DUFFY v. BANK OF AMERICA, N.A., et al

Filing 24

MEMORANDUM OPINION to the Order granting Defendants' Motion to Dismiss and denying Plaintiff's Motion for Leave to File an Amended Complaint. Signed by Judge Gladys Kessler on 1/30/14. (CL, )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA

SEAN DUFFY,
Plaintiff,
v.

Civil Action No. 13-696 (GK}

BANK OF AMERICA, N.A., et al.,:
Defendants.

MEMORANDUM OPINION
Plaintiff

Sean Duffy

("Plaintiff"

or

"Duffy")

brings

diversity action against Defendants Bank of America, N. A.
of America"),
Electronic
Securities
Bank") ,

Wells

Fargo Bank,

Registration
Mortgage

and

HSBC

N .A.

Systems,

Loan
Bank

Inc.

Trust,
USA,

("Wells Fargo"),
( "MERS") ,

Series

("Bank

Mortgage

Deutsche Alt-A
("Deutsche

2006-0Al

(collectively,

( "HSBC")

N.A.

this

"Defendants")
This
Motion

matter

to

is

Dismiss

presently before
Plaintiff's

the

Court

Complaint

[Dkt.

on Defendants'
No.

3]

Plaintiff's Motion for Leave to File an Amended Complaint
No.

16].

Replies,
below,

Upon
the

consideration

entire

Defendants'

of

the

record herein,

Motions,
and

for

[Dkt.

Oppositions,

the

reasons

and

and

stated

Motion to Dismiss is granted and Plaintiff's

Motion for Leave to File an Amended Complaint is denied.

I.

BACKGROUND 1
Duffy

property

is

located

October 31,
loan

the

to

in

2006,

Duffy.

resident
the

and

owner

District

of

in

fee

simple

of

Columbia.

Compl.

~ 1.

Aegis Wholesale Corporation
~

Id.

2.

To

evidence

and

Plaintiff signed an Adjustable Rate Note
identified Aegis

as

("Aegis")
secure

("Note")

loan,

The Note

the Lender and attached the Deed of Trust

("Deed")

to secure Duffy's obligation.

Id.

MERS

"the

Lender's

as

On

made a

the

Id.

real

nominee

for

Lender

and

The Deed also names
successors

and

assigns." Id.; see also Compl. Ex. 1, p. 2.
In 2007,
2012,

its

Compl.

~

3.

Aegis

final

filed

for

liquidation

bankruptcy,
and

and on December 15,

dissolution

was

completed.

It is undisputed that there is an unsatisfied note

and deed of trust encumbering the property.
On September 29,
America.

Id.

~ 16;

2011,

MERS

assigned the Deed to Bank of

see also Compl.

Ex.

2.

This Assignment was

recorded with the Land Records in the District of Columbia.

Id.

~ 16.

1

For purposes of ruling on a motion to dismiss, the factual
allegations of the complaint must be presumed to be true and
liberally construed in. favor of the plaintiff. Aktieselskabet AF
21. November 2001 v. Fame Jeans Inc., 525 F.3d 8, 15 (D.C. Cir.
2008); Shear v. Nat'l Rifle Ass'n, 606 F.2d 1251, 1253 (D.C.
Cir. 1979). Therefore, the facts set forth herein are taken from
the Complaint ( "Compl. ") [Dkt. No. 1-1] .
-2-

On January 10,

2013,

Bank of America assigned the Deed to

HSBC as Trustee for Holders of the Deutsche Bank Mortgage Pass
Through

Certificates.

Id.

~

20;

see

also

Compl.

Ex.

3.

On

January 11, 2013, this Assignment was recorded with the Recorder
of Deeds for the District of Columbia. Id.

~

7.

Bank of America now services the Loan.
2013,

Bank

of

America

informed

Duffy

that
~

foreclose on his home on behalf of HSBC. Id.
On March 26,

6. In January

it

intended

to

23.

2013, Duffy filed a complaint in the Superior

Court for the District of Columbia
2013,

~

Id.

