Cornejo v. The Bank of New York Melon, As Trustee For The Certificate Holders of CBS, Inc., Asset-Backed Certificates Series 2006
Filing
5
MEMORANDUM AND ORDER granting 4 Motion for Judgment on the Pleadings. So Ordered by Chief Judge William E. Smith on 8/17/2016. (Jackson, Ryan)
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF RHODE ISLAND
______________________________________
)
)
)
Plaintiff,
)
)
v.
)
)
BANK OF NEW YORK MELON, AS TRUSTEE
)
FOR THE CERTIFICATE HOLDERS
)
OF CBS, INC.,
)
)
Defendant.
)
______________________________________)
DUCY CORNEJO,
C.A. No. 16-64 S
MEMORANDUM AND ORDER
William E. Smith, Chief Judge.
Before the Court is a Motion for Judgment on the Pleadings
(“Motion”) (ECF No. 4) filed by Defendant, the Bank of New York
Mellon,
in
Plaintiff
response
did
not
to
file
Plaintiff’s
an
Complaint
opposition
brief.
(ECF
No.
After
1-1).
careful
consideration, the Motion is GRANTED for the reasons set forth
within.
I.
Background 1
On April 13, 2006, Plaintiff Ducy Cornejo executed promissory
notes (“Notes”) with America’s Wholesale Lender (“AWL”), a New
1
Typically, in “reviewing a motion under Rule 12(c), the
court ‘may consider documents the authenticity of which are not
disputed by the parties; . . . documents central to plaintiffs'
claim;
[and]
documents
sufficiently
referred
to
in
the
complaint.’” Romanoff v. CitiMortgage, Inc., No. 4:15-CV-122681
York corporation, in the amount of $324,000.
ECF No. 1-1.)
(Compl. ¶¶ 12, 13,
The Notes were secured by a mortgage on Plaintiff’s
Rhode Island property.
(Id. ¶ 12.)
On September 12, 2013, the
Mortgage Electronic Registration System, Inc. (“MERS”), as nominee
for AWL, assigned the Notes to the Bank of New York Mellon (“BNY
Mellon”).
(Id. ¶ 14.)
Plaintiff first defaulted on the loan in November of 2007.
(Ex. A. to Ans., ECF No. 3-1.)
On October 2, 2013, SLS, the
servicer and an agent of BNY Mellon, sent Plaintiff a Notice of
Default and Notice of Intent to Foreclose.
(See id.; Compl. ¶ 15,
ECF No. 1-1.) On August 18, 2015, SLS sent a Notice of Acceleration
and a copy of the Notice of Foreclosure to Plaintiff.
to Ans., ECF No. 3-2; Compl. ¶ 15, ECF No. 1-1.)
(See Ex. B
SLS published
the notice of foreclosure sale in the local newspaper on October
1, 2015.
(See Ex. C to Ans., ECF No. 3-3.)
The sale was scheduled
for October 15, 2015, coincidentally the same day that Plaintiff
TSH, 2016 WL 2993619, at *2 (D. Mass. May 23, 2016) (internal
quotation marks omitted) (quoting Curran v Cousins, 509 F.3d 36
(1st Cir. 2007)). Defendant attached exhibits to its Answer, which
Plaintiff references in his Complaint. (Compare Compl. ¶ 15, ECF
No. 1-1 (“Between August 18, 2015 and October 15, [2015], the
servicer of the Defendants, SLS Servicer, not lender or its
assignee
gave
invalidates
[sic]
notices
of
acceleration,
mediation, and foreclosure.”) with Ex. A to Ans., ECF No. 3-1
(notice of default and intent to foreclose) and Ex. B to Ans., ECF
No. 3-2 (notice of acceleration). These documents fall within the
aforementioned categories and the Court may rely on them.
2
filed a Chapter 13 bankruptcy petition. 2
(Id.; see Ch. 13 Vol.
Pet, In re Ducy Cornejo, BK No. 15-bk-11981, ECF No. 1.)
As a
result of Plaintiff’s bankruptcy petition, the foreclosure sale
was stayed, though the Chapter 13 petition was ultimately dismissed
as
a
result
of
documentation.
Plaintiff’s
failure
to
submit
appropriate
(See Order Dismissing Case, In re Ducy Cornejo, BK
No. 15-bk-11981, ECF No. 10.)
The day after dismissal of her
bankruptcy petition, Plaintiff filed the present action in state
court.
(See Compl., ECF No. 1-1.)
this Court on February 12, 2016.
Defendant removed the case to
(Notice of Removal, ECF No. 1.)
Defendant has not completed the foreclosure sale.
(Ans. ¶ 24, ECF
No. 3.)
II.
Legal Standard
Federal Rule of Civil Procedure 12(c) allows a party to move
for judgment on the pleadings.
F.2d 631, 635 (1st Cir. 1988).
Rivera-Gomez v. de Castro, 843
The standard of review for a motion
under Rule 12(c) is governed by the same standards as that for a
motion to dismiss under Rule 12(b)(6).
Magnum Defense, Inc. v.
Harbour Group Ltd., 248 F. Supp. 2d 64, 66 (D.R.I. 2003).
both
rules,
the
court
must
view
2
the
facts
contained
Under
in
the
Although Plaintiff does not reference the bankruptcy
proceedings in the Complaint, the Court may take judicial notice
of it as an official public record. See Watterson v. Page, 987
F.2d 1, 3 (1st Cir. 1993).
3
pleadings in the light most favorable to the Plaintiff and draw
all reasonable inferences in that party’s favor.
Perez-Acevedo v.
Rivero-Cubano, 520 F.3d 26, 29 (1st Cir. 2008).
