Editor: David Reiss
Brooklyn Law School

April 16, 2013

Eleventh Circuit Court of Appeals Affirms Dismissal because Mortgagor Plaintiff Failed to State a Claim

By Abigail Pugliese

In Milani v. One West Bank FSB, 491 Fed. App’x. 977 (11th Circ. 2012), the Court of Appeals affirmed the District Court’s decision to dismiss Mortgagor Plaintiff’s claims for (1) wrongful foreclosure, (2) to quiet title, and (3) for fraud.

In 2005, Plantiff refinanced his home by signing an adjustable-rate note with IndyMac Bank, FSB and a security deed with Defendant MERS, which granted MERS power of sale on the property. MERS subsequently assigned the security deed to Defendant OneWest Bank. Plaintiff failed to make payments and Defendant OneWest Bank foreclosed on his property. Plaintiff then filed a complaint alleging that OneWest Bank cannot foreclose because the Defendants illegally securitized residential mortgages and because the assignment to Defendant OneWest Bank was fraudulent. The District Court granted Defendant’s motion to dismiss and Plaintiff appealed.

Because Plaintiff acknowledged that MERS assigned the security deed to Defendant OneWest Bank, “Plaintiff’s complaint does not contain sufficient factual matter – accepted as true – to state a wrongful foreclosure claim that is plausible on its face.” Further, Plaintiff has not stated a fatal defect in Defendant OneWest Bank’s title and therefore Plaintiff’s quiet title claim also fails. Finally, Plaintiff’s fraud claim fails because Defendant OneWest Bank did not have “a duty to disclose or communicate the material information” nor did Plaintiff identify a materially false representation that Defendant made. Thus, there was no error in the District Court’s decision to dismiss and deny Plaintiff leave to amend his complaint.

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