White v. Servicing
| Decision Date | 19 April 2011 |
| Docket Number | No. 4:10-CV-2137 CAS,4:10-CV-2137 CAS |
| Parties | QUINCY C. WHITE, et al., Plaintiffs, v. BAC HOME LOANS SERVICING, L.P., et al., Defendants. |
| Court | U.S. District Court — Eastern District of Missouri |
On October 1, 2010, plaintiffs Quincy and Carmen White filed a petition in the Circuit Court of St. Louis County, Missouri. Plaintiffs allege claims of wrongful foreclosure, quiet title, violation of the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692, et seq., negligence, and fraud against defendants BAC Home Loans Servicing, LP ("BAC"), Federal National Mortgage Association d/b/a Fannie Mae ("Fannie Mae"), and Kozeny & McCubbin, L.C. ("Kozeny").1 On November 12, 2010, defendants BAC and Fannie Mae filed a notice of removal, in which they state that the action is removable to this Court pursuant to 28 U.S.C. § 1441(b) because a federal question (under the FDCPA) is present, and that the Court has supplemental jurisdiction over plaintiffs' state-law claims of wrongful foreclosure, quiet title, negligence, and fraud.
Now before the Court is defendants BAC and Fannie Mae's motion to dismiss. Plaintiffs oppose defendants' motion, and defendants have filed a reply. For the following reasons, the Court will grant defendants' motion to dismiss.
Under Federal Rule of Civil Procedure 8(a)(2), a pleading 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). The pleading standard Rule 8 announces does not require "detailed factual allegations," Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007), but "it demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation," Ashcroft v. Iqbal, _______U.S.______, 129 S. Ct. 1937, 1949 (2009). A pleading that offers labels, conclusions, a formulaic recitation of elements, or naked assertions devoid of factual enhancement does not suffice. Iqbal, 129 S. Ct. at 1949.
Rule 9(b) requires that an allegation of fraud "state with particularity the circumstances constituting fraud or mistake." Fed.R.Civ.P. 9(b). "Under Rule 9(b), a plaintiff must plead 'such matters as the time, place and contents of false representations, as well as the identity of the person making the misrepresentation and what was obtained or given up thereby.'" BJC Health Sys. v. Columbia Cas. Co., 478 F.3d 908, 917 (8th Cir. 2007) (quoting Abels v. Farmers Commodities Corp., 259 F.3d 910, 920 (8th Cir. 2001)). "The level of particularity required depends on, inter alia, the nature of the case and the relationship between the parties." Id. (citing Payne v. United States, 247 F.2d 481, 486 (8th Cir. 1957)).
To survive a motion to dismiss under Rule 12(b)(6), a complaint must contain sufficient factual matter, accepted as true, to "state a claim to relief that is plausible on its face." Iqbal, 129 S. Ct. at 1949. A claim has facial plausibility when the alleged facts allow a court to draw the reasonable inference that the defendant is liable for the misconduct alleged. Id. "Where a complaint pleads facts that are merely consistent with a defendant's liability it stops short of the line between possibility and plausibility of entitlement to relief." Id. When a complaint contains well-pleadedfactual allegations, a court should assume the well-pleaded facts are true and then determine whether they plausibly entitle the plaintiff to relief. Id. at 1949-50. Only well-pleaded facts are accepted as true, while "[t]hreadbare recitals of the elements of a cause of action" and legal conclusions are not. Id. at 1949. "[L]egal conclusions can provide the framework of a complaint, [but] they must be supported by factual allegations." Id. at 1950. When a complaint contains well-pleaded factual allegations, a court should determine whether they plausibly entitle the plaintiff to relief. Id. If the well-pleaded facts do not plausibly entitle the plaintiff to relief, the claim should be dismissed. Id.
Generally, the Court must ignore materials that are outside of the pleadings; however, the Court may "consider some public records, materials that do not contradict the complaint, or materials that are 'necessarily embraced by the pleadings.'" Noble Sys. Corp. v. Alorica Cent., LLC, 543 F.3d 978, 982 (8th Cir. 2008) (quoting Porous Media Corp. v. Pall Corp., 186 F.3d 1077, 1079 (8th Cir. 1999)); see also 5B Charles A. Wright & Arthur R. Miller, Federal Practice and Procedure: Civil 3d § 1357, at 376 (2004) (). "The district court may take judicial notice of public records and may thus consider them on a motion to dismiss." Stahl v. U.S. Dept. of Agriculture, 327 F.3d 697, 700 (8th Cir. 2003) (citing Faibisch v. Univ. of Minn., 304 F.3d 797, 802-03 (8th Cir. 2002)).
