Emmons v. Bank of America Corporation N.A. et al
Filing
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ORDER denying 8 defendants' Motion to Dismiss - plaintiff is directed to file an Amended Complaint providing additional factual details related to his claims on or before 9/19/16 in Case No. 15-cv-0799; and granting 4 defendants' motion to consolidate case and consolidating Case No. 13-1055 with Case No. 15-799. The Clerk of the Court shall enter this Order in each of the consolidated cases. Case No. 15-799 shall be the lead case and Case No. 13-1055 shall be the subordinate case. All future filings shall be made only in the lead case, and each filing shall clearly indicate the relevant case number. No filings will be permitted in the subordinate case. The parties are advised that consolidation does not merge the cases into a single action, and each will retain its separate character. However, the Court will enter a single scheduling order for both cases. Signed on 8/30/16 by District Judge Fernando J. Gaitan, Jr. (Enss, Rhonda)
IN THE UNITED STATES DISTRICT COURT FOR THE
WESTERN DISTRICT OF MISSOURI
WESTERN DIVISION
CHARLES EMMONS,
Plaintiff,
v.
BANK OF AMERICA, N.A.,
PRLAP, INC., and OCWEN FINANCIAL
CORPORATION and JUDITH KUHLMAN
Defendants.
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NO. 15-CV-00799-FJG
ORDER
Currently pending before the Court is defendant Bank of America, N.A.’s
(“BANA”) and Ocwen Financial Corporation’s (“Ocwen”) Motion to Consolidate Cases
(Doc. # 4) and Defendants’ Motions to Dismiss (Doc. # 8).
I.
BACKGROUND
On December 4, 2007, Judith A. Kuhlman and Paul W. Kuhlman, entered into a
promissory note in the principal amount of $165,243.12. The Note was secured the
same day by a Deed of Trust. The Note and Deed of Trust related to real property
located at 3000 NE 76th Street, Gladstone, Missouri 64119 (“Tract 1”). There is a parcel
of property adjoining the northern border of Tract 1, which is also the subject of the
lawsuit. This parcel will be referred to as the “Adjacent Property” or “Tract 2.” A
residence straddles both of these properties. Approximately 40% of the residence is
located on Tract 1 and the remaining 60% is located on Tract 2.
Mr. Kuhlman died on August 9, 2010. On or about April 2012, the Kuhlmans
defaulted on the payment obligations under the Note. In May 2013, plaintiff states that
he contacted Judith Kuhlman about the property located at 3000 N.E. 76th Street,
Gladstone, Missouri. Plaintiff states he agreed to make all necessary repairs to the
property in exchange for equity in the property. Plaintiff states that he agreed to take a
Quitclaim Deed to the property and assume any and all responsibility for liens on the
property, finish repairs at his own expense and assist Judith Kuhlman in other matters.
Plaintiff also alleges that Judith Kuhlman does not recall signing any note or deed or
trust regarding securing this property for a mortgage to Bank of America. Plaintiff states
that since acquiring the properties, he has furnished goods and services to the
Residence thereby making significant, material, valuable and beneficial improvements
to the property. Plaintiff alleged that Judith Kuhlman quitclaimed her interests in the
property to him on June 1, 2013 and he filed the quitclaim with the Clay County
Recorder of Deeds on June 3, 2013. On June 7, 2013 plaintiff filed a “Petition to
Remove Lien” in the Clay County District Court. Defendants removed the first case to
this Court on October 28, 2013. (Case No. 13-1055). In that case, plaintiff Charles
Emmons sued Bank of America, PRLAP, Inc. and Ocwen Financial Corp. for Quiet Title
and Quantum Meruit. On May 5, 2014, Bank of America filed a counterclaim against
plaintiff Charles Emmons and a third-party complaint against Judith Kuhlman and other
entities. On July 7, 2014 Bank of American and Ocwen Financial Corporation filed a
Motion to Dismiss for Failure to State a Claim. Plaintiff’s counsel failed to file a
response to the motion or to an Order to Show Cause. On September 3, 2014, the
Court dismissed plaintiff’s First Amended Complaint in Case No. 13-1055. The claims
which remain in that case are Bank of America’s counterclaim for Quiet Title against
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Charles Emmons and Bank of America’s Third-Party Complaint against Emmons, Judith
Kuhlman and the Kuhlman Estate for Reformation of Instruments, Quiet Title, Judicial
Foreclosure and Breach of Contract. On October 1, 2015, the Court stayed the
proceedings in Case No. 13-1055 in order to give the parties an opportunity to resolve
the matter. The parties have been unsuccessful in resolving the litigation.
