Newsom v. Branch Banking & Trust Co.
| Decision Date | 09 January 2019 |
| Docket Number | 4:18-CV-112-FL |
| Court | U.S. District Court — Eastern District of North Carolina |
| Parties | NELLIE NEWSOM, Plaintiff, v. BRANCH BANKING AND TRUST COMPANY, et al., Defendants. |
This pro se case is before the court on the motion to proceed in forma pauperis under 28 U.S.C. § 1915(a)(1) (D.E. 1) by plaintiff Nellie Newsom ("plaintiff") and for a frivolity review pursuant to 28 U.S.C. § 1915(e)(2)(B). Plaintiff has also filed a motion for a temporary restraining order and other injunctive relief. D.E. 1-6 ("TRO Motion"). The motion to proceed in forma pauperis was referred to the undersigned Magistrate Judge for determination pursuant to 28 U.S.C. § 636(b)(1)(A) and the other matters for issuance of a memorandum and recommendation pursuant to 28 U.S.C. § 636(b)(1)(B). See Public D.E. dated 23 Oct. 2018. As set out below, the motion to proceed in forma pauperis will be allowed; and it will be recommended that the TRO motion be denied and all but one of plaintiff's claims—the fifth cause of action—be dismissed for lack of subject matter jurisdiction pursuant to the Rooker-Feldman and Younger doctrines and/or failure to state a claim upon which relief can be granted.
The court finds that plaintiff has adequately demonstrated her inability to prepay the required court costs. Her motion to proceed in forma pauperis is therefore GRANTED.
In this action, commenced on 25 June 2018, plaintiff alleges improprieties in lending practices and foreclosure proceedings relating to her real property located at 544 Pine Ridge Road, Roanoke Rapids, Halifax County, North Carolina ("the property"). See Compl. (D.E. 1-1) ¶¶ 2, 19. She contends that defendants, who are originators, servicers, or holders of the mortgage loan on the property, have violated state and federal regulations. See id. ¶¶ 2-18. The alleged violations are grounded, in part, on the purported fact that defendants have no ownership interest in the property in question and should not be permitted to sell, auction off, foreclose on, or otherwise transfer ownership of it. Id. ¶ 22.
Specifically, in her complaint, plaintiff alleges as follows: On 7 July 2005, plaintiff executed a negotiable promissory note and security interest in the form of a deed of trust for $249,000 with defendant Branch Banking and Trust Company ("BBT") as the original lender. Id. ¶¶ 3; 36-38. Plaintiff alleges that on or around 31 October 2005 the promissory note was sold, transferred, assigned, and securitized to Morgan Stanley Mortgage Loan Trust 2005-7 ("Morgan Stanley Trust"). Id. ¶ 42. Defendant Mortgage Electronic Registration Services, Inc. ("MERS") acted as the electronic agent and as a purported beneficiary for BBT under the deed and in a capacity as bailor/bailee for each successor defendant of the Morgan Stanley Trust. Id. ¶¶ 9, 28.
Defendant Deutsche Bank National Trust Company ("Deutsche Bank") is the Trustee of the Morgan Stanley Trust and defendant Morgan Stanley Mortgage Capital, Inc. ("Morgan Stanley Mortgage Capital") is the sponsor of the Morgan Stanley Trust. Id. ¶¶ 4, 7. Defendant Morgan Stanley Capital I, Inc. ("Morgan Stanley Capital") is the depositor. Id. ¶ 8. Defendant Wells Fargo Bank, National Association ("Well Fargo") is the master servicer of plaintiff's loan. Id. ¶ 5.Defendant Specialized Loan Servicing, LLC ("Specialized Loan Servicing") and defendant SN Servicing Corporation ("SN") are servicers of the loan. Id. ¶¶ 6, 10. Defendants FV-I, Inc. ("FV-I"), Morgan Stanley Mortgage Capital Holdings, LLC ("Morgan Stanley Mortgage Capital Holdings"), U.S. Bank Trust National Association ("U.S. Bank Trust"), and Igloo Series II Trust ("Igloo Trust") are holders of the loan. Id. ¶¶ 11, 12, 13, 15. Defendant Hutchens Law Firm ("Hutchens") is the firm representing SN and a substitute trustee of the loan. Id. ¶¶ 15, 16. John Does 1-100 are unnamed defendants who claim any right, title, or interest in plaintiff's property. Id. ¶ 17.
On 24 February 2014, an assignment deed of trust to FV-I, Inc. in trust for Morgan Stanley Mortgage Capital Holdings was recorded in Halifax County. Id. ¶ 43. The 24 February 2014 assignment of deed of trust was fraudulently signed and was an unlawful and void transfer. Id. ¶¶ 44-47.
On 8 November 2016, an assignment of deed of trust to Morgan Stanley Capital Holdings recorded in Halifax County was fraudulently signed and was an unlawful and void transfer. Id. ¶¶ 48-52. Also on 8 November 2016, another assignment of deed of trust to U.S. Bank Trust as Trustee of the Igloo Trust was recorded in Halifax County. Id. ¶ 53. This additional assignment of deed of trust on 8 November 2016 was also fraudulently signed and was an unlawful unilateral transfer that is void on its face. Id. ¶¶ 54-57. Only the depositor, Morgan Stanley Capital, has the right to convey the asset into the trust. Id. ¶ 58.
