Turman v. Wells Fargo Bank NA

Filing 10

MEMORANDUM signed by Senior Judge John T. Nixon on 9/29/2016. (xc:Pro se party by regular and certified mail.)(DOCKET TEXT SUMMARY ONLY-ATTORNEYS MUST OPEN THE PDF AND READ THE ORDER.)(hb)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF TENNESSEE
NASHVILLE DIVISION

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JEAN TURMAN,
Plaintiff,
v.
WELLS FARGO BANK, N.A.,
Defendant.

No. 3:15-cv-1119
Senior Judge Nixon

MEMORANDUM OPINION
Plaintiff, Jean Turman, has filed, pro se, a complaint alleging violations of the National
Housing Act (“NHA”), 12 U.S.C. § 1701, et seq., and the Single Family Mortgage Foreclosure
Act (“SFMFA”), 12 U.S.C. § 3751et seq., against Defendant Wells Fargo Bank, N.A. Plaintiff
has paid the civil action filing fee.
Before the Court is Defendant’s motion to dismiss the complaint because it fails to state a
claim upon which relief can be granted (ECF No. 5). For the reasons set forth below, Plaintiff’s
complaint will be dismissed with prejudice for failure to state a claim upon which relief may be
granted.
Discussion
I.

Factual Allegations

In her complaint, Plaintiff alleges that on January 27, 2015, Scott Talley executed a quit
claim deed conveying to her title to the property located at 1216 Waverunner Court, Nashville,
TN 37217 (“the Property”). (ECF No. 1 at 2.) Talley originally bought the Property in 2009
after executing a promissory note, which was secured by a Deed of Trust on the Property. The
Note and the Deed of Trust were later transferred and assigned to Defendant. Plaintiff claims

that while she is not obligated under the terms of the Note signed by Talley and held by
Defendant, she is an intended third-party beneficiary under the Deed of Trust. (Id. at 2-3.) As a
result, Plaintiff alleges she may enforce the terms of the Deed of Trust. (Id. at 3.) Plaintiff
alleges that under the terms of the Deed of Trust and pursuant to the provisions of the SFMFA,
12 U.S.C. § 3759(C)(2), she “may reinstate the entire amount of the principle and interest, which
would be due if payments of the mortgage had not been accelerated.” (Id.)
Accordingly, on or about July 16, 2015, Plaintiff requested a reinstatement quote from
Defendant.

(Id.)

Rather than send a reinstatement quote, Defendant responded by letter

explaining that Plaintiff was not a party to the contract, was not authorized by Defendant to
assume liability on the Note, and that the provision on which Plaintiff relied in pursuing
reinstatement did not entitle her to seek reinstatement.1 (Id.; see also ECF No. 1-3, partial copy
of response letter.) Specifically, Defendant explained that paragraph 12 of the Deed of Trust,2
the provision on which Plaintiff relied in seeking reinstatement, was limited by paragraph 9(b) of
the same document which provided that, the Lender may accelerate the Note and require
immediate and full payment of the indebtedness if (a) the Property is sold, and (b) the

