Vandi et al v. JPMorgan Chase Bank, N.A. et al
Filing
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MEMORANDUM OPINION. Signed by Judge Alexander Williams, Jr on 9/19/2012. (rss, Deputy Clerk)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
SOUTHERN DIVISION
SAO F. VANDI, et al.,
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Plaintiffs,
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v.
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Case No. 12-cv-02424-AW
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JPMORGAN CHASE BANK, N.A., et al.,
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Defendants.
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MEMORANDUM OPINION
Plaintiffs Sao F. Vandi and Fattu D. Salia (hereinafter “Plaintiffs”) filed this action for
declaratory and injunctive relief against Defendants JPMorgan Chase Bank, N.A. (“JPMorgan”),
Deutsche Bank National Trust Company, N.A. (“Deutsche Bank”), and Long Beach Securities
Corporation (“Long Beach”) (collectively, “Defendants”) in the Circuit Court for Prince
George’s County on May 14, 2012. The case was removed to this Court on August 15, 2012.1
Pending before the Court is Defendants’ Motion to Dismiss Plaintiffs’ Complaint for failure to
state a claim. Doc. No. 8. Plaintiffs did not file a response, and the Motion is now ripe for the
Court’s consideration. The Court concludes that no hearing is necessary. See Loc. R. 105.6 (D.
Md. 2011). For the reasons articulated below, the Court will GRANT Defendants’ Motion.
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In its Notice of Removal, Defendants state that this is a civil action for damages in excess of $75,000, such that this
Court has diversity jurisdiction under 28 U.S.C. § 1332(a)(1). See Doc. No. 1, ¶¶ 4, 6. However, Plaintiffs are only
seeking declaratory and injunctive relief. The Court nevertheless concludes that it has jurisdiction because the relief
sought by Plaintiffs is worth more than $75,000 as they seek to quiet title to property that they purchased for
$669,608.00. See, e.g., Hunt v. Wash. State Apple Adver. Comm’n, 432 U.S. 333, 347 (1977) (“In actions seeking
declaratory or injunctive relief, it is well established that the amount in controversy is measured by the value of the
object of the litigation.”); JTH Tax, Inc. v. Frashier, 624 F.3d 635, 639 (4th Cir. 2010) (same).
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I. FACTUAL AND PROCEDURAL BACKGROUND
Plaintiffs have been at all times relevant to this action residents of a property located at
4404 Hatties Progress Drive, Bowie, Maryland 20720. Doc. No. 2, ¶ 4. Plaintiffs purchased the
property on August 2, 2006, for $669,608.00, and the Deed to the property was recorded in
Prince George’s County on September 20, 2006. Id.; Doc. No. 8-2. Plaintiffs financed the
purchase of the property with a loan in the amount of $535,686.00 from Long Beach. Plaintiffs
executed a promissory note (the “Note”) and Deed of Trust securing Long Beach for repayment
of the loan. As with the Deed, the Note and Deed of Trust were recorded in Prince George’s
County on September 20, 2006. Doc. Nos. 8-3 and 8-4. JPMorgan was the servicer for
Plaintiff’s loan and Deutsche Bank is the trustee for the Long Beach Trust Series 2006-10 (the
“Trust”), into which Long Beach assigned the Note. Doc. No. 2, ¶ 6. Plaintiffs admit that they
defaulted on their obligations under the Note “at some point.”2 Id. ¶ 11. Plaintiffs’ Complaint
also sets forth the following claims:
It is believed and is therefore alleged that Deutsche Bank and JPMorgan maintain
various insurance benefits for and on behalf of the Trust, which insurance benefits
are triggered upon the default of any particular loan held by Deutsche Bank for
and on behalf of the Long Beach Trust. Accordingly, it is believed and is
therefore alleged that Plaintiff’s Note, held by Deutsche Bank as said, has been
paid off, in whole and/or substantial part.
For the aforesaid reasons and such other and further reasons may be set forth
during trial hereon, it is believed that the Defendants do not hold any interest in
and to the Property.
Id. ¶¶ 12–13.
Plaintiffs seek to remove any cloud from their title to the property resulting from any
claim that may be asserted by Defendants or their assignees. Id. ¶ 14. Specifically, Plaintiffs
request that the Court issue an order declaring that Defendants and their assigns have no rights,
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Defendants contend that Plaintiffs stopped making payments on the Note in August 2008. Doc. No. 8-1, at 2 n.1.
