Rodriguez v. The Bank of New York Mellon, N.A. et al

MOTION to Dismiss for Failure to State a Claim

E.D. Va.August 17, 2016

1 IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF VIRGINIA Alexandria Division MARIA RODRIGUEZ, Plaintiff, v. THE BANK OF NEW YORK MELLON, N.A., as trustee for THE CERTIFICATE HOLDERS OF THE CWMBS INC., CHL MORTGAGE PASS-THROUGH TRUST 2007-17, MORTGAGE PASS THROUGH CERTIFICATES, SERIES 2007-17, MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., RESIDENTIAL CREDIT SOLUTIONS, INC., and EQUITY TRUSTEES, LLC, Defendants. Case No.: 1:16-cv-0483 (GBL/JFA) DEFENDANTS’ MOTION TO DISMISS THE SECOND AMENDED COMPLAINT Defendants, The Bank of New York Mellon, N.A., as trustee for the Certificate Holders of the CWMBS Inc., CHL Mortgage Pass-Through Trust 2007-17, Mortgage Pass Through Certificates. Series 2007-17 (hereinafter “BoNY”), and Mortgage Electronic Registration Systems, Inc. (“MERS”) (collectively “Defendants”), by counsel, move to dismiss the Second Amended Complaint pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure for failure to state a claim. For the reasons stated in the accompanying Memorandum of Law in Support of Motion to Dismiss, the Complaint should be dismissed with prejudice. WHEREFORE, Defendants, The Bank of New York Mellon, N.A., as trustee for the Certificate Holders of the CWMBS Inc., CHL Mortgage Pass-Through Trust 2007-17, Mortgage Case 1:16-cv-00483-GBL-JFA Document 40 Filed 08/17/16 Page 1 of 3 PageID# 357 2 Pass Through Certificates. Series 2007-17 and Mortgage Electronic Registration Systems, Inc. respectfully request that the Court grant their Motion to Dismiss, dismiss the Complaint with prejudice, award Defendants their attorneys’ fees and costs, and award all just and equitable relief. Dated: August 17, 2016 Respectfully submitted, THE BANK OF NEW YORK MELLON, N.A., as trustee for THE CERTIFICATE HOLDERS OF THE CWMBS INC., CHL MORTGAGE PASS-THROUGH TRUST 2007-17, MORTGAGE PASS THROUGH CERTIFICATES, SERIES 2007-17, and MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC. By: /s/ Jon S. Hubbard Of Counsel Jon S. Hubbard (VSB No. 71089) TROUTMAN SANDERS LLP 1001 Haxall Point Richmond, Virginia 23219 Telephone: (804) 697-1407 Facsimile: (804) 397-1339 E-mail: jon.hubbard@troutmansanders.com Counsel for Defendants The Bank of New York Mellon, N.A., as trustee for the Certificate Holders of the CWMBS Inc., CHL Mortgage Pass-Through Trust 2007- 17, Mortgage Pass Through Certificates, Series 2007-17 and Mortgage Electronic Registration Systems, Inc. Case 1:16-cv-00483-GBL-JFA Document 40 Filed 08/17/16 Page 2 of 3 PageID# 358 3 CERTIFICATE OF SERVICE I certify that on the 17th day of August, 2016, I electronically filed the foregoing document with the Clerk of the Court using the CM/ECF System which will then send a notification of such filing (NEF) to the following: Counsel for Plaintiff Christopher E. Brown, Esq. The Brown Firm, PLLC 526 King Street, Suite 207 Alexandria, VA 22314 Counsel for Residential Credit Solutions, Inc. and Equity Trustees, LLC Robert R. Michael, Esq. David L. Ward, Esq. BWW Law Group, LLC 8100 Three Chopt Rd., Suite 240 Richmond, VA 23229 /s/ Jon S. Hubbard Jon S. Hubbard (VSB No. 39267) TROUTMAN SANDERS LLP 1001 Haxall Point Richmond, Virginia 23219 Telephone: (804) 697-1407 Facsimile: (804) 397-1339 E-mail: jon.hubbard@troutmansanders.com Counsel for Defendants The Bank of New York Mellon, N.A., as trustee for the Certificate Holders of the CWMBS Inc., CHL Mortgage Pass-Through Trust 2007-17, Mortgage Pass Through Certificates. Series 2007-17 and Mortgage Electronic Registration Systems, Inc. Case 1:16-cv-00483-GBL-JFA Document 40 Filed 08/17/16 Page 3 of 3 PageID# 359 IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF VIRGINIA ALEXANDRIA DIVISION MARIA RODRIGUEZ, Plaintiff, v. THE BANK OF NEW YORK MELLON F/K/A THE BANK OF NEW YORK, AS TRUSTEE FOR THE CERTIFICATEHOLDERS OF THE CWMBS INC., CHL MORTGAGE PASS-THROUGH TRUST 2007-17, MORTGAGE PASS THROUGH CERTIFICATES, SERIES 2007- 17, et al., Defendants. ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) Case No. 1:16-cv-00483-GBL-JFA MEMORANDUM IN SUPPORT OF MOTION TO DISMISS Defendants The Bank of New York Mellon f/k/a The Bank of New York, as Trustee for the Certificateholders of the CWMBS, Inc., CHL Mortgage Pass-Through Trust 2007-17, Mortgage Pass Through Certificates, Series 2007-17 (“BONY”) and Mortgage Electronic Registration Systems, Inc., (“MERS”) (collectively, “Defendants”), by counsel, submit this memorandum in support of their Motion to Dismiss the Second Amended Complaint filed by Plaintiff Maria Rodriguez (“Plaintiff”). INTRODUCTION Plaintiff’s Second Amended Complaint should be dismissed because it fails to state a claim for relief against all defendants, including BONY and MERS. In her Second Amended Complaint, Plaintiff asserts “lack of standing to foreclose” claims (also known as, “show-me-the- note” claims) disguised as claims for “Remove Cloud on Title” (Count I), Fraud (Count II), “Slander of Title - In the Public Record” (Count III), violation of the Fair Debt Collection Case 1:16-cv-00483-GBL-JFA Document 40-1 Filed 08/17/16 Page 1 of 20 PageID# 360 2 Practices Act (Count IV), and “Equitable Action to Rescind Foreclosure Sale” (Count V). These theories of relief have been rejected time and again by the Fourth Circuit, this Court, and the state courts of the Commonwealth of Virginia. Additionally, Plaintiff has failed to provide sufficient factual support for any of the Second Amended Complaint’s five causes of action. For the reasons stated below, the Motion to Dismiss should be granted, and