On September 2, 2015, Charles Emmons filed a petition in the Circuit Court of Clay
County to Review Lien and Quiet Title and in the alternative for Compensation Quantum
Meruit. Named as defendants were Bank of America, Ocwen, PRLAP, Inc. and Judith
Kuhlman. Defendants removed that case to this Court on October 14, 2015 (Case No.
15-799). Bank of America and Ocwen have filed the instant Motion to Dismiss this
action and have also moved to consolidate Case No. 15-799 with Case No. 13-1055.
II.
STANDARD
To survive a motion to dismiss under 12(b)(6), Aa complaint must contain sufficient
factual matter, accepted as true, to state a claim for relief that is plausible on its face.@
Ashcroft v. Iqbal, 556 U.S. 662,129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009)
(quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167
L.Ed.2d 929 (2007)). A pleading that merely pleads Alabels and conclusions@ or a
Aformulaic recitation@ of the elements of a cause of action, or Anaked assertions@
devoid of Afurther factual enhancement@ will not suffice. Id. (quoting Twombly).
ADetermining whether a complaint states a plausible claim for relief will . . . be a
context-specific task that requires the reviewing court to draw on its judicial
experience and common sense.@ Id. at 1950. Under Fed. R. Civ. P. 12(b)(6) we must
accept the plaintiff=s factual allegations as true and grant all reasonable inferences in
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the plaintiff=s favor. Phipps v. FDIC, 417 F.3d 1006, 1010 (8th Cir. 2005).
III.
DISCUSSION
A. Defendants’ Motion to Dismiss
Defendants state that on December 4, 2007, Judith A Kuhlman and Paul W.
Kuhlman entered into a promissory note. Defendants state that the promissory note
was secured by a Deed of Trust. The Note and the Deed of Trust relate to real property
commonly referred to as 3000 NE 76th Street, Kansas City, Missouri 64119 (“Tract 1”).
The parcel of property adjoining the northern border of the Property is also the subject
of the lawsuit (“Tract 2”). Defendants argue that plaintiff is unable to assert a claim for
quiet title, because he “has made the cardinal error of attempting to use an alleged
infirmity in another party’s interest to establish his own interest.” (Suggestions in
Support of Motion to Dismiss, p. 4).
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 for 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.
White v. CTX Mortgage, LLC, No. 13-0335-CV-W-DGK, 2014 WL 1806705, *6
(W.D.Mo. May 7, 2014). Plaintiffs must plead “facts showing they, in fact, have a
superior title to the property at issue.” Dufrenne v. Citimortgage, Inc., No. 4:09CV1524
HEA, 2009 WL 5103275, *3 (E.D.Mo. Dec.17, 2009). Defendants state that while a
quitclaim deed is effective for purposes of conveying title, an individual who takes title
by quitclaim deed does so subject to all outstanding interests and liens. Because
Emmons interest in the property is subject to a first priority lien interest due to the Deed
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of Trust and the default under the Loan, plaintiff has failed to adequately allege
superiority of title.
In opposition, plaintiff states that he has alleged that he “acquired fee simple
interest in these Properties (Tract 1 and Tract 2) by deed from Defendant Judith A.
Kuhlman in exchange for good and valuable consideration received by her.” (Petition,
Doc. 1-1, p.3 ¶ 7). Plaintiff also states that “[s]ince acquiring the Properties Plaintiff
furnished goods and services to the Residence thereby making significant, material,
valuable, and beneficial improvements to the Property.” (Petition, p. 3, ¶ 10). Plaintiff
requests that the Court quiet title to the above described properties in favor of Plaintiff
and extinguish all purported liens Bank of America or others might claim against the
properties.
