Deutsche Bank Trust Company Americas v. Haffey et al

Filing 43

MEMORANDUM OPINION & ORDER: GRANTING 3rd party dft MERS & MERSCorp by Mortgage Electronic Registration Systems, Inc.'s 40 MOTION to Dismiss. Signed by Judge Jennifer B Coffman on 08/11/2011. Filed pursuant to order at DE 42 .(RJD)cc: COR

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF KENTUCKY
CENTRAL DIVISION
LEXINGTON

CIVIL ACTION NO. 08-459-JBC
(Related action: Lexington Civil Action No. 09-362)
GMAC MORTGAGE, LLC,
PLAINTIFF,
V.

MEMORANDUM OPINION AND ORDER

HEATHER BOONE MCKEEVER, ET AL.,

DEFENDANTS.

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This matter is before the court on the motion of third-party defendants,
Mortage Electronic Registration Systems Inc. and Merscorp, Inc. (“MERS
Defendants”) to dismiss the third-party complaint. For the reasons below, the court
will grant the motion.
I.

Background
This case is the lead case in consolidated actions involving property located

at 3250 Delong Road in Lexington, Kentucky. Deutsche Bank brought this
foreclosure action against Heather McKeever and Shane Haffey, a married couple,
on November 9, 2009. Lexington Civil Action 09-362, R. 1. McKeever filed a
counter-claim and third-party complaint on February 9, 2010, naming Deutsche
Bank; GMAC Mortgage, LLC; Residential Accredit Loans, Inc.(“RALI”); Residential
Funding Company, LLC (“RFC”); the Bank of the Bluegrass and several of its
employees individually (“BoB”); and Mortgage Electronic Registration Systems, Inc.,
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and MERSCORP (collectively referred to as “MERS defendants.”). Id. at R. 17.
The MERS defendants moved to dismiss the third-party complaint against
them on January 14, 2011. Within the time allotted to respond, McKeever filed a
notice of dismissal without prejudice, which this court construed as a response.
The MERS Defendants filed no reply.
II.

Analysis
The third-party plaintiffs have failed to state a claim upon which relief can be

granted.
A.

Law of the Case

Several of the claims McKeever makes have already been dismissed in
another consolidated action and will therefore be dismissed in this action under the
doctrine of “law of the case.” Several of the counts fail because a decision has
already been made upon a rule of law in one of the consolidated cases. “The law
of the case doctrine provides that ‘when a court decides upon a rule of law, that
decision should continue to govern the same issues in subsequent stages of the
same case.’” Westside Mothers v. Olszewski, 454 F.3d 532, 538 (6th Cir. 2006)
(quoting Scott v. Churchill, 377 F.3d 565, 569-570 (6th Cir. 2004)) (internal
citation removed). Since the instant case was consolidated, earlier decisions in
other consolidated cases are part of the same case. In re Aetna Cas. & Surety Co.,
919 F.2d 1136, 1143 (6th Cir.1990) (noting in dicta that a decision on the merits
of an issue in consolidated cases “could or might constitute law of the case in all of

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them, or involve collateral estoppel, or be highly persuasive as precedent”).
In consolidated case LEX 5:08-CV-510, this court ruled that MERS was
entitled to a judgment as a matter of law and granted a motion for summary
judgment for MERS on a number of the same counts. Id. at R. 31. In McKeever’s
third-party complaint, she makes several claims which are identical to the claims
which were dismissed by this court previously. Those claims are:
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Count 1 - Breach of Contract and Rescission
Count 2 - Violations of the Truth in Lending Act
Count 3 - Violations of the Home Ownership and Equity Protection Act
Count 4 - Violations of the Real Estate Settlement Procedures Act
Count 5 - Defamation of Title
Count 6 - Violations of the Fair Debt Collection Practices Act and the
Fair Credit Reporting Act
Count 7 - Violations of Kentucky Consumer Protection Act
Count 8 - Breach of Fiduciary Duty
Counts 9 through 11 - Fraud
Count 12 - Conspiracy and Violations of the Racketeer Influenced and
Corrupt Organizations Act
Counts 13 and 17 - Violations of the Kentucky Financial Services
Code