Plaintiff’s Second Amended Complaint should be dismissed with prejudice.1 BACKGROUND2 On or about March 1, 2006, Plaintiff executed a deed of trust (“Deed of Trust”) securing a promissory note (the “Note”) evidencing a loan in the amount of $789,000.00 in favor of Sandy Spring Bank. (2d Am. Compl. ¶ 9; id. Ex. A). The Deed of Trust places a lien on property located at 3401 Putnam Street, Falls Church, Virginia 22042. (2d Am. Compl. ¶ 9; id. Ex. A at pg. 4). The Deed of Trust names MERS as nominee for Sandy Spring Bank, as the original lender, and its successors and assigns, and as the beneficiary under the Deed of Trust. (2d Am. Compl. Ex. A at pg. 2). On September 12, 2011, MERS assigned its interest in the Deed of Trust to BONY via a Certificate of Transfer. (2d Am. Compl. ¶ 20; id. Ex. B). In March of 2013, Plaintiff received notice that the Property was scheduled for foreclosure sale on April 6, 2013. (2d Am. Compl. ¶ 35). On the day before the scheduled foreclosure sale, Plaintiff filed for Chapter 13 Bankruptcy to prevent foreclosure. (2d Am. Compl. ¶ 36). Eighteen days later, the Bankruptcy Court dismissed Plaintiff’s petition. On May 6, 2014, an Appointment of Substitute Trustee was executed wherein Equity was appointed as substitute trustee. (2d Am. Compl. ¶ 38; id. Ex. H). 1 Defendants BONY and MERS join in the Motion to Dismiss filed by co-Defendants, Residential Credit Solutions, Inc. (“RCS”) and Equity Trustees, LLC (“Equity”). 2 Although Defendants do not necessarily agree with the allegations in the Second Amended Complaint, for the limited purposes of this Motion, only well-pleaded factual allegations are accepted as true. See Edwards v. City of Goldsboro, 178 F.3d 231, 244 (4th Cir. 1999). Case 1:16-cv-00483-GBL-JFA Document 40-1 Filed 08/17/16 Page 2 of 20 PageID# 361 3 Subsequent to May 2014, Plaintiff states that she applied for a loan modification on three occasions: August 22, 2014 (2d Am. Compl. ¶ 42), January 5, 2014 (2d Am. Compl. ¶ 51), and June 10, 2015 (2d Am. Compl. ¶ 57). Plaintiff concedes that she was “continually turned down” on her loan modification applications. (2d Am. Compl. ¶ 62). Within this time frame, Plaintiff states that she also received four Notice of Foreclosure Sale letters regarding the Property: June 21, 2014 (2d Am. Compl. ¶ 39), September 11, 2014 (2d Am. Compl. ¶ 47), December 29, 2014 (2d Am. Compl. ¶ 50), and September 14, 2015 (2d Am. Compl. ¶ 61). Also, Plaintiff provides that she filed for bankruptcy to avoid the foreclosure of the Property on two additional occasions: October 1, 2014 (2d Am. Compl. ¶ 48), and January or February of 2015 (2d Am. Compl. ¶¶ 53- 54). On or about October 2, 2015, the Property was sold at a foreclosure sale. (2d Am. Compl. ¶ 64). PROCEDURAL HISTORY Plaintiff commenced this action by filing a pro se complaint with the Circuit Court of Fairfax County, Virginia, Case Number CL-2015-0009452, against RCS and Equity. On December 9, 2015, Plaintiff, then represented by counsel, filed a Motion for Leave to file an Amended Complaint, which was granted on January 8, 2015. The Amended Complaint added three additional defendants: BONY, Bank of America, N.A. (“BANA”), and BWW Law Group, LLC (“BWW”). On April 27, 2016, BWW filed a Notice of Removal of this action to this Court. [ECF # 1]. On May 25, 2016, Plaintiff filed a Consent Motion for Extension of Time to Amend the Complaint, [ECF #18], which was granted on May 26, 2016. [ECF # 21]. Plaintiff filed her Second Amended Complaint on June 10, 2016. [ECF # 25]. The Second Amended Complaint removed BANA and BWW as defendants and added MERS as a defendant. Case 1:16-cv-00483-GBL-JFA Document 40-1 Filed 08/17/16 Page 3 of 20 PageID# 362 4 LEGAL STANDARD A complaint must be dismissed if it fails to state a claim upon which relief may be granted. Fed. R. Civ. P. 12(b)(6). Although a court ruling on a 12(b)(6) motion must assume the facts alleged in the Complaint to be true, it is not proper to assume that a plaintiff can prove facts that he has not alleged. Associated General Contractors v. Cal. State Council of Carpenters, 459 U.S. 519, 526 (1983). Nor is the Court required to consider unsupported legal conclusions or legal conclusions disguised as factual allegations. See Ashcroft v. Iqbal, 556 U.S. 662, 678-79 (2009). “Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Iqbal, 556 U.S. at 678. “[N]aked assertions of wrongdoing necessitate some factual enhancement within the complaint to cross the line between possibility and plausibility of entitlement to relief.” Francis v. Giacomelli, 588 F.3d 186, 193 (4th Cir. 2009) (internal quotation marks omitted). This plausibility standard requires a plaintiff to demonstrate more than “a sheer possibility that a defendant has acted unlawfully.” Id. It requires the plaintiff to articulate facts that, when accepted as true, “show” that the plaintiff has stated a claim entitling him to relief, that is, the “plausibility of ‘entitlement to relief.’” Id. (quoting Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949, 556 U.S. 662 (2009); Twombly, 550 U.S. at 557). Thus, the “[f]actual allegations must be enough to raise a right to relief above the speculative level,” Twombly, 550 U.S. at 545, to one that is “plausible on its face,” rather than merely “conceivable.” Id. at 570. Rather, the “[f]actual allegations must be enough to raise a right to relief above the speculative level, on the assumption that all the allegations in the complaint are true (even if doubtful in fact).” Iqbal, 556 U.S. at 678 (citations omitted). “When the allegations in a complaint, however true, could not raise a claim of