Edwards v. HSBC Mortg. Servs., Inc.
| Decision Date | 09 September 2013 |
| Docket Number | CIVIL ACTION NO. 1:12-cv-4162-JEC |
| Parties | DENISE EDWARDS, Plaintiff, v. HSBC MORTGAGE SERVICES, INC., Defendant. |
| Court | U.S. District Court — Northern District of Georgia |
This case is before the Court on the plaintiff's Motion for Leave to Amend Complaint [7], the defendant's Motion to Dismiss [4], the defendant's Motion to Dismiss Amended Complaint [11], and the defendant's Motion to Modify State Court Order [6]. The Court has reviewed the record and the arguments of the parties and, for the reasons set out below, concludes that the plaintiff's Motion for Leave to Amend Complaint [7] should be GRANTED, the defendant's Motion to Dismiss [4] should be DENIED as moot, the defendant's Motion to Dismiss Amended Complaint [11] should be GRANTED, and the defendant's Motion to Modify State Court Order [6] should be DENIED as moot.
On October 30, 2012, Denise Edwards (hereafter, "Plaintiff") filed this action for wrongful foreclosure and wrongful evictionseeking temporary and permanent injunctive relief against HSBC Mortgage Services, Inc. ("Defendant") in DeKalb County Superior Court. (Def.'s Notice of Removal [1].) The property in foreclosure is located at 4301 Riverview Lane, Lithonia, Georgia 30038. (Id.) Judge Gregory A. Adams issued an order on November 27, 2012, requiring the defendant to be "restrained and enjoined from having Plaintiff evicted from her premises . . . and further that Plaintiff pay $3200.00 as monthly rent, into the Court Registry beginning December 1, 2012, until further order of this Court." (Id. at [1-1].) On November 30, 2012, the defendant removed the suit to the United States District Court for the Northern District of Georgia. (Def.'s Notice of Removal [1].) This Court determined it has proper jurisdiction over the case as the parties are completely diverse.1
The facts of the case will be taken as the Court understands them from the plaintiff's Amended Verified Complaint, filed on December 26, 2012.2 On September 25, 2006, the plaintiff entered into a residential mortgageloan transaction with Mortgage Electronic Recording Systems, Inc. ("MERS"), as the nominee for Solstice Capital Group, Inc. ("Solstice"). (Id. at ¶ 6.) The plaintiff executed a security deed and a promissory note in favor of MERS for the amount of $489,500.00. (Id.) Only the plaintiff and the MERS agent were present at the closing transaction. (Id. at ¶ 7.) Agent Caren E. Barnes executed the closing documents as no attorney was present. (Id. at ¶¶ 7-10.) The plaintiff claims that the signing was unattested, meaning it was not subject to witnesses, and that all documents requiring her signature were not notarized at the time of signing. (Pl.'s Am. Compl. [10] at ¶ 14.) Further, the word "attorney" in the Waiver of Borrower's Rights attached to the security deed was scratched out and the word "agent" replaced. (Id. at ¶ 7.)
The plaintiff argues that MERS was not the "wet-ink holder" of the note as required by law, but instead sold the promissory note at an unknown time. (Id. at ¶¶ 16, 21-22.) While the plaintiff alleges it is unknown who presently owns and holds the wet-ink original note, she states that the note was most likely securitized and held by a mortgage backed security trust. (Id. at ¶¶ 7, 16.) She claims the promissory note was separated from the security deed at that time. (Pl.'s Am. Compl. [10] at ¶ 17.)
It is undisputed that on January 25, 2012, MERS assigned the mortgage to the defendant at Deed Book 22843 Page 418, Dekalb County,Georgia records. (Id. at ¶ 20.) The defendant claims plaintiff defaulted on her mortgage, and the plaintiff does not dispute that fact. The defendant subsequently sent a foreclosure notice to the plaintiff on May 3, 2012, which stated that the defendant was the secured creditor of the property. (Id. at ¶ 25.) The foreclosure was conducted on June 5, 2012 as provided under the terms of the notice. (Id.)
The plaintiff avers that the defendant was neither the holder of the promissory note nor the grantee of the security deed on May 3, 2012. (Id. at ¶ 26.) The defendant responds that the promissory note and security deed were transferred and assigned to it on January 25, 2012 and that it was the assignee of the deed at the time of foreclosure. (Def.'s Mot. to Dismiss [11].) Attached to the defendant's motion to dismiss is the Corporate Assignment of Security Deed executed by the defendant and MERS, as nominee for Solstice. (Id. at [11-4].) Both the promissory note and the security deed also are attached. (Id. at [11-2], [11-3].)
