Ward v. Fid. Bank (In re Ward)

• Decision Date: 02 April 2018
• Docket Number: Adversary Number 17–04047–EJC,Number 17–41129–EJC
• Citation: 583 B.R. 558
• Parties: IN RE: Tremar K. WARD, Debtor. Tremar K. Ward, Plaintiff, v. Fidelity Bank d/b/a Fidelity Bank Mortgage, Defendant.
• Court: U.S. Bankruptcy Court — Southern District of Georgia

583 B.R. 558

IN RE: Tremar K. WARD, Debtor.

Tremar K. Ward, Plaintiff,

v.Fidelity Bank d/b/a Fidelity Bank Mortgage, Defendant.

Number 17–41129–EJC

Adversary Number 17–04047–EJC

United States Bankruptcy Court, S.D. Georgia, Savannah Division.

Signed April 2, 2018

Tremar K. Ward, Savannah, GA, pro se.

Mallory Kate Velten, Brock & Scott, PLLC, Atlanta, GA, for Defendant.

OPINION ON MOTION TO DISMISS COMPLAINT

Edward J. Coleman, III, Chief Judge

On November 16, 2017, Tremar K. Ward (the "Plaintiff") filed this adversary proceeding against his mortgage lender, Fidelity Bank (the "Defendant"). The Plaintiff, proceeding pro se , alleges that the Defendant "monetized" a promissory note signed by the Plaintiff and used the funds therefrom to finance the Plaintiff's purchase of real property. He contends that the Defendant's conduct discharged his obligation to repay the debt. Based on these allegations, the Plaintiff brings claims against the Defendant under Georgia law and under the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. §§ 1692 et seq. He also seeks a declaratory judgment concerning the Defendant's security interest in the real property. Before the Court is the Defendant's Motion to Dismiss (adv. dckt. 13) the Complaint (adv. dckt. 1) for failure to state a claim upon which relief can be granted. Although the Court has liberally construed the Plaintiff's pro se filings, his Complaint will be dismissed for the reasons set forth below.

I. JURISDICTION

This Court has subject-matter jurisdiction pursuant to 28 U.S.C. § 1334(a), 28 U.S.C. § 157(a), and the Standing Order of Reference signed by then Chief Judge Anthony A. Alaimo on July 13, 1984. This is a "core proceeding" within the meaning of 28 U.S.C. § 157(b)(1).

II. PROCEDURAL BACKGROUND

The Plaintiff filed a Chapter 7 bankruptcy petition on July 31, 2017. (Dckt. 1). On November 16, 2017, the Plaintiff filed this adversary proceeding against the Defendant, enumerating claims for "action of trespass on the case/trespass quare clausum fregit," "action of trover," "action of covenant," and declaratory judgment. (Adv. Dckt. 1). In a section of his Complaint entitled "Bill of Particulars,"¹ the Plaintiff demands $100,000.00 in compensatory damages and contends that he is entitled to "triple damages of $300,000.00 should a fraudulent claim be found." Id. at p. 23. The Plaintiff also seeks "$1,000 per day for time and legal expenses, calculated beginning 21 days after the date of notice to appear. Id. at p. 25.

On December 15, 2017, the Defendant filed an Answer. (Adv. Dckt. 6). In the Answer, the only defense asserted by the Defendant is that the Complaint must be dismissed pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure ("Federal Rules") because it fails to state a claim upon which relief may be granted. Id. at p. 8. The Defendant also requests attorneys' fees and costs.

On January 26, 2018, the Defendant filed the instant Motion to Dismiss the Plaintiff's Complaint pursuant to Federal Rule 12(b)(6) (adv. dckt. 13), as well as a supporting memorandum of law (adv. dckt. 14). On February 12, 2018, the Plaintiff filed a response. (Adv. Dckt. 17). At a hearing on February 15, 2018, the Defendant's counsel presented oral argument, and the Plaintiff rested on his written response. The matter was taken under advisement and is now ripe for ruling.

III. THE PLAINTIFF'S ALLEGATIONS

As set forth in the Plaintiff's Complaint, the facts of this case are as follows: On April 30, 2014, the Plaintiff obtained a mortgage loan from the Defendant in the amount of $81,900.00.² (Adv. Dckt. 1, p. 7). As evidenced by a promissory note (the "Promissory Note"), the Plaintiff promised to pay the Defendant $391.04 per month beginning on June 1, 2014.³ Id. at p. 41 (Exhibit "1"). The Plaintiff also executed a security deed conveying to the Defendant title to real property commonly known as 126 Greenbriar Court, Savannah, Chatham County, Georgia 31419 (the "Property"). Id. at p. 44 ("Exhibit 2").

In the Complaint, the Plaintiff alleges that the Defendant engaged in certain fraudulent conduct in connection with the April 30, 2014 loan transaction. These allegations are somewhat confusing. According to the Complaint, the Defendant did not "finance the purchase of the Subject Property with its own money." Id. at p. 9. Instead, the Defendant "endorsed the Note ‘Pay to the Order of’ and left it blank." Id. The Defendant then "deposited the Note into a transaction account in [the Plaintiff's] name[,] ... wrote a check off of that account to pay the seller of the Subject Property," and "sold the Note through the Securitization process to fund [the Plaintiff's] deposit account," which the Defendant "unlawfully depleted." Id. at p. 11.