entitlement to relief, ‘this basic deficiency should…be exposed at the point of minimum expenditure of time and money by the parties and Case 1:16-cv-00483-GBL-JFA Document 40-1 Filed 08/17/16 Page 4 of 20 PageID# 363 5 the court.’” Id. at 558 (citation omitted). In this case, the Complaint is lacking sufficient factual allegations - as opposed to conclusions and labels - to support any cause of action against Defendants. ARGUMENT I. PLAINTIFF’S UNDERLYING LEGAL THEORIES HAVE BEEN ROUTINELY REJECTED. At bottom, all of Plaintiff’s claims assert the same theory- Defendants lack “standing” or authority to foreclose on the Property. “This Court, along with the Fourth Circuit Court of Appeals, has repeatedly rejected th[ese] ‘standing to foreclose’ argument[s] in a number of recent lawsuits where borrowers attempted to avoid and delay foreclosure by attacking their lenders.” Reyes v. Wells Fargo Bank, N.A., No. 1:13cv547, 2013 U.S. Dist. LEXIS 104428, at *5 (E.D. Va. July 24, 2013) (citations omitted). As shown below, the Court should dismiss Plaintiff’s “standing to foreclose” claims as contrary to Virginia law. A. Plaintiff Has No Standing To Challenge The Assignment. The genesis of all of Plaintiff’s causes of action is the theory that the September 12, 2011 Certificate of Transfer from MERS, as nominee to Sandy Spring Bank, to BONY was false, and, therefore, BONY lacked the authority to appoint the substitute trustee and request foreclosure of the Property. Plaintiff, however, lacks standing to challenge the assignment of interest in the Deed of Trust effectuated by the Certificate of Transfers, as this Court has held over and over again. “Time and time again, courts applying Virginia law have dismissed such claims on the grounds that debtors lack standing to challenge contracts where they are neither a party to nor an intended beneficiary of the contract.” O’Connor v. Sand Canyon Corp., Case No. 6:14-cv- 00024, 2015 U.S. Dist. LEXIS 5316, at *9 (W.D. Va. Jan 16, 2015); see, e.g., Pena v. HSBC Bank USA, N.A., 633 Fed. Appx. 580, 582 (4th Cir. 2015) (holding that borrowers lacked Case 1:16-cv-00483-GBL-JFA Document 40-1 Filed 08/17/16 Page 5 of 20 PageID# 364 6 standing to challenge the validity of the assignment of deed of trust to which they were neither parties nor beneficiaries and that “Virginia law provides no avenue for such a challenge”); Grenadier v. BWW Law Group, Case No. 1:14-cv-00827-LMB-TCB, 2015 U.S. Dist. LEXIS 11418, at *13 (E.D. Va. Jan 30, 2015) (holding that borrower “lack[ed] standing to raise any claims attacking the validity of those assignments” because she had “not alleged any facts showing that she is either a party to or an intended third party beneficiary of any of the assignments of her Note and Deed of Trust”); Mabutol v. Fed. Home Loan Mortg. Corp., Case No. 2:12-cv-00406, 2013 U.S. Dist. LEXIS 42685, at *11 (E.D. Va. Mar. 25, 2013) (“[I]n the absence of an enforceable contract right, the plaintiffs lack standing to challenge the assignment’s validity”). It is well-established that a party “generally must assert his own legal rights and interests, and cannot rest his claim to relief on the legal rights or interests of third parties.” Wolf v. Fannie Mae, 512 Fed. Appx. 336, 342 (4th Cir. 2013) (quoting Warth v. Seldin, 422 U.S. 490, 498, S95 S. Ct. 2197, 45 L. Ed. 2d 343 (1975)). “In Virginia, to sue on a contract one must be a party to or beneficiary of the contract.” Id. Here, Plaintiff baldly challenges BONY’s authority to initiate foreclosure against the Property under the Deed of Trust by claiming that the September 12, 2011 Certificate of Transfer is “clearly false.” (2d Am. Compl. ¶ 77). Importantly, though, Plaintiff has not alleged that she is a party to the Certificate of Transfer from MERS to BONY or that she is an intended beneficiary of the assignment. “Without an enforceable contract right, [Plaintiff] lacks standing to attack the validity of the assignment.” Wolf, 512 Fed. Appx. at 342. Here, as in Wolf, the Certificate of Transfer of the beneficial interest in Plaintiff’s Deed of Trust to BONY “does not affect [Plaintiff’s] rights or duties at all.” Id. Indeed, Plaintiff “still has the obligation under the Case 1:16-cv-00483-GBL-JFA Document 40-1 Filed 08/17/16 Page 6 of 20 PageID# 365 7 note to make payments. In fact, the only thing the assignment affects is to whom [Plaintiff] makes the payments.” Id. Accordingly, because Plaintiff has “no interest in the assignment . . . to [BONY],” Plaintiff has “no standing to challenge it.” Id. The Fourth Circuit’s ruling in Pena v. HSBC Bank USA, N.A. is instructive here.3 633 Fed. Appx. 580 (4th Cir. 2015). In Pena, the secured party (HSBC) received three separate assignments of the deed of trust. Id. at 582. Based on these assignments, HSBC appointed the substitute trustee and, upon the borrower’s default, instructed the substitute trustee to foreclose. Id. After the foreclosure sale, the Pena claimants filed suit alleging that the “assignment of the deed of trust to HSBC was invalid, and that HSBC therefore had no authority to appoint [the substitute trustee] and no authority to instruct [the substitute trustee] to initiate foreclosure proceedings.” Id. The district court dismissed the claims in Pena ruling that “the Penas lack standing to challenge the assignment.” Id. at 581. On appeal the Fourth Circuit affirmed the district court’s dismissal, ruling that all of the claims were “entirely dependent on their challenge to the validity of the assignment from MERS to HSBC - a challenge that they have no standing to raise.” Id. at 583. The same conclusion must apply to Plaintiff’s