Pazmino v. LaSalle Bank, N.A. et al, No. 1:2009cv01173 - Document 63 (E.D. Va. 2010)
Court Description: MEMORANDUM OPINION Re: 38 MOTION to Dismiss the Amended Complaint by LaSalle Bank, N.A., Lehman XS Trust 2006-19, Aurora Loan Services, LLC and 56 MOTION to Strike Notice of Supplemental Exhibit by Lehman XS Trust 2006-19, Mortgage Electronic Registration Systems, Inc. Signed by District Judge Gerald Bruce Lee on 05/20/2010. (stas)
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IN THE UNITED FOR THE STATES DISTRICT COURT EASTERN DISTRICT OF VIRGINIA ALEXANDRIA DIVISION Liliana E. Pazmino, ) Plaintiff, ) v. ) LaSalle Bank, N.A., for Lehman XS Trust Mortgage as Trustee Case No. l:09cvll73(GBL) ) ) Pass-Through Certificates, ) Series 2006-19 c/o Bank of ) America, ) N.A., a federally chartered bank, successor by merger to LaSalle Bank, et ) N.A., ) al., ) Defendants. ) MEMORANDUM OPINION THIS MATTER is before N.A., as Trustee Certificates, 19 the Court on Defendants LaSalle Bank, for Lehman XS Trust Mortgage Pass-Through Series 2006-19 ("Lehman"); ("LaSalle"); and Aurora Loan Service, to Dismiss the Amended Complaint LaSalle, Lehman, Aurora, Supplemental Exhibit (Dkt. Lehman XS Trust 2006- LLC's No. ("Aurora") Motion 38)1 and Defendants and MERS's Motion to Strike Notice of (Dkt. No. 56). This case concerns Plaintiff's allegations that Defendants improperly instituted a non-judicial foreclosure proceeding on her home. 1 Defendant Mortgage Electronic Registration Systems, Motion to Dismiss the Amended Complaint. (Dkt. No. Inc. 49.) There are five ("MERS") joined the issues before the Court.2 The first issue is whether Ms. Pazmino sufficiently alleges a claim for declaratory relief where foreclosure sale has already occurred but now declare that that none of the she asks the the Court to foreclosure on her property is void and the Defendants the First Promissory Note. has any right, title, The second issue or interest in is whether Ms. Pazmino sufficiently alleges a similar claim for declaratory relief as to the whether Ms. Second Promissory Note. Pazmino states she acknowledges that The a plausible quiet third issue is title claim where she defaulted on the promissory notes. The fourth issue is whether Ms. Pazmino sufficiently states a claim for fraud on the state court under section 8.01-428 of the Virginia Code where she alleges that Aurora, MERS and ALG committed fraud on the state circuit court by misrepresenting their authority to conduct the foreclosure. The Court grants Defendants' II, IV, V, Defendants' and VI of Motion to Dismiss Counts the Amended Complaint. Motion as The I, Court grants to Counts I and II because declaratory relief is not available where the alleged wrongs have already been suffered and, alternatively, because Plaintiff state plausible grounds for declaratory relief. fails to The Court 2 A fifth issue is presented with regard to Defendants' Motion to Dismiss Count V U.S.C. (Violation of the Fair Debt Collection Practices Act §§ 1692, et seq. (2000)). However, ("FDCPA"), thus the Court dismisses Count V without analyzing the issue presented. (PI.'s Opp'n 26.) 15 Plaintiff withdrew the claim and grants Defendants' Plaintiff alleges superior title mortgage because fail to Count IV because to plausibly suggest since Plaintiff admits in full released. Motion as that the she that facts has she has not paid her and the note has not been cancelled or The Court grants Defendants' the Amended Complaint fails Motion as to allege to Count VI sufficient facts to establish a fraud on the court claim under section 8.01-428 of I. the Virginia Code. BACKGROUND This action arises Ms. from a residential mortgage foreclosure. Liliana Pazmino purchased the property located at Evelyn Way, Alexandria, September 19, 2006. promissory notes She in the Promissory Note") respectively, Virginia and 22309 (the signed two deeds amounts of $62,800.00 of 3752 Mary "Property") on trust and two $502,448.00 ("First ("Second Promissory Note"), each naming CTX Mortgage Company, LLC ("CTX") as the Lender and MERS as the beneficiary.3 In 2008, Ms. and threats of ("ALG"), Pazmino began receiving demands foreclosure for payment from Aurora and ALG Trustee, LLC who alleged that the first loan was in default.4 3 The first Deed of Trust (the "Deed") "nominee for Lender and Lender's On or indicates that MERS is also the successors and assigns." (Deed 4.) 4 Plaintiff does not allege that her loans were current when she received the demands. 