Hall v. Bank of America, N.A.
Filing
7
ORDER granting Defendant's 2 Motion to Dismiss. Signed by Judge Richard W. Story on 4/22/2013. (cem)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF GEORGIA
ATLANTA DIVISION
CARLOS A. HALL,
Plaintiff,
v.
BANK OF AMERICA, N.A.,
Defendant.
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CIVIL ACTION NO.
1:12-CV-3068-RWS
ORDER
This case is before the Court on Defendant Bank of America, N.A.’s
(“BANA”) Motion to Dismiss [2]. After reviewing the record, the Court enters
the following Order.
Background1
On or about July 16, 2002, Plaintiff purchased property located at 239
Stallion Trail, Riverdale, Georgia 30274 (the “Property”). Plaintiff financed the
purchase of the Property with a mortgage loan underwritten by Homestar
Mortgage Services, LLC (the “Homestar Security Deed”). The Homestar
Security Deed named Mortgage Electronic Registration Systems, Inc.
1
At the motion to dismiss phase, the Court accepts as true all well-pleaded
facts in Plaintiff’s Complaint (Dkt. [1-1] at 16-27 of 37.)
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(“MERS”) as nominee for Homestar. On or about January 22, 2008, the
Homestar Security Deed was discharged. (See Discharge of Deed to Secure
Debt, Dkt. [1-1] at 31 of 37.)
Plaintiff executed a new Security Deed for the Property on or about May
22, 2009 (the “2009 Security Deed”), which named Taylor, Bean & Whitaker
Mortgage Corp. (“Taylor Bean”) as Lender and MERS as nominee for Taylor
Bean and its successors and assigns. On or about December 2, 2011, MERS
assigned its interest in the 2009 Security Deed to Defendant BANA (the
“Assignment”). On or about August 7, 2012, BANA sent Plaintiff a letter
notifying him that BANA intended to exercise its power of sale under the 2009
Security Deed, and that it intended to conduct a non-judicial foreclosure sale of
the Property. The letter identified BANA as “the entity that has full authority to
negotiate, amend, and modify all terms of the mortgage.”
Before the foreclosure sale occurred, Plaintiff filed suit in the Superior
Court of Clayton County, Georgia for a temporary restraining order (“TRO”)
prohibiting BANA from conducting a foreclosure sale of the Property. (See
Pl.’s Motion for TRO, Dkt. [1-1] at 2 of 37.) On August 6, 2012, Chief Judge
Deborah C. Benefield granted Plaintiff a 30-day TRO. (See TRO, Dkt. [1-1] at
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35 of 37.) On August 20, 2012, Judge Benefield entered an Interlocutory
Injunction restraining BANA “from taking any action to foreclose on the
[Property] during the pendency of this litigation.” (Interlocutory Injunction,
Dkt. [1-1] at 36 of 37.)
On August 2, 2012, Plaintiff also filed a Complaint and Petition for
Temporary and Permanent Injunctive Relief; Declaratory Relief, to Restrain
Foreclosure, and to Quiet Title (the “Complaint”) in the Superior Court of
Clayton County. (Dkt. [1-1] at 16 of 37.) Defendant removed the case from
state court to the Northern District of Georgia pursuant to 28 U.S.C. §§ 1332,
1441, and 1446. (See Notice of Removal, Dkt. [1].) Defendant’s Motion to
Dismiss [2] is now before the Court. Plaintiff did not file a response to
Defendant’s motion and therefore, the motion is deemed unopposed. See L.R.
7.1B.
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
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allegations,” mere 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 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.
“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, 1273
n.1 (11th Cir. 1999). However, 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, 129 S. Ct. at 1949). “Threadbare recitals of the
elements of a cause of action, supported by mere conclusory statements, do not
suffice.” Iqbal, 556 U.S. at 678. Furthermore, the court does not “accept as
true a legal conclusion couched as a factual allegation.” Twombly, 550 U.S. at
555.
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“The district court generally must convert a motion to dismiss into a
motion for summary judgment if it considers materials outside the complaint.”
D.L. Day v. Taylor, 400 F.3d 1272, 1275-76 (11th Cir. 2005); see also Fed. R.
Civ. P. 12(d). However, documents attached to a complaint are considered part
of the complaint. Fed. R. Civ. P. 10(c). Documents “need not be physically
attached to a pleading to be incorporated by reference into it; if the document’s
contents are alleged in a complaint and no party questions those contents, [the
court] may consider such a document,” provided it is central to the plaintiff’s
claim. D.L. Day, 400 F.3d at 1276. At the motion to dismiss phase, the Court
may also consider “a document attached to a motion to dismiss . . . if the
attached document is (1) central to the plaintiff’s claim and (2) undisputed.” Id.
