White et al v. MERSCORP Holdings, Inc et al
ORDER granting 5 Defendants Nationstar Mortgage LLC and Mortgage Electronic Registration Systems, Inc.'s Motion to Dismiss for Failure to State a Claim. Signed on 10/10/13 by District Judge Greg Kays. (Francis, Alexandra)
IN THE UNITED STATES DISTRICT COURT FOR THE
WESTERN DISTRICT OF MISSOURI
JIMMIE WHITE, et al.,
CTX MORTGAGE, LLC, et al.,
Case No. 13-0335-CV-W-DGK
ORDER GRANTING DEFENDANTS’ MOTION TO DISMISS
This case arises from Defendant CTX Mortgage Company’s (“CTX’s”) foreclosure of
real estate in Kansas City, Missouri, owned by Plaintiffs Jimmie and Carol White (“Plaintiffs”).
After receiving a notice of foreclosure, Plaintiffs filed suit in this Court on April 3, 2013, against
CTX, Co-Defendant Nationstar Mortgage, LLC (“Nationstar”), and Co-Defendant Mortgage
Electronic Registration Systems, Inc. (“MERS”). Now before the Court is Nationstar’s and
MERS’ joint motion to dismiss for failure to state a claim (Doc. 6). For the reasons stated
below, the motion is GRANTED, and all counts are dismissed as to Nationstar and MERS.
At the outset, the Court notes the factual background in this case is unclear. The
Complaint’s (“Complaint’s”) fact section lists a variety of title transfers and numerous party and
non-party entities without providing a coherent history of when these title transfers occurred or
what role each entity allegedly played in them. Rather, the Complaint merely makes cursory
reference to the entities and cites to “exhibits” attached to the Complaint. The Court has
attempted to piece together the relevant background facts through analyzing the short “facts”
section in the Complaint in conjunction with Plaintiffs’ attached “exhibits.”
As best the Court can tell, on May 11, 2005, Plaintiffs executed a promissory note
(“Note”) in the amount $23,500 to CTX for what appears to be a second mortgage on Plaintiffs’
home (“the Property”). Compl., Facts Section,1 ¶ 1; Exhibit A. On the same day, Plaintiffs
executed a deed of trust (“the Deed”) naming CTX as the Lender, Marcia Stolle as the trustee,
and Defendant MERS as the nominee for CTX and beneficiary under the security instrument.
Compl., Facts Section, ¶ 4; Exhibit C. The Deed functioned as CTX’s security for the loan by
providing CTX with a lien on Plaintiffs’ Property. This instrument also provided that MERS
possessed legal title to the property and had the right “to exercise any or all of those interests,
including, but not limited to, the right to foreclose and sell the property; and to take any action
required of Lender….” Exhibit C.
On October 9, 2012, MERS assigned the Deed of Trust to Defendant Nationstar. Compl.,
Facts Section, ¶ 4(a). MERS currently “reports” Nationstar as the Servicer of the Deed and
UBS, a non-party to the instant case, as trustee of the Deed. Compl., Facts Section, ¶ 4(c). CTX
is now attempting to foreclose on Plaintiffs’ Property. Compl., Parties Section, ¶ 1(a). The
Complaint also asserts that the chain of title has been broken. Compl., Facts Section, ¶ 6.
Consequently, “title [is not] clear enough” for CTX to foreclose on the Property.2 Id.
The Complaint has multiple sections with overlapping numbering. Instead of numbering each paragraph
consecutively from the beginning of the complaint, Plaintiffs separately number each section. Thus, the Court’s
citations refer first to the labeled section in the complaint and then to the appropriate paragraph in that section.
However, the section listing the separate counts, which begins with paragraph 33, has no explicit section reference.
The Court refers to this section as “Allegations” in its citations.
The facts section also refers to several non-parties to the current litigation. According to Plaintiffs, Nations Bank
is named as a lender on some of Plaintiffs’ tax documents. Compl., Facts Section, ¶ 4(d). Also, a “proof of claim”
from September 27, 2005 reported Irwin Home Equity Corporation as “Sub-Servicer for UBS as Owner/Lender.”
