Duncan v. Bank of America, N.A. et al
MEMORANDUM OPINION AND ORDER. 1. Defendants' Motion to Dismiss (Doc. No. 4 ) is GRANTED. 2. Plaintiff's Complaint (Doc. No. 1, Ex. A) is DISMISSED WITH PREJUDICE. (Written Opinion). Signed by Judge Donovan W. Frank on 6/18/2015. (BJS)
UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
Stephanie Jo Duncan f/k/a
Civil No. 14-901 (DWF/SER)
OPINION AND ORDER
Bank of America, N.A.;
BAC Home Loans Servicing, LP;
U.S. Bank, N.A.; and Nationstar
Frederic W. Knaak, Esq., Holstad & Knaak PLC; and Wayne B. Holstad, Esq.,
Wayne B. Holstad, PLC, counsel for Plaintiff.
Mark G. Schroeder, Esq., Briggs & Morgan, PA; and Keith S. Anderson, Esq.,
Bradley Arant Boult Cummings LLP, counsel for Defendants Bank of American, N.A.,
BAC Home Loan Servicing, LP, and U.S. Bank, N.A.
David R. Mortensen, Esq., Wilford, Geske & Cook, PA, counsel for Defendant
Nationstar Mortgage, LLC.
This matter is before the Court on a Motion to Dismiss brought by Defendants
Bank of America, N.A. (“BANA”), BAC Home Loan Servicing, LP (“BAC”), U.S.
Bank, N.A. (“U.S. Bank”), and Nationstar Mortgage, LLC (collectively, “Defendants”).
(Doc. No. 4.) For the reasons set forth below, the Court grants the motion.
The facts of this case were previously set forth in a prior lawsuit in this District
brought by Plaintiff against Defendants (“Duncan I”), which was dismissed without
prejudice on February 13, 2014. (Doc. No. 7 (“Anderson Aff.”) ¶ 7, Ex. F (Civ.
No. 13-3079, PAM/FLN) (“Duncan I Order”).) The Court summarizes the relevant facts
This is a mortgage case involving allegations relating to a mortgage loan executed
on June 8, 2006, for property located in Lino Lakes, Minnesota (the “Property”). (Doc.
No. 1, Compl. ¶ 8.) At the time the mortgage loan was executed, Brian R. Winges
(“Winges”) and Plaintiff were married and jointly owned the Property. (Compl. ¶ 7.)
The mortgage loan transaction was evidenced by a note (the “Note”) executed by Winges
and a mortgage on the Property (the “Mortgage”), which serves as security for the Note,
and was executed by Winges and Plaintiff. (Compl. ¶¶ 8-9, 12; Anderson Aff. ¶¶ 2, 3,
Exs. A & B.) 1
The original holder of the Mortgage was Mortgage Electronic Registration
Services, Inc. (“MERS”), who later assigned it to BANA, successor by merger to BAC
f/k/a Countrywide Home Loans Servicing LP, on February 29, 2012. (Compl. ¶ 13;
Anderson Aff. ¶ 4, Ex. C.) BANA then assigned the Mortgage to U.S. Bank, as Trustee,
on April 16, 2012. (Anderson Aff. ¶ 5, Ex. D.)
The Court may consider documents pertaining to the Mortgage that are attached to
Plaintiff’s Complaint and the Anderson Affidavit, as they are necessarily embraced by
the Complaint or are matters of public record. Porous Media Corp. v. Pall Corp., 186
F.3d 1077, 1079 (8th Cir. 1999).
On May 17, 2007, Plaintiff obtained a Final Judgment and Decree of Divorce,
which granted Plaintiff all marital right, title, interest and equity in the Property. (Compl.
¶¶ 10-11.) Plaintiff has not assumed the Note obligation. (Id. ¶¶ 22-25.) On
February 14, 2013, Winges filed for Chapter 7 Bankruptcy protection. (Id. ¶ 21.)
On October 18, 2013, Plaintiff filed Duncan I seeking a declaratory judgment
voiding the Mortgage based on allegations that are substantially similar to those made in
the present action. Defendants removed Duncan I to this Court and filed a motion to
dismiss. In an Order dated February 13, 2014, Judge Paul A. Magnuson granted
Defendants’ motion to dismiss without prejudice, and granted Plaintiff thirty days to file
a new complaint. (Duncan I Order.) In the Duncan I Order, Judge Magnuson concluded
that Plaintiff’s title to the Property was subject to the Mortgage, Winges’ bankruptcy
proceedings did not invalidate the Mortgage, and Plaintiff’s purported bad faith loan
servicing claim was not recognized by law. (Duncan I Order at 3-5.)
