Davis v. Mortgage Electronic Registration Systems, Inc. et al

Filing 16

OPINION AND ORDER ADOPTING 14 Final Report and Recommendation; DENYING 12 Motion to Remand to State Court; GRANTING 10 Motion to Dismiss Amended Complaint for Failure to State a Claim; DENYING AS MOOT 4 Motion to Dismiss Original Complaint for Failure to State a Claim; DENYING AS MOOT 6 Motion for Oral Argument. Signed by Judge William S. Duffey, Jr on 7/28/2015. (adg)

recommends that Plaintiff’s Motion to Remand [12] be denied, and Defendants’
Motion to Dismiss [10] Plaintiff’s Amended Complaint [7] be granted.
I.

BACKGROUND3
On January 4, 2007, Plaintiff executed, in favor of First Franklin Financial

Corporation (“Franklin”), a promissory note in the amount of $273,750, and a
security deed (“Security Deed”) to real property located at 1807 Jacksons Creek
Drive, Marietta, Georgia 30068 (the “Property”). Plaintiff executed the Security
Deed in favor of MERS, as nominee for Franklin and Franklin’s successors and
assigns.
On September 9, 2009, MERS assigned its rights, title, and interest in the
Security Deed to U.S. Bank (“Assignment”).
On December 4, 2012, U.S. Bank, pursuant to the power of sale in the
Security Deed, conducted a foreclosure sale of the Property.
On October 23, 2013, Plaintiff, who is represented by counsel, filed his
No. 1:11-CV-4472-TWT, 2012 WL 3779106, at *4 (N.D. Ga. Aug. 29, 2012); see
also Lowery v. Ala. Power Co., 483 F.3d 1184, (11th Cir. 2007) (“[A]n amended
complaint supersedes the initial complaint and becomes the operative pleading in
the case.”). As noted by the Magistrate Judge, Plaintiff’s Motion for Oral
Argument [6] is also denied as moot because it was filed in state court and was
mistakenly docketed as a pending motion before this Court. (See [11]).
3
The facts are taken from the R&R and the record. The parties have not
objected to any facts set out in the R&R, and finding no plain error in the
Magistrate Judge’s findings, the Court adopts them. See Garvey v. Vaughn, 993
F.2d 776, 779 n.9 (11th Cir. 1993).
2

Complaint in the Superior Court of Cobb County, Georgia, asserting claims for
wrongful foreclosure (Count I) and declaratory relief (Count II).4 Plaintiff also
named as defendants WRI Property Management, LLC (“WRI”) and Colfin
AI-GA1 (“Colfin”). The parties do not dispute that WRI and Colfin are citizens of
Georgia.
On September 10, 2014, the Superior Court of Cobb County issued an order
(“September 10th Order”) [5] dismissing WRI and Colfin from this action.
On September 15, 2014, Plaintiff filed his Amended Complaint, abandoning
his claim for declaratory relief. The Amended Complaint asserts a single claim for
wrongful foreclosure.
On October 10, 2014, Defendants removed the Cobb County Action to this
Court based on diversity jurisdiction [1].
On October 17, 2014, Defendants filed their Motion to Dismiss Plaintiff’s
Amended Complaint.5
On November 9, 2014, Plaintiff filed his Motion to Remand.6 Plaintiff
asserts that Defendants’ removal was untimely because the state court dismissed
Colfin as a defendant during an “oral hearing,” several weeks prior to entry of the
4

No. 13-1-9200-33.
Plaintiff did not respond to Defendants’ Motion, and pursuant to Local Rule
7.1B, Defendants’ Motion is deemed unopposed. See LR 7.1B, NDGa.
6
The Court notes that Plaintiff’s Motion to Remand is unsigned.
5

3

September 10th Order. (Mot. to Remand at 2). Plaintiff asserts further that
Defendants violated 28 U.S.C. § 1446(a) by not “procur[ing] a copy of all records
[from] [the state court] proceedings,” including the “transcript of the [oral]
hearing” where, Plaintiff asserts, the state court dismissed Colfin. (Id. at 2-3).
Plaintiff did not submit any evidence to support his assertion that Defendants’
removal was untimely or procedurally defective.7
On March 17, 2015, the Magistrate Judge issued his R&R, recommending
that Defendants’ Motion to Dismiss be granted.
The parties did not object to the R&R.
II.

DISCUSSION
A.

