Smiley v. Nationstar Mortgage LLC
Filing
24
ORDER ATTACHED granting 22 Motion to Dismiss, dismissing case with prejudice as to Defendant Nationstar, and directing Plaintiff to show cause in writing on or before August 30, 2016, regarding status of service of process on Defendant Vertical Lending, Inc., or suffer dismissal without prejudice and without further notice. Signed by Judge Richard A. Lazzara on 8/23/2016. (CCB)
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION
NATHANIEL SMILEY,
Plaintiff,
v.
CASE NO. 8:16-cv-1065-T-26AEP
NATIONSTAR MORTGAGE LLC, d/b/a
Champion Mortgage Company, and
VERTICAL LEND, INC.,
Defendants.
/
ORDER
BEFORE THE COURT is Defendant Nationstar Mortgage LLC, d/b/a Champion
Mortgage Company’s Motion to Dismiss the Second Amended Complaint (Dkt. 22).1
After careful consideration of the allegations of the second amended complaint (Dkt. 19),
the argument of the Defendant Nationstar, and the applicable law, the Court concludes
that Plaintiff has failed to allege any cognizable claim for relief.
FRAUDULENT INDUCEMENT
1
On August 5, 2016, this Court entered an order at docket 23 directing the
Plaintiff to file a response to the motion to dismiss within the time required by Local Rule
3.01(b) and warning Plaintiff’s counsel that failure to do so would result in the Court
ruling on the motion without the benefit of a response from the Plaintiff. Plaintiff’s
counsel, for some unknown reason, has failed to file a timely response to the motion to
dismiss so the Court has no other alternative but to consider the merits of the motion
without a response from the Plaintiff.
The second amended complaint represents Plaintiff’s third and final attempt to
allege a claim for relief. The first count, “Inducement of Fraud,” is exactly the same as
the count alleged by the same title in the first amended complaint, save the deletion of the
last two paragraphs. Those paragraphs alleged that Defendant Nationstar knew or should
have known that Defendant Vertical Lend, Inc. (Vertical Lend) in 2007 had induced
Elvira Smiley, long since divorced from George Smiley, to quitclaim her interest in the
marital home in addition to the interest of the heirs and devisees of the estate of George
Smiley, deceased, to herself.
The underlying facts are as follows. In 1980, the divorce court awarded Elvira
Smiley possession of the marital home until she remarried or the youngest child became
an adult at which time the property was to be sold by agreement of the parties. When
George Smiley died in 2003, Elvira Smiley continued to live in the home. In 2007, Elvira
Smiley quitclaimed the property to herself and obtained a reverse mortgage with the
assistance of Vertical Lend.2 Nationstar holds the note and reverse mortgage secured by
the home. Elvira Smiley died in January 2011. In 2012, Nationstar sued to foreclose the
mortgage in state court. Plaintiff Nathaniel Smiley, the son of George and Elvira Smiley,
2
Prior to the quitclaim deed executed with the assistance of Vertical Lend on
October 18, 2007, Elvira Smiley quitclaimed her interest in May 2007 to her daughter
Linata Smiley who was also living in the house at the time. In August 2007, Linata
Smiley quitclaimed her interest to Elvira Smiley. Plaintiff alleges the property was not
“probated to the siblings” as part of George Smiley’s estate and, therefore, Linata could
not quitclaim Plaintiff’s interest in August 2007.
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resides in the home. Plaintiff alleges that Vertical Lend knew or should have known that
Elvira Smiley was not the proper party to execute the quitclaim deed and therefore
induced Elvira Smiley to commit fraud in the execution of the quitclaim deed to obtain a
reverse mortgage she was not qualified to obtain. Based on these facts, Plaintiff further
alleges that Nationstar knew or should have known that the quitclaim deed and the note
executed by Elvira Smiley were premised on fraud in the inducement.
As argued by Nationstar, the second amended complaint, assuming the allegations
as true and construing them in the light most favorable to the Plaintiff, does not state a
plausible claim for relief. See Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937,
1949, 173 L.Ed.2d 868 (2009); Bell Atl. Corp. v. Twombly, 550 U.S. 554, 555, 127 S.Ct.
