CARTWRIGHT v. INDYMAC BANK, F.S.B. et al
OPINION. Signed by Judge Robert B. Kugler on 3/30/2015. (drw)n.m.
NOT FOR PUBLICATION
(Doc. Nos. 7, 9)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
Civil No. 14-6004 (RBK/JS)
INDYMAC BANK, F.S.B. et al.,
KUGLER, United States District Judge:
This matter comes before the Court on the Motion to Dismiss of Defendants IndyMac
Bank, F.S.B. (“IndyMac”), Mortgage Electronic Registration Systems, Inc. (“MERS”), and
HSBC Bank USA, National Association (“HSBC”) (collectively “Defendants”), Plaintiff Carlton
Cartwright’s (“Plaintiff”) Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6) (Doc.
No. 7), as well as Plaintiff’s Motion for Remand to State Court (Doc. No. 9). This action is
based on Plaintiff’s claims involving a mortgage he claims was fraudulently originated. The
Court considers first Plaintiff’s Motion for Remand, in order to assure itself that jurisdiction
exists in this case. Because the Court determines that Plaintiff’s Motion for Remand shall be
denied, the Court considers next Defendant’s Motion to Dismiss, which the Court will grant.
Plaintiff is the owner of the real property located at 261 John F. Kennedy Way,
Willingboro, New Jersey 08046 (the “Property”). (Compl., Identity of Parties and Land ¶ 1.) On
February 8, 2007, Plaintiff entered into a loan transaction with IndyMac by which IndyMac lent
Plaintiff $222,400, which was evidenced by a promissory note (the “Note”) and secured by a
mortgage on the Property (the “Mortgage”). (Id., Pertinent Facts and Law ¶ 1.) MERS was
nominee for IndyMac, as set forth in the Mortgage documents. (See Ex. B to Clark Cert.,
Mortgage at 2.)2
According to Plaintiff, IndyMac was closed by the Office of Thrift Supervision (“OTS”)
on or around July 11, 2008, and the Federal Deposit Insurance Corporation (“FDIC”) was named
as the receiver. (Compl., Identity of Parties and Land ¶ 2.) Allegedly, OneWest Bank, National
Association (“OneWest”) succeeded IndyMac by purchase from the FDIC sometime thereafter.
Soon after the loan origination, the Note and Mortgage were securitized on the secondary
loan market. (Id., Pertinent Facts and Law ¶¶ 19-20.) Then, MERS filed an assignment of the
Mortgage to BAC Home Loan Servicing, L.P. (“BAC”) on April 2, 2010, claiming to be the
On a motion to dismiss under Fed. R. Civ. P. 12(b)(6), the Court must “accept all factual allegations as true and
construe the complaint in the light most favorable to the Plaintiff.” Accordingly, the following facts are taken from
Plaintiff’s Complaint. See Phillips v. Cnty. of Allegheny, 515 F.3d 224, 231 (3d Cir. 2008).
A court may “consider an undisputedly authentic document that a defendant attaches as an exhibit to a motion to
dismiss if the plaintiff’s claims are based on the document.” Pension Ben. Guar. Corp. v. White Consol. Indus., Inc.,
998 F.2d 1191, 1196 (3d Cir. 1993); see also In re Burlington Coat Factory, 114 F.3d 1410, 1426 (3d Cir. 1997)
(noting the inquiry is whether the claims in the complaint are “based” on the extrinsic document). In considering the
pending Motion to Dismiss, the Court will consider the Mortgage (see Ex. B to Clark Cert., Mortgage), and the Note
(see Ex. C to Clark Cert., Note), attached to Defendant’s Motion to Dismiss. Plaintiff’s claims arise from alleged
defects in the transfer of the Note and Mortgage during the years that followed. The parties do not dispute the
authenticity of these documents or the Court’s reliance upon them. Thus, the Court may properly consider
Defendants’ attached materials because failure to do so might permit the Plaintiff to survive the present Motion to
Dismiss simply by failing to attach these documents to his Complaint.
beneficiary of the Mortgage. (See id., Pertinent Facts and Law ¶¶ 41, 50.) Without describing
any transfers in the interim, Plaintiff alleges that on March 12, 2012, Bank of America, N.A.
