Deel v. Wells Fargo Bank, N.A.

• Decision Date: 01 April 2016
• Docket Number: CASE NO. 5:15-cv-2042
• Parties: LORI L. DEEL, et al, PLAINTIFFS, v. WELLS FARGO BANK, N.A., et al, DEFENDANTS.
• Court: U.S. District Court — Northern District of Ohio

LORI L. DEEL, et al, PLAINTIFFS, v. WELLS FARGO BANK, N.A., et al, DEFENDANTS.

CASE NO. 5:15-cv-2042

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF OHIO EASTERN DIVISION

April 1, 2016

JUDGE SARA LIOI

MEMORANDUM OPINION

Presently pending before the Court are the motions of defendants Lender Processing Services, Inc. nka Black Knight InfoServ, L.L.C. ("Black Knight") and Liquenda Allotey ("Allotey") (Doc. No. 9 ["BK Mot."]), Mortgage Electronic Registration Systems, Inc. ("MERS") (Doc. No. 11 ["MERS Mot."]), and Wells Fargo Bank, N.A. ("Wells Fargo") (Doc. No. 13 ["Wells Fargo Mot."]), to dismiss this action filed by pro se plaintiffs Lori and John Deel ("plaintiffs") related to a note, mortgage, and foreclosure action in the Summit County Court of Common Pleas. (See Doc. No. 1 ["Compl."].) Plaintiffs have not opposed defendants' motions.

For the reasons that follow, defendants' motions are granted, and this action is dismissed.

I. BACKGROUND

This lawsuit involves a note and mortgage that plaintiffs executed in favor of Fremont Investment and Loan ("Fremont") with regard to the property located at 2820 South Main Street, Akron, Ohio 44319. Freemont nominated MERS to act as the mortgagee. On March 12, 2009, the note and the mortgage were transferred to Wells Fargo as Trustee for the Certificate Holders of Carrington Mortgage Trust, Series, 2007-FRE. Plaintiffs defaulted on the note and mortgage. (Compl. ¶¶ 12-18.)

Wells Fargo filed the first of three foreclosure actions against plaintiffs in the Summit County Court of Common Pleas on March 20, 2009. See Wells Fargo Bank, N.A. v. Deel, Summit C.P. No. CV-2009-03-2298 (Mar. 20, 2009); Wells Fargo Bank v. Deel, Summit C.P. No. CV-2010-07-4904 (July 16, 2010); Wells Fargo Bank N.A. v. Deel, Summit C.P. No. CV-2010-12-8137 (Dec. 9, 2010); (see also Compl. ¶ 37.) The first two actions were dismissed without prejudice.

Wells Fargo was awarded a default judgment in the third foreclosure case on March 4, 2011. (Doc. No. 9-1; Compl. ¶¶ 39, 52.) Plaintiffs attempted to obtain relief from the default judgment four months after it was issued but the court denied their motion on November 8, 2011. They appealed the decision to the Ohio Court of Appeals, but the court of appeals affirmed the judgment on August 22, 2012. (Doc. No. 9-2); see Wells Fargo Bank, N.A. v. Deel, No. 25876, 2012 WL 359085 (Ohio Ct. App. Aug. 22, 2012).

Plaintiffs obtained counsel, filed a second motion to vacate judgment, and attempted to file a belated answer. The motion was denied on the basis of res judicata. Plaintiffs filed pro se motions seeking relief from judgment and a stay of the execution ofthe judgment. On September 30, 2014, those motions were denied. (Doc. No. 9-5.) The property was set for a sheriff's sale on June 19, 2015 and October 16, 2015, but plaintiffs filed bankruptcy actions on the mornings of those sales, temporarily staying the proceedings.¹

Plaintiffs filed this action on October 2, 2015, seeking to vacate the judgment of foreclosure, void the note and mortgage, receive clean title to the property, and obtain monetary damages. The complaint contains six counts.

In count one, plaintiffs assert claims under the Fair Debt Collections Practices Act ("FDCPA"), 15 U.S.C. §§ 1692(d), (e), and (f), the Real Estate Settlement Procedures Act ("RESPA"), 12 U.S.C. §§ 2602 and 2605, and state law, contending they did not receive proper notice of the transfer of the mortgage into the trust. They also contend defendants misrepresented the legal status of the note and mortgage by claiming a legal interest in them, and by filing a foreclosure action. (Compl. ¶¶ 73-97.).

In count two, plaintiffs assert claims for negligence and breach of fiduciary duties. They state that they did not authorize the securitization of their loan, and claim the securitization process left their note without a lawful owner, rendering the note void. (Compl. ¶¶ 98-115.) In count three, plaintiffs assert that defendants made fraudulent representations to them, but do not indicate what these fraudulent representations were. (Compl. ¶¶ 116-23.) Count four contains claims for civil conspiracy stating, without explanation, that defendants jointly and separately caused plaintiffs to suffer damages.(Compl. ¶¶ 124-30.).