The plaintiff has filed a motion to amend complaint. (Pl.'s Mot. to Amend Compl. [7].) The defendant has filed three motions: two motions to dismiss and a motion to modify state court order. (Def.'s Mot. to Dismiss [4] and [11], and Def.'s Mot. to Modify State Ct. Order [6].) All of these motions presently are before the Court.
The plaintiff provides two arguments for her claim for wrongful foreclosure and wrongful eviction. First, the plaintiff asserts that because the defendant was not the holder of the security deed or the promissory note, it was not the Secured Creditor and thus could not foreclose on the plaintiff's property. (Pl.'s Am. Compl. [10] at ¶¶ 26-33.) Second, the plaintiff avers that because the closing transaction was invalid, the defendant was not assigned a valid loan and thus could not foreclose on the plaintiff's property. (Id. at ¶¶ 7-13.) The plaintiff seeks temporary and permanent injunctive relief enjoining the defendant from foreclosing on the property.
The plaintiff has filed a motion for leave to amend her complaint, requesting that she be allowed to correct the name of the mortgage companies referred to in the pleading. (Pl.'s Mot. for Leave to Amend Compl. [7].) Because the plaintiff has already amended her complaint once, Federal Rule of Civil Procedure 15(a)(2) governs the motion. Rule 15(a)(2) allows the plaintiff the right to amend her pleadings with the court's assent. FED. R. CIV. P. 15(a)(2). The standard is for the court to give leave for a plaintiff to amend "when justice so requires." Id.
Here, the defendant has not presented any evidence that the motion, if granted, would prejudice its case. In fact, the defendantdoes not oppose the motion and has already filed a motion to dismiss the plaintiff's amended complaint. In the interest of efficiency, the Court GRANTS plaintiff's motion for leave to amend complaint. The plaintiff's Amended Verified Complaint will act as the operative pleading. (See Pl.'s Am. Compl. [10].)
As the plaintiff has amended her complaint, "[a]n amended pleading supersedes the former pleading[,] the original pleading is abandoned by the amendment, and [the original pleading] is no longer a part of the pleader's averments against his adversary." Dresdner Bank AG v. M/V Olympia Voyager, 463 F.3d 1210, 1215 (11th Cir. 2006) (quotation marks and citations omitted). Thus, the defendant's motion to dismiss is DENIED as moot. (See Def.'s Mot. to Dismiss [4].) The Court instead will consider the defendant's motion to dismiss amended complaint.
Federal Rule of Civil Procedure 8(a)(2) requires only that a plaintiff provide "a short and plain statement of the claim showing that the pleader is entitled to relief." FED. R. CIV. P. 8(a)(2). In deciding a motion to dismiss under Rule 12(b)(6), the Court assumes that all of the allegations in the complaint are true and construes all of the facts in favor of the plaintiff. See Randall v. Scott,610 F.3d 701, 705 (11th Cir. 2010). That said, in order to survive a motion to dismiss, a complaint "must contain sufficient factual matter, accepted as true, to 'state a claim for relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)(quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). "The plausibility standard is not akin to a 'probability requirement,' but it asks for more than a sheer possibility that a defendant has acted unlawfully." Id. (quoting Twombly, 550 U.S. at 556). Pleadings that contain nothing more than "'labels and conclusions'" and "'a formulaic recitation of the elements of a cause of action'" do not meet the requirements of Rule 8(a)(2), nor do pleadings that merely provide "'naked assertion[s]' devoid of 'further factual enhancement.'" Id. (quoting Twombly, 550 U.S. at 555, 557).
"The district court generally must convert a motion to dismiss into a motion for summary judgment if it considers materials outside the complaint." Day v. Taylor, 400 F.3d 1272, 1275-76 (11th Cir. 2005); see also FED. R. CIV. P. 12(d). However, the Eleventh Circuit has recognized an exception to this rule Speaker v. U.S. Dep't of Health and Human Servs.Ctrs. for Disease Control and Prevention, 623 F.3d 1371, 1379 (11th Cir. 2010)(quoting SFM Holdings, Ltd. v. Banc of Am. Secs., LLC, 600 F.3d 1334, 1337)(11th Cir. 2010)). The court's review during the dismissal phase is not limited to documents submitted by the plaintiff: "the defendant[] attaching such documents to the motion to dismiss will not require conversion of the motion into a motion for summary judgment." Brooks v. Blue Cross and Blue Shield of Fla., Inc., 116 F.3d 1364, 1369 (11th Cir. 1997).
Here, the plaintiff claims that the defendant was not the secured creditor of the property as it was not the holder of the promissory note or the security deed. (...
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