Morrison v. Wells Fargo Bank, N.A.
| Decision Date | 15 January 2014 |
| Docket Number | Civil Action No. 2:13cv576. |
| Citation | 30 F.Supp.3d 449 |
| Court | U.S. District Court — Eastern District of Virginia |
| Parties | Randolph J. MORRISON, Plaintiff, v. WELLS FARGO BANK, N.A., Defendant. |
Drew David Sarrett, Henry W. McLaughlin, III, The Law Office of Henry McLaughlin, P.C., Richmond, VA, for Plaintiff.
Christy Lee Murphy, Hunter Wilmer Sims, Jr., Kaufman & Canoles PC, Norfolk, VA, for Defendant.
Before the Court is Defendant Wells Fargo Bank, N.A.'s (“Defendant” or “Wells Fargo”) Motion to Dismiss for Failure to State a Claim against Plaintiff Randolph J. Morrison (“Plaintiff”). Plaintiff has filed a response. A hearing on this matter will not aid the Court's decisional process. Having carefully considered the parties' pleadings, this matter is now ripe for disposition. For the reasons set forth herein, the Motion to Dismiss the breach of Deed of Trust and breach of good faith and fair dealing claims is GRANTED WITH PREJUDICE and DENIED as to the fraud claim.
On April 19, 2007, the late Mrs. Veola H. Morrison, Plaintiff's mother, entered into a mortgage loan agreement with Defendant for her home property at 1092 Blackburn Lane in Virginia Beach, VA (“Morrison Property”). Pl.'s Am. Compl. ¶ 3. The loan was evidenced by a Note and secured by a Deed of Trust that named Samuel I. White (“White”) as trustee.Id. ¶ 4. The Note and Deed of Trust provide that the trustee may invoke the power of sale upon certain conditions. Def.'s Mot. Dismiss 3. The Deed of Trust also provides for the trustee to be removed and a successor trustee to be appointed. Pl.'s Am. Compl. ¶ 8. Equity Trustees LLC was eventually appointed as trustee in place of White through the execution of an Appointment of Substitute Trustee two-page document. Pl.'s Opposition to Mot. Dismiss 9.
Mrs. Morrison died intestate in 2009. Id. at 5. Defendant began foreclosure proceedings on the Morrison Property and intended to foreclose on January 19, 2011. Def.'s Mot. Dismiss 3. On January 7, 2011, Plaintiff wrote a letter to Well Fargo Bank's Loss Mitigation Department, notifying Defendant that he wished to assume the mortgage on the Morrison Property and discuss an interest rate reduction to lower loan payments. Pl.'s Opposition to Mot. Dismiss 6. Then, on January 12, 2011, Plaintiff maintains that he had a telephone conversation with a Wells Fargo employee who assured him that he was approved for a loan modification and the foreclosure would not take place on January 19, 2011. Id. Plaintiff also contends that Defendant sent him a letter dated January 14, 2011, addressed to “Estate of Veola H. Morrison, c/o Randolph S. Morrison,” which offered him a Special Forbearance Agreement, specified that the first payment was due on February 1, 2011, and stated that Defendant would “instruct its foreclosure counsel to suspend foreclosure proceedings once the initial installment has been received, and to continue to suspend the action as long as you keep to the terms of this Agreement.” Id. at 6–7. On January 19, 2011, Equity Trustees LLC conducted a foreclosure auction and the Morrison Property was sold to HSBC USA. Id. at 9. The Morrison Property was later sold to a third party. Id. at 10.
On February 15, 2012, Plaintiff filed a Complaint against Defendant in the Circuit Court for the City of Virginia Beach, Virginia. After Defendant filed and scheduled for hearing a Motion Craving Oyer and a Demurrer, Plaintiff filed a Motion for Nonsuit, which was granted on July 25, 2012. On January 22, 2013, Plaintiff again filed a Complaint against Defendant in the Circuit Court for the City of Virginia Beach. On October 23, 2013, Defendant simultaneously filed a Notice of Removal to remove the case to federal court and a Motion to Dismiss. Plaintiff then filed an Amended Complaint on November 8, 2013. On November 15, 2013, Defendant filed the instant Motion to Dismiss Plaintiff's Amended Complaint (“Motion to Dismiss”) for failure to state a claim. On November 29, 2013, Plaintiff filed a Memorandum in Opposition to Defendant's Motion to Dismiss his Amended Complaint (“Opposition Memorandum”). On December 4, 2013, Defendant filed a Reply to Plaintiff's Opposition Memorandum. Plaintiff and Defendant both requested a hearing on this matter.