claims in this matter. Like the Pena claimants, Plaintiff seeks to attack the assignment of the beneficial interest in the Deed of Trust from MERS, as nominee, to BONY. While Plaintiff’s argument varies slightly from Pena in that Plaintiff asserts that the Certificate of Transfer is attempting to assign the Note as well as the beneficial interest in the Deed of Trust, such distinction is of no consequence. Like Pena, Plaintiff is not a party to or a beneficiary of the Certificate of Transfer. Like the claims in Pena, Virginia law provides no avenue by which Plaintiff may challenge the validity of the assignment 3 Counsel for Plaintiff represented the unsuccessful claimant in the Pena matter. Case 1:16-cv-00483-GBL-JFA Document 40-1 Filed 08/17/16 Page 7 of 20 PageID# 366 8 of the beneficial interest in the Deed of Trust to BONY via the Certificate of Transfer. Accordingly, Plaintiff’s claims revolving around the validity of the Certificate of Transfer should be dismissed as a matter of law. B. Plaintiff’s Allegation That The Certificate of Transfer Is False Is Factually And Legally Incorrect. Even if Plaintiff were to have standing to challenge the assignment of the beneficial interest in the Deed of Trust via the Certificate of Transfer, her claims would still fail because they are based on erroneous factual and legal conclusions. Plaintiff first argues that the Certificate of Transfer did not transfer any interest in the Loan because MERS has allegedly stated that assignments which MERS executes “do not transfer any interest in the loan.” (2d Am. Compl. ¶ 26). In support of this contention, Plaintiff argues that the MERS related documents attached to the Second Amended Complaint establish that MERS cannot transfer any interests in loans where it is named a nominee and/or beneficiary. (2d Am. Compl. ¶ 26). Additionally, Plaintiff argues that interest in a deed of trust cannot be transferred or assigned without underlying note. (2d Am. Compl. ¶ 25). As shown below, Plaintiff assertions are contrary to the facts and the law of the Commonwealth. 1. The MERS documents do not support Plaintiff’s position that MERS assignments do not transfer any interest in the underlying loans. Plaintiff relies on the excerpts of MERS related documents attached to the Complaint to put forth the unsupported statement that MERS has admitted “that its assignments do not transfer any interest in the loan[s].” (2d Am. Compl. ¶ 26). To support this statement, Plaintiff has attached five documents which purportedly stand for this proposition. First, Plaintiff provides MERSCORP, INC.’s Rules of Membership. (2d Am. Compl. Ex. C). Yet, nowhere in the provided excerpt of the Rules of Membership does it state that MERS-executed assignments do not transfer any interest in a loan, specifically in a deed of trust securing a loan. Plaintiff Case 1:16-cv-00483-GBL-JFA Document 40-1 Filed 08/17/16 Page 8 of 20 PageID# 367 9 attempts to remedy this by providing her own commentary to the Rules of Membership in a document entitled “MERS Rules Details.” (2d Am. Compl. Ex. D). This document is merely Plaintiff’s attempt to twist the words of the Rules of Membership to support her position, but fails to correctly interpret the plain language of the specific section she cites. Plaintiff next provides MERS’ Procedures Manual and its section regarding Transfer of Beneficial Rights to aid her cause. (2d Am. Compl. Ex. E). Yet, this portion of the Procedures Manual states nothing to the effect that MERS assignments do not transfer any interest in the underlying loan. Finally, Plaintiff relies on excerpts from an answer and a deposition transcript to support her contention. (2d Am. Compl. Exs. F & G). Unfortunately for Plaintiff, these two documents rebut her position instead of providing support. The Answer in Exhibit F states that “it is denied that MERS cannot assign interests in deeds of trust.” (2d Am. Compl. Ex. F ¶¶ 75-76). The deposition transcript in Exhibit G also provides that MERS can assign legal title that it receives pursuant to a deed of trust. (2d Am. Compl. Ex. G). Plaintiff’s position that MERS cannot assign any interest in her loan is also contrary to the express provisions in the Deed of Trust that she signed. Here, within the granting clause in the Deed of Trust is a section entitled “Transfer of Rights in the Property” which states that: 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) the repayment of the Loan, and all renewals, extensions and modifications of the Note; and (ii) the performance of Borrower’s covenants and agreements under this Security Instrument and the Note. For this purpose, Borrower irrevocably grants and conveys to Trustee, in trust, with power of sale, the following described property . . . 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 or 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 cancelling this Security Instrument. Case 1:16-cv-00483-GBL-JFA Document 40-1 Filed 08/17/16 Page 9 of 20 PageID# 368 10 (2d Am. Compl. Ex. A at pg. 4). It is clear from the unambiguous terms of the Deed of Trust, which Plaintiff executed, that MERS was granted the rights and interests of the originating lender, Sandy Spring Bank, to undertake certain activities as provided by the Deed of Trust. The rights granted to MERS included the authority to assign its beneficial interest in the Deed of Trust. Plaintiff has failed to put forth any evidence or argument which supersedes the express terms of the Deed of Trust. Plaintiff’s attempts to misconstrue the above-referenced documents to bolster her position are plainly wrong as shown by the clear language of provided excerpts and the express provisions of the Deed of Trust. As such, Plaintiff’s arguments that MERS has admitted to not being able to transfer any interest in loans via assignment is factually incorrect and unavailing. 