Author Archives: Ebube Okoli

Bank of America and MERS Motion for Dismissal Granted Against Homeowner-Plaintiff in Reconsideration of Order Denying Preliminary Injunction in Foreclosure Proceeding

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In Harris v. Americas Wholesale Lender, No. 2011-659-CH (Macomb Cty. Cir. Ct. June 8, 2011) the court granted the defendant’s motion for dismissal of all the homeowner-plaintiff’s claims in foreclosure proceeding.

Defendants Countrywide, Bank of America, and MERS moved for summary disposition against plaintiff-homeowner under MCR 2.116(C)(7) and (C)(8). Plaintiff moved for reconsideration of the lower court’s denial for preliminary injunction and another motion for entry of default judgment.

Plaintiff alleged five counts; [1] fraud, [2] breach of contract, [3] collusion, [4] conversion, and finally [5] unjust enrichment. In assessing these claims the court found that they were all without merit.

In regards to the plaintiff’s alleged fraud claim the court dismissed it as frivolous as plaintiff could not, and had not, produced any evidence to support the allegation. Upon considering the second count, the court likewise dismissed as the plaintiff failed to show any cognizable allegation of a breach of contract.

The claim of collusion was also dismissed as the court found that the plaintiff failed to plead the claim with particularity. Accordingly, the claim of conversion was also dismissed as the plaintiff failed to explain, to the court’s satisfaction, how a claim of conversion could be supported. Finally, the claim of unjust enrichment was found to be without merit, as the court found that the plaintiff failed to show how an unjust enrichment took place.

First Circuit Grants Wells Fargo’s Motion to Dismiss Plaintiff-Homeowner’s Suit to Preclude Foreclosure Sale

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The court in McKenna v Wells Fargo Bank, N.A. Case No. 11-1650 (C.A. 1, Aug. 16, 2012) was faced with questions relating to the district court’s subject matter jurisdiction. Here, Wells Fargo’s primary assertion in its removal papers – “that there was federal question jurisdiction present in the case” – turned out to be mistaken as no federal claim was present. However, diversity jurisdiction was found to be sufficient enough to support the state statutory claims that were asserted in the complaint.

Wells Fargo brought a foreclosure action against the plaintiff [McKenna], the plaintiff responded by asserting a right to rescind the mortgage and then filed suit to preclude the foreclosure sale.

The plaintiff claimed a right to rescind on the grounds that [1] Wells Fargo had provided her with only one Truth in Lending disclosure statement at the time of the loan rather than two copies, and [2] Wells Fargo had understated the finance charge in its Truth in Lending statement by more than $35. The lower court then issued a preliminary injunction restraining Wells Fargo from taking further action to sell the plaintiff’s home.

On March 10, 2010, Wells Fargo removed the case to the federal district court in Massachusetts. Wells Fargo asserted that federal question jurisdiction existed. The bank then moved to dismiss for failure to state a claim, and the district court granted the motion. On review, the court found that diversity jurisdiction existed as Wells Fargo was a bank and a citizen of the state where it is “located.” The bank’s location being North Dakota, and the plaintiff being a citizen of Massachusetts, allowed for diversity jurisdiction.

On review the court determined that the plaintiff’s complaint alleged that Wells Fargo made certain misrepresentations. However, the court found that the plaintiff failed to specify the time or place of these misrepresentations or their real content and, as the district court held, these assertions were “too vague to meet the particularity requirement of Rule 9.” The First Circuit affirmed the lower court’s ruling. Further, the suit was not timely under the federal Truth in Lending Act, 15 U.S.C. 1635(a), and the complaint failed to state claims under the equivalent state law.

Massachusetts District Court Dismisses Homeowner-Plaintiff’s Claim of Alleged Inadequacies in Foreclosure and Assignment of His Mortgage

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In Butler v. Deutsche Bank Trust Co. Americas, 2012 WL 3518560 (D Mass 2012), the court dealt with alleged inadequacies in the assignment and foreclosure of a mortgage. The plaintiff and mortgagor, Frank Butler, claimed that the defendant [Deutsche Bank] had wrongfully foreclosed on two separate occasions, slandered the property’s title, and violated G.L. c. 93A. Deutsche Bank moved to dismiss the complaint on the theory that the alleged inadequacies were not based on actionable legal theories that support the plaintiff’s claims. The court granted the bank’s motion to dismiss.

The plaintiff offered a number of theories to support his claim as to the invalidity of one or both of the foreclosure actions. First, he contended that the foreclosure actions were invalid because the bank did not hold the note secured by the mortgage and the mortgage assignments were not made in compliance with the Pooling and Servicing Agreement.

Next, the plaintiff contended that the foreclosure auctions were invalid because the assignments from MERS were invalid and a robo-signer was used. Lastly, he contended that the foreclosure auctions were invalid as the assignment was made without identifying the relevant trust.

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After review of the plaintiff’s contentions, the court found that they all lacked merit. The court relied on case law that dealt directly with all of the plaintiff’s contentions. Because none of the plaintiff’s theories as to the invalidity of either the assignment or the foreclosure was actionable, the court granted the defendant’s motion to dismiss.

Massachusetts District Court Dismisses Homeowner-Plaintiff’s Challenge to Assignment Due to Lack of Standing

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The two actions from Oum v. Wells Fargo Bank, N.A., et al, 1:11-cv-11663, No. 23 (D.Mass. Jan. 4, 2012) reflected nearly identical facts. Both cases arose from an allegedly invalid assignment of a mortgage from defendant Sand Canyon to Wells Fargo.

Plaintiffs argued that because the assignments of their mortgages were invalid, the foreclosures by Wells Fargo as trustee on their homes were invalid as well. After considering the plaintiff’s contentions, the court dismissed the plaintiff’s claims, after holding that the non-party plaintiffs lacked standing to challenge the assignment.

