Tarhawi v. Ocwen Loan Servicing, LLC et al
Filing
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MEMORANDUM OPINION in re 3 MOTION to Dismiss for Failure to State a Claim; 9 MOTION to Dismiss for Failure to State a Claim. Signed by District Judge James C. Cacheris on 09/18/2014. (jlan) (Copy Mailed)
IN THE UNITED STATES DISTRICT COURT FOR THE
EASTERN DISTRICT OF VIRGINIA
Alexandria Division
ROLA TARHAWI,
Plaintiff,
v.
OCWEN LOAN SERVICING,
et al.,
Defendants.
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M E M O R A N D U M
1:14cv1028 (JCC/IDD)
O P I N I O N
This matter is before the Court on Defendant Ocwen
Loan Servicing LLC’s (“Ocwen”) Motion to Dismiss [Dkt. 9] and
Defendant McCabe, Weisberg & Conway LLC’s (“McCabe”) Motion to
Dismiss [Dkt. 3].
For the reasons set forth below, the Court
will grant both Defendants’ motions.
I. Background
In order to purchase their home in Sterling, Virginia
(the “Property”), Rola Tarhawi (“Plaintiff”) and her husband,
Justin Dibbs, took out a loan for $315,000.00 as evidenced by a
promissory note.
Repayment of the note was secured by the
Property pursuant to a deed of trust.
(Notice of Removal [Dkt.
1], Ex. A, Compl. ¶ 7 [hereinafter “Compl.”].)
The deed of
trust named First Savings Mortgage Corporation (“First Savings”)
1
as lender, Mortgage Electronic Registration Systems (“MERS”) as
beneficiary, and Larry F. Pratt as trustee.
(Id. ¶ 4.)
The deed of trust 1 states:
The beneficiary of this Security Instrument
is MERS (solely as nominee for Lender and
Lender’s successors and assigns) and the
successors and assigns of MERS.
This
Security Instrument secures to Lender: (i)
repayment of the Loan, and all renewals,
extensions, and modification of the Note;
and (ii) the performance of the Borrower’s
covenants and agreements under this Security
Instrument and the Note.
(Notice of Removal, Ex. A., at 14.) 2
It also states:
Borrower understands and agrees that MERS
holds only legal title to the interests
granted
by
Borrower
in
this
Security
Instrument, but if necessary to comply with
law or custom, MERS (as nominee for Lender
and Lender’s successors and assigns) has the
right: to exercise any or all of those
interests, including, but not limited to,
the
right
to
foreclose
and
sell
the
Property; and to take any action required of
Lender
including,
but
not
limited
to,
releasing
and
canceling
this
Security
Instrument.
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In deciding a motion to dismiss, a court may look at documents incorporated
into the complaint by reference “as well as those attached to the motion to
dismiss, so long as they are integral to the complaint and authentic.”
Phillips v. Pitt Cnty. Mem’l Hosp., 572 F.3d 176, 180 (4th Cir. 2009).
Additionally, a district court may consider “matters of public record,
orders, items appearing in the record of the case, and exhibits attached to
the complaint.” Moore v. Flagstar Bank, 6 F. Supp. 2d 496, 500 (E.D. Va.
1997). Therefore, the Court will consider the promissory note, the deed of
trust, and complaints previously filed by Plaintiff’s husband in actions in
the Circuit Court of Loudon County that Ocwen attached to its Motion to
Dismiss.
2
Pagination is CM/ECF pagination.
2
(Id.)
Per the deed of trust, Lender had the ability to freely
transfer its security interest as well as appoint substitute
trustees in its discretion.
(Id. at 22, 24.)
On October 20, 2011, MERS executed an assignment of
the deed of trust purporting to transfer its beneficial interest
in the instrument to Deutsche Bank.
(Compl. ¶ 13.)
On June 7,
2013 Deutsche Bank executed a deed of appointment of substitute
trustee appointing Surety as trustee.
(Id. ¶ 4.)
It is unclear
from the complaint when Plaintiff began to fall behind in her
payments, but the complaint acknowledges that the house was sold
at a foreclosure auction on August 2, 2013.
