Brown et al v. Green Tree Servicing LLC

Filing 16

ORDER granting 6 Motion to Dismiss, dismissing Complaint with prejudice. (Written Opinion). Signed by Judge Richard H. Kyle on 02/06/15. (KLL)

UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA

Raymond L. Brown and Ruth A. Brown,
Plaintiffs,

Civ. No. 14-4678 (RHK/LIB)
ORDER

v.
Green Tree Servicing LLC,
Defendant.

This mortgage-foreclosure case is before the Court on Defendant’s Motion to
Dismiss (Doc. No. 6). For the reasons that follow, the Motion will be granted.
The Amended Complaint alleges the following facts. On March 30, 2007,
Plaintiffs executed a $285,000 promissory note with Countrywide Home Loans, Inc.
(“Countrywide”), secured by a mortgage on property they owned in St. Cloud, Minnesota,
in favor of Countrywide’s nominee, Mortgage Electronic Registration Systems, Inc.
(“MERS”). In 2010, MERS assigned the mortgage to BAC Home Loans Servicing, LP;
the assignment was executed by Steven H. Bruns, MERS’s Vice President. In 2013, the
mortgage was assigned to Defendant Green Tree Servicing LLC (“Green Tree”), which
initiated foreclosure proceedings when Plaintiffs fell behind on their payments.
Plaintiffs commenced this action in the Stearns County, Minnesota District Court
in October 2014, shortly before a sheriff’s sale of their home. They alleged (1) the
assignment executed by Bruns was invalid and (2) a Notice of Intent to Accelerate
(“Notice”) sent to them failed to comply with the terms of the mortgage and, as a result,

Green Tree lacked the legal authority to foreclose on their home. After the sheriff’s sale
occurred, Plaintiffs filed an Amended Complaint containing the same allegations and
seeking a declaration the sheriff’s sale was void and a determination Green Tree did not
properly acquire title to the property. Green Tree later removed the action to this Court
and now moves to dismiss all of Plaintiffs’ claims; the Court finds its Motion well-taken. 1
First, the undersigned agrees with Green Tree, and with a slew of other recent
court decisions, that individuals such as Plaintiffs lack standing to challenge a mortgage
assignment under these circumstances. As noted in Gerlich v. Countrywide Home Loans,
Inc., a plaintiff challenging the assignment of his or her mortgage from one entity to
another lacks standing to challenge that assignment because “the mortgage assignment,
standing alone, caused Plaintiff no injury,” even if it was invalid. Civ. No. 10-4520, 2011
WL 3920235, at *3 (D. Minn. Sept. 7, 2011) (Frank, J.) (“Even assuming Plaintiff were
able to show that Defendant Ehinger had no authority to assign Ameriquest’s interest in
the mortgage to Countrywide, the party sustaining injury as a result of the fraudulent
assignment would be Ameriquest, not Plaintiff.”); accord, e.g., Quale v. Aurora Loan
Servs., LLC, 561 F. App’x 582, 583 (8th Cir. 2014) (per curiam) (“The party injured by
1

Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), and Ashcroft v. Iqbal, 556 U.S. 662
(2009), set forth the standard for evaluating a motion to dismiss. A complaint must include
“enough facts to state a claim to relief that is plausible on its face.” Twombly, 550 U.S. at 547.
“The plausibility standard is not akin to a ‘probability requirement,’ but it asks for more than a
sheer possibility that a defendant has acted unlawfully.” Iqbal, 556 U.S. at 678 (citation
omitted). The Court “must accept [the] plaintiff’s specific factual allegations as true but [need]
not . . . accept a plaintiff’s legal conclusions.” Brown v. Medtronic, Inc., 628 F.3d 451, 459 (8th
Cir. 2010) (citation omitted). The Amended Complaint must be construed liberally, and any
allegations or reasonable inferences arising therefrom must be interpreted in the light most
favorable to Plaintiffs. Twombly, 550 U.S. at 554-56.
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an improper or fraudulent assignment is the mortgagee-assignor (mortgage holder), not
the mortgagor (homeowner).”). Accordingly, to the extent Plaintiffs’ claims are
predicated on an invalid mortgage assignment, they lack standing to bring them. 2
This leaves only Plaintiffs’ claims predicated on the Notice’s alleged violation of
the mortgage’s terms. These claims fare no better.
Plaintiffs first argue the Notice violated the mortgage because it failed to specify
precisely how they could cure their default, since it provided only that they were obligated
to pay the overdue amount, “plus unspecified additional regular monthly payment or
payments, late charges, fees and charges which become due” after the Notice. The Court
agrees with Green Tree that no greater specificity was required. Certainly Green Tree
could not anticipate whether Plaintiffs would miss future payments or would attempt to
cure their default before their next monthly payment became due. Informing Plaintiffs
they were obligated to pay the past-due amount plus any additional amounts that might
come due in the future was sufficient to satisfy the mortgage’s provision that any notice
of default provide “the action required to cure” it. See, e.g., Bank of Am., N.A. v.
Stewart, No. 13 MA 48, 2014 WL 819319, at *1 (Ohio Ct. App. Feb. 14, 2014) (lender
complied with identical mortgage language by informing plaintiff of amount due, plus