(“BANA”) assigned the Note and the Mortgage to HSBC. (Id., Pertinent Facts and Law ¶ 64;
id., Fourth Quiet Title Claim/Cause of Action ¶ 115.)
The thrust of the remaining one hundred or more paragraphs in Plaintiff’s rather puzzling
Complaint is that every party’s interest in the Mortgage and Note is or was invalid, and Plaintiff
is entitled to a judgment quieting title to the Property and declaring the Note and Mortgage void
and of no legal effect. (See generally Compl.; id., Prayer for Relief ¶¶ 1-7.) Though it is unclear
how or why Plaintiff contests the validity of IndyMac’s original interest in the Mortgage and
Note, the problems seem to begin in earnest with the assignment from MERS to BAC. Plaintiff
concludes that MERS had no authority to assign the Mortgage and Note to BAC because MERS
had no beneficial interest in the Property. (See generally id., Pertinent Facts and Law ¶¶ 44, 52,
56, 63.) The events taking place between MERS’s alleged assignment to BAC and BANA’s
alleged assignment to HSBC are missing, but Plaintiff goes on to conclude that BANA had no
interest in the Note and Mortgage when it assigned the same to HSBC. (Id., Pertinent Facts and
Law ¶ 64.)
Apparently Plaintiff’s position, as referenced in his first claim, is that the only “true”
owners of the Property interest are investors, “each holding a proportional and typically
miniscule interest in [Plaintiff’s] note and security instrument.” (Id., First Quiet Title
Claim/Cause of Action ¶ 88.) Thus, MERS and HSBC have no interest in the Mortgage and
Note, and are not entitled to Plaintiff’s mortgage payments. (Id., First Quiet Title Claim/Cause
of Action ¶ 90.) The second and third claims are much of the same, (see id., Second Quiet Title
Claim/Cause of Action; id., Third Quiet Title Claim/Cause of Action), and the fourth claim
additionally challenges IndyMac’s ability to transfer “the contractual relationship with the
borrower” without “fulfilling the statute of frauds formalities prior to the April 2, 2010
assignment.” (Id., Fourth Quiet Title Claim/Cause of Action ¶ 117.) For all the reasons
expressed in the four quiet title claims, Plaintiff believes he is entitled to have the interests of
IndyMac, MERS, and HSBC in the Note and Mortgage declared void, to have Defendants
declared disqualified from enforcing Plaintiff’s mortgage, to have Defendants ordered to
summon the “true current owners consisting of holders of mortgage-backed securities owning at
least a majority interest in Plaintiff’s Note and [Mortgage]” to this case, and to have the Court
remove all clouds upon Plaintiff’s Property. (Id., Prayer for Relief.)
Plaintiff filed his original Complaint in the Burlington County Superior Court, Burlington
County, New Jersey on August 16, 2014. (Notice of Removal (“NOR”) (Doc. No. 1) ¶ 1.)
Defendants were all served with the initial pleadings between August 26, 2014, and September 5,
2014. (Id. ¶ 2.) Thereafter, Defendants all timely removed this action under 28 U.S.C. § 1441,
based on this Court’s diversity jurisdiction pursuant to 28 U.S.C. §§ 1332(a) and 1367, on
September 25, 2014. (See id. ¶ 2-3.) In Defendants’ Notice of Removal they averred that there
was complete diversity between the citizenship of the parties, (id. ¶ 3),3 and the amount in
controversy in this matter exceeds $75,000. (Id. ¶ 4.)
On October 2, 2014, Defendants filed the present Motion to Dismiss the Complaint.
