Jackson v. Branch Banking and Trust Company (BB&T) et al
Filing
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MEMORANDUM OPINION. Signed by Judge Theodore D. Chuang on 10/13/2015. (kns, Deputy Clerk)(c/m 10/13/15)
UNITED STATES DISTRICT COURT
DISTRICT OF MARYLAND
JANICE JACKSON,
Plaintiff,
v.
BRANCH BANKING AND TRUST
COMPANY,
BRANCH BANKING AND TRUST
COMPANY REGISTERED AGENT,
SAMUEL I. WHITE, P.C., and
WILLIAM ADAM WHITE,
Civil Action No. TDC-14-3155
Defendants.
MEMORANDUM
OPINION
On October 7, 20]5, Plaintiff Janice Jackson filed a Complaint pro se against Defendants
Branch Banking and Trust Company ("BB&T'),
BB&T Registered Agent, Samuel I. White,
P.C., and William Adam White (collectively, "Defendants").
Court is Defendants'
ECF No. I. Pending before the
Motion to Dismiss the Complaint, ECF No.8,
to which Jackson has
responded with her Objection to Defendant's Motion to Dismiss, ECF No. 12. The Court has
reviewed the pleadings and briefs, and no hearing is necessary. See D. Md. Local R. 105.6. For
the following reasons, Defendants' Motion to Dismiss is GRANTED.
BACKGROUND
On March 9, 2005, Janice and Mandel Jackson purchased a residence at 5532 Keyworth
Court, Capitol Heights, Maryland (the "Property") and executed a deed of trust (the "Deed") and
a promissory note ("Note") for $153,340.'
money to the Jacksons,
Although Liberty Mortgage Corporation lent the
the Deed listed Mortgage
Electronic
Registration
Systems,
Inc.
C"MERS") as the sale beneficiary. The Deed states that the "'Note or a partial interest in the Note
(together with [the Deed]) can be sold one or more times without prior notice to Borrower."
CompI. Ex. B at II.
Jackson also initialed and signed the page of the Note containing the
statement, "I understand that the Lender may transfer this Note."
Mot. Dismiss Ex. D, at I.
Subsequently, the Note was transferred to BB&1, as evinced by stamps and signatures on the
last page of the Note.
On October 14, 2011, Jackson filed a Chapter 13 Voluntary Petition for bankruptcy,
which was converted to a Chapter 7 Petition on December 8, 2011 and was closed on March 12,
2012. In re Jackson, Final Decree, No. 11-30506-PM (Bankr. D. Md. Mar. 12,2012).
On July
8, 2013, BB&1 brought a foreclosure action on the Property in the Circuit Court for Prince
George's
County.
When BB&T filed the foreclosure action, Jackson moved to reopen her
bankruptcy case to challenge BB&T's ability to foreclose on the Property. in re Jack'ion, Order
Granting Motion to Reopen Chapter 7 Case to File for Contempt for Violation of the Discharge
Injunction Against Creditors, No. 11-30506-PM (Dankr. D. Md. Sept. 25, 2013). Ultimately, the
United States Bankruptcy Court for the District of Maryland denied Jackson's claims against
, For purposes of the Motion to Dismiss, the Court considers the Deed, which was attached to
the Complaint, and the Note, which was attached to the Motion, because they are integral to the
Complaint and are of undisputed authenticity. See Philips v. Pitt County Mem 'I f{osp., 372 F.3d
176,180 (4th Cir. 2009). The Court also takes judicial notice of court proceedings. See Fed. R.
Evid.201(b)(2).
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BB&T. In re Jackson, Order, No. 11-30506-PM (Bankr. D. Md. Dec. 30, 2013). Jackson then
filed her Complaint in this case.2
The Court reads Jackson's Complaint to allege that BB&T cannot enforce the Note
because it acquired it through improper and fraudulent means.
In particular, she appears to
allege that because (I) the Deed and the Note are held by separate entities. and (2) IJIJ&T did not
physically receive, and does not physically have possession of, the original Note, it may not
foreclose on the Properly.
The Court also reads Jackson's Complaint to allege fraud based on
the theory that BB&T's filing of claims against Jackson, when it did not have legal possession of
the Note, constituted a "false claim." Compl. 'w'l 10, 14. Finally, Jackson alleges that by
enforcing the Note, BB&T violated the United States and Maryland Constitutions,
as well as
several statutes and regulations, including the Coinage Act of 1792, ch. 16, I Stat. 246; a Joint
Resolution of Congress
of June 5, 1933, ch. 48, 48 Stat. 112 ("To assure uniform value to the
coins and currencies of the United States."); 28 U.S.c. ~ 1604 (2012) (Immunity of Foreign State
from Jurisdiction); 28 U.S.c. ~ 1330 (2012) (Actions Against Foreign States); 22 C.F.R. ~ 93.1
(2015) (Service Through the Diplomatic Channel); and 22 C.F.R. ~ 93.2 (2015) (Notice of Suit).