Compl., Facts Section, ¶ 4(e). In addition, Plaintiffs make reference to non-party Lehman Brothers Bank as having
a role in the events. At sometime in the past, CTX transferred the Note to Lehman Brothers Bank. Compl., Facts
Section, ¶ 1(a). It is further alleged, Lehman Brothers Bank “pooled” this mortgage with others in a trust fund to
perpetrate a “securitization scheme.” Compl., Nature of the Action Section, ¶ 1. As best the Court can tell,
Plaintiffs included these facts to demonstrate that it is unclear as to the identity of current Note “owner”, the loan
servicer, the beneficiary under the Deed, and the trustee under the Deed.
Plaintiffs raise eight claims: (1) “Predatory Lending”; (2) “Servicer Fraud”; (3) violations
of the Home Ownership Equity Protection Act (“HOEPA”), 15 U.S.C. § 1639, et seq.; (4)
violations of the Real Estate Settlement Procedures Act (“RESPA”), 15 U.S.C. § 2601, et seq.;
(5) “Breach of Fiduciary Duty”; (6) “Identity Theft”; (7) Civil Rico; and (8) Quiet Title to Real
Property. For relief, Plaintiffs request economic damages; a declaratory judgment identifying the
“owner” of the Note and clarifying whether the Deed is actually security for the loan; and
injunctive relief conveying the Property to Plaintiffs or a judgment quieting title to Plaintiffs’
A court must dismiss a complaint if it fails to state a claim on which relief can be granted.
Fed R. Civ. P. 12(b)(6). In reviewing the adequacy of a complaint, the court assumes that the
factual allegations in the complaint are true and construes them in the light most favorable to the
plaintiff. Data Mfg. Inc. v. UPS, Inc., 557 F.3d 849, 851 (8th Cir. 2009). To survive a 12(b)(6)
motion to dismiss, the complaint must do more than recite the bare elements of a cause of action.
Ashcroft v. Iqbal, 556 U.S. 662, 687 (2009). Rather, it must include “enough facts to state a
claim to relief that is plausible on its face.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555
(2007). “While a complaint ... does not need detailed factual allegations,” a plaintiff must
provide the grounds of his entitlement with more than mere “labels and conclusions,” or “a
formulaic recitation of the elements of a cause of action.” Benton v. Merrill Lynch & Co., Inc.,
524 F.3d 866, 870 (8th Cir. 2008) (quoting Twombly, 550 U.S. at 545 (internal citations
A complaint that alleges only “naked assertion[s] devoid of ‘further factual
enhancement’” will not survive a motion to dismiss. Twombly, 550 U.S. at 557.
Additionally, in ruling on a 12(b)(6) motion to dismiss, the court is not limited to the four
corners of the complaint. Outdoor Cent., Inc. v. GreatLodge.com, Inc., 643 F.3d 1115, 1120 (8th
Cir. 2011). The court may consider “the pleadings themselves, materials embraced by the
pleadings, exhibits attached to the pleadings, and matters of public record.” Mills v. City of
Grand Forks, 614 F.3d 495, 498 (8th Cir. 2010) (quoting Porous Media Corp. v. Pall Corp., 186
F.3d 1077, 1079 (8th Cir. 1999)). Thus, this allows the Court to consider the complaint and the
attached “exhibits” when ruling on Defendants’ motion to dismiss.
Finally, in considering a 12(b)(6) motion based on the running of a statute of limitations,
the court may only grant the motion if it is clear from the face of the complaint that the cause of
action is time-barred. Joyce v. Armstrong Teasdale, LLP, 635 F.3d 364, 367 (8th Cir. 2011).
Nationstar and MERS argue the Court should dismiss all eight counts because they (1)
fail to state a claim upon which relief can be granted, or (2) are barred by the applicable statute
At the outset, the Court makes several general observations about the Complaint. In each
count, Plaintiffs have substituted legal conclusions for facts. Plaintiffs allege countless parties
have engaged in a wide-ranging conspiracy to swindle the Plaintiffs and other similarly situated
mortgagors out of millions of dollars. Plaintiffs, however, fail to provide any specific facts
connecting Defendants to such a scheme. Likewise, Plaintiffs’ pleading in each of the eight
counts is littered with references to acronyms that were never defined and the Complaint often
uses “Plaintiff” interchangeably with “Defendant.”3 Furthermore, the Complaint routinely refers
Plaintiffs refer to “REMIC” throughout the Complaint, but fail to specify what the term means or why it is
relevant to the instant case. Compl., Allegations, ¶ 32(f). Also, in Count IV alleging violations of the RESPA, the
Complaint states “[i]n violation of 12 USC sec. 2607(d)(2) and in connection with the mortgage loan to Defendant,
Plaintiffs accepted charges for the rendering of real estate services which were in facts charges for oth[er] than
to the Defendants collectively even though they have separate roles in the mortgage transaction,
and then, with little or no connecting facts, asserts that the Defendants either violated statutory
provisions or the common law.
