Michael L and Lillie E Calloway Recoverable Trust et al v. Bank of America Corporation et al

Filing 17

ORDER granting 6 defendants' motion to dismiss and dismissing this action (as more fully set out). Signed by Honorable Vicki Miles-LaGrange on 6/15/2015. (ks)

IN THE UNITED STATES DISTRICT COURT FOR THE
WESTERN DISTRICT OF OKLAHOMA
MICHAEL L. AND LILLIE E.
CALLOWAY REVOCABLE TRUST, and
MICHAEL L. CALLOWAY and LILLIE
E. CALLOWAY (trustee) of the
MICHAEL L. AND LILLIE E.
CALLOWAY REVOCABLE TRUST,
Plaintiffs,
vs.
BANK OF AMERICA CORPORATION,
BANK OF AMERICA, N.A.,
BAC HOME LOANS SERVICING, L.P.,
f/k/a COUNTRYWIDE HOME LOANS
SERVICING, L.P., and
BofA MERRILL LYNCH ASSETS
HOLDINGS,
Defendants.

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Case No. CIV-15-68-M

ORDER
Before the Court is defendants’ Motion to Dismiss, filed January 28, 2015. On February 18,
2015, plaintiffs filed their response, and on February 26, 2015, defendants filed their reply.
On July 18, 2008, Michael L. Calloway and Lillie E. Calloway took out a mortgage loan in
the amount of $350,000, which was secured by real property located at 19445 Sportmen’s Road,
Edmond, Oklahoma (“Property”). Mr. and Mrs. Calloway subsequently defaulted on the mortgage
loan. On September 14, 2011, defendant Bank of America, N.A. (“BANA”)1 commenced a
foreclosure action in the District Court of Oklahoma County (“Foreclosure Action”). On April 12,
2013, the state court entered a foreclosure judgment against the Property (“Foreclosure Judgment”).

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BANA is the successor by merger to defendant BAC Home Loan Servicing, LLC, f/k/a
Countrywide Home Loan Servicing, L.P.

Plaintiffs subsequently filed numerous motions seeking relief from the Foreclosure Judgment and
the sale of the Property, all of which were ultimately denied by the state court. On September 11,
2014, BANA purchased the Property at a foreclosure sale. On December 4, 2014, the foreclosure
sale was confirmed by the state court.
On December 12, 2014, plaintiffs filed a Complaint to Quiet Title in the District Court of
Oklahoma County, seeking to quiet title to the Property. In their Complaint to Quiet Title, plaintiffs
assert that defendants lacked standing to bring the Foreclosure Action and that the note and
mortgage had been canceled and never reinstated. On January 21, 2015, defendants removed this
quiet title action to this Court. Defendants now move this Court, pursuant to Federal Rule of Civil
Procedure 12(b)(6), to dismiss plaintiffs’ Complaint to Quiet Title.
Regarding the standard for determining whether to dismiss a claim pursuant to Rule 12(b)(6),
the United States Supreme Court has held:
To survive a motion to dismiss, a complaint must contain sufficient
factual matter, accepted as true, to state a claim to relief that is
plausible on its face. 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. 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. Where a complaint pleads facts that
are merely consistent with a defendant’s liability, it stops short of the
line between possibility and plausibility of entitlement to relief.
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal quotations and citations omitted). “A court
reviewing the sufficiency of a complaint presumes all of plaintiff’s factual allegations are true and
construes them in the light most favorable to the plaintiff.” Hall v. Bellmon, 935 F.2d 1106, 1109
(10th Cir. 1991).

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Defendants assert that plaintiffs’ Complaint to Quiet Title should be dismissed because the
issues and claims raised in plaintiffs’ complaint are barred under the principles of claim and issue
preclusion. Specifically, defendants assert that plaintiffs are barred from seeking to relitigate the
issues and claims that were adjudicated, along with the issues that could have been adjudicated, in
the Foreclosure Action.
The preclusive effect of the Foreclosure Action to the claims in this case is governed by
Oklahoma law. See Valley View Angus Ranch, Inc. v. Duke Energy Field Servs., Inc., 497 F.3d
1096, 1100 (10th Cir. 2007). Under Oklahoma law, claim preclusion, also known as res judicata,
“bars the parties (or their privies) from relitigating not only the adjudicated claim, but also any
theories or issues that were actually decided together with those which could have been decided in
that action.” McDaneld v. Lynn Hickey Dodge, Inc., 979 P.2d 252, 255-56 (Okla. 1999) (citations
and emphasis omitted). Under Oklahoma law, issue preclusion, also known as collateral estoppel,
provides: “once a court has decided an issue of fact or law necessary to its judgment, the same
parties or their privies may not relitigate that issue in a suit brought upon a different claim.” Okla.
Dept. of Public Safety v. McCrady, 176 P.3d 1194, 1199 (Okla. 2007) (citations omitted).
In their Complaint to Quiet Title, plaintiffs seek to quiet title to the Property based upon
defendants’ alleged lack of standing in the Foreclosure Action and the fact that the note and
mortgage were allegedly cancelled. Having carefully reviewed the court filings in the Foreclosure
Action, the Court finds that both the issue of standing and the alleged cancellation of the note and
mortgage were raised and adjudicated in the Foreclosure Action. In the state court’s April 12, 2013
Journal Entry of Judgment, the state court found that BANA “has cured any standing defects and
established it has standing to bring this action”. April 12, 2013 Journal Entry of Judgment in Case

3

No. CJ-2010-7513 at 3, attached as Exhibit 4 to defendants’ Motion to Dismiss. Additionally, in
their Emergency Request for Permanent Injunction and Order to Set-Aside and Vacate Sheriff’s Sale
and Objection to Renewed Confirmation of Sale for Lack of Jurisdiction, Fraud, Suborn Perjury,
Perjury, and Professionalism, plaintiffs specifically raised the issue of the alleged cancellation of
the note and mortgage. The state court denied plaintiffs’ emergency request. See Order on
December 4, 2014 Hearing in Case No. CJ-2010-7513, attached as Exhibit 9 to defendants’ Motion
to Dismiss. Accordingly, the Court finds that the claims and issues raised in plaintiffs’ Complaint
to Quiet Title are barred under the principles of claim and issue preclusion.
The Court, therefore, GRANTS defendants’ Motion to Dismiss [docket no. 6] and
DISMISSES this action.
IT IS SO ORDERED this 15th day of June, 2015.

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