Mull v. Available Mortgage Funding, LLC et al

Filing 21

ORDER granting 14 Motion to Dismiss. Signed by Judge S. Thomas Anderson on 3/24/12. (Anderson, S.)

UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TENNESSEE
WESTERN DIVISION
______________________________________________________________________________
SONYA M. MULL,

)
)
Plaintiff,
)
)
v.
)
No. 2:11-cv-2338-STA-dkv
)
AVAILABLE MORTGAGE FUNDING,
)
LLC; A.C.T. MORTGAGE & LOANS,
)
INC.; LITTON LOAN SERVICING LP;
)
DEUTSCHE BANK NATIONAL TRUST
)
COMPANY; and NATIONWIDE TRUSTEE
)
SERVICES, INC.
)
)
Defendant.
)
______________________________________________________________________________
ORDER GRANTING DEFENDANT’S MOTION TO DISMISS
______________________________________________________________________________
Before the Court is Defendant Nationwide Trustee Services, Inc.’s (“Nationwide”)
Motion to Dismiss (D.E. # 14), filed on July 28, 2011. For the reasons set forth below,
Nationwide’s Motion is GRANTED.
BACKGROUND
Plaintiff filed her Complaint on May 2, 2011 (D.E. # 1-1), seeking to enjoin a foreclosure
sale of her property and rescind a mortgage loan transaction. (Compl. ¶ 1.) In her Prayer for
Relief, she requested damages due to fraud in the inducement of the transaction, breach of
contract, and violation of the Tennessee Consumer Protection Act. (Id.) Due to the legal issues
in the Motion to Dismiss presently before the Court, the specific facts supporting Plaintiff’s
claims are not relevant and therefore will not be recited here.

Nationwide is one of five defendants named in Plaintiff’s Complaint. Nationwide serves
as a substitute trustee for Deutsche Bank National Trust Company (Id. ¶ 9) and sent Plaintiff a
notice advising that a foreclosure sale of her property would be held on March 24, 2011 (Id. ¶
46). Beyond its role as trustee and its act of sending Plaintiff the notice, Nationwide is not
implicated in the facts set forth in Plaintiff’s Complaint. In its Verified Answer, Nationwide
acknowledged its role as trustee in the foreclosure sale (Verified Ans., D.E. #13-1, ¶ 9) but
asserted the affirmative defense that it is not a necessary party in accordance with Tennessee law
(Id. at 2). Nationwide has now moved for dismissal from this action on those grounds. (D.E. #
14-1.)
STANDARD OF REVIEW
A defendant may move to dismiss a claim for “failure to state a claim upon which relief
can be granted” under Federal Rule of Civil Procedure 12(b)(6) (“Rule 12(b)(6)”). Here,
because Nationwide filed its Verified Answer1 before filing this Motion to Dismiss, the Court
will treat this Motion as a Motion for Judgment on the Pleadings under Rule 12(c).2 Where the
12(b)(6) defense is raised under a Rule 12(c) motion for judgment on the pleadings, courts apply
the standard for reviewing a 12(b)(6) motion.3
When considering a Rule 12(b)(6) motion, the court must treat all of the well-pled factual
allegations of the complaint as true, construe those allegations in the light most favorable to the
non-moving party, and draw all reasonable inferences in favor of the plaintiff.4 However, legal
1

(D.E. # 13-1.)

2

See Morgan v. Church’s Fried Chicken, 829 F.2d 10, 11 (6th Cir. 1987); Fed. R.
Civ. P. 12(c); Fed. R. Civ. P. 12(h)(2).
3

See Morgan, 829 F.2d at 11.

4

Jones v. City of Cincinnati, 521 F.3d 555, 559 (6th Cir. 2007).

conclusions “masquerading as factual allegations” or unwarranted factual inferences, including
“conclusory allegations,” need not be accepted as true.5 To avoid dismissal under Rule 12(b)(6),
“the complaint must contain either direct or inferential allegations” with respect to all material
elements of the claim.6
Under Rule 8 of the Federal Rules of Civil Procedure, a complaint need only contain “a
short and plain statement of the claim showing that the pleader is entitled to relief[.]”7 Although
this standard does not require “detailed factual allegations,” it does require more than “labels and
conclusions” or “a formulaic recitation of the elements of a cause of action.”8 To survive a
motion to dismiss, the plaintiff must allege facts that, if accepted as true, are sufficient “to raise a
right to relief above the speculative level” and to “state a claim to relief that is plausible on its
face.”9 “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.”10

5

Id.

6

Eidson v. State of Tenn. Dep’t of Children’s Servs., 510 F.3d 631, 634 (6th Cir.