1

When considering a motion to dismiss, federal courts may consider exhibits attached thereto
without converting the motion to dismiss into a motion for summary judgment if the exhibits are
referenced in the complaint and are central to the claims contained therein. Rondigo, L.L.C. v.
Twp. of Richmond, 641 F.3d 673, 680-81 (6th Cir. 2011) (quoting Bassett v. Nat'l Collegiate
Athletic Ass'n, 528 F.3d 426, 430 (6th Cir.2008)) (“However, a court may consider ‘exhibits
attached [to the complaint], public records, items appearing in the record of the case and exhibits
attached to defendant's motion to dismiss so long as they are referred to in the complaint and are
central to the claims contained therein,’ without converting the motion to one for summary
judgment.”). The documents referenced herein were either attached to the complaint or are
referred to in the complaint and were attached to Defendant’s moving papers.
2
Paragraph 12 provides, in pertinent part, that “[t]he covenants and agreements of this Security
Instrument shall bind and benefit the successors and assigns of Lender and Borrower, subject to
the provisions of paragraph 9(b). (ECF No. 1-2 at 6.)
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purchaser’s credit has not been approved by Defendant. (ECF No. 1-3.) Defendant further
explained that because it had not approved Plaintiff as a borrower, she was not a “successor and
assign” under Paragraph 12 of the Deed of Trust. (ECF No. 1-3.)
Plaintiff claims that the “Lender” is unknown and that Defendant is not that lender but at
most, is the loan servicer. (ECF No. 1 at 5.) Additionally, Plaintiff alleges that Defendant has
refused to comply with 12 U.S.C. § 1701 j-3(b)(3) and Paragraph 9(b) of the Deed of Trust. (Id.)
Finally, Plaintiff alleges that Defendant improperly denied her the opportunity to establish that
she met customary credit standards in order to assume the loan because Defendant has a
reputation for discriminating against African Americans. (Id.)
In its motion to dismiss, Defendant argues that the NHA does not provide Plaintiff with a
private right of action, that the SFMFA is inapplicable because Defendant is a private company,
and that Plaintiff has no right to reinstate the Note because she is not vested with any rights
under the Deed of Trust and because, under the circumstances present here, the Note is not
subject to reinstatement.
II.

Standard of Review

A complaint may be dismissed for failure to state a claim if it fails “‘to give the
defendant fair notice of what the . . . claim is and the grounds upon which it rests.’” Bell Atl.
Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)).
While a complaint need not contain detailed factual allegations, a plaintiff’s allegations must
include more than labels and conclusions. Twombly, 550 U.S. at 555; Ashcroft v. Iqbal, 556 U.S.
662, 678 (2009) (“Threadbare recitals of the elements of a cause of action, supported by mere
conclusory statements, do not suffice.”). The court must determine whether the complaint
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contains “enough facts to state a claim to relief that is plausible on its face.” 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.”
Iqbal, 556 U.S. at 679. Although the plausibility standard is not equivalent to a “‘probability
requirement,’ . . . it asks for more than a sheer possibility that a defendant has acted unlawfully.”
Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 556). “[W]here 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.” Iqbal, 556 U.S. at 679
(quoting Fed. R. Civ. P. 8(a)(2)).
“Pro se complaints are to be held to less stringent standards than formal pleadings drafted
by lawyers, and should therefore be liberally construed.” Williams, 631 F.3d at 383 (internal
quotation marks and citation omitted). Pro se litigants, however, are not exempt from the
requirements of the Federal Rules of Civil Procedure. Wells v. Brown, 891 F.2d 591, 594 (6th
Cir. 1989); see also Brown v. Matauszak, 415 F. App'x 608, 613 (6th Cir. 2011) (“[A] court
cannot create a claim which [a plaintiff] has not spelled out in his pleading”) (internal quotation
marks and citation omitted); Payne v. Sec'y of Treas., 73 F. App'x 836, 837 (6th Cir. 2003)
(affirming sua sponte dismissal of complaint pursuant to Fed. R. Civ. P. 8(a)(2) and stating,
“[n]either this court nor the district court is required to create Payne's claim for her”); cf. Pliler v.
Ford, 542 U.S. 225, 231 (2004) (“District judges have no obligation to act as counsel or
paralegal to pro se litigants.”); Young Bok Song v. Gipson, 423 F. App'x 506, 510 (6th Cir.2011)
(“[W]e decline to affirmatively require courts to ferret out the strongest cause of action on behalf
of pro se litigants. Not only would that duty be overly burdensome, it would transform the courts
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from neutral arbiters of disputes into advocates for a particular party. While courts are properly
charged with protecting the rights of all who come before it, that responsibility does not
encompass advising litigants as to what legal theories they should pursue.”).
II.

