Kellyman v. Fairway Independent Mortgage Co.

Filing 30

ORDER. Defendant's Motion to Dismiss (Doc. 5) is GRANTED. The Complaint (Doc. 1) is DISMISSED with leave to amend. Plaintiff shall file any amended complaint on or before 30 days from the entry of this Order. If Plaintiff fails to do so, the Complaint will be dismissed with prejudice without further notice. See Order for details. Signed by Judge John L. Badalamenti on 3/5/2025. (SV)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
FORT MYERS DIVISION
JAMAR O. KELLYMAN, c/o Jamar
Kellyman-Living Man,
Plaintiff,
v.

Case No.: 2:24-cv-287-JLB-KCD

FAIRWAY INDEPENDENT
MORTGAGE CO.,
Defendant.

ORDER
Before the Court is Fairway’s Motion to Dismiss Complaint and Supporting
Memorandum of Law.1 (Doc. 5). Plaintiff filed a response. (Doc. 10). As set forth
herein, the Court GRANTS the Motion to Dismiss. Plaintiff will be afforded one
opportunity to file an amended complaint consistent with this Order.
BACKGROUND2
The Court recognizes that Plaintiff is proceeding pro se and thus reviews the
complaint liberally. In a nutshell, this is a claim for quiet title accompanied by

1 Defendant has failed to comply with Middle District of Florida Local Rule 3.01(g)

by its lack of “Local Rule 3.01(g) Certification.”
2 “At the motion to dismiss stage, all well-pleaded facts are accepted as true, and
the reasonable inferences therefrom are construed in the light most favorable to the
plaintiff.” Bryant v. Avado Brands, Inc., 187 F.3d 1271, n.1 (11th Cir. 1999)
(internal citation omitted). As such, the Court accepts the facts recited in the
Complaint (Doc. 1).
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claims of fraud, federal securities violations, failure to record an assignment, and
bifurcation of a note and mortgage.
Plaintiff Jamar O. Kellyman is the borrower and owner of the property
located at 5004 Gambero Way, Ave Maria, Florida 34142 (the “Property”). (Doc. 1
at 3; Doc 5-1 at 2). On June 22, 2023, Plaintiff executed a mortgage (the
“Mortgage”) granting a lien against the Property. (Doc. 5-1 at 2). Defendant
Fairway Independent Mortgage Company is listed as the “lender” and “loan
servicer” on the Mortgage. (Doc. 1 at 6; Doc 5-1 at 2). The Mortgage Electronic
Registration System, Inc. (“MERS”) is listed as the “mortgagee” and Defendant’s
“nominee” on the Mortgage. (Doc. 5-1 at 2). Plaintiff executed a promissory note
(the “Note”) for $544,087 payable to Defendant. (Doc. 5-1 at 2; Doc. 10-1 at 13–15).
On January 9, 2024, MERS assigned the Mortgage to Defendant and recorded such
in Collier County’s public records (the “Assignment”). (Doc. 5-2). Defendant filed a
Notice of Lis Pendens in Collier County on May 6, 2024. (Doc. 24 at ¶ 5).
Defendant possesses the Note. (Doc. 24-1 at 9).3

