Winston v. 360 Mortg. Grp., LLC

• Decision Date: 02 October 2017
• Docket Number: 1:17-cv-1186-WSD
• Parties: DARRYL WINSTON, Plaintiff, v. 360 MORTGAGE GROUP, LLC, Defendant.
• Court: U.S. District Court — Northern District of Georgia

DARRYL WINSTON, Plaintiff, v. 360 MORTGAGE GROUP, LLC, Defendant.

1:17-cv-1186-WSD

UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF GEORGIA ATLANTA DIVISION

October 2, 2017

OPINION AND ORDER

This matter is before the Court on Defendant 350 Mortgage Group, LLC's ("Defendant" or "360 Mortgage") Motion to Dismiss [4] ("Motion") Plaintiff Darryl Winston's ("Plaintiff" or "Winston") Complaint [1.1]. Plaintiff failed to respond to Defendant's Motion, and it is deemed unopposed. See LR 7.1B, NDGa. Also before the Court is Plaintiff's "Ex Parte Verified Petition for Temporary Restraining Order" [2] ("Motion for TRO").

I. BACKGROUND

On December 17, 2014, Plaintiff obtained a loan in the amount of $369,000 from Defendant. (Compl. at 2). Repayment of the loan was secured by a deed ("Security Deed") to real property located at 1356 Churchill Way, Marietta, Georgia (the "Property"). (Id.). Plaintiff executed the Security Deed in favor of Mortgage Electronic Registration Systems, Inc. ("MERS"), as nominee for Defendant and Defendant's successors and assigns. (Id.). Under the terms of the Security Deed, Plaintiff "grant[ed] and convey[ed] to MERS . . . and the successors and assigns of MERS with power of sale, [the Property]." (Security Deed, Cobb County Deed Book 15208, Page 1521-1540, at 2).¹

In June 2015, Plaintiff "became delinquent in his . . . monthly mortgage payments" and sought "loss mitigation assistance." (Pet. for TRO [2] at 3).

On August 25, 2015, MERS assigned the Security Deed to Defendant. (Compl. at 3; see also Cobb County Deed Book 15275, Page 5919).

On March 3, 2017, Defendant "advertised the notice of sale under power of Plaintiff's [P]roperty on April 4, 2017, as a result of Plaintiff's alleged default on the loan secured by the [P]roperty." (Id. at 3). Plaintiff claims that the "notice did not identify who was the holder of the Security Deed and identified [Defendant] as the loan servicer." (Id.). Plaintiff asserts that "Defendant continues to hold itselfout as the holder of the note and the security deed while claiming to be the servicer of the loan. . . . Defendant cannot show they are a real party of [sic] interest to foreclose or enforce the negotiable instrument as they are the servicer." (Id. at 4).

On March 14, 2017, Plaintiff, proceeding pro se, filed in the Superior Court of Cobb County, Georgia, his Complaint, asserting claims for fraudulent conversion (Count I), mortgage servicing fraud (Count II), "declaratory judgment (credit default swap)" (Count III), "unfair and/or deceptive business practices" (Count IV), "fraud and/or attempted fraud" (Count V), and intentional infliction of emotional distress (Count VI).

On March 31, 2017, Plaintiff filed his Motion for TRO, seeking to enjoin the April 4, 2017, foreclosure sale.

On April 3, 2017, Defendant removed the Cobb County Action to this Court on the basis of diversity of citizenship. (Notice of Removal [1]).²

On August 7, 2017, Defendant moved to dismiss Plaintiff's Complaint for failure to state a claim.³ Plaintiff did not respond to Defendant's Motion, and it is deemed unopposed.

II. DISCUSSION

A. Legal Standard

Dismissal of a complaint, pursuant to Rule 12(b)(6), is appropriate "when, on the basis of a dispositive issue of law, no construction of the factual allegations will support the cause of action." Marshall Cnty. Bd. of Educ. v. Marshall Cnty. Gas Dist., 992 F.2d 1171, 1174 (11th Cir. 1993). In considering a motion to dismiss, the Court accepts the plaintiff's allegations as true and considers the allegations in the complaint in the light most favorable to the plaintiff. See Hishon v. King & Spalding, 467 U.S. 69, 73 (1984); Watts v. Fla. Int'l Univ., 495 F.3d 1289, 1295 (11th Cir. 2007); see also Bryant v. Avado Brands, Inc., 187 F.3d 1271, 1273 n.1 (11th Cir. 1999). The Court is not required to accept a plaintiff's legal conclusions as true. See Sinaltrainal v. Coca-Cola Co., 578 F.3d1252, 1260 (11th Cir. 2009) (citing Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)), abrogated on other grounds by Mohamad v. Palestinian Auth., — U.S. —, 132 S. Ct. 1702 (2012). The Court also will not "accept as true a legal conclusion couched as a factual allegation." See Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). The complaint, ultimately, is required to contain "enough facts to state a claim to relief that is plausible on its face." Twombly, 550 U.S. at 570.

