Gerdes v. Federal Home Loan Mortgage Corporation et al
Filing
29
ORDER granting 8 & 12 Motions to Dismiss (Written Opinion). Signed by Senior Judge David S. Doty on 7/30/2013. (PJM)
UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
Civil No. 13-696(DSD/JJK)
Mark Gerdes,
Plaintiff,
ORDER
v.
Federal Home Loan Mortgage
Corporation, Bank of America,
NA, successor by merger to
BAC Home Loans Servicing, LP,
fka Countrywide Home Loans
Servicing, LP, Mortgage Electronic
Registration System, MERSCORP, Inc.,
Peterson, Fram & Bergman, P.A. and
also all other persons unknown
claiming any right, title, estate,
interest, or lien in the real
estate described in the complaint
herein,
Defendants.
William B. Butler, Esq. and Butler Liberty Law, LLC, 33
South Sixth Street, Suite 4100, Minneapolis, MN 55402,
counsel for plaintiff.
Andre T. Hanson, Esq. and Fulbright & Jaworski LLP, 80
South Eighth Street, Suite 2100, Minneapolis, MN 55402,
counsel for Federal Home Loan Mortgage Corporation; Jared
M. Goerlitz, Esq. and Peterson, Fram & Bergman, PA, 55
East Fifth Street, Suite 800, St. Paul, MN 55101, counsel
for defendant Peterson, Fram & Bergman, PA.
This matter is before the court upon the motions to dismiss by
defendants Federal Home Loan Mortgage Corporation (Freddie Mac);
Bank of America, N.A.; Mortgage Electronic Registration System
(MERS); Peterson, Fram & Bergman, P.A. (PFB) and BAC Home Loans
Servicing,
LP.
Based
on
a
review
of
the
file,
record
and
proceedings herein, and for the following reasons, the court grants
the motions.
BACKGROUND
This
mortgage
dispute
arises
out
property owned by plaintiff Mark Gerdes.
of
the
foreclosure
on
On May 14, 2007, Gerdes
and Countywide Home Loans, Inc. (Countywide) executed a note for
property located at 237 Chestnut Street South, Belle Plaine,
Minnesota.
Compl. ¶¶ 1, 8.
On the same day, Gerdes also executed
a mortgage in favor of MERS, as nominee for Countywide.1
Id. Ex.
1.
On October 19, 2011, MERS assigned the mortgage to Bank of
America,2 and later recorded the assignment in Scott County on
November 1, 2011.
Id. ¶ 12; id. Ex. 2.
Thereafter, on November 2,
1
The complaint alleges that the mortgage was executed on June
30, 2005, almost two years before the note was signed on May 14,
2007. See Compl. ¶ 8. A copy of the mortgage was attached to the
complaint, however, and it states that the agreement was executed
on May 14, 2007. See id. Ex. 1, at 11. The court presumes that
the June 30, 2005, date is a remnant from a previously-drafted
complaint. Gerdes’s memorandum in opposition contains at least two
other such instances where attorney William Butler mistakenly
argues on behalf of clients he previously represented. Compare
Pl.’s Mem. Opp’n 18 (arguing that “Mine has pled sufficient
facts”), and id. at 19 (discussing “fraudulent representation
alleged in the Quales’ complaint”), with Quale v. Aurora Loan
Servs., LLC, No. 13-621, 2013 WL 3166584 (D. Minn. June 20, 2013),
and Mine v. Fed. Home Loan Mortg. Corp., No. 13-220, 2013 WL
2443852 (D. Minn. June 5, 2013).
2
Bank of America is successor by merger to BAC Home Loans
Servicing. Compl. ¶ 6.
2
2011, MERS again assigned the mortgage to Bank of America.
¶ 14.
Id.
This second assignment was recorded in Scott County on
December 13, 2011.
Id.; id. Ex. 4.
On November 28, 2011, PFB executed a Notice of Pendency and
Power of Attorney (collectively, POA) and recorded the POA on
December 13, 2011.
Id. ¶ 16; id. Ex. 6.
On February 7, 2012, PFB
executed a second POA, which was recorded on March 13, 2012.
Id.
¶ 18; id. Ex. 7.
Gerdes defaulted, and Bank of America, through PFB, initiated
non-judicial foreclosure proceedings.
Compl. ¶¶ 20, 31.
Bank of
America purchased the property at the foreclosure sale on June 26,
2012.
Id. ¶ 20; id. Ex. 8.
