Nye v. HSBC Bank USA et al

Filing 4

ORDER granting 3 Motion to Dismiss for Failure to State a Claim. Clerk is DIRECTED to close case. Signed by Judge Richard W. Story on 11/13/2012. (bdb)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF GEORGIA
ATLANTA DIVISION
JAMES A. NYE,
Plaintiff,
v.
HSBC BANK USA, N.A. as
Trustee for Opteum Mortgage
Acceptance Corporation, AssetBacked, Pass-Through Certificates,
Series 2005-2,
Defendant.

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CIVIL ACTION NO.
1:12-CV-00770-RWS

ORDER
This case comes before the Court on Defendant HSBC Bank USA, N.A.
as Trustee for Opteum Mortgage Acceptance Corporation, Asset-Backed, PassThrough Certificates, Series 2005-2’s (“Defendant”) Motion to Dismiss with
Incorporated Brief (“Def.’s MTD”) [3]. After reviewing the record, the Court
enters the following Order.
Background
On October 5, 2010, Plaintiff James A. Nye (“Plaintiff”) initiated this
action in the Superior Court of Forsyth County in an attempt to stop the
non-judicial foreclosure of his home located at 6685 Cold Stream Drive in

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Cumming, Georgia (“Property”). (Compl. to Establish Proof of Loan
Ownership and Legal Standing to Foreclose (“Compl.”), Dkt. [1-1] ¶ 1.) After
the foreclosure sale occurred, Plaintiff amended the Complaint. (Amendment to
Compl. to Establish Proof of Loan Ownership and Legal Standing to Foreclose
(“Am. Compl.”), Dkt. [2].) After a hearing and extensive briefing by the
parties, the Superior Court of Forsyth County found that Plaintiff had failed to
properly serve Defendant. (Order of Pl.’s Mot. for Default J., Dkt. [1-18] at 1.)
Defendant timely removed the action to this Court on the basis of diversity of
citizenship (Notice of Removal, Dkt. [1]) and now moves to dismiss Plaintiff’s
Amended Complaint under Federal Rule of Civil Procedure (“Rule”) 12(b)(6).1
(Def.’s MTD, Dkt. [3] at 2.) Plaintiff failed to file a response to Defendant’s
motion, so the motion is deemed unopposed. See LR 7.1(B), NDGa (“Failure
to file a response shall indicate that there is no opposition to the motion.”).2
1

Defendant also moves to dismiss the Amended Complaint pursuant to Rule
12(b)(2), (4), and (5), arguing that Plaintiff failed to properly serve Defendant. (Def.’s
Mot. to Dismiss, Dkt. [3] at 2, 13-14.) However, Defendant asserts no facts with
regard to this issue and states: “[B]ecause proper service would not remedy Plaintiff’s
baseless claims, the Court should address the merits of this motion and dismiss for
failure to state a claim upon which relief may be granted.” (Id. at 14.) Therefore, the
Court considers this motion on Rule 12(b)(6) grounds.
2

When a party fails to respond to a Rule 12(b)(6) motion to dismiss, it is within
the Court’s discretion to grant the motion solely on the basis that it is unopposed.
Magluta v. Samples, 162 F.3d 662, 664-65 (11th Cir. 1998). In light of the Court’s
preference for resolving cases on the merits, however, the Court considers the
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The facts underlying this case are as follows.3 Plaintiff executed a
promissory note in favor of Opteum Financial Services, LLC on December 28,
2004. (Am. Compl., Dkt. [2] ¶ 1.) That same day, Plaintiff executed a security
deed (“Security Deed”) in favor of Mortgage Electronic Registration Systems,
Inc. (“MERS”) as nominee for Opteum Financial Services, LLC to secure his
debt on the Property. (Id. ¶ 9). Plaintiff admits he was in default on his
mortgage payments. (Id. ¶ 9.) Plaintiff received notice of the foreclosure sale
on September 16, 2010. (Id. ¶ 2.) On October 26, 2010, the assignment of the
Security Deed from MERS to Defendant was recorded. (Id. ¶ 8.) On
November 2, 2010, Defendant conducted a non-judicial foreclosure sale of the
Property and became its owner. (See id. ¶ 8, Ex. C.) After the foreclosure sale,
Plaintiff vacated the Property because he feared that potential “seizure tactics
used by foreclosing banks” would exacerbate his mother’s already poor health.
(Id. ¶ 11.)
Based on the foregoing, Plaintiff filed the Amended Complaint, which
contains no separately enumerated counts. Plaintiff asserts that there is “a

allegations of the Complaint and reviews Defendant’s motion on the merits.
3

Because the case is before the Court on a motion to dismiss, the Court accepts
as true all well-pleaded factual allegations in the Complaint. Cooper v. Pate, 378 U.S.
546, 546 (1964).
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distinct likelihood that Defendant does not have possession of the original
promissory note and security deed” because his mortgage has been
“securitized.” (Id. ¶ 6.) Defendant now moves to dismiss the Amended
Complaint in its entirety for failure to state a claim upon which relief can be
granted pursuant to Rule 12(b)(6). The Court sets out the legal standard
governing a Rule 12(b)(6) Motion to Dismiss before considering Defendant’s
motion on the merits.
Discussion
I.