As a remedy for these alleged violations, Jackson seeks four times the value of the property, $10
million in punitive damages, free and clear title to the Property, and destruction of the Deed.
Defendants move to dismiss the Complaint because, in their estimation, Jackson fails to plead
facts sufficient to state a claim for relief as to any of these causes of action. See Fed. R. Civ. P.
12(b)(6).
Although Jackson did not list a basis of jurisdiction in her Civil Cover Sheet or Complaint, she
claims violations of several federal statutes, thus establishing federal question jurisdiction. 28
U.S.c. ~ 1331 (2012). In addition, the Complaint identifies Jackson's address in Maryland. lists
Virginia and North Carolina addresses for Defendants, and seeks damages greater than $75,000,
thus indicating that there may be diversity jurisdiction as well. See 28 U.S.C. ~ 1332.
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DISCUSSION
I.
Legal Standard
To defeat a Rule 12(b)(6) motion, a complaint must allege enough facts to state a
plausible claim for relief. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). A claim is plausible
when "the plaintiff pleads factual content that allows the Court to draw the reasonable inference
that the defendant is liable for the misconduct alleged."
[d.
Complaints filed by pro se plaintiffs
are "to be liberally construed" and "must he held to less stringent standards than formal
pleadings drafted by lawyers." Erickson v. Pardus, 551 U.S. 89, 94 (2007). Nevertheless, legal
conclusions or conclusory statements do not suffice and are not entitled to the assumption of
truth. ld.; Nemet Chevrolet. Ltd v. C011.mmerajJairs.com, Inc" 591 F.3d 250, 255 (4th Cir.
2009). In evaluating the sufficiency of the plaintiffs claims, courts examine the complaint as a
whole, consider the factual allegations in the complaint as true, and construe the factual
allegations in the light most favorable to the plaintiff. Albright v. Oliver, 510 U.S. 266, 268
(1994); Lambeth v. Bd. ofComm'rs
of Davidson County, 407 F.3d 266, 268 (4th Cir. 2005).
In addition, Jackson's fraud claim is subject to a heightened pleading standard. See Fed.
R. Civ. P. 9(b) ("In alleging fraud or mistake, a party must state with particularity the
circumstances constituting fraud or mistake."). Under this standard, Jackson must allege "the
time, place, and contents" of the fraudulent representation, the identity of the person who made
the misrepresentation, and what the alleged perpetrator of fraud "'obtained thereby."
See
Harrison v. Westinghouse Savannah River Co., 176 F.3d 776, 784 (4th Cir. 1999).
II.
Separation of the Deed from the Note
Jackson raises several claims related to the enforceability of the Note, which the Court
will address in turn. Jackson's primary claim appears to be that because the Deed of Trust and
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the Note are now held by sepanlte entities, there is no legal right for BB&T, which purports to
now hold the Note, to foreclose on the Property. In Maryland, however, the right to enforce the
deed of trust remains with the note even if the note is transferred. See Deutsche Bank Nat. Trust
Co. v. Brock, 63 A.3d 40, 48 (Md. 2013) (observing that "once the note is transferred, the right to
enforce the deed of trust follows") (internal quotation marks and citation omitted). Courts in this
district have therefore repeatedly rejected the argument that separation of the deed from the note
invalidates a mortgage, sometimes referred to as the "separation theory." See McNeil v. Bank of
America, No. DKC.13.2162,
2014 WL 1831115, at '3 (D. Md. May 7, 2014) (observing that
"courts in this district have rejected this 'separation theory.'''); Somarriba v. Greenpoint Mortg.
Funding, Inc., No. 13.CY.072.RWT,
2013 WL 5308286, at '3 (D. Md. Sept. 19,2013); Reed v.
PNC Mortg., No. AW-13-1536, 2013 WL 3364372, at '3 (D. Md. July 2, 2013) ("Courts in this
district have rejected similar claims based on the alleged separation of a note from the deed of
trust."); Parker v. Deutsche Bunk Nat 'J Trust Co., No. WMN.12.3358,
2013 WL 1390004, at '3
(D. Md. Apr. 3, 2013) (rejecting the separation theory because the "rights under the Deed of
Trust follow the Note"). Therefore, in alleging that BB&T cannot foreclose under this separation
theory, Jackson does not state a plausible claim for relief.
III.
Transfer of the Note
Next, Jackson appears to object to the manner in which BB&T acquired the Note,
suggesting that promissory notes may be acquired only by physical transfer.
In particular,
Jackson argues that BB&T cannot enforce the Note because "there is no record of a lien
registered with the Secretary of State," notes in MERS's possession are "photographed and then
destroyed," and BB&T does not have possession of the original Note. See Compl. "14,9.
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Here, the recorded Deed explicitly listed MERS, an entity that electronically tracks
ownership interests in residential mortgages, along with its successors and assigns, as the
beneficiaries and nominees for the lender, Liberty Mortgage Corporation. MERS operates a
system of recordation, which tracks ownership interests in residential mortgages in an electronic
database.
