Tag Archives: motion to dismiss

Texas Court Dismisses Plaintiff’s Wrongful Foreclosure Action, as MERS was Authorized to Assign the Note and Deed of Trust to Defendant

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The court in deciding Perez v. Deutsche Bank Nat’l Trust Co., 2013 U.S. Dist. LEXIS 153947, 2013 WL 5781208 (W.D. Tex. Oct. 25, 2013) dismissed the plaintiff’s wrongful foreclosure.

Plaintiff alleged that the defendant’s foreclosure action was wrongful. Also plaintiff alleged that the deed of trust was not enforceable due to that lack of ownership in the note by the defendants.

Plaintiff asserted that First NLC, rather than MERS, was the only party authorized to assign the note and deed of trust to the defendant; she asserted that assignment is only complete upon recording, and recording has not been effectuated; and she asserted that the deed of trust and the transfer of lien document were fraudulently created, and therefore ineffective as a security instrument and assignment, respectively. Additionally, plaintiff asserted that the note and deed of trust were not enforceable because they had been split.

Defendant filed a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6). Defendant argued that plaintiff has not stated a claim for wrongful foreclosure because she has not alleged that her home had been foreclosed.

Ultimately, the court rejected the plaintiff’s claims and the broader legal theories she asserted; however, the court granted the plaintiff leave to amend to allow her an opportunity to assert a valid claim.

Supreme Court of New York Grants Plaintiff’s Motion to Dismiss and Denied Defendant’s Cross-Motion

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The court in deciding Bank of N.Y. Mellon v Arthur, 2013 N.Y. Misc. LEXIS 4875, 2013 NY Slip Op 32625(U) (N.Y. Sup. Ct. Oct. 23, 2013) granted the plaintiff’s motion to dismiss and denied the defendant’s [Arthur] cross-motion.

The Plaintiff commenced a foreclosure of a mortgage. Plaintiff moved for an order: (i) pursuant to CPLR § 3212 granting summary judgment on its foreclosure claim; (ii) pursuant to CPLR § 3211(b) and § 3212, dismissing with prejudice each of the affirmative defenses and counterclaims raised by the defendant in his answer.

The court noted that in a mortgage foreclosure case, “a plaintiff may establish a prima facie right to foreclosure by producing the mortgage documents underlying the transaction and undisputed evidence of nonpayment.” Thus, once the plaintiff established its right to foreclosure, the burden is on the defendant “to raise a triable issue regarding his affirmative defenses and counterclaims in opposition to foreclosure.”

Here, the plaintiff made out its prima facie by producing undisputed affidavits. The court found that Arthur’s response failed to produce competent evidence of any defense to raise an issue of fact. Thus, the court eventually granted the plaintiff’s motion and denied Arthur’s cross-motion.

Georgia Court Affirms That The Holder of a Deed to Secure Debt is Authorized to Exercise the Power of Sale in Accordance With the Terms of the Deed

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The court in deciding Sanford v. Bank of Am., N.A., 2013 U.S. Dist. LEXIS 156084, 2013 WL 5899238 (N.D. Ga. Oct. 31, 2013), found that each of the plaintiff’s arguments lacked merit and subsequently granted defendant’s motion to dismiss.

Plaintiff’s claim for wrongful foreclosure against BANA was based on three theories: (1) invalid assignment of the security deed; (2) improper notice under O.C.G.A. § 44-14-162.2; and (3) BANA’s lack of authority to foreclose as a non-secured creditor.

The court rejected plaintiff’s second and third arguments based on previous case law. The court cited a previous holding, noting that “the holder of a deed to secure debt is authorized to exercise the power of sale in accordance with the terms of the deed even if it does not also hold the note or otherwise have any beneficial interest in the debt obligation underlying the deed.”

Furthermore, the court noted that the notice requirement is satisfied if the notice identifies the individual or entity with full authority to negotiate, amend, and modify the terms of the mortgage, regardless of whether that entity is a secured creditor, note holder, deed holder, or none of the above.

