McGhie et al v. Trustee Services of The Carolinas Substitute Trustee, LLC et al

Filing 42

MEMORANDUM AND RECOMMENDATIONS on 19 , 21 , 30 , 33 MOTIONS to Dismiss. ( Objections to M&R due by 7/29/2016). ORDER granting 32 MOTION to Strike Plaintiff's Amended Complaint with Prejudice. The Amended Complaint (Doc. 27) is STRICKEN; denying 36 MOTION to Amend/Correct Complaint. Signed by Magistrate Judge David S. Cayer on 7/12/2016. (Pro se litigant served by US Mail.) (tmg)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF NORTH CAROLINA
CHARLOTTE DIVISION
CIVIL NO. 3:16-CV-44-MOC-DSC
ERIC MCGHIE et al.,

)
)
Plaintiffs,
)
)
v.
)
)
TRUSTEE SERVICES OF THE
)
CAROLINAS SUBSTITUTE TRUSTEE, )
LLC et. al.,
)
)
Defendants.
)

MEMORANDUM AND RECOMMENDATION AND ORDER
THIS MATTER is before the Court on the following Motions:
1. Defendants Select Portfolio Services Inc., First Franklin Mortgage Loan Trust, Mortgage
Electronic Registration Systems, U.S. Bank National Association, Bank of America, First Franklin
Mortgage, First Franklin Loan Service, and John T. Benjamin Jr.’s “Motion to Dismiss …
Complaint …” (document #19);
2. Defendants “Trustee Services of Carolina LLC, Brock & Scott PLLC, Devin Chidester,
and Sarah Banks’ Motion to Dismiss” (document #21);
3. Defendants “Trustee Services of Carolina LLC, Brock & Scott PLLC, Devin Chidester,
and Sarah Banks’ Motion to Dismiss Amended Complaint” (document #30);
4. Defendants Select Portfolio Services Inc., First Franklin Mortgage Loan Trust, Mortgage
Electronic Registration Systems, U.S. Bank National Association, Bank of America, First Franklin
Mortgage, First Franklin Loan Service, and John T. Benjamin Jr.’s “Motion to Strike … Amended

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Complaint …” (document #32);
5. Defendants Select Portfolio Services Inc., First Franklin Mortgage Loan Trust, Mortgage
Electronic Registration Systems, U.S. Bank National Association, Bank of America, First Franklin
Mortgage, First Franklin Loan Service, and John T. Benjamin Jr.’s “Motion to … Dismiss …
Amended Complaint …” (document #33);
6. Pro se Plaintiffs’ “Motion to Ammend [Sic] Complaint” (document #36); as well as the
parties’ associated briefs and exhibits.
This matter was referred to the undersigned Magistrate Judge pursuant to 28 U.S.C. §
636(b)(1), and these Motions are now ripe for the Court’s consideration.
Having fully considered the arguments, the record, and the applicable authority, the Court
will deny Plaintiffs’ Motion to Amend and grant Defendants’ Motion to Strike. The undersigned
respectfully recommends that Defendants’ Motions to Dismiss be granted, as discussed below.

I. FACTUAL BACKGROUND AND PROCEDURAL HISTORY
This lawsuit is similar to numerous others filed in this Court purporting to appeal a
foreclosure order entered in state court. The Court takes judicial notice of the public records
referenced in Plaintiff’s filings and attached to Defendants’ Motions and briefs. On October 31,
2006, Plaintiff Eric McGhie signed an Adjustable Rate Note in the amount of $393,100.00 (the
“Note”) to First Franklin, a Division of National City Bank (“First Franklin”). Plaintiffs Eric
McGhie and his wife Shirley McGhie signed a Deed of Trust dated October 31, 2006 that secured
the loan amount of $393,100.00 on the Property. (the “Deed of Trust”). First Franklin is named
as the lender.
On May 1, 2009, Plaintiffs entered into a Modification Agreement Adding Cosigner.
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Plaintiffs were required to pay monthly payments pursuant to the modified Note and Deed of Trust.
Through a series of indorsements and transfers, U.S. Bank National Association, as trustee
for registered holders of First Franklin Mortgage Loan Trust Mortgage Loan Asset-Backed
Certificates, Series 2006-FF18 (“U.S. Bank”) became the current holder of the Note.
Plaintiffs subsequently defaulted under the terms of the Note and Deed of Trust.
Foreclosure proceedings began in 2015. On December 16, 2015, a Foreclosure Order was entered
in Mecklenburg County Superior Court.
The Property was sold at a foreclosure sale and no upset bids were submitted.
On January 27, 2016, Plaintiffs filed a nearly incomprehensible Complaint based upon the
notion that they are entitled to “an order striking … motion to foreclose” in the state court
proceeding. Document #1 at 1.
On January 29, 2016, the Substitute Trustee, Trustee Services of Carolina, LLC conveyed
the property to the highest bidder.
On March 17 and 18, 2016, Defendants filed their initial Motions to Dismiss” (documents
##19 and 21).
On April 11, 2016, Plaintiff Eric McGhie’s “Amended Motion to Vacate Judgement allege
Fraud on the Court Rights Violations Under Deed of Trust Motion to Vacate Judgement, Set Aside
Sale Due to Lack of Jurisdiction and Violating Constitutional and Statutorily Required Notice”
[sic] (“Plaintiff’s Motion to Vacate”) and U.S. Bank’s Motion for Rule 11 sanctions and a
gatekeeper order were heard in Mecklenburg County Superior Court.
On April 21, 2016, the state court denied Plaintiff’s Motion to Vacate. The Court also
entered an Order sanctioning Plaintiff Eric McGhie for his repeated frivolous filings in the