Federal Rule of Civil Procedure 8(a)(2) requires that, in addition to a statement of the court's jurisdiction and a demand for relief, a complaint must contain a “short and plain statement of the claim showing that the pleader is entitled to relief.”
Federal Rule of Civil Procedure 12(b)(6) provides for dismissal of actions that fail to state a claim upon which relief can be granted. “To survive a 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) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) (internal quotations omitted)); Francis v. Giacomelli, 588 F.3d 186, 193 (4th Cir.2009) ; Giarratano v. Johnson, 521 F.3d 298, 302 (4th Cir.2008). Specifically, “[a] claim has facial plausibility when the pleaded factual content allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678, 129 S.Ct. 1937. For purposes of a Rule 12(b)(6) motion, courts may only rely upon matters in the pleadings, including the complaint's allegations and the documents attached as exhibits or incorporated by reference. Simons v. Montgomery Cnty. Police Officers, 762 F.2d 30, 31 (4th Cir.1985). See also Beaudett v. City of Hampton, 775 F.2d 1274, 1278 (4th Cir.1985) ().
Federal Rule of Civil Procedure 9(b) prescribes a heightened pleading standard for fraud claims. A party alleging fraud “must state with particularity the circumstances constituting fraud or mistake.” Fed.R.Civ.P. 9(b). Rule 9(b) requires a plaintiff to allege the particulars of “the time, place, and contents of the false representations, as well as the identity of the person making the misrepresentation and what he obtained thereby.” Harrison v. Westinghouse Savannah River Co., 176 F.3d 776, 784 (4th Cir.1999).
Defendant argues that Plaintiff's breach of Deed of Trust claim should be dismissed because Plaintiff has not demonstrated that he has standing to sue for breach of contract based on the successor trustee appointment. Defendant asserts that Plaintiff's injuries in the form of loss of record title, loss of equity, eviction, loss of quiet enjoyment and inconvenience stem from the failure to make payments on the Note, not from the appointment of a substitute trustee. Defendant contends that without identifying a causal connection between the appointment and his injuries, in addition to failing to argue that proper appointment of a substitute trustee would redress those injuries, Plaintiff does not establish that he has standing. Also, Defendant argues that Plaintiff's breach of Deed of Trust claim should be dismissed because Plaintiff does not adequately undermine the validity of the successor trustee appointment. Defendant does not believe that the Appointment of Substitute Trustee document is a “bogus” document. Defendant states the only contentions supporting this allegation of bogusness are that the staple marks on the two pages of the document do not match and the filing of the Appointment of Substitute Trustee was not in compliance with the Virginia Code, neither of which establish a breach of any legally enforceable obligation to Plaintiff.
Plaintiff asserts that as the homeowner, he has standing to contest a “bogus” Appointment of Substitute Trustee. This assertion is based on Virginia state court rulings that Plaintiff cited and attached to his Opposition Memorandum as exhibits. Plaintiff claims that Defendant breached paragraphs 16, 22 and 24 of the Deed of Trust by failing to comply with applicable law governing the contract. Specifically, Plaintiff avers that Defendant did not lawfully remove White as trustee because the notarized document effectuating Equity Trustees' appointment was a “bogus” document. Plaintiff alleges that the second page was not attached to the first page when the document was signed, and the second page was later signed by a “robosigner.” Consequently, because the second page of the document describing the appointment of Equity Trustees was not properly signed or notarized, all subsequent activities related to or performed by Equity Trustees as successor trustee are invalid, including the published notice of foreclosure and the actual foreclosure sale.
A trustee's power to foreclose is conferred by the deed of trust. Fairfax Cnty. Redevelopment & Hous. Auth. v. Riekse, 281 Va. 441, 445–46, 707 S.E.2d 826, 829 (2011). The two purposes of a deed of trust are “to secure the lender-beneficiary's interest in the parcel it conveys and to protect the borrower from acceleration of the debt and foreclosure on the securing property prior to the fulfillment of the conditions precedent it imposes.” Mathews v. PHH Mortgage Corp., 283 Va. 723, 732, 724 S.E.2d 196, 200 (2012). A substitute trustee may be appointed under a separate notarized document by removal of the original trustee named in the deed of trust. See generally Wachovia Bank, N.A. v. Van Huyck, 64 Va.Cir. 306, 2004 WL 2848527 (2004) ; see also Va.Code Ann. § 55–59(9) (). Under Virginia law, “[a]...
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