(Doc. No. 7.) Plaintiff failed to respond to Defendants’ Motion to Dismiss, and instead filed the
Specifically, Defendants claim that OneWest Bank, National Association, the successor by purchase of certain
assets from the Federal Deposit Insurance Corporation (“FDIC”), as receiver for IndyMac, is a national banking
association with its main office located in California, MERS is a Delaware corporation with its principal place of
business located in Virginia, HSBC is a national banking association with its main office located in Virginia, and
Plaintiff is a citizen of New Jersey.
instant Motion for Remand to State Court on October 22, 2014. (Doc. No. 9.) In support of his
Motion, Plaintiff argues that there is no federal question jurisdiction, and diversity jurisdiction is
not available to national banks. Defendants response in opposition to Plaintiff’s Motion,
submitted on November 3, 2014 (Doc. No. 10), was the last submission in this matter.
Because the Court finds that the two motions in this case have been fully and sufficiently
briefed by the parties, it turns to the merits of the parties’ motions.
a. Motion for Remand
Federal Courts are courts of limited jurisdiction and may only decide cases as authorized
by the Constitution. Kokkonen v. Guardian Life Ins., 511 U.S. 375, 377 (1994). Congress has
authorized federal subject matter jurisdiction in civil suits where the amount “in controversy
exceeds the sum or value of $75,000” and the parties are “citizens of different States.” 28 U.S.C.
§ 1332(a). The statutory requirement that parties be citizens of different states means that
complete diversity must exist; if any two adverse parties are co-citizens, there is no jurisdiction.
See Strawbridge v. Curtiss, 7 U.S. 267 (1806); State Farm Fire & Cas. Co. v. Tashire, 386 U.S.
523, 531 (1967).
Under 28 U.S.C. § 1441, a defendant may remove an action filed in state court to a
federal court with original jurisdiction over the action. Once an action is removed, a plaintiff
may challenge removal by moving to remand the case back to state court. To defeat a plaintiff’s
motion to remand, the defendant bears the burden of showing that the federal court has
jurisdiction to hear the case. Abels v. State Farm Fire & Cas. Co., 770 F.2d 26, 29 (3d Cir.
1985). Where the decision to remand is a close one, district courts are encouraged to err on the
side of remanding the case back to state court. See id. (“Because lack of jurisdiction would
make any decree in the case void and the continuation of the litigation in federal court futile, the
removal statute should be strictly construed and all doubts should be resolved in favor of
b. Motion to Dismiss
Rule 12(b)(6) allows a court to dismiss an action for failure to state a claim upon which
relief can be granted. Fed. R. Civ. P. 12(b)(6). When evaluating a motion to dismiss, “courts
accept all factual allegations as true, construe the complaint in the light most favorable to the
plaintiff, and determine whether, under any reasonable reading of the complaint, the plaintiff
may be entitled to relief.” Fowler v. UPMC Shadyside, 578 F.3d 203, 210 (3d Cir. 2009)
(quoting Phillips, 515 F.3d at 233). In other words, a complaint is sufficient if it contains enough
factual matter, accepted as true, to “state a claim to relief that is plausible on its face.” Ashcroft
v. Iqbal, 556 U.S. 662, 678 (2009); Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007).
It is not for courts to decide at this point whether the moving party will succeed on the merits,
but “whether they should be afforded an opportunity to offer evidence in support of their
claims.” In re Rockefeller Ctr. Prop., Inc., 311 F.3d 198, 215 (3d Cir. 2002). Yet, while
“detailed factual allegations” are not necessary, a “plaintiff’s obligation to provide the ‘grounds’
of his ‘entitle[ment] to relief’ requires more than labels and conclusions, and a formulaic
recitation of the elements of a cause of action will not do[.]” Twombly, 550 U.S. at 555; see also
Iqbal, 556 U.S. at 678-79.
To make this determination, a court conducts a three-part analysis. Santiago v.
