Smith v. Bank of Am. Home Loans, N.A.

• Decision Date: 13 August 2013
• Docket Number: Case No. 2:11–cv–676–FtM–29DNF.
• Citation: 968 F.Supp.2d 1159
• Parties: Brian T. SMITH, Jonathan C. Calianos, Plaintiffs, v. BANK OF AMERICA HOME LOANS a subsidiary of Bank of America, N.A., Mortgage Electronic Registration Systems, Inc., Defendants.
• Court: U.S. District Court — Middle District of Florida

968 F.Supp.2d 1159

Brian T. SMITH, Jonathan C. Calianos, Plaintiffs,

v.BANK OF AMERICA HOME LOANS a subsidiary of Bank of America, N.A., Mortgage Electronic Registration Systems, Inc., Defendants.

Case No. 2:11–cv–676–FtM–29DNF.

United States District Court,

M.D. Florida,

Fort Myers Division.

Aug. 13, 2013.

Brian T. Smith, Upton, MA, pro se.

Jonathan C. Calianos, Upton, MA, pro se.

Sara F. Holladay–Tobias, Emily Yandle Rottmann, McGuireWoods, LLP, Jacksonville, FL, for Defendants.

OPINION AND ORDER

JOHN E. STEELE, District Judge.

This matter comes before the Court on Defendants' Bank of America, N.A. and Mortgage Electronic Registration Systems, Inc. Motion to Dismiss Plaintiff's Second Amended Verified and Sworn Complaint (Doc. # 59) filed on February 1, 2013. Also before the Court is defendant Fannie Mae's Motion to Dismiss Plaintiffs' Second Amended Verified & Sworn Complaint filed on February 21, 2013. (Doc. # 66.) On March 12, 2013 ¹, plaintiffs filed a response to both motions. (Doc. # 69.) For the reasons set forth below, Fannie Mae's motion is granted and Bank of America, N.A. and Mortgage Electronic Registration Systems, Inc.'s motion is granted in part and denied in part.

I.

The Second Amended Complaint (Doc. # 53) alleges the following:

On August 4, 2005, plaintiffs Brian T. Smith and Jonathan C. Calianos (collectively, plaintiffs) purchased a condominium located at 28111 Tamberine Court, Unit 1321 (the property), Bonita Springs, Florida for the sum of $399,900.00. To finance the property, plaintiffs obtained a $240,000.00 loan from MLD Mortgage, Inc. (MLD). Plaintiffs executed a promissory note in favor of MLD which gave MLD a first mortgage on the Property. The promissory note is dated August 4, 2005 (the Original Note). Within a month of closing, the plaintiffs were directed to make all payments to Countrywide Home Loans (Countrywide). Plaintiffs never made any payments to MLD Mortgage. Plaintiffs made payments to Countrywide until Countrywide mailed the original note to the plaintiffs.² The Original Note was marked with a “void” stamp. The Original Note, bearing the “void” stamp, is in the possession of Callianos, and it is plaintiffs' position that the note is not enforceable.

Thereafter, on October 11, 2005, an assignment of mortgage was recorded in the Lee County land evidence records showing that MLD Mortgage, Inc. assigned the mortgage to defendant Mortgage Electronic Registration System (MERS). On February 10, 2012, MERS, at the direction of Bank of America, assigned the mortgage to Bank of America.

On an undisclosed date, but sometime after receiving the voided note from Countrywide, Calianos began to receive payment requests from Bank of America. Both plaintiffs questioned Bank of America's authority to collect on the void note, but were told by the Bank that the Original Note was in its possession. Plaintiffs requested a copy of the Original Note that was alleged to be in Bank of America's possession, and were provided with a copy of a note that was identical to the Original Note except it was not stamped “void”, did not contain an “allonge”, had “Generated by PDFKit.NET Evaluation” and “Account No. 104153740” printed on it, and contained a stamp which stated “We hereby certify that this is a true and exact copy of the original. By Rm First Title Southwest Florida.” (Compl., Exh. C.) Plaintiffs allege that this is not a copy of the true Original Note, and instead, the true Original Note is the voided copy in Callianos's possession. Nonetheless, plaintiffs made the requested payments to Bank of America “under protest” to avoid adverse action to their credit.

In order to stop Bank of America from seeking payment on the note, plaintiffs initiated this action by filing a Complaint on November 30, 2011. (Doc. # 1.) Plaintiffs stopped making payments to Bank of America after this action was initiated, and instead placed the alleged monies owed in an escrow account. Plaintiffs allege that in retaliation for this action, Bank of America began to make negative reports to plaintiff's credit bureaus resulting in decreased credit scores to both plaintiffs. These decreased credit scores are alleged to have caused financial damages including increased interest rates for plaintiffs. In addition, after this action was initiated, Bank of America produced a “Superceding Promissory Note” (the Superceding Note) and alleged that it was seeking payment from plaintiffs under this note. The plaintiffs allege that the Superceding Note is forged and unenforceable.

