E. CLIFTON KNOWLES, Magistrate Judge.
Pending before the Court is a Motion to Dismiss pursuant to Fed. R. Civ. P. 12(b)(6) filed by Defendants Mortgage Electronic Registration Systems, Inc., MERSCORP, Inc. (collectively "MERS"), and CitiMortgage, Inc. ("CMI").
Plaintiff has not filed a Response to the instant Motion to Dismiss.
Plaintiff filed this pro se action alleging the following violations: 18 U.S.C. §1962(c) and (d) (civil RICO), "conspiracy," T.C.A. §32-14-114 (criminal forgery), common law fraud, T.C.A. §39-14-105 (criminal grading of theft offenses), slander of title, quiet title, conspiracy to commit fraud, conspiracy to commit wrongful foreclosure, unjust enrichment, Real Estate Settlement Procedures Act (RESPA), and the "Federal Debt Collection Practices Act" (FDCPA). Docket No. 1. Plaintiff sues Mortgage Electric Registration Systems, Inc., MERSCORP, CitiMortgage, Inc., Wilson and Associates, PLLC, and Shellie Wallace, Trustee.
Defendants argue that Plaintiff's claims should be dismissed because, "The majority of the arguments in Plaintiff's Complaint and Motions are based upon unrelated general allegations of corruption and improper practices in the mortgage industry," and because Plaintiff "has failed to present facts that support any of his claims in this case, and the facts on record are plainly contrary to his assertions." Docket No. 70, p. 5.
With regard to Plaintiff's Civil RICO claim (and his claims of mail or wire fraud as predicate offenses), Defendants argue that Plaintiff cannot prevail because he has failed to describe the time, place, and content of any alleged misrepresentations as required by the heightened pleading standard of Fed. R. Civ. P. 9(b). Id., p. 9-10. Defendants also argue that Plaintiff cannot sustain his general conspiracy claims, conspiracy to commit fraud claims, and conspiracy to commit wrongful foreclosure claims, because Plaintiff has failed to demonstrate the existence of an underlying predicate tort, as required to state a cause of action for conspiracy. Id., p. 12, 17. With regard to Plaintiff's claims of fraud (as a separate claim and as the predicate tort for his conspiracy to commit fraud claim), Defendants argue that Plaintiff has failed to comply with Fed. R. Civ. P. 9(b)'s requisite specificity of pleading, and therefore cannot sustain his fraud claims. Id., p. 15. Defendants further maintain that Plaintiff's contention that a conspiracy exists because MERS has transferred an interest in the Deed of Trust while acting as a nominee for Mortgage Investors Group and because CMI was not assigned the Note and Deed of Trust fails because the position of MERS as nominee has been held valid by a number of courts and because the plain language of Plaintiff's deed of trust states that MERS has legal title and may act as nominee for the lender and its successors and assigns. Id., p. 12-13. Likewise, with regard to Plaintiff's claims of conspiracy to commit wrongful foreclosure, Defendants argue that Plaintiff has failed to demonstrate the underlying act of wrongful foreclosure, because Plaintiff's allegation of wrongful foreclosure stems from his contention that the naming of MERS as nominee for the lender is unlawful, but as has been discussed, a number of courts have held that MERS may act as a nominee for a lender. Id., p. 17.
Defendants contend that Plaintiff cannot sustain his claims pursuant to Tenn. Code Ann. §§ 39-14-114 and 39-14-105, because those statutes involve offenses under Tennessee criminal law, and Plaintiff has failed to plead that there is any private right of action in them for Defendants' alleged violations. Id., p. 14.
Defendants argue that Plaintiff cannot establish his slander of title claim because he has offered nothing more than a legal conclusion that Defendants acted improperly against his property, and because Plaintiff has failed to show any facts demonstrating that Defendants maliciously claimed title to his property. Id., p. 16. Defendants also argue that Plaintiff's claim to quiet title must be dismissed because it is based on the theory that neither MERS nor CMI ever had any true interest in the property, and because the Deed of Trust, Assignment of Deed of Trust, and Note all demonstrate that that theory has no factual support. Id.
Defendants additionally argue that Plaintiff's unjust enrichment claim must fail because Plaintiff has failed to plead that equity demands restitution, and because it is unclear how Defendants have been unjustly enriched, when Plaintiff has retained possession of the property that is the subject of this lawsuit, there has been no foreclosure sale to net Defendants any proceeds, Defendants have been deprived of the loan payments, and Plaintiff has leased the property to a third party. Id., p. 18-19.