Warminster Twp., 629 F.3d 121, 130 (3d Cir. 2010). First, the court must “tak[e] note of the
elements a plaintiff must plead to state a claim.” Id. (quoting Iqbal, 556 U.S. at 675). Second,
the court should identify allegations that, “because they are no more than conclusions, are not
entitled to the assumption of truth.” Santiago, 629 F.3d at 131 (quoting Iqbal, 556 U.S. at 680).
Finally, “where there are well-pleaded factual allegations, a court should assume their veracity
and then determine whether they plausibly give rise to an entitlement for relief.” Santiago, 629
F.3d at 131 (quoting Iqbal, 556 U.S. at 680). This plausibility determination is a “contextspecific task that requires the reviewing court to draw on its judicial experience and common
sense.” Iqbal, 556 U.S. at 679. A complaint cannot survive where a court can only infer that a
claim is merely possible rather than plausible. Id.
a. Motion for Remand
Because the Court must satisfy itself of its own jurisdiction before it decides any other
substantive matters, it will address Plaintiff’s Motion for Remand First. In his Motion for
Remand, Plaintiff asserts several reasons why he believes remand is appropriate, none of which
the Court finds either relevant or persuasive.
First, Plaintiff argues that the Complaint must be remanded because there is no federal
question jurisdiction over the quiet title claims. (Motion for Remand (“MFR”) at 13-15.)
Though the Court agrees there is no federal question jurisdiction pursuant to 28 U.S.C. § 1331,
Defendants did not invoke § 1331 in support of this Court’s jurisdiction as part of their Notice of
Removal. Rather, Defendant’s specifically invoke 28 U.S.C. § 1332, noting that this Court has
diversity jurisdiction over this matter. (NOR ¶ 3.)
Plaintiff also apparently contests the exercise of diversity jurisdiction in this case, though
his reasoning is unclear. (MFR at 15-17.) He seems to argue that national banks cannot remove
suits to which they are parties merely on account of being federal corporations, and cites Leather
Mfrs.’ Bank v. Cooper, 120 U.S. 778 (1887) and 28 U.S.C. § 1348 in support of his argument.
(MFR at 16.)
Leathers Mfrs.’ Bank dealt with a federal law passed in 1882 that restricted national
banks from invoking federal jurisdiction “solely ‘on the ground of their Federal origin,’” and
placed them on the “same footing as the banks of the state where they were located.” Wachovia
Bank v. Schmidt, 546 U.S. 303, 310 (2006) (quoting Petri v. Commercial Nat’l Bank of Chicago,
142 U.S. 644, 649 (1892); Leather Mfrs.’ Bank, 120 U.S. at 780). That principle remains in
effect in § 1348. See Wachovia Bank, 546 U.S. 310-11. Thus, national banking associations are
to be “deemed citizens of the States in which they are respectively located,” and they do not have
access to federal courts merely by virtue of being national banks. See § 1348; see also Wachovia
Bank, 546 U.S. at 318 (holding that national banking associations are “deemed citizens” of “the
State designated in its articles of association as its main office.”)4 Thus, Leather Mfrs.’ Bank
does not foreclose the Court’s exercise of diversity jurisdiction over the national banking
association defendants in this case.
There is no indication that Defendants have attempted to remove this case based solely on
the fact that OneWest and HSBC are national banking associations. Instead, Defendants clearly
invoke diversity jurisdiction, pursuant to § 1332(a), in favor of removal. With respect to their
allegations of the parties’ citizenship, Defendants claim in their Notice of Removal that Plaintiff
is a citizen of New Jersey, OneWest, receiver for IndyMac, is a national banking association with
its main office located in California, MERS is a Delaware corporation with its principle place of
In fact, while Wachovia Bank clarified where national banking associations are deemed to be citizens, it also
accepted outright that they were to be treated as any other corporation for diversity purposes. See Wachovia Bank,
546 U.S. at 306, 308.
business located in Virginia,5 and HSBC is a national banking association with its main office
located in Virginia. Based on these averments as to the citizenship of the parties, it appears that
complete diversity exists between the Plaintiff and all Defendants.