To state a plausible claim for relief, the plaintiff must plead factual content that "allows the Court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 556 U.S. at 678. "Plausibility" requires more than a "sheer possibility that a defendant has acted unlawfully," and a complaint that alleges facts that are "merely consistent with" liability "stops short of the line between possibility and plausibility of 'entitlement to relief.'" Id. (citing Twombly, 550 U.S. at 557); see also Arthur v. JP Morgan Chase Bank, NA, 569 F. App'x 669, 680 (11th Cir. 2014) (noting that Conley's "no set of facts" standard has been overruled by Twombly, and a complaint must contain "sufficient factual matter, accepted as true, to state a claim for relief that is plausible on its face."). "A complaint is insufficient if it 'tenders naked assertions devoid offurther factual enhancement.'" Tropic Ocean Airways, Inc. v. Floyd, 598 F. App'x 608, 609 (11th Cir. 2014) (quoting Iqbal, 556 U.S. at 678).

"To survive a motion to dismiss, plaintiffs must do more than merely state legal conclusions; they are required to allege some specific factual bases for those conclusions or face dismissal of their claims." Jackson v. BellSouth Telecomms., 372 F.3d 1250, 1263 (11th Cir. 2004); see also White v. Bank of America, NA, 697 F. App'x 1015, 1018 (11th Cir. 2014) ("[C]onclusory allegations, unwarranted deductions of facts or legal conclusions masquerading as facts will not prevent dismissal.") (quoting Oxford Asset Mgmt., Ltd. v. Jaharis, 297 F.3d 1182, 1188 (11th Cir. 2002)).

Complaints filed pro se are to be liberally construed and are "held to less stringent standards than formal pleadings drafted by lawyers." Erickson v. Pardus, 551 U.S. 89, 94 (2007) (citations and internal quotation marks omitted). Nevertheless, a pro se plaintiff must comply with the threshold requirements of the Federal Rules of Civil Procedure. "Even though a pro se complaint should be construed liberally, a pro se complaint still must state a claim upon which the Court can grant relief." Grigsby v. Thomas, 506 F. Supp. 2d 26, 28 (D.D.C. 2007). "[A] district court does not have license to rewrite a deficient pleading." Osahar v. U.S. Postal Serv., 297 F. App'x 863, 864 (11th Cir. 2008).

B. Analysis⁴

1. Defendant's Standing to Foreclose on the Property

Plaintiff asserts that "Defendant continues to hold itself out as the holder of the note and the security deed while claiming to be the servicer of the loan. . . . Defendant cannot show they are a real party of [sic] interest to foreclose or enforce the negotiable instrument as they are the servicer." (Compl. at 4). It is undisputed that Plaintiff executed the Security Deed in favor of MERS, as nominee for Defendant and Defendant's successors and assigns. (Id.). Under the terms of the Security Deed, Plaintiff "grant[ed] and convey[ed] to MERS . . . and the successors and assigns of MERS with power of sale, [the Property]." (Security Deed at 2).

On August 25, 2015, MERS assigned the Security Deed to Defendant. (Compl. at 3; see also Assignment at 1). The Assignment states that MERS "doesassign and set over, without recourse, to [Defendant] the described mortgage with all interest, all liens, any rights due or to become due thereon . . . ." (Assignment at 1). Defendant is thus entitled to exercise the power of sale in the Security Deed. See O.C.G.A. § 23-2-114.11.

To the extent Plaintiff argues that Defendant cannot foreclose on the Property and his mortgage is void because it was improperly securitized, this argument has been consistently rejected under Georgia law. See, e.g., Searcy v. EMC Mortg. Corp., No. 1:10-cv-0965, 2010 Dist. LEXIS 119975, at *2 (N.D. Ga. Sept. 30, 2010) ("While it may well be that Plaintiff's mortgage was pooled with other loans into a securitized trust that then issued bonds to investors, that fact would not have any effect on Plaintiff's rights and obligations with respect to the mortgage loan, and it certainly would not absolve Plaintiff from having to make loan payments or somehow shield Plaintiff's property from foreclosure."). Plaintiff has not, and cannot, assert a viable claim under any legal theory based on Defendant's alleged lack of authority to foreclose on the Property. Insofar as any of his claims, including his request for injunctive relief, are based on Defendant's alleged lack of authority to foreclose on the Property, these claims are required to be dismissed.

2. Fraudulent Conversion (Count I)

Plaintiff cannot state a claim for conversion because the property Defendant allegedly converted is Plaintiff's home, and under Georgia law, "[c]onversion does not apply to real property." Chung v. JPMorgan Chase Bank, N.A., 976 F. Supp. 2d 1333, 1347 (N.D. Ga. 2013) (citing Levenson v. Ward, 668 S.E.2d 763 (Ga. Ct. App. 2008) ("An action for conversion and trover will not lie to recover real property.")). Plaintiff has not, and cannot, state a claim for fraudulent conversion based on Defendant's alleged conversion of the Property, and Plaintiff's fraudulent conversion claim is required to be dismissed.

To the extent Plaintiff's conversion claim is based on his argument that Defendant never "put forth any consideration in the alleged contract" and that Plaintiff was not loaned any money, so he does not owe a debt, could not have defaulted on his mortgage, and thus cannot be foreclosed upon, this "no money lent" or "vapor money" theory had been consistently rejected by this Court and other courts throughout the...