Plaintiffs had asked the court to enjoin Wells Fargo from proceeding with any eviction action [Count 1]; to quiet title by declaring them the “sole owners” of the properties [Count 2]; and to grant appropriate relief for Wells Fargo as trustee’s breach of the duty of good faith and reasonable diligence [Count 3].

Defendants argued that plaintiffs lacked standing to challenge the validity of the assignments Sand Canyon made to Wells Fargo as trustee of their respective mortgages because plaintiffs were neither parties to the contractual assignments, nor were they third-party beneficiaries. Plaintiffs argued that because they had a “claim of rightful legal ownership” to the respective properties, they have standing to contest the “cloud” on their wrongfully divested title. The court sided with the defendants, finding that an assignment is a contract, and the plaintiffs were not parties to the contract.

Massachusetts Supreme Court Dismisses Try Title Action Due To Lack Of Subject Matter Jurisdiction

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In Bevilacqua v. Rodriguez, 460 Mass. 762 (2011), theMassachusetts Supreme Court handled the issue of whether a plaintiff had standing to maintain a try title action under G.L. c. 240, §§ 1-5, where he was in physical possession of real property but his chain of title rested on a foreclosure sale conducted by someone other than “the mortgagee or his executors, administrators, successors or assigns.”

In this case, the purchaser of property, after foreclosure of a mortgage, brought an action to try title against mortgagor. The purchaser alleged, that because foreclosure sale had been conducted by assignee before the mortgagee had actually assigned mortgage, a cloud existed on purchaser’s title. This action was dismissed, and an appeal ensued. On review, the Massachusetts Supreme Court affirmed the lower court’s holding. However, the court modified the lower court’s holding, finding that the dismissal should have been entered without prejudice.

The court found that the lower court properly raised the issue of whether the plaintiff had record title to the property such that he had standing to bring a try title action. The court found that the plaintiff had not identified a basis on which the court could conclude that the plaintiff had record title to the property such that a try title action could be sustained.

Kansas Supreme Court Holds That a Non-Lender to a Mortgage is Not a Necessary Party in Foreclosure Action

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In Landmark Nat. Bank v. Kesler, 216 P.3d 158 (KS 2009), the court dealt with the issue of what exactly constitutes a necessary party to a foreclosure action. MERS and Sovereign Bank sought review of a lower court judgment, which held that a non-lender is not a contingently necessary party in a mortgage foreclosure action and that due process does not require that a non-lender be allowed to intervene in a mortgage foreclosure action.

At the heart of this appeal was whether the lower court abused its discretion in refusing to set aside the default judgment and refusing to join MERS as a contingently necessary party. The Supreme Court of Kansas found no such abuse and denied the motion to set aside the motion, a finding in line with the lower court.

The Supreme Court of Kansas held, as a matter of first impression, that the lower court did not abuse its discretion in denying the company’s motion to set aside default judgment or its motion to intervene as a contingently necessary party.

MERS contended further, that due process rights were violated as foreclosure action was consummated without MERS receiving notice of the proceeding and without MERS having the opportunity to intervene in the action. However, the court found that MERS failed to demonstrate that it possessed any tangible interest in the mortgage beyond a nominal designation as the mortgagor. Accordingly, the court held that the lower court’s refusal to allow the company to intervene did not violate its due process rights.

Massachusetts Trial Court Limits Ibanez Holding by Rejecting Plaintiff’s Proposition That Foreclosing Party Needs to Hold The Mortgage in Order to Bring a Service Member’s Action

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This action commenced in this court on August 12, 2009. The plaintiff in Randle v. GMAC, No. 09 MISC 408202 GHP, Allison Randle, sought to prevent a foreclosure sale by defendant GMAC Mortgage, LLC [GMAC], and asked the court for judgment declaring that GMAC did not hold any claim secured by a certain mortgage recorded with the county registry of deeds. Therefore GMAC lacked standing to bring such an action against plaintiff Randle pursuant to the Servicemembers Civil Relief Act, and under legislation enacted in Massachusetts under and pursuant to that federal law.

Partially relying on the holding from U.S. Bank Nat’l Assoc. v. Ibanez, 17 LCR 202 (2009), the plaintiff claimed that she had a right to challenge the standing of GMAC to have filed the Servicemembers Case as a vehicle to vindicating this right, she had filed the Miscellaneous Case.

In relying on Ibanez the court found that the plaintiff confused or conflated the issue in Ibanez with the issues in her case. In Ibanez two foreclosures were determined to be invalid because the foreclosing parties failed to comply with the provisions of G.L. c. 244, § 14. These provisions required that requisite notice be given which “identifies the holder of the mortgage.” See Ibanez, 17 LCR at 204 [failure to identify holder of mortgage renders sale void as matter of law]; Ibanez, 17 LCR at 206-07 [foreclosure invalid where foreclosing party named in notice had not been assigned mortgage either on or off record].

In reaching this decision in Ibanez, the Land Court determined that a bank did not “hold” a mortgage, within the meaning of G.L. c. 244, §14, before a valid assignment had been executed and delivered. However, it was also noted that nothing from the Ibanez decision stood for the proposition that a foreclosing party needs to “hold” the mortgage to file a complaint under the Servicemembers Civil Relief Act for a determination that the mortgagor or owner is not entitled to the benefits of the federal Act, and the plaintiff’s complaint pointed to neither an authority in support of such a contention nor precedent in support of her contention.

Accordingly, the court in the current case decided there was no need to consider the question of whether GMAC Mortgage had standing to commence the Servicemembers Case, deciding that the answer to such a question could not and did not affect the outcome in such a case.