On July 11, 2012, Bank of America
assigned the sheriff’s certificate of sale to Freddie Mac.
¶ 22.
The assignment was recorded on August 7, 2012.
Id.
Id.; id. Ex.
9.
On November 19, 2012, Gerdes filed this action in Minnesota
court, alleging claims for quiet title, negligence per se and
slander of
title.
Gerdes
also
seeks
a
regarding the parties’ property interests.
declaratory
judgment
Defendants timely
removed,3 and move to dismiss.
3
Federal courts are courts of limited jurisdiction. Thomas
v. Basham, 931 F.2d 521, 522 (8th Cir. 1991). As such, the court
“has a special obligation to consider its own jurisdiction,” even
when, as here, plaintiff does not contest that subject-matter
jurisdiction exists. Id. at 523 (citation omitted).
(continued...)
3
DISCUSSION
I.
Standard of Review
To survive a motion to dismiss for failure to state a claim,
“‘a complaint must contain sufficient factual matter, accepted as
true, to state a claim to relief that is plausible on its face.’”
Braden v. Wal-Mart Stores, Inc., 588 F.3d 585, 594 (8th Cir. 2009)
(quoting Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009)). “A claim
has facial plausibility when the plaintiff [has pleaded] factual
content that allows the court to draw the reasonable inference that
the defendant is liable for the misconduct alleged.” Iqbal, 129 S.
Ct. at 1949 (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556
(2007)).
Although a complaint need not contain detailed factual
allegations, it must raise a right to relief above the speculative
level. See Twombly, 550 U.S. at 555.
“[L]abels and conclusions or
a formulaic recitation of the elements of a cause of action” are
not sufficient to state a claim.
Iqbal, 129 S. Ct. at 1949
(citation and internal quotation marks omitted).
3
(...continued)
Defendants claim that original jurisdiction exists pursuant to
28 U.S.C. § 1332(a). See Notice Removal ¶ 13. In the present
action, however, the parties are not completely diverse. See id.
¶¶ 6-11.
Nevertheless, for the reasons that follow, the court
concludes that no reasonable claims exist against the non-diverse
law firm defendant and that it was fraudulently joined.
See
Karnatcheva v. JPMorgan Chase Bank, N.A., 704 F.3d 545, 546 (8th
Cir. 2013) (“[W]e recently concluded that nearly identical claims
against a resident law firm had no reasonable basis in law and fact
under Minnesota law and constituted fraudulent joinder.” (citation
omitted)). As a result, diversity jurisdiction exists, and removal
of the matter was proper.
4
The court does not consider matters outside the pleadings
under Rule 12(b)(6).
See Fed. R. Civ. P. 12(d).
The court,
however, may consider matters of public record and materials that
are “necessarily embraced by the pleadings.”
See Porous Media
Corp. v. Pall Corp., 186 F.3d 1077, 1079 (8th Cir. 1999) (citation
and internal quotation marks omitted).
In this case, the POAs and
mortgage documents are properly considered, as they were attached
to the complaint and are matters of public record.
II.
Quiet Title and Declaratory Judgment
Gerdes
first
raises
a
quiet-title
claim
declaration that the sheriff’s sale was invalid.
and
seeks
a
Specifically,
Gerdes argues “upon information and belief” that (1) employees of
the mortgage servicing companies did not have authority to sign the
POA documents or to assign the mortgages and (2) unrecorded POAs
and mortgages, including a 2007 assignment from Bank of America to
Freddie Mac, exist. Based on these beliefs, Gerdes argues that the
foreclosure and the assignments of the mortgage were invalid.4
These claims fail, however, as they are not adequately pleaded
under Iqbal and Twombly and are insufficient to state a claim.
“[T]he plaintiff’s pleadings, on their face, have not provided
anything to support their claim that the defendants’ adverse claims
are
invalid,
other
than
labels
4
and
conclusions,
based
on
MERS twice assigned the mortgage to Bank of America.
See Compl. ¶¶ 12, 14. Gerdes does not argue that this irregularity
gives rise to a quiet-title claim.
5
speculation that transfers affecting payees and assignments of the
notes were invalid.” Karnatcheva v. JPMorgan Chase Bank, N.A., 704
F.3d 545, 548 (8th Cir. 2013) (citations omitted), petition for
cert. filed, 81 U.S.L.W. 3670 (U.S. Apr. 29, 2013) (No. 12–1303);
see Richter v. Fed. Nat’l Mortg. Ass’n, No. 13-00475, 2013 WL
3223377, at *3 (D. Minn. June 25, 2013) (rejecting argument that
Fannie Mae policy document could “plausibly establish [that the
entity]
obtained
an
unrecorded
interest
in
the
[p]roperty”).