3 Plaintiff failed to attach a copy of the Mortgage, Assignment, and Note referenced

in the Complaint that are central to his claims. Defendant attached both the
Mortgage and Assignment to its Motion to Dismiss (Doc. 5-1; Doc. 5-2), and Plaintiff
attached the Note to its Motion to Stay Proceedings (Doc. 24-1 at 10-12). On a Rule
12(b)(6) motion to dismiss, the Court generally cannot consider matters outside the
pleadings without converting it to a summary judgment motion. Horne v. Potter,
392 F. App’x 800, 802 n.1 (11th Cir. 2010). However, a court can take judicial notice
of public records without conversion. Universal Express, Inc. v. U.S. S.E.C., 177 F.
App’x 52, 53 (11th Cir. 2006). Thus, the Court takes judicial notice of the Mortgage,
Assignment, and Note.
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Plaintiff alleges that the “GNMA 2023-097 Trust purchas[ed] the Plaintiff’s
Intangible Obligation (the debt)” from Defendant without properly recording the
assignment with Collier County. (Doc. 1 at 7–8). He alleges that whether the Note
was delivered to the GNMA 2023-097 Trust is unknown. (Id. at 6). He alleges that
the assignment of the Mortgage is precluded because by “selling only the Plaintiffs
Intangible Obligation (the debt) to Ginnie Mae, the Kellyman Tangible Promissory
Note is no longer eligible for negotiation[.]” (Id. at 9). Thus, his allegations
conclude that the “[m]ortgage is an unenforceable contract, no longer tied to an
obligation to enforce its contractual terms over.” (Id. at 10).
The Complaint, titled “1 Million Dollar Civil Complaint for Breach of
Contract,” fails to plead an actionable breach of contract claim. (Id.). Instead,
Plaintiff pleads counts of fraud in the concealment (Count I), federal securities
violations (Count II), “recoupment and disgorgement of wrongful gains” (Count III),
“Mortgage Electronic Registration System aka MERS” (Count IV), and quiet title
(Count V). (Id.).
Plaintiff seeks a judgment that “Defendant return the GENUINE ORIGINAL
PROMISSORY NOTE and ALL MONEY PAID”; supply an affidavit stating that the
“Defendant has NO RIGHTS to the real property”; return the “DEED and all other
documents pertaining to ownership of real property”; declare that “Defendant[]
lack[s] any interest in the subject property which would permit them to foreclose . . .
the subject property”; declare that the “trust deed is not a lien against the subject
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properties, ordering the immediate release of the trust deed of record, and quieting
title to the subject propert[y]”; return “any and all wrongfully or improperly
collected fees and payments”; provide monetary relief, including interest “over
$100,000 but not more than $2,000,000.00”; and “produce admissible
evidence/Competent fact witnesses.” (Id. at 26–27). At the risk of oversimplifying
Plaintiff’s request, Plaintiff is asking the Court to void the Mortgage and release
any obligation to repay the approximately half-million dollar loan. Essentially,
Plaintiff is making the argument that because the Mortgage was assigned to the
GNMA 2023-097 Trust without a proper recording with Collier County and because
the Note and the Mortgage have purportedly been separated, he no longer has an
obligation to repay the debt, and the Property should be quiet titled in his name.
Plaintiff’s Complaint is, in effect, a collateral attack against Defendant’s standing to
foreclose on the Property.
LEGAL STANDARD
To avoid dismissal subject to a motion to dismiss under Federal Rule of Civil
Procedure 12(b)(6), a plaintiff’s complaint must “contain sufficient factual matter,
accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009). Mere “labels and conclusions, and a formulaic
recitation of the elements of a cause of action” are not enough to survive a motion to
dismiss. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007).