Massachusetts Land Court Finds Defendant Was Not Entitled to Service Member Relief Act

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The Massachusetts Land Court in deciding Suntrust Mortg., Inc. v. Forsberg, 2013 Mass. LCR LEXIS 159 (Mass. Land Ct. 2013) found that defendant (Alfred Forsberg) was not entitled to the protection of the Servicemembers Civil Relief Act, 50 U.S.C. §§ 510 et seq., at the time of foreclosure; and that service and publication of the notice naming SunTrust Mortgage LLC rather than SunTrust Mortgage Inc. did not invalidate the foreclosure sale.

The Superior Court of New Jersey, Appellate Division, Finds That Wells Fargo Had Standing to File Foreclosure Action

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The Superior Court of New Jersey, Appellate Division, in deciding Wells Fargo Bank, N.A. v. Garner, 2013 N.J. Super. LEXIS 2648, 2013 WL 5827033 (App.Div. Oct. 31, 2013) affirmed the lower court’s decision and dismissed motions to vacate the judgment of foreclosure.

Defendant argued that plaintiff, Wells Fargo Bank, N.A., lacked standing to file the foreclosure action. The defendant claimed that Wells Fargo did not own the note and mortgage on the date it filed the complaint. For the same reason, the defendant maintained that plaintiff improperly issued the notice of intent to foreclose.

The court found defendant was not entitled to relief under any subsection of Rule 4:50-1, and subsequently dismissed her complaint.

Wrongful Foreclosure Claim Survives Motion to Dismiss

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Judge Conti (N.D. Cal.) issued an order granting in part and denying in part a motion to dismiss in Subramani v. Wells Fargo Bank N.A. et al., No. 13-1605 (Oct. 30, 2013).

Plaintiff Subramani received a mortgage loan from Defendant Wells Fargo secured by a deed of trust (DOT).  Subramani alleges (and these allegations are taken to be true for the purposes of a motion to dismiss)  that Wells Fargo sold the loan in 2006 to an affiliate and that it was ultimately bundled with other mortgages into a mortgage-backed security.  Subramani later defaulted on the loan and the home was sold at foreclosure.

Subramani contends that documents relating to the foreclosure were void because Wells Fargo “was no longer the valid lender in the DOT, or even an agent of a successor beneficiary after it sold the Loan in 2006 . . .. Plaintiff therefore states that after Defendant sold the Loan, neither Defendant nor anyone else had any right to or interest in the Loan, so all legal notices associated with the note and DOT — including the SOTs [substitutions of trustee] , NODs [notice of defaults], and the foreclosure sale itself — are illegal and void.” (4, citations omitted)

The Court found that at the motion to dismiss stage, Subramani “has sufficiently stated a claim for wrongful foreclosure based on his allegations that Defendant’s 2006 sale of Plaintiff’s DOT precluded Defendant from retaining a beneficial interest in the DOT. Plaintiff has sufficiently alleged that Defendant directed the wrong party to issue Notices of Default, that Defendant is not the true beneficiary, and that Defendant failed to abide by the rules regarding transference of the Loan.” (8, citations omitted)

 

[HT April Charney]

Texas Court of Appeals Finds That Plaintiff’s Claim – That the Note and Deed of Trust Became “Split” – Has No Basis in Law

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The Court of Appeals of Texas, Ninth District in deciding Townsend v. Barrett Daffin Frappier Turner & Engel, LLP, 2013 Tex. App. LEXIS 13515, 2013 WL 5874607 (Tex. App. Beaumont Oct. 31, 2013) affirmed the lower court’s decision holding that Tex. Prop. Code Ann. § 51.0025 permitted the company to administer the foreclosure proceedings.

Plaintiff alleged conspiracy to commit fraud due to the fact that the promissory note was “split” from the deed of trust when the deed of trust was assigned through MERS. Further, the plaintiff alleged that the local clerk’s office did not have a record of an assignment into Bank of America, as successor “by merger” to BAC Home Loans Servicing, LP.

However, the court found that the plaintiff’s allegation that the note and deed of trust “split” had no basis in law. The court reasoned that the alleged agreement between the persons conducting the foreclosure accomplished neither an unlawful purpose nor a lawful purpose by unlawful means. Thus, the assignment would be binding on both plaintiff, who had notice of it, and the parties to the assignment.