With regard to Plaintiff's RESPA claims, Defendants argue that those claims must fail because Plaintiff has failed to allege that either MERS or CMI gave or accepted any kind of fee. Id., p. 19. Defendants further contend that the RESPA provisions at issue apply to the "lender" or "loan originator," which is Mortgage Investors Group, which is not a party to this lawsuit. Id. Also, with respect to Plaintiff's FDCPA claims, Defendants maintain that those claims must fail because Defendants are creditors, to which the FDCPA does not apply, as the FDCPA generally applies to debt collectors (not creditors).
Finally, with regard to the lis pendens that Plaintiff recorded on March 24, 2011 against the property that is the subject of this lawsuit, Defendants argue that dismissal of Plaintiff's action terminates the lien lis pendens. Id., p. 22. Should Plaintiff's action be dismissed, Defendants seek an Order terminating the lien lis pendens with direction that the Order be filed with the Register of Deeds in which the lien lis pendens was originally filed. Id.
As mentioned, Plaintiff has not responded to the instant Motion.
For the reasons discussed below, the undersigned recommends that Defendants' Motion to Dismiss be GRANTED.
Plaintiff has filed a 73 page Complaint containing 272 separately numbered paragraphs of "factual" allegations, the majority of which are general allegations of corruption and improper practices in the mortgage industry. See Docket No. 1. Accordingly, the undersigned will discuss only those "facts" relevant to Plaintiff's specific claims against the instant Defendants.
As primary support for his allegations against the instant Defendants, Plaintiff states:
Docket No. 1, p. 3
Fed. R. Civ. P. 12(b)(6) provides that a claim may be dismissed for failure to state a claim upon which relief can be granted. In order to state a claim upon which relief can be granted, a complaint must contain either direct or inferential allegations respecting all material elements to sustain a recovery under some viable legal theory. Mezibov v. Allen, 411 F.3d 712, 716 (6
Moreover, the United States Supreme Court has recently addressed the appropriate standard that must be applied in considering a Motion to Dismiss for failure to state a claim. See Ashcroft v. Iqbal, 129 S.Ct. 1937, 137 L. Ed. 2d 868 (2009). The Iqbal Court stated in part as follows:
129 S.Ct. at 1949-1950, 173 L. Ed. 2d at 884 (citations omitted).
As an initial matter, Plaintiff includes two criminal statues in his grounds for suit: T.C.A. §32-14-114 (criminal forgery) and T.C.A. §39-14-105 (criminal grading of theft offenses). See Docket No. 1. This is a civil action, and Plaintiff has failed to plead that either criminal statute provides any private right of action. Absent a private right of action, Plaintiff cannot recover civilly for these criminal statutes, and Plaintiff's criminal forgery and criminal grading of theft offenses claims should be dismissed.
Plaintiff's unjust enrichment claim is admittedly based upon Defendants intention "to acquire monies from the sale of the property." Id., p. 27-28, 62-63 (emphasis added). Plaintiff does not allege that Defendants have, in any way, financially benefitted thus far. Plaintiff's home has not yet been the subject of a foreclosure sale. In fact, Plaintiff has leased the subject property to a third party. Because Plaintiff's own allegations demonstrate that Defendants have thus far not been enriched in any way, his unjust enrichment claim must fail. Accordingly, this claim should be dismissed.
With regard to Plaintiff's Civil RICO, conspiracy, fraud, conspiracy to commit fraud, and conspiracy to commit wrongful foreclosure claims, Plaintiff alleges:
Id., p. 37-38 (bold in original).
Plaintiff also alleges:
Id., p. 39-40 (bold in original).
Plaintiff states:
Id., p. 38 (bold in original). See also, id., p. 40, para. 144.
Civil RICO claims and conspiracy claims require the establishment of an underlying predicate offense, which Plaintiff in the case at bar asserts to be mail or wire fraud. Claims of fraud are subject to the heightened pleading standard of Fed. R. Civ. P. 9(b). Specifically, Fed. R. Civ. P. 9(b) requires the pleader to state the circumstances constituting fraud with particularity. As can be seen by the quoted passages above, Plaintiff has failed to do so. Plaintiff's averments are general and conclusory. Accordingly, Plaintiff's claims of fraud should be dismissed. Because Plaintiff's fraud claims should be dismissed, Plaintiff cannot establish the requisite underlying predicate offense necessary to sustain his civil RICO and conspiracy claims, or his conspiracy to commit fraud claim, and those claims should likewise be dismissed.