Defendants

removed

the

[Dkt.

action

to

No.

1-1]. On May 13,

this

Court

alleging

diversity jurisdiction [Dkt No. 1] .
On

May

13,

2013,

Plaintiff s Complaint
1

Defendants
[Dkt.

No.

filed

3]

a

Motion

On May 3 0,

to

2 013,

Dismiss

Plaintiff

filed an Opposition [Dkt. No. 11]. On June 10, 2013, Defendants
filed a Reply [Dkt. No. 13].
II.

STANDARD OF REVIEW

To
plaintiff

survive

a

motion

need only plead

to

dismiss

"enough

under

facts

relief that is plausible on its face

11

to

Rule
state

12(b) (6),
a

claim to

and to "nudge [

[his or

her] claims across the line from conceivable to plausible.
Atlantic Corp. v.

Twombly,

550 U.S.

a

544,

570

(2007).

11

Bell

"[O]nce a

claim has been stated adequately, it may be supported by showing
-3-

any

set

of

facts

consistent

with

the

allegations

in

the

complaint." Id. at 563.
Under the Twombly standard,

a

"court deciding a motion to

dismiss must not make any judgment about the probability of the
plaintiffs' success .

[,] must assume all the allegations in

the complaint are true

[, and]

(even if doubtful in fact)

must give the plaintiff the benefit of all reasonable inferences
derived from the facts alleged." Aktieselskabet AF 21,
at

17

(internal

complaint

will

quotation

not

marks

suffice,

and

however,

citations
if

it

525 F.3d

omitted) .

"tenders

A

'naked

assertion[s]' devoid of 'further factual enhancement.'" Ashcroft
v. Iqbal, 556 U.S. 662, 678 (2009)
557)

(quoting Twombly, 550 U.S. at

(alteration in Iqbal) .

III. ANALYSIS

Duffy

seeks

three

things.

First,

he

seeks

a

declaration

that he "owns the Property free and clear of all encumbrances."
Compl. p.

14. Second,

Defendants has

he seeks a declaration "that none of the

any interest

in his property."

Opp' n

at

1,

8.

Third, he requests that the Court declare the two Assignments of
the Deed void. Id.
Duffy's first request must be denied because the existence
of

an encumbrance on his property is undisputed.

Compl.

~

1.

Because Duffy alleges no facts that chal,lenge the existence of
-4-

the encumbrance,

there is no factual support for a declaration

that

uowns

Plaintiff

the

Property

free

and

clear

of

all

requests

are

based

on

his

encumbrances."
Duffy's

second

and

third

assertion that the original holder of the Deed,

MERS,

did not

have the authority to transfer the Deed to Bank of America. He
alleges that uMERS is not now nor has it ever been the holder of
the

Deed

authorize

of

Trust,"

MERS

Opposition,

to

Duffy

and

sell

that
or

insists

uthe

convey
that

Deed
it."

uthe

of

Trust

Compl.

~

Deed

of

does

not

In

his

does

not

17.

Trust

provide to MERS or the beneficiary any rights with respect to
the Deed of Trust." Opp'n at 4. He repeatedly insists that MERS
is only mentioned twice in the Deed, on page one and page two,
and that u [t] here is no other mention of MERS in the document."
Id. at 10-11.
This is incorrect.
the Defendants)

If Duffy

(or,

for that matter,

any of

had turned to page three of the Deed, he would

have observed that it specifically grants the right to foreclose
on the property to MERS:
Borrower understands and agrees that MERS holds only
legal title to the interests granted by Borrower in
this Security Instrument, but, if necessary to comply
with law or custom, MERS (as nominee for Lender and
Lender's successors and assigns) has the right to
exercise any or all of those interests, including, but
not limited to, the right to foreclose and sell the
-5-

Property; and to take any action required of Lender
including, but not limited to, releasing and canceling
this Security Instrument.
Compl.,

Ex.