On March 27, 2014, Plaintiff initiated the present action in Minnesota state court.
(Compl.) On April 1, 2014, Defendants removed the action to this Court. (Doc. No. 1,
Notice of Removal.) In her Complaint, Plaintiff asserts two claims: declaratory
judgment and specific performance. (Compl. ¶¶ 28-35.) Defendants move to dismiss
Plaintiff’s claims for failure to state a claim. (Doc. No. 4.)
In deciding a motion to dismiss pursuant to Rule 12(b)(6), a court assumes all
facts in the complaint to be true and construes all reasonable inferences from those facts
in the light most favorable to the complainant. Morton v. Becker, 793 F.2d 185, 187 (8th
Cir. 1986). In doing so, however, a court need not accept as true wholly conclusory
allegations, Hanten v. Sch. Dist. of Riverview Gardens, 183 F.3d 799, 805 (8th
Cir. 1999), or legal conclusions drawn by the pleader from the facts alleged, Westcott v.
City of Omaha, 901 F.2d 1486, 1488 (8th Cir. 1990). A court may consider the
complaint, matters of public record, orders, materials embraced by the complaint, and
exhibits attached to the complaint in deciding a motion to dismiss under Rule 12(b)(6).
Porous, 186 F.3d at 1079.
To survive a motion to dismiss, a complaint must contain “enough facts to state a
claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544,
570 (2007). Although a complaint need not contain “detailed factual allegations,” it must
contain facts with enough specificity “to raise a right to relief above the speculative
level.” Id. at 555. As the United States Supreme Court reiterated, “[t]hreadbare recitals
of the elements of a cause of action, supported by mere conclusory statements,” will not
pass muster under Twombly. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing
Twombly, 550 U.S. at 555). In sum, this standard “calls for enough fact[s] to raise a
reasonable expectation that discovery will reveal evidence of [the claim].” Twombly, 550
U.S. at 556.
Defendants argue that Plaintiff’s claims previously failed as a matter of law in
Duncan I, wherein Plaintiff’s claims were dismissed without prejudice. Defendants
argue that Plaintiff has reasserted the same material allegations that were previously
rejected by the Court.
In the prior lawsuit, Plaintiff sought a declaration that she is the fee simple owner
of the Property, that the mortgage is invalid, and that Defendants have no remaining
interest in the Property. (Duncan I Order at 3.) In the present action, Plaintiff again
seeks a declaration that she is the fee simple owner of the Property, that she is free from
any and all mortgage interest in the Property, and that Defendants have no right, title,
estate or interest in the Property. (Compl. ¶¶ 28-33.)
Plaintiff’s declaratory judgment claim fails for several reasons. First, Plaintiff
pleads only speculative and conclusory allegations to support her claim. For example,
Plaintiff asserts that the Mortgage is invalid, but does not plead any facts that would show
that the Mortgage is not a lawful lien on the Property.
Second, Winges’ Bankruptcy Action does not invalidate the Mortgage. Just as
Judge Magnuson held in Duncan I, Winges’ bankruptcy proceedings do not impact
Plaintiff’s obligation to pay the Mortgage debt. The Court agrees with the reasoning in
the Duncan I Order:
The law is clear that a discharge of debt in bankruptcy discharges a
debtor’s personal liability, but does not “deprive a mortgagee of its right to
collect its debt in rem.” In re Fisette, 455 B.R. 177, 184 (B.A.P. 8th Cir.
2011). Indeed, the bankruptcy code expressly provides that a discharge
operates as an injunction against any attempt to collect a debt “as a personal
liability of the debtor.” 11 U.S.C. § 524(a)(2). A discharge, does not,
without more, affect a creditor’s right to collect a debt in rem by
foreclosing a mortgage. Harmon v. U.S. through Farmers Home Admin.,
101 F.3d 574, 579 (8th Cir. 1996); see also In re Annen, 246 B.R. 337, 34041 (B.A.P. 8th Cir. 2000 (holding that it is “well established” that liens pass
through bankruptcy unaffected).