2. Plaintiff’s position that the Certificate of Transfer is Void because it only transfers the Deed of Trust is legally incorrect. Plaintiff asserts that “[t]he Deed of Trust cannot be transferred without the note.” (2d Am. Compl. ¶ 25). Plaintiff fails to support this bald assertion with any legal precedent or statutory authority. For over a century, it has been settled that under Virginia law, interests in deeds of trust accompany the promissory notes that they secure. In other words, “deeds of trust and mortgages are regarded in equity as mere securities for the debt, and whenever the debt is assigned the deed of trust or mortgage is assigned or transferred with it.” Horvath v. Bank of N.Y., N.A., 641 F.3d 617, 623 (4th Cir. 2011); see also Ruggia v. Mash Mut., 719 F. Supp. 2d 642, 646-47 (E.D. Va. 2010) (stating that “the so-called ‘split’ of the Deed [of Trust] from the Note alleged by Plaintiffs does not render the Deed [of Trust] unenforceable nor does it leave the Note unsecured”). “[A] note and deed of trust do not receive different legal treatment and [] the transfer of one does not split it from the other.” Wolf, 830 F. Supp. 2d 153, 162-63 (W.D. Va. 2011) (interpreting Horvath, 641 F.3d 617 (4th Cir. 2011)). Plaintiff’s Case 1:16-cv-00483-GBL-JFA Document 40-1 Filed 08/17/16 Page 10 of 20 PageID# 369 11 conclusory assertion that the Deed of Trust cannot be assigned without the Note is unsupported by the case law and should be rejected. For the reasons above, Plaintiff’s claims should all be dismissed as relying on legal theories which are contrary to the laws of Virginia and which have been routinely rejected. II. PLAINTIFF FAILED TO STATE A CLAIM FOR RELIEF. A. The Complaint Fails To Satisfy Rule 8(a) Of The Federal Rules Of Civil Procedure. “Under Rule 8, a complaint must allege facts with sufficient specificity to inform defendants what they are accused of so that they can answer or respond to the allegations. Plaintiff’s Complaint is peppered with nothing more than “unadorned, the-defendant-unlawfully- harmed-me-accusation[s].” Iqbal, 556 U.S. at 678. Plaintiff provides little, if any, facts about each Defendant’s role in the alleged wrongdoing. See Alliance Tech. Group, LLC v. Achieve 1, LLC, No. 3:12cv701, 2013 U.S. Dist. LEXIS 4708, at *11-12 (E.D. Va. Jan. 11, 2013) (“In the Complaint now under review, many of the omnibus allegations against ‘the Defendants’ are conclusory, meriting minimal credit. . . . In conducting the appropriate review, the Court must remain mindful of the indiscriminate character of those allegations against the ‘Defendants.’ While such pleading is not prohibited per se, it impacts the Court’s plausibility analysis with respect to [the moving defendants].”); Blick v. JP Morgan Chase Bank, N.A., No. 3:12cv00001, 2012 U.S. Dist. LEXIS 41265, at *18-19 (W.D. Va. Mar. 27, 2012) (citing Dealers Supply Co. v. Cheil Indus., Inc., 348 F. Supp. 2d 579, 590 (M.D.N.C. 2004) (“Courts have been quick to reject pleadings in which multiple defendants are lumped together and in which no defendant can determine from the complaint which of the alleged representations it is specifically charged with having made.”). Plaintiff’s generalized allegations are not enough to satisfy Rule 8. Plaintiff has asserted five claims in her Second Amended Complaint, and all of them fail Case 1:16-cv-00483-GBL-JFA Document 40-1 Filed 08/17/16 Page 11 of 20 PageID# 370 12 to specify what roles the individual defendants played in the alleged wrongful acts. Plaintiff repeatedly contends that “the Defendants” misled Plaintiff, (2d Am. Compl. ¶ 85), published false words regarding title to the Property in the Land Records (2d Am. Compl. ¶ 89), wrongfully accelerated the loan and foreclosed on the Property (2d Am. Compl. ¶ 91), engage in abusive debt collection practices (2d Am. Compl. ¶¶ 98-100), and wrongfully initiated foreclosure (2d Am. Compl. ¶¶ 104-05). Without more, Plaintiff’s Second Amended Complaint fails to satisfy Federal Rule of Civil Procedure 8(a), and this Court should dismiss the Second Amended Complaint. B. Plaintiff Cannot Seek the Relief of Quiet Title (Count I). To the extent that Count I asserts a claim under the theory of quiet title, this claim must be dismissed. In Virginia, “[a]n action for quiet title is based on the premise that a person with good title to certain real or personal property should not be subjected to various future claims against the title.” Maine v. Adams, 277 Va. 230, 672 S.E.2d 862, 866-67 (2009). “In order to assert a claim for quiet title, the plaintiff must plead that he has fully satisfied all legal obligations to the party in interest.” Bagley v. Wells Fargo Bank, N.A., No. 3:12-CV-617, 2013 U.S. Dist. LEXIS 11880, at *24 (E.D. Va. Jan. 29, 2013). The Supreme Court of Virginia explained that “in order for a claim for quiet title to survive demurrer in the foreclosure context, the former homeowner must plead that she has fully satisfied all legal obligations to the real party in interest.” Squire v. Va. Hous. Dev. Auth., 287 Va. 507, 520, 758 S.E.2d 55, 62 (2014) (citing Tapia v. U.S. Bank, N.A., 718 F. Supp. 2d 689, 700 (E.D. Va. 2010), aff’d, 441 Fed. App’x 166 (4th Cir. 2011)). Plaintiff argues that the Certificate of Transfer, the Appointment of Substitute Trustee, and the Trustees’ Deed are documents recorded in the Land Records which contain false statements that cloud Plaintiff’s title to the