11.) In fact, she admits that she "owes someone money." (Pl.'s Opp'n about October 14, 2008, Ms. Pazmino, "Qualified Written Request" Section 6 of the Real ("QWR") through counsel, pursuant Estate Settlement to the sent out FDCPA and Procedures Act ("RESPA") to determine the status of the First Promissory Note.5 January 5, 2009, sale date of Ms. Pazmino received a notice January 19, 2009. On January 13, filed a petition for an injunction to stay the proceeding in the Circuit Court Aurora and MERS. Promissory Note was provided copies of Security Aurora the owner of in trust closing, foreclosure 2009, Ms. Pazmino foreclosure responded to the the First for Lehman. the First Promissory Note, documents executed at account.6 2009, Pazmino that LaSalle a On for Fairfax County against On January 23, QWR and notified Ms. of a Aurora also the Deed, and the payment other history of the The Deed7 states that n[t]he beneficiary of this Instrument is MERS (solely as nominee for Lender and 5 The Amended Complaint does not specify to whom Plaintiff sent the QWR. 6 In the original Complaint, "as of December 1, assigned, sold, 2006, Plaintiff alleged that Aurora notified her that the servicing of her lot trust mortgage loan was or transferred" from CTX to Aurora. (Compl. U 22.) This allegation has been omitted from the Amended Complaint. 7 Plaintiff references and relies on the terms of the Deed in the Amended Complaint. Deed as In addition, attached Therefore, Plaintiff does not challenge the authenticity of the to Defendants' the Court Motion can consider to Dismiss this document motion. See American Chiropractic Ass'n v. 212, (4th Cir. 234 complaint, 2004) (stating that the Amended in deciding Complaint. the Trigon Healthcare, current Inc., 367 F.3d in deciding whether to dismiss a a court may consider a document that is attached to a defendant's motion to dismiss if the document is "integral to and explicitly relied on in the complaint" and "the plaintiffs do not challenge its authenticity." (citing Phillips v. LCI Int'l Inc., 190 F.3d 609, 618 (4th Cir. 1999)). Lender's successors and assigns) of MERS." (Deed 4.) and the to the Instrument, MERS but, has interests, if the right The Deed Property, legal including, interest to any action limited to releasing "[t]he in the Note can be to Borrower." the right and to take but not and these Security Instrument. further provides Security Instrument) successors but not limited to, the Lender Note or a partial notice only to exercise any or all of including, and canceling this (Deed 4.) holds necessary to comply with law or custom, for Lender and Lender's foreclose and sell required of that MERS interests granted by Borrower in this Security (as nominee assigns) and assigns The Deed also provides Borrower understands and agrees title successors [First (together with this sold one or more (Deed Promissory] times without prior 13.) After an evidentiary hearing conducted on February 12, 2009, the Circuit Court motion to strike, foreclosure, Mot. 10, Court violated Compl. Ex. the ex parte the case with prejudice. B.) The property was the 10, 2009, Ms. for Fairfax County alleging: FDCPA during ALG breached process; alone,- (4) and to stay (Aurora's foreclosed on Pazmino filed a complaint the the (5) its MERS of in the Defendants (2) an foreclosure unlawful; fiduciary duty during title (1) foreclosure process; entitlement to a judgment declaring the (3) injunction 2009. On August Circuit dissolved and dismissed to Dismiss August for Fairfax County granted Defendants' the foreclosure the Property was vested in Plaintiff and Aurora fraudulently misrepresented their authority to conduct the foreclosure. Aurora removed the action to this 1331. Thereafter, Aurora moved Complaint for failure 2009. the I to 28 to dismiss U.S.C. § the On January 8, 2010, the Ms. Pazmino filed an following counts: (Declaratory Action on the First Trust Note), Defendants Count Court 2009, The Court granted the motion on Amended Complaint which includes Count Court pursuant 16, to state a claim against Aurora upon which relief could be granted. November 20, On October II CTX, LaSalle, Lehman, Aurora and MERS; (Declaratory Action on the Second Trust Note), Defendant CTX and any named Defendant claiming an interest; Count III Count IV Count V (Breach of Fiduciary Duty), (Quiet Title), (Violation of any competing the FDCPA), Defendant ALG; interest; Defendants Equity and Countrywide;8 and Count VI (Void Judgment by Fraud), Defendants Aurora, MERS, and ALG. Defendants LaSalle, "Defendants") and VI of Lehman, now move the Aurora, Court and MERS to dismiss (collectively, Counts I, Court Aurora. IV, V, the Amended Complaint. 