Legal Standard: Motion to Dismiss
Federal Rule of Civil Procedure 8(a)(2) requires that a pleading contain a

“short and plain statement of the claim showing that the pleader is entitled to
relief.” While this pleading standard does not require “detailed factual
allegations,” “labels and conclusions,” or “a formulaic recitation of the elements
of a cause of action will not do.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)
(quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). In order to
withstand a motion to dismiss, “a complaint must contain sufficient factual
matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’”
Id. (quoting Twombly, 550 U.S. at 570). A complaint is plausible on its face

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when the plaintiff pleads factual content necessary for the court to draw the
reasonable inference that the defendant is liable for the conduct alleged. Id.
It is important to note that while the factual allegations set forth in the
Complaint are to be considered true at the motion to dismiss stage, the same
does not apply to legal conclusions set forth in the Complaint. Sinaltrainal v.
Coca-Cola Co., 578 F.3d 1252, 1260 (11th Cir. 2009) (citing Iqbal, 556 U.S. at
678). “Threadbare recitals of the elements of a cause of action, supported by
mere conclusory statements, do not suffice.” Iqbal, 556 U.S. at 678. The court
does not need to “accept as true a legal conclusion couched as a factual
allegation.” Twombly, 550 U.S. at 555.
Because Plaintiff is acting pro se, his “pleadings are held to a less
stringent standard than pleadings drafted by attorneys and will, therefore, be
liberally construed.” Tennenbaum v. United States, 148 F.3d 1262, 1263 (11th
Cir. 1998). “This leniency, however, does not require or allow courts to rewrite
an otherwise deficient pleading in order to sustain an action.” Thomas v.
Pentagon Fed. Credit Union, 393 F. App’x 635, 637 (11th Cir. 2010).
II.

Analysis
Defendant moves to dismiss the Amended Complaint in its entirety.

Although the Amended Complaint does not set forth separate counts, it appears
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that Plaintiff has made the following claims: (1) Defendant was required to be
the assignee of record for the entire period of the advertisement of the
foreclosure sale and it was not; (2) The securitization of Plaintiff’s mortgage
creates a cause of action; and (3) Defendant wrongfully entered the Property
after the foreclosure sale. Using the legal standard stated above, the Court
considers Defendant’s motion as to each of Plaintiff’s claims.
A.

Assignee of Record Claim

Plaintiff argues that Defendant was not the assignee of record for most of
the time the foreclosure sale was advertised and therefore violated O.C.G.A.
§ 44-14-162(b). (See Am. Compl., Dkt. [2] ¶ 8.) The statute provides: “The
security instrument or assignment thereof vesting the secured creditor with title
to the security instrument shall be filed prior to the time of sale in the office of
the clerk of the superior court of the county in which the real property is
located.” O.C.G.A. § 44-14-162(b). The statute makes no mention of the
advertisement period. The assignment of the Security Deed from MERS to
Defendant was recorded on October 26, 2010 and the non-judicial foreclosure
sale occurred on November 2, 2010. (See Am. Compl. ¶ 8; see also id. Ex. C.)
Therefore, Defendant complied with the statute by recording the assignment of

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the Security Deed prior to the time of sale. Defendant’s Motion to Dismiss is
GRANTED as to this claim.
B.

Securitization Claim

Plaintiff alleges that “[t]he original mortgage has been ‘securitized,’
possibly numerous times, creating a distinct likelihood that the Defendant does
not have possession of the original promissory note and security deed.” (Id.
¶ 6.) Plaintiff’s vague allegation is insufficient to state a claim for relief that is
plausible on its face. Even if Plaintiff had alleged additional facts with regard
to this claim, the securitization of a mortgage does not give rise to a cause of
action. See, e.g., Searcy v. EMC Mortg. Corp., [Dkt. 11],
1:10–cv–00965–WBH (N.D.Ga. Sept. 30, 2010) (“While it may well be that
Plaintiff's mortgage was pooled with other loans into a securitized trust that
then issued bonds to investors, that fact would not have any effect on Plaintiff's
rights and obligations with respect to the mortgage loan, and it certainly would
not absolve Plaintiff from having to make loan payments or somehow shield
Plaintiff's property from foreclosure.”). Therefore, Defendant’s motion to
dismiss this claim is GRANTED.
C.

Trespass Claim

Plaintiff further alleges that Defendant “trespassed” on the Property by
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placing a lock box on the house. (Am. Compl. ¶ 11.) Under Georgia law, “[a]
trespass is any wrongful, continuing interference with a right to the exclusive
use and benefit of a property right.” Lanier v. Burnette, 538 S.E.2d 476, 480
(Ga. Ct. App. 2000). “The purchaser at a foreclosure sale under a power of sale
in a security deed is the sole owner of the property until and unless the sale is
set aside.” Womack v. Columbus Rentals, Inc., 478 S.E.2d 611, 614 (Ga. Ct.
App. 1996). A former owner of real property becomes a tenant at sufferance if
that person remains on the property after a foreclosure sale. Steed v. Fed. Nat.
Mortg. Corp., 689 S.E.2d 843, 848 (Ga. Ct. App. 2009) (citations omitted). If
that former owner vacates the property, however, he ceases to be a tenant at
sufferance and will be deemed an intruder if he reenters the property. Id.
(citation omitted).
Plaintiff admits that a foreclosure sale of the Property occurred and that
he subsequently vacated the Property. (Am. Compl., Dkt. [2] ¶ 8, 11.)
Accepting the factual allegations in the Amended Complaint as true, as the
Court must at the Motion to Dismiss phase, Plaintiff did not have a possessory
right in the Property when Defendant installed the lock box. Therefore, there
was no trespass and Defendant’s Motion to Dismiss as to this claim is
GRANTED.
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CONCLUSION
In accordance with the foregoing, Defendant’s Motion to Dismiss [3] is
GRANTED. The Clerk is DIRECTED to close the case.
SO ORDERED, this 13th day of November, 2012.

_______________________________
RICHARD W. STORY
UNITED STATES DISTRICT JUDGE

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