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Complaints filed by pro se plaintiffs are to be “held to less stringent
standards than [complaints] drafted by lawyers.” Stephens v. DeGiovanni, 852 F.3d
1298, 1318 n.16 (11th Cir. 2017). Although liberal construction requires courts to
“look beyond the labels used in a pro se party’s complaint and focus on the content
and substance of the allegations,” courts cannot “serve as de facto counsel for a
party, or [] rewrite an otherwise deficient pleading in order to sustain an action.”
Torres v. Miami-Dade Cty., Fla., 734 F. App’x 688, 691 (11th Cir. 2018); Campbell v.
Air Jamaica Ltd., 760 F.3d 1165, 1168–69 (11th Cir. 2014).
DISCUSSION
Central to the facts alleged is an understanding of the operation and
relevance of MERS, “a private electronic database that ‘tracks the owners of deeds
of trust and the mortgage servicing firms on behalf of its member organizations
through a unique mortgage identification number.’” Parker v. America’s Servicing
Co., No. 1:11-CV-1620-TCB-ECS, 2012 WL 13009241 at *5 (N.D. Ga. Aug. 31, 2012)
(quoting Michael A. Valenza, Digest of Selected Articles, 40 Real Est. L.J. 260, 261
(2011)). One court has outlined MERS’s role in the mortgage-backed securities
industry as follows:
It has become common for original lenders to bundle the beneficial
interest in individual loans and sell them to investors as mortgagebacked securities, which may themselves be traded. See id. at 180;
Jackson, 770 N.W.2d at 490. MERS was designed to avoid the need to
record multiple transfers of the deed by serving as the nominal record
holder of the deed on behalf of the original lender and any subsequent
lender. Jackson, 770 N.W.2d at 490.
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At the origination of the loan, MERS is designated in the deed of trust
as a nominee for the lender and the lender’s “successors and assigns,”
and as the deed's “beneficiary” which holds legal title to the security
interest conveyed. If the lender sells or assigns the beneficial interest in
the loan to another MERS member, the change is recorded only in the
MERS database, not in county records, because MERS continues to hold
the deed on the new lender's behalf. If the beneficial interest in the loan
is sold to a non-MERS member, the transfer of the deed from MERS to
the new lender is recorded in county records and the loan is no longer
tracked in the MERS system.
Cervantes v. Countrywide Home Loans, Inc., 656 F.3d 1034, 1039 (9th Cir. 2011).
“MERS’ role as a nominee for both the mortgagee and the note holder—a role which
it serves in order to facilitate the mortgage-backed securities industry—generally
does not invalidate the borrower’s obligations under Florida law.” Byrd v. Bank
Mortg. Sols., LLC, No. 14-14069-CIV, 2014 WL 12861313, at *3 (S.D. Fla. Apr. 17,
2014). Thus, any issue Plaintiff takes with a lack of recorded assignment is
unfounded in the context of MERS and its designation as “nominee” on the
Mortgage.
With this understanding of MERS’s role, the Court addresses Plaintiff’s issue
with the alleged bifurcation of the Note and the Mortgage. The Eleventh Circuit
has stated that “the ‘bifurcat[ed]’ nature of a note and mortgage is par for the course
and not the basis for a fraud claim” because they are separate instruments under
Florida law. Price v. Lakeview Loan Servicing, LLC, No. 21-11806, 2022 WL
896816, at *2 (11th Cir. Mar. 28, 2022) (alteration in original) (citation omitted). In
Florida, no rights are created for the assignee when a security agreement is
assigned without assignment of the underlying note. Sobel v. Mutual Dev., Inc., 313
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So. 2d 77, 78 (Fla. 1st DCA 1975). However, this does not mean “that a mortgage is
invalid, resulting in clear title to the homeowner, merely as a result of assigning it
without the assignment of the note to the same entity.” Altier v. Fed. Nat. Mortg.
Ass’n, No. 1:13-CV-164-MW/GRJ, 2013 WL 6388521, at *4 (N.D. Fla. Dec. 6, 2013)
(dismissing a quiet title claim “even if the Note and Mortgage were split when the
Mortgage was securitized” because doing such does not make the mortgage and/or
note voidable and the plaintiff was still obligated under the note and mortgage).
Plainly, whether a defendant holds a note has no effect on a mortgage’s validity.
Moving to the claims to which these legal principles apply, the Court will first
address the “MERS” and “Declaratory Relief” claims (Counts IV and V). The
remaining claims will follow.
I.

Plaintiff fails to state a claim for “MERS” (Count IV).
Count IV is titled “Mortgage Electronic Registration System aka MERS.”

