Rogers v. Bank of Am., N.A., Case No. 13-cv-1698 (SRN/TNL)

• Decision Date: 01 July 2014
• Docket Number: Case No. 13-cv-1698 (SRN/TNL)
• Parties: Irene A. Rogers, Plaintiff, v. Bank of America, N.A. as successor by merger to Countrywide Home Loans, Inc., and Countrywide Home Loans Servicing, LP; Bank of New York Mellon formerly known as the Bank of New York as Trustee for the Certificateholders CWABS, Inc., Asset-backed Certificates, Series 2005-4; Bank of New York Mellon Trust Company N.A. formerly known as Bank of New York Trust Company N.A. as Co-Trustee for Certificateholders CWABS, Inc., Asset-based Certificates, 2005-4; Mortgage Electronic Registration Systems, Inc.; John and Jane Does 1-10, Defendants.
• Court: U.S. District Court — District of Minnesota

Irene A. Rogers, Plaintiff, v. Bank of America, N.A. as successor by merger to Countrywide Home Loans, Inc.,and Countrywide Home Loans Servicing, LP; Bank of New York Mellon formerlyknown as the Bank of New York as Trustee for the Certificateholders CWABS, Inc.,Asset-backed Certificates, Series 2005-4; Bank of New York Mellon Trust CompanyN.A. formerly known as Bank of New York Trust Company N.A. as Co-Trusteefor Certificateholders CWABS, Inc., Asset-based Certificates, 2005-4; MortgageElectronic Registration Systems, Inc.; John and Jane Does 1-10, Defendants.

Case No. 13-cv-1698 (SRN/TNL)

UNITED STATES DISTRICT COURT DISTRICT OF MINNESOTA

Dated: July 1, 2014

MEMORANDUM OPINIONAND ORDER

Michael J. Keogh, Keogh Law Office, P.O. Box 11297, St. Paul, MN 55111, for Plaintiff.

Keith S. Anderson, Bradley Arant Boult Cummings LLP, One Federal Place, 1819 Fifth Avenue North, Birmingham, AL 35203; and Mark G. Schroeder, Briggs and Morgan, P.A., 2200 IDS Center, Minneapolis, MN 55402, for Defendants Bank of America, N.A., Bank of New York Mellon, and Mortgage Electronic Registration Systems, Inc.

SUSAN RICHARD NELSON, United States District Judge

I. INTRODUCTION

This matter is before the Court on Defendants Bank of America, N.A. as successor by merger to Countrywide Home Loans, Inc. and Countrywide Homes Loans Servicing, LP("BANA"), Bank of New York Mellon formerly known as The Bank of New York as Trustee for the Certificateholders CWABS, Inc., Asset-backed Certificates, Series 2005-4 ("BONY"), and Mortgage Electronic Registration Systems ("MERS")'s (collectively, "Defendants")¹ Motion to Dismiss [Doc. No. 9] Plaintiff Irene Rogers' Complaint [Doc. No. 1] with prejudice. For the reasons set forth below, the Court grants Defendants' Motion.

II. BACKGROUND

In this lawsuit, Plaintiff is challenging the foreclosure of the mortgage on her home. According to the Complaint, in April 2005, Plaintiff's husband refinanced the existing mortgage on their home located at 13443 Red Fox Road, in Rogers, Minnesota ("Mortgage"), in favor of Countrywide Home Loans, Inc. (Compl. [Doc. No. 1] ¶¶ 4, 15 & Ex. B.) MERS was the mortgagee. (Id., Ex. B ¶ C.) Plaintiff's husband, but not Plaintiff, signed the Note. (Id. ¶ 15.) MERS assigned its interest in the Mortgage to BONY on June 10, 2008, and the assignment was subsequently recorded with the Hennepin County Recorder on June 27 ("First Assignment"). (Id. ¶ 25 & Ex. E.) Meanwhile, on June 12, Plaintiff and her husband sent a letter to Countrywide Home Mortgage (a subsidiary of BANA), in which they requested a mortgage modification. (See id. ¶ 24 & Ex. D.) Plaintiff's husband passed away on September 26, 2009. (Id. ¶ 30.)

Plaintiff alleges that, in November 2009, BANA offered a "trial loan modification" contingent on Plaintiff making three timely payments in January, February, and March of 2010. (Id. ¶ 31.) According to Plaintiff, she made the required payments in a timely manner and received documents for a permanent loan modification. (Id. ¶ 33.) When Plaintiff learned that the forms required her husband's signature, she informed BANA of his death and provided documentation showing that she was the personal representative of his estate. (Id. ¶ 34 & Ex. F.) However, BANA refused to honor the loan modification because Plaintiff was not a party to the Note. (Id. ¶ 35.) Plaintiff "continued to make partial and late payments," (id. ¶¶ 36, 38), and attempted to obtain assistance from the U.S. Department of Housing and Urban Development, (id. ¶¶ 39-42). But, according to the Complaint, Plaintiff's application was denied because she was not a party to the Note. (See id. ¶¶ 42-43.)

On October 28, 2011, another assignment of the Mortgage was recorded. (Id. ¶ 44 & Ex. G.) This assignment was executed on October 17, 2011, and again assigned the Mortgage from MERS to BONY ("Second Assignment"). (Id. ¶ 44 & Ex. G.) On January 11, 2012, a Notice of Pendency of Proceeding and Power of Attorney to Foreclose Mortgage by Corporation ("Notice of Pendency") was recorded. (Id. ¶ 46 & Ex. H.) And, on May 17, 2013, the property was purchased by BONY at a sheriff's sale. (See id. ¶ 39 & Ex. I.) BONY, which is the trustee of a securitized mortgage trust, (see id. ¶¶ 6-7), was a party to a Pooling and Servicing Agreement ("Pooling Agreement") entered into between various entities, not including Plaintiff, (see id. ¶ 16 & Ex. C). According to Plaintiff, thePooling Agreement "required that all mortgages to be included in the corpus of the Mortgage Trust were to be transferred into the Mortgage Trust between June 1, 2005 and August 8, 2005. ('the Funding Period')." (Id. ¶ 17.)