Further, Defendants pled that the amount in controversy exceeds $75,000, (NOR ¶ 4),
and based on the fact that Plaintiff has claimed the Note was originally worth $222,400, (Compl.,
Pertinent Facts and Law ¶ 1), the Court has no reason to doubt that the amount in controversy
requirement in § 1332(a) has not been satisfied.
Because the Court finds that the prerequisites for diversity jurisdiction pursuant to §
1332(a) have been met, it will deny Plaintiff’s Motion for Remand and proceeds to discuss
Defendants’ Motion to Dismiss.6
b. Motion to Dismiss
All four of Plaintiff’s Counts are quiet title claims. Under New Jersey law, quiet title
actions are brought when ownership or title to property is disputed or contested. N.J. Stat. §
2A:62-1. This may include situations where a property owner seeks to resolve whether a
putative assignee of an otherwise valid mortgage properly holds the mortgage. See Suser v.
Wachovia Mortg., FSB, 433 N.J. Super. 317, 324-25 (App. Div. 2013).
When a corporation is a party, it “shall be deemed to be a citizen of every state and foreign state by which it has
been incorporated and of the state or foreign state where it has its principal place of business ….” 28 U.S.C.
Plaintiff also apparently raises a standing challenge to OneWest’s representation of IndyMac’s interests in this
case. (See MFR at 17.) He argues there is no documentary evidence attached to the Complaint or Defendants’
papers that indicate OneWest has an interest in Plaintiff’s Note and Mortgage. (Id.) Yet, Plaintiff’s own Complaint
acknowledges that OneWest acquired IndyMac after its failure, (Compl., Identity of the Parties and Land ¶ 2), and
Defendants have stated that OneWest is “receiver for [IndyMac].” (NOR.) Despite Plaintiff’s attempt to create an
ambiguity over which “assets” OneWest purchased from the FDIC, without any evidentiary support, his assertions
are conclusory and do not call into question OneWest’s interests in this litigation. As receiver for IndyMac, it is
clear that, to the extent Plaintiff is attempting to invalidate IndyMac’s interests in the Note and Mortgage, OneWest
faces an actual or imminent injury based on this action. See Monsanto Co. v. Geertson Seed Farms, 561 U.S. 139,
While the Court can follow Plaintiff’s claims in broad strokes, such as, that Plaintiff
contests Defendants’ interests in his Property and the validity of the various assignments of the
Note and Mortgage, Plaintiff has either left out, or has failed to clearly articulate, important
details in his Complaint which would lend support to his claims and give rise to the relief he
For example, it is unclear why or even whether Plaintiff contests the validity of
IndyMac’s own interest in the Note and Mortgage. Nor does Plaintiff clearly address what
interest he claims IndyMac or MERS currently have in the Note and Mortgage, despite claiming
HSBC is the only party with a presently recorded interest in Plaintiff’s Property. (Compl.,
Fourth Quiet Title Claim/Cause of Action ¶ 115.) There are also significant gaps in Plaintiff’s
timeline—namely the time between OneWest’s acquisition of IndyMac’s assets and the alleged
assignment by MERS to BAC in 2010 and the time between that assignment and the assignment
between BANA and HSBC in 2012. Though Plaintiff discusses various legal rules or doctrines,
such as the Uniform Commercial Code, the Statute of Frauds, and 28 U.S.C. § 860F, the Court
cannot follow how these principles apply to Plaintiff’s claims.
Moreover, Plaintiff has included
numerous paragraphs in his Complaint that were apparently obtained or informed by “the
internet, Law Library, [and the] Securities and Exchange Commission Web Site,” (id., Pertinent
Facts and Law ¶ 67), and set forth a lengthy dissertation on how loans are transferred on the
secondary market, but fails to adequately connect this volume of information to his actual claims.
