Price v. First Banc Mortgage, Inc. et al

Filing 91

ORDER ADOPTING DE 87 REPORT AND RECOMMENDATIONS re DE 81 , DE 82 and DE 86 Motions to Dismiss and Order Granting DE 88 Motion to Dismiss filed Bank of New York and Order dismissing case with prejudice signed by Judge John T. Fowlkes, Jr. on 1/30/17. (Fowlkes, J.)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TENNESSEE
WESTERN DIVISION
______________________________________________________________________________
LITTLETON PRICE.,
)
)
Plaintiff,
)
)
v.
)
No. 2:16-cv-2649-JTF-cgc
)
)
FIRST BANK MORTGAGE, INC.,
)
d/b/a
)
FIRST BANC HOME MORTGAGE, INC., )
MORTGAGE ELECTRONIC
)
REGISTRATION SYSTEMS, INC.,
)
a/k/a MERS,
)
COUNTRYWIDE HOME LOANS, d/b/a
)
BANK OF AMERICA HOME LOANS,
)
BANK OF NEW YORK, as trustee for
)
securitize trust countrywide ABS 2003-2, and )
WILSON & ASSOCIATES PLLC,
)
)
Defendants.
)
______________________________________________________________________________
ORDER ADOPTING THE MAGISTRATE JUDGE’S
REPORT AND RECOMMENDATION RE [81] MOTION TO DISMISS, AND MOTIONS
TO DISMISS FOR FAILURE TO STATE A CLAIM, [82] AND [86], AND ORDER
GRANTING [88] MOTION TO DISMISS AND DISMISSING CASE WITH PREJUDICE
______________________________________________________________________________
On July 10, 2015, Plaintiff Littleton Price, proceeding pro se, filed a complaint for
damages and an application for injunctive and declaratory relief in the United States District
Court for the Southern District of New York. The complaint alleged, inter alia, securities fraud
in reference to a mortgage loan in violation of 15 U.S.C. §§ 77a-77m and 15 U.S.C. § 78a. (ECF
No. 1). On August 9, 2016, the case was transferred to this district. (ECF No. 73). On
September 1, 2016, Defendants, Countrywide Home Loan and Mortgage Electronic Registration
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Systems, Inc., (“MERS”), filed a Motion to Dismiss. (ECF No. 81).