(Doc. 1 at 17). Plaintiff alleges that MERS’ assignment of the “Security Instrument
verifies that bifurcation (separation) of the Security Instrument from the Negotiable
Instrument has taken place.” (Id. at 18). And, thus, the “Negotiable Instrument is
now an ‘[u]nsecured’ [i]ndebtedness.” (Id.). Plaintiff alleges that “the failure to file
[in the County public records] establishe[d] bifurcation of the Security Instrument
from the Negotiable Instrument and renders the Security Instrument a nullity.”
(Id.). Simply stated, the Complaint alleges that “the assignment of the mortgage,
without an assignment of the debt” precludes foreclosure. (Id. at 18–19).
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Even with the liberal construction afforded to pro se litigants, the Court
cannot identify a claim for which relief can be granted. As previously stated,
MERS, by its design, is intended to bypass the recordation requirements of
assignments. Thus, the alleged “GNMA 2023-097 Trust purchase” is valid even
though it was not recorded in the public records of Collier County. To the extent
Plaintiff seeks to avoid repayment of the Mortgage because the Mortgage and Note
have allegedly been bifurcated, the claim also fails. Altier, 2013 WL 6388521, at *5
(dismissing the plaintiff’s claim because “even if the Note and Mortgage were split
when the Mortgage was securitized, as Plaintiffs contend, the separation of the
Note and Mortgage does not make the Mortgage (or the Note) voidable.”).
Thus, even with the liberal construction afforded to Plaintiff as a pro se party,
the Court is unable to identify a viable claim and Count IV is dismissed.
II.

Plaintiff’s quiet title action also fails (Count V).
Count V brings a claim for quiet title. “Under Florida law, in order to bring a

claim for quiet title a plaintiff must establish that (1) the plaintiff holds title to the
property in question; and (2) a cloud on title exists.” Id. at *3 (quoting Stark v.
Frayer, et al., 67 So. 2d 237 (Fla. 1953)). A plaintiff “must show with clearness,
accuracy, and certainty the validity of his or her title and the invalidity of the title
of the opposing party.” Rhodes v. JPMorgan Chase Bank, N.A., No. 12-80368-CIV,
2012 WL 5411062, at *3 (S.D. Fla. Nov. 6, 2012). Plaintiff seeks to invalidate
Defendant’s title by alleging that the Note and Mortgage are “invalid and
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unenforceable” and, thus, “constitute a cloud on Plaintiff’s property supporting a
quiet title claim.” (Doc. 1 at 25). However, “subsequent securitization of a note
[does not] deprive Defendant of any legal interest in the note.” Rhodes, 2012 WL
5411062, at *4. Similarly, “the separation of the note from the mortgage does not
void the borrower’s obligation.” Byrd, 2014 WL 12861313, at *3. Courts have
“repeatedly rejected” the “theory that a mortgage that undergoes securitization is
invalid.” Kerr v. Wells Fargo Bank, No. 215CV327FTM38MRM, 2015 WL 8042272,
at *3 (M.D. Fla. Dec. 7, 2015) (collecting cases).
Thus, Plaintiff’s claim fails because he has not alleged that a cloud on his title
exists. Kaan v. Wells Fargo Bank, N.A., 981 F. Supp. 2d 1271, 1274 (S.D. Fla. 2013)
(holding that a “note and mortgage remain a valid and enforceable lien against
Plaintiff’s property, and do not, as a matter of law, constitute a cloud on Plaintiff’s
property supporting a quiet title claim.”). Therefore, because Plaintiff has failed to
allege a cloud on the Property’s title, Count V is dismissed.
III.

