Henry v. Premium Capital Funding, LLC et al
Filing
10
ORDER granting Defendants' 3 Motion to Dismiss. Plaintiff's Complaint 1 is DISMISSED without prejudice. The Clerk is directed to enter judgment in favor of Defendants and to close the case. Signed by Judge Richard W. Story on 4/10/13. (cem)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF GEORGIA
ATLANTA DIVISION
KERVON L. HENRY,
Plaintiff,
v.
PREMIUM CAPITAL FUNDING,
LLC, a foreign limited liability
company, doing business as
TOPDOT MORTGAGE, BANK
OF AMERICAN, N.A. and
MORTGAGE ELECTRONIC
REGISTRATION SYSTEMS,
INC., a foreign corporation,
Defendants.
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CIVIL ACTION NO.
1:12-CV-02617-RWS
ORDER
This case comes before the Court on Defendants Bank of America, N.A.
and Mortgage Electronic Registration Systems, Inc.’s Motion by Special
Appearance to Dismiss Plaintiff’s Complaint (“Defendants’ Motion to
Dismiss”) [3]. After reviewing the record, the Court enters the following Order.
Background
This case arises out of Plaintiff’s attempt to avoid foreclosure
proceedings on his property, located at 1250 Log Cabin Way, Lawrenceville,
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Georgia 30045 (the “Property”). Accepting the allegations in Plaintiff’s
Petition for Declaratory Relief (“Complaint,” Dkt. [1]) as true, as the Court
must on a motion to dismiss,1 the facts are as follows.
On or about February 12, 2008, Plaintiff executed a security deed (the
“Security Deed”) in favor of Mortgage Electronic Registration Systems, Inc.
(“MERS”) as nominee for Premium Capital Funding, LLC, d/b/a Topdot
Mortgage (“Topdot”). (Compl., Dkt. [1] ¶ 9; Defs.’ Mot. to Dismiss, Ex. D (the
Security Deed), Dkt. [3-5].)2 Plaintiff also entered into a loan agreement (the
“Loan”) with Topdot, executing a promissory note (the “Note”) for the
principal amount of $193,509.00. (Compl., Dkt. [1] ¶ 9.) In September 2011,
MERS assigned the Security Deed to Bank of America, N.A. (“BANA”). (Id.
¶ 10; Defs.’ Mot. to Dismiss, Ex. E (“the Assignment”), Dkt. [3-6].) The
Assignment was recorded in the Superior Court of Gwinnett County on October
20, 2011. (Id.)
1
Cooper v. Pate, 378 U.S. 546, 546 (1964).
2
When considering a motion to dismiss, the Court may take notice of public
records not attached to the Complaint, including in this case the Security Deed and
Assignment filed in the Superior Court of Gwinnett County. This does not convert the
motion into one for summary judgment. Universal Express, Inc. v. S.E.C., 177 F.
App’x 52, 53 (11th Cir. 2006) (“A district court may take judicial notice of certain
facts without converting a motion to dismiss into a motion for summary judgment. . . .
Public records are among the permissible facts that a district court may consider.”)
(citations omitted).
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On July 30, 2012, Plaintiff filed the Complaint in this Court, seeking
declaratory relief against Defendants. (Compl., Dkt. [1] ¶¶ A-N at 6-7.) The
Complaint names Topdot, BANA, and MERS as Defendants and asserts
diversity of citizenship as the basis for jurisdiction. (Id. at ¶¶ 5-7.) Plaintiff
raises only a cause of action for declaratory relief pursuant to 28 U.S.C. §§
2201-2202, seeking “a judicial determination of any and all rights under the
Note and/or Security Deed.” (Id. at ¶ 17.) Plaintiff asks the Court to declare
that Defendants (1) are not the legitimate owners of the Note and/or Security
Deed and (2) do not have the rights to service the Note and/or Security Deed,
engage in the “loss mitigation process,” receive payments, enforce penalties or
fines against Plaintiff, issue delinquency notices, engage in debt collection
practices, report “negative items about [Plaintiff] to consumer credit reporting
agencies,”declare Plaintiff in default of the Note and/or Security Deed,
accelerate payments due under the Note and/or Security Deed, or enforce the
Note and/or Security Deed through foreclosure, foreclosure sale, and eviction.
