Marsh v. JPMorgan Chase Bank, N.A.

• Decision Date: 29 August 2012
• Docket Number: Civil Case No. SA–12–CA–599–FB.
• Citation: 888 F.Supp.2d 805
• Parties: Juhn F. MARSH and Ingrid Marsh, Plaintiffs, v. JPMORGAN CHASE BANK, N.A.; Incorrectly Named in State Court as JP Morgan Bank as Servicer; Mortgage Electronic Registration Systems, Inc.; Bank of America, National Association, As Successor By Merger to LaSalle Bank National Association, as Trustee for Certificateholders of Bear Stearns Asset Backed Securities I LLC, Asset Backed Certificates, Series 2005–HE12, Defendants.
• Court: U.S. District Court — Western District of Texas

888 F.Supp.2d 805

Juhn F. MARSH and Ingrid Marsh, Plaintiffs,

v.JPMORGAN CHASE BANK, N.A.; Incorrectly Named in State Court as JP Morgan Bank as Servicer; Mortgage Electronic Registration Systems, Inc.; Bank of America, National Association, As Successor By Merger to LaSalle Bank National Association, as Trustee for Certificateholders of Bear Stearns Asset Backed Securities I LLC, Asset Backed Certificates, Series 2005–HE12, Defendants.

Civil Case No. SA–12–CA–599–FB.

United States District Court,

W.D. Texas,

San Antonio Division.

Aug. 29, 2012.

Oscar L. Cantu, Jr., Law Offices of Oscar Cantu, San Antonio, TX, for Plaintiffs.

Charles R. Curran, William Lance Lewis, Quilling Selander Lownds Winslett & Moser, PC, Dallas, TX, for Defendants.

ORDER CONCERNING DEFENDANTS' JOINT MOTION TO DISMISS

FRED BIERY, Chief Judge.

Before the Court are Defendants' Joint Motion to Dismiss (docket # 3), Plaintiffs' Response to Defendants' Motion to Dismiss (docket # 4), and Defendants' Reply (docket # 5). For the reasons set forth below, the Court finds Defendants' Joint Motion to Dismiss (docket # 3) should be GRANTED.

I. Background

This case involves the attempted foreclosure of residential real property described in the real property records of Bexar County, Texas as: “Lot 38, Block 2, NCB 34034A, The Cloisters of Dominion, PUD, San Antonio, Bexar County, Texas according to map or plat thereof as recorded in Volume 9525, Pages 74–75 of the Deed and Plat Records of Bexar County, Texas.” (Plaintiffs' Original Petition, Ex Parte Application for Temporary Restraining Order, and Setting for Temporary Injunction at page 2, attached as Exhibit A–3 to Defendants' Notice of Removal, docket # 1.) On June 11, 2005, plaintiffs Juhn F. Marsh ¹ and Ingrid Marsh executed a Note payable to MIT Lending, secured by a Deed of Trust encumbering the property. Id.

Plaintiffs allege on March 29, 2010, defendant Mortgage Electronic Registration Systems, Inc. (hereinafter “MERS”) “caused to be filed an Assignment of Note and Deed of Trust where MERS was the assignor as nominee for Lender.” Id. Plaintiffs attached to their Original Petition a copy of the purported Assignment, which lists as the assignee defendant Bank of America, National Association As Successor by Merger to LaSalle Bank National Association, as Trustee for Certificateholders of Bear Stearns Asset Backed Securities I LLC, Asset Backed Certificates, Series 2005–HE12 (hereinafter “BOA”). (Assignment of Note and Deed of Trust, attached as Exhibit A to Plaintiffs' Original Petition.) ² The Assignment was signed by Christina Trowbridge as Vice President of MERS. Id. Plaintiffs contend defendant JPMorgan Chase Bank, N.A. (hereinafter “JPMorgan”),³ acting as servicer for BOA, attempted to foreclose on the property in June of 2012.

On June 5, 2012, plaintiffs filed the present action against JPMorgan, MERS, and BOA in the 408th Judicial District of Bexar County, Texas, alleging the following:Lack of Standing ... [BOA's] interest claimed in Plaintiffs' property is void as the assignment from MERS executed on FebruMarch [sic] 29, 2010 (Exhibit A) was executed by Christina Trowbridge, a person not authorized by MERS to execute such a conveyance. .... Trowbridge was never appointed by the MERS Board of directors as an “authorized signatory” as required by the corporate bylaws of MERS. Therefore the assignment to [BOA] by MERS is void.... Furthermore, ... [s]ince MERS never had any interest in the promissory note, then [BOA] ... can receive no rights of payment under the note and is not the Lender under the terms of the deed of trust .... [and] Wells Fargo [sic] had no right to execute a power of sale under the terms of the deed of trust.

(Plaintiffs' Original Petition at pages 3–4.) Plaintiffs further allege:

Fraudulent Lien ... [Ms. Trowbridge] had no authority to bind MERS and when [she] executed the assignment of Plaintiff's property, MERS caused the filing of a fraudulent document within the meaning of Texas Government Code § 51.901(c). Furthermore, ... the notary acknowledgment is false and fails to identify the signatory as required by statute. The assignments [sic] referred to herein were filed by MERS with knowledge of a fraudulent lien claim against property with the intent to be considered a valid lien and with the intent to cause financial injury in violation of Texas Civil Practice and Remedies Code § 12.002.