Similarly, on September

12, 2016, Defendant Bank of New York Mellon, (f/k/a Bank of New York), and on October 5,
2016, Defendant Wilson and Associates, PLLC filed Motions to Dismiss. (ECF Nos. 82 and 86).
The matter was referred to the Magistrate Judge for report and recommendation or determination
of all pretrial matters pursuant to 28 U.S.C. §§ 631-639. On December 12, 2016, the Magistrate
Judge issued a Report and Recommendation that the Court grant all of the Defendants’ motions
to dismiss under the doctrine of res judicata to which the Plaintiff filed objections on December
28, 2016. (ECF Nos. 87 and 89). On January 11, 2017, Bank of New York Mellon, f/k/a, The
Bank of New York filed a Response to Plaintiff’s Objections to the Magistrate Judge’s report
and recommendation. (ECF No. 90).
On December 23, 2016, Defendant First Bank Mortgage, Inc. filed a Motion to Dismiss
that the Court will address without referral to the Magistrate Judge. (ECF No. 88). Pursuant to
LR 12.1, the time allowed for responding to First Bank Mortgage’s motion to dismiss has
expired. To date, Plaintiff has not filed his response in opposition to the motion.
For the following reasons, the Court finds the Magistrate Judge’s report and
recommendation, ECF No. 87, should be adopted, Plaintiff’s Objections thereto overruled, and
all of the motions to dismiss should be Granted.
II. LEGAL STANDARD
Congress passed 28 U.S.C. § 636(b) “to relieve some of the burden on the federal courts
by permitting the assignment of certain district court duties to magistrates.” See e.g. Baker v.
Peterson, 67 Fed. App’x. 308, 311, 2003 WL 21321184 (6th Cir. 2003) and Fed. R. Civ. P.
72(a). A United States District Judge may refer certain dispositive pretrial motions to a United
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States Magistrate Judge for submission of proposed findings of fact and conclusions of law,
pursuant to 28 U.S.C. § 636(b)(1)(B) and (C); Brown v. Wesley Quaker Maid, Inc., 771 F.2d
952, 957 (6th Cir. 1985). The District Court Judge may accept, reject, or modify in whole or in
part, the Magistrate Judge’s proposed findings and recommendations. While most actions by a
Magistrate Judge are reviewed for clear error, dispositive recommendations to the District Court
Judge are reviewed de novo. Thomas v. Arn, 474 U.S. 140, 141-42 (1985).
Any party who disagrees with a Magistrate Judge’s recommendation must file written
objections to the report and recommendation. Thomas, 474 U.S. at 142; Fed. R. Civ. P. 72 (b);
28 U.S.C. § 636(b)(1)(C) and LR 72.1(g)(2). When a party fails to timely object to a Magistrate
Judge’s recommended decision, it waives any right to further judicial review of that decision. Id.
at 149 n.7, and United States v. Walters, 638 F.2d 947 (6th Cir. 1981). Therefore, a District
Judge should adopt the findings and rulings of the Magistrate Judge to which a specific objection
is not filed. Brown v. Board of Educ. of Shelby County Schools, 47 F.Supp.3d 665, 674 (W.D.
Tenn. 2014). “Pro se complaints are to be held “to less stringent standards than formal pleadings
drafted by lawyers, and should therefore be liberally construed. . . . 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).
III. FACTUAL HISTORY
The Magistrate Judge’s report and recommendation offers proposed findings of fact in
reference to the motions to dismiss filed by Defendants, Countrywide Home Loan and MERS,
Defendant Bank of New York and Defendant Wilson and Associates, PLLC. (ECF No. 87, pp.
2-4). As noted, Plaintiff filed objections on December 28, 2016. (ECF No. 89, p. 1). However,
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the Court finds Plaintiff’s objections fail to address the factual findings of the report and
recommendation. Arn, 474 U.S. at 148. As such, the Court adopts the Magistrate Judge’s
proposed findings of fact as the factual summary of this case.
IV. ANALYSIS
A. Motions Addressed in the Report and Recommendation (ECF No. 81, 82 & 86)
In the report and recommendation, the Magistrate Judge recommended that the Court
grant the Defendants’ Countrywide Home Loan and MERS, Defendant Bank of New York, and
Defendant Wilson and Associates, PLLC’s motions to dismiss based on the doctrine of res
judicata. Applying the four-part test of Rawe, the Magistrate Judge determined that these claims
arise under the same set of facts, involve the same parties, and have been previously litigated in
both a federal and state court action wherein both courts reached a final determination. See Rawe
v. Liberty Mut. Fire Ins. Co., 462 F.3d 521, 528 (6th Cir. 2006).

The Magistrate Judge

concluded that this action is barred by res judicata. (ECF No. 87). See Gutierrez v. Lynch, 826
F.2d 1534, 1537 (6th Cir. 1986). The Court agrees.
On February 29, 2012, Plaintiff filed a prior action in this Court against the Defendants
ReconTrust Company, N.A. and Bank of New York Mellon (“BNYM”) in reference to the
mortgage loan and pending foreclosure of his property located at 4810 East Shore Drive,
Memphis, Tennessee. See Price v. ReconTrust Company, N.A. et al, Case No. 2:12-cv-2170JTF-cgc. At the time, BNYM was the mortgage lender or holder of the loan on the real property
at issue, while ReconTrust was the substitute trustee of Plaintiff’s deed of trust. (Case No. 12cv-2170, ECF No. 1, ¶¶ 1-4). Plaintiff alleged claims of fraud, breach of contract and fiduciary
duty, and requested that the Court set aside the foreclosure action. He also claimed that the loan

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agreement failed for lack of consideration, having been secured by Federal Reserve notes which
he claimed “[were] not money by law.” (ECF No. 1, p. 7).