Finally, and fatally for Plaintiff’s claims, he fails to allege factual matter which would suggest
Defendants’ interests in the Note and Mortgage were ever invalid, or that they were unable to
assign the Note and Mortgage during the period covered by the Complaint.7
What the Court, and Defendants, are left with when trying to make sense of the
Complaint are Plaintiff’s numerous legal conclusions that IndyMac, MERS, and HSBC held no
beneficial interest in the Note and Mortgage, and all transfers after the origination of the same
were invalid. This is insufficient to support Plaintiffs action to quiet title. See Iqbal, 556 U.S. at
678 (“Threadbare recitals of the elements of a cause of action, supported by mere conclusory
statements, do not suffice.”) (citing Twombly, 550 U.S. at 555); see also Iqbal, 556 U.S. at 678
(noting that Rule 8 requires “more than an unadorned, the-defendant-unlawfully-harmed-me
accusation.) (citing Twombly, 550 U.S. at 555). While Plaintiff may dispute the interest in his
Property held by each Defendant, he must offer factual allegations which lend some support to
his position in order to maintain his claims.
Because Plaintiff has not adequately alleged claims to quiet title against Defendants at
this time, the Court will grant Defendants’ Motion to Dismiss. The Complaint will be dismissed
in its entirety without prejudice.
LEAVE TO AMEND
Normally, “if a complaint is subject to a Rule 12(b)(6) dismissal, a district court must
permit a curative amendment unless such an amendment would be inequitable or futile.”
Phillips, 515 F.3d at 245 (citing Alston v. Parker, 363 F.3d 229, 235 (3d Cir. 2004)). Indeed,
even when “a plaintiff does not seek leave to amend a deficient complaint after a defendant
Nor, as Defendants note, has Plaintiff addressed the language in the Note and the Mortgage, which expressly
permits multiple assignments of the same without Plaintiff’s consent. (See Mortgage at 11 (“The Note or a partial
interest in the Note (together with this Security Instrument) can be sold one or more times without prior notice to
Borrower.”); Note at 1 (“I understand that the Lender may transfer this Note. The Lender or anyone who takes this
Note by transfer and who is entitled to receive payments under this Note is called the ‘Note Holder.’”).)
moves to dismiss it, the court must inform the plaintiff that he has leave to amend within a set
period of time, unless amendment would be inequitable or futile.” Grayson v. Mayview State
Hosp., 293 F.3d 103, 108 (3d Cir. 2002).
Here, the Court is unable to conclude that Plaintiff could not amend his Complaint to
properly raise a claim to quiet title against Defendants. Therefore, in accordance with the Order
accompanying this Opinion, Plaintiff shall be granted time to file a Motion for Leave to File an
Amended Complaint pursuant to Fed. R. Civ. P. 15(a)(2), and consistent with L. Civ. R. 7.1(f).8
However, Plaintiff is reminded that Rule 8 requires that a pleading contain, at a minimum, “a
short and plain statement of the grounds for the court's jurisdiction,” and “a short and plain
statement of the claim showing that the pleader is entitled to relief,” and that “[e]ach allegation
must be simple, concise, and direct.” Fed. R. Civ. P. 8(a)(1)-(2), (d)(1).
For the foregoing reasons, Plaintiff’s Motion for Remand will be DENIED and
Defendants’ Motion to Dismiss will be GRANTED. Plaintiff’s Complaint will be DISMISSED
WITHOUT PREJUDICE. An accompanying Order shall issue.
s/ Robert B. Kugler
ROBERT B. KUGLER
United States District Judge
Specifically, if Plaintiff files a Motion for Leave to Amend Complaint, he shall attach to the Motion a copy of the
proposed Amended Complaint, as required by Loc. Civ. R. 7.1(f).
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