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Foreclosure Proceeding. Plaintiff was ordered to pay U.S. Bank’s attorneys’ fees and prohibited
from filing any documents with the Mecklenburg County Clerk of Court absent a certification by
a licensed attorney.
That same day, Plaintiffs filed their Amended Complaint (document #27).
On April 22, 2016, Plaintiffs filed a “Motion for Temporary Restraining Order and
Preliminary Injunction” (document #28), which was denied by District Judge Max O. Cogburn, Jr.
on April 29, 2016. See “Order” (document #29). Judge Cogburn “note[d] that the Amended
Complaint appears to be identical to the original Complaint.” Id. at 3. Judge Cogburn also “note[d]
that foreclosure actions brought under state law do not give rise to federal question subject-matter
jurisdiction.” Id. (citing Parker v. Investire, LLC, No. CV JKB-16-256, 2016 WL 687496, at *1
(D. Md. Feb. 19, 2016) (citing McNeely v. Moab Tiara Cherokee Kituwah Nation Chief, 2008 WL
4166328 (W.D.N.C 2008) (nothing in “simple foreclosure action of real property...suggests the
presence of a federal question.”))).
On May 5, 2016, Defendants filed their respective Motions to Strike and Dismiss the
Amended Complaint.
On June 10, 2016, Plaintiffs filed their Motion to Amend, attaching an Amended Complaint
that appears indistinguishable from their previous Complaints.
The parties’ Motions are now ripe for disposition.

II. DISCUSSION
In reviewing a Rule 12(b)(6) motion, “the court should accept as true all well-pleaded
allegations and should view the complaint in a light most favorable to the plaintiff.” Mylan Labs.,
Inc. v. Matkari, 7 F.3d 1130, 1134 (4th Cir. 1993). The plaintiff’s “[f]actual allegations must be
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enough to raise a right to relief above the speculative level.” Bell Atlantic Corp. v. Twombly, 550
U.S. 544, 555 (2007). “[O]nce a claim has been stated adequately, it may be supported by showing
any set of facts consistent with the allegations in the complaint.” Id. at 563. A complaint attacked
by a Rule 12(b)(6) motion to dismiss will survive if it contains enough facts to “state a claim to
relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly,
550 U.S. at 570). “A claim has facial plausibility when the plaintiff pleads factual content that
allows the court to draw the reasonable inference that the defendant is liable for the misconduct
alleged.” Id.
In Iqbal, the Supreme Court articulated a two-step process for determining whether a
complaint meets this plausibility standard. First, the court identifies allegations that, because they
are no more than conclusions, are not entitled to the assumption of truth. Id. “Threadbare recitals
of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Id.
(citing Twombly, 550 U.S. at 555) (allegation that government officials adopted challenged policy
“because of” its adverse effects on protected group was conclusory and not assumed to be true).
Although the pleading requirements stated in “Rule 8 [of the Federal Rules of Civil Procedure]
mark[] a notable and generous departure from the hyper-technical, code-pleading regime of a prior
era ... it does not unlock the doors of discovery for a plaintiff armed with nothing more than
conclusions.” Id. at 678-79.
Second, to the extent there are well-pleaded factual allegations, the court should assume
their truth and then determine whether they plausibly give rise to an entitlement to relief. Id. at
679. “Determining whether a complaint contains sufficient facts to state a plausible claim for relief
“will ... be a context-specific task that requires the reviewing court to draw on its judicial