(citing Horsley v. Feldt, 304 F.3d 1125, 1134 (11th Cir. 2002)). “‘Undisputed’
means that the authenticity of the document is not challenged.” Id.
II.
Analysis
Plaintiff asserts two substantive claims: rescission of
mortgage/assignment of security deed (Count I) and quiet title (Count II).
Plaintiff seeks declaratory relief (Count III) and emergency temporary and
permanent injunctive relief (Count IV).
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A.
Recision of Mortgage/Assignment of Security Deed
Plaintiff alleges that BANA does not have authority to foreclose on
Plaintiff’s Property because it was “not legally assigned the 2009 Security Deed
and does not otherwise have standing to enforce that obligation.” (Compl., Dkt.
[1-1] at 20 of 37, ¶ 15.) Moreover, Plaintiff alleges, even if the Assignment was
valid, BANA “is and at all relevant times was merely the servicer of the
mortgage, acting as the secured creditor’s ‘nominee,’ and not the ‘secured
creditor’ itself.” (Id. at 21 of 37, ¶ 16.) Therefore, Plaintiff alleges, notice of
the attempted foreclosure sale was deficient under O.C.G.A. § 44-14-162.2.
Defendant argues that, as a threshold matter, Plaintiff lacks standing to
challenge the Assignment. The Court agrees. A person who is not a party to a
contract or an intended third-party beneficiary of a contract lacks standing to
challenge or enforce the contract. See O.C.G.A. § 9-2-20(a) (“an action on a
contract ... shall be brought in the name of the party in whom the legal interest
in the contract is vested, and against the party who made it in person or by
agent”); Joseph v. Fed. Home Loan Mortg. Corp., No. 1:12-CV-1022-RWS,
2012 WL 5429639, at *2 (N.D. Ga. Nov. 6, 2012) (finding plaintiff could not
support claim for wrongful foreclosure by challenging assignment of the
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security deed because she was not a party to the contract and lacked standing to
challenge validity of the assignment). Here, Plaintiff was not a party to the
Assignment or an intended third-party beneficiary of the Assignment and
therefore, he may not challenge its validity or seek recision of the contract.
Plaintiff’s next allegation is that BANA is not the party with authority to
foreclose on the Property. On December 2, 2011, MERS conveyed to BANA
“all beneficial interest under [the 2009 Security Deed] together with the note(s)
and obligations therein described and the money due and to become due theron
with interest and all rights accrued or to accrue under said Security Deed.”
(Assignment, Dkt. [1-1] at 34 of 37.) In other words, with the Assignment,
BANA received all rights under the 2009 Security Deed. Under the explicit
terms of that Deed, Plaintiff granted and conveyed “to MERS . . . and the
successors and assigns of MERS, with the power of sale, the [Property].” (2009
Security Deed, Dkt. [1-1] at 32 of 37 (emphasis added).) Therefore, under the
2009 Security Deed and the Assignment, BANA does have the authority to
foreclose on and sell the Property.2
2
To the extent Plaintiff is asserting a “splitting of the Note and Deed” theory of
wrongful foreclosure, the claim fails. This Court has previously found that Georgia
law does not preclude the holder of a security deed from initiating foreclosure if it
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Plaintiff’s last argument is that BANA is not the secured creditor for
purposes of O.C.G.A 44-14-162.2's notice requirement. Under § 44-14-162.2:
Notice of the initiation of proceedings to exercise a
power of sale in a mortgage, security deed, or other
lien contract shall be given to the debtor by the
secured creditor no later than 30 days before the date
of the proposed foreclosure. Such notice shall be in
writing, [and] shall include the name, address, and
telephone number of the individual or entity who shall
have full authority to negotiate, amend, and modify all
terms of the mortgage with the debtor . . . .
Plaintiff alleges that the notice he received was defective because it was not
sent to him “by the secured creditor.” As BANA notes, however, Plaintiff does
not allege which party is the secured creditor. BANA argues that it is the holder
of the Note indorsed in blank and accordingly, is properly entitled to payment
of the underlying debt. (Def.’s MTD, Dkt. [2] at 12.) Furthermore, BANA
argues that Plaintiff should be estopped from alleging that BANA is not the
secured creditor in this action because in his Chapter 7 bankruptcy filing (No.
does not also hold the note. See LaCosta v. McCalla Raymer, LLC, No. 1:10-CV1171-RWS, 2011 WL 166902, at *5-6 (N.D. Ga. Jan. 18, 2011) (rejecting debtor’s
argument that the foreclosing entity must possess both the promissory note and the
security deed); accord Alexis v. Mortg. Elec. Registration Sys., Inc., No. 1:11-CV1967-RWS, 2012 WL 716161, at *3 (N.D. Ga. Mar. 5, 2012).