This court dismissed those claims because the plaintiffs failed to establish
numerous elements of their claims and the settlement agreement bars claims
against MERS arising out of the loan at issue. See Id. at R. 31. Because the above
claims against MERS have been dismissed as a matter of law, this court is bound
by the law of the case.
McKeever states that she has named MERSCORP as a defendant because it
is “the owner of MERS.” R. 17 at 13. MERSCORP, as owner of MERS, would fall
under the same “successors in interest” clause that this court determined bars the
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above-mentioned claims against MERS.
McKeever has failed to show that she is entitled to reconsideration under the
three exceptions to “law of the case.” She has not presented substantially different
evidence, shown a subsequent contrary view of the law by a controlling authority
or shown the previous decision is clearly erroneous and would work a manifest
injustice. Hanover Ins. Co. v. American Engineering Co., 105 F.3d 306, 312 (6th
Cir. 1997). Therefore, this court will grant the motion to dismiss on the
aforementioned counts.
B.

Failure to state a claim upon which relief can be granted

McKeever cannot sustain her remaining claims because her pleadings fail to
state a claim for relief that is plausible on its face and they do not comply with the
pleading requirements of Rule 8 and, where applicable, Rule 9 of the Federal Rules
of Civil Procedure. See Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)
(explaining that factual allegations must be enough to raise a right to relief above
the speculative level and that the pleading must contain more than a statement of
facts that merely creates a suspicion of a cognizable right of action) (citations
omitted).
1.

Count Fourteen: Violations of the Kentucky Residential
Mortgage Fraud Act

McKeever’s claim for violations of the Kentucky Residential Mortgage Fraud
Act (“Fraud Act”), Ky. Rev. Stat. Ann. § 286.8-990 (2011), fails because she fails

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to state a basis for her claim that the MERS Defendants intended to commit fraud.
In her third-party complaint, McKeever fails to plead facts to support her claim and
her legal conclusions are not entitled to a presumption of truth. Further, McKeever’s
claim under the Fraud Act fails because she appears to rely on her fraud claims,
which this court has denied based on “law of the case.” Therefore, since her claim
under the Fraud Act is based on her fraud claims, this claim also fails.
2.

Count Fifteen: Forgery in the second degree

McKeever alleges that MERS committed forgery when “it placed the
Mortgage into the records of the Fayette County clerk for which it had no pecuniary
right . . . or interest in” and when it “forged an assignment on behalf of the
bankrupt American Home Mortgage . . . .” McKeever fails to articulate any facts
indicating that the MERS Defendants recorded or possessed the allegedly forged
mortgage “with an intent to defraud, deceive or injure another.” Ky. Rev. Stat. Ann.
§ 516.030 (2011); Ky. Rev. Stat. Ann. § 516.060 (2011). A “complaint does not
suffice if it tenders ‘naked assertions’ devoid of ‘further factual enchantments.’”
Ashcroft v. Iqbal, – U.S. –, 129 S.Ct. 1937, 1949 (2009) (quoting Bell Atlantic
Corp. V. Twombly, 550 U.S. 544, 557 (1995)). As the complaint does not contain
sufficient factual matter, this court will grant the motion to dismiss.
3.

Count Sixteen: Criminal possession of forged instrument in the
second degree

Count Sixteen does not contain any factual allegations that would give rise

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to liability against the MERS Defendants. Therefore this count will be dismissed.

4.

Count Eighteen: Kentucky Usury Statute

Count Eighteen under the Kentucky Usury Statute is barred by the application
of the statute of limitations. Ky. Rev. Stat. Ann. § 360.020 (2011) provides that
any action must be commenced “within two years from the time the usurious
transaction occurred.” The loan at issue was closed in May of 2007. The thirdparty complaint was filed over two years later, on February 9, 2010.

5.

Count Nineteen: The Quiet Title Action Precludes the Filing of
this Action and the MERS Mortgage and Subsequent Transfer
are a Legal Nullity and Based on Fraud.

Count Nineteen fails because McKeever has failed to provide any support for
her contention that Lexington Civil Action 08-456 precluded the filing of this
action. Moreover, the dismissal of that action renders this argument moot.
6.

Count Twenty: The October 15, 2008, Rescission of the
Mortgage Precludes the Foreclosure and the Filing of the
Foreclosure is Based on Fraud and Violates Rule 11.

Count Twenty does not contain any factual allegations that would give rise
to liability against the MERS Defendants. Therefore this count will be dismissed.

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III.

Conclusion
Accordingly
IT IS ORDERED that the motion to dismiss (R. 103) is GRANTED.

Signed on May 19, 2011

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