See Anderson v. Burson, 35 A.3d 452, 455-56 (Md. 2011). Courts reviewing
challenges to this electronic system of transferring rights "have found that the system of
recordation is proper and assignments made through that system are valid." Suss v. Jp Morgan
Chase Bank, NA., No. WMN-09-1627,
2010 WL 2733097, at '5 (D. Md. July 9, 2010)
(collecting cases); see also McNeil, 2014 WL 1831115, at ' 5; Parker, 2013 WL 1390004, at '3.
Moreover, Jackson's claim that BB&T only has enforceable rights if it can produce the
original Note is incorrect. Courts in this district have repeatedly rejected this "show me the
note" argument. See Jones v. Bank oj NY. Mel/on, No. OKC-13-3005, 2014 WL 3778685, at '4
(D. Md. Jul. 29, 2014); Harris v. Household Finance Corp., RWT-14-606, 2014 WL 3571981, at
*2 (D. Md. Jul. 18, 2014) (explaining that "there is no recognizable claim" that a mortgagor must
"produce 'wet ink' signature documents" in order for a mortgage to be valid). Thus, Jackson has
not stated a valid claim relating to the transfer or possession ofthe Note.
IV.
Fraud
Jackson also alleges fraud, specifically that BB&T fraudulently acquired and enforced the
Note, arguing that the "defendant(s) are operating under deception to deprive me of my property
by trying to obtain Title under fraudulent activity." Compl. 2 (citing Joint Resolution of June 5,
1933, ch. 48, 48 Stat. 112). To allege fraud in Maryland, a plaintiff must demonstrate that (1) the
defendant made a false representation to the plaintiff; (2) the defendant either knew the
misrepresentation was false or made the misrepresentation with "reckless indifference to its
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truth"; (3) the defendant made the misrepresentation for the purpose of defrauding the plaintiff;
(4) the plaintiff relied on the misrepresentation
and had the right to rely on it; and (5) the
plaintiff, as a result of the misrepresentation, suffered some compensable injury. Nails v. S & R,
Inc., 639 A.2d 660, 668 (Md. 1994); Chubb & Son v. C & C Complete Servs., LLC, 919 F. Supp.
2d. 666, 673 (D. Md. 2013). Plaintiffs who assert fraud claims in federal court must plead with
particularity.
See Fed. R. Civ. P. 9(b); Harrison, 176 F.3d at 784.
As a threshold matter, Jackson fails to plead her fraud claim with particularity.
She does
not state the time, place, or contents of the false representations, Harrison, 176 F.3d at 784, let
alone the substantive requirements
for fraud under Maryland law, Nails, 639 A.2d at 668.
Instead, Jackson states only generally that the defendants committed "fraudulent
activity."
Compl. 2. That conclusory statement is insufficient to meet the heightened pleading standard for
fraud under Rule 9(b).
Moreover, Jackson's fraud claim cannot succeed because it relies on the same faulty legal
theory underlying her other claims.
While the Note's transfer is admittedly complicated,
complexity does not amount to invalidity, let alone false representation.
its
As discussed above,
BB&T does not lose its rights simply because the Note was separated from the Deed, the Note
was transferred through MERS's electronic database, or BB&T does not have the original Note.
1berefore,
Jackson's
claim that BB&T is defrauding her by seeking to enforce the Note
necessarily fails, and the fraud claim is appropriately dismissed with prejudice.
See United
States ex reI. Wilson v. Kellagg Brown & Root, Inc., 525 F.3d 370, 376 (4th Cir. 2008) (holding
that a district court may deny leave to amend as futile if "the proposed amended complaint fails
to satisfy the requirements of the federdl rules") (internal quotation marks omittedĀ».
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v.
Other Claims
Jackson also claims violations of the United States Constitution, Article I, Section 10 of
the Maryland Constitution (qualifications of officers), the Coinage Act of 1792, and the Joint
Resolution of June 5, 1933. ch. 48, 48 Stat. 112, because Defendants are seeking payment from
her in federal reserve notes rather than coinage.
None of these provisions provide a plausible
basis to invalidate the Note or to provide relief from Jackson's mortgage obligations.
Finally, Jackson claims that she is immune from suit because she "was being sued in the
corporate capacity."
Compi.
';l
12-13.
Her cited authority, however, bears no relationship to
her status or the issues in this case. 28 U.S.c. ~ 1604 (providing immunity from suit to foreign
states, subject to exceptions); 28 U.S.C. ~ 1330 (addressing personal jurisdiction
states); 22 C.F.R. ~~ 93.1-93.2
over foreign
(addressing guidelines for providing service upon a foreign
state). Thus, Jackson fails to state a claim on any of these theories.
CONCLUSION
For the foregoing reasons, the Motion to Dismiss is GRANTED.
DISMISSED WITH PREJUDICE.
Jackson's Complaint is
A separate Order follows.
-s:;c:~
Date: October 13, 2015
. THEODORE\;C
United States District Judge
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