As a result, plaintiffs filed an Amended Complaint on February 21, 2012. (Doc. # 17.) The Amended Complaint was dismissed with leave to amend on December 19, 2012 (Doc. # 51) and a Second Amended Complaint was filed on January 9, 2013. (Doc. # 53.) The Second Amended Complaint seeks declaratory judgment (Count I) and asserts violations of the Fair Credit Reporting Act (FCRA) (Count II), civil fraud (Count III), federal civil Racketeer Influenced and Corrupt Organizations Act (RICO) (Count IV), and the Real Estate Settlement Procedures Act (RESPA) (Count V).

II.

Under Federal Rule of Civil Procedure 8(a)(2), a Complaint must contain a “short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). This obligation “requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) (citation omitted). To survive dismissal, the factual allegations must be “plausible” and “must be enough to raise a right to relief above the speculative level.” Id. at 555, 127 S.Ct. 1955. See also Edwards v. Prime Inc., 602 F.3d 1276, 1291 (11th Cir.2010). This requires “more than an unadorned, the-defendant-unlawfully-harmed-me accusation.” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (citations omitted).

In deciding a Rule 12(b)(6) motion to dismiss, the Court must accept all factual allegations in a complaint as true and take them in the light most favorable to plaintiff, Erickson v. Pardus, 551 U.S. 89, 127 S.Ct. 2197, 167 L.Ed.2d 1081 (2007), but “[l]egal conclusions without adequate factual support are entitled to no assumption of truth,” Mamani v. Berzain, 654 F.3d 1148, 1153 (11th Cir.2011) (citations omitted). “Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Iqbal, 556 U.S. at 678, 129 S.Ct. 1937. “Factual allegations that are merely consistent with a defendant's liability fall short of being facially plausible.” Chaparro v. Carnival Corp., 693 F.3d 1333, 1337 (11th Cir.2012) (internal quotation marks and citations omitted). Thus, the Court engages in a two-step approach: “When there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief.” Iqbal, 556 U.S. at 679, 129 S.Ct. 1937.

III.

A. Claims Against Fannie Mae

Fannie Mae seeks to dismiss the Complaint because it alleges that the counts do not specifically assert which defendant each count is asserted against. Further, the Second Amended Complaint lacks any factual allegations that implicate it for any wrongdoing. Therefore, it has no notice as to which claims, if any, are asserted against it.

The Court agrees. With respect to Fannie Mae, the only allegations in the Amended Complaint that relate to this defendant are that Fannie Mae is the current holder of the Superceding Note and does not have a legal right to collect money from the plaintiffs. (Doc. # 53, ¶ 65, 66.) There are no allegations that Fannie Mae has, at any point, tried to collect money from the plaintiffs or otherwise attempted to enforce the Superceding Note. Because it cannot be ascertained from the allegations in the Second Amended Complaint what claims are brought against Fannie Mae, or the nature of their alleged wrongdoing, the Second Amended Complaint fails to meet Fed.R.Civ.P. 8, and all claims against this party are dismissed without prejudice.

B. Count One—Declaratory Relief

Count I does not specifically identify which defendant this count is asserted against, but the factual allegations contained therein make it clear that this count is asserted solely against Bank of America. In Count I, plaintiffs seek declaratory judgment that the Original Note is void and ineffective, the Superceding Note is forged and ineffective, and Bank of America is required to release and discharge the mortgage it holds on the property. Finally, Count I seeks an order requiring Bank of America to refund all sums paid to Bank of America under the Original Note, plus interest.

Bank of America seeks to dismiss Count I because it asserts that plaintiffs have failed to allege an actual controversy that merits review. In support, plaintiffs cite to Perez v. Indymac FSB, 2012 U.S. Dist. Lexis 158403 (M.D.Fla. Nov. 5, 2012) for the proposition that there is not actual controversy until foreclosure proceedings have been initiated. Furthermore, Bank of America asserts that to the extent the Superceding Note is forged, the Original Note is clearly enforceable because it would have been unintentionally or mistakenly cancelled, given that plaintiffs have failed to allege that they have made a full payment. Finally, Bank of America alleges that plaintiffs cannot maintain a claim because they ratified the debt by making payments to Bank of America.

The Court finds that, at this stage of the litigation, plaintiffs have stated a plausible claim for declaratory relief.

If jurisdiction otherwise exists, a federal district court may issue declaratory relief pursuant to the Declaratory Judgment Act.³ To establish the existence of an actual controversy within the meaning of the Declaratory Judgment Act, the party invoking a federal court's authority must show: (1) that they personally have...