Gerdes responds that state law pleading standards - rather than the
federal pleading standards set forth by Iqbal and Twombly - should
apply.
Such
an
established law.
argument,
however,
is
plainly
contrary
to
See Karnatcheva, 704 F.3d at 548; Richter, 2013
WL 3223377, at *3 (rejecting argument that “Minnesota quiet title
actions place the burden of proof on defendants”).
As a result,
Gerdes fails to state a claim, and dismissal of the quiet title and
declaratory judgment claims is warranted.
III.
Negligence Per Se
Gerdes
next
argues
that
PFB
was
negligent
per
se.
Specifically, Gerdes asserts that PFB violated Minnesota Statutes
§ 580.05 by drafting and executing the November 28, 2011, POA on
behalf of Bank of America and sending a notice of foreclosure prior
to recording the POA.
See Compl. ¶ 50.
“The essential elements of a negligence claim are: (1) the
existence of a duty of care; (2) a breach of that duty; (3) an
6
injury was sustained; and (4) breach of the duty was the proximate
cause of the injury.”
(Minn. 1995)
Lubbers v. Anderson, 539 N.W.2d 398, 401
(citation
omitted).
“A
per
se
negligence
rule
substitutes a statutory standard of care for the ordinary prudent
person standard of care, such that a violation of a statute ... is
conclusive evidence of duty and breach.”
Gradjelick v. Hance, 646
N.W.2d 225, 231 n.3 (Minn. 2002) (citations omitted).
Under Minnesota law, however, “an attorney acting within the
scope of his employment as attorney is generally immune from
liability
to
third
persons
professional relationship.”
for
actions
arising
out
of
that
McDonald v. Stewart, 182 N.W.2d 437,
440 (Minn. 1970) (citations omitted).
“Further, attorneys are
generally not liable to the client’s adversary, absent evidence of
an affirmative misrepresentation.”
Karnatcheva v. JPMorgan Chase
Bank, N.A., 871 F. Supp. 2d 834, 839 (D. Minn. 2012) (citation
omitted), aff’d 704 F.3d 545 (8th Cir. 2013), petition for cert.
filed, 81
U.S.L.W.
3670
(U.S.
Apr.
29,
2013)
(No.
12–1303).
Moreover, violations of § 580.05 cannot establish negligence per
se.
See Forseth v. Bank of Am., N.A., No. 13-38, 2013 WL 2297036,
at *7 (D. Minn. May 24, 2013); Stilp v. HSBC Bank USA, N.A., No.
12-3098, 2013 WL 1175025, at *2 (D. Minn. Mar. 20, 2013).
result, dismissal of this claim is warranted.
7
As a
IV.
Slander of Title
Finally, Gerdes claims slander of title. To state a claim for
slander of title, a plaintiff must allege facts that show:
(1)
That
there
was
a
false
statement
concerning the real property owned by the
plaintiff; (2) That the false statement was
published to others; (3) That the false
statement was published maliciously; and
(4) That the publication of the false
statement concerning title to the property
caused the plaintiff pecuniary loss in the
form of special damages.
Paidar v. Hughes, 615 N.W.2d 276, 279-80 (Minn. 2000) (citation
omitted).
The filing of an instrument known to be inoperative is
a false statement that, if done maliciously, constitutes slander of
title.
Kelly v. First State Bank of Rothsay, 177 N.W. 347, 347
(Minn. 1920).
In the present case, Gerdes has alleged no facts from which
the court could infer that defendants made a false statement, that
defendants acted with malice or that Gerdes suffered any pecuniary
damages from a publication concerning his title to the property.
See Dunbar v. Wells Fargo Bank, N.A., 709 F.3d 1254, 1257-58 (8th
Cir. 2013) (dismissing similarly-pleaded slander-of-title claim).
Therefore, Gerdes fails to state a claim for slander of title, and
dismissal is warranted.
8
CONCLUSION
Accordingly, based on the above, IT IS HEREBY ORDERED that the
motions to dismiss [ECF Nos. 8, 12] are granted.
LET JUDGMENT BE ENTERED ACCORDINGLY.
Dated:
July 30, 2013
s/David S. Doty
David S. Doty, Judge
United States District Court
9
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?