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title, lien, and/or interest in or to the property. Id. Plaintiffs also request that the Court
permanently enjoin the Defendants and their assigns from instituting any action in foreclosure
relative to Plaintiffs’ default under the terms of the Note. Id.
II. STANDARD OF REVIEW
The purpose of a motion to dismiss under Rule 12(b)(6) is “to test the sufficiency of [the]
complaint.” Edwards v. City of Goldsboro, 178 F.3d 231, 243 (4th Cir. 1999). Except in certain
specified cases, the complaint need only satisfy Rule 8(a) of the Federal Rules of Civil
Procedure, which requires a “short and plain statement of the claim showing that the pleader is
entitled to relief.” Fed. R. Civ. P. 8(a)(2). A plaintiff must plead “enough facts to state a claim
to relief that is plausible on its face.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 547 (2007).
In resolving a motion to dismiss, the Court should proceed in two steps. First, the Court should
determine which allegations in the Complaint are factual allegations entitled to deference, and
which are mere legal conclusions that receive no deference. See Ashcroft v. Iqbal, 129 S. Ct.
1937, 1949-50 (2009). “Threadbare recitals of the elements of a cause of action, supported by
mere conclusory statements, do not suffice.” Id. at 1949. Second, “[w]hen there are wellpleaded factual allegations, a court should assume their veracity and then determine whether they
plausibly give rise to an entitlement to relief.” Id. at 1950.
In its determination, the Court must “accept the well-pleaded allegations of the complaint
as true,” Albright v. Oliver, 510 U.S. 266, 268 (1994), and “must construe factual allegations in
the light most favorable to the plaintiff,” Harrison v. Westinghouse Savannah River Co., 176
F.3d 776, 783 (4th Cir. 1999). The Court should not, however, accept unsupported legal
allegations, Revene v. Charles Cnty. Comm’rs, 882 F.2d 870, 873 (4th Cir. 1989), “legal
conclusion[s] couched as . . . factual allegation[s],” Papasan v. Allain, 478 U.S. 265, 286 (1986),
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or conclusory factual allegations devoid of any reference to actual events, United Black
Firefighters of Norfolk v. Hirst, 604 F.2d 844, 847 (4th Cir. 1979). “Factual allegations must be
enough to raise a right to relief above the speculative level on the assumption that all of the
complaint’s allegations are true.” Twombly, 550 U.S. at 545. “[I]n seeking a declaratory
judgment—just as in seeking any other remedy—a plaintiff must state a claim upon which relief
can be granted.” Estate of Fisher v. PNC Bank, N.A., 769 F. Supp. 2d 853, 857 (D. Md. 2011)
(quoting Miller v. Pac. Shore Funding, 224 F. Supp. 2d 977, 993 (D. Md. 2002)).
Generally, consideration of matters outside the pleadings requires courts to treat motions
to dismiss under Rule 12(b)(6) as motions for summary judgment. Fed. R. Civ. Pro. 12(d).
However, “[t]he Fourth Circuit and courts in this district have recognized an exception for
written documents referred to in the complaint and relied upon by the plaintiff in bringing the
civil action.” HQM, Ltd. v. Hatfield, 71 F. Supp. 2d 500, 502 (D. Md. 1999); see also New
Beckley Min. Corp. v. Int’l Union, United Mine Workers of Am., 18 F.3d 1161, 1164 (4th Cir.
1994); Biospherics, Inc. v. Forbes, Inc., 989 F. Supp. 748, 749 (D. Md. 1997). In reviewing a
12(b)(6) motion, courts may also take judicial notice of matters of public record. See, e.g.,
Philips v. Pitt Cnty. Mem’l Hosp., 572 F.3d 176, 180 (4th Cir. 2009).
III. ANALYSIS
The basis for Plaintiffs’ claims for declaratory and injunctive relief appears to be that
Defendants do not hold any interest in the property. Id. ¶ 13. In support, Plaintiffs aver that “[i]t
is believed and is therefore alleged” that Defendants received insurance benefits when Plaintiffs
defaulted on the Note and have been “paid off, in whole and/or substantial part.” Id. ¶ 12.