For example, in Count V, which alleges fiduciary duty
violations, the Complaint states that “[d]efendants breached their fiduciary duties to the Plaintiff
by fraudulently inducing Plaintiff to enter into a mortgage transaction which was contrary to the
Plaintiff’s stated intentions;…interests; and…preservation of his home.” Compl., Allegations, ¶
59. In short, Plaintiffs’ entire Complaint fails to plead sufficient facts to place defendants on
notice of their alleged wrongs, let alone provide enough facts to make these claims plausible.4
Plaintiffs’ predatory lending claim is time-barred, and they fail to state a claim for
Count I asserts Defendants engaged in “predatory lending.” Plaintiffs raise three separate
theories to advance this claim: (1) the terms of the loan were not in their best interests; (2) the
lender knowingly made the loan with the intention of transferring it to another entity to be
bundled with mortgages to form mortgage-backed securities, which compromised the
negotiability of the note; and (3) the Defendants failed to make the required disclosures to
Plaintiffs as required by the Truth in Lending Act (“TILA”) and RESPA. The Court holds these
claims are barred by the statute of limitations, and, even if they were not barred, Plaintiffs fail to
state a claim upon which relief can be granted.
Any cause of action arising from Plaintiffs’ contentions is time-barred either under state
law or federal statutory law. Plaintiffs fail to state any legal basis for the first two theories
advanced under Plaintiffs’ “predatory lending” cause of action. To the extent that either of the
services actually performed.” Compl., Allegations, ¶ 56. Such mistakes, while in and of themselves not fatal to the
Complaint, cumulatively detract from the coherence of the allegations.
The Court also notes that significant portions of the Complaint seem to be a verbatim recitation of the boilerplate
language from a template complaint for “wrongful foreclosure” lawsuits found on various websites. See e.g., Ask
the Expert: Wrongful Foreclosure, available at http://foreclosureinfosearch.blogspot.com/2009/11/litigationwrongful-foreclosure.html (possessing the same claims and language as the complaint in this case).
first two theories is premised on some quasi-fiduciary duty, the general five-year limitation
period under section 516.120(4) of the Missouri Revised Statutes has expired. See Klemme v.
Best, 941 S.W.2d 493, 497 (Mo. 1997) (holding that breach of fiduciary duty claims fall under
the statute’s five-year limitation period).
Under Plaintiffs’ first two theories Defendants’
allegedly breached their fiduciary duties by making the loan, and thus the limitations period
began to run when the loan closed on May 11, 2005. Therefore, the limitations period expired on
May 11, 2010.
Similarly, any claim Plaintiffs had for any TILA or RESPA violations is also time-barred.
A claim brought under TILA for rescission has a three-year statute of limitations, while a
damages claim under TILA has a one-year statute of limitations. 15 U.S.C. § 1635(f); 15 U.S.C.
1640(e). Here, Plaintiffs alleges that the TILA violations of failure to disclose occurred prior to
and during the loan closing on May 11, 2005. Thus, the statute of limitations for the TILA claim
ran out on May 11, 2008. Likewise, RESPA also imposes either a one-year or three-year time
period in which to file a claim. 12 U.S.C. § 2614. Since Plaintiffs failed to file their claims
before May 11, 2008, any potential RESPA claim based on failure to make proper disclosures is
Plaintiffs do not dispute the statute has run; rather, they contend the Court should
equitably toll the limitations period. Specifically, Plaintiffs argue that (1) federal law requires
the Court to liberally apply equitable tolling to statutory violations; and (2) that fraudulent
concealment also supports equitable tolling. Plaintiffs’ argument, however, completely ignores
the pleading requirements for equitable tolling.