Property. (2d Am. Compl. ¶¶ 76-80). As shown Case 1:16-cv-00483-GBL-JFA Document 40-1 Filed 08/17/16 Page 12 of 20 PageID# 371 13 above, Plaintiff has no standing to challenge the assignment of beneficial interest in the Deed of Trust to BONY. Additionally, Plaintiff has asserted no facts that suggest that she has superior title to the Property or has satisfied all legal obligations to BONY. In the Second Amended Complaint, Plaintiff acknowledges that she received a loan that was secured by a lien on the Property. (2d Am. Compl. ¶ 9). Plaintiff has not pleaded, nor can she plead, that she paid off the Loan. The Trustees’ Deed evidences that Plaintiff has no title to the Property. Likewise, Plaintiff cannot claim that the Loan was forgiven, cancelled, or extinguished. Indeed, Plaintiff defaulted on her Loan because she failed to meet her payment obligations. Consequently, Plaintiff cannot contend that she holds superior title to the Property. See Harrell v. Caliber Home Loans, Inc., 995 F. Supp. 2d 548, 552 (E.D. Va. 2014) (“Here, the Plaintiffs have not alleged any facts that suggest they have superior title to the Property. Specifically, the Complaint contains no facts that would suggest that they have satisfied their obligations under the loan agreement. Without alleging facts to that effect, Plaintiff has not stated a claim for quiet title.”). Therefore, Count I should be dismissed with prejudice. C. Plaintiff’s Fraud Claim (Count II) Fails To State A Claim For Relief. Plaintiff’s claim for Fraud should be dismissed. To establish fraud under Virginia law, a plaintiff must allege “(1) a false representation, (2) of a material fact, (3) made intentionally and knowingly, (4) with intent to mislead, (5) reliance by the party misled, and (6) resulting damage to the party misled.” State Farm Mut. Auto. Ins. v. Remley, 270 Va. 209, 618 S.E.2d 316, 321 (2005). A fact is material “when it influences a person to enter into a contract, when it deceives him and induces him to act, or when without it the transaction would not have occurred.” Packard Norfolk, Inc. v. Miller, 95 S.E.2d 207, 211-12 (Va. 1956) (citations omitted). Federal Rule of Civil Procedure 9(b) requires that a claim for fraud be pled with particularity. See Parkman v. Elam, 2009 U.S. Dist. LEXIS 21578, at *8 (E.D. Va. Mar. 17, 2009) (“In alleging Case 1:16-cv-00483-GBL-JFA Document 40-1 Filed 08/17/16 Page 13 of 20 PageID# 372 14 fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake”) (citing Fed. R. Civ. P. 9(b)) (emphasis in original). At a minimum, a plaintiff must specifically allege “the time, place, and contents of the false representations, as well as the identity of the person making the misrepresentation and what he obtained thereby.” Harrison v. Westinghouse Savannah River Co., 176 F.3d 776, 784 (4th Cir. 1999) (internal citations omitted); Morris v. Wachovia Securities, Inc., 277 F. Supp. 2d 622, 645 (E.D. Va. 2003) (“[U]nder Rule 9(b), ‘particularity of pleading is required with regard to the time, place, speaker, and contents, as well as the manner in which statements are false and the specific acts raising an inference of fraud - the who, what, where, why and when.’”) (quoting In re The First Union Corp. Securities Litigation, 128 F. Supp. 2d 871, 884 (W.D.N.C. 2001)). Where a case involves claims for fraud against multiple defendants, a plaintiff must establish the elements of the fraud claim against each defendant. See Juntti v. Prudential-Bache Sec., No. 92-2066, 1993 U.S. App. LEXIS 10345, at *4 (4th Cir. May 3, 1993) (“Further indicative of the insufficiently particular character of the complaint is its impermissible aggregation of defendants without specifically alleging which defendant was responsible for which act. . . . Such pleading practice is insufficient either to provide a defendant with fair notice of the claim against him or to protect a defendant from harm to his reputation or goodwill.”); Jones v. Bank of Am. Corp., 2010 U.S. Dist. LEXIS 142918, at *27 (E.D. Va. Aug. 24, 2010) (“When the plaintiff alleges that a fraud was perpetrated by multiple defendants, ‘the complaint should inform each defendant of the nature of his alleged participation in the fraud.’”) (quoting Zaremski v. Keystone Title Assocs., Inc., 884 F.2d 1391 (4th Cir. 1989) (unpublished table decision) (internal citations omitted)). Plaintiff’s fraud claim is not plead with the requisite particularity required by Federal Case 1:16-cv-00483-GBL-JFA Document 40-1 Filed 08/17/16 Page 14 of 20 PageID# 373 15 Rule of Civil Procedure 9(b). Rather, Plaintiff’s claim vaguely asserts that: The Defendants purposefully misled Plaintiff by making blatant misrepresentations that if [sic] would abide by the servicing guidelines imposed upon it by the federal government and review her for a loan mod, as it was required to do by law, but in truth had no intention of doing at all. (2d Am. Compl. ¶ 85). No description is provided describing the who, what, where, when, and how of the alleged misrepresentations or what was obtained from the purported fraudulent conduct. Additionally, Plaintiff’s fraud claim has completely failed to inform each defendant as to the nature of its participation in the fraud. Plaintiff’s allegation that the Defendants had no intention of reviewing her for a loan modification is contradicted by the Second Amended Complaint wherein Plaintiff concedes that her loan modification applications were “continually turned down.” (2d Am. Compl. ¶ 62). Plaintiff’s general claim that she relied on offers to explore foreclosure avoidance options while foregoing other actions to reinstate the loan or sell her