In his response to the Defendant's Motion to Dismiss, the Plaintiff clarifies his allegations. There, he explains that "banks endorse the back of the Promissory Note like a check and place the funds on their books as a debit." (Adv. Dckt. 17, p. 6). Then, "because they use [Generally Accepted Accounting Principles], they place an entry on the credit side of the ledger[,] thereby making the man or women [sic] who signed the Promissory Note the Creditor of the funds." Id. In other words, the Defendant financed the purchase of the Property with money the Defendant "created when it monetized [the] Promissory Note." Id. at p. 5.

According to the Plaintiff, the Defendant's conduct took place without his knowledge or consent. At the time of the loan transaction, the Plaintiff did not know "that [his] Promissory Note was the same as cash or a cashier's check." Id. at p. 7. The Plaintiff learned of the Defendant's alleged actions when he "saw a video on the Internet of a speech recorded by a member of the Federal Reserve Board who explained this fraudulent scheme that is practiced by so many banks and mortgage lenders in the residential mortgage lending business." (Adv. Dckt. 1, p. 11).

After the April 30, 2014 loan transaction, the Defendant allegedly used the United States Postal Service "to collect on a [f]raudulent debt," made various "false claims exceeding their jurisdiction," and "charged [the Plaintiff] for mortgage insurance ...."⁴ (Adv. Dckt. 1, p. 21). The Plaintiff further alleges that the Defendant "used threats of intimidation, double recovery, and extortion using the mail." (Adv. Dckt. 1, p. 21). One such communication is a letter from the Defendant's counsel dated February 10, 2017. (Adv. Dckt. 1, p. 64) (Exhibit "4"). Pursuant to § 1692g(a) of the FDCPA, the letter notified the Plaintiff that the amount of the debt was $83,562.88, identified the creditor as the Defendant, and informed the Plaintiff of his right to dispute the validity of the debt within 30 days. (Adv. Dckt. 1, p. 64) (Exhibit "4").

Subsequently, the Plaintiff drafted a document entitled "Notice of Default Judgment." (Adv. Dckt. 1, pp. 52–62) (Exhibit "4"). This document, dated March 31, 2017, is addressed to the Defendant's counsel and cc'd to an assortment of federal, State of Georgia, and ecclesiastical officials. (Adv. Dckt. 1, pp. 57–58). It provides in relevant part as follows:

I, as man, Tremar Kenard Ward, Authorized Representative to the Legal Entity/Artificial Person "TREMAR K WARD," conjoined with all the derivatives thereof, have sent (via Certified United States Mail) this formal Default Judgment in the contested matters of the above and to address any related former Claims or Actions initiated by you and/or held in your Trusted Responsibility. Upon request, any and all Trustees are accountable to Report in fully [sic] to the one whose Trust they hold.

I am in receipt of your February 10, 2017 notice (see Exhibit 1). This letter is to notify you, your firm, your servicing company and the mortgage company claiming ownership of this alleged loan and note, that I am exercising my rights under the "Fair Debt Collections [sic] Practices Act" as codified at 15 U.S.C. § 1692, which stipulates that a debt collector must, if requested, provide validation of the alleged debt, i.e. validate the debt, per the "Fair Debt Collections [sic] Practices Act," "FDCPA." The debt collector (Foreclosure Attorney, Bank, Alleged Lender) is mandated under "FDCPA" to cease and desist ALL collection activity until validation of the alleged debt is provided.

...

The facts [sic] that this lawful Request had not been Honored nor answered, this Default Judgment is being claimed against you, H. Palmer Proctor Jr—President, Thomas E Brock—Founding Partner, Gregory A Scott—Founding Partner and all other parties of interest relating to this matter.

...

Id. at pp. 52–62. According to the Plaintiff, this document demonstrates that his debt to the Defendant "has been paid in full and discharged a second time ...." (Adv. Dckt. 1, pp. 11–13).⁵

The Plaintiff alleges that the Defendant's fraudulent conduct "reached epic proportions on or about July 23, 2017[,] with the mailing of a Notice of Foreclosure Sale," which is attached to the Complaint as Exhibit "3." (Adv. Dckt. 1, p. 21). The document attached as Exhibit "3" is a solicitation letter sent to the Plaintiff by DVH Law Group, LLC, not by the Defendant's counsel, Brock and Scott PLLC. (Adv. Dckt. 1, p. 51) (Exhibit "3"). The letter, dated July 21, 2017, notified the Plaintiff that the Defendant's counsel scheduled a foreclosure sale for August 1, 2017, and suggested that the Plaintiff call DVH Law Group, LLC "IMMEDIATELY for a FREE case evaluation." Id. (emphasis in original).⁶ The Plaintiff does not allege that the scheduled foreclosure sale actually took place.⁷

IV. LEGAL STANDARD ON MOTION TO DISMISS

The Defendant contends that the Plaintiff's Complaint fails to state a claim upon which relief may be granted pursuant to Federal Rule 12(b)(6), made applicable to this adversary proceeding by Rule 7012(b) of the Federal Rules of Bankruptcy Procedure ("Bankruptcy Rules"). The Defendant, however, improperly filed the instant Motion to Dismiss under Federal Rule 12...