Meyer v. Wells Fargo Home Mortg., Inc., Case No.: 3:16cv17/MCR/EMT
| Decision Date | 02 June 2016 |
| Docket Number | Case No.: 3:16cv17/MCR/EMT |
| Parties | HERBERT H. MEYER and CHERI L. MEYER, Plaintiffs, v. WELLS FARGO HOME MORTGAGE, INC., et al., Defendants. |
| Court | U.S. District Court — Northern District of Florida |
Plaintiffs Herbert and Cheri Meyer ("the Meyers"), proceeding pro se, commenced this case on January 8, 2016, by filing a complaint under 28 U.S.C. §§ 1331 and 1332 (ECF No. 1). Present before the court is a motion to dismiss filed by Defendant Nationstar Mortgage, LLC ("Nationstar") (ECF No. 10). The Meyers responded in opposition to the motion (ECF No. 11).
The case was referred to the undersigned for the issuance of all preliminary orders and any recommendations to the district court regarding dispositive matters. See N.D. Fla. Loc. R. 72.2(E); see also 28 U.S.C. § 636(b)(1)(B); Fed. R. Civ. P. 72(b). After careful consideration of the issues raised by the parties, it is the opinion of the undersigned that Nationstar's motion to dismiss should be granted, and this case dismissed with prejudice.
The Meyers commenced this action by filing a Complaint for Declaratory Judgment, pursuant to this court's diversity and federal question jurisdiction, 28 U.S.C. §§ 1331, 1332 (ECF No. 1). They name the following Defendants: (1) Wells Fargo Home Mortgage, Inc., (2) Ark-La-Tex Financial Services, LLC d/b/a Benchmark Mortgage, (3) U.S. Bank, National Association, (4) Bank of America, N.A., and (5) Nationstar (id.). The Meyers claim that they are citizens of the State of Florida, residing at 14126 Hwy. 20 West, Niceville, Florida (id. at 7). They allege that each Defendant is located in a State other than Florida (id.). The Meyers allege that the amount in controversy is $241,108.85, which is the current amount due on the defaulted residential mortgage transaction at issue (id. at 6).
The Meyers allege that on September 30, 2003, they purchased a residence located at 14126 Hwy. 20 West, Niceville, Florida, for $125,800.00 (ECF No. 1 at 2). They allege they financed $119,500.00 of the purchase price with a residential mortgage with Defendant Wells Fargo on September 30, 2003 (id.). The Meyers allege that Defendant U.S. Bank initiated a foreclosure action in the Circuit Court in and for Walton County, Florida, Case No. 2011-CA-495 (id. at 2, 4). The Meyers allege Wells Fargo was not the "true creditor" or "actual source" of the funds they received from the residential mortgage transaction, and the "true creditor" or "actual source" has never been disclosed to them (id. at 2-3). The Meyers contend that this alleged failure to disclose violated the requirements of the federal Truth in Lending Act ("TILA") (id.). The Meyers allege that on June 8, 2015, they sent a "Notice of Rescission/Cancellation" to each Defendant, and on September 17, 2015, they recorded the Notice in the public records of Walton County (id. at 3). The Meyers allege that Defendant Bank of America and Defendant Benchmark responded that any right to rescission which the Meyers may have under TILA expired prior to service of the Notice (id.). The Meyers allege they sought dismissal of the state foreclosure action, pursuant to 15 U.S.C. § 1635 (id. at 4, 6). The Meyers assert that the state court held hearings in the state foreclosure action on October 12, 2015, and December 11, 2015, at which time the Meyers argued that the court lacked jurisdiction over the foreclosure action due to the Meyers' purported rescission of the mortgage transaction (id. at 4). The Meyers allege that on December 14, 2015, the state court issued a Final Judgment of Foreclosure in favor of Defendant U.S. Bank (see id.; see also ECF No. 1, Ex. D). The Meyers allege that Defendant U.S. Bank filed a Notice of Foreclosure Sale with the Walton County Clerk of Court, and the sale of the residential real property was scheduled for January 19, 2016, eleven days after the Meyers commenced this lawsuit (ECF No. 1 at 4-5, see also ECF No. 1, Ex. E).
