White-Lett v. Bank of N.Y. Mellon, Corp. (In re Lett)
| Docket Number | 10-61451-BEM,Adversary Proceeding 20-6278-BEM |
| Decision Date | 29 November 2021 |
| Parties | IN RE: Shirley Lett, Debtor. v. The Bank of New York Mellon, Corp., BANK OF AMERICA, N.A., Federal National Mortgage Association a/k/a Fannie Mae, Federal Home Loan Mortgage Corp. a/k/a Freddie Mac, Mortgage Electronic Registration Systems Incorporated (MERS), RRA CP Opportunity Trust 1, Merscorp Holdings, Inc. d/b/a MERS, Shellpoint Mortgage Servicing, and The Bank of New York Mellon, Defendants. Shirley White-Lett, Plaintiff, |
| Court | U.S. Bankruptcy Court — Northern District of Georgia |
ORDER ON BANK OF NEW YORK MELLON'S MOTION TO DISMISS AND MOTION FOR JUDGMENT ON THE PLEADINGS AND PLAINTIFF'S MOTION FOR PARTIAL SUMMARY JUDGMENT
This matter is before the Court on Bank of New York Mellon's ("BONYM") Motion to Dismiss Shirley White-Lett's ("Plaintiff") Amended Complaint ("Complaint" or "AC") and Motion for Judgment on the Pleadings ("Motion") [Doc 102][1]. Plaintiff filed a response ("Response"). [Doc. 103]. BONYM filed a reply. [Doc. 110]. Plaintiff has also filed a Motion for Partial Summary Judgment against BONYM. [Doc. 71]. Plaintiff's and BONYM's Motions are ripe for determination.
BONYM filed a proof of claim in Plaintiff's bankruptcy case asserting a secured claim based on a note (the "Note") and deed to secure debt on Plaintiff's residence[2] (the "Deed"). Plaintiff brought this adversary proceeding to object to BONYM's proof of claim, to avoid its lien, and for a declaration that "BONYM is not entitled to enforce the security deed having failed to establish a complete chain of title and that the note at issue herein is unsecure" and for an injunction to prohibit BONYM from foreclosing Plaintiff's property. [AC ¶ 87, ¶ 114]. Plaintiff is also seeking damages from BONYM for alleged discharge injunction violations by one of BONYM's former servicers.
BONYM moves to dismiss Plaintiff's objection to claim and Plaintiff's claims attacking BONYM's interest in the Note and Deed due to lack of subject matter jurisdiction and the doctrine of res judicata. BONYM contends the Court lacks subject matter jurisdiction because Plaintiff lacks standing to object to its proof of claim due to a lack of a pecuniary interest in the distributions that may be made by the chapter 7 Trustee (the "Trustee"). Additionally, BONYM argues that Plaintiff lacks standing to challenge the validity of the Note and Deed. Alternatively BONYM argues that even if standing were not an issue Plaintiff is precluded from relitigating issues related to the Note and Deed as she has raised these same issues in a prior state court action, which was not decided in her favor. Finally, BONYM seeks a judgment on the pleadings on Plaintiff's claim for violation of the discharge injunction for failure to state a claim arguing that her claim is barred by the doctrine of laches. Plaintiff seeks summary judgment on her claims against BONYM for determination of the validity of the lien and for declaratory relief.
For the reasons stated herein, the Court will grant BONYM's motion to dismiss and will dismiss Plaintiff's claims objecting to BONYM's proof of claim, seeking a determination of the validity of BONYM's lien, and for declaratory relief. As a result, the Court will deny Plaintiff's motion for summary judgment as moot. The Court will also deny BONYM's motion for judgment on the pleadings as to the claim for violation of the discharge injunction.
Under Federal Rule of Civil Procedure ("Rule") 12(b)(1), made applicable to adversary proceedings under Federal Rule of Bankruptcy Procedure ("F.R.B.P.") 7012(b), a defendant may move to dismiss a plaintiff's complaint on the grounds that the court lacks subject matter jurisdiction. BONYM challenges Plaintiff's standing to bring certain of her claims. "Because standing is jurisdictional, a dismissal for lack of standing has the same effect as a dismissal for lack of subject matter jurisdiction." Stalley ex rel. U.S. v. Orlando Reg. Healthcare Sys., Inc., 524 F.3d 1229, 1232 (11th Cir. 2008) (quotation marks and citation omitted). The party invoking federal court jurisdiction has the burden to establish they have standing with the degree of evidence required for the stage of the litigation. TransUnion LLC v. Ramirez, 141 S.Ct. 2190, 2207 (2021). "[S]tanding is an essential and unchanging part of the case-or-controversy requirement of Article III" of the U.S. Constitution and serves to identify those disputes that can be appropriately resolved in the courts. Lujan v. Defenders of Wildlife, 504 U.S. 555, 560, 112 S.Ct. 2130, 2136 (1992). To establish standing, Plaintiff must demonstrate: (1) an injury in fact; (2) a causal connection between the injury and the conduct complained of; and (3) a likelihood that the injury will be redressed by a favorable decision. Id.