With regard to Plaintiff's conspiracy to commit wrongful foreclosure claim, in order to prevail, Plaintiff must establish the requisite underlying predicate act of wrongful foreclosure. To that end, Plaintiff complains essentially that MERS lacks standing to foreclose, and therefore, that any attempted foreclosure would be wrongful. Particularly, Plaintiff contends:
Id., p. 60-61.
As can be seen, Plaintiff's allegations against MERS are general and conclusory. Moreover, Plaintiff's contention that the naming of MERS as nominee for the lender is unlawful does not stand, as numerous courts have held that MERS may, in fact, act as a nominee for a lender. See, e.g., In Re: Mortgage Electronic Registration Systems (MERS) Litigation, 2011 U.S. Dist. LEXIS 7232 (D. Ariz. 2011); In re Martinez, 2011 WL 489905 (Bankr. D. Kan. 2011); In re Lopez, 2011 WL 576820 (Bankr. C. Mass. 2011); Kiah v. Aurora Loan Svcs., LLC, 2010 U.S. Dist. LEXIS 121252 (D. Mass 2010). Because Plaintiff cannot demonstrate the underlying predicate act of wrongful foreclosure, he cannot sustain his conspiracy to commit wrongful foreclosure claim and it should be dismissed.
Plaintiff's slander of title and quiet title claims are similarly based upon the theory discussed above that Defendants lacked any legal interest in the subject property. See Docket No. 1, p. 49-53. Specifically, Plaintiff avers:
Id.
For the reasons discussed above, Plaintiff's allegations that Defendants have no interest in the property at issue or legal standing to foreclose on the same cannot sustain his claims for slander of title or to quiet title, and those claims should be dismissed.
Plaintiff has also raised a claim under RESPA. Docket No. 1. Plaintiff avers that, "[a]t closing, [he] was charged fraudulent closing fees on his HUD-1 Settlement statement." Id., p. 63. Plaintiff also complains that, "[o]n closing, [he] wasn't told that the loan would be sold over and over again as a Mortgage Backed Security through MERS," and that, the "[l]ender failed to adhere to the Truth in Lending Act amendment requiring that when a loan is sold, the new owner of the loan must notify the borrower." Id., p. 64. Plaintiff's RESPA claims are claims against the lender or loan originator (Mortgage Investors Group), which is not one of the instant Defendants. Because this claim does not pertain to one of the instant Defendants, it should be dismissed against them.
Finally, Plaintiff has asserted a FDCPA claim. Docket No. 1. Plaintiff avers that Defendant Law Firm identified itself as a "debt collector" for the lender, but failed to validate Plaintiff's debt when asked to do so. Id., p. 64-65. Defendant Law Firm is not a party to the instant Motion. The FDCPA applies to debt collectors. See, e.g., 15 U.S.C. § 1692a(6); Montgomery v. Huntington Bank, 346 F.3d 693, 698 (6
For the reasons discussed above, the undersigned recommends that Defendants' Motion to Dismiss be GRANTED. Additionally, because these are the last remaining Defendants in this action, the undersigned recommends that an Order be issued terminating the lien lis pendens placed on the property by Plaintiff on March 24, 2011, with direction that the Order be filed with the Register of Deeds in which the lien lis pendens was originally filed.
Under Rule 72(b) of the Federal Rules of Civil Procedure, any party has fourteen (14) days after service of this Report and Recommendation in which to file any written objections to this Recommendation with the District Court. Any party opposing said objections shall have fourteen (14) days after service of any objections filed to this Report in which to file any response to said objections. Failure to file specific objections within fourteen (14) days of service of this Report and Recommendation can constitute a waiver of further appeal of this Recommendation. See Thomas v. Arn, 474 U.S. 140, 106 S.Ct. 466, 88 L. Ed. 2d 435 (1985), reh'g denied, 474 U.S. 1111 (1986); 28 U.S.C. § 636(b)(1); Fed. R. Civ. P. 72.