The Eighth Circuit has cautioned that equitable tolling “should be invoked only in
exceptional circumstances truly beyond the plaintiff’s control.” Jenkins v. Mabus, 646 F.3d
1023, 1029 (8th Cir. 2011). To establish a claim of fraudulent concealment to equitably toll a
federal claim, the plaintiff must plead with particularity the “who, what, when, where, and how”
of the alleged fraudulent act. Great Plains Trust Co. v. Union Pacific R. Co., 492 F.3d 986, 995
(8th Cir. 2007) (internal quotations and citations omitted). Under this standard, “conclusory
legal allegations” do not establish fraudulent concealment. Id. In their response to the motion to
dismiss, Plaintiffs only generally refer to abstract principles of equitable tolling and then assert
that “sufficient particularity has been pled regarding fraudulent concealment to apply equitable
tolling.” Plaintiffs have not made any allegations regarding actions or statements by Nationstar
or MERS that would give rise to a claim of fraudulent concealment. This is insufficient to plead
Assuming, arguendo, that any of the “predatory lending” claims were not time-barred,
Plaintiffs have still failed to plead sufficient facts to state a claim. With respect to Plaintiffs’ first
theory, they have failed to allege that Nationstar or MERS even made the initial loan to
Plaintiffs, much less that this loan was not in their best interest, and they have failed to cite any
legal authority that a cause of action exists for providing a loan that is not in their best interest.
As for the second theory, Plaintiffs failed to provide any legal or factual basis for their arguments
that demonstrates why extending the loan without informing Plaintiffs of potential securitization
of their Note violated any legal provision or why the subsequent transfers invalidated the Note
and gave rise to a cause of action.
Plaintiffs have also failed to sufficiently plead facts showing Nationstar or MERS could
plausibly be liable for a violation of TILA or RESPA. To plead a cause of action under TILA,
Plaintiffs must demonstrate that the Defendants are the Plaintiffs’ creditors or assignees of the
creditor. See Mourad v. Homeward Residential, Inc., 517 Fed. Appx. 360, 364 (6th Cir. 2013).
Plaintiffs have failed to demonstrate that Nationstar and MERS are creditors because they have
only alleged that Nationstar was a servicer and MERS was the nominee and beneficiary. See id.
(defining creditor as “someone who both regularly extends consumer credit and is initially due
payment for debt arising from a consumer-transaction”). In fact, Plaintiffs have alleged that
CTX is the creditor, because it is the entity to which the original debt was payable. Similarly,
Plaintiffs have completely failed to allege that either defendant is an assignee of the creditor.
Finally, Plaintiffs have failed to plead sufficient facts to state a claim under RESPA,
because they have not satisfied the threshold requirement of demonstrating that Nationstar or
MERS is a “lender” under the regulations. See 24 C.F.R. § 3500.2 (defining lender as “the
secured creditor or creditors named in the debt obligation and document creating the lien.”). In
fact, neither Nationstar nor MERS meets this definition, because Nationstar was never mentioned
in the Note or the Deed and MERS was simply the nominee for the actual secured creditor, CTX.
Thus, Count I is dismissed as to Nationstar and MERS.
Plaintiffs fail to state a claim for “servicer fraud.”
Count II for “servicer fraud” alleges that “[d]efendants engaged in a pattern and practice
of defrauding Plaintiff5 in that, during the entire life of the mortgage loan, Defendants failed to
properly credit payments made; incorrectly calculated interest on the accounts; and have failed to
accurately debit fees….Plaintiff made payments on the improper, inaccurate, and fraudulent
representations as to Plaintiff’s accounts.” Assuming Plaintiffs intended to plead a fraudulent
misrepresentation claim under Missouri law, they fail to sufficiently plead enough facts to state a
To maintain a claim for fraudulent misrepresentation Plaintiffs must plead: “(1) a
The use of the singular “Plaintiff” throughout the complaint is a typographical error. As discussed in footnote four,
it appears the complaint was taken almost verbatim from a template on a website. Consequently, the reference to
“Plaintiff” instead of “Plaintiffs” probably derives from counsel’s use of the template language without properly
adapting it to the facts of this case.
representation; (2) its falsity; (3) its materiality; (4) the speaker’s knowledge of its falsity or
ignorance of its truth; (5) the speaker’s intent that it should be acted on by the person in the
manner reasonably contemplated; (6) the hearer’s ignorance of the falsity of the representation;
(7) the hearer’s reliance on the representation being true; (8) the hearer’s right to rely thereon;
and (9) the hearer’s consequent and proximately caused injury.” Freitas v. Wells Fargo Home
Mortg., 703 F.3d 436, 438-39 (8th Cir. 2013) (citing Renaissance Leasing, LLC v. Vermeer Mfg.