On 20 June 2018, defendants fraudulently foreclosed on the property. Id. ¶ 121.
Plaintiff asserts the following claims or, as she refers to them, causes of action, each sequentially numbered in the complaint as indicated: (1) lack of standing to foreclose and wrongful foreclosure, id. ¶¶ 60-73; (2) unconscionable contract, id. ¶¶ 74-80; (3) breach ofcontract, id. ¶¶ 81-85; (4) breach of fiduciary duty, id. ¶¶ 86-90; (5) violations of the Truth in Lending Act ("TILA"), 15 U.S.C. § 1601, et seq., id. ¶¶ 91-97; (6) violations of the Real Estate Settlement Procedures Act ("RESPA"), 1 U.S.C. § 2601, et seq., id. ¶¶ 98-103; (7) fraud in the concealment, id. ¶¶ 104-112; (8) fraud in the inducement, id. ¶¶ 113-119; (9) intentional infliction of emotional distress, id. ¶¶ 120-130; (10) slander of title, id. ¶¶ 131-141; (11) quiet title, id. ¶¶ 142-149; (12) rescission, id. ¶¶ 150-154; (13) declaratory relief, id. ¶¶ 155-158; and (14) a temporary restraining order and other injunctive relief enjoining sale of the property pending trial, id. ¶¶ 159-164. In addition to the injunctive relief noted, plaintiff seeks declaratory relief, monetary relief between $100,000 and $2 million (including compensatory and punitive damages), pre- and post-judgment interest, the refund of wrongfully paid sums, costs, and such other relief to which she is entitled. See, e.g., id. at 36-37 ¶¶ A-D, F, G.
In her complaint, plaintiff references the following exhibits she purports to attach to her complaint: the deed of trust, id. ¶ 21; an internet article, id. ¶ 23; an asset securitization manual, id. ¶ 24; a MERS procedural manual, id. ¶ 28; a MERS patent, id. ¶ 28; a Morgan Stanley prospectus supplement, id. ¶ 30; and an affidavit of a forensic expert, id. ¶ 34. But none of these documents are included anywhere in her filings. The documents that are attached to the complaint are: an affidavit by plaintiff (D.E. 1-2), a lis pendens (D.E. 1-3), and the TRO motion (D.E. 1-6) and a proposed order (D.E. 1-7) allowing it.
The TRO motion seeks essentially the same relief sought by plaintiff in her fourteenth cause of action—that is, enjoining defendants from selling the property pending trial on her claims.
After allowing a party to proceed in forma pauperis, as here, the court must conduct a frivolity review of the case pursuant to 28 U.S.C. § 1915(e)(2)(B). The court must dismiss the ifit determines that the action is frivolous or malicious, 28 U.S.C. § 1915(e)(2)(B)(i); fails to state a claim upon which relief can be granted, id. § 1915(e)(2)(B)(ii); or seeks monetary relief from an immune defendant, id. § 1915(e)(2)(B)(ii). 28 U.S.C. § 1915(e)(2)(B); see Denton v. Hernandez, 504 U.S. 25, 27 (1992) (standard for frivolousness).
Under Rule 8 of the Federal Rules of Civil Procedure, a pleading that states a claim for relief must contain "a short and plain statement of the grounds for the court's jurisdiction . . . [and] a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(1), (2). Case law explains that the complaint must "'state[ ] a plausible claim for relief' that 'permit[s] the court to infer more than the mere possibility of misconduct' based upon 'its judicial experience and common sense.'" Coleman v. Md. Court of Appeals, 626 F.3d 187, 190 (4th Cir. 2010) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009)). Likewise, a complaint is insufficient if it offers merely "labels and conclusions," "a formulaic recitation of the elements of a cause of action," or "naked assertion[s]" devoid of "further factual enhancement." Iqbal, 556 U.S. at 678 (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (internal quotation marks omitted)).
In evaluating frivolity specifically, a pro se plaintiff's pleadings are held to "less stringent standards" than those drafted by attorneys. White v. White, 886 F.2d 721, 722-23 (4th Cir. 1989). Nonetheless, the court is not required to accept a pro se plaintiff's contentions as true. Denton, 504 U.S. at 32. Instead, the court is permitted to "pierce the veil of the complaint's factual allegations and dismiss those claims whose factual contentions are clearly baseless." Neitzke v. Williams, 490 U.S. 319, 327 (1989). Provided that a plaintiff's claims are not clearly baseless, the court must weigh the factual allegations in plaintiff's favor in its frivolity analysis. Denton, 504 U.S. at 32.The court must read the complaint carefully to determine if a plaintiff has alleged specific facts sufficient to support the claims asserted. White, 886 F.2d at 724.
A court may consider subject matter jurisdiction as part of the frivolity review. See Lovern v. Edwards, 190 F.3d 648, 654 (4th Cir. 1999) (); ...
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