The plaintiff
must state “factual allegations that ‘raise a right to relief above
the speculative level, on the assumption that all the allegations
in the complaint are true.’”
Id. (quoting Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 545 (2007)).
III. Discussion
Breach of Mortgage Contract Claim 3
A.
Plaintiff bases the breach of contract claim on two alleged
breaches, neither of which provides Plaintiff with a plausible
breach
of
contract
claim.
First,
Plaintiff
argues
that
the
contract was breached when MERS “failed to assign its mortgage
deed to its New York Trust within ninety days (90 days) of its
creation.”
(Compl. ¶ 17, ECF No. 1-1.)
Though less than clear,
Plaintiff seems to assert that this assignment did not comply with
the terms of the Trust’s Production Sharing Agreement (“PSA”).
3
Defendant also argues that Plaintiff’s claims are not ripe
because no foreclosure is pending against Plaintiff’s property.
(Def.’s Mot. 6-8, ECF No. 4.)
Defendant argues that, although
Plaintiff styles Count I as asserting a claim for “Breach of
Mortgage Contract,” Plaintiff actually asserts a wrongful
foreclosure claim and no foreclosure has occurred. (Id. at 6.)
Irrespective of the strengths of Defendant’s argument, even taking
the Complaint as styled and assuming Plaintiff has brought a breach
of contract action, as opposed to wrongful foreclosure action,
Plaintiff’s claims still fail, as detailed below.
4
The First Circuit has held that borrowers lack standing to bring
such claims.
See Woods v. Wells Fargo Bank, N.A., 733 F.3d 349,
354 (1st Cir. 2013) (holding that “claims that merely assert
procedural infirmities in the assignment of a mortgage, such as a
failure to abide by the terms of a governing trust agreement, are
barred for lack of standing”); see also Caito v. Mortgage Elec.
Registration Sys., No. CA 13-429 M, 2015 WL 4480348, at *1 (D.R.I.
July 21, 2015). 4
As a result, Plaintiff lacks standing to bring
the first breach of contract claim.
Second, Plaintiff argues that Defendant breached the contract
when BNY Mellon, through an agent, sent Plaintiff the required
notices
of
default
and
foreclosure.
Plaintiff
alleges
that
Defendant violated the terms of Plaintiff’s contract which states
that the “Lender” must provide these notices.
ECF No. 1-1.)
(Compl. ¶¶ 20-22,
In making this argument, Plaintiff relies on Paiva
4
In Woods v. Wells Fargo Bank, N.A., 733 F.3d 349 (1st Cir.
2013), the First Circuit distinguished between mortgage assignment
breach of contract claims in which a borrower would have standing
and those in which standing was lacking. Borrowers have standing
where they challenge “that the assigning party never possessed
legal title and, as a result, no valid transferable interest ever
exchanged hands.”
Id. at 354.
On the other hand, no standing
exists where a claim “merely asserts procedural infirmities in the
assignment of a mortgage, such as a failure to abide by the terms
of a governing trust agreement.” Id. Plaintiff’s Complaint does
not allege that Defendants lacked legal title. Instead, as noted
above, the Complaint merely asserts that Defendants did not follow
the proper procedures for assignment.
Thus, Plaintiff lacks
standing.
5
v. Bank of New York Mellon, 120 F. Supp. 3d. 7 (D. Mass. 2015).
Paiva, however, interprets Massachusetts law, and, Plaintiff’s
reliance on it for guidance under Rhode Island law is, thus,
misplaced. See id. at 10; see also Wolfrock Road Realty Redemption
Co. v. Wells Fargo Bank N.A., No. CV 16-12 6M, 2016 WL 3766297, at
*1-2 (D.R.I. July 11, 2016) (distinguishing the holding in Paiva
and the Massachusetts law on which it relied from Rhode Island
law).
Under Rhode Island law, the governing law of this dispute,
“MERS or its assigns, even without the original note holder, ha[s]
the power to foreclose.”
Breggia v. Mortgage Elec. Registration
Sys., 102 A.3d 636, 641 (R.I. 2014).
And servicers, as agents of
the lenders, can lawfully provide the borrower with the requisite
foreclosure notices.
See Ingram v. Mortgage Elec. Registration
Sys., 94 A.3d 523, 529 (R.I. 2014) (affirming the validity of a
foreclosure were the mortgagee’s servicer properly mailed the
notice
of
sale
to
the
borrowers
and
properly
advertised
foreclosure); see also Wolfrock, 2016 WL 3766297, at *2.
result,
BNY
noteholder
to
Mellon
was
conduct
well
the
within
foreclosure
its
and
statutory
could
the
As a
power
appoint
as
its
servicer, SLS, as an agent to deliver the notices of acceleration
and foreclosure. Thus, Plaintiff’s alleged breach fails to support
a plausible breach of contract claim.
6
B.
Quiet Title Claim
Plaintiff also asserts a claim for quiet title.
Under § 34-
16-2 of the Rhode Island General Laws, “[a] necessary component to
a claim to quiet title on property is . . . a record showing that
title is held by someone other than the claimant.”
Brousseau, 102 A.3d 627, 630 (R.I. 2014).
Nye v.
Plaintiff has neither
produced such a record indicating her dispossession of the title
to
the
property,
nor
has
she
alleged
that
Defendants
have
foreclosed upon her mortgage and evicted her from the premises.
Consequently, this claim also fails.
IV.
Conclusion
For the foregoing reasons, Defendant’s Motion for Judgment on
the Pleadings is GRANTED and Plaintiff’s Complaint is hereby
dismissed.
IT IS SO ORDERED.
William E. Smith
Chief Judge
Date: August 17, 2016
7
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