7

Fed. R. Civ. P. 8(a)(2).

2007).

8

Ashcroft v. Iqbal, 129 S. Ct. 1937, 1953 (2009); Bell Atlantic Corp. v. Twombly,
550 U.S. 544, 555 (2007); see also Hensley Mfg. v. ProPride, Inc., 579 F.3d 603, 609 (6th Cir.
2009).
9

Iqbal, 129 S. Ct. at 1949-50; Twombly, 550 U.S. at 570.

10

Iqbal, 129 S. Ct. at 1949.
3

ANALYSIS
Tennessee law provides that “[a]ny trustee named in a suit or proceeding, as related to a
sale of real property under a trust deed or mortgage, may plead in the answer that the trustee is
not a necessary party by a verified denial.”11 The trustee’s answer must state “the basis for the
trustee’s reasonable belief that the trustee was named as a party solely in the capacity as a trustee
under a deed of trust, contract lien, or security instrument.”12 Within thirty days of filing of such
a verified answer, “a verified response is due from all parties to the suit or proceeding setting
forth all matters, whether in law or fact, that rebut the trustee’s verified denial.”13 If there are no
such objections or the other parties fail to file a timely response, “the trustee shall be dismissed
from the suit without prejudice.”14
Here, Nationwide filed its Verified Answer on June 15, 2011. In its Motion, Nationwide
asserts that no other party has filed an objection or response to its Verified Answer.15
Nationwide alleges that this circumstance falls under Tennessee Code Annotated Section 35-5116(c) because no party has objected or responded to its Verified Answer. Accordingly, the
thirty-day objection and response deadline is long-past.16 Therefore, Nationwide asserts that it is

11

Tenn. Code Ann. § 35-5-116(a).

12

Id.

13

Id. § 35-5-116(b).

14

Id. § 35-5-116(c) (emphasis added).

15

(Def.’s Mot. to Dismiss, D.E. # 14-1, at 1-2.)

16

(Id. at 3.)
4

entitled to dismissal from the suit.17 Furthermore, no party has responded to Nationwide’s
Motion to Dismiss.
The Court finds that Nationwide has sufficiently alleged that it is not a necessary party as
provided in Section 35-5-116. Both Plaintiff and Nationwide acknowledge that Nationwide’s
involvement in this case is solely based on its role as trustee in the foreclosure sale of the real
property at issue. Plaintiff’s Complaint only mentions that Nationwide is substitute trustee to the
foreclosure sale18 and states that Nationwide sent a notice of the foreclosure sale.19 Nationwide
acknowledged in its Verified Answer that it was acting as substitute trustee20 and further
reiterated this fact in its Motion.21 Moreover, Nationwide asserted the affirmative defense that it
was not a necessary party to the action. Therefore, it appears to the Court that Nationwide has
satisfied the general requirements of Section 35-5-116.
However, the Court acknowledges that Nationwide has not fully complied with the
requirements of Section 35-5-116(a). Its Verified Answer did not “state[e] the basis for the
trustee’s reasonable belief that the trustee was named as a party solely in the capacity as a trustee
under a deed of trust.”22 Despite this deficiency, and in light of the lack of response or objection
from Plaintiff or any other defendant within the thirty days required by statute, the Court accepts

17

(Id.)

18

(Compl., D.E. # 1-1, ¶ 9.)

19

(Id. ¶ 46.)

20

(Verified Ans., D.E. #13-1, ¶ 9)

21

(Def.’s Mot. to Dismiss, D.E. # 14-1, at 2.)

22

Tenn. Code Ann. § 35-5-116(a).
5

Nationwide’s conclusion that the Verified Answer satisfies Section 35-5-116's requirements. For
these reasons, Nationwide’s Motion to Dismiss is GRANTED.23
CONCLUSION
For the reasons set forth above, Nationwide’s Motion to Dismiss is GRANTED.
IT IS SO ORDERED.
s/ S. Thomas Anderson
S. THOMAS ANDERSON
UNITED STATES DISTRICT JUDGE
Date: March 24th, 2012.

23

The Court notes that Plaintiff’s Complaint prays for enjoinment of the foreclosure
sale of the subject property. Dismissal under Section 35-5-116 will not hinder Plaintiff’s ability
to seek such relief. Under Section 35-5-116(e), “dismissal of the trustee pursuant to subsections
(c) and (d) shall not prejudice a party’s right to seek injunctive relief to prevent the trustee from
proceeding with a foreclosure sale.” Tenn. Code Ann. § 35-5-116(e).
6