Co., 322 S.W.3d 112, 131-32 (Mo. 2010)).
In pleading the facts that satisfy these elements,
Federal Rule of Civil Procedure 9(b) requires the plaintiff to plead “with particularity the
circumstances constituting [the] fraud.” Fed. R. Civ. P. 9(b). The Eighth Circuit has further
explained that this rule requires the plaintiff to “plead such matters as the time, place and
contents of false representations, as well as the identity of the person making the
misrepresentation and what was obtained or given up thereby.”
Freitas, 703 F.3d at 439
(internal quotations and citations omitted).
Plaintiffs have failed to meet this heightened standard for several reasons. Plaintiffs’
blanket reference to “Defendants” fails to identify which defendant made the alleged
misrepresentations. Furthermore, Plaintiffs fail to specify the alleged time or place of the
misrepresentation or in what form the Defendants made the misrepresentation. Thus, Plaintiffs
fail to state a claim, and Count II is dismissed as to Nationstar and MERS.
Plaintiffs’ HOEPA claim is time-barred, and they also fail to state a claim for a
violation of HOEPA.
Count III alleges the “Defendants” violated the disclosure requirements of HOEPA.
Plaintiffs argue that “Defendants” failed to make a variety of disclosures required under the act,
including provisions discussing the possibility of foreclosure and the “right to rescind the
transaction.” Compl., Allegations, ¶¶ 49, 53.
Plaintiffs’ claims are time-barred under HOEPA, and even if they were not time-barred,
Plaintiffs fail to state a claim. HOEPA, as an amendment of TILA, possesses the same statute of
limitations as TILA. McLeod v. PB Inv. Corp., 492 Fed. Appx. 379, 387 (4th Cir. 2012).
HOEPA claims also have a one-year statute of limitations for damages actions and a three-year
statute of limitations for a rescission action. Estate of Davis v. Wells Fargo Bank, 633 F.3d 529,
532 (7th Cir. 2011). Plaintiffs’ loan closed on May 11, 2005, and they did not file suit until
April 3, 2013. As discussed above, Plaintiffs arguments for equitable tolling are unavailing, and
thus the HOEPA claims are time-barred.
Even if the HOEPA claim was not time-barred, Plaintiffs still fail to state a claim against
Nationstar and MERS. Similar to a TILA claim, in order for Nationstar or MERS to be liable
under HOEPA, Plaintiffs must demonstrate Defendants are Plaintiffs’ creditors or assignees of
their creditor. See 15 U.S.C. § 1602(g), 1641. Plaintiffs make a conclusory allegation that
“Defendants are a ‘creditor’ as defined in HOEPA,” but there is no allegation that either
Nationstar or MERS originated high cost loans in the specified period in order to qualify as a
creditor under this provision. 15 U.S.C. § 1602(g). Likewise, Plaintiffs have failed to allege that
either Nationstar or MERS was an assignee of a creditor or provide any facts to suggest that
Defendants committed acts to incur assignee liability. 15 U.S.C. § 1639, 1641. In place of
factual allegations, Plaintiffs again merely recite the elements of different statutory provisions
under HOEPA and state that Defendants violated these provisions. Thus, Plaintiffs failed to state
a claim against these Defendants. For these reasons, Count III is dismissed as to Nationstar and
Plaintiffs’ RESPA claim is time-barred, and they fail to state a claim under RESPA.