Rule 12(c), made applicable to bankruptcy court proceedings under F.R.B.P. 7012(b), permits parties to move for a judgment on the pleadings after the pleadings are closed. Here, the pleadings are closed between Plaintiff and BONYM because BONYM filed its answer to the Complaint on February 12, 2021. [Doc. 43]. Granting a judgment on the pleadings is appropriate when "there are no material facts in dispute and the moving party is entitled to judgment as a matter of law." Douglas Asphalt Co. v. Qore, Inc., 541 F.3d 1269, 1273 (11th Cir. 2008). Motions for judgment on the pleadings subject claims to the same pleading standards as Rule 12(b)(6) motions to dismiss. Puissant v. Bank of Am. Home Loan Servicing, No. 5:12-CV-388(MTT), 2013 U.S. Dist. LEXIS 171396, at *5 (M.D. Ga. Dec. 5, 2013) (citing Provident Mut. Life Ins. Co. of Philadelphia v. City of Atlanta, 864 F.Supp. 1274, 1278 (N.D.Ga. 1994)).
Rule 12(b)(6), made applicable to proceedings in bankruptcy court under F.R.B.P. 7012(b), permits courts to dismiss plaintiffs' claims when they fail to state a claim upon which relief can be granted. Wells Fargo Bank, N.A. v. Farmery (In re Farmery), No. 13-71735, AP 13-5450, 2014 Bankr. LEXIS 2865, at *2 (Bankr. N.D.Ga. 2014) (Diehl, J.). To adequately state a claim for relief, plaintiffs must allege facts that, if taken as true, establish a facially plausible claim. Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 1949 (2009) (citation omitted). Claims are facially plausible if they allow the court to reasonably infer that the defendant is liable. Id.
Speculative claims about the defendant's conduct or merely reciting the elements of the claim is not sufficient. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556, 127 S.Ct. 1955, 1965 (2007); Claros v. Taylor Lee & Assocs. LLC, No. 1:18-cv-2204, 2018 U.S. Dist. LEXIS 224591, at *4-5 (N.D.Ga. Sep. 18, 2018).
Although a plaintiff's pro se status entitles his or her complaint to be reviewed more liberally than an attorney's pleadings, a pro se party's pleadings must still satisfy the pleading requirements laid out in Rule 12(b)(6). Beckwith v. Bellsouth Telecomms., Inc., 146 Fed.Appx. 368, 371 (11th Cir. 2005) ("Although we construe them liberally, pro se complaints also must comply with the procedural rules that govern pleadings."). The Court may not serve as de facto counsel or rewrite deficient pleadings to carry them past the motion to dismiss stage. See Smith v. Ocwen Fin., 488 Fed.Appx. 426, 427 (11th Cir. 2012) (citation omitted).
When reviewing motions for judgment on the pleadings, similar to Rule 12(b)(6) motions, the court must accept the facts plaintiffs allege in their complaints as true and in a light most favorable to them. Cannon v. City of W. Palm Beach, 250 F.3d 1299, 1301 (11th Cir. 2001); Resnick v. AvMed, Inc., 693 F.3d 1317, 1321-22 (11th Cir. 2012).
"Res judicata, or claim preclusion, bars relitigation of matters that were litigated or could have been litigated in an earlier suit." Manning v. City of Auburn, 953 F.2d 1355, 1358 (11th Cir. 1992) (citing Nevada v. U.S., 463 U.S. 110, 130, 103 S.Ct. 2906, 2918 (1983)). Federal courts applying res judicata must give effect to applicable law of the court that rendered the prior decision. Ebah v. St. Paul Travelers, 459 Fed.Appx. 860, 861 (11th Cir. 2012). Here, the prior decision was made by a Georgia Superior Court, such that the Georgia law of res judicata applies. "In Georgia, the doctrine of res judicata prevents the re-litigation of all claims which have already been adjudicated, or which could have been adjudicated, between identical parties or their privies in identical causes of action." Starship Enters. of Atlanta, Inc. v. Coweta Cty., Ga., 708 F.3d 1243, 1253 (11th Cir. 2013); Karan, Inc. v. Auto-Owners Ins. Co., 280 Ga. 545, 546 (2006) ().
In evaluating whether or not res judicata bars a claim based on identity of the causes of action, "Georgia courts look to see whether the claims arise from the same subject matter." Starship Enters., 708 F.3d at 1254; see also Morrison v. Morrison, 284 Ga. 112 116 (2008) (), disapproved on other grounds by Gilliam v. State, 860 S.E.2d 543 (2001). Additionally, "one must assert all claims for relief concerning the same subject matter in one lawsuit and any claims for relief concerning that same subject matter which are not raised will be res judicata pursuant to O.C.G.A. §...
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