Tag Archives: banks

Texas Court Dismisses Action Claiming Fraud in Concealment, Fraud in Inducement, Quiet Title, & Rescission

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The court in deciding Diaz-Angarita v. Countrywide Home Loans, Inc., 2013 U.S. Dist. LEXIS 147091 (S.D. Tex. 2013) eventually dismissed the plaintiff’s claims.

Plaintiff asserted causes of action for “fraud in the concealment,” fraud in the inducement, to quiet title, and for rescission. Defendants moved to dismiss.

In claims one and seven, plaintiff sought a declaratory judgment that the substitute trustee’s deed was void as there was no valid notice of foreclosure and no appointment of a substitute trustee recorded, and because there was no assignment of the note and deed of trust recorded.

In claim two, plaintiff sought a declaratory judgment that Defendants had no standing to foreclose. Claim three asserted “fraud in the concealment” based on the allegation that Defendants failed to inform Schonacher, the original borrower, that the loan was securitized. Plaintiff’s fourth claim asserted a fraud in the inducement claim based on the allegation that defendants misrepresented their entitlement to foreclose and that they were the holder and owner of the note.

In claim five, plaintiff asserted a quiet title claim under Texas law. In claim six, plaintiff asserted a cause of action for rescission, which is a remedy and not a recognized cause of action. After categorically analyzing the plaintiff’s claims the court ultimately dismissed all seven of the plaintiff’s claims.

Although a court typically may grant the plaintiff at least one chance to amend the complaint under Rule 15(a) before dismissing the action with prejudice. In this case, the court found that the plaintiff, who is represented by counsel, filed a complaint based on key facts that were within his own knowledge. The court noted that it appeared unlikely that the plaintiff could amend to state viable claims for relief. As a result, the Court enters the dismissal without leave to amend and dismissed with prejudice.

California Court Dismisses Claim Due to lack of Standing and Failure to State a Claim

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The court in deciding Britto v. Bank of Am., N.A., 2013 U.S. Dist. LEXIS 146978 (N.D. Cal. 2013) granted defendant’s motion to dismiss.

In this foreclosure action, defendants moved to dismiss the complaint for lack of standing and failure to state a claim. The court granted defendants’ motion to dismiss.

Plaintiffs alleged a host of violations during the securitization process. Realty Mortgage allegedly did not endorse or record a sale or assignment of the deed of trust to any entity and Countrywide Home Loans allegedly did not endorse or record a sale or assignment to BNY Mellon.

Plaintiffs also argued that BOA did not retain servicing rights to the deed of trust, BNY Mellon did not have any interest as legal trustee of the trust, and “no entity . . . had any valid lien or legal, recorded, documentable, standing on the plaintiff’s mortgage loan”

Moreover, defendant (MERS) was named beneficiary and nominee in the deed of trust prior to the securitization. In 2011, MERS transferred all of its beneficial interest under the deed of trust to BNY Mellon. Plaintiffs thus alleged that after the deed of trust and promissory note were securitized in 2006 and improper transfers of ownership to the deed of trust occurred, MERS’ nominal rights were extinguished. Thus, MERS could not have properly transferred its interests to BNY Mellon in 2011, and BNY Mellon cannot foreclose on the property.

The court rejected these arguments finding that the plaintiff’s argument failed.

California Court Dismisses All 12 Claims

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The court in deciding Scott v. Saxon Mortg. Servs., 2013 U.S. Dist. LEXIS 146988 (N.D. Cal. Oct. 10, 2013) granted defendant’s motion to dismiss with leave to amend in part.

Plaintiff’s brought 12 claims against defendants. Plaintiff’s first claim for violation of California Business and Professions Code section 17200 predicated on violation of California Civil Code section 2923.5 and Plaintiff’s ninth claim for violation of California Civil Code section 2923.5. The court dismissed both without leave to amend.

Plaintiff’s second claim for breach of good faith and fair dealing was also dismissed with leave to amend; the third claim for slander of title was likewise dismissed without leave to amend.

Plaintiff’s fourth claim for “alter ago liability” and fifth claim for breach of contract were both dismissed without leave to amend. Unlike the former claims, plaintiff’s sixth claim for unjust enrichment was dismissed with leave to amend. However, plaintiff’s seventh claim for violation of California Business and Professions Code section 17200 was dismissed without leave to amend. Plaintiff’s eighth claim for predatory lending and violation of TILA were dismissed without leave to amend.

Plaintiff’s tenth claim for defamation and eleventh claim for false light were also dismissed without leave to amend. Lastly, plaintiff’s twelfth claim to void or cancel assignment of the deed of trust and the thirteenth claim for cancellation of a voidable contract were dismissed without leave to amend

California Court Dismisses Show-Me-the-Note Claim

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The court in deciding Newman v. Bank of N.Y. Mellon, 2013 U.S. Dist. LEXIS 147562 (E.D. Cal. 2013) granted the defendant’s motion and dismissed the complaint.

Plaintiff (Newman) argued that he was not challenging the authorization to foreclose, nor was he requiring defendants to “produce the note.” Rather, he was challenging whether the correct entity is initiating foreclosure. He claimed that BONY did not have the right to enforce the mortgage because it did not own the loan, the note, or the mortgage.

