Nelson et al v. US Bank Trust NA
ORDER AND OPINION RULING ON REPORT AND RECOMMENDATION adopting 25 Report and Recommendation of Magistrate Judge Bristow Marchant granting 19 Defendant's Motion to Dismiss. AND IT IS SO ORDERED. Signed by Honorable Richard M Gergel on 5/23/2017. (sshe, )
IN THE UNITED STATES DISTRICT COURT
DISTRICT OF SOUTH CAROLINA
Atiya S. Nelson and Jermaine Johnson,
US Bank Trust NA, as Trustee for LSF9
Master Participation Trust on behalf of
LSF9 Master Participation Trust,
Case No 9:16-cv-2950-RMG
ORDER AND OPINION
This matter is before the Court on the Report and Recommendation (“R. & R.”) of the
Magistrate Judge (Dkt. No. 25) recommending that the Court grant Defendant’s motion to
dismiss (Dkt. No. 19). For the reasons set forth below, this Court adopts the R. & R. as the order
of the Court. Defendant’s motion to dismiss (Dkt. No. 19) is granted.
Plaintiffs, proceeding pro se, have filed this action seeking monetary damages for
Defendant’s alleged violation of the Fair Debt Collections Practices Act (FDCPA), 15 U.S.C. §
1692, et seq., and the South Carolina Consumer Protection Code, S. C. Code Ann. § 37-1-101, et
seq. Plaintiffs allege that the Defendant has attempted to foreclose on the Plaintiffs’ “intellectual
property” by attempting to “collect a disputed debt prior to validation and verification” through
the use of “false representations.” (Dkt. No. 1 at 3.) Defendant has filed a motion to dismiss.
(Dkt. No. 19.)
Under Rule 12(b)(6), a “complaint must be dismissed if it does not allege ‘enough facts
to state a claim to relief that is plausible on its face.’” Giarratano v. Johnson, 521 F.3d 298, 302
(4th Cir. 2008) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). On a motion to
dismiss, this Court must “take all of the factual allegations in the complaint as true.” Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009). “However, while the court must draw all reasonable inferences
in favor of the plaintiff, it need not accept legal conclusions, “unwarranted inferences,
unreasonable conclusions or arguments.” Nemet Chevrolet, Ltd. v. Consumeraffairs.com, Inc.,
591 F.3d 250, 253 (4th Cir. 2009) (citing Edwards v. City of Goldsboro, 178 F.3d 231, 244 (4th
Cir. 1999); Giarratano, 521 F.3d at 298). Although this matter is before the Court on a Rule 12
motion to dismiss, this Court may consider documents such as court filings, notes, and
mortgages in ruling on the motion.1
This Court liberally construes complaints filed by pro se litigants to allow the
development of a potentially meritorious case. See Cruz v. Beto, 405 U.S. 319 (1972); Haines v.
Kerner, 404 U.S. 519 (1972). As Plaintiffs are proceeding pro se, their pleadings are considered
pursuant to this liberal standard. The requirement of liberal construction does not mean that the
Court can ignore a clear failure in the pleadings to allege facts which set forth a viable federal
claim, nor can the Court assume the existence of a genuine issue of material fact where none
exists. Weller v. Dep’t of Social Services, 901 F.2d 387 (4th Cir. 1990).
Plaintiff Atiya S. Nelson owned property at 353 Riley Street in Yemassee South
Carolina. Nelson borrowed money that was secured by a mortgage on the Riley Street property.
Philips v. Pitt Cnty. Mem. Hosp., 572 F.3d 176, 180 (4th Cir. 2009) (Courts “may properly take judicial
notice of matters of public record”); American Chiropractic Ass’n v. Trigon Health Care, Inc., 367 F.3d
212, 234 (4th Cir. 2002) (Court may consider evidence of which the Plaintiff has notice, relies on in
framing the Complaint, or does not dispute its authenticity); Phillips v. LCI International, Inc., 190 F.3d
609, 618 (4th Cir. 1999) (In addition to the factual allegations of the Complaint, the Court may also
consider as part of the review of a 12(b) motion any documents that are “integral to and explicitly relied
on in the complaint”); Olson v. Midland Funding, LLC, 578 Fed. Appx. 248, 250 (4th Cir. 2014) (“In
considering a Fed.R.Civ.P. 12(b)(6) motion, a court may consider the complaint itself and any documents
that are attached to it . . . .”) (internal citations omitted).
(Dkt. Nos. 19-2 (the Note), 19-3 (the Mortgage).) It is not clear to the Court whether Plaintiff
Johnson has any connection to this property as he was not a signatory to the loan or mortgage
documents, and there is no indication that he was an owner of the Riley Street property.
On or around August 7, 2015, Defendant commenced a foreclosure action on the
Mortgage based on non-payment of the Note. (Dkt. No. 19-7.) Plaintiff Nelson contested the
validity of the debt, the Defendant’s right to foreclose on her property, and the foreclosure action
itself in that state court action. These proceedings resulted in an order of foreclosure being
entered, and the property was sold pursuant to the foreclosure order. (Dkt. Nos. 19-8, 19-9, 1910.) Nelson filed a motion to set aside the foreclosure order under Rule 60(b), S.C. Rules Civil
Procedure, which was denied. (Dkt. No. 19-11.) Defendant asserts, and Plaintiffs have not
disputed, that Nelson did not appeal the denial of her Rule 60(b) motion to set aside, and that the
State Court foreclosure action is now closed.
For the reasons thoroughly explained by the Magistrate Judge in the R. & R., Plaintiffs’
attempt to challenge the state court’s decision to grant Defendant a judgment of foreclosure2 is
barred by the doctrines of res judicata and collateral estoppel. (Dkt. No. 25 at 4-5.) Further, to
the extent Plaintiffs are seeking review of the judgment of the state court, this Court lacks subject
matter jurisdiction under the Rooker-Feldman Doctrine. (Dkt. No. 25 at 5-7.)
This Court reviews de novo any part of the R. & R. to which there has been proper objection.
Fed. R. Civ. P. 72(b)(2). Plaintiff Nelson’s objections to the R. & R. are difficult to follow, but
she appears to argue that the Defendant should not have been allowed to bring the foreclosure
Plaintiff Nelson concedes as much, stating, “I felt as I was getting nowhere with The Common Plea
Court & was not getting a fair trial so I filed by suit with US Federal Court again in a timely matter.”
(Dkt. No. 22 at 3.)
action because the securitization of her mortgage means “[t]he loan is no more” and “the security
is forever lost.” (Dkt. No. 30 at 2.)
The Court has reviewed the objections and concluded that Plaintiffs have not specifically
objected to the Magistrate’s findings that their claims are barred by the doctrines of res judicata
and collateral estoppel or that this Court lacks subject matter jurisdiction under the RookerFeldman Doctrine. This Court’s review of the record indicates that the R. & R. accurately
analyzes the facts of this case and the applicable law.
For the reasons stated above, Defendant’s motion to dismiss (Dkt. No. 19) is GRANTED.
AND IT IS SO ORDERED.
s/ Richard M. Gergel
Richard Mark Gergel
United States District Court Judge
May 23, 2017
Charleston, South Carolina
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