In count five, plaintiffs contend the defendants behaved outrageously and are liable to them for intentional infliction of emotional distress. (Compl. ¶¶ 131-43.) Finally, in count six, plaintiffs assert that defendants violated the Racketeer Influenced Corrupt Organizations Act ("RICO"), 18 U.S.C. § 1961, et seq. ("RICO") and the Ohio Corrupt Practices Act ("OCPA"), Ohio Rev. Code § 2923.31, by attempting to collect an unlawful debt through a pattern of corrupt activity. Plaintiffs assert that the corrupt activity consisted of mail fraud, wire fraud, forgery, and general "fraud." (Compl. ¶ 154.)

Plaintiffs seek monetary damages and ask this Court to vacate the judgment in the state court foreclosure case, enjoin the sale of the property through sheriff's auction, void the mortgage and note on the property, award them full, unencumbered title to the property, and enjoin defendants from ever making a claim to the property or to the monies owed on the mortgage. (Compl. at 28-30.²).

Defendants' motions to dismiss are filed pursuant to Rules 12(b)(1) and 12(b)(6) of the Federal Rules of Civil Procedure.³ Defendants collectively argue that: (1) the Rooker-Feldman Doctrine divests this Court of jurisdiction to reverse a state court judgment; (2) plaintiffs lack standing to challenge the mortgage assignment; (3) plaintiffs' fraud claims were not pled with specificity as required by Fed. R. Civ. P. 9; (4) plaintiffs failed to plead their conspiracy claim with the specificity needed to state a claim upon which relief may begranted; (5) plaintiffs' negligence claim fails because defendants do not owe plaintiffs a duty of care, and the claims are barred by Ohio's economic loss doctrine; (6) there is no fiduciary relationship between the parties; (7) filing a foreclosure action is not extreme and outrageous behavior to support a claim for intentional infliction of emotional distress; (8) the statute of limitations for a FDCPA claim has expired, defendants are not debt collectors as defined by the statute, and there are no facts suggesting defendants violated the FDCPA or RESPA; and (9) plaintiffs failed to establish predicate offenses or a pattern of racketeering activity to state a claim under RICO or the OCPA.

II. DISCUSSION

A. Standard of Review

1. Rule 12(b)(1)

Federal Rule of Civil Procedure 12(b)(1) allows dismissal for "lack of subject-matter jurisdiction" of claims asserted in the Complaint. Fed. R. Civ. P. 12(b)(1). Generally, Rule 12(b)(1) motions fall into two categories: facial attacks and factual attacks. United States v. Ritchie, 15 F.3d 592, 598 (6th Cir. 1994). A facial attack tests the adequacy of the complaint. Scheuer v. Rhodes, 416 U.S. 232, 235-37, 94 S. Ct. 1683, 40 L. Ed. 2d 90 (1974), overruled on other grounds by Davis v. Scherer, 468 U.S. 183, 104 S. Ct. 3012, 82 L. Ed. 2d 139 (1984). A factual attack evaluates the actual existence of subject matter jurisdiction. Ohio Hosp. Ass'n v. Shalala, 978 F. Supp. 735, 739 (N.D. Ohio 1997) (citation omitted), affirmed, in part, reversed, in part, on other grounds, 201 F.3d 418 (6th Cir. 1999).

The importance of this distinction has to do with the nature of the Court'sconsideration of the facts and allegations presented in connection with the Rule 12(b)(1) motion. If the motion presents a facial attack, the Court must take all of the material allegations in the complaint as true and construe them in the light most favorable to the non-moving party. Ritchie, 15 F.3d at 598 (citing Scheuer, 416 U.S. at 235-37). In contrast, if the motion presents a factual attack, the Court is free to consider extrinsic evidence and may weigh the evidence of its own jurisdiction without affording the plaintiff the presumption of truthfulness. Id. (citation omitted). The plaintiff has the burden of proving subject matter jurisdiction in order to survive a motion to dismiss pursuant to Rule 12(b)(1). Madison-Hughes v. Shalala, 80 F.3d 1121, 1130 (6th Cir. 1996) (citation omitted). Lack of subject matter jurisdiction is a non-waivable, fatal defect. See Von Dunser v. Aronoff, 915 F.2d 1071, 1074-75 (6th Cir. 1990).

2. Rule 12(b)(6)

In reviewing a complaint in the context of a motion to dismiss under Rule 12(b)(6), the Court must construe the complaint in the light most favorable to the plaintiff and accept all well-pleaded material allegations in the complaint as true. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555-56, 127 S. Ct. 1955, 167 L. Ed. 2d 929 (2007).

The sufficiency of the complaint is tested against the notice pleading requirements of Fed. R. Civ. P. 8(a)(2), which provides that a complaint must contain "a short and plain statement of the claim showing that the pleader is entitled to relief[.]" Although this standard is liberal, Rule 8 still requires a complaint to provide the defendant with "enough facts to state a claim to relief that is plausible on its face." Twombly, 550 U.S. at 570. Thus, "[t]o survive a motion to dismiss, a complaint must contain sufficient factual matter,accepted as true," to state a plausible claim. Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S. Ct. 1937, 173 L. Ed. 2d 868 (2009) (quoting Twombly, 550 U.S. at 570). A claim is facially plausible "when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. (citing Twombly, 550 U.S. at 556). Plausibility "is not akin to a 'probability requirement,' but it asks for more than a sheer possibility that a defendant has acted unlawfully.'" Id. "[W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged—but it has not 'show[n]'—...