Coley v. Bank of America Corp.

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
)
MICHELE RENEE COLEY, )
)
Plaintiff, )
)
v. ) Civ. Action No. 12-1653 (EGS)
)
BANK OF AMERICA CORP., et al. )
)
Defendants. )
)
MEMORANDUM OPINION
Plaintiff Michele Renee Coley, proceeding pro se, brings
this action alleging, inter alia, fraud, deceptive practices,
and unfair business practices against Bank of America Corp.,
successor to Countrywide Financial Corp., Morris Hardwick
Schneider (hereinafter “MHS”), and Mortgage Electronic
Registration Systems, Inc. (hereinafter “MERS”). Pending before
the Court are motions to dismiss filed by Bank of America and
MHS pursuant to Rule 12(b)(6). Upon consideration of the
motions, the opposition and replies thereto, the applicable law,
and the record as a whole, the Court GRANTS Defendants’ motions
to dismiss. Additionally, Ms. Coley has failed to state a claim
against MERS. The Court dismisses this action against MERS, sua
sponte.
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I. BACKGROUND
On April 13, 2007, Plaintiff Michele Renee Coley, a
Washington D.C. resident, was issued a $247,000 mortgage loan by
Countrywide Home Loans, Inc., which was later bought by
Defendant Bank of America. Am. Compl. ¶¶ 7; Bank of America’s
Mot. to Dismiss (hereinafter “BAC Mot. to Dismiss”) at 3. The
mortgage loan, a 30-year fixed rate loan secured by real
property located at 734 Kenyon Street NW, Washington, D.C.
20010, was reduced to a Deed of Trust and Promissory Note. Am.
Compl. ¶¶ 31-33; BAC Mot. to Dismiss at 3. According to Ms.
Coley, the payment term ensured that the bulk of her monthly
payment would be applied to interest and that there would be
very little principal reduction in the first 15 years. Am.
Compl. ¶ 41.
Ms. Coley alleges that the manner in which the loan was
issued was fraudulent because Defendants failed to determine
whether she would be able to repay the loan. Id. ¶¶ 42-46.
Specifically, she alleges that the originator of the loan
created a fictional income figure to obtain approval for the
loan. Id. ¶ 38. She also alleges that the loan had a 68.87%
loan-to-value ratio, which made it “toxic.” Id. Plaintiff
claims that this type of loan is likely to strain the borrower,
and notes that Defendant never advised her of the risks
associated with the loan. Id. ¶¶ 51-53. Finally, she alleges
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that Defendants “breached their duty to [her] because [they]
knew, or should have known, that [she] would, or had a strong
likelihood of defaulting on this loan.” Id. ¶ 56.
At an unspecified time after the loan was issued, Ms. Coley
applied for a loan modification, which was denied. Am. Compl. ¶
36. Plaintiff alleges that there was an offer and acceptance of
the modification, but it did not ultimately take place. Id.
According to Plaintiff, the reason for the denial was that Bank
of America either did not have possession of the note or could
not locate it. Id. ¶ 37. On or about October 12, 2009,
Plaintiff defaulted on her loan. BAC Mot. to Dismiss at 4.
Notice of the Foreclosure Sale was recorded among the land
records in Washington, D.C. on November 4, 2009. However, prior
to the sale, Bank of America canceled the sale. It has not
since sought to foreclose on the property. Id.
Plaintiff filed a lawsuit against Defendant Bank of America
on October 5, 2012. Bank of America filed a motion to dismiss
pursuant to Rule 12(b)(6). Plaintiff filed an opposition
Defendant’s motion to dismiss as well as a motion to strike. In
those pleadings, Plaintiff raised new claims sounding in fraud
and pursuant to the Fair Debt Collections Practices Act
(hereinafter “FDCPA”), 15 U.S.C. § 1692, and the Real Estate
Settlement Procedures Act (hereinafter “RESPA”), 12 U.S.C. §
2601 et seq. Given the obligation of the Court to construe pro
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se filings liberally, the Court ordered Plaintiff to file an
Amended Complaint stating clearly all of her claims against
Defendant. See April 12, 2013 Minute Order. Plaintiff filed an
Amended Complaint on May 13, 2013 and added MHS and MERS as
Defendants. Both Bank of America and MHS have filed a motion to
dismiss Plaintiff’s Amended Complaint as well as a motion to
strike Plaintiff’s Opposition to their motions to dismiss.
