Sanford v. Bank of America, N.A.

Filing 12

ORDER granting Defendants' 6 Motion to Dismiss and Plaintiff's 8 Motion for Leave to Amend Complaint is DENIED. Signed by Judge Richard W. Story on 10/31/2013. (cem)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF GEORGIA
ATLANTA DIVISION
DENNIS SANFORD,
Plaintiff,
v.
BANK OF AMERICA, N.A. and
FEDERAL HOME LOAN
MORTGAGE CORP.,
Defendants.

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CIVIL ACTION NO.
1:13-CV-1228-RWS

ORDER
This case is before the Court on Defendants’ Motion to Dismiss [6] and
Plaintiff’s Motion for Leave to Amend Complaint [8]. After reviewing the
record, the Court enters the following Order.
Background
Plaintiff initiated this action in Clayton County Superior Court on
November 26, 2012, seeking relief from an alleged wrongful foreclosure. The
suit was removed to federal court. Plaintiff, acting pro se at that time, did not
respond to a Motion to Dismiss from Bank of America, N.A. (“BANA”), and
United States District Court Judge William Duffey ordered the action dismissed
without prejudice on February 20, 2013. ([4-1] Ex. A).

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On March 8, 2013, Plaintiff re-filed his Complaint in state court through
counsel. Then, on March 13, 2012, Plaintiff filed an Amended Complaint [4-1]
adding Federal Home Loan Mortgage Corporation (“Freddie Mac”) as a
defendant. Defendants timely removed the second suit to this Court pursuant to
28 U.S.C. § 1332(a) based on diversity of citizenship jurisdiction. ([1-3]).
The facts in this case are largely undisputed. On October 9, 2007,
Plaintiff entered into a mortgage refinance transaction with Capital One Home
Loans (“Capital One”) for the residential property located at 9292 Jordan Mill
Trail, Jonesboro, Georgia (“Property”). ([1-1] ¶ 5). Plaintiff contemporaneously
executed a promissory note in favor of Capital One and a security deed naming
Mortgage Electronic Registration Systems, Inc. (“MERS”) as grantee and
nominee for Capital One. ([6-3]). The security deed was properly recorded in
Clayton County’s real estate records. ([6-3]). MERS subsequently assigned the
security deed to BAC Home Loans Servicing, LP, which merged with and into
BANA on July 1, 2011. ([4-1] ¶ 8). The assignment from MERS to BAC Home
Loans Servicing, LP was recorded on June 15, 2011. ([1-1] ¶ 9).
At some point, Plaintiff defaulted on his loan and BANA initiated nonjudicial foreclosure proceedings. BANA sent Plaintiff a notice of foreclosure
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sale on May 3, 2012, and foreclosed on the Property on August 2, 2012.
Freddie Mac bought the Property and is seeking to have Plaintiff evicted. ([4-1]
¶ 27).
Plaintiff requests temporary and permanent injunctive relief to set aside
the foreclosure sale and enjoin eviction proceedings. He also moves for leave
to amend his Amended Complaint. Defendants move to dismiss Plaintiff’s suit
under Federal Rule of Civil Procedure (“Rule”) 12(b)(6) for failure to state a
claim upon which relief can be granted.
Discussion
I.

Defendants’ Motion to Dismiss
A.

Legal Standard

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,” 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
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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.
“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
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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.
B.

Analysis

First, the Court agrees with Defendants that Plaintiff has failed to satisfy
Rule 8's pleading standard as to Freddie Mac. The Amended Complaint
contains no allegations of wrongdoing against Freddie Mac except the
conclusory statement that it is “seeking, through illegal and unlawful means
without satisfying the necessary legal standing requirements to institute a
foreclosure, take possession, custody, and control of the Property.” (Am.
Compl., [4-1] ¶ 27.) Plaintiff has failed to supply any factual basis for this
claim and consequently, his suit is DISMISSED against Freddie Mac.
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Plaintiff’s claim for wrongful foreclosure against BANA is based on
three theories: (1) invalid assignment of the security deed; (2) improper notice
under O.C.G.A. § 44-16-162.2; and (3) BANA’s lack of authority to foreclose
as a non-secured creditor. (See generally, Am. Compl., [4-1]; Pl.’s Resp. Br.,
[7].) The Court finds that each of these arguments lacks merit.
“As a general rule, 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.” O.C.G.A. § 9-2-20(a).
The assignment at issue here is a contract between MERS and BAC Home
Loans (now BANA). Plaintiff was neither a party to that contract nor a thirdparty beneficiary under it. Therefore, Plaintiff lacks standing to challenge the
validity of that contract. See Montgomery v. Bank of Am., 740 S.E.2d 434, 438
(Ga. Ct. App. 2013) (mortgagor lacks standing to contest validity of assignment
where assignment contract is between two other parties).
Plaintiff’s second and third arguments were rejected by the Georgia
Supreme Court in You v. JP Morgan Chase Bank, N.A., 743 S.E.2d 428 (Ga.
2013). Plaintiff’s primary contention is that BANA was not the secured