The Meyers claim that they rescinded the residential mortgage transaction effective June 8, 2015, pursuant to 15 U.S.C. § 1635 (ECF No. 1 at 7-11). They seek a judgment declaring (1) that they are sole owners of the real property at issue in the state foreclosure action, (2) that the foreclosure, the promissory note, and the mortgage are null and void, and (3) that all documents recorded after June 8, 2015 (the date they sent the notice of rescission) on or against the title to the real property are null and void (id. at 11-12).
Contemporaneously with the complaint, the Meyers filed a Motion for Emergency Temporary Restraining Order, in which they sought an order enjoining Defendants from proceeding with the public sale of the property (see ECF No. 2). The court denied the motion on February 11, 2016 (ECF No. 9).
Nationstar filed the instant motion to dismiss on February 19, 2016 (ECF No. 10). Nationstar contends the TILA rescission provisions are inapplicable to the Meyers' residential mortgage transaction, pursuant to 15 U.S.C. § 1635(e) (id. at 3-4). Nationstar alternatively contends that to the extent any right of rescission existed, the Meyers' failure to assert such right within the three-year period provided under 15 U.S.C. § 1635(f) is fatal to their claim (id. at 4). Therefore, the complaint should be dismissed with prejudice, pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure (id. at 2-5).
The Meyers contend Nationstar waived its right to challenge the rescission by failing to challenge it within twenty days of receipt of the Notice of Rescission; therefore, Nationstar is barred from asserting the arguments presented in the motion to dismiss (see ECF No. 11).
When considering a motion to dismiss for failure to state a claim upon which relief can be granted, pursuant to Rule 12(b)(6), the allegations of the complaint are taken as true and are construed in the light most favorable to the plaintiff. Davis v. Monroe Cnty. Bd. of Educ., 120 F.3d 1390, 1393 (11th Cir. 1997). Additionally, "[p]ro se pleadings are held to a less stringent standard than pleadings drafted by attorneys and will, therefore, be liberally construed." Boxer X v. Harris, 437 F.3d 1107, 1110 (11th Cir. 2006). The court may consider documents attached to a complaint or incorporated into the complaint by reference, and matters of which a court may take judicial notice. See Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 322, 127 S. Ct. 2499, 168 L. Ed. 2d 179 (2007); Saunders v. Duke, 766 F.3d 1262, 1272 (11th Cir. 2014); Brooks v. Blue Cross & Blue Shield of Fla., Inc., 116 F.3d 1364, 1369 (11th Cir. 1997) ().
To survive dismissal under Rule 12(b)(6), "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, 1949 (2009) (quotation and citation omitted). A claim is plausible on its face where "the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. (citation omitted). Plausibility means "more than a sheer possibility that a defendant has acted unlawfully." Id. "Where a complaint pleads facts that are merely consistent with a defendant's liability, it stops short of the line between possibility and plausibility of entitlement to relief." Id. (quotation and citation omitted).
The provisions of TILA expressly provide that the TILA-based right to rescission does not apply to a residential mortgage transaction, which is defined as "a transaction in which a mortgage, deed of trust, purchase money security interest arising under an installment sales contract, or equivalent consensual security interest is created or retained against the consumer's dwelling to finance the acquisition or initial construction of such dwelling." See 15 U.S.C. §§ 1602(x), 1635(e). "Dwelling" is defined as a residential structure which contains one to four family housing units. See 15 U.S.C. § 1602(w).
Here, the Meyers admit that in the transaction at issue, a mortgage was created against their dwelling to finance the acquisition of the dwelling. Therefore, the transaction is exempt from TILA's rescission provisions. See Infante v. Bank of Am. Corp., 468 F. App'x 918, 921 (11th Cir. 2012) () (TILA-based rescission claim was without merit because some of the proceeds of the loan at issue were used to finance the cost of constructing the plaintiff's residence); Grimes v. Fremont Gen. Corp., 785 F. Supp. 2d 269, 284-85 (S.D.N.Y. 2011) ( ).
Furthermore, even if § 1635 applied to this transaction, the Meyers failed to exercise the right of rescission within the deadline set forth in TILA. TILA grants borrowers the right to rescind a loan "until midnight of the third business day following the consummation of the transaction or the delivery of the [disclosures required by the Act], whichever is later, by notifying the creditor, in accordance with regulations of the [Federal Reserve] Board, of his intention to do so." 15 U.S.C. § 1635(a). TILA's regime grants borrowers an unconditional right to rescind for three days, after which they may rescind only if the lender failed to satisfy TILA's disclosure requirements. I...
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