(Duncan I Order at 3-4.) Thus, for the same reasons articulated in Judge Maguson’s
Order in Duncan I, the Court concludes that Winges’ bankruptcy discharge did not affect
Defendants’ right to collect the amount owed under the Mortgage. 2
Finally, the Mortgage does not impair Plaintiff’s homestead rights. Plaintiff
argues that the failure to obtain her signature on the Note disrupts her homestead rights.
Plaintiff’s argument, however, is misplaced. There is no dispute that title to the Property
is vested in Plaintiff, stemming from the divorce decree and/or quit claim deed from
Winges. However, the only interest that Winges could convey was his half interest in the
Property subject to the Mortgage. Plaintiff cites to Minnesota Statute section 507.02
(“Conveyances by Spouses”) (“If the owner is married, no conveyance of the
homestead . . . shall be valid without the signatures of both spouses.”). Minn. Stat. §
507.02. This statute does not provide authority for her arguments, however.
Here, the conveyance of the homestead is subject to the Mortgage, and the
Mortgage was signed by both Plaintiff and Winges. (Doc. No. 7 ¶ 3, Ex. B.) Plaintiff
suggests that the Note is a conveyance. It is not. The Note is a contract by which
In addition, the Court notes that the Note is not the debt, but rather evidence of the
debt, and that the Mortgage itself provides that Plaintiff is obligated to pay the “debt
evidenced by the note.” (Duncan I Order at 4.) Therefore, Plaintiff has an independent
obligation regarding the debt.
Winges promised to repay the debt. The Note did not create an interest in real estate or
affect title to the Property. See, e.g., Jackson v. Mort. Elec. Registration Sys., Inc., 770
N.W.2d 487, 493-94 (Minn. 2009). Thus, even in the absence of her signature on the
Note, the Property conveyed to her was subject to the Mortgage.
For the above reasons, the Court concludes that Plaintiff has not alleged any facts
that would demonstrate that the Mortgage is invalid. Therefore, Plaintiff’s cause of
action for declaratory judgment fails.
Plaintiff also asserts a claim for specific performance. Plaintiff asserts that
Defendants have failed to provide Plaintiff with required tax documentation establishing
that Plaintiff has made monthly mortgage payments and is entitled to a tax deduction for
interest paid. (Compl. ¶ 34.) First, specific performance is a remedy, not a cause of
action. See Lane v. CMG Mortg., Inc., Civ. No. 14-3277, 2015 WL 2195176, at *7 (D.
Minn. May 11, 2015).
Second, to the extent that Plaintiff is attempting to assert a claim based on
Defendants’ loan servicing, the claim fails. In Duncan I, the Court dismissed Plaintiff’s
claim for bad faith loan servicing:
The Court agrees that there is no claim for bad faith loan servicing
under Minnesota law and that this claim must also be dismissed. The
allegations in the Complaint suggest, however, that Defendants may be
forcing [Plaintiff] into foreclosure. [Plaintiff] alleges that she has
unsuccessfully attempted to make mortgage payments and to assume the
note previously held by Winges. Defendants have not responded to the
substance of allegations. The Court will allow [Plaintiff] the opportunity to
re-plead this aspect of her case with a claim recognized by law.
(Duncan I Order at 4-5.) Here, Plaintiff has not pleaded facts supporting a claim
recognized by law. Further, Plaintiff has failed to plead any facts suggesting that
Defendants owed Plaintiff a legal duty that would have entitled her to a remedy of
specific performance. 3
Based upon the parties’ submissions and arguments, and for the reasons set forth
above, IT IS HEREBY ORDERED that:
Defendants’ Motion to Dismiss (Doc. No. ) is GRANTED.
Plaintiff’s Complaint (Doc. No. 1, Ex. A) is DISMISSED WITH
Dated: June 18, 2015
s/Donovan W. Frank
DONOVAN W. FRANK
United States District Judge
In her opposition, Plaintiff argues that she is entitled to damages for Defendants’
failure to accept her payments and alleges that Defendants have breached a contract.
(Doc. No. 12 at 5-6.) Plaintiff, however, has not asserted a claim for breach of contract.
Nor has Plaintiff sought to amend her Complaint to assert a breach of contract claim.
Thus, there is no breach of contract claim before the Court.
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?