(Id. at 6-7.) Plaintiff also seeks an injunction preventing Defendants from
exercising any rights under the Note or Security Deed, as “supplemental relief
under [28 U.S.C. §] 2202.” (Id. at 7.)
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Defendants now move to dismiss the Complaint for failure to state a
claim upon which relief may be granted under Federal Rule of Civil Procedure
(“Rule”) 12(b)(6), arguing that Plaintiff has failed to present a case or
controversy ripe for adjudication. (Defs.’ Mot. to Dismiss, Dkt. [3].) The
Court deems this to be a Rule 12(b)(1) motion to dismiss for lack of subject
matter jurisdiction. See Sammons v. Nat’l Comm’n on Certification of
Physician Assistants, Inc., 104 F. Supp. 2d 1379, 1381 (N.D. Ga. 2000) (noting
that “ripeness goes to [a federal district court’s] subject matter jurisdiction”).
Defendants also move to dismiss the Complaint under Rule 12(b)(5) for
insufficient service of process. (Defs.’ Mot. to Dismiss, Dkt. [3].) Plaintiff has
not responded to Defendants’ motion, and therefore the Court considers the
Motion to Dismiss unopposed. See LR 7.1(B) (“Failure to file a response shall
indicate that there is no opposition to the motion.”).
Discussion
I.
Legal Standard
A.
Motion to Dismiss for Lack of Subject Matter Jurisdiction
Rule 12(b)(1) attacks on subject matter jurisdiction can come in two
forms–facial or factual. Lawrence v. Dunbar, 919 F.2d 1525, 1528-29 (11th
Cir. 1990). “Facial attacks” require the court to evaluate the complaint to see
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whether the plaintiff has sufficiently alleged a basis for subject matter
jurisdiction; the allegations are taken as true for purposes of the motion. Garcia
v. Copenhaver, Bell & Assocs., M.D.’s, P.A., 104 F.3d 1256, 1261 (11th Cir.
1997); Lawrence, 919 F.2d at 1529 (11th Cir. 1990). “Factual attacks”
challenge subject matter jurisdiction in fact, irrespective of the pleadings.
Garcia, 104 F.3d at 1261. Here, because Defendants have not offered matters
outside the pleadings for the Court to consider, this challenge will be considered
a facial challenge, and the allegations of the Complaint will be taken as true.
B.
Motion to Dismiss for Insufficient Service of Process
“Service of process is a jurisdictional requirement: a court lacks
jurisdiction over the person of a defendant when that defendant has not been
served.” Pardazi v. Cullman Med. Ctr., 896 F.2d 1313, 1317 (11th Cir. 1990).
Rule 4 sets forth the procedure for serving a Defendant. “The plaintiff is
responsible for having the summons and the complaint served within the time
allowed under Rule 4(m) . . . .” FED. R. CIV. P. 4(c)(1). Rule 4(m) provides:
If a defendant is not served within 120 days after the complaint is
filed the court—on motion or on its own after notice to the
plaintiff—must dismiss the action without prejudice against that
defendant or order that service be made within a specified time.
But if the plaintiff shows good cause for the failure, the court must
extend the time for service for an appropriate period.
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FED. R. CIV. P. 4(m).
II.
Analysis
As stated in the Background section, supra, in the Complaint, Plaintiff
requests only declaratory relief, seeking clarification about “what entity holds,
owns or possesses any and all rights under the Note and/or Security Deed.”
(Compl., Dkt. [1] ¶ 16.) Defendants move to dismiss on two grounds: first,
that Plaintiff has not pled the existence of an actual controversy in which relief
may be granted, and second, that in any event, Plaintiff’s Complaint is due to be
dismissed for failure to effect service of process. (Defs.’ Mem., Dkt. [3-1] at 68.) The Court addresses each argument in turn.
A.
Actual Controversy
First, Defendants assert that Plaintiff has not “allege[d] that BANA or
MERS is not the owner and/or holder of the Note and Security Deed, that
BANA or MERS is not the mortgage servicer, or that BANA or MERS has no
right to enforce the Note and Security Deed,” and as such, that Plaintiff has
failed to present an actual controversy ripe for adjudication. (Defs.’ Mem., Dkt.
