Sampson, Jr. v. U.S. Bank National Association as Trustee Successor in Interest to Bank of America N.A.

Filing 15

Judge Nathaniel M. Gorton: ORDER entered. MEMORANDUM AND ORDER, granting 12 MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM (Motion of Defendant U.S. Bank, N.A., as Trustee, to Dismiss Complaint) filed by U.S. Bank National Association as Trustee Successor in Interest to Bank of America N.A., Successor in Interest to LaSalle Bank, N.A. as Trustee for WAMU Pass Through Certificates, Series 2007-OA4 Trus.(Patch, Christine)

United States District Court
District of Massachusetts
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)
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Plaintiff,
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v.
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U.S. BANK N.A. AS TRUSTEE,
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SUCCESSOR IN INTEREST TO BANK OF )
AMERICA, N.A., SUCCESSOR IN
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INTEREST BY MERGER TO LASALLE
)
BANK, N.A., AS TRUSTEE FOR WAMU )
PASS THROUGH CERTIFICATES,
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SERIES 2007-OA4 TRUST,
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)
Defendant.
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FRANCIS J. SAMPSON, JR.,

Civil Action No.
15-11064-NMG

MEMORANDUM & ORDER
GORTON, J.
Here we have a case involving a dispute over the legality
of a scheduled foreclosure of a residential property.

Plaintiff

Francis J. Sampson, Jr. (“Sampson”) brought suit in
Massachusetts state court against defendant U.S. Bank N.A. as
Trustee, Successor in Interest to Bank of America, N.A.,
Successor in Interest by Merger to LaSalle Bank, N.A., as
Trustee for WaMu Pass-Through Certificates, Series 2007-OA4
Trust (“U.S. Bank”) seeking, inter alia, a declaratory judgment
that U.S. Bank lacks authority to exercise a “power of sale”
foreclosure under M.G.L. c. 244, § 14.

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Defendant promptly removed the case to this Court and moved
to dismiss for failure to state a claim under Fed. R. Civ. P.
12(b)(6).

For the reasons that follow, that motion will be

allowed.
I.

Factual Background
In March, 2007, Sampson purchased residential property at

85 Heritage Lane, Duxbury, Massachusetts (“the Property”).

In

conjunction with the purchase, Sampson borrowed $432,000 secured
by a promissory note (“the Note”) from Washington Mutual Bank
(“WaMu”).

Sampson granted WaMu a mortgage (“the Mortgage”) on

the Property to secure the Note (together, “the mortgage loan”).
In April, 2007, WaMu sold the underlying mortgage loan and other
assets to the Washington Mutual Mortgage Pass-Through
Certificates, Series 2007-OA4 Trust (“the Trust”).

WaMu

endorsed the Note in blank which has since been in possession of
the Trust.

WaMu continued, however, to hold the Mortgage

itself.
In September, 2008, WaMu failed as an institution and the
Federal Deposit Insurance Corporation (“the FDIC”) was appointed
receiver over its remaining assets.

The FDIC then sold all WaMu

assets to JPMorgan Chase Bank N.A. (“JPMorgan”), which in May,
2010, assigned the Mortgage to the Trust.
America served as trustee of the Trust.

At that time, Bank of
In April, 2013,

defendant U.S. Bank succeeded Bank of America as trustee.
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After the economic downturn of 2008, Sampson fell behind on
his mortgage payments.

Eventually, Sampson was notified by the

Trust that it intended to utilize the “power of sale”
foreclosure remedy made available to mortgagees under M.G.L.
c. 244, § 21 in March, 2014.

Pursuant to M.G.L. c. 184, § 18,

the Trust sent Sampson a Notice of Auction Sale (“the Notice of
Sale”) in July, 2014, with an intended auction sale date of
March 24, 2015.
II.

The foreclosure sale has yet to occur.

Procedural History
On March 19, 2015, five days before the scheduled auction

sale of the Property, Sampson brought the subject suit against
U.S. Bank in the Massachusetts Superior Court for Plymouth
County. In a three-count complaint, Sampson seeks 1) declaratory
judgment that defendant lacks the authority to enforce the power
of sale under M.G.L. c. 244, § 14, 2) damages for wrongful
foreclosure pursuant to § 14 and 3) damages for slander of title
against JPMorgan which was not named as a party in the subject
suit or served with process.
U.S. Bank timely removed the suit to this Court in March,
2015, based on diversity jurisdiction.