9 Equity and Countrywide are not named defendants in this suit. the II, that Plaintiff It appears to actually alleges Count V against Defendants ALG and II. STANDARD OF A Federal REVIEW Rule of Civil Procedure 12(b)(6) granted unless an adequately stated claim is showing any set complaint." (2007) of facts Bell Atlantic (internal recitation of U.S. at v. the 129 129 S. of Ct. In order to complaint must on its face." at Id.; facially plausible that allows defendant Ct. at the is 194 9; Fed. R. of 1949 factual court liable to draw citations at (4th Cir. the 555 U.S. a Rule at 1993). 12(b)(6). formulaic not do." if 550 it relies upon omitted). that 570. is plausible A claim is factual content inference that Iqbal, the 129 S. 556. motion, in the light most true. P. 561 motion to dismiss a reasonable 12(b)(6) complaint 544, Twombly, for the misconduct alleged." Twombly, read the or a in the enhancement." for relief 550 U.S. Civ. (2009); 12(b)(6) "a claim U.S. action will "when the plaintiff pleads asserted therein as 1134 further (internal Twombly, construe the complaint 113 0, see 550 is also insufficient 1949 forth In considering plaintiff, 1937, survive a Rule set the allegations Twombly, a cause Ct. A complaint S. "supported by labels and conclusions "naked assertions devoid of Iqbal, v. with omitted); elements Iqbal, 555. Corp. citations "A pleading that offers Ashcroft consistent motion should be as a whole, Mylan Lab., the court must favorable to the and take Inc. In addition to v. the the Matkari, facts 7 complaint, F.3d the court may also examine "documents complaint by reference, judicial notice." 127 S. Ct. 24 99, Inc. (2007). v. "Conclusory allegations the facts alleged" Labram v. F.3d 921 43 central purpose of the Makor Issues & Rights, the legal effect of Havel, into and matters of which a court may take Tellabs, 2509 incorporated 918, the complaint regarding need not be accepted. (4th Cir. is Ltd., 1995). to provide Because the the defendant "fair notice of what the plaintiff's claim is and the grounds upon which it rests," supported by some the plaintiff's factual basis legal allegations must be sufficient defendant to prepare a fair response. U.S. III. 41, 47 Conley v. Gibson, 355 (1957). ANALYSIS The Court grants Defendants' II to allow the Motion to Dismiss Counts I and because a declaratory action cannot be used to redress alleged past wrongs and, alternatively, because Plaintiff to allege facts plausibly suggesting an entitlement declaratory relief. The Court dismisses Count to IV because Plaintiff fails to sufficiently plead superior title. dismisses Count VI because Plaintiff each count The Court fails to sufficiently allege facts that establish a fraud on the court claim. Court analyzes fails in order below. The A. Count I: Declaratory Action - The Court grants Defendants' I because declaratory relief is forth facts relief. inappropriate federal rules judgment Rule of "govern Civil § 2201." Declaratory Judgment Act, United States . . . 28 grounds Procedure the procedure under 28 U.S.C. the to Count foreclosure fails to for declaratory 57 provides that the for obtaining a declaratory Fed. U.S.C. may declare as as the Amended Complaint establishing plausible Federal Trust Note Motion to Dismiss has already occurred and because set First § the R. Civ. P. 2201(a), rights relations of any interested party seeking 57. Under "any court and other the of the legal such declaration, whether or not further relief is or could be sought."9 "[D]eclaratory judgments are designed to declare parties can conform their conduct and are untimely if to avoid future the questionable conduct has occurred or damages have already accrued. Inc., 589 F. Here, "Deed of Supp. 2d at Plaintiff Sale" asks the Court that 9 Plaintiff's Amended Complaint cites these 589 F. (Counts claims after removal. Supp. 2d 602, 614 I and See (E.D. litigation," already The Hipage federal to void the "none Co, of foreclosure the Defendants has to Virginia law as the grounds II). However The Hipage Va. to a declaratory action which was subsequently removed to See so that 615. and declare declaratory actions rights 2008) Co, the federal Inc. Access 2 for her apply to Go, Inc., (applying Declaratory Judgment Act originally filed in court). v. rules any state court and was right, title, Compl. H 15.) 