Legal Standard for Review of a Magistrate Judge’s R&R

After conducting a careful and complete review of the findings and
recommendations, a district judge may accept, reject, or modify a magistrate
judge’s report and recommendation. 28 U.S.C. § 636(b)(1);
Williams v. Wainwright, 681 F.2d 732 (11th Cir. 1982), cert. denied,
459 U.S. 1112 (1983). A district judge “shall make a de novo determination of
7

Plaintiff asserts that he “ordered a transcript of [the] said [oral] hearing and
will provide it to this Court as soon as it becomes available.” (Id. at 2). As the
Magistrate Judge noted, Plaintiff never “file[d] a copy of the promised transcript,
proof of a state-court docket entry indicating that the [state] court had orally
dismissed Colfin from the case [prior to September 10, 2014], or even an affidavit
testifying to the factual representations contained in his brief.” (R&R at 6).
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those portions of the report or specified proposed findings or recommendations to
which objection is made.” 28 U.S.C. § 636(b)(1). With respect to those findings
and recommendations to which objections have not been asserted, the Court must
conduct a plain error review of the record. United States v. Slay, 714 F.2d 1093,
1095 (11th Cir. 1983), cert. denied, 464 U.S. 1050 (1984). The parties have not
objected, or otherwise responded to, the R&R and the Court thus conducts a plain
error review of the record.
B.

Plaintiff’s Motion to Remand
1.

Legal Standard

28 U.S.C. § 1441(a) provides that “any civil action brought in a State court
of which the district courts of the United States have original jurisdiction, may be
removed by the defendant.” The Court’s jurisdiction in this case is premised on
diversity of citizenship, which authorizes federal jurisdiction over suits between
citizens of different states where the amount in controversy exceeds $75,000.
28 U.S.C. § 1332(a). “Diversity jurisdiction, as a general rule, requires complete
diversity—every plaintiff must be diverse from every defendant.” Palmer v. Hosp.
Auth. of Randolph Cnty., 22 F.3d 1559, 1564 (11th Cir. 1994). The parties do not
dispute that complete diversity exists among the parties or that the amount in

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controversy requirement is satisfied.8 Plaintiff instead argues that Defendants did
not satisfy the procedural requirements for removal.
An action is removable in two types of cases: “(1) those removable on the
basis of an initial pleading; and (2) those that later become removable on the basis
of ‘a copy of an amended pleading, motion, order or other paper.’” Lowery v. Ala.
Power Co., 483 F.3d 1184, 1212 (11th Cir. 2007). “[I]f the case stated by the
initial pleading is not removable, a notice of removal may be filed within 30 days
after receipt by the defendant . . . of a copy of an amended pleading, motion, [or]
order . . . from which it may first be ascertained that the case . . . has become
removable.” 28 U.S.C. § 1446(b)(3).
2.

Analysis

Magistrate Judge Baverman found that this action first became removable on
September 10, 2014, when the Superior Court of Cobb County dismissed WRI and
Colfin—the two Georgia Defendants—from this action, thus creating diversity of
citizenship among the remaining parties.9 Because Defendants removed the Cobb

8

Plaintiff does not dispute that Plaintiff is a citizen of Georgia, MERS is a
citizen of Delaware and Virginia, and U.S. Bank is a citizen of Minnesota.
(See [1] ¶¶ 10-12).
9
In his Motion to Remand, Plaintiff alleges only that Colfin—and not WRI—
was “orally dismissed” from this case prior to the September 10th Order. Even if
Plaintiff could show that Colfin was dismissed from this action prior to the
6

County Action to this Court on October 10, 2014, within 30 days of the September
10th Order, Magistrate Judge Baverman concluded that removal was timely.
Magistrate Judge Baverman recommended that Plaintiff’s Motion to Remand be
denied, and the Court finds no plain error in his findings or recommendation. See
28 U.S.C. § 1446(b)(3); Palmer, 22 F.3d at 1564. Plaintiff’s Motion to Remand is
denied.
C.

Defendants’ Motion to Dismiss
1.