Those motions are now ripe for determination by this Court.
II. STANDARD OF REVIEW
A motion to dismiss under Rule 12(b)(6) tests the legal
sufficiency of the complaint. Browning v. Clinton, 292 F.3d
235, 242 (D.C. Cir. 2002). To be viable, a complaint must
contain “a short and plain statement of the claim showing that
the pleader is entitled to relief, in order to give the
defendant fair notice of what the . . . claim is and the grounds
upon which it rests.” Bell Atl. Corp. v. Twombly, 550 U.S. 544,
555 (2007) (internal quotation marks omitted). The plaintiff
need not plead all of the elements of a prima facie case in the
complaint, Swierkiewicz v. Sorema N.A., 534 U.S. 506, 511-14
(2002), nor must the plaintiff plead facts or law that match
every element of a legal theory. Krieger v. Fadely, 211 F.3d
134, 136 (D.C. Cir. 2000).
However, despite these liberal pleading standards, to
survive a motion to dismiss, “a complaint must contain
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sufficient factual matter, accepted as true, to state a claim
for relief that is plausible on its face.” Ashcroft v. Iqbal,
129 S. Ct. 1937, 1949 (2009) (internal quotation marks omitted);
Twombly, 550 U.S. at 562. A claim is facially plausible when
the facts pled in the complaint allow the Court “to draw the
reasonable inference that the defendant is liable for the
misconduct alleged.” Iqbal, 129 S. Ct. at 1949 (citing Twombly,
550 U.S. at 556). While this standard does not amount to a
“probability requirement,” it does require more than a “sheer
possibility that a defendant has acted unlawfully.” Id. (citing
Twombly, 550 U.S. at 556).
“[W]hen ruling on a defendant’s motion to dismiss, a judge
must accept as true all of the factual allegations contained in
the complaint.” Atherton v. D.C. Office of the Mayor, 567 F.3d
672, 681 (D.C. Cir. 2009) (quoting Erickson v. Pardus, 551 U.S.
89, 94 (2007)). The court must also give the plaintiff “the
benefit of all inferences that can be derived from the facts
alleged.” Kowal v. MCI Commc’ns Corp., 16 F.3d 1271, 1276 (D.C.
Cir. 1994) (internal citations omitted). Nevertheless, a court
need not “accept inferences drawn by plaintiff[] if such
inferences are unsupported by the facts set out in the
complaint.” Id. Further, “[t]hreadbare recitals of elements of
a cause of action, supported by mere conclusory statements” are
not sufficient to state a claim. Iqbal, 129 S. Ct. at 1949.
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Although a pro se complaint “must be held to less stringent
standards than formal pleadings drafted by lawyers,” Erickson,
551 U.S. at 94 (internal quotation marks and citations omitted),
it too “must plead ‘factual matter’ that permits the court to
infer “more than the mere possibility of misconduct.’”
Atherton, 567 F.3d at 681-82 (quoting Iqbal, 129 S. Ct. at 1950).
III. DISCUSSION
Defendant Bank of America argues that Plaintiff’s Amended
Complaint should be dismissed on the grounds that she has failed
to state a claim and because certain of her claims are time
barred. BAC Mot. to Dismiss at 8. Defendant MHS argues that
Plaintiff’s Amended Complaint should be dismissed as to it
because the Amended Complaint fails to even mention it, except
to name it as a Defendant. MHS Mot. to Dismiss at 5. The Court
agrees with respect to both motions to dismiss. Even assuming
the facts alleged in Plaintiff’s Amended Complaint are true, and
giving Plaintiff the “benefit of all reasonable inferences,”
Aktieselskabet AF 21. November 21 v. Fame Jeans, 525 F.3d 8, 17
(D.C. Cir. 2008) (internal citations and quotation marks
omitted), the Court finds that Plaintiff has failed to state a
claim upon which relief can be granted.