Plaintiff is a

Massachusetts resident while U.S. Bank is a national bank with a
principal place of business in Cincinnati, Ohio and serves as
trustee of a Delaware trust.

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In April, 2015, defendant moved to dismiss for failure to
state a claim pursuant to Fed. R. Civ. P. 12(b)(6).

Plaintiff

opposes the motion.
III. Defendant’s Motion to Dismiss
A. Legal Standard
To survive a 12(b)(6) motion to dismiss, a pleading must
contain a claim to relief that is “plausible”, not just a “sheer
possibility that a defendant has acted unlawfully.”

Ashcroft v.

Iqbal, 556 U.S. 662, 678 (2009) (citing Bell Atlantic Corp. v.
Twombly, 550 U.S. 544, 570 (2007)).

A district court assesses a

complaint’s sufficiency in two steps. Manning v. Boston Medical
Ctr. Corp., 725 F.3d 34, 43 (1st Cir. 2013).

First, a court

ignores conclusory allegations mirroring legal standards. Id.
Second, it accepts the remaining factual allegations as true and
draws all reasonable inferences in the plaintiff’s favor,
thereafter deciding if the plaintiff would be entitled to
relief. Id.

A court may also consider documents attached to or

incorporated in the complaint and other undisputed documents.
Wilborn v. Walsh, 584 F. Supp. 2d 384, 386 (D. Mass. 2008).
B. Application
1. Claims predicated on Wrongful Foreclosure
(Counts I and II)
Sampson avers that M.G.L. c. 244, § 14 bars U.S. Bank as
trustee of the Trust from enforcing its power of sale in the

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Mortgage now within the trust corpus.

In order to be entitled

to either declaratory relief or damages, Sampson must plausibly
claim that U.S. Bank lacks authority to carry out the
foreclosure under the subject statute. See U.S. Bank Nat’l Ass’n
v. Ibanez, 458 Mass. 637, 647 (2011).

According to the plain

language of the statute, U.S. Bank had such authority only if it
was the mortgagee at the time the Notice of Sale was issued in
July, 2014. Id. at 648 (citing In re Schwartz, 366 B.R. 265, 269
(Bankr. D. Mass. 2007)).

Thus, to survive the bank’s motion

under Fed. R. Civ. P. 12(b)(6), Sampson’s complaint must include
a plausible claim that U.S. Bank was not the valid mortgagee in
July, 2014.
Sampson has offered nothing beyond conclusory allegations
of law in support of this claim.

Moreover, the facts of the

case, even after drawing all reasonable inferences in Sampson’s
favor, render less than plausible the claim that the Trust was
not the valid mortgagee and thus did not have authority to
foreclose on the mortgage loan in July, 2014.
The Trust was the proper mortgagee if it held both the
Mortgage and the Note, or acted on behalf of the Note holder.
Eaton v. Fed. Nat’l Mortg. Ass’n, 462 Mass. 569, 571 (2012).

In

Massachusetts, the Mortgage and Note may travel independently of
one another. Id. at 576.

The Trust has been the possessor of

the Note since it was endorsed in blank by WaMu in April, 2007.
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WaMu’s blank endorsement makes the Note payable to the present
possessor. M.G.L. c. 106, § 3-205(b).

Therefore, the Note is

now payable to the Trust through transfer of possession.
Sampson’s contention that the Note is not a legal asset of the
Trust is thus not plausible on its face.
Ultimately, Sampson’s claim for relief is predicated
principally on his contention that the Trust did not validly
hold the Mortgage securing the Note in July, 2014. Sampson
contends that WaMu’s sale of the mortgage loan to the Trust in
April, 2007 invalidated the subsequent transfer of the actual
Mortgage to the FDIC.

That argument, however, relies on a

fundamental misunderstanding of mortgage conveyances.
Initially, WaMu remained the record holder of the Mortgage until
its failure in September, 2008, at which time the Mortgage and
all other WaMu assets came under FDIC receivership and promptly
were sold to JPMorgan.