Plaintiff’s fraud claim fails (Count I).
To state a claim for fraudulent concealment under Florida law, a plaintiff

must show: (1) the defendant “concealed or failed to disclose a material fact[,]” (2)
the defendant “knew or should have known the material fact should be disclosed[,]”
(3) the defendant “knew their concealment of or failure to disclose the material fact
would induce the plaintiff[] to act[,]” (4) the defendant “had a duty to disclose the
material fact[,]” and (5) “the plaintiff[] detrimentally relied on the misinformation.”
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Hess v. Philip Morris USA, Inc., 175 So. 3d 687, 691 (Fla. 2015) (quotation omitted).
Under Federal Civil Procedure Rule 9(b), “a party must state with particularity the
circumstances constituting fraud or mistake.” To comply with Rule 9(b), a party
must “plead the who, what, when, where, and how of the allegedly false statements
and then allege generally that those statements were made with the requisite
intent.” Mizzaro v. Home Depot, Inc., 544 F.3d 1230, 1237 (11th Cir. 2008).
Plaintiff alleges generally that he detrimentally relied upon Defendant’s
concealment of “a third party Securitizer as well as the terms of the Securitization
Agreement[],” of which had “an adverse effect on the value of Plaintiff’s and
Sureties home by clouding the title.” (Doc. 1 at 11–12). The Court has already
discussed that no cloud on the title exists. Given the heightened pleading standard
of Rule 9(b), and the fact that Plaintiff “does not specify what that fraudulent
statement or omission was (beyond the purportedly unexpected transfer,
assignment, and or securitization of the note/mortgage debt),” Plaintiff fails to state
a claim for fraudulent concealment. Byrd, 2014 WL 12861313, at *3 (dismissing a
fraud claim that generally alleged the “unexpected transfer, assignment, and or
securitization of the note/mortgage debt” was somehow fraudulent); Aprigliano v.
Am. Honda Motor Co., 979 F. Supp. 2d 1331, 1343 (S.D. Fla. 2013) (dismissing a
fraudulent concealment claim when the plaintiffs failed to allege “specifics of [the]
purported scheme, the means [] used to perpetrate the scheme, or specific facts
indicating the existence of the alleged scheme.”). Indeed, the Mortgage itself plainly
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and unambiguously states that the Mortgage and Note “can be sold one or more
times without prior notice[.]” (Doc. 5-1 at 8). So, even despite Plaintiff’s glaring
Rule 9(b) pleading deficiencies and failure to state a fraud claim, Plaintiff was
clearly on notice that the Mortgage and Note could be sold. Thus, Count I is
dismissed.
IV.

Plaintiff lacks standing to bring a securities violation claim (Count
II).
Count II attempts to bring claims under the Securities Act of 1933 and

Securities Exchange Act of 1934 by alleging violations of 15 U.S.C. §§ 77e(a), (c); 15
U.S.C. § 77q(a); 15 U.S.C. § 78j(b); and 17 C.F.R. § 240.10b-5. Plaintiff alleges that
Defendant “offered and sold unregistered securities . . . and made material
misrepresentations and omissions of fact and employed schemes to defraud in
connection with the offer and sale of securities[.]” (Doc. 1 at 14–15). Defendant
argues that Plaintiff lacks standing to bring these claims. (Doc. 5 at 6).
15 U.S.C. § 78j(b), 17 C.F.R. § 240.10b-5, and 15 U.S.C. § 77e permit “only
purchasers and sellers of securities [to] invoke the subject matter jurisdiction of the
courts[.]” Licht v. Watson, 567 F. App’x 689, 691 (11th Cir. 2014). Similarly, “only
purchasers of securities have standing to sue under 15 U.S.C. § 77q.” Kennedy v.
Trustmark Nat. Bank, No. 3:05CV220-RS, 2006 WL 140707, at *2 (N.D. Fla. Jan.
17, 2006). Because Plaintiff does not allege he was a purchaser of a security, he
lacks standing, and Count II, as pleaded, is dismissed.

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V.