In Augustine v. Bank of America, N.A., No. 4:11CV2251CDP, 2012 WL 1379654
(E.D.Mo. Apr.20, 2012), the Court stated:
Missouri law follows the lien theory regarding mortgages, which means
that “a grantor in a deed of trust does not convey the title to a trustee, but
creates a lien on the land to secure the payment of debt, and that the
grantor continues [as] the owner of the land until entry for breach of the
condition of the deed of trust.”
Id. at *3 (quoting R.L. Sweet Lumber Co. v. E.L. Lane Inc., 513 S.W.2d 365, 369
(Mo.1974)). In that case, the Court found that this meant that the plaintiff held legal title
to his property, but his interest was subject to a lien held by the mortgagee. The Court
found that if plaintiff was correct that the defendants were not lawfully entitled to appoint
a successor trustee and initiate foreclosure on the property because there was no legal
assignment of the deed of trust or note, then the plaintiff’s interest would in fact be
superior to that of the defendants.
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Upon review of the plaintiff’s petition, the defendants allege that the Note and the
Deed of Trust relate to Tract 1, but state nothing regarding Tract 2, other than it is the
subject of the lawsuit. On the other hand, plaintiff has alleged in his Petition that he
acquired fee simple interest in both Tracts 1 and 2 by deed from Judith Kuhlman. The
Court finds that plaintiff has sufficiently alleged the elements necessary to state a claim
for quiet title because he has alleged that he acquired fee simple title in both Tracts of
land and that his interest is superior to that of defendants. With regard to plaintiff’s
claim for Quantum Meruit, defendants argue that plaintiff has only recited the elements
of this cause of action, but had not described in any detail what services or materials he
has provided that have improved the property nor alleged any facts relating to
defendants requesting or approving the services. The Court finds that plaintiff has only
barely alleged facts relating to this claim. However, rather than dismiss this Court, the
Court will rather allow plaintiff an opportunity to further expand upon the factual basis for
this claim. Accordingly, the Court hereby DENIES defendants’ Motion to Dismiss (Doc.
#8 ). Plaintiff is directed to file an Amended Complaint providing additional factual
details related to his claims on or before September 19, 2016.
B. Motion to Consolidate Cases
Defendants have moved to consolidate Case No. 13-1055 (the “First Case”) with
Case No. 15-99 (the “Instant Case”), because they involve many of the same legal and
factual issues. Pursuant to Fed.R.Civ.P. 42(a)(2), a court may consolidate actions if
they involve a common question of law or fact. See In the Matter of the Complaint of
American River Transportation Company for Exoneration From, or Limitation of,
Liability, No. 4:11-CV-523(CEJ), 2016 WL 1615677, *3 (E.D.Mo. Apr. 22, 2016).
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Defendants state that in both cases, the plaintiff sued Bank of America, Ocwen and
PRLAP to remove lien and quiet title to real property located at 3000 NE 76th Street,
Gladstone, Missouri or in the alternative for compensation quantum meruit. Defendants
also state that consolidation of the two actions would advance the interests of judicial
economy of the Court and the parties and would minimize the likelihood of inconsistent
results. Defendants state that all parties consent to the consolidation of these actions.
Accordingly, for good cause shown and with no opposition indicated, the Court hereby
GRANTS Defendants’ Motion to Consolidate and CONSOLIDATES Case No. 13-1055
with Case No. 15-799. The Clerk of the Court shall enter this Order in each of the
consolidated cases. Case No. 15-799, shall be the lead case and Case no. 13-1055,
shall be the subordinate case. The parties are advised that all future filings shall be
made only in the lead case, and each filing shall clearly indicate the relevant case
number. No filings will be permitted in the subordinate case. The parties are advised
that consolidation does not merge the cases into a single action, and each will retain its
separate character. However, the Court will enter a single scheduling order for both
cases.
IV.
CONCLUSION
Accordingly, for the reasons stated above, the Court hereby DENIES Defendants’
Motion to Dismiss (Doc. # 8) and GRANTS the Motion to Consolidate Cases (Doc. # 4).
Plaintiff is directed to file an Amended Complaint in Case No. 15-799 on or before
September 19, 2016.
Date: August 30, 2016
Kansas City, Missouri
S/ FERNANDO J. GAITAN, JR.
Fernando J. Gaitan, Jr.
United States District Judge
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