home are unavailing. Plaintiff provides nothing more than this conclusory statement to attempt to establish the element of reliance, but fails to specify how she would have resolved the default on the Loan through other avenues. Finally, Plaintiff has only stated that she has been “personally and financially damaged” as a result of the alleged fraudulent acts. More is needed under the heightened pleading standard for fraud claims. Because Plaintiff has failed to plead the elements of fraud with the particularity required under the Federal Rules of Civil Procedure, this claim should be dismissed with prejudice. D. Plaintiff Has Failed To State A Claim for Slander of Title (Count III). In Virginia, to state a valid claim for slander of title, “a plaintiff must allege facts showing ‘(1) the uttering and publication of the slanderous words by the defendant, (2) the falsity of the words, (3) malice, (4) and special damages.’” Allison v. Shapiro & Burson, Case No. 1:09-cv-00057, 2009 U.S. Dist. LEXIS 108040, at *21 (W.D. Va. Nov. 19, 2009) (internal Case 1:16-cv-00483-GBL-JFA Document 40-1 Filed 08/17/16 Page 15 of 20 PageID# 374 16 quotations omitted). “It is not sufficient to simply allege a cloud on the title of the plaintiffs’ property; a plaintiff must plead and prove that he has suffered a monetary loss as a result of the defendant’s actions.” Id. Here, Plaintiff bases her slander of title claim on the Defendants’ alleged lack of authority to enforce the terms of the Deed of Trust. (2d Am. Compl. ¶ 89). Plaintiff alleges that because the Certificate of Transfer could not effectuate the assignment of any interest in the Loan to BONY, documents recorded in Land Records contained “false words” and “disparaged Plaintiff’s title to the Property.” (2d Am. Compl. ¶ 89). As stated previously, Plaintiff has no standing to challenge the assignment of the beneficial interest in the Deed of Trust via the Certificate of Transfer. Also, “[w]here the lien of the Deed of Trust is not disputed, any documents relating to enforcement of the Deed of Trust, such as Assignments and Substitutions of Trustees, cannot served as the basis of a slander of title claim.” Syed Aftab Kazmi v. Green Point Mortg. Funding, Inc. (In re Syed Aftab Kazmi), Case No. 13-10897-BFK, Chapter 11, Adversary Proceeding Number 13-01087, 2013 Bankr. LEXIS 3752, at *19 (E.D. Va. Bankr. Sept. 3, 2013). The Kazmi court stated that “[t]he Substitutions of Trustees and Assignments of Deeds of Trust are not slanderous statements regarding the Plaintiff’s title to his and his wife’s Property” and that “[t]hese instruments did not encumber the property any further than the original Deed of Trust did, from its inception.” Id. at 19. The Kazmi court held that: Plaintiff cannot plausibly allege a set of facts under which he and his wife have suffered some injury to the title to their property as a result of the recordation of the Substitution of Trustees and the Assignments of the Deeds of Trust, where the validity of the underlying Deed of Trust is not in dispute. Id. at *19-20. The same result should follow here. The documents which Plaintiff argues demonstrate the disparagement of her title to the Property are the documents recorded in the land records. Though not specifically identified, these documents include the Certificate of Transfer Case 1:16-cv-00483-GBL-JFA Document 40-1 Filed 08/17/16 Page 16 of 20 PageID# 375 17 and the Substitution of Trustees. As the Kazmi court found, these documents cannot be a basis for a slander of title claim where, as here, the validity of the underlying loan in not in question. Accordingly, Count III of the Second Amended Complaint should be dismissed with prejudice. E. Plaintiff Has No Claim Under The Fair Debt Collection Practices Act (Count V). Plaintiff’s Fair Debt Collection Practices Act (“FDCPA”) is without merit and should also be dismissed. In Count V, Plaintiff contends that the Defendants “used false, deceptive and misleading representations or means in connection with the collection of the alleged debt from the Plaintiff.” (2d Am. Compl. ¶ 98). Plaintiff attempts to support this claim by asserting purported violations of 15 U.S.C. § 1692e(5) in the form of vague, conclusory statements which rehash the allegations contained in the prior causes of action. (2d Am. Compl. ¶ 98). To state a claim under the FDCPA, a plaintiff must show: “(1) the plaintiff has been the object of collection activity arising from consumer debt, (2) the defendant is a debtor collector as defined by the FDCPA, and (3) the defendant has engaged in an act or omission prohibited by the FDCPA.” Dikun v. Streich, 369 F. Supp. 2d 781, 785 (E.D. Va. 2005) (quotation omitted). Plaintiff has not pleaded facts demonstrating the necessary elements upon which an FDCPA claim can proceed. There is no indication of when the alleged violations occurred, how they occurred, or how each Defendant should be liable for violating the FDCPA. Defendants and the Court are left to guess exactly how Defendants violated the FDCPA. Also, Plaintiff has not shown that Defendants are debt collectors under the FDCPA. The FDCPA defines a debt collector as “any person who uses an instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another.” 