Under the Federal Rules of Civil Procedure, a plaintiff
must meet “a minimal pleading standard to ensure that the
adverse party is reasonably informed of the asserted causes of
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action such that he can file a responsive answer and prepare an
adequate defense.” McCarter v. Bank of New York, 873 F. Supp.
2d 246, 249 (D.D.C. 2012). Specifically, Fed. R. Civ. P.
8(a)(2) requires that a complaint contain “a short and plain
statement of the claim showing that the pleader is entitled to
relief.” Though this standard is fairly liberal, pleadings
that: (1) are “confused and rambling narrative[s] of charges and
conclusions;” (2) are “untidy assortment[s] of claims that are
neither plainly nor concisely stated;” or (3) fail to allege
“even with modest particularity the dates and places of alleged
transactions” must be dismissed. Poblete v. Goldberg, 680 F.
Supp. 2d 18, 19 (D.D.C. 2009) (quoting Brown v. Califano, 75
F.R.D. 497, 499 (D.D.C. 1977)).
Plaintiff’s 48-page Amended Complaint is largely devoted to
broad generalizations about the banking industry as well as a
lengthy discussion of how MERS operates. See generally Am.
Compl. Many of the allegations are so overbroad that Defendants
could not possibly discern the factual basis for those claims or
properly respond. With respect to Defendant MHS, Plaintiff does
not even make a single allegation referencing the firm in the
entire Amended Complaint.
In Count One, Plaintiff seeks declaratory relief, claiming
that Defendants “did not have the right to initiate foreclosure
proceedings on the Subject Property” because the loan was a
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“flip” prohibited by District of Columbia law and because they
“did not properly comply with applicable statutes regarding
filing of all transfer documents prior to foreclosure.” Am.
Compl. ¶¶ 159, 161. Ms. Coley also alleges that Defendants
illegally foreclosed on her property pursuant to Executive Law §
63(12), a New York state statute that she claims renders the
Power of Sale Clause in the Deed of Trust inoperative. Id. ¶¶
163-66. She also seeks relief against Bank of America’s
“foreclosure Attorney.” Id. ¶ 163. Plaintiff does not identify
the “foreclosure attorney” and it is unclear whether she intends
this to be a reference to MHS. These allegations seem to be
based on Ms. Coley’s contention that Bank of America’s cancelled
foreclosure of her property was pursuant to an assignment of the
Deed of Trust by MERS. Id. ¶¶ 12-16.
Bank of America argues that it has never claimed standing
to foreclose on the basis of a purported assignment of rights
facilitated by MERS. BAC Mot. to Dismiss at 5. Instead, Bank
of America’s right to foreclose arose from its merger with
Countrywide, pursuant to which it was the successor to any
interest that Countrywide had in Plaintiff’s loan. Id. 5-6.
Additionally, Defendant argues that Plaintiff has failed to cite
to any law, regulation, or legal precedent that would empower a
Court to strike a Power of Sale clause from a Deed of Trust.
Id. at 6.
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The Court agrees and finds that Plaintiff has failed to
plead any facts that plausibly support a claim for declaratory
relief. Not only is Plaintiff’s focus on MERS misplaced, but
she has failed entirely to state any claim regarding the alleged
foreclosure of her property to justify the Court voiding the
Power of Sale in the Deed of Trust. Ms. Coley apparently
concedes that Bank of America did not actually foreclose on her
property, arguing that “courts have recognized a cause of action
for wrongful attempted foreclosure when foreclosure action was
commenced, but not completed, where plaintiff[s] have shown that
a defendant knowingly published an untrue and derogatory
statement concerning the plaintiffs’ financial conditions and
that damages were sustained as a direct result.” Am. Compl. ¶
14. Even if the Court were to recognize such an action,
Plaintiff has not stated any facts regarding untrue and
derogatory statements published by any Defendant.
