Juarez v. U.S. Bank Nat'l Ass'n
| Decision Date | 04 November 2011 |
| Docket Number | Civil Action No. 11-10318-DJC |
| Parties | MELISSA A. JUAREZ, Plaintiff, v. U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE, ON BEHALF OF THE HOLDERS OF THE ASSET BACKED SECURITIES CORPORATION HOME EQUITY LOAN TRUST, SERIES NC 2005-HE8, ASSET BACKED PASS-THROUGH CERTIFICATES, SERIES NC 2005-HE8, AND SELECT PORTFOLIO SERVICING, INC., Defendants. |
| Court | U.S. District Court — District of Massachusetts |
Plaintiff Melissa Juarez ("Juarez") brings this action against U.S. Bank National Association ("U.S. Bank") and Select Portfolio Servicing, Inc. ("SPS") (collectively, "Defendants") alleging fraud and violations of Massachusetts statutory law in connection with the foreclosure of her residence. The Defendants have moved to dismiss pursuant to Federal Rule of Civil Procedure ("Rule") 12(b)(6) for failure to state a claim upon which relief can be granted and Rule 12(b)(7) for failure to join necessary parties. For the reasons set forth below, the Defendants' motion to dismiss is GRANTED.
The following facts are drawn from Juarez's amended complaint. On August 5, 2005, Juarez purchased a single family residence located at 68 1/2 Chickatawbut Street, Dorchester, Massachusetts (the "Property") for $351,000.00. (.1 To finance this purchase, she executed a promissory note ("Note") which was secured by a mortgage ("Mortgage") on the Property in the amount of $280,800.00. (Id. ¶¶ 9, 11, Ex. B). She also executed a second promissory note secured by a second mortgage on the property in the amount of $70,200.00. (Id. ¶ 12). The Note and Mortgage identify New Century Corporation ("New Century") as the lender and holder of the promissory note. (Id. ¶ 9, Ex. B).
"Immediately after" the closing, New Century assigned the Note and Mortgage to NC Capital Corporation ("NC Capital"). (Id. ¶¶ 14, 15, 40, 71). NC Capital subsequently sold the Mortgage to Asset Backed Securities Corporation which created the Asset Backed Securities Corporation Home Equity Loan Trust, Series NC 2005-HE8 ("Trust") holding pools of loans. (Id. ¶¶ 16,19). No assignments to evidence any of these transactions were recorded in the Registry of Deeds on August 5, 2005 or before the foreclosure of the Property. (Id. ¶¶ 15-17, 42). The Trust is governed by a Pooling and Servicing Agreement ("PSA") under which U.S. Bank, as Trustee, holds and manages the Trust assets. (Id. ¶¶ 21-23, 29). SPS acts as servicer for U.S. Bank. (Id. ¶ 29). The PSA required that all assignments to the Trust be publicly recorded in the appropriateCounty Registry office, which in Juarez's case was the Suffolk County Registry of Deeds. (Id. ¶ 38).
Soon after purchasing the Property in 2005, Juarez fell behind on her payments and defaulted under the terms of the Note and Mortgage. (Id. ¶¶ 44-45). Defendants commenced foreclosure proceedings in August 2007. (Id. ¶ 45).
About a year later, on July 22, 2008, the Property was sold at a foreclosure sale and purchased by U.S. Bank for $325,869.45. (Id. ¶¶ 59, 63). An affidavit was recorded evidencing the foreclosure sale and stating that SPS, as attorney-in-fact for U.S. Bank, sold the Property although no power of attorney was recorded with the affidavit. (Id. ¶¶ 59, 61). The affidavit also stated that notices regarding the sale of the Property were mailed to Juarez, but Juarez alleges that she did not receive such notices. (Id. ¶ 60).
Three months after the foreclosure sale, on October 29, 2008, SPS (acting under power of attorney granted by New Century), recorded the assignment of the Mortgage to U.S. Bank. (Id. ¶¶ 47-48). No power of attorney was recorded with this assignment evidencing U.S. Bank's grant of authority to either SPS or Bill Koch, the signatory, in his capacity as an employee of SPS, to act on behalf of U.S. Bank. (Id. ¶¶ 49-50). The assignment was executed and notarized on October 16, 2008 and indicated a "Date of Assignment" of June 13, 2007. (Id. ¶ 51). On October 31, 2008, Defendants sold the Property to its current owners. (Id. ¶ 65).
Nearly two years after the foreclosure of the Property, on October 29, 2010, Juarez filed a complaint in Suffolk Superior Court against Defendants alleging fraud and violations of Massachusetts foreclosure statutes. (D. 9). On January 24, 2011, Juarez filed an amendedcomplaint, alleging fraud (Count I), violations of foreclosure statutes, Mass. Gen. L. c. 244, § 14 (Count II) and Mass. Gen. L. c. 244, § 2 (Count III), as well as violations of Mass. Gen. L. c. 93A (Count IV). (D. 9). Juarez also sought to invalidate the foreclosure sale, restore her status as the rightful legal owner of the Property, determine that the Defendants were not the legal owners of the Mortgage and Note at the time of foreclosure, and that the Court allow Juarez to move back into the Property or allow her to sell it. Juarez seeks damages including mortgage payments, closing costs, down payments, moving fees, court costs, double and treble damages plus attorney's fees as prescribed under c. 93A.