1955, 1964-65, 167 L.Ed.2d 929 (2007). Rather, it continues to represent the
quintessential shotgun pleading as this Court has ruled before, by wholly incorporating all
paragraphs of the complaint into the second and final count. See Weiland v. Palm Beach
Cnty. Sheriff’s Office, 792 F.3d 1313, 1321 (11th Cir. 2015); Davis v. Coca-Cola Bottling
Co. v. Consolidated, 516 F.3d 955, 979 n.54 (11th Cir. 2008) (collecting cases). Failure to
correct such pleadings, given ample opportunity, supports dismissal. See Corsello v.
Lincare, Inc., 428 F.3d 1008, 1014 (11th Cir. 2005) (holding district court did not abuse its
discretion in failing to permit filing of third amended complaint for “repeated failure to
cure deficiencies by [previous] amendments” and quoting Bryant v. Dupree, 252 F.3d
1161, 1163 (11th Cir. 2001)).
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In addition to the failure to correct the obvious flaws, there are no allegations
supporting fraud, much less allegations of fraud with the particularity required by Rule of
Civil Procedure 9(b), committed by Nationstar. To plead fraudulent inducement and
comply with Rule 9(b), the plaintiff must allege “(1) precisely what statements were made
in what documents or oral representations or what omissions were made, and (2) the time
and place of each such statement and the person responsible for making (or, in the case of
omissions, not making) same, and (3) the content of such statements and the manner in
which they misled the plaintiff, and (4) what the defendants obtained as a consequence of
the fraud.” Garfield v. NDC Health Corp., 466 F.3d 1255, 1262 (11th Cir. 2006) (citing
Ziemba v. Cascade Int’l, Inc., 256 F.3d 1194, 1202 (11th Cir. 2001) as quoting Brooks v.
Blue Cross & Blue Shield of Fla., Inc., 116 F.3d 1264, 1371 (11th Cir. 1997)). The facts
as alleged do not state a claim for relief for fraudulent inducement against Nationstar. It
is not explained how Nationstar should or could have known about a fraudulent
inducement that Vertical Lending committed in 2007. No connection has been alleged
between Vertical Lending such that its actions are attributable to Nationstar.
WRONGFUL FORECLOSURE
The second count alleging “illegal bank foreclosure” also fails to state a claim for
relief. To the extent such a claim is cognizable in Florida, it requires the wrongful sale of
property, which has not occurred here. Courts in the Middle District have held that
Florida does not recognize a cause of action for wrongful foreclosure. See Raines v.
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GMAC Mortgage Co., No. 3:09-cv-477, 2009 WL 4715969, at *2 (M.D. Fla. Dec. 10,
2009); Perez v. IndyMac FSB, No. 6:12-cv-1146, 2012 WL 12538952, at *4 (M.D. Fla.
Nov. 5, 2012). To the extent some courts mention wrongful foreclosure claims in Florida,
those courts note that the real property must be sold at a foreclosure sale before any such
action might be brought. See Hack v. Wachovia Bank, N.A., No. 12-cv-21436, 2012 WL
3043017, at *3 (S.D. Fla. July 25, 2012) (citing Raines); In re: Taylor, Bean & Whitaker
Mortgage Corp., No. 3:09-bk-7047-JAF, 2011 WL 5245420, at*5 (Bank. M.D. Fla. Oct.
24, 2011) (citing Raines); Wells Fargo Bank, N.A. v. Averett Family P’ship, LLLP, No.
4:12-cv-140, 2012 WL 6728058, at *6 (M.D. Ga. Dec. 28, 2012) (citing Raines). Absent
the ability to allege that the property has been sold, the Plaintiff cannot allege a claim for
relief.
It is therefore ORDERED AND ADJUDGED that Defendant’s Motion to
Dismiss the Second Amended Complaint (Dkt. 22) is granted. This case is dismissed
with prejudice as to Defendant Nationstar.
As to the Defendant Vertical Lend, Inc., Plaintiff shall show cause in writing on or
before August 30, 2016, regarding the status of service of process on Defendant Vertical
Lend, Inc., failing which the case as to that Defendant will be dismissed without prejudice
and without further notice pursuant to Local Rule 3.10(a).
DONE AND ORDERED at Tampa, Florida, on August 23, 2016.
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s/Richard A. Lazzara
RICHARD A. LAZZARA
UNITED STATES DISTRICT JUDGE
COPIES FURNISHED TO:
Counsel of Record
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