(Id. ¶ 20.) 3
According to Defendants, this action represents the
latest in a round of judicial challenges to the foreclosure of
Plaintiff’s home. 4
Plaintiff filed the instant action in the
Circuit Court for Loudoun County on July 14, 2014 alleging three
causes of action: a claim for declaratory relief against Ocwen
to determine what, if any, rights Ocwen had in the foreclosed
property (“Count 1”); quiet title to remove documents relating
3
Defendants maintain that Deutsche Bank and Surety were the entities that
foreclosed on the property. Ocwen’s Mot. to Dismiss Mem. [Dkt. 10] at 15;
McCabe’s Mot. to Dismiss Mem. [Dkt. 4] at 9.
4
Dibbs brought the previous actions contesting the foreclosure. Plaintiff
was not formally named as a party in those suits. However, she and her
husband were co-owners of the Property. (Ocwen’s Mot. to Dismiss Mem. at 8.)
Therefore, since Plaintiff would have benefitted to the same extent as Dibbs
had Dibbs succeeded in the prior actions, those actions will be considered in
deciding whether to move forward with Plaintiff’s claim here. See Columbia
Gas Transmission, LLC v. David N. Martin Revocable Trust, 833 F. Supp. 2d
552, 558-59 (E.D. Va. 2011) (stating Virginia courts find privity when the
parties “share a contractual relationship, owe some kind of legal duty to
each other, or have another legal relationship such as co-ownership.”).
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to the foreclosure sale from the land records (“Count 2”); and a
negligence claim against McCabe for failing to perform due
diligence when Ocwen requested to proceed with foreclosure.
(Compl. ¶¶ 43, 49, 54.)
Pursuant to 28 U.S.C. § 1441, Ocwen
removed the action to this court on the basis of both federal
question and diversity jurisdiction.
(Notice of Removal [Dkt.
1] at 1.)
McCabe filed its instant motion on August 12, 2014
with accompanying Roseboro notice [Dkt. 5] as required under
Local Rule 7(K). 5
Ocwen filed its motion to dismiss, including a
Roseboro notice, on August 18, 2014.
Plaintiff’s response to
Ocwen was due September 5, 2014, and her response to McCabe was
due September 11, 2014. 6
Plaintiff has not filed a response.
Having been briefed, Defendants’ motions are now before the
Court.
II. Standard of Review
Federal district courts are “vested with the inherent
power to control and protect the administration of court
proceedings.”
Porter Hayden Co. v. Century Indem. Co., 939 F.
Supp. 424, 429 (D. Md. 1996) (citing White v. Raymark Indus.,
Inc., 783 F.2d 1175, 1177 (4th Cir. 1986)).
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“The authority to
Notice requirements include notifying the pro se party that it has twentyone days to file a response opposing the motion and that failure to do so
could result in the Court’s dismissal of the action on the basis of the
moving party’s papers. E.D. Va. Loc. R. 7(k).
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Plaintiff received an additional three days to respond under Federal Rule of
Civil Procedure 6(d).
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dismiss a party's case sua sponte is “governed not by rule or
statute but by the control necessarily vested in courts to
manage their own affairs so as to achieve the orderly and
expeditious disposition of cases.”
Link v. Wabash R.R. Co., 370
U.S. 626, 630–31 (1962); see also United States v. Shaffer
Equip. Co., 11 F.3d 450, 461 (4th Cir. 1993).
Additionally, Federal Rule of Civil Procedure 41(b)
has been interpreted to vest authority in the district court to
dismiss a case with prejudice, on its own motion, for failure to
prosecute.
Link, 370 U.S. at 630 (“The authority of a federal
trial court to dismiss a plaintiff’s action with prejudice
because of his failure to prosecute cannot be seriously doubted
. . . It has been expressly recognized in Federal Rule of Civil
Procedure 41(b).”); Davis v. Williams, 588 F.2d 69, 70 (4th Cir.
1978).
A dismissal with prejudice is a harsh sanction and is
not invoked lightly in view of the “sound policy of deciding
cases on their merits.”
Davis, 588 F. 2d at 70 (citations
omitted) (internal quotation marks omitted).
Courts are
especially hesitant to dismiss a complaint with prejudice in
cases brought by pro se plaintiffs.