10, 2009, loans.10 as or interest However, a result Thus, First Promissory note." (Am. the Property was foreclosed on August of Plaintiff's admitted default on the any wrong Plaintiff suffered as a result of the allegedly deficient Therefore, in the foreclosure has already occurred. a declaratory judgment at this stage is inappropriate." Two cases with near identical facts were brought District and dismissed on similar grounds. Mortgage 19, Corp., 2010) cv-1129, Like l:09-cv-1121, (O'Grady, 2010 WL Plaintiff, against No. 538039 Horvath v. (E.D. institutions foreclosure their mortgage 2010 WL 538039, Va. the homeowners financial based on the J.); loans. at declaratory relief 2010 of Jan. 29, "the foreclosure . that "none . of identity of where the J.). claims *1; on Horvath, any right, having provided conflicting the true owner of the Promissory Notes 10, Property" 2009" (Am. (Am. Compl. Compl. H 1 49) 51). the Court would dismiss Count I because section 8.01-184 "claims and rights asserted have the correct cause of at the Defendants has is unavailable under S.E.2d 534, 537 (Va. 1976) v. Bishop, 111 S.E.2d 519, 1:09- the homeowner sought occurred on August wrongs have already been suffered." 221 Co. Mar. Plaintiff refused to pay to them and 11 Even if Virginia law applied here, declaratory relief No. (Trenga, 2010 WL 103 9842, In Merino, . 2010) Va. following a default Defendants proceeded to foreclose on Plaintiff's and (E.D. alleging a variety of *1. true party in interest, 1039842 EMC in Merino and Horvath filed suits 10 The Amended Complaint reads "Defendants, and/or the See Merino v. Bank of New York, their homes Merino, information concerning the WL in this Bd. of fully matured, of Supervisors v. Virginia Code and the alleged Hylton Enters., (citation omitted); see also Liberty Mut. Ins. 524 <Va. 1970) (declaratory judgment is not action when the rights have matured). 10 and various duties of the parties title, at the or interest" *4. in the promissory notes. In Horvath, the homeowner sought declaratory relief foreclosure deed of In both cases, the declaratory relief Merino, sale was void. court noted that is at *4 future"); (" [d]eclaratory relief future conduct. 2010 WL 538039, appropriate, at even if Plaintiff 2010 WL Merino, Defendants (2) and because of rejects (3) the property 1039842, at *4; declaratory action was to declaratory relief. facts Plaintiff argues for three reasons: the terms of lacked standing to institute the the they could not prove Article III Defendants could not foreclose on the Property the prohibition on double recovery. each of therefore held to set forth plausible foreclosure proceedings because injury; *1 *l. lack the authority to enforce Defendants at because 2010 WL that she is entitled to declaratory relief Deed; 538039, not appropriate Plaintiff's fails showing her entitlement (1) See is reserved for forward looking foreclosed. Furthermore, *1. intended to guide parties' Both the Merino and Horvath courts had already been at ("a declaratory judgment is an Horvath, that declaratory relief was Horvath, WL 538039, that the underlying purpose of inherently forward-looking mechanism, actions"). 2010 to guide parties' 2010 WL 1039842, behavior in the 2010 WL 1039842, these arguments in turn. 11 The Court First, to enforce Plaintiff the argues terms of according to Plaintiff, interest only the Lender or this argument unavailing because loan. Property in the event The Deed states Security Instrument is MERS Lender's successors of MERS." or all of that the because, successor in and appoint (Deed 4.) the Deed authorizes MERS that successors The Deed also provides MERS (as nominee interests, has the this including, but Lender including, but not and assigns "if necessary to for Lender and right right to foreclose and sell the Property, required of Plaintiff defaulted "[t]he beneficiary of and the successors and assigns) these The Court (solely as nominee for Lender and and assigns) comply with law or custom, Lender's Trust trustees to foreclose on the Property. to foreclose the on the First Deed of to the Lender is authorized to remove substitute finds the that Defendants have no authority not to exercise any limited to, the and to take any action limited to releasing and canceling this Security Instrument."12 (Deed 4.) terms of beneficiary and nominee the Deed, for Lender. MERS has two roles: By signing the Deed, Under the Plaintiff agreed that MERS, nominee for Lender and Lender's successors and assigns, as had the right to foreclose the Property and recognized that MERS could 12 Plaintiff alleges Aurora informed Plaintiff that LaSalle is the "current owner of the first trust note" (Am. Compl. U 29), but later alleges that none of Defendants is Lender under the Deed (Am. Compl. IHi 61-64). For purposes of this argument, the Court uses the term "Lender" instead of a specific entity that is in fact the Lender or Noteholder. 