On February 19, 2013, the

undersigned Court granted the Defendants’ Rule 12(b)(6) motion to dismiss. Reviewed under
the lenient standards allowed pro se complaints, the Court concluded that the complaint failed to
adequately allege fraud or breach of contract against the Defendants pursuant to Fed. R. Civ. P.
8, 9(b) and 12(b)(6). (ECF No. 12).
On February 26, 2014, Bank of New York Mellon, filed an action in the Circuit court of
Shelby County, Tennessee for the Thirtieth Judicial District against Littleton Price. 1 Following a
non-jury trial, the Court entered a final judgment for Plaintiff on January 22, 2015, finding that
Defendant Price had executed and defaulted on a mortgage loan on the East Shore property. The
loan had been secured by a deed of trust properly owned by the Plaintiff. The Court found that
following the foreclosure proceeding, the deed of trust was properly held by the substitute
trustee. The Court also determined that Defendant’s counterclaims regarding the assignment of
the deed of trust and the foreclosure proceeding were barred by res judicata based on the federal
court case. (ECF No. 86-3).
In its response to Plaintiff’s objections to the Magistrate Judge’s recommendations, Bank
of New York Mellon summarized Plaintiff’s objections as frivolous assertions regarding his
constitutional right to a jury trial, that his mortgage violates Article I of the Constitution, and a
third attempt to contest his prior mortgage and deed of trust. (ECF No. 90, p. 2). The Court
agrees. Plaintiff has failed to submit any specific objections to the Magistrate Judge’s report and
recommendation to grant the Defendants’ motions to dismiss. Therefore, the Court adopts the
Magistrate Judge’s recommendation to grant Defendants’ motions, ECF Nos. 81, 82 and 86, to
1

Case No. CT-000856-14, Bank of New York Mellon v. Littleton Price.

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dismiss. 2
B. First Bank’s Motion to Dismiss (ECF No. 88)
Rule 12(b)(1) Legal Standard
A motion to dismiss for lack of subject matter jurisdiction under Fed. R. Civ. P. 12(b)(1) falls
into two categories, facial attacks and factual attacks. A facial attack is a challenge to the
sufficiency of the pleading itself. Regarding these motions, the court must take all the material
allegations within the petition as true and construe them in the light most favorable to the
nonmoving party. U.S. v. Ritchie, 15 F.3d 592, 598 (6th Cir. 1994). On the other hand, a factual
attack challenges the factual existence of subject matter jurisdiction wherein no presumption of
truthfulness applies. Id. “The res judicata effect of a 12(b)(1) motion is . . .limited to the
jurisdictional issue.” Charles A. Wright & Arthur R. Miller, Federal Practice and Procedure §
1350 at 225(199).
Rule 12(b)(6) Legal Standard
Fed. R. Civ. P. 12(b)(6) allows dismissal of a complaint that “fail[s] to state a claim upon
which relief can be granted.” As such, a Rule 12(b)(6) motion permits the “defendant to test
whether, as a matter of law, the plaintiff is entitled to legal relief even if everything alleged in the
complaint is true.” Mayer v. Mylod, 988 F.2d 635, 638 (6th Cir. 1993) (citing Nishiyama v.

2

It should be noted that on February 2, 2016, The Honorable Vernon S. Broderick, presiding Judge over the action
filed in SDNY ordered the Plaintiff to file an opposing brief in response to the motions to dismiss or alternatively to
transfer filed by Defendants Bank of New York and First Banc Mortgage, Inc., ECF No. 32, and Defendants
Countrywide Home Loans and MERS, (ECF No. 41), by February 17, 2016, or the motions would granted as
unopposed. (ECF No. 57). First Banc Mortgage had also filed a motion to dismiss that was inadvertently not
included in the record. The motion was subsequently cured and later added in the motions for consideration by the
Court. (ECF Nos. 36, 60 and 61). On August 2, 2016, Judge Broderick entered an Order transferring the case to the
Western District of Tennessee for judicial economy, finding that Plaintiff resides in Tennessee, the WDTN is more
convenient, the events underlying the action all occurred in Tennessee including the loan origination. (ECF No. 72).
The Clerk of Court for the SDNY terminated the motions and the Defendants subsequently renewed them by filing
all new motions to dismiss.

