Tag Archives: misrepresentation

United States District Court for the District of Columbia Dismisses Case Due to Lack of Jurisdiction

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The court in deciding Glaviano v. JP Morgan Chase Bank, N.A., 2013 U.S. Dist. 180582 (D.D.C. Dec. 27, 2013) dismissed the plaintiff’s claim due to lack of jurisdiction.

Plaintiffs alleged that the defendants did not have “possession of the note” or a “documented property interest in the note and mortgage or deed of trust.” Plaintiff also alleged that the “deed of trust was void and ineffective due to fraud,” and that the trustee’s foreclosure sale was “void because the alleged beneficiary . . . never had standing to substitute the trustee.” They further claimed that the sale of their property at a foreclosure sale violated their due process rights under the U.S. Constitution. Based on these allegations, plaintiff sought an injunction against the foreclosure sale.

The court considered the plaintiff’s argument and found that the court lacked jurisdiction, as such the case must be dismissed. Because the plaintiff sought the equivalent of appellate review of state court rulings, the district court dismissed the suit for lack of jurisdiction under Rooker-Feldman. The court found that plaintiffs in this case also asked the federal district court to review state court rulings.

Accordingly, the complaint was dismissed for lack of jurisdiction and the motion for injunction was denied as moot due to dismissal of the case.

Kansas Court of Appeals Finds Note Splitting Argument Lacked Merit

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The court in deciding Wells Fargo Bank, N.A. v. Richards, 2013 Kan. App. 1160 (Kan. Ct. App. 2013) ultimately upheld the lower court’s decision.

The plaintiff [Chester E. Richards, Jr.], appealed the lower court’s decision which granted summary judgment to Wells Fargo.

Plaintiff had asserted (1) Wells Fargo lacked standing to bring the foreclosure action; (2) the lower court erred in holding Wells Fargo’s possession of the promissory note he signed was insufficient to enforce and foreclose the mortgage it secures; (3) Wells Fargo did not experience/suffer a default; (4) there was no contract because the note and mortgage were split; and (5) Richards was not afforded due process.

The court examined the record and considered the arguments of both the parties and held that there was no merit to any of the plaintiffs’ arguments. Consequently, the court affirmed the decision from the lower court.

 

California Court Upholds Summary Judgment Against Plaintiff, Dismissing California Uniform Commercial Code section 9313 Violations

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The court in deciding Wolford v. Am. Home Mortg. Servicing, 2013 Cal. App. Unpub. LEXIS 7307 (Cal. App. 2d Dist. 2013) ultimately granted summary judgment in favor of defendants. AHMSI and Wells Fargo met their threshold burden to show they satisfied the requirements necessary for non-judicial foreclosure, and appellant failed to raise a triable issue of material fact.

The plaintiff’s complaint alleged causes of action for declaratory relief; injunctive relief; determination of lien pursuant to California Uniform Commercial Code section 9313; breach of contract and the implied covenant of good faith and fair dealing; violation of the Truth in Lending Act (15 U.S.C. § 1601 et seq.); violation of the Real Estate Settlement and Procedures Act (12 U.S.C. § 2601 et seq.); rescission; unconscionability; and quiet title.

The lower court dismissed the plaintiff’s initial claims as summary judgment was granted in favor of the defendants. Appellant contended the denial of summary judgment in the related unlawful detainer action and evidence of irregularities in the foreclosure process demonstrated triable issues of material fact warranting the denial of summary judgment. However, this court in upholding the lower court’s decision, found that there was no merit to the plaintiff’s contentions.

 

Missouri Court Dismisses Real Estate Settlement Procedures Act and Home Ownership Equity Protection Act Violation Claims Brought Against Nationstar Mortgage, LLC and MERS

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The court in deciding White v. CTX Mortg., LLC, 2013 U.S. Dist. LEXIS 146589 (W.D. Mo. 2013) ultimately granted the defendant’s motion to dismiss. The plaintiff’s complaint asserted that the chain of title had been broken. Consequently, “title was not clear enough” for CTX to foreclose on the property.