Plaintiff alleged claims for declaratory relief, quasi-contract, California Civil Code § 2923.5, the Fair Debt Collection Practices Act (15 U.S.C. § 1692 et. seq.) (“FDCPA”),California Business & Professions Code § 17200 (“UCL”), and negligence.

Defendants argue that dismissal is appropriate for several reasons. First, Newman could not bring an action to determine whether the person initiating the foreclosure was authorized to do so. Second, Newman’s allegations that the assignments of the deed of trust involved illegible signatures and “robo-signers” were irrelevant. Third, Newman had no standing to challenge any violations of the Pooling and Servicing Agreement (“PSA”).

After reviewing the arguments the court found that the claims for declaratory relief, quasi-contract, under Cal. Civ. Code § 2923.5, and under the Fair Debt Collection Practices Act (FDCPA) failed because any claims that were based on violation of the pooling and servicing agreement were not viable, the borrower was estopped from arguing that the assignment violated the automatic stay, and the allegations of fraudulent assignments were insufficient and implausible.

The negligence claim also failed. The claim under Cal. Bus. & Prof. Code § 17200 (UCL) failed because the complaint did not state a claim for violation of the FDCPA, Cal. Penal Code § 532f(a)(4) could not have formed the basis of a UCL claim, and no violation of the Security First Rule was apparent.

Utah Court Dismisses HAMP, RICO, ECOA, RESPA & FDCPA Claims

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The court in deciding Cornia v. Countrywide Home Loans, Inc., 2013 U.S. Dist. LEXIS 149592 (D. Utah 2013) granted defendant’s motion to dismiss. Plaintiffs’ claims based on securitization, assignment to MERs, or “robo-signing,” were dismissed with prejudice.

Plaintiffs’ complaint sought to quiet title in the property in plaintiffs’ names. As the basis for this relief, plaintiffs claimed that defendant (1) engaged in predatory lending, mail fraud, and wire fraud, (2) violated the Real Estate Settlement  Procedures Act (“RESPA”), the Fair Debt Collection Practices Act (“FDCPA”), the Racketeer Influence and Corrupt Organizations Act (“RICO”), Homeowners Affordable Modification Program (“HAMP”), Equal Credit Opportunity Act (“ECOA”), the Utah Fraudulent Transfer Act and other statutes, regulations and unspecified consent orders, (3) fraudulently “robosigned,” the deeds of trust, and (4) securitized the loan.

Defendant moved pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure (“FRCP”) and also pursuant to FRCP 8(a) and 9(a)(2) to dismiss all Plaintiffs’ claims. After considering both arguments, the court granted defendant’s motion.

Texas Court Found That There Was no Gap in Chain of Title

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The court in deciding Acosta v. Fannie Mae, 2013 U.S. Dist. LEXIS 148066 (S.D. Tex. 2013) found that Under Section 51.0025 of the Texas Property Code, BOA had standing to foreclose as servicer of the loan.

Plaintiff asserted numerous claims arising from the foreclosure of his property.

The court found that the plaintiff had offered no summary judgment proof of any defect in the foreclosure proceedings. Acosta had also offered no summary judgment proof that BOA made any false or reckless statement to him upon which he relied to his harm; therefore, his claim for fraud or misrepresentation failed.

The court also found that BOA effectively became the “original lender” of Acosta’s loan by virtue of the merger with Countrywide. MERS, in its capacity as nominee, assigned the loan to BOA, as successor of the merger. Hence, there is no cognizable “gap in the chain of title” and BOA, therefore, had standing to foreclose.

The court ultimately granted summary judgment in favor of the defendants.

Michigan Court Dismisses State Claims Against 13 Defendants – Including Wells Fargo

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The court in deciding Berry v. Main St. Bank, 2013 U.S. Dist. LEXIS 147915 ( E.D. Mich. 2013) granted the defendant’s motion to dismiss, and the plaintiff’s claims were dismissed without prejudice.

Plaintiff Erik Berry initiated this action against thirteen defendants, including Defendant Wells Fargo, in state court seeking to redress alleged improprieties in the foreclosure of his home. Wells Fargo filed a motion seeking dismissal of plaintiff’s complaint pursuant to Federal Rule of Civil Procedure 12(b)(6), or in the alternative, a motion for summary judgment pursuant to Rule 56. The court ultimately granted Wells Fargo’s motion and dismissed this action without prejudice.

The court found significant portions of the plaintiff’s complaint and response were dedicated to challenging the validity of the note, mortgage, and assignment. Although plaintiff relied on case law from several states other than Michigan, the court construed the complaint as alleging that (1) the splitting of the note and mortgage rendered the assignment from MERS acting as nominee for Main Street Bank to Wells Fargo defective, (2) because the assignment was invalid, no record chain of title evidencing the assignment of the mortgage existed as required by Michigan Compiled Laws § 600.3204(3), and (3) this chain of title defect deprived Wells Fargo of the authority to initiate foreclosure proceedings. The court rejected these arguments.

Wells Fargo’s motion to dismiss was ultimately granted and plaintiff’s claims were dismissed without prejudice.