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creditor1 and thus did not have authority to send the notice of foreclosure under
O.C.G.A. § 44-16-162.2 or to foreclose on the Property. (See generally, Am.
Compl., [4-1]; Pl.’s Resp. Br., [7].) However, as the You court explained, “the
holder of a deed to secure debt is authorized to exercise the power of sale in
accordance with the terms of the deed even if it does not also hold the note or
otherwise have any beneficial interest in the debt obligation underlying the
deed.” 743 S.E.2d at 433. Furthermore, under You, O.C.G.A. § 44-16-162.2's
notice requirement is satisfied if the notice identifies the individual or entity
with full authority to negotiate, amend, and modify the terms of the mortgage,
regardless of whether that entity is a secured creditor, note holder, deed holder,
or none of the above. Id. at 433-34. Plaintiff makes no claim that this entity
was not identified in the notice he received; instead, he relies entirely on his
allegation that BANA was not a secured creditor. But Plaintiff’s arguments

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Plaintiff’s claim that BANA was not a secured creditor is based on his
allegation that “BAC was neither the holder of the promissory note nor the grantee of
the security deed.” (Am. Compl., [4-1] ¶ 14.) The fact that BANA did not hold the
promissory note is immaterial after the You decision. Further, Plaintiff admits in his
Amended Complaint that the security deed was assigned from MERS to BAC Home
Loans, and the assignment was recorded on June 15, 2011. (Id. ¶¶ 8-9.) Therefore,
Plaintiff’s apparent assertion that BAC (later BANA) did not hold the security deed is
contradicted by his own statements.
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regarding BANA’s non-secured creditor status are simply insufficient to
support a claim for wrongful foreclosure under Georgia law.
To obtain temporary injunctive relief, Plaintiff must show a substantial
likelihood of success on the merits of the underlying case. Johnson & Johnson
Vision Care, Inc. v. 1-800 Contacts, Inc., 299 F.3d 1242, 1246 (11th Cir. 2002).
For permanent injunctive relief, Plaintiff must show actual success on the
merits. For the reasons stated above, Plaintiff has not satisfied either standard.
Accordingly, Plaintiff’s request for injunctive relief is denied and Defendants’
Motion to Dismiss is GRANTED.
II.

Plaintiff’s Motion for Leave to Amend
Plaintiff requests leave to amend his Amended Complaint to “specify his

claims.” (Pl.’s Mot. to Amend, [8] at 4 of 7.) While it is true that leave to
amend should be freely given under Rule 15(a), a motion to amend “may be
denied on numerous grounds such as undue delay, undue prejudice to the
defendants, and futility of the amendment.” Chen v. Lester, 364 Fed. App’x
531, 538 (11th Cir. 2010). “An amendment is futile where the amended
complaint would still be subject to dismissal.” Id.

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The Court finds that Plaintiff’s proposed amendments are futile. First,
the proposed amendments contain no additional substantive allegations to
support Plaintiff’s claim for wrongful foreclosure against BANA or Freddie
Mac. (See generally Pl.’s Proposed Am. Compl., [8-1].) Second, although the
proposed amendments contain new references to California law, an alleged loan
modification, and the Fair Debt Collection Practices Act, they are devoid of any
factual context to support a plausible claim for relief. Plaintiff’s Motion for
Leave to Amend Complaint is therefore DENIED.

Conclusion
In accordance with the foregoing, Defendants’ Motion to Dismiss [6] is
GRANTED and Plaintiff’s Motion for Leave to Amend Complaint [8] is
DENIED.
SO ORDERED, this 31st day of October, 2013.

_______________________________
RICHARD W. STORY
UNITED STATES DISTRICT JUDGE
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