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Dickson Cnty., 814 F.2d 277, 279 (6th Cir. 1987)). A motion to dismiss only tests whether the
plaintiff has pleaded a cognizable claim and allows the court to dismiss meritless cases which
would waste judicial resources and result in unnecessary discovery. Brown v. City of Memphis,
440 F.Supp.2d 868, 872 (W.D. Tenn. 2006).
When evaluating a motion to dismiss for failure to state a claim, the Court must determine
whether the complaint alleges “sufficient factual matter, accepted as true, to ‘state a claim to
relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) citing Twombly,
550 U.S. at 570. If a court decides in light of its judicial experience and common sense, that the
claim is not plausible, the case may be dismissed at the pleading stage. Iqbal, 556 U.S. at 679.
The “[f]actual allegations must be enough to raise a right to relief above [a] speculative level.”
Ass’n of Cleveland Fire Fighters v. City of Cleveland, 502 F.3d 545, 548 (6th Cir. 2007) quoting
Twombly, 550 U.S. at 555. A claim is plausible on its face if “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 678 (citing Twombly¸ 550 U.S. at 556). A complaint
need not contain detailed factual allegations. However, a plaintiff’s “[t]hreadbare recitals of the
elements of a cause of action, supported by mere conclusory statements, do not suffice.” Id.
When deciding a 12(b)(6) motion to dismiss, the Court may look to “matters of public record,
orders, items appearing in the record of the case and exhibits attached to the complaint” for
guidance. Barany-Snyder v. Weiner, 539 F.3d 327, 332 (6th Cir. 2008) quoting Amini v. Oberlin
Coll., 259 F.3d 493, 502 (6th Cir. 2001).
Analysis
On December 23, 2016, First Bank, d/b/a First Bank Mortgage, and successor to First
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Banc Mortgage, Inc., filed a Motion to Dismiss alleging that Plaintiff has failed to state a claim
for which relief may be granted under Fed. R. Civ. P. 12(b)(1) and 12(b)(6). (ECF No. 88).
Specifically, First Bank asserts that Plaintiff’s complaint fails to assert any actionable claims
because: 1) Plaintiff lacks standing under the Rooker-Feldman doctrine; 2) he has failed to allege
an injury in fact; 3) the claims are barred by res judicata and collateral estoppel as they have
either been or should have been resolved in the prior state foreclosure or detainer actions and
federal court action; 3 4) the claims regarding the loan assignment are barred by the applicable
statute of limitations or repose; and finally, 5) all of the claims fail as a matter of law. (ECF No.
88).
Res Judicata
The Court finds the same analysis regarding res judicata applied by the Magistrate Judge
and adopted by this Court in reference to the other motions is applicable to First Bank of New
York. Similar to the other named Defendants, First Bank was also a party in the prior two
actions and the facts underlying this action are the same facts and issues, the foreclosure of his
property, that were presented those actions with each ending in final and valid decisions on the
merits. ABS Industries, Inc. ex rel. ABS Litigation Trust v. Fifth Third Bank, 333 F. Appx. 994,
999 (6th Cir. 2009); Malone v. Mortgage Electronic Registration Systems, Inc., No. 3:13-01150,
2014 WL 1350503, *2 (M.D. Tenn. Apr. 3, 2014); and Rawe, 462 F.3d at 529.

Thus, res

judicata bars this action against First Bank of New York.
Standing
Moreover, First Bank, as substitute trustee following the foreclosure, was deemed in
3

Littleton Price v. ReconTrust Co., N.A., et al., Case No. 12-cv-2170-cgc and Bank of New York Mellon v. Littleton
Price and/ or Current Occupants of 4810 East Shore Drive, Memphis, TN 38109, No.: CT-000856-14, Division 9
(Circuit Court Action).

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proper possession of the deed of trust and mortgage note by the Shelby County, Tennessee
Circuit Court. Plaintiff has no standing to challenge the subsequent holder of the note after his
default on the loan.