1, p.

assertions,

3

(emphasis added) . 2 Thus,

contrary to Duffy's

the Deed explicitly provided MERS with the right to

exercise the Lender's interests,

including,

but not limited to,

the right to foreclose on his property.
The D.C.
vests

Code provides that "[t]ransfer of an instrument

in

the

transferee

any

enforce the instrument." Leake v.
257

(D.D.C.

rights

2011)

vested

assign~ent

(quoting D.C.

in MERS

could be

to Bank of America.

right

of

Prensky,
Code

798 F.

transferor
Supp.

28:3-203 (b)).

§

and were
Se~

the

to

2d 254,

Thus,

the

transferred by valid

Compl.,

Ex.

2.

Those rights

were then transferred by valid assignment to HSBC as Trustee for
Deutsche Bank.
to

either a

void

or

a

Compl.,

Ex.

declaration
declaration

3.

that
"that

Therefore,
the
none

Duffy is not entitled

Assignments
of

the

of

the

Defendants

Deed are
has

any

interest in his property." Opp'n at 1, 8.

2

In deciding a motion under Federal Rule of Civil Procedure
12(b) (6),
"a court may consider 'the facts alleged in the
complaint, documents attached as exhibits or incorporated by
reference in the complaint,'
or 'documents upon which the
plaintiff's complaint necessarily relies even if the document is
produced not by [the parties] . '" Cannon v. Wells Fargo Bank,
N.A.,
F. Supp. 2d
2013 WL 3306156, at *6 (D.D.C. July 1,
2013) (citation omitted). Thus, the Court can consider the Deed
of Trust, attached to the Complaint as Exhibit 1, and the two
Assignments of the Deed, attached as Exhibits 2 and 3.
-6-

None of Duffy's additional arguments in any way affect the
rights of Bank of America, acting on behalf of HSBC, to exercise
the power-of-sale clause in the Deed.
First,
requires

a

Duffy is

incorrect

foreclosing

that

institution

District
to

be

of

the

Columbia

holder

law

of

the

underlying Note. See Diaby v. Bierman, 795 F. Supp. 2d 108, 113
(D.D.C.

2011)

(holding

that

"whether

or

not

defendants

are

holders of the note is not dispositive as to whether they have
standing

to

foreclose

Columbia

is

a

on

the

non-judicial

property").

foreclosure

The

District

of

which

jurisdiction,

allows for a power-of-sale to be located in a deed of trust and
then executed by the lender or its representative. See id.; see
also Carter v.

Bank of America,

(D.D.C.

(noting

judicial

2012)

foreclosure

pursuant to a
trust"')

§

District

jurisdiction,

an

WL

Supp.

Columbia

which

"allows

2d 1,
is

a

14

non-

foreclosure

Duffy alleges that there was a violation of D.C.

47-1431

when

assignment

Robinson v.
2013

of

F.

'power of sale provision contained in any deed of

the

Note

of

a

was
~~

without being recorded. Compl.
that

888

(quoting Leake, 798 F. Supp. 2d at 256).

Second,
Code

that

N.A.,

note

at

*5

in

September

of

2011

13-14. There is no requirement
be

Deutsche Bank Nat'l

1191034,

sold

(D.D.C.
-7-

recorded

Trust

Co.,

Mar.

25,

to

be

valid.

Case No.
2013)

See

12-0732,

(noting

that

"District of Columbia law does not require an assignment of a
note or deed of trust to be recorded in order for the transfer
to be valid") ;

Leake,

798 F.

Supp.