Id. at 4–5. In addition to the Assignment of Note and Deed of Trust, plaintiffs also attach to their petition an excerpt from the 2010 deposition transcript of William Hultman, MERS Corporate Secretary, taken in a case in the Superior Court of New Jersey, Chancery Division. (Hultman Deposition, attached as Exhibit B to Plaintiffs' Original Petition.) Plaintiffs contend the deposition establishes “MERS has never executed any corporate resolution permitting the appointment of any non-MERS employees as authorized signatories of MERS or as assistant secretaries of MERS.” (Plaintiffs' Original Petition at page 3.)

Plaintiffs seek damages, injunctive relief, and a “declaratory judgment determining that neither [BOA], nor JP Morgan, nor MERS have any ... interest in the property, that neither Defendant is entitled to enforce the power of sale, ... and that neither Defendant is entitled to payment for the subject property.” Id. at 5. Plaintiffs further state they seek damages for “attempted wrongful foreclosure,” damages because “Defendants knowingly committed fraud upon the court,” and “damages [for] breach of contract.” Id.

The state court issued a temporary restraining order, restraining defendants from foreclosing on the property. (Temporary Restraining Order, attached as Exhibit A–5 to Defendants' Notice of Removal.) On June 18, 2012, defendants removed the action to this Court on the basis of diversity jurisdiction. ⁴ (Defendants' Notice of Removal, docket # 1.)

II. Legal Standard

Defendants filed a Motion to Dismiss under Fed.R.Civ.P. 12(b)(6) (docket # 3). To survive a Rule 12(b)(6) motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to “state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). “Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Id. In considering a motion to dismiss for failure to state a claim, the Court must accept as true the well-pleaded factual allegations and any reasonable inference to be drawn from them, but legal conclusions are not entitled to the same assumption of truth. Id. A complaint must contain either direct or inferential allegations respecting all the material elements necessary to sustain recovery under some viable legal theory. Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 562, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). Defendants contend plaintiffs' claims should be dismissed in their entirety because they “assert[ ] no viable cause of action or cognizable claim by which Plaintiffs may be entitled to relief.” (Defendants' Motion to Dismiss at page 2.) ⁵ Plaintiffs request the Court deny the Motion to Dismiss, or in the alternative, “direct the [p]laintiff[s] to replead any offending portions of their complaint.” (Plaintiffs' Response at page 10.)

III. Analysis

A. Standing

Juhn and Ingrid Marsh contend “[BOA's] interest claimed in Plaintiffs' property is void as the assignment from MERS executed on FebruMarch [sic] 29, 2010 (Exhibit A) was executed by Christina Trowbridge, a person not authorized by MERS to execute such a conveyance. .... Trowbridge was never appointed by the MERS Board of directors as an ‘authorized signatory’ as required by the corporate bylaws of MERS. Therefore the assignment to [BOA] by MERS is void.” (Plaintiffs' Original Petition at page 3.) In other words, plaintiffs challenge defendants' standing to foreclose on the property.

Plaintiffs' allegations regarding Ms. Trowbridge's authority as a signatory fail because plaintiffs were not parties to the Assignment between MERS and BOA and therefore lack standing to challenge it. See Metcalf v. Deutsche Bank Nat'l Trust Co., No. 3:11–CV–3014–D, 2012 WL 2399369, at *5 (N.D.Tex. Jun. 26, 2012) (“Courts in this circuit have repeatedly held that borrowers do not have standing to challenge the assignments of their mortgages because they are not parties to those assignments.”); Defranceschi v. Wells Fargo Bank, N.A., 837 F.Supp.2d 616, 623–24 (N.D.Tex.2011) (plaintiffs did not have standing to challenge assignments of a deed of trust where plaintiffs were not parties to the assignments); Eskridge v. Fed. Home Loan Mortg. Corp., No. W–10–CA–285, 2011 WL 2163989, at *5 (W.D.Tex. Feb. 24, 2011) (“Plaintiff has no standing to contest the various assignments as she was not a party to the assignments.”).

Plaintiffs attempt to distinguish the case at bar from these and similar cases by arguing:

those cases center[ ] on plaintiffs who argued the assignment was somehow technically deficient or flawed as a matter of law. In this case, Plaintiff does not dispute the right to securitize the mortgage or the technical aspects of executingan assignment, but alleges that as a result of improper procedures, the true owner of the mortgage is unclear.

(Plaintiffs' Response at page 2.) The Court finds plaintiffs' distinction unconvincing. Juhn and Ingrid Marsh lack standing to challenge the Assignment despite their characterization of the challenge as one based on “improper procedures” as opposed to one based on “technical[ ] deficicien[cies].” Courts within this circuit have held a mortgagor lacks standing to challenge the assignment of a deed of trust based on the assignment signatory's alleged lack of authority. See Willeford v. Wells Fargo Bank, N.A., No. 3:12–CV–0448–B, 2012 WL 2864499, at *2 (N.D.Tex. Jul. 12, 2012) (holding mortgagor “lack[ed] standing to challenge MERS's assignment of the Deed of Trust...