Plaintiff's Complaint raises six causes of action. In Count I, Plaintiff seeks a declaratory judgment that the assignments, and therefore the resulting foreclosure, are void for failure to comply with the Pooling Agreement. (See id. ¶¶ 47-52.) In Count II, Plaintiff seeks a declaratory judgment that the foreclosure is void for failure to comply with the statutory foreclosure requirements. (See id. ¶¶ 57-52.)² Count III asserts a breach of contract claim based on BANA's failure to execute a final loan modification agreement. (See id. ¶¶ 67-71.) In Count IV, Plaintiff asserts a defamation of title claim. (See id. ¶¶ 73-78.) Count V alleges that BANA violated Minnesota law by failing to record a legal assignment of the Note prior to commencing the foreclosure by advertisement proceedings and by failing to include the Second Assignment in the Notice of Mortgage Foreclosure Sale. (See id. ¶¶ 83-86.) Finally, in Count VI, Plaintiff seeks relief under Minn. Stat. § 8.31. (See id. ¶¶ 89-90.)

Defendants filed a motion to dismiss Plaintiff's Complaint on November 14, 2013 [Doc. No. 9], along with a supporting memorandum [Doc. No. 11] and affidavit with several exhibits [Doc. No. 12]. Plaintiff filed an opposition memorandum on December 6 [Doc. No. 15], and Defendants filed a reply brief on December 20 [Doc. No. 16]. Thematter was heard on April 10, 2014, at which time Plaintiff was granted leave to submit supplemental briefing. Plaintiff did so on April 18 [Doc. Nos. 19-20].

III. DISCUSSION

A. Standard of Review

Defendants move to dismiss Plaintiff's Complaint pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure for failure to state a claim upon which relief can be granted. When evaluating a motion to dismiss under Rule 12(b)(6), the Court assumes the facts in the Complaint to be true and construes all reasonable inferences from those facts in the light most favorable to Plaintiff. Morton v. Becker, 793 F.2d 185, 187 (8th Cir. 1986). However, the Court need not accept as true wholly conclusory allegations, see Hanten v. Sch. Dist. of Riverview Gardens, 183 F.3d 799, 805 (8th Cir. 1999), or legal conclusions Plaintiff draws from the facts pled, Westcott v. City of Omaha, 901 F.2d 1486, 1488 (8th Cir. 1990). In addition, the Court ordinarily does not consider matters outside the pleadings on a motion to dismiss. See Fed. R. Civ. P. 12(d). The Court may, however, consider exhibits attached to the complaint and documents that are necessarily embraced by the pleadings, Mattes v. ABC Plastics, Inc., 323 F.3d 695, 697 n.4 (8th Cir. 2003), and may also consider public records, Levy v. Ohl, 477 F.3d 988, 991 (8th Cir. 2007).³

To survive a motion to dismiss, a complaint must contain "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). Although a complaint need not contain "detailed factual allegations," it must contain facts with enough specificity "to raise a right to relief above the speculative level." Id. at 555. "Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly, 550 U.S. at 555). In sum, this standard "calls for enough fact[s] to raise a reasonable expectation that discovery will reveal evidence of [the claim]." Twombly, 550 U.S. at 556.

B. The Claims

1. Declaratory Judgment—Defective Assignments

Count I of Plaintiff's Complaint fails because Plaintiff lacks standing to challenge the validity of the assignments of the Mortgage under the Pooling Agreement. Plaintiff argues that, because the Mortgage was assigned to BONY outside of the Funding Period mandated by the Pooling Agreement, the assignments and subsequent foreclosure are void. (See Compl. ¶¶ 47-52.) However, numerous courts within this District—including this Court—have held that a plaintiff mortgagor is not a party to, or beneficiary of, the agreement that governs the trust to which the mortgagor's debt instrument has been transferred and, therefore, does not have standing to challenge that agreement. See, e.g., Nelson v. Bank of N.Y. Mellon, Civ. No. 12-1096 (SRN/SER), 2012 WL 4511165, at *3(D. Minn. Oct. 1, 2012) ("Moreover, Plaintiffs were not parties to the pooling and servicing agreements by which their notes were pooled into mortgage-backed securities. They therefore do not have standing to challenge those agreements.") (citation omitted); Anderson v. Countrywide Home Loans, Civ. No. 10-2685 (MJD/JJG), 2011 WL 1627945, at *4 (D. Minn. Apr. 8, 2011) ("Plaintiffs do not have standing to challenge the validity of the assignment to the Trust because they are not parties to the PSA."), Report and Recommendation adopted by 2011 WL 1630113, at *1 (D. Minn. Apr. 28, 2011); Greene v. Home Loan Servs., Inc., Civ. No. 09-719 (DWF/JJK), 2010 WL 3749243, at *4 (D. Minn. Sept. 21, 2010) ("Even assuming this matter was adequately pleaded, which it was not, Plaintiffs are not a party to the Pooling and Servicing Agreement and therefore have no

standing to challenge any purported breach of the rights and obligations of that agreement."). And, when the Eighth Circuit Court of Appeals was presented with this issue in Karnatcheva v. JP Morgan Chase Bank, N.A., it agreed:

The plaintiffs base [their] request

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