2d at 257

(concluding that

bank could enforce note's foreclosure provision under District
of Columbia law, despite its failure to record the assignment of
the note); Diaby,
to

record

action")

an

795 F. Supp. 2d at 112

assignment

does

not

give

(holding that "failure
rise

to

a

cause

of

Thus, Duffy's argument regarding the failure to record

a transfer of the Note is unavailing. 3
In sum, Duffy signed a Deed which granted MERS a power-ofsale

over

his

property

if

he

accordance with the agreement.
which

challenges

the

failed

to

make

payments

in

Duffy has raised no fact or law

validity

of

the

power-of-sale

clause,

MERS's ability to assign that right to Bank of America, Bank of
America's ability to assign that right to HSBC as Trustee for

3

Moreover, D.C. Code § 47-1431 does not expressly confer a
private right of action. The burden is on the plaintiff to show
that "the D.C. Council intended to imply a right to sue for
damages for violations" of the statute. Koker v. Aurora Loan
Servicing, LLC, Case No. 12-1069, 2013 WL 40320, at *7 (D.D.C.
Jan. 3, 2013) (quoting Coates v. Elzie, 768 A.2d 997, 1001 (D.C.
2001)). Duffy has failed to address this issue, much less carry
his burden of proof. His failure to respond to the argument is
enough to consider the issue conceded. See Koker, 2013 WL 40320,
at *7 (dismissing claim when plaintiff "provide [d] no analysis
on the point and simply assume[d] that she may sue for a
violation of the statute"); see also Henok v. Chase Home Fin.,
LLC, Case No. 12-292, 2013 WL 151173, at *7 (D.D.C. Jan. 15,
2 0 13 ) ( sa me) .
-8-

Deutsche

Bank,

or

Bank

of

America's

ability

to

enforce

that

right on HSBC's behalf. Thus, Duffy has failed to "state a claim
to relief that is plausible on its face,

Twombly,

11

550 U.S.

at

570, and Defendants' Motion to Dismiss must be granted.

IV.

MOTION FOR LEAVE TO FILE AN AMENDED COMPLAINT
Plaintiff

Complaint
the

[Dkt.

No.

as

the

power-of-sale
seeks

is

motion
would

clause

Cir.

to

for

is

survive

the

Deed,

(per curiam)
complaint

a

based

Complaint,

See Hettings v.

a

Leave

to

File

Amended

and that Motion is now ripe.

Complaint

in

2012)

amend

not

Motion

original

futile.

(D.C.

a
16] ,

proposed Amended

premise

480

filed

motion

as

namely,
the

the

same

that

mistaken

there

is

no

amendment

the

Plaintiff

United States,

677

F.3d 471,

("A district court may deny a
futile

to

on

Because

dismiss.

if
11

)

the
•

4

proposed

Thus,

claim

Plaintiff's

Motion is denied.

V.

CONCLUSION
For

Dismiss

4

the
is

foregoing

granted,

and

reasons,
the

the

Defendants'

Plaintiff's

case

is

Motion

to

dismissed

In Plaintiff's Reply in Support of its Motion for Leave to
Amend Complaint [Dkt. No. 21], Plaintiff mentions for the first
time "the power of sale contained in the Deed of Trust" without
citation or explanation. Pl.'s Reply Mem. of Law in Support of
His Mot. to Amend the Compl. 4. The rest of Plaintiff's reply
suggests that, even if Plaintiff has now recognized that a
power-of-sale clause is present in the Deed,
he does not
understand the legal significance of that fact.
-9-

without

prejudice.

" [T] he

with prejudice is high:

standard

for

dismissing

a

complaint

'dismissal with prejudice is warranted

only when a trial court determines that the allegation of other
facts consistent with the challenged pleading could not possibly
cure

the

deficiency.'"

(D.C.

Cir.

2006)

1209

(D.C.

Cir.

the

Plaintiff

1996))
nor

consistent

v.

Herson,

(quoting Firestone v.

clause in the Deed,
facts

Belizan

the

(emphasis

434

Firestone,

in original).

Defendant

F.3d

identified

of

583

76 F.3d 1205,

Because neither

the

power-of-sale

the possibility that Plaintiff could allege

with

the

presence

of

a

power-of-sale

that could justify relief has never been addressed.
abundance

579,

caution,

the

Court

will

dismiss

the

Thus,

An Order shall accompany this Memorandum Opinion.

Copies to: attorneys on record via ECF

-10-

in an

case without

prejudice.

January 30, 2014

clause