Plaintiffs raised eight claims: (1) “Predatory Lending”; (2) “Servicer Fraud”; (3) violations of the Home Ownership Equity Protection Act (“HOEPA”), 15 U.S.C. § 1639, et seq.; (4) violations  [5] of the Real Estate Settlement Procedures Act (“RESPA”), 15 U.S.C. § 2601, et seq.; (5) “Breach of Fiduciary Duty”; (6) “Identity Theft”; (7) Civil Rico; and (8) quiet title to real property.

For relief, plaintiffs requested economic damages; a declaratory judgment identifying the “owner” of the note and clarifying whether the deed was actually security for the loan; and injunctive relief conveying the property to plaintiffs or a judgment quieting title to plaintiffs’ property.

At the outset, the court made several general observations about the complaint. In each count, plaintiffs had substituted legal conclusions for facts. Subsequently, Nationstar and MERS argued that the court should dismiss all eight counts because they (1) failed to state a claim upon which relief can be granted, or (2) were barred by the applicable statute of limitations. Ultimately, the plaintiff’s claims were dismissed.

 

Nevada Court Dismisses TILA and Fraud Claims Brought Against Chase and MERS

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The court in deciding Leong v. JPMorgan Chase, 2013 U.S. Dist. LEXIS 144678 (D. Nev. 2013) ultimately granted the defendant’s motion to dismiss.

This action arose out of the foreclosure proceedings initiated against the property of the plaintiff Teresa Leong. Defendants Chase and MERS filed a motion to dismiss plaintiff’s action. Plaintiff alleged two causes of action, one of which was fraud: “wrongful use of a non existent co-borrower” and the other was “fraudulent documentation.” Plaintiff also requested, “to see her original documents, note and deed.”

After considering the plaintiff’s contentions, the court found that the plaintiff failed to allege that she was current on her mortgage payments or had otherwise satisfied the conditions and terms under the deed of trust. Accordingly, the court found that plaintiff failed to state a legally cognizable claim for wrongful foreclosure, and the action must be dismissed.

Plaintiff also insisted that defendant failed to provide the original note, plaintiff cited Nev. Rev. Stat. § 107.086(4). However, the court found that the defendants correctly point out that the plaintiff failed to cite to any authority that required defendants to produce the original note. As such, this cause of action was dismissed with prejudice.

Plaintiff lastly alleged that defendant failed to comply with the Federal Truth in Lending Act (“TILA”), codified at 15 U.S.C. § 1601 et seq. TILA contained many provisions concerning accurate and meaningful credit disclosures. However, the court found that the plaintiff’s complaint did not specify any particular provision with which defendant failed to comply. Accordingly, plaintiff provided only a conclusory statement as support for a vague TILA claim, and to the extent that this cause of action is alleged, it must be dismissed.

 

Tennessee Court Finds Allegation of Fraud Was Pled With Sufficient Particularity Pursuant to Tenn. R. Civ. P. 12.03

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The court in deciding Zhong v. Quality Loan Serv. Corp., 2013 U.S. Dist. LEXIS 145916 (W.D. Wash. 2013) reversed the lower court’s ruling dismissing the mortgagor’s intentional misrepresentation claim on the pleadings pursuant to Tenn. R. Civ. P. 12.03.

Plaintiff defaulted on her mortgage and defendants advised plaintiff of their plan to foreclose. Plaintiff subsequently sought an injunction and a declaratory judgment. The trial court entered a temporary restraining order preventing foreclosure, which it dissolved after granting defendants’ motion for judgment on the pleadings. Plaintiff appeals the trial court’s grant of defendants’ motion for judgment on the pleadings.

This court ruled that the lower court erred in dismissing the mortgagor’s intentional misrepresentation claim on the pleadings pursuant to Tenn. R. Civ. P. 12.03 because her allegation of fraud stemming from an intentional misrepresentation were pleaded with sufficient particularity.

Moreover, because the amended complaint alleged particular intentional misrepresentations of a material fact, that signatories possessed authority to execute the deed of trust, as well as the mortgagor’s detrimental reliance upon such, the claim satisfied the heightened requirements of Tenn. R. Civ. P. 9.02. Further, this court found that the mortgagor’s claim was not correctly dismissed based upon the statute of limitations, Tenn. Code Ann. § 28-3-105, because it was at least plausible that the mortgagor was unable to discover the alleged intentional misrepresentation until the mortgagees commenced foreclosure against her.

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.