[3-1] at 7.)
The Declaratory Judgment Act authorizes federal courts to “declare the
rights and other legal relations of any interested party seeking such
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declaration.” 28 U.S.C. § 2201(a). A declaratory judgment may be issued only
to resolve an “actual controversy.” MedImmune, Inc. v. Genentech, Inc., 549
U.S. 118, 126-27 (2007) (citing Aetna Life Ins. Co. v. Haworth, 300 U.S. 227,
240 (1937)). The Supreme Court has required that, in order for a declaratory
judgment to be proper, the dispute must be “‘definite and concrete, touching the
legal relations of parties having adverse legal interests’; and that it be ‘real and
substantial’ and ‘admi[t] of specific relief through a decree of a conclusive
character, as distinguished from an opinion advising what the law would be
upon a hypothetical state of facts.’” Id. (citing Aetna, 300 U.S. at 241). “A
controversy, to be justiciable, must be such that it can presently be litigated and
decided and not hypothetical, conjectural, conditional or based upon the
possibility of a factual situation that may never develop.” Brown & Root, Inc.
v. Big Rock Corp., 383 F.2d 662, 665 (5th Cir. 1967).3 Additionally, “it is not
the function of a United States District Court to sit in judgment on . . .
intriguing questions which today may readily be imagined, but may never in
fact come to pass.’” Id. at 666 (quoting Am. Fid. & Cas. Co. v. Pennsylvania T.
& F. M. Cas. Ins. Co., 280 F.2d 453, 461 (5th Cir. 1960)).
3
In Bonner v. City of Prichard, the Eleventh Circuit Court of Appeals adopted
as binding precedent all decisions the former Fifth Circuit handed down before
October 1, 1981. 661 F.2d 1206, 1209 (11th Cir. 1981) (en banc).
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Here, the Complaint does not allege an actual controversy. The
Complaint does not allege that Defendants are not the rightful owners and/or
holders of the Note and Security Deed, that Defendants are not the mortgage
servicers, or that Defendants have no right to enforce the Note and Security
Deed through non-judicial foreclosure. While there could at some point be a
dispute among the parties, any such dispute is, at this point, hypothetical or
conjectural and has not yet ripened into an actual controversy. Accordingly,
Plaintiff has not alleged the existence of an “actual controversy” and thus is not
entitled to declaratory relief. The Complaint is due to be DISMISSED.4
B.
Service of Process
Additionally, Local Rule 41.2(B) allows the Court to dismiss a
Complaint without prejudice for lack of service of process. LR 41.2(B).
Defendants allege that, as of the date of filing their Motion to Dismiss, they
have not been served with summons and a copy of the Complaint pursuant to
Rule 4. (Defs.’ Mem., Dkt. [3-1] at 7-8.) In this case, the Complaint was filed
4
“A dismissal for lack of subject matter jurisdiction is not a judgment on the
merits and is entered without prejudice.” Stalley ex rel. U.S. v. Orlando Reg'l
Healthcare Sys., Inc., 524 F.3d 1229, 1232 (11th Cir. 2008) (citing Crotwell v.
Hockman-Lewis Ltd., 734 F.2d 767, 769 (11th Cir.1984)).
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on July 30, 2012, such that the 120 day window for service of process under
Rule 4(m) expired on November 27, 2012. After reviewing the record, the
Court finds no evidence that Defendants have been served with process in
accordance with Rule 4. Nor has Plaintiff provided “good cause” for failing to
effect timely service. Accordingly, Plaintiff’s claims are due to be
DISMISSED on this basis as well as for the reasons discussed in Part II.A.,
supra.
Conclusion
In accordance with the foregoing, Defendants’ Motion to Dismiss [3] is
GRANTED. Plaintiff’s Complaint [1] is DISMISSED without prejudice.
The Clerk is directed to enter judgment in favor of Defendants and to close the
case.
SO ORDERED, this 10th day of April, 2013.
_______________________________
RICHARD W. STORY
UNITED STATES DISTRICT JUDGE
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