Busby v. Capital One, N.A.

Decision Date25 March 2013
Docket NumberCivil Action No. 11–01172 (CKK).
Citation932 F.Supp.2d 114
PartiesWanda BUSBY, Plaintiff, v. CAPITAL ONE, N.A., et al., Defendants.
CourtU.S. District Court — District of Columbia


Wanda Busby, Washington, DC, pro se.

Anand V. Ramana, David Fisher, Washington, DC, Adrienne J. Lawrence, Los Angeles, CA, for Defendants.



Plaintiff Wanda Busby (Busby), proceeding pro se, brings the above-captioned action against Defendants Capital One, N.A. (Capital One), David N. Prensky, Esq. (“Prensky”), and Ida Williams, in her official capacity as the District of Columbia Recorder of Deeds 1 (“Recorder”), asserting various causes of action in connection with a promissory note and deed of trust executed by Busby in 1996. Before the court is Busby's [26] Motion for an Order Remanding this Case to the D.C. Superior Court. Also before the Court is Capital One's [19] Motion to Dismiss, which requests the Court to dismiss, with prejudice, all claims against Capital One pursuant to Federal Rule of Civil Procedure 12(b)(6). Both motions are fully briefed and ripe for the Court's consideration. Upon careful review of the parties' submissions,2 the relevant authorities, and the entire record, and for the foregoing reasons, the Court shall DENY Busby's Motion to Remand Case and GRANT–IN–PART and DENY–IN–PART Capital One's Motion to Dismiss.

Specifically, the Court shall dismiss the following claims for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6): fraud and intentional misrepresentation (Count II); conspiracy to commit fraud (Count III); wrongful attempted foreclosure (Count IV); violation of the District of Columbia Interest Rate Ceiling Amendment Act (“D.C. Usury Statute), D.C. Code § 28–3312, and the District of Columbia Consumer Protection Procedures Act (“CPPA”), D.C. Code § 28–3904 (Count V); civil conspiracy (Count VII); negligence (Count VIII); unconscionability, bad faith, and unfair dealing (Count IX); and emotional distress (Count X). Because the pleading deficiencies discussed below afflict the claims insofar as they are asserted against both Capital One and Prensky, who has not yet been served in this action, the Court shall dismiss these claims in their entirety. See Baker v. Director, U.S. Parole Comm'n, 916 F.2d 725, 727 (D.C.Cir.1990) (observing that sua sponte dismissal pursuant to Rule 12(b)(6) is appropriate when it is patently obvious that the plaintiff cannot prevail based on the facts alleged in the complaint). Further, because Busby was previously warned about these deficiencies in connection with prior litigation and has not here requested leave to amend, the Court shall dismiss these claims with prejudice.

However, because the Court concludes that Busby has adequately—albeit barely—pled conversion (Count VI), the Court shall deny Capital One's motion's insofar as it seeks dismissal of that claim. Accordingly, the only remaining claims in this action include conversion (Count VI), and claims asserted against the other two defendants: Busby's request for declaratory and injunctive relief against the Recorder (Count I) and a breach of fiduciary duty claim against Prensky (Count XI).


A. Factual Background

As alleged in Busby's Amended Complaint, on December 20, 1996, Busby purchased real property located in Northwest Washington, D.C., which she financed with a $207,000 loan from the B.F. Saul Mortgage Company (B.F. Saul). Am. Compl. ¶ 30; id. Ex. B (Deed of Trust). The loan was documented by a promissory note (the “Note”), id.; Capital One's Mem., Ex. A (Note),3 and secured by a deed of trust (the “Deed of Trust”), which was filed with the Recorder on December 24, 1996. Am. Compl. ¶ 30 & Ex. B (Deed of Trust).

According to Busby, there exists no recorded transfer of the Deed of Trust from B.F. Saul to any other entity. Id. ¶ 42. While Busby alleges that Capital One “collected payments from” her (without specifying when this alleged collection of payments began), see id. ¶ 63, she also alleges, upon information and belief, that Capital One is not the lender or note holder, has never been the lender or note holder, does not have physical possession of the note, and has not been authorized to collect payments by any entity having authority to provide such authorization under the terms of the Deed of Trust. See id. ¶¶ 45–81. Further, Busby alleges that as early as September 2009, Capital One represented to Busby that it was the lender, even though it was not the lender. Id. ¶ 66. Busby alleges that sometime in early April 2010, during a conversation with Capital One, she discovered that Capital One had “misapplied” payments that she had made. Id. ¶ 68. Specifically, she alleges that Capital One told her that as early as September 2009, Capital One had been allocating Busby's payments to her escrow account to cover “exorbitant” and “unauthorized” insurance charges, instead of to the principal and interest. Id. ¶¶ 69–71, 78. She alleges that Capital One also told her that despite that allocation, there remained a sizeable underpayment of her escrow account. Id. ¶ 73. Busby contends that she communicated that the amounts were mistaken and that, during the time she was attempting to resolve the errors (and unbeknownst to her), Capital One “fraudulently and without authority to do so, took actions to invoke the power of sale provisions under the [Deed of Trust].” Id. ¶¶ 74–80.