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experience and common sense.” Id.. “Where the well-pleaded facts do not permit the court to
infer more than the mere possibility of misconduct, the complaint has alleged-but it has not
‘show[n]’-‘that the pleader is entitled to relief,’” and therefore should be dismissed. Id. (quoting
Fed. R. Civ. P. 8(a)(2)).
The Court is mindful of the latitude extended to the pleadings of pro se litigants. See
Haines v. Kerner, 404 U.S. 519, 520 (1972) (courts should “[c]onstru[e] [a pro se] petitioner’s
inartful pleading liberally”). However, courts cannot act as the pro se plaintiff’s advocate or
develop claims which the plaintiff failed to raise clearly on the face of his complaint. Gordon v.
Leeke, 574 F.2d 1147, 1152 (4th Cir. 1978) (recognizing that district courts are not expected to
assume the role of advocate for the pro se plaintiff). See also Brock v. Carroll, 107 F.3d 241, 243
(4th Cir. 1997) (Luttig, J., concurring); Beaudett v. City of Hampton, 775 F.2d 1274, 1278 (4th
Cir. 1985).
Plaintiffs’ Complaint is barred by the Rooker-Feldman doctrine which prohibits actions
attacking state court judgments in federal court. This doctrine provides that "a party losing in state
court is barred from seeking what in substance would be appellate review of the state judgment in
a United States district court, based upon losing party's claim that the state judgment itself violates
the losers ... rights." Johnson v. DeGrandy, 512 U.S. 997, 1005-06 (1994). See also District of
Columbia Court of Appeals v. Feldman, 460 U.S. 462, 482 (1983); Rooker v. Fidelity Trust
Company, 263 U.S. 413, 416 (1923). Whether evaluated as an attack on the Foreclosure Order or
the underlying foreclosure proceeding, the Rooker-Feldman doctrine bars Plaintiffs’ action here.
District Courts have denied motions to amend complaints where an amendment would be
futile. U.S. ex rel. Wilson v. Kellogg Brown & Root, Inc., 525 F.3d 370, 376 (4th Cir. 2008).

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Plaintiffs’ proposed Second Amended Complaint does not address the deficiencies of their prior
pleadings. An amendment would be futile.

ORDER
IT IS HEREBY ORDERED that:
1. Plaintiff’s “Motion to Ammend [Sic] Complaint” (document #36) is DENIED.
2.

Defendants Select Portfolio Services Inc., First Franklin Mortgage Loan Trust,

Mortgage Electronic Registration Systems, U.S. Bank National Association, Bank of America,
First Franklin Mortgage, First Franklin Loan Service, and John T. Benjamin Jr.’s “Motion to Strike
… Amended Complaint [document #27] …” (document #32) is GRANTED. The Amended
Complaint (document #27) is STRICKEN.
3. All further proceedings in this action, including all discovery, are STAYED pending
the District Judge’s ruling on this Memorandum and Recommendation and Order.

RECOMMENDATION
FOR THE FOREGOING REASONS, the undersigned respectfully recommends that
Defendants Select Portfolio Services Inc., First Franklin Mortgage Loan Trust, Mortgage
Electronic Registration Systems, U.S. Bank National Association, Bank of America, First Franklin
Mortgage, First Franklin Loan Service, and John T. Benjamin Jr.’s “Motion to Dismiss …
Complaint …” (document #19); Defendants “Trustee Services of Carolina LLC, Brock & Scott
PLLC, Devin Chidester, and Sarah Banks’ Motion to Dismiss” (document #21); Defendants
“Trustee Services of Carolina LLC, Brock & Scott PLLC, Devin Chidester, and Sarah Banks’
Motion to Dismiss Amended Complaint” (document #30); and Defendants Select Portfolio

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Services Inc., First Franklin Mortgage Loan Trust, Mortgage Electronic Registration Systems, U.S.
Bank National Association, Bank of America, First Franklin Mortgage, First Franklin Loan
Service, and John T. Benjamin Jr.’s “Motion to … Dismiss … Amended Complaint …” (document
#33) be GRANTED and this matter be DISMISSED WITH PREJUDICE.

NOTICE OF APPEAL RIGHTS
The parties are hereby advised that, pursuant to 28 U.S.C. §636(b)(1)(c), written objections
to the proposed findings of fact and conclusions of law and the recommendation contained in this
Memorandum must be filed within fourteen (14) days after service of same. Failure to file
objections to this Memorandum with the District Court constitutes a waiver of the right to de novo
review by the District Judge. Diamond v. Colonial Life, 416 F.3d 310, 315-16 (4th Cir. 2005);
Wells v. Shriners Hosp., 109 F.3d 198, 201 (4th Cir. 1997); Snyder v. Ridenour, 889 F.2d 1363,
1365 (4th Cir. 1989). Moreover, failure to file timely objections will also preclude the parties
from raising such objections on appeal. Thomas v. Arn, 474 U.S. 140, 147 (1985); Diamond, 416
F.3d at 316; Page v. Lee, 337 F.3d 411, 416 n.3 (4th Cir. 2003); Wells, 109 F.3d at 201; Wright v.
Collins, 766 F.2d 841, 845-46 (4th Cir. 1985); United States v. Schronce, 727 F.2d 91 (4th Cir.
1984).
The Clerk is directed to send copies of this Memorandum and Recommendation and Order
to the pro se Plaintiffs; to defense counsel; and to the Honorable Max O. Cogburn, Jr.
SO ORDERED AND RECOMMENDED.
Signed: July 12, 2016

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