2

The Court declines to follow Glaski v. Bank of America, National Association, 218 Cal. Rptr.
4th 1079 (Cal. Ct. App. 2013), and Saldivar v. JP Morgan Chase Bank, N.A. (In re Saldivar), No.
12-01010, 2013 WL 2452699 (Bankr. S.D. Tex. June 5, 2013), cited by Plaintiffs, as each has
been roundly criticized. See, e.g., U.S. Bank Nat’l Ass’n v. Salvacion, 338 P.3d 1185, 1190-91
(Haw. Ct. App. 2014) (Glaski and Saldivar “are the clear minority on the matter and run counter
to the majority of decisions that have expressly rejected such assignment challenges”). In any
event, Quale was decided by our Court of Appeals and controls.
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“any regular monthly payment or payments, plus late charges, fees and charges which
[later] become due”; “The bank cannot predict when the borrower will pay the overdue
amount. The borrower knows his payment due date and knows the amount of his regular
monthly payments. Nothing in the [mortgage] requires the bank to provide a schedule of
predictions.”).
Next, Plaintiffs argue the Notice failed to indicate they enjoyed an “unconditional”
right to reinstate the mortgage following acceleration if they were able to cure their
default by bringing their payments current; instead it provided that they “may” reinstate.
But as Green Tree correctly notes, nothing in the mortgage gave Plaintiffs an
“unconditional” right to reinstatement. Indeed, other terms of the mortgage make clear
the right to reinstate was conditioned upon Plaintiffs meeting a number of terms,
including providing Green Tree with information sufficient to demonstrate they would be
able to continue making payments in the future. (See Brodin Aff. Ex. 1, ¶ 19.) 3
Plaintiffs’ argument simply finds no support in the mortgage. See Stewart, 2014 WL
819319, at *4 (“Paragraph 19 of the Mortgage provides that the borrower has the right to
reinstate after acceleration if the borrower meets certain conditions, which are then listed
therein. Thus, when paragraph 22 states that the notice shall inform the borrower of the
right to reinstate, it does not refer to an absolute right, but a right subject to paragraph 19.

3

Although the mortgage is attached to an Affidavit of Green Tree’s counsel, the Court may
consider it in connection with the instant Motion because it is expressly referenced in the
Amended Complaint. E.g., Cole v. Homier Distrib. Co., 599 F.3d 856, 863 (8th Cir. 2010).
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Accordingly, the notice’s use of ‘may’ . . . does not insufficiently comply with the
requirement to ‘inform the borrower of the right to reinstate after acceleration.’”).
Lastly, Plaintiffs assert “Green Tree has not produced any evidence the Notice was
sent on the date [indicated thereon]. Plaintiffs’ counsel has been unable to find
confirmation that the tracking number on the Notice is valid.” (Mem. in Opp’n at 5.) 4
The Court finds this assertion curious. The Notice is dated April 29, 2011, and the
Amended Complaint itself alleges that “[o]n or about April 29, 2011, [Green Tree] sent
[Plaintiffs] a Notice of Intent to Accelerate via certified mail.” (Am. Compl. ¶ 31.) The
unsupported assertion of Plaintiffs’ counsel (which is beyond the pleadings in any event)
does not undermine that allegation. Nowhere have Plaintiffs alleged they failed to receive
the Notice, that it was improperly addressed, or that they received it at some time well
after April 29, 2011. Moreover, it has long been recognized that when an item “is
transmitted by the United States mails, properly addressed and postage fully prepaid,
there is a strong presumption that it will be received by the addressee in the ordinary
course.” Ark. Motor Coaches Ltd. v. CIR, 198 F.2d 189, 191 (8th Cir. 1952). In the
absence of any allegation that Green Tree failed to send the Notice on the date indicated
on is face or any other allegation undermining the timeliness or propriety of the mailing,
which Plaintiffs themselves have alleged, Plaintiffs’ argument lacks merit. See, e.g.,
Stephenson v. El-Batrawi, 524 F.3d 907, 913 (8th Cir. 2008) (“The law presumes . . .

4

The mortgage required 30 days’ notice before acceleration, in order to give Plaintiffs the
opportunity to cure their default.
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documents mailed . . . were received by [the addressee], and his mere denial is
insufficient to overcome this presumption.”).
Based on the foregoing, and all the files, records, and proceedings herein, IT IS
ORDERED that Green Tree’s Motion to Dismiss (Doc. No. 6) is GRANTED and
Plaintiffs’ Amended Complaint (attached to Doc. No. 1) is DISMISSED WITH
PREJUDICE.
LET JUDGMENT BE ENTERED ACCORDINGLY.

Dated: February 6, 2015

s/Richard H. Kyle
RICHARD H. KYLE
United States District Judge

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