After Defendants removed this case to this Court, Juarez moved to remand the case to state court on March 11, 2011. (D. 1, 4-5). The Court has denied that motion. (5/6/2011 D. entry). Defendants subsequently moved to dismiss the amended complaint, (D. 10-11), and the Court has now heard oral argument on that motion.
Post-Twombly and Iqbal, whether a complaint should survive a motion to dismiss for failure to state a claim depends upon whether the pleading satisfies the "plausibility" standard. Ashcroft v. Iqbal, 129 S.Ct. 1937 (2009); Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007). As the First Circuit has made clear, to determine whether the factual allegations in the complaint are sufficient to survive a motion to dismiss, the Court "employ[s] a two-pronged approach." Soto-Torres v. Fraticelli, 654 F.3d 153, 158 (2011). "The first prong is to identify the factual allegation and to identify statements in the complaint that merely offer legal conclusions couched as facts or are threadbare or conclusory." Id. (citing Ocasio-Hernández v. Fortuño-Burset, 640 F.3d 1, 12 (1st Cir.2011)). "A plaintiff is not entitled to 'proceed perforce' by virtue of allegations that merely parrot the elements of the cause of action." Ocasio-Hernández, 640 F.3d at 12 (quoting Iqbal, 129 S.Ct. at 1950). The second prong is to assess whether the factual allegations "'allow [ ] the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.'" Soto-Torres, 654 F.3d at 159 (quoting Iqbal, 129 S.Ct. at 1949). If they do, "the claim has facial plausibility." Ocasio-Hernandez, 640 F.3d at 12. "The make-or-break standard . . . is that the combined allegations, taken as true, must state a plausible, not a merely conceivable, case for relief." Soto-Torres, 654 F.3d at 159 (quoting Sepúlveda-Villarini v. Dep't. of Educ. of P.R., 628 F.3d 25, 29 (1st Cir. 2010) (Souter, J.)).
Central to Juarez's complaint are her claims arising under statutory law and so the Court begins its analysis with a discussion of these counts.
Count II alleges that Defendants violated M.G.L. c. 244, § 14 by stating that they sent Juarez a notice of the foreclosure in the mail when they did not do so. (Am. Compl. ¶¶ 92-94). Under § 14, notice of a foreclosure sale must be sent via registered mail to the owner of the property and published in a town newspaper where the mortgaged property lies prior to the date of sale.2 "The . . . registered mail notice requirement is satisfied by mailing and nonreceipt is irrelevant." Hull v. Attleboro Sav. Bank, 33 Mass. App. Ct. 18, 25 (1992).
Here, Juarez attached to her amended complaint an affidavit executed by Defendants on October 22, 2008 (Am. Compl., Ex. E), stating that Defendants published a notice of the foreclosure and mailed the required notice to Juarez in accordance with § 14. (Am. Compl. ¶¶ 92). Since the affidavit was furnished by Juarez, is central to her claim and she does not dispute its authenticity, the Court may consider the assertions in the affidavit as if they were allegations in the amended complaint, without converting this motion into one for summary judgment. See Watterson v. Page, 987 F.2d 1, 3-4 (1st Cir. 1993). Even accepting Juarez's allegation that she never received the notice, the affidavit states that the Defendants mailed the notice to Juarez and as such is sufficient to satisfy § 14. See Hull, 33 Mass. App. Ct. at 25. Thus, Juarez's allegations that Defendants failed to comply with the notice requirement does not state a plausible claim under Mass. Gen. L. c. 244, § 14.
The amended complaint also appears to challenge Defendants' legal authority under Mass. Gen. L. c. 244, § 14 to foreclose on the Property on three grounds: (1) assignments of the Mortgage were not recorded prior to the notice of sale or subsequent foreclosure sale; (2) assignment of the Mortgage to U.S. Bank violated the PSA; and (3) U.S. Bank did not hold the Note at the time of foreclosure. (Am. Compl. ¶¶ 32, 71-74, 80-82, 95-96).
As to the allegation that no assignments were recorded prior to the notice of sale or foreclosure, including the assignment of the Mortgage to U.S. Bank, in U.S. Bank National Association v. Ibanez, 458 Mass. 637, 651 (2011), the Supreme Judicial Court held that an assignment need not be recorded prior to execution of a notice of sale or foreclosure sale. Id. at 651. So long as there is an otherwise valid assignment of the mortgage to the foreclosing entity, that assignment gives the mortgage holder the statutory power to sell regardless of whether theassignment has been recorded prior to the notice of sale or foreclosure sale. Id. at 654 (citing Mass. Gen. L. c. 183 § 21; MacFarlane v. Thompson, 241 Mass. 488, 489 (1922)). If the...
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