In addition to the RESPA claims raised in Count I, Count IV alleges that Defendants
violated § 2607(b) of RESPA by accepting charges for services not actually performed. Again,
this claim is time-barred, and even if it was not time-barred, Plaintiffs have failed to state a claim
The statute of limitations for violations of 12 U.S.C. § 2607 is one year from the
occurrence of the violation. 12 U.S.C. § 2614. The statute of limitations begins to run “on the
date of closing.” Carter v. Bank of America, 888 F. Supp. 2d 1, 25 (D.D.C. 2012). Because the
loan closed on May 11, 2005, the claim expired on May 11, 2006. As discussed above, Plaintiffs
fail to sufficiently plead reasons for equitable tolling, and therefore Plaintiffs’ claim is timebarred.
Even if the claim was not time-barred, Plaintiffs fail to state a claim against Nationstar or
MERS. The three short paragraphs pleading this claim merely recite the applicable statutory
provisions and state legal conclusions. Without more facts on how or when Nationstar or MERS
accepted charges without performing services, this claim is not plausible. Thus, Count IV is
Plaintiffs’ breach of a fiduciary duty claim is time-barred, and they fail to state a
claim for breach of a fiduciary duty.
Plaintiffs contend that Defendants violated the fiduciary duties owed to Plaintiffs by
inducing Plaintiffs to enter into a mortgage that was contrary to their best interests. This claim is
time-barred, and it also fails to state a claim because Missouri does not recognize a fiduciary
relationship between Plaintiffs and Defendants.
As discussed above, the general statute of limitations for fiduciary duty claims is five
years. Any claim premised on Defendants making a loan contrary to Plaintiffs’ best interest is
time-barred because the claim expired on May 11, 2010.
Even if the action was not time-barred, Plaintiffs still fail to state a claim against
Nationstar and MERS. Under Missouri common law, lender institutions do not owe fiduciary
duties to borrowers “absent other evidence of a fiduciary relationship.” UT Commc’ns. Credit
Corp. v. Resort Dev., 861 S.W.2d 699, 710 (Mo. Ct. App. 1993). Here, Plaintiffs fail to allege
how Nationstar as the loan “servicer” and MERS as the nominee owed any fiduciary duties to
them, let alone how they violated those fiduciary duties.
On the contrary, nothing in the
pleadings or the attached exhibits suggests that MERS or Nationstar even had a role in the initial
loan negotiations between CTX and Plaintiffs in which Plaintiffs were “induced” into entering a
“predatory” loan. Thus, Count V is dismissed as to Nationstar and MERS.
Plaintiffs fail to state a claim for “Identity Theft.”
Count VI alleges a putative claim for “identity theft.” The factual and legal basis for
Plaintiffs “identity theft” claim is difficult to discern from the pleadings. In an unnumbered
paragraph prior to paragraph sixty-three, Plaintiffs allege that “…negotiation of Plaintiff’s note
was in actuality the theft of his identity to his the vast number of ‘toxic waste’ mortgages, notes
and obligations that the enterprise defendants were selling up through their ‘securitization’
chain.” The “defendants” then bundled Plaintiffs’ note with other disguised notes in order to sell
to “unsuspecting investors,” which allowed Defendants to reap significant profits. Compl.,
Allegations, ¶¶ 62-63. Plaintiffs conclude that they are entitled to the profits obtained from this
scheme. Compl., Allegations, ¶ 64.
Plaintiffs provide no legal authority for this claim and no specific factual basis for
Nationstar’s or MERS’ role in this alleged scheme. Even if Plaintiffs are attempting to plead a
cause of action for fraud, they fail to specify how the identity theft occurred, when it occurred, or
who perpetrated the identity theft. Thus, Plaintiffs have failed to state a claim in Count VI and
this count is dismissed.
Plaintiffs fail to state a claim for “Civil RICO.”
Under Count VII, Plaintiffs allege that Defendants use of fraud to induce Plaintiffs and
others into accepting the predatory loans constituted a pattern of racketeering activity, which
brings the conduct into the purview of the “Civil RICO” statute. Defendants counter that
Plaintiffs have failed to plead with sufficient particularity the relevant facts to state a claim for a
RICO violation. While it is unclear what RICO statute Plaintiffs refer to in this count, the Court
analyzes this claim solely under the federal statute. 6
Aside from establishing criminal penalties, the federal RICO statute also “provides a
private right of action for any person ‘injured in his business or property by reason of’ [a RICO
violation].” Crest Const. II, Inc. v. Doe, 660 F.3d 346, 353 (8th Cir. 2011) (internal quotations
and citations omitted); 18 U.S.C. § 1964(c). To demonstrate a violation of civil RICO, the
plaintiff must show “(1) conduct (2) of an enterprise (3) through a pattern (4) of racketeering
activity.” Crest Const. II, Inc., 660 F.3d at 353 (internal quotations and citations omitted). In
order to prove the last two elements, a plaintiff must demonstrate that the defendant committed at
least two racketeering activities that were comprised of specific crimes delineated in the statute.