On April 12, 2010, Busby was issued a notice of foreclosure sale (“Notice of Foreclosure Sale”), advising her that she owed $168,842.38 on the Note as of that date and that her property would be sold at a foreclosure sale on May 19, 2010, see id. ¶ 94 & Ex. D (Notice of Foreclosure Sale). The Notice of Foreclosure identifies Capital One as the holder of the Note. Id. ¶ 96 & Ex. D (Notice of Foreclosure Sale). The Notice of Foreclosure also indicated that if Busby wanted to stop the foreclosure sale, she should contact Defendant Prensky, who had purportedly been appointed as trustee pursuant to a deed of appointment of substituted trustee (“Deed of Appointment”), dated December 1, 2009. Id. ¶ 159; id., Ex. D (Notice of Foreclosure Sale); id., Ex. C (Deed of Appointment). Both the Notice of Foreclosure Sale and the Deed of Appointment were filed with the Recorder on April 14, 2010. Id. ¶ 94.

Busby alleges that both the Notice of Foreclosure Sale and the Deed of Appointment are fraudulent documents. See Am. Compl. ¶¶ 94–193. Specifically, she alleges, relying upon the statutory five year term of expiration for notaries under District of Columbia law, that the Deed of Appointment was backdated and was executed by officers of Chevy Chase Bank (with whom Capital One later merged) at a time when Chevy Chase Bank was no longer in existence. Am. Compl. See id. ¶ 132. Further, Busby contends that, because at the time of execution of the Deed of Appointment, neither Chevy Chase Bank nor Capital One were the lender or otherwise had authority to substitute a trustee, Prensky is not the true trustee. Id. ¶ 154.

Regarding the Notice of Foreclosure Sale, Busby alleges it is fraudulent because the amounts due and owing by Busby stated therein are overstated and not owed, see id. ¶ 171, and also because it represents that Capital One is the Note holder, but Capital One is not, and never was, the Note holder. See id. ¶ 45–81, 135, 155. Busby contends that she at first believed the information in the Notice of Foreclosure Sale because Capital One had previously represented to her over several months that it was the lender. Id. ¶ 158. However, on May 12, 2010, Busby allegedly telephoned Prensky to request postponement of the scheduled sale date of the property. Id. ¶ 159. Busby further alleges that Prensky referred her to a representative at Capital One, who indicated that Capital One was not the holder of the note (but rather, that Fannie Mae was), and Capital One therefore could not authorize postponement of the foreclosure sale. Id. ¶¶ 160–64. However, Busby also alleges that on May 18, 2010, after Busby commenced litigation against Capital One and Prensky, Prensky telephoned Busby to inform her that the Capital One representative with whom Busby had spoken was incorrect when she represented that Capital One was not the Note Holder and also that Capital One had cancelled the foreclosure sale scheduled for May 19, 2010. Id. ¶ 173. Subsequently, from June 2010 to August 2010, Busby avers that she repeatedly requested, both verbally and in writing, that Capital One's counsel provide her with documentation showing that it had the right to enforce the Note, but that Capital One has been “unable to provide such evidence.” See id. ¶¶ 81, 184–192.

B. Procedural Background1. Busby I (Civil Action No. 10–1025)

On May 18, 2010, Busby commenced an action against Defendants Capital One and Prensky in the Superior Court of the District of Columbia (hereinafter “Busby I ”). See Busby v. Capital One, N.A., 772 F.Supp.2d 268, 273 (D.D.C.2011). After being served with the complaint, Prensky informed Busby that Capital One had agreed to cancel the foreclosure sale, which had been scheduled for May 19, 2010, but left open the possibility that the sale would be rescheduled for a later date. Id. (citing Original Action Am. Compl. ¶¶ 95–96). Busby filed an amended complaint in the Superior Court on June 9, 2010, and Capital One and Prensky removed the action to this District on June 17, 2010. Id. at 273–74. Judge Ricardo M. Urbina presided over the action and described Busby's ten-count amended complaint as follows:

[T]he plaintiff alleges that the Notice [of Foreclosure] was fraudulent and ineffective because it misrepresented CapitalOne as the holder of the note, when, in reality, Capital One was acting, at best, as the loan servicer.... The plaintiff also alleges that in the Notice, the defendants misrepresented the amounts owed by the plaintiff. In addition, ...

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