12 take any action required of makes no Lender. legally-supported argument and pleads Amended Complaint as or custom.13 Defendants As such, have In Ruiz v. the I. at court examined a similar *1 White, (E.D. P.C., Va. issue Dec. and the deed of to appoint a substitute according to for Lender and Lender's any or all limited to, the right et cannot of to conduct a obligations secured thereby, (2009). interests, appoint a substitute states lacked authority "MERS has (as nominee the right: but not the Property." Id. as the the foreclosure "[t]he party secured by the deed of MERS trustee because a homeowner including, than fifty percent for any Plaintiff, the of Virginia Code, MERS, shall have the right trustee or trustees According to case, substitute trustee to conduct holders of greater the foreclosure trust, to foreclose and sell appoint a as J.), The Ruiz court dismissed the those Section 55-59(9) substitute that loan alleged MERS Id. l:09-cv-688, (Ellis, successors and assigns) trust, the No. 2009) In the deed of proceedings. or the successor trustees under 13 Plaintiff argues that under section 55-59(9) beneficiary, al., 11, trust. trustee proceeding on her property. exercise in the the Deed is untenable. found that MERS, had the authority to appoint who defaulted on her mortgage to facts the Property in accordance with law authority to enforce 2009 WL 4823933, claim because no Plaintiff's allegation that none of Samuel the plain terms of Plaintiff to why MERS as nominee did not have right to foreclose and sell nominee, Furthermore, reason." of the monetary and power to appoint a Va. Code. Ann. § 55-59(9) lacked the power as beneficiary it was not to entitled to greater than fifty percent of the obligations due under the First Note. However, who signed the Deed in 2006 and received a copy of the Deed and Plaintiff, other document Lender, on January and that foreclose the 23, 2009, the Deed authorizes Property in the event knew that MERS of a 13 MERS to act default is also the nominee of on behalf of on the loans. the Lender the to at *2. The Ruiz court held law or custom' have language the power to act "[t]he does not *if comply with . . necessary to require the . only when directed by that law; nominee rather, the nominee may act on behalf of the Lender as authorized by the deed of Similarly, trust." Id. at *1. Plaintiff's allegation that Defendants foreclose the Second, in the current have no right suit, to Property fails. Plaintiff argues that Defendants demonstrate standing to institute could not prove Article III the injury. could not foreclosure because The Court they rejects Plaintiff's standing argument to the extent that Plaintiff uses the term "standing" to refer to a requirement that a secured party first prove in court its right before the proceedings commence. Plaintiff's argument is foreclosure state. forth the procedural foreclosure, "standing" process. Sections 55-59.1 requirements in a court of sale by trustee The fundamental flaw in to owners, through 55-59.4, which set for a non-judicial an interested party to prove law before Code Ann. § 55-59.1 lienors, initiating the foreclosure (requiring notice before etc.); advertisement before sale by trustee); contents of advertisement of sale); powers and duties of initiate a foreclosure that Virginia is a non-judicial do not require See Va. to trustee § § 55-59.2 55-59.3 55-59.4 in event of 14 § (requiring (specifying (setting forth sale under or satisfaction of Plaintiff's Third, deed of "standing" Plaintiff recovered damages trust). The Court therefore rejects argument. asserts that Defendants have already caused by her default and thus Defendants had no right to foreclose on the Property due to the prohibition against double recovery. received pay-outs from mortgage credit derivatives. cured the thus, First, "[A] According are barred Plaintiff's double to Plaintiff, from double to relief conclusions." Twombly, U.S. at relief did not above the intend to must speculative 555 the 'ground' than labels be of ... and (citations omitted). allegations enough to raise a right level," id., as the "unlock the doors of discovery armed with nothing more Court for two reasons. conclusions must be supported by factual "[f]actual allegations The loans, to support her allegations. requires more 550 have these pay-outs recovery. recovery argument obligation to provide *entitle[ment] the that Defendants insurance policies or other Plaintiff pleads no facts plaintiff's Legal asserts