18 U.S.C. § 1961(1), (5). Pleading a RICO claim triggers the heightened “particularity” standard
At the outset of this count, Plaintiffs make a brief reference to an Ohio Revised Code statute purporting to be a
state counterpart to the federal RICO statute. However, Plaintiffs fail to discuss why an Ohio statute should apply to
transactions that originated under Missouri law for property located in Missouri. Furthermore, Plaintiffs fail to even
mention the statute again after the initial reference. After parsing through the remainder of the count, it appears
Plaintiffs meant to bring this claim under the federal statute.
of Rule 9(b), which requires the “plaintiffs to plead the who, what, when, where, and how: the
first paragraph of any newspaper story.” Crest Const. II, Inc., 660 F.3d at 353.
Plaintiffs’ allegations do not meet this heightened standard. First, Plaintiffs again only
collectively refer to “the Defendants” without identifying which defendant they are referring to
or their role in the alleged “racketeering activity.” Plaintiffs also do not specify the time or place
of these alleged activities nor do they describe specific instances of how the defendants
committed the alleged racketeering activity. Instead of providing factual details in the pleadings,
Plaintiffs merely make legal conclusions such as “[o]n information and belief given the volume
of residential loan transactions solicited and processed by the Defendants, the Defendants have
engage in two or more instances of racketeering activity….” Compl., Allegations, ¶ 70. Such a
conclusory statement cannot satisfy the pleading requirements of Rule 8(b), let alone the
heightened standards of Rule 9(b). Consequently, the Court dismisses this count for failure to
state a claim.
Plaintiffs fail to state a claim for “quiet title” to the Property.
Count VIII of Plaintiffs’ Complaint requests that the Court quiet title to the Property in
Plaintiffs’ favor due to the Defendants’ failure to make disclosures, fraudulent actions, and
“unfair persuasion.” Compl., Allegations, ¶¶ 72-76. In moving for dismissal of this count,
Defendants’ contend that an action to quiet title is a remedial measure that is wholly derivative
upon the preceding counts, which all fail to state a claim. Contrary to the position taken in their
Complaint, Plaintiffs assert, in their response to Defendants’ 12(b)(6) motion, that they are not
requesting quiet title in their favor, but merely requesting the Court to determine which creditor
Plaintiffs should pay.
Under Missouri law, any person claiming title or interest in real property “may institute
an action against any person or persons having or claiming to have any title, estate or interest in
such property....” Mo.Rev.Stat. § 527.150(1). To maintain a cause of action to quiet title, a
plaintiff must plead: (1) ownership of the described real estate; (2) that the defendant claims title
or interest in the subject premises; and (3) such claim is adverse and prejudicial to plaintiff. See
Howard v. Radmanesh, 586 S.W.2d 67, 68 (Mo.Ct.App. 1979) (citing Randall v. St. Albans
Farms, Inc., 345 S.W.2d 220, 221 (Mo. 1961)). While Plaintiffs have pled ownership in the
Property, Plaintiffs have failed to allege that either Nationstar or MERS is claiming title to the
property. In fact, Plaintiffs have only alleged that CTX is foreclosing on the property. Without
asserting that Nationstar or MERS has an interest in the property that is adverse to Plaintiffs,
there is no actual title dispute for the Court to resolve as respects these defendants. Thus, Count
VIII is dismissed as to Nationstar and MERS.
Viewing the factual allegations in the Complaint as true and construing them in the light
most favorable to Plaintiffs, the Court concludes that all claims against Nationstar and MERS
must be dismissed. Defendants’ 12(b)(6) Motion to Dismiss is GRANTED as to all counts.
Dismissal of all counts is without prejudice.
IT IS SO ORDERED.
Date: October 10, 2013
/s/ Greg Kays
GREG KAYS, JUDGE
UNITED STATES DISTRICT COURT
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