Plaintiffs’ assertions do not raise a right to relief “above the speculative level” as required by
Twombly. 550 U.S. at 545, 547. Plaintiffs have not identified the parties to the alleged
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insurance policy, the terms of the policy, whether and when a claim was made under the policy,
and the amount paid under the policy. Plaintiffs have also made no attempt to explain how
Plaintiffs’ indebtedness on the Note was discharged by the policy, and why the insurer is not
subrogated to the rights of Defendants (or any other insured parties) after it issued payment
under the policy. As in Twombly, the Plaintiffs in this case “have not nudged their claims across
the line from conceivable to plausible.” Id. at 547. Accordingly, the Complaint must be
dismissed.
Even if the Court accepted that an insurance policy exists, Plaintiffs have still failed to
state a claim upon which relief can be granted. Plaintiffs do not claim that they paid for the
insurance policy or that they are the intended beneficiaries of such a policy, and the Court
discerns no reason from the record why Plaintiffs are entitled to its benefits. Plaintiffs admit that
they defaulted on their loan, Doc. No. 2, ¶ 11, and have failed to plead any facts supporting the
conclusion that their obligations under the Note and Deed of Trust have been extinguished.
Plaintiffs’ assertion that they should be discharged from their obligations based on the
Defendants’ receipt of default insurance has repeatedly been rejected by this and other district
courts in the Fourth Circuit. See, e.g., Flores v. Deutsche Bank Nat. Trust Co., No. DKC 100217, 2010 WL 2719849, at *5 (D. Md. July 7, 2010) (“[A]lthough Plaintiff’s default may have
triggered insurance for any losses caused by that default, she is not discharged from the
promissory notes themselves.”); Ruggia v. Washington Mut., 719 F. Supp. 2d 642, 647 (E.D. Va.
2010) (“Plaintiff provides no factual or legal basis, and the Court finds none, to support his
contention that because Plaintiff’s default triggered insurance for any losses caused by that
default . . . , he is discharged from the promissory notes and the Property is released from the
deeds of trust.”) (citations omitted); Bolouri v. Bank of Am., N.A., No. 1:10-cv-225, 2010 WL
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3385177, at *4 (E.D. Va. Aug. 24, 2010) (same). Furthermore, even if Defendants received
insurance proceeds as a result of Plaintiffs’ default, Plaintiffs’ obligations under the Note would
not be extinguished as the insurer would be subrogated to Defendants’ position under the Note
and Deed of Trust. See In re Schubert, 437 B.R. 787, 792 (Bankr. D. Md. 2010) (“So soon as a
surety pays the debt of a principal debtor, equity subrogates him to the place of the creditor and
gives him every right, lien, and security to which the creditor could have resorted for the
payment of his debt.”) (quoting Wallace v. Jones, 72 A. 769, 770 (Md. 1909)).
Plaintiffs have likewise failed to state a claim for quieting title to the property. The
Maryland Real Property Code permits a person in possession of property to bring a quiet title
action “when his title to the property is denied or disputed, or when any other person claims, of
record or otherwise to own the property, or any part of it, or to hold any lien encumbrance on it .
. . .” Md. Code, Real Prop. § 14-108(a). There is no dispute that Plaintiffs executed a Note and
Deed of Trust granting Long Beach an interest in the property, and that Plaintiffs received the
loan and subsequently defaulted on their obligations. See Doc. No. 2, ¶¶ 9, 11; Doc. Nos. 8-3
and 8-4. Plaintiffs have not pled that they are entitled to rescission of the loan agreement, and
the Court finds nothing in the record to support rescission. Accordingly, Plaintiffs’ complaint
must be dismissed. See, e.g., Void v. OneWest Bank, No. DKC 11-0838, 2011 WL 3240478, at
*7 (D. Md. July 27, 2011) (dismissing quiet title action where Plaintiff acknowledged entering
the mortgage agreement, received the loan, and defaulted, but failed to show a right to
rescission); Koehler v. Wells Fargo Bank, No. WDQ-10-1903, 2011 WL 691583, at *4 (D. Md.
Feb. 18, 2011) (same); Hood v. Aurora Loan Servs., No. CCB-10-11, 2010 WL 2696755, at *5
(D. Md. July 6, 2010) (same).
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IV. CONCLUSION
For the foregoing reasons, the Court will GRANT Defendants’ Motion to Dismiss. A
separate order will follow.
September 19, 2012
Date
/s/
Alexander Williams, Jr.
United States District Judge
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