injury allegedly caused by her default on the Defendants rejects Plaintiff than conclusions." Supreme and to Court for a plaintiff Iqbal, 129 S.Ct. 1950. Here, support of Plaintiff her double sets forth only conclusory statements recovery generalization Plaintiff theory. alleges 15 In one sweeping in at the applicable securitized mortgage pool has already been paid out by one or more enhancement policies, loan loss insurance policies specific following; iv.) t 79.) i.) pay-outs, v.) mortgage iii.) default swaps, These payouts indebtedness which is However, credit credit default other credit derivatives. satisfied the alleged this Complaint. Compl. the overcollateralization, reserves pay-outs, and/or vi.) (Am. of ii.) the subject of the Amended Complaint contains no facts plausibly suggesting that any pay-out actually occurred; that any Defendant received a pay-out Plaintiff's default on her loans; or that as the result of the pay-outs satisfied Plaintiff's obligation under the loans. These conclusory statements forth a claim for relief do not adequately set is plausible on its face. The Merino and Horvath courts this issue. The plaintiffs identical arguments loans, that, their obligations triggered a pay-out. 2010 WL 538039, at this Court agrees, reached a similar result on in Merino and Horvath raised as a result of were Merino, their default on the satisfied because 2010 WL 103 984 2, the at default *4; Horvath, *2. The Merino and Horvath courts held, that "[Plaintiff] legal basis, and the Court that because [Plaintiff's] losses that caused by that provides no factual finds none, to support his and or contention default triggered insurance for any default or 'credit enhancement,' discharged from the promissory notes and the Property 16 he is is released from *4; Horvath, Second, support of facts. the 2010 deeds WL trust." 538039, the Court her of at finds National Ass'n, relies 650 the cases WL 103 9842, cited by Plaintiff argument on Nizan v. S.E.2d 497 2010 at *2. "double recovery" Plaintiff Merino, (Va. in irrelevant on these Wells Fargo Bank Minnesota 2007), that Defendants who received pay-outs for the proposition cannot foreclose on the Property because double recovery is prohibited in Virginia. Nizan, a trustee of apartment at 4 99. a real loan as part After the of estate a loan went into default, Id. to recover a deficiency after the the loan pool, Id. at 500. The trustee the guarantor "double then sought Court [but amount [of is], damages] Id. guarantor Upon lender regarding additional and stated that discovery. "a party with 'seek compensation in in the second action if Id. Nizan has minimum value here although Nizan provides sued the estopped from collecting the paid therefor in the first.'" at 502 (citation omitted). for two reasons. trustee 17 full they were partially First, for a double recovery defense, focuses on a dispute between a Id. of Virginia discussed the common recovery" nonetheless, loan pool. trustee the foreclosure. two valid causes of action is entitled to each, the trustee had settled with the The Supreme law defense of trust acquired an securitized mortgage foreclosed on the property. learning that investment In Nizan and a guarantor over a deficiency after a foreclosure. no cases extending this the legitimacy of Here, defense foreclosure. similar conclusion. See Merino, double "Plaintiffs cite no case Plaintiff to apply to actions a (rejecting homeowner's however, The Merino court 2010 WL 1039842, recovery argument indicating [double cites challenging reached a at *4 n.6 because recovery] defense can be converted somehow into a basis on which to bring a claim before this Court."). theory applies here, allegations on this further factual the relief she is as even if the double mentioned above, "Plaintiffs' enhancement' Id. to conclude (quoting Iqbal, 129 that, S.Ct. no to Defendants. Dismiss Count Plaintiff the Property because Therefore, I fails because of Court the declaratory action is grants that Plaintiff she alone can Defendants' to plead plausible grounds 18 facts for 1949). any alleged pay-outs the relief. at despite her default, discharged from the promissory notes and that claim title 'devoid of and provide no plausible basis" the Amended Complaint contains Court recovery issue are completely naked and seeks. In short, allow the Second, Motion to to untimely and for declaratory B. Count II: Declaratory Action The Court grants same reasons that Defendants' the Court declare right, it dismissed Count title, However, the only above. that none of facts Second Trust Note Motion as I, or interest in the - to Count Count II II for the requests the Defendants has any Second Promissory Note. alleged as to Count II are that (1) Plaintiff entered into a mortgage loan and she began paying her loan (Am. Compl. UK 15, 18, 19) and (2) was placed in an unknown pool or trust These facts are insufficient it dismisses C^ Motion to Dismiss Count Count IV: Compl. 