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11-70636-PWB (N.D. Ga.)), Plaintiff listed Bank of America Home Loans3 as
the entity holding a secured, liquidated, and undisputed claim in the
approximate amount of $144,314.00 secured by a “First Mortgage on Real
Property.” (Def.’s MTD, Dkt. [2] at 13.) Then, in his Individual Debtor’s
Statement of Intention in the bankruptcy case, Plaintiff identified Bank of
America Home Loans as a creditor secured by Plaintiff’s Property. (Id.)
The Court agrees with BANA. Plaintiff represented in another court
proceeding that BANA is a creditor secured by Plaintiff’s real property. He
cannot now claim the opposite, especially without alleging which party is the
secured creditor. Therefore, Defendant’s motion is GRANTED with respect to
this claim.
B.
Quiet Title
Plaintiff seeks to quiet title in his favor under O.C.G.A. § 23-3-62.
Plaintiff states that he filed a plat of survey of the land with his Complaint.
(Compl., Dkt. [1-1] at 22 of 37, ¶ 21.) However, the Court finds no such
document in the record. The statute requires that a plat of survey of the land be
filed with the petition to quiet title. O.C.G.A. § 23-3-62(c). Therefore, Plaintiff
3
BANA is the successor by merger to Bank of America Home Loans.
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has not satisfied the statutory requirements and Defendant’s motion is
GRANTED as to this claim.4
C.
Declaratory and Injunctive Relief
Plaintiff seeks declaratory relief “on the grounds that Defendant has no
legal or equitable rights in the 2009 Security Deed or the property reflected
therein for purposes of foreclosure and that said Defendant has no legal
standing to institute or maintain foreclosure on the property.” (Compl., Dkt. [11] at 23 of 37, ¶ 24.) The Court has already concluded that BANA does have
power of sale and the authority to foreclose under the Security Deed. (See Part
II.A., supra.) As there are no allegations demonstrating the existence of an
actual controversy, Plaintiff is not entitled to declaratory relief. See O.C.G.A. §
9-4-2(a) (providing that declaratory judgments may be issued in “cases of actual
4
Defendant also argues that Plaintiff’s basis for challenging BANA’s interest
in the Property is flawed. (Def.’s MTD, Dkt. [2] at 15.) The Court agrees. Although
it is difficult, based on the conclusory statements in the Complaint, to determine
Plaintiff’s theory of cloud upon the title, he appears to base his claim on the allegedly
fraudulent Assignment of the Security Deed. (See Compl., Dkt. [1-1] at 23 of 37, ¶ 4.)
As discussed in Part II.A., supra, Plaintiff does not have standing to challenge the
Assignment. O.C.G.A. § 23-3-62(b) requires a petition to quiet title to include “a
statement as to the grounds upon which it is sought to remove the cloud or clouds.”
The Court has already concluded that BANA has authority to foreclose on the
Property under the Security Deed. Therefore, even if Plaintiff had satisfied the
statutory filing requirements, the Court finds that his quiet title claim would be futile.
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controversy”); Lubin v. Cincinnati Ins. Co., No. 1:09-CV-1156-RWS, 2009 WL
4641765, at *3 (N.D. Ga. Nov. 30, 2009) (“In order to bring a declaratory
judgment action an actual controversy must exist. The issue is whether the facts
alleged, under all the circumstances, show that there is a substantial controversy
between parties having adverse legal interests, of sufficient immediacy and
reality to warrant issuance of a declaratory judgment.”) (internal quotation
marks and citations omitted).
Plaintiff is also not entitled to injunctive relief. To obtain an injunction,
Plaintiff must show he has suffered an irreparable harm for which BANA is
liable. See Peter Letterese & Assoc. v. World Inst. of Scientology Enters., 533
F.3d 1287, 1323 (11th Cir. 2008) (quoting eBay Inc. v. MercExchange, LLC,
547 U.S. 388, 391 (2006)). Because Plaintiff has failed to state a claim against
BANA, he has not met this requirement. Accordingly, all of Plaintiff’s prayers
for relief are DENIED.
Conclusion
Based on the foregoing, Defendant’s Motion to Dismiss [2] is
GRANTED.
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SO ORDERED, this 22nd day of April, 2013.
________________________________
RICHARD W. STORY
United States District Judge
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