Plaintiff’s “Recoupment and Disgorgement of Wrongful Gains” claim
(Count III) fails.
Plaintiff brings a claim for “recoupment and disgorgement of wrongful gains,”

demanding that funds held in escrow be returned to Plaintiff. (Doc. 1 at 15–17).
Plaintiff “demands that the Defendant show on their books that they are not doing
offset entries.” (Id. at 17). Also, Plaintiff vaguely mentions violations of Generally
Accepted Accounting Principles. (Id. at 15–16). Defendant argues they cannot
discern the cause of action, the alleged facts giving rise to liability, and the relief
sought in Count III. (Doc. 5 at 7–8). The Court agrees.
Under Federal Rule of Civil Procedure Rule 8(a)(2), a complaint must contain
“a short and plain statement of the claim showing that the pleader is entitled to
relief.” A complaint that fails to comply with Rule 8 is colloquially referred to as a
shotgun pleading.4 Shotgun pleadings are fatal because “they fail . . . to give the
defendants adequate notice of the claims against them and the grounds upon which
each claim rests.” Weiland, 792 F.3d at 1323. To say the Complaint at large is
“replete with conclusory, vague, and immaterial facts not obviously connected to
any particular cause of action[]” would be an understatement. Id. at 1322. Plaintiff
attempts to rectify the deficiencies of his Complaint in his response by arguing he

4 The entirety of Plaintiff’s Complaint is also characterized as a shotgun pleading

because “each count adopts the allegations of all preceding counts, causing each
successive count to carry all that came before and the last count to be a combination
of the entire complaint.” Weiland v. Palm Beach Cnty. Sheriff’s Off., 792 F.3d 1313,
1321 (11th Cir. 2015).
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has a statutory right of rescission pursuant to 15 U.S.C. § 1635. (Doc. 10 at 5–7).
Yet that will not do because “residential mortgage transaction[s]” are exempt from
Section 1635. 15 U.S.C. § 1635(e)(1). Plaintiff also argues “a plea in recoupment
may be used to obtain affirmative relief.” (Doc. 10 at 7). However, the Court is
confused about the relevance of recoupment since it is a defense “available only to
reduce or satisfy a plaintiff[’s] claim.” In re Sundale, Ltd., 499 F. App’x 887, 892
(11th Cir. 2012) (per curiam) (quoting Kellogg v. Fowler, White, Burnett, Hurley,
Banick & Strickroot, P.A., 807 So. 2d 669, 670 n.2 (Fla. 4th DCA 2001)). To the
extent Plaintiff seeks disgorgement as a private citizen, the claim fails because “in
the securities context, the remedy of disgorgement is a distinctly public-regarding
remedy, available only to government entities seeking to enforce explicit statutory
provisions.” Dunston v. Carrington Mortg. Servs. LLC, No. 3:24CV00185/MCR/ZCB,
2024 WL 3817191, at *5 (N.D. Fla. Aug. 14, 2024) (cleaned up) (dismissing claims
for disgorgement and recoupment based on securities violations when the plaintiff
was a private citizen—not a government entity). Thus, Count III is dismissed.
The Court has carefully and liberally reviewed the crux of the complaint and
its individual claims. Given the deficiencies of the Complaint and the overall
frivolity of the claims raised therein, the Court has doubts that any amendment to
this complaint would comply with the pleading requirements of the Federal Rules of
Civil Procedure. At bottom, Plaintiff has raised claims that have been repeatedly
rejected by the courts to avoid repayment of a mortgage he seeks not to repay.
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Given Plaintiff’s pro se status, the Court will provide Plaintiff one opportunity for
the Plaintiff to amend his complaint. Accordingly, the Complaint is dismissed with
leave to amend. That said, Plaintiff’s pro se status would not shield him
from Court-imposed sanctions and assessment of Defendant’s attorney’s
fees and costs incurred for this litigation.
CONCLUSION
Accordingly, it is ORDERED that:
1.

Defendant’s Motion to Dismiss (Doc. 5) is GRANTED.

2.

The Complaint (Doc. 1) is DISMISSED with leave to amend.

3.

Plaintiff shall file any amended complaint on or before 30 days from the entry
of this Order. If Plaintiff fails to do so, the Complaint will be dismissed with
prejudice without further notice.

ORDERED in Fort Myers, Florida on March 5, 2025.

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