1 41).14 Accordingly, Count for the the Court grants II on the same grounds that I. Quiet Title The Court grants the Amended Complaint claim of (Am. to show plausible grounds requested declaratory relief. Defendants' the Second Trust Note Defendants' Motion as contains no facts superior title. to Count supporting Plaintiff's "An action to quiet the premise that a person with good title title Maine v. is based on to certain real or personal property should not be subjected to various claims against that title." IV because Adams, future 672 S.E.2d 862, 866 " Although Plaintiff does not explicitly plead that she defaulted on the loan, she does allege "Defendants, having provided conflicting information concerning the identity of the true owner of the Promissory Notes and/or the true party in interest, Plaintiff refused to pay to them and Defendants foreclose on Plaintiff's Property." (Am. Compl. H 4 9.) proceeded to 19 (Va. 2009). A party asserting a quiet that he or she has Here, that superior title Plaintiff she has alleges no superior title. in the Amended Complaint alleges in conclusory "can prove legal Property." (Am. showing that In fact, facts claim to the H 94.) However, forgiven, the (Am. Compl. The Iqbal, the Notes selling, on the Defendants' Ct. at in "owes superior title fails to to the Property. Plaintiff's allegation that, First, the Second, Motion to Dismiss, have no therefore and insuring of the Deeds and are unenforceable 1940. someone the Amended secondary market, to refused to pay that Defendants trading, for three reasons. S. she still pled in the and Plaintiff Plaintiff she has conclusion not entitled 129 that or fully paid. Plaintiff U 49) facts Court rejects are split from the Notes legal only party cancelled, admits Property. showing that H 99) the she makes no factual "[g]iven the splitting, Compl. is Plaintiff Compl. Complaint do not plausibly suggest pieces of she in her Opposition that Moreover, the opposite. contained interest the Amended Complaint plead facts the allegations and equitable ownership (PL's Opp'n 11). rightful See id. that plausibly suggest In fact, fashion that Defendants on the Notes money" to the property. suggest quite the debt was acknowledges title action must plead of Trust (Am. this allegation is a assumption of truth. in arguing against Plaintiff 20 ..." the cites no legal See authority supporting her assertion of unenforceability. this allegation contradicts law.15 is "Transfer of an instrument, a negotiation, vests transferor to enforce in the the holder in due course." Deed states interest "[t]he [First in the Note (Deed 13.) The and the Deed could be Consequently, ls Recently, pieces of Security Instrument) the Note to Borrower." the parties and that the Court the right the from is unpersuaded to enforce the Deed is transfer and securitization of the the Note With each transfer, Therefore, that The or a partial the Deed passed along with the Note Court grants Defendants' the Merino court held, "given the the loan. Motion to Dismiss the Notes on the and this Court agrees, splitting, in view of the settled enforcement of deeds of 1039842 at selling, secondary market, from the Notes and are unenforceable" 2010 WL Notes as a (2009). the Deed indicates that transfers of the IV. allegation that relief 8.3A-203(b) sold together. by Plaintiff's argument to the § Promissory] of including any right times without prior notice transferor to transferee. lost due Code Ann. language of right to enforce transferee any right {together with this contemplated subsequent the Deed and Virginia whether or not the transfer instrument, Va. can be sold one or more Count the terms of Third, trust law of trading, failed to provide securing notes 21 insuring of the Deeds of Trust are negotiable *2. that an identical and the split a plausible basis instruments and the after their negotiation. See for D. Count VI; Void Judgment Obtained by The Court grants Defendants' Plaintiff of fails Motion as to allege sufficient facts fraud on the state court. Fraud to Count VI because to support her claim Virginia preserves the right of a court of equity to entertain an independent action "to relieve a party from any judgment or proceeding, relief