Diamond v. Mohawk Indus.,
Inc., No. 6:12-cv-00057, 2014 WL 1404563, at *4 (W.D. Va. Apr.
10, 2014).
Balanced against these policies are principles of
sound judicial administration.
In determining whether to
dismiss a case under Rule 41(b), district courts should
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consider: “(1) the degree of personal responsibility on the part
of the plaintiff; (2) the amount of prejudice to the defendant
caused by the delay; (3) the presence or absence of a drawn out
history of deliberately proceeding in a dilatory fashion; and
(4) the effectiveness of sanctions less drastic than dismissal.”
Davis, 588 F. 2d at 70 (citation omitted).
III. Analysis
As noted earlier, Plaintiff has not filed a response.
Thus, the issue in this case is whether dismissal with prejudice
is appropriate under Rule 41(b) and the Davis factors.
Turning
to the first Davis factor, Plaintiff bears personal
responsibility for failure to respond.
Though she is not
represented by counsel, she received not one, but two Roseboro
notices in this case.
These notices complied with the
requirements of Local Rule 7(k), setting forth the time she had
to respond and the potential penalties for failing to do so.
There is no indication that service on Plaintiff has been
ineffective.
In fact, it appears from court filings that she
has lived at the same address since August 2010.
(Compare
Ocwen’s Mot. to Dismiss Mem. [Dkt. 10], Ex. A, at 1 with Compl.)
Thus, it must be assumed that she received the notices and the
filings.
See Fed. R. Civ. P. 5(b)(2)(C) (“A paper is served
under this rule by mailing it to the person’s last known
address, in which event service is complete upon mailing.”).
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As to the second Davis factor, continuing to delay
this case prejudices Defendants.
This is not the first time
that Plaintiff and her husband have tried to challenge the
foreclosure of their home in court.
There have been three
previous attempts in state court to invalidate the foreclosure,
naming a variety of defendants.
(Ocwen’s Mot. to Dismiss Mem.
at 3-5; see also Ocwen’s Mot. to Dismiss Mem., Ex. A-M.)
The
legal theories in all three cases have been considered and
roundly rejected by many other courts for a number of reasons,
not least because plaintiffs in those cases willingly signed
contracts that agreed to the terms of the foreclosures.
See
Tapia v. U.S. Bank, N.A., 718 F. Supp. 2d 689, 695-96 (E.D. Va.
2010), aff’d, 441 F. App’x 166 (4th Cir. 2011); Larota-Florez v.
Goldman Sachs Mortg. Co., 719 F. Supp. 2d 636, 639 (E.D. Va.
2010), aff’d, 441 Fed. App’x 202 (4th Cir. 2011); Horvath v.
Bank of New York, N.A., et al., No. 1:09-cv-01129 (AJT/TCB),
2010 WL 538039, at *2 (E.D. Va. Jan. 29, 2010), aff’d, 641 F.3d
617 (4th Cir. 2011); see also Wolf v. Fed. Nat’l Mortg. Assoc.,
et al., 830 F. Supp. 2d 153, 162 (W.D. Va. 2011) (collecting
cases in other circuits).
Turning to the third Davis factor, this Court has no
knowledge of the speed at which Plaintiff and Dibbs prosecuted
previous actions, and Defendants’ moving papers do not indicate
whether Plaintiff has a history of delaying proceedings.
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However, it should be noted that the first suit in this legal
battle was filed on August 5, 2010.
Mem. at 3.)
(Ocwen’s Mot. to Dimiss
This has resulted in four years of unsuccessful
and, quite frankly, wasteful litigation.
Finally, there are no less drastic sanctions than
dismissal with prejudice.
Despite Virginia’s non-judicial
foreclosure laws and Plaintiff’s signature on a contract
agreeing to the transferability of the note and deed of trust,
Plaintiff and her husband have already had several chances to
attempt to invalidate the foreclosure.
Additional time to
prosecute this case is not warranted on these facts.
IV. Conclusion
For the reasons stated above, the Court will grant
Defendants’ Motions to Dismiss and dismiss this case with
prejudice.
An appropriate order will follow.
September 18, 2014
Alexandria, Virginia
/s/
James C. Cacheris
UNITED STATES DISTRICT COURT JUDGE
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