In Count II, Plaintiff alleges that Defendants engaged in
deceptive acts or practices because they attempted to defraud
her with a “non-judicial foreclosure without proof of the true
Promissory Note’s existence, or having the Security Deed
Properly Assigned or retained.” Am. Compl. ¶ 171. Bank of
America again argues that this claim should be dismissed because
Plaintiff seems to believe that MERS was somehow involved in the
attempted foreclosure of her property. BAC Mot. to Dismiss at
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6. The Court agrees – Bank of America initiated foreclosure
proceedings on Ms. Coley’s property pursuant to its merger with
Countrywide, not because of an allegedly faulty assignment
through MERS.
Plaintiff purports to plead a claim for unfair and
deceptive business practices pursuant to “General Business Law §
349” in Count III. Am. Compl. ¶ 180. As Bank of America points
out, that is a New York statute which does not apply in this
jurisdiction. BAC Mot. to Dismiss at 6. Because Ms. Coley
claims that Defendants failed to properly underwrite her loan
and failed to follow accepted appraisal guidelines, Am. Compl.
¶¶ 178-180, the Court will construe Count III as a claim for
fraud. As such, the claim is subject to the heightened pleading
requirements of Fed. R. Civ. P. 9(b). However, Plaintiff has
made no factual allegations against Defendants to raise her
right to relief above a speculative level, much less with the
requisite particularity to meet the standards of Rule 9(b). She
has not provided specific dates when fraudulent statements were
made to her, nor does she describe the nature of those
statements. Under such circumstances, the Court “need not
accept inferences drawn by plaintiff if those inferences are not
supported by the facts set out in the complaint, nor must the
court accept legal conclusions cast as factual allegations.”
Hettinga v. United States, 677 F.3d 471, 476 (D.C. Cir. 2012)
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(internal citations omitted). See also Carter v. Bank of
America, 888 F. Supp. 2d 1, 14-15 (D.D.C. 2012) (dismissing
fraud claims in an almost identical complaint where plaintiff
failed to plead the elements of common law fraud and instead set
forth a number of conclusory allegations); McCarter, 873 F.
Supp. 2d at 250 (same).
In Count IV, Plaintiff seeks to Quiet Title to her property
and to forever enjoin Bank of America “from asserting any
estate, right, title, or interest” in the property that is
adverse to her own. Am. Compl. ¶ 185. Again, Plaintiff has
stated no basis for such prospective declaratory relief nor has
she offered any facts to suggest that her quiet enjoyment of the
property has been disturbed. Thus, this claim is also
dismissed. See Diably v. Bierman, 795 F. Supp. 2d 108, 111-13
(D.D.C. 2011) (dismissing a quiet title claim under similar
circumstances).
Plaintiff makes fleeting references to the Truth in Lending
Act (hereinafter “TILA”), 15 U.S.C. § 1601 et seq., and RESPA
throughout her Amended Complaint. To the extent that she seeks
to state a claim pursuant to those statutes, her claims are
time-barred. Claims brought under TILA must be brought within a
year of the violation for money damages or within three years of
the violation for rescission. 15 U.S.C. § 1640(e). For the
purposes of the statute, a TILA action accrues “no later than
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the settlement date” of the loan. Lawson v. Nationwide Mortg.
Corp., 628 F. Supp. 804, 807 (D.D.C. 1986) (internal citations
omitted). Similarly, RESPA actions must be brought within one
year of the violation. 21 U.S.C. § 2614.
Finally, despite a lengthy discussion of how MERS operates,
Plaintiff has failed to state a claim – either explicitly or
implicitly – against Defendant MERS anywhere in the Amended
Complaint. Accordingly, the Court will dismiss the claims
pending against MERS as well.
IV. CONCLUSION
For the reasons set forth above, the Court GRANTS
Defendants’ Motions to Dismiss and DENIES Defendant Bank of
America’s Motion to Strike as moot. An appropriate order
accompanies this memorandum opinion.
Signed: Emmet G. Sullivan
United States District Judge
March 31, 2014
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