defendant not judgment served with process or decree 8.01-428(D) . . for fraud upon the (2009). The elements or to grant . to a or to set aside a court." Va. that must be Code Ann. § established in such an independent action are: (1) a judgment which ought not, conscience, to be enforced; alleged cause of (3) fraud, defendant defense; of Charles accident v. "Fraud on and (5) founded; the benefit of his fault or negligence on the part the absence of any adequate court, Tune, Inc., 414 S.E.2d no matter which party Swofford v. (Va. it affects, Bowles, CH03- 24, 2004). to the third element must allege intentionally and knowingly, material (4) reliance by the party misled, party misled. Id. at *5. The fact, with intent and (6) (3) to mislead, the (1) The a made resulting damage challenger of 22 June No. party alleging fraud as of Ct. 1992). should be *4 (2) Cir. 833 at representation, (Va. 831, WL 3142307, false 2004 to the is law. remedied when appropriate." 12828, from obtaining the absence of Precision the judgment or mistake which prevented the judgment the defendant; remedy at a good defense action on which the in the (4) (2) in equity and good (5) to the judgment must clearly and conclusively establish particularly the element of intent. The Amended Complaint to establish a plausible reasons. First, pertaining to alleges that MERS. does not plead sufficient facts for three facts The Amended Complaint only are discrepancies between the Deed of Substitute Trustee executed by Aurora, court foreclosure. fraud, forth sufficient Plaintiff does not allege Defendants the circuit of Id. to set fraud element. there and the Deed of fails existence claim for fraud on the court Plaintiff the the in order Further, state circuit court to there ALG and intended to mislead commence or effectuate is no allegation as relied on Defendants' Trust the to whether the alleged misrepresentation. Second, remaining allege four Precision that the nor does merit. she Tune elements. circuit court's allege judgment the opportunity Circuit Court appeal of for to fully absence the not allege litigate The Amended Complaint does of should not be enforced; judgment to the fault or negligence on the part of the does not the circuit that state any adequate Supreme issue was did in an Court of not allege an absence of Plaintiff; monetary remedy at 23 court had Plaintiff Fairfax County or whether there the circuit court Virginia. Plaintiff that her claims before The Amended Complaint does not have the the Amended Complaint does not even mention the nor does law. it allege Third, Plaintiff's unsupported theories. on the theory that foreclose on the this line of claim The allegations Defendants Property. argument grants Defendants' for fraud on the court in Count VI is based on are premised lack authority and standing to As discussed in Section A, is unavailing. Therefore, Motion to Dismiss Count VI of above, the Court the Amended Complaint. IV. CONCLUSION The II, IV, Court grants V, and VI Defendants' of Defendants' the Amended Complaint. Motion as to Counts relief is not available where been suffered and, Plaintiff alleges Counts Court I, grants declaratory the alleged wrongs have already because Plaintiff for declaratory relief. Motion as fail The I and II because alternatively, state plausible grounds grants Defendants' Motion to Dismiss to Count IV because to plausibly suggest that fails to The Court the facts she has superior title. The Court grants Defendants' Motion as to Count V as unopposed. The Court grants Defendants' Motion as to Count VI because facts the Amended Complaint to establish a 8.01-428 of the Virginia is GRANTED. to allege sufficient fraud on the court claim under section Code. ORDERED that Defendants' Complaint fails It is Accordingly, it Motion to Dismiss further 24 is hereby the Amended ORDERED that dismissal Defendants and no further is WITH PREJUDICE as leave to amend will be granted because Plaintiff has had two full opportunities the Court's analysis set to all to plead her case and forth herein demonstrates pleading would be futile as a matter of law. Davis, (1962). that further further 371 U.S. 178, 182 ORDERED that Defendants Motion to Strike Notice of the reasons set forth It LaSalle, is Lehman, See Foman v. Aurora, Supplemental Exhibit is GRANTED for in the Memorandum in Support. The Clerk is directed to forward a copy of this Order to counsel. Entered this L/1/ day of May, Alexandria, and MERS's Virginia 2010. f6/ Gerald Bruce Lee United States District Judge 25
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