Livonia Properties Holdings, LLC v. 12840-12976 Farmington Road

Holdings, LLC, 399 F. App’x 97, 102 (6th Cir.2010); Moore v. Carrington Mortg. Services, No.
12-3098, 2013 WL 2458720, at *13 (W.D. Tenn. June 6, 2013) and Gibson v. Mortgage
Electronic Registration Systems, Inc., No. 11-2173, 2012 WL 1601313 (W.D. Tenn. May, 7,
2012). “Under Tennessee law, the lien of a mortgage or trust deed passes, without a special
assignment thereof, to the endorsee of a note or transferee of the debt secured by the instrument.”
Id. at *4. Accordingly, First Bank’s argument that because Plaintiff has been divested of the
property based on his default and the subsequent foreclosure, Plaintiff’s claim does not fall
within the zone of interest of his claims and as such, he lacks standing in this action. “To
establish Article standing, a litigant must show 1) an injury in fact; 2) a causal connection
between the injury and the conduct complained of; and; 3) that the injury will be redressed by a
favorable decision. Cruz v. Capital One, N.A., No. 15-13543, 2016 WL 351121, at *4 (E.D.
Mich., June 28, 2016). In this case, loss of property was due to Plaintiff’s admitted default on
the mortgage loan, and not due to any conduct on the part of First Bank of New York. Because
the property has been foreclosed, action by this Court to “redress the injury” is unwarranted.
Slander of Title Argument/Fraud Claim
The slander of title argument also fails, as a plaintiff must show: 1) he has an interest in
the property; 2) defendant published false statements about the title of the property; 3) the
defendant was acting maliciously, and 4) the false statement proximately caused the plaintiff a
pecuniary loss. Thompson v. Bank of America, N.A., 773 F.3d 741, 754 (6th Cir. 2014). To
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prevail on a “fraudulent inducement claim, the plaintiff must prove that the defendant: (1) made
a false statement concerning a fact material to the transaction; 2) with knowledge of the
statement’s falsity or utter disregard for its truth; 3) with the intent of inducing reliance on the
statement; 4) that the plaintiff reasonably relied on the statement; and 5) the reliance resulted in
an injury. Id. at 752. As noted by the undersigned Court in the previously-filed federal case and
in the Magistrate Judge’s report and recommendation, Plaintiff’s complaint fails to adequately
allege a fraud claim in accordance with Fed. R. Civ. P. 9(b).

Moreover, these issues were

appropriately addressed in the prior cases. In the prior federal court proceeding, the Court ruled
that Plaintiff’s fraud claim did not comply with the Fed. R. Civ. P. 9(b), the complaint failed to
identify any false statements made by the Defendant, nor did it allege the elements of a fraud
claim based on a failure or a duty to disclose. (See Littleton Price v. ReContrust Co., N.A, et al,
Case No. 2:12-cv-2170-JTF-cgc, ECF No. 12, pp. 12-13). Again, both Plaintiff and Bank of
New York were parties to that lawsuit, thereby barring the Court from revisiting these issues in a
subsequent action.
The Statute of Limitations Defense
The Defendant First Bank’s statute of limitations argument also has merit. First Bank
asserts that the loan was assumed by Countywide Home Loans and recorded on March 15, 2004.
First Bank asserts that it has since had no involvement or interest in Plaintiff’s loan and mortgage
since April 2003, the origination of the $142,375.00 mortgage loan. (ECF No. 88, p. 6 and ECF
No. 1-2, pp. 19, 22). Regarding Plaintiff’s fraud or misrepresentation claims, a three-year statute
of limitations would apply. Regarding Plaintiff’s claims that he was fraudulently induced to
enter into an exploitative adjustable-rate-mortgage, Tennessee’s ten-year catchall statute of
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limitations period applies. Humphreys v. Bank of America, 557 Fed. Appx. 416, 422 (6th Cir.
2014) and Coleman v. Wells-Fargo Bank, N.A., No. 3:15-cv-00842, 2016 WL 6900729, *6
(M.D. Tenn. Nov. 21, 2016). Plaintiff filed the instant complaint in the Southern District of New
York on July 10, 2015, twelve years past the date of the loan’s origination and eleven years after
the assignment to Countywide. (ECF No. 1). Therefore, all of Plaintiff’s claims are barred by
the applicable statutes of limitations.
In this case, Plaintiff admittedly defaulted on the loan in the Circuit Court for Shelby
County, Tennessee, thereby causing his loss. Furthermore, Plaintiff has failed to respond to any
of the motions to dismiss prior to the transfer or since the renewed motions have been filed
before this Court.
CONCLUSION
Upon a de novo review of the Magistrate Judge’s Report and Recommendation, the
parties’ motions to dismiss, and the previously filed cases, the Magistrate Judge’s report and
recommendation, ECF No. 87, is adopted in full. Further, the Defendant First Bank’s Motion to
Dismiss is Granted. (ECF Nos. 81, 82, 86, and 88).
Accordingly, the case is ordered Dismissed with Prejudice.
IT IS SO ORDERED on this 30th day of January, 2017.

s/John T. Fowlkes, Jr.
JOHN T. FOWLKES, JR.
UNITED STATES DISTRICT JUDGE

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