In their petition, plaintiffs allege that on September 17, 2007, they entered into a promissory note with Countrywide Bank, FSB, which is secured by a deed of trust on property located in St. Louis County, Missouri. Doc. #6, 5-9. Plaintiffs allege that the deed of trust lists Countrywide, FSB as the lender, M, L&L Foreclosure Services, Inc. as the trustee, and Mortgage ElectronicRegistration Systems, Inc. ("MERS") as the beneficiary. Id. ¶ 7. Plaintiffs allege that neither "BAC or Countrywide, L.P." was the original lender or named as a party with an interest on the deed of trust. Id. ¶ 11.
Plaintiffs allege, "[u]pon information and belief, no [a]ssignment was ever entered, recorded, or filed transferring or assigning any interest in the [p]roperty, the [n]ote, or the [d]eed of [t]rust to either BAC or Countrywide, L.P." Id. ¶ 12. Plaintiffs further allege that, upon information and belief, "the [n]ote and/or [d]eed of [t]rust were sold into securitization utilizing the electronic system belonging to MERS." Id. ¶ 13. Plaintiffs allege that, upon information and belief, "when said [n]ote and/or [d]eed of [t]rust were securitized, they were separated." Id. ¶ 14.
Plaintiffs allege that on July 15, 2009, Jerry Morgan, as purported attorney-in-fact of defendant BAC, filed an "Appointment of Successor Trustee" with the St. Louis County Recorder of Deeds which named defendant Kozeny as successor trustee to the deed of trust. Id. ¶ 19. Plaintiffs allege that Morgan had no authority to act on behalf of defendant BAC or Countrywide FSB, and therefore the successor trustee appointment was and is null and void. Id. ¶¶21-22.
Plaintiffs allege that on July 21, August 12, and September 10, 2010, defendant BAC, through defendant Kozeny, contacted plaintiffs by letters sent by the United States Postal Service ("Kozeny Letters") which indicated or implied that: (1) defendant BAC was the holder of the note; (2) nonpayment of the debt would result in a trustee foreclosure sale of plaintiffs' property; (3) defendant Kozeny was foreclosing on the note, which would result in the sale of plaintiffs' property; (4) plaintiffs owed attorney's fees, collection costs, and other charges to defendant Kozeny; (5) plaintiffs' property had been lawfully sold at a trustee's sale; (6) defendant Fannie Mae was the owner of plaintiffs' property; and/or (7) plaintiffs must vacate the subject property. Id. ¶¶41-43.Plaintiffs allege that on or about September 3, 2010, defendant Kozeny purported to conduct a trustee's sale of the property, and executed a trustee's deed transferring title of the property to defendant Fannie Mae. Id. ¶ 25.
Plaintiffs allege that at the time defendant BAC attempted to appoint defendant Kozeny as successor trustee (such attempt allegedly "made in [defendant] BAC's position as successor to Countrywide, L.P., not in any position on behalf of Countrywide, FSB"), it had no right to make such an appointment, as defendant BAC was not the original lender, the holder of the note, a nonholder in possession of the note who has the rights of the holder, or a person in possession of the note "who is entitled to enforce the instrument pursuant to Section 400.3-309 or 400.3-418(d), of the [n]ote."2Id. ¶¶23-24. Plaintiffs further allege that defendant Kozeny knew or should have known that defendant BAC had no authority to appoint it as successor trustee. Id. ¶ 46. Plaintiffs allege that, because defendants BAC and Kozeny were without any authority to conduct a trustee foreclosure sale (as the successor trustee appointment was invalid and defendant BAC was not the lender or holder of the note), the foreclosure of the subject property was wrongful, absolutely void, and not lawful. Id.¶¶ 26,45. Additionally, plaintiffs allege that the trustee foreclosure sale and filing of the trustee deed was a nonjudicial action to effect dispossession or disablement of the property when there was no present right to possession of the property by either defendant BAC or defendant Kozeny. Id. ¶ 47.
Plaintiffs allege that based on the trustee's sale and deed, defendants Fannie Mae and BAC are both claiming an interest in the property. Id. ¶¶28-29. Plaintiffs allege that, because defendants Fannie Mae and BAC have no right or claim to the property, plaintiffs' rights and interest in the property supersede that of defendants Fannie Mae and BAC. Id. ¶ 30.
Plaintiffs allege that defendant BAC is a loan "servicer" and has no right or interest in the note, or the proceeds from payment thereof. Id. ¶ 32. Plaintiffs also allege that defendants BAC and Kozeny are "debt collectors" as that term is defined in 15 U.S.C. § 1692a(6)(F). Id. ¶ 33. Additionally, plaintiffs allege that defendant BAC did not obtain the note prior to the time the debt was in default. Id. ¶ 34. Plaintiffs allege that the Kozeny Letters contained false representations. Id. ¶ 43. Plaintiffs further allege that the representations contained in the Kozeny Letters mailed to plaintiffs by defendant Kozeny were made for the purpose...
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