiff's Claim for Judicial Foreclosure

As a threshold matter, defendant alleges that plaintiff is not entitled to foreclose on the Property because it was not properly assigned the rights under the Note and Deed of Trust. See generally Def.'s Resp. Plaintiff contends that it is the assignee of the rights under the Note and Deed of Trust and the holder of the Note. Compì. ¶¶ 8–9. The Court, however, does not need to resolve this dispute. Because defendant has not alleged that he is either a party to, or an intended beneficiary of, the assignment of the Note and Deed of Trust, he does not have standing to attack the assignment. Although defendant cites three cases from other jurisdictions in support of the proposition that borrowers have standing to challenge void assignments of their loans,⁵ those cases represent a minority view, indeed one has since been reversed, and the prevailing rule is that a third party typically lacks standing to challenge an assignment. See, e.g, Jessup v. Progressive Funding, 35 F.Supp.3d 25, 35 (D.D.C.2014) (finding that plaintiff did not have standing to challenge the validity of any assignment of her mortgage because she did not plead facts showing that she was either a party to, or an intended beneficiary of, the assignment agreement); Ward v. Sec. Atl. Mortg. Elec. Registration Sys., Inc., 858 F.Supp.2d 561, 568 (E.D.N.C.2012) (same); Wolf v. Fed. Nat'l Mortg. Ass'n, 830 F.Supp.2d 153, 162 (W.D.Va.2011) (same), aff'd, 512 Fed.Appx. 336 (4th Cir.2013) (per curiam). Moreover, finding that defendant lacks standing to attack the assignment makes good sense: the assignment does not affect defendant's rights or obligations at all. Regardless of whether the Note and Deed of Trust were properly assigned, defendant was still required to make timely payments on his mortgage and, by the plain terms of the Note and Deed of Trust, he is subject to foreclosure upon default.

With defendant's contentions regarding proper assignment put to the side, the Court easily concludes that summary judgment for judicial foreclosure is appropriate. In the District of Columbia there exists a common law cause of action to foreclose a mortgage or deed of trust. See, e.g., Johnson v. Fairfax Village Condo. IV, 641 A.2d 495 (D.C.1994) (affirming judgment ordering judicial foreclosure of condominium unit).⁶ The central issue in a

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judicial foreclosure proceeding is whether the mortgagor is in default. See id. at 506 ; Scheibe v. Kennedy, 64 Wis. 564, 25 N.W. 646, 648 (1885) (describing foreclosure as an action which "may be commenced when any condition of the...