Legal Standard

On a motion to dismiss pursuant to Rule 12(b)(6) of the Federal Rules of
Civil Procedure, the Court must “assume that the factual allegations in the
complaint are true and give the plaintiff[] the benefit of reasonable factual
inferences.” Wooten v. Quicken Loans, Inc., 626 F.3d 1187, 1196 (11th Cir.
2010). Although reasonable inferences are made in the plaintiff’s favor,
“‘unwarranted deductions of fact’ are not admitted as true.” Aldana v. Del Monte
Fresh Produce, N.A., 416 F.3d 1242, 1248 (11th Cir. 2005) (quoting S. Fla. Water
Mgmt. Dist. v. Montalvo, 84 F.3d 402, 408 n.10 (1996)). Similarly, the Court is
not required to accept conclusory allegations and legal conclusions as true. See
Am. Dental Ass’n v. Cigna Corp., 605 F.3d 1283, 1290 (11th Cir. 2010)
September 10th Order, diversity jurisdiction could not exist until Colfin and WRI
were dismissed. See Palmer, 22 F.3d at 1564.
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(construing Ashcroft v. Iqbal, 556 U.S. 662 (2009); Bell Atl. Corp. v. Twombly,
550 U.S. 544 (2007)).
“To survive 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.’”
Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 570)). Mere “labels and
conclusions” are insufficient. Twombly, 550 U.S. at 555. “A claim has facial
plausibility when the plaintiff pleads factual content that allows the court to draw
the reasonable inference that the defendant is liable for the misconduct alleged.”
Iqbal, 556 U.S. at 678 (citing Twombly, 550 U.S. at 556). This requires more than
the “mere possibility of misconduct.” Am. Dental, 605 F.3d at 1290 (quoting
Iqbal, 556 U.S. at 679). The well-pled allegations must “nudge[] their claims
across the line from conceivable to plausible.” Id. at 1289 (quoting Twombly, 550
U.S. at 570).
2.

Analysis

Magistrate Judge Baverman found that the crux of Plaintiff’s wrongful
foreclosure claim is based on his assertion that MERS, as grantee and nominee of
Franklin, lacked authority to assign the Security Deed to U.S. Bank. Magistrate
Judge Baverman found that relief cannot be granted on this claim because, under
Georgia law, Plaintiff lacks standing to challenge the Assignment, and, even if he

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had standing, Georgia courts have repeatedly rejected the argument that MERS, as
grantee and nominee of the original lender, cannot effect assignment of a security
deed. Magistrate Judge Baverman recommended that Plaintiff’s wrongful
foreclosure claim be dismissed pursuant to Rule 12(b)(6), and the Court finds no
plain error in this recommendation. See Larose v. Bank of Am. N.A., 740 S.E.2d
882, 884 (Ga. Ct. App. 2013); Montgomery v. Bank of Am., 740 S.E.2d 434, 437
(Ga. Ct. App. 2013) (“the security deed expressly conveyed title to the interests in
the security deed to MERS, gave MERS the right to invoke the power of sale, and
authorized MERS to assign its rights and interests in the security deed”).10
Defendants’ Motion to Dismiss is required to be granted.

10

Plaintiff’s claim that he “was not in default with the U.S. Bank,” appears to
be based on his argument that the Assignment was not valid and therefore U.S.
Bank lacked interest in the Note or Security Deed. It does not appear, and Plaintiff
does not assert, that he is current on his loan obligations. Failure to make the
proper loan payments or tender the amount due defeats any claim for wrongful
foreclosure. See Harvey v. Deutsche Bank Nat’l Trust Co., No. 1:12-cv-1612,
2012 WL 3516477, at *2 (N.D. Ga. Aug. 14, 2012) (“When the borrower cannot
show that the alleged injury is attributable to the lender’s acts or omissions, the
borrower has no claim for wrongful foreclosure.”); Heritage Creek Dev. Corp. v.
Colonial Bank, 601 S.E. 2d 842 (Ga. Ct. App. 2004) (plaintiff’s injury was “solely
attributable to its own acts or omissions both before and after the foreclosure”
because it defaulted on its loan payments, failed to cure default, and did not bid on
property at foreclosure sale). Plaintiff’s wrongful foreclosure claim must be
dismissed for this additional reason.
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III.

CONCLUSION
For the foregoing reasons,
IT IS HEREBY ORDERED that Magistrate Judge Alan J. Baverman’s

Final Report and Recommendation [14] is ADOPTED.
IT IS FURTHER ORDERED that Plaintiff’s Motion to Remand [12] is
DENIED.
IT IS FURTHER ORDERED that Defendants’ Motion to Dismiss [10]
Plaintiff’s Amended Complaint is GRANTED.
IT IS FURTHER ORDERED that Defendants’ Motion to Dismiss [4]
Plaintiff’s original Complaint and Plaintiff’s Motion for Oral Argument [6] are
DENIED AS MOOT.

SO ORDERED this 28th day of July, 2015.

_______________________________
WILLIAM S. DUFFEY, JR.
UNITED STATES DISTRICT JUDGE

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