Lanier v. Branch Bank & Trust Co.
| Decision Date | 29 August 2013 |
| Docket Number | C/A No. 3:12-0628-MBS |
| Court | U.S. District Court — District of South Carolina |
| Parties | Cathy G. Lanier and Randy D. Lanier, Plaintiffs, v. Branch Bank & Trust Company, an unknown business entity; Bayview Loan Services, LLC, an unknown business entity; Fleming & Whitt, P.A., an unknown business entity; McDonnell & Associates, P.A., an unknown business entity; Reggie Enlow as agent for Southern Visions Realty, Inc., an unknown business entity; and Does 1-9, inclusive, Defendants. |
Plaintiffs Cathy G. Lanier and Randy D. Lanier, proceeding pro se, brought this action on March 2, 2012, seeking to set aside the foreclosure of certain commercial properties (the "Properties") located in Lexington County, South Carolina. Plaintiffs filed an amended complaint on March 5, 2012; a second amended complaint on April 24, 2012, and a third amended complaint on November 13, 2012. Plaintiffs assert causes of action for violation of the Truth in Lending Act (TILA), 15 U.S.C. §§ 1601 et seq., as to Defendants Branch Bank & Trust (BB&T) and Bayview Loan Services, LLC ("Bayview") (First Cause of Action); violation of the Real Estate Settlement Procedures Act (RESPA), 12 U.S.C. §§ 2601 et seq., as to Defendants BB&T and Bayview (Second Cause of Action); violation of the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. §§ 1692, et seq., as to all Defendants (Third Cause of Action); to quiet title as to Defendants BB&T andBayview (Fourth Cause of Action); for wrongful foreclosure as to Defendants BB&T and Bayview (Fifth Cause of Action); for slander of title as to all Defendants (Sixth Cause of Action); for civil conspiracy as to all Defendants (Seventh Cause of Action); violation of the South Carolina Unfair Trade Practices Act (SCUTPA), S.C. Code Ann. §§ 39-5-20 et seq., as to all Defendants (Eighth Cause of Action); violation of the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. §§ 1961 et seq., as to all Defendants (Ninth Cause of Action); imposition of a constructive trust as to Defendants BB&T and Bayview (Tenth Cause of Action); a claim under criminal statutes for fraud and swindle, 18 U.S.C. § 1346, and false statements, 18 U.S.C. § 1001, as to all Defendants (Eleventh Cause of Action); and illegal dispossession, breaking and entering, and theft as to Defendants BB&T and Reggie Enlow as agent for Southern Visions Realty, Inc. (Twelfth Cause of Action). Plaintiffs seek damages and injunctive and declaratory relief.
In accordance with 28 U.S.C. § 636(b) and Local Rule 73.02, D.S.C., this matter was referred to United States Magistrate Judge Shiva V. Hodges for pretrial handling. On December 14, 2012, Bayview and Flaming & Whitt P.A. filed a motion to dismiss for failure to state a claim (ECF No. 60). By order filed December 17, 2012, in accordance with Roseboro v. Garrison, 528 F.2d 309 (4th Cir. 1975), Plaintiffs were advised of the dismissal procedure and the possible consequences of failing to respond adequately. On December 19, 2012, Enlow filed a motion to dismiss on the grounds of improper service and failure to join a real party in interest. (ECF No. 65). A second Roseboro order was issued on December 21, 2012. Plaintiff filed responses in opposition to Bayview's and Enlow's motions to dismiss on January 22, 2013. Also on January 22, 2013, BB&T filed a motion to dismiss (ECF No. 71). A third Roseboro order was issued on January 25, 2013. On January 24, 2013, Defendant McDonnell & Associates, P.A. ("McDonnell") filed a motion todismiss for failure to state a claim (ECF No. 74). A fourth Roseboro order was issued on January 25, 2013.
On February 21, 2013, Enlow filed a second motion to dismiss (ECF No. 79). A fifth Roseboro order was issued on February 22, 2013. On February 27, 2013, Plaintiffs filed responses in opposition to McDonnell's and BB&T's motions to dismiss. On March 27, 2013, Plaintiffs filed a response in opposition to Enlow's second motion to dismiss.
Finally, on May 2, 2013, Plaintiffs filed a motion to amend their complaint (ECF No. 85). BB&T filed a response in opposition to Plaintiffs' motion on May 17, 2013. McDonnell filed a response in opposition to Plaintiffs' motion on May 20, 2013.
On May 30, 2013, the Magistrate Judge issued a Report and Recommendation in which she recommended that Defendants' motions to dismiss be granted and that Plaintiffs' motion to amend their complaint be denied. Plaintiffs filed objections to the Report and Recommendation on July 22, 2013, to which BB&T filed a reply on August 6, 2013 and Enlow filed a reply on August 8, 2013.