Discussion
A. NHA.

Plaintiff alleges that Defendant has failed to comply with the NHA. Generally, the NHA
does not provide a private right of action. See e.g. Shiver v. Landrieu, 674 F.2d 906, 910-11
(D.C. Cir. 1981); Castrillo v. Am. Home Mortgage Servicing, Inc., 670 F.Supp. 2d 516, 526–27
(E.D. La. 2009) (listing cases). Specifically, Section 1701j-3, upon which Plaintiff relies, does
not provide her with a private right of action. See Dupuis v. Yorkville Fed. Sav. & Loan Ass’n,
589 F. Supp. 820, 823 (S.D.N.Y. 1984). Consequently, Plaintiff fails to state a claim upon which
relief can be granted under the NHA.
B. SFMFA
Plaintiff alleges that Defendant violated the SFMFA by denying her the right to reinstate
the Note. The SFMFA governs foreclosure proceedings brought by or on behalf of the Secretary
of Housing and Urban Development (“HUD”). See 12 U.S.C. § 3751(b) (providing that “[t]he
purpose of this chapter is to create a uniform Federal foreclosure remedy for single family
mortgages that” are held or secured by the HUD Secretary pursuant to Title I or Title II of the
National Housing Act.) Even assuming for the sake of argument that Plaintiff had rights under
the Note, Plaintiff does not allege that HUD ever held the note, or secured the note, or that the
Secretary of HUD initiated foreclosure proceedings. The provisions of the SFMFA simply do
not apply. Consequently, Plaintiff fails to state a claim under the SFMFA.
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C.

Plaintiff is Not Vested with Any Rights Provided by the
Deed of Trust.

As Defendant notes, although she does not raise a specific claim, Plaintiff implies that
she has a right to reinstate the Note based upon the Quit Claim Deed she obtained from Talley,
the original mortgagor and borrower. Defendant disagrees; arguing that Plaintiff is not vested
with any rights provided by the Deed of Trust and that, even if she were, the right to reinstate
applies only where the default is caused by a failure to remit mortgage payments, not where, as
here, the default is caused by transfer of the property via Quit Claim Deed without Defendant’s
approval.
Paragraph 12 the Deed of Trust provides that a successor or assign of the borrower or
lender shall be bound by, and benefit from, the terms of the Deed of Trust except where, under
the provision provided in Paragraph 9(b), the Property is otherwise sold or transferred by the
borrower without the lender’s prior approval. Where the borrower fails to secure lender
approval of the sale, as appears to have happened here, the lender may require immediate
payment in full of the sums secured by the Note.
Defendant did not approve the sale of the Property to Plaintiff via Quit Claim Deed.
Plaintiff is thus, not a successor or assign under the terms of the Deed of Trust. She is therefore
not vested with any rights provided by the Deed of Trust, including the right to reinstatement.
Additionally, even assuming arguendo, that Plaintiff were vested with rights provided by
the Deed of Trust, she could still not seek reinstatement because, as Defendant notes,
reinstatement is provided for only where the default is failure to make mortgage payments, not
where, as here, the default is caused by selling the Property without Defendant’s approval.
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Finally, to the extent Plaintiff means to suggest that Defendant is refusing to allow her to
demonstrate that she can satisfy customary credit standards to assume the loan because she is
African-American, it bears noting: (1) that while 12 U.S.C. §1701 j-3(b)(3), upon which Plaintiff
relies, encourages lenders to permit the assumption of a real property loan, as discussed above,
this section is inapplicable here; and (2) that Plaintiff has failed to allege any facts that would
demonstrate that Defendant has any obligation to allow her to assume the loan.
IV.

Conclusion
Because Plaintiff’s complaint fails to state any claims upon which relief may be granted,

the complaint will be dismissed with prejudice.
An appropriate order is filed herewith.

____________________________________
JOHN T. NIXON
SENIOR UNITED STATES DISTRICT JUDGE

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