15 U.S.C. § 1692a(6). “[C]reditors, mortgag[ees], and Case 1:16-cv-00483-GBL-JFA Document 40-1 Filed 08/17/16 Page 17 of 20 PageID# 376 18 mortgage servicing companies are not debt collectors and are statutorily exempt from liability under the FDCPA.” Blick v. JP Morgan Chase Bank, N.A., Case No. 3:12-cv-00001, 2012 U.S. Dist. LEXIS 41265, at *19-20 (W.D. Va. Mar. 27, 2012). Congress only intended the FDCPA to apply to debt collectors, and not to creditors themselves. See, e.g., Areebuddin v. Onewest Bank, F.S.B., No. 1:09-cv-1083, 2010 U.S. Dist. LEXIS 28469, at *16-19 (E.D. Va. Mar. 24, 2010) (dismissing FDCPA claims because Complaint could “only plausibly allege that [the defendant] is simply a mortgagor or mortgage servicer of the mortgage on Plaintiff’s home, which is not violative of the FDCPA.”). F. Plaintiff’s Claim For Equitable Action To Rescind Foreclosure Sale (Count VI) Cannot Stand. In her final cause of action, Plaintiff requests that the October 2, 2015 foreclosure sale be rescinded because “all of the requisite conditions precedent have not been satisfied to authorize any of the Defendants to initiate foreclosure on the Property.” (2d Am. Compl. ¶ 104). Plaintiff alleges that if BONY does not provide “admissible valid evidence” that it is the successor in interest to the original lender, Sandy Spring Bank, then none of the conditions precedent to initiate foreclosure will have been satisfied and foreclosure will is void “as having been conducted at the request of one with no authority to so act.” (2d Am. Compl. ¶ 107). This claim is a veiled standing to foreclose claim attacking the assignment of the Loan which has been rejected consistently. As stated above, Plaintiff has no standing to challenge the assignment of the beneficial interest in the Deed of Trust via the Certificate of Transfer and Virginia law does not require a foreclosing entity to prove standing to foreclose in a judicial action prior to initiating foreclosure. For these reasons, Count VI of the Second Amended Complaint should be dismissed with prejudice. Case 1:16-cv-00483-GBL-JFA Document 40-1 Filed 08/17/16 Page 18 of 20 PageID# 377 19 CONCLUSION For the reasons stated above, Defendants The Bank of New York Mellon f/k/a The Bank of New York, as Trustee for the Certificateholders of the CWMBS, Inc., CHL Mortgage Pass- Through Trust 2007-17, Mortgage Pass Through Certificates, Series 2007-17 and Mortgage Electronic Registration Systems, Inc. respectfully request that the Court grant their Motion to Dismiss, dismiss Plaintiff’s Second Amended Complaint with prejudice, award Defendants their attorneys’ fees and costs, and award all just and equitable relief. Respectfully submitted, THE BANK OF NEW YORK MELLON F/K/A THE BANK OF NEW YORK, AS TRUSTEE FOR THE CERTIFICATEHOLDERS OF THE CWMBS, INC., CHL MORTGAGE PASS- THROUGH TRUST 2007-17, MORTGAGE PASS THROUGH CERTIFICATES, SERIES 2007-17 and MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC. By:/s/ Jon. S. Hubbard Jon S. Hubbard, Esq. (VSB No. 71089) TROUTMAN SANDERS LLP 1001 Haxall Point Richmond, Virginia 23219 Telephone: (804) 697-1407 Facsimile: (804) 697-1339 E-mail: jon.hubbard@troutmansanders.com Counsel for Defendants The Bank of New York Mellon f/k/a The Bank of New York, a Trustee for the Certificateholders of the CWMBS, Inc., CHL Mortgage Pass-Through Trust 2007-17, Mortgage Pass Through Certificates, Series 2007-17 and Mortgage Electronic Registration Systems, Inc. Case 1:16-cv-00483-GBL-JFA Document 40-1 Filed 08/17/16 Page 19 of 20 PageID# 378 20 28924249 CERTIFICATE OF SERVICE I hereby certify that on the 17th day of August, 2016, I electronically filed the foregoing with the Clerk of the Court using the CM/ECF system, which will then send a notification of such filing (NEF) to the following: Christopher E. Brown, Esq. The Brown Law Firm, PLLC 526 King Street, Suite 207 Alexandria, VA 22314 Counsel for Plaintiff Robert R. Michael, Esq. David L. Ward, Esq. BWW Law Group, LLC 8100 Three Chopt Road, Suite 240 Richmond, VA 23229 Counsel for Defendants Residential Credit Solutions, Inc. and Equity Trustees, LLC /s/ Jon. S. Hubbard Jon S. Hubbard, Esq. (VSB No. 71089) TROUTMAN SANDERS LLP 1001 Haxall Point Richmond, Virginia 23219 Telephone: (804) 697-1407 Facsimile: (804) 697-1339 E-mail: jon.hubbard@troutmansanders.com Counsel for Defendants The Bank of New York Mellon f/k/a The Bank of New York, a Trustee for the Certificateholders of the CWMBS, Inc., CHL Mortgage Pass-Through Trust 2007-17, Mortgage Pass Through Certificates, Series 2007-17 and Mortgage Electronic Registration Systems, Inc. Case 1:16-cv-00483-GBL-JFA Document 40-1 Filed 08/17/16 Page 20 of 20 PageID# 379 1 IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF VIRGINIA Alexandria Division MARIA RODRIGUEZ, Plaintiff, v. THE BANK OF NEW YORK MELLON, N.A., as trustee for THE CERTIFICATE HOLDERS OF THE CWMBS INC., CHL MORTGAGE PASS-THROUGH TRUST 2007-17, MORTGAGE PASS THROUGH CERTIFICATES, SERIES 2007-17, MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., RESIDENTIAL CREDIT SOLUTIONS, INC., and EQUITY TRUSTEES, LLC, Defendants. Case No.: 1:16-cv-0483 (GBL/JFA) ORDER This matter came before the Court on the Motion to Dismiss filed by Defendants, The Bank of New York Mellon, N.A., as trustee for the Certificate Holders of the CWMBS Inc., CHL Mortgage Pass-Through Trust 2007-17, Mortgage Pass-Through Certificates. Series 2007- 17, and Mortgage Electronic Registration Systems, Inc. Upon consideration of the Motion, the memoranda filed herein, and the arguments of the parties, it is hereby ORDERED that the Motion to Dismiss the Complaint is GRANTED; and it is further ORDERED that the Complaint is DISMISSED WITH PREJUDICE. IT IS SO ORDERED. Case 1:16-cv-00483-GBL-JFA Document 40-2 Filed 08/17/16 Page 1 of 2 PageID# 380 2 ENTERED this _____ day of August, 2016. _______________________________________ Hon. Gerald Bruce Lee Judge, United States District Court Case 1:16-cv-00483-GBL-JFA Document 40-2 Filed 08/17/16 Page 2 of 2 PageID# 381