JPMorgan properly assigned the Mortgage

to the Trust in May, 2010, when Bank of America was trustee.
Defendant U.S. Bank then succeeded Bank of America as trustee.
Because each transfer of the Mortgage was valid,
plaintiff’s claims asserting a wrongful foreclosure are without
merit.

The Court will address more fully each transfer of the

Mortgage.

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i.

FDIC receivership

Applicable federal and Massachusetts law support the
validity of the transfer of the Mortgage to FDIC receivership.
When WaMu first separated the Note from the Mortgage by
assigning the Note to the Trust, it held the Mortgage in
equitable trust for the benefit of the Trust. Culhane v. Aurora
Loan Servs. of Neb., 708 F.3d 282, 293 (1st Cir. 2013); Eaton,
462 Mass. at 577-78.

The FDIC’s receivership of WaMu occurred

under the Financial Institutions Reform, Recovery and
Enforcement Act of 1989 (“FIRREA”), 12 U.S.C. § 1821, which
precludes any claim related to any act or omission of a failed
financial institution. Demelo v. U.S. Bank Nat’l Ass’n, 727 F.3d
117, 122 (1st Cir. 2013).

Moreover, FIRREA empowers the FDIC to

transfer any asset or liability of [a failed financial
institution] . . . without any approval, assignment, or
consent with respect to such transfer[,]
effectively exempting this transfer from applicable
Massachusetts requirements. Id. at 125 (citing 12 U.S.C.
§ 1821(d)(2)(G)(i)(II)).

Sampson thus fails plausibly to assert

that the FDIC’s receivership occurred outside of the lawful
process.
ii.

The FDIC’s sale to JPMorgan

Next, Sampson raises various claims about JPMorgan’s
subsequent purchase of WaMu’s assets and liabilities, including
the Mortgage, from the FDIC.

However, most of these claims are
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bare conclusions of law and those which contain factual
allegations do not give rise to a claim for wrongful
foreclosure.

Federal courts have repeatedly rejected

contentions that JPMorgan somehow failed to acquire mortgages
held by WaMu when it purchased WaMu’s assets from the FDIC. See,
e.g., Lomely v. JPMorgan Chase Bank, 2012 WL 4123403, at *4
(N.D. Cal. Sept. 17, 2012).

Likewise, in parallel cases

involving WaMu mortgages that came under the service of JPMorgan
through the same series of transactions as in the instant case,
federal courts have allowed foreclosures to proceed. See, e.g.,
Garand v. JPMorgan Chase Bank, 532 F. App’x 693, 695 (9th Cir.
2013).

Thus, Sampson has not stated a claim upon which relief

can be granted through his assertions pertaining to the FDIC’s
sale of the Mortgage to JPMorgan.
iii.

JPMorgan’s assignment to the Trust

In May, 2010, JPMorgan assigned the Mortgage to the Trust.
Sampson fails to proffer any facts disputing the validity of
that final assignment of the Mortgage by JPMorgan to the Trust.
Thus, the Court has no reason to presume that this final step in
the chain of transfers of the Mortgage was invalid or that the
Trust did not become the lawful holder of the Mortgage in May,
2010.
The Trust, therefore, as holder of the Mortgage and Note at
the time of the Notice of Sale was a mortgagee with proper
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authority to exercise the power of sale under Massachusetts law.
See Ibanez, 458 Mass. at 647.
2. Slander of Title claim (Count III)
Sampson’s complaint also includes a slander of title claim
against JPMorgan.

JPMorgan is not, however, named as a

defendant in this case.

Thus, the Court lacks jurisdiction over

that claim and it will be dismissed. See Saykin v. Donald W.
Wyatt Det. Ctr., 2008 WL 2128059, at *2 (D.R.I. May 20, 2008).

ORDER
For the foregoing reasons, defendant’s motion to dismiss
(Docket No. 12) is ALLOWED.

So ordered.

/s/ Nathaniel M. Gorton____
Nathaniel M. Gorton
United States District Judge
Dated July 24, 2015

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