In their third amended complaint, Plaintiffs allege that they refinanced one the Properties, known as 220 West Main Street, Lexington, South Carolina (the "Main Street Property"), through BB&T in 2004. According to Plaintiffs, BB&T filed a complaint for foreclosure on or about August 25, 2010. Plaintiff allege that BB&T's counsel, McDonnell, fraudulently recorded affidavits of service although, according to Plaintiffs, they were never noticed of the complaint or subsequent filings, including an affidavit of default. Plaintiffs contend they received notice of a foreclosure hearing purely by accident on February 18, 2011. Plaintiffs subsequently attended a hearing onFebruary 24, 2011, after which they experienced a "verbal attack" by McDonnell's representative.
Plaintiffs further allege that they were served with an incomplete copy of the complaint on April 30, 2011. Plaintiffs also state that title to the Main Street Property was held by C&R Holdings, LLC, and that this entity was not served. Plaintiffs state that they engaged counsel to represent C&R Holdings, LLC. The state foreclosure action was referred to Special Referee Clyde Davis, who set a hearing for August 1, 2011. Plaintiffs further allege that counsel for BB&T admitted that C&R Holdings, LLC had not been served, and agreed to postpone the hearing until August 30, 2011 if Plaintiffs would agree that C&R Holdings, LLC had been served as of the end of July 2011. Counsel for C&R Holdings, LLC agreed to the arrangement. Plaintiffs allege these and other acts "show[] that obstruction of justice, fraud and swindle, perjury to mislead the court, and solicitation of criminal acts from the judge and other parties is the modus operandi" of the bar of Lexington County, South Carolina. Comp. ¶ 25, ECF No. 37.
Plaintiffs allege that on August 30, 2011, BB&T offered to waive its right to a deficiency judgment if Plaintiffs would not contest the foreclosure proceedings. Plaintiffs contend that they refused the settlement but that the Special Referee nevertheless signed an order withdrawing the deficiency. The Special Referee set a foreclosure sale for November 8, 2011. Plaintiffs further assert that, after these events transpired, they learned that Branch Banking and Trust Company of South Carolina, the entity suing for foreclosure, previously had been dissolved as the result of numerous mergers. Plaintiffs contend that a defunct entity has no standing to enforce a security interest.
Plaintiffs further allege that they refinanced through Interbay Funding, LLC ("Interbay") certain property known as 1324 North Lake Drive, Lexington, South Carolina (the "North LakeProperty"). Plaintiffs allege that Interbay delayed closing on the loan for nearly three months, and then changed the loan to less favorable terms less than 24 hours prior to closing. Plaintiffs contend this is a pattern and scheme designed to "bait and switch" unwitting loan recipients into moving loans to Interbay on favorable terms, delaying the loan closing to impart a hardship on the recipients, and then forcing recipients to accept unfavorable terms or be without financing. Plaintiffs also allege that they were instructed to make payments to Bayview, and that Bayview engaged in a fraudulent scheme to collect late fees. Plaintiffs assert that Bayview is without standing to foreclose on the loan because it is not the holder of the note and mortgage securing the loan.
A foreclosure hearing was held on August 1, 2011. Plaintiffs allege that they testified regarding the predatory lending practices to which they had been subjected and their belief that the loan had illegally been transferred among certain parties without the recording of an assignment or transfer of any kind. The foreclosure judge awarded Bayview the right to foreclose and set a foreclosure sale for November 8, 2011. According to Plaintiffs, "[t]his, again, is consistent with the court's bias of preference toward all banks doing business in Lexington County, even those who have clearly committed illegal and immoral acts." Third Am. Compl. ¶ 42, ECF No. 37.
On November 4, 2011, Plaintiff Randy D. Lanier attempted to stay the foreclosure sale scheduled for November 8, 2011, by filing for protection under Chapter 13 of the Bankruptcy Code. On November 7, 2011, United States Bankruptcy Judge David R. Duncan held an emergency hearing. Plaintiffs contend that "in effect, the attorneys had now partnered to bulldoze the Plaintiffs." Third Am. Compl. ¶ 45. Judge Duncan dismissed the Chapter 13 bankruptcy on the grounds that the amount of the secured and unsecured debt exceeded the limitations provided by 11 U.S.C. § 109(e). Plaintiffs did not appeal Judge Duncan's order. Rather, Plaintiffs jointly filed asecond Chapter 13 bankruptcy case on November 8, 2011 that successfully stayed the foreclosure sales. On January 3, 2012, Chief Bankruptcy Judge John E. Waites concluded that Plaintiffs had filed the second bankruptcy case in bad faith and to impede the foreclosure sales. Accordingly, Judge Waites dismissed the second bankruptcy case with prejudice.
Plaintiffs filed a notice of appeal to this court on February 14, 2014, as well as a motion to stay foreclosure sales rescheduled for March 5, 2012. The court denied Plaintiffs' motion to stay by order filed February 28, 2012,...
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