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Yencho v. Chase Home Finance LLC

United States District Court, S.D. New York

January 8, 2015

ROBIN K. YENCHO and PATRICIA O. YENCHO, Plaintiffs,
v.
CHASE HOME FINANCE LLC, JPMORGAN CHASE BANK, N.A., and GSR MORTGAGE LOAN TRUST 2007-lF, GOLDMAN SACHS MORTGAGE CO., Defendants.

OPINION & ORDER

NELSONS. ROMAN, District Judge.

Plaintiffs Robin K. Yencho and Patricia O. Yencho ("Plaintiffs") commenced this action by complaint filed January 13, 2014, against Chase Home Finance LLC, JP Morgan Chase Bank, N.A., and "GSRMortgage Loan Trust 2007-lF, Goldman Sachs M01tgage Co., " asserting four claims against all defendants: wrongful collection practice, quiet title, fraud, and wrongful conversion. JP Morgan Chase Bank, N.A. ("JPMC"), individually and as successor by merger to Chase Home Finance LLC, now moves to dismiss the complaint pursuant to Federal Rule of Civil Procedure 12(b)(6), for failure to state a claim upon which relief may be granted. For the reasons explained below, the Court grants the motion and dismisses all claims against JPMC and Chase with prejudice.

I. COMPLAINT

The complaint alleges that Plaintiffs obtained a $450, 000 mortgage with Nationwide Advantage Mortgage Co. ("Nationwide") on or about October 10, 2005, which financed real property in Florida. See Complaint ("Compl.") (dkt. no. 1) ¶ 7. Mortgage Electronics Registration Services, Inc. ("MERS") allegedly assigned the mortgage to GSR Mortgage Trust 2007-1F (the "Trust") on or about June 12, 2008. Id. ¶¶ 9-10. On or about July 13, 2010, the Trust assigned the mortgage to defendant Chase Home Finance LLC ("Chase"). Id. ¶ 11.

Plaintiffs contend the note, as opposed to the mortgage, is not indorsed. Id. ¶ 12. Rather, it contains an allonge, which is a slip of paper sometimes attached to a negotiable instrument that may reflect indorsements. Id. ¶ 14. The allonge has a single indorsement: "Pay to the Order of JP Morgan Chase Bank, NA Without Recourse Nationwide Advantage Mortgage Company." This allegedly signifies fraud, since there is no allonge reflecting the interim note transfer to the Trust and because inconsistencies between a note transfer and a mortgage assignment can render the transfers a legal nullity. Id. ¶¶ 17-23. At bottom, Plaintiffs contend ownership of the note and mortgage are "in serious question, " and that Plaintiffs were therefore wrongfully foreclosed upon when they failed to pay their mortgage, which foreclosure occurred on August 27, 2010. See Declaration of Marie Claire Dekar ("Dekar Decl.") (dkt. no. 10) Ex. D.

The public record indicates that Chase filed a mortgage foreclosure complaint in the Circuit Court of the Nineteenth Judicial Circuit in and for Indian River County, Florida, in January 2010.[1] The complaint alleged inter alia that Chase was a holder in due course of the mortgage note, had complied with all notice requirements of the Fair Debt Collection Practices Act, and was legally entitled to enforce the note and mortgage. Dekar Decl. Ex. B. Upon Plaintiffs' (there, defendants) default in the foreclosure action, Chase filed a motion for summary judgment which was granted by way of the aforementioned August 27, 2010 foreclosure judgment. Id. Ex. C, D. On February 17, 2012, Plaintiffs filed a motion to vacate the judgment, and the motion made substantially the same allegations as are made here: Chase was not an "owner in due corse" [sic], on account of apparent "bifurcation" of the note and mortgage when transferred. Id. Ex. E. The Florida court denied that motion on July 8, 2013, finding an absence of excusable neglect for the default and finding that Plaintiffs lacked any meritorious defense to foreclosure. Id. Ex. F. The instant action followed.

II. MOTION TO DISMISS STANDARD

On a motion to dismiss for "failure to state a claim upon which relief can be granted, " Rule 12(b)(6) dismissal is proper unless the complaint "contain[s] sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)); accord Hayden v. Paterson, 594 F.3d 150, 160 (2d Cir. 2010). "Although for the purposes of a motion to dismiss [a court] must take all of the factual allegations in the complaint as true, [it is] not bound to accept as true a legal conclusion couched as a factual allegation.'" Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 555). "While legal conclusions can provide the framework of a complaint, they must be supported by factual allegations." Id. at 679.

When there are well-pleaded factual allegations in the complaint, "a court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief." Id. A claim is facially plausible when the factual content pleaded allows a court "to draw a reasonable inference that the defendant is liable for the misconduct alleged." Id. at 678. Ultimately, determining whether a complaint states a facially plausible claim upon which relief may be granted must be "a context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Id. at 679.

III. CLAIMS

A. FDCPA Claim

Count Three of the complaint alleges fraud, and, included within that count, is a claim that JPMC violated the Fair Debt Collection Practices Act ("FDCPA") by sending Plaintiffs debt collection notices without any legal right to collect. See Compl. ¶¶ 47-51. JPMC moves to dismiss the FDCPA claim on the grounds that (a) the claim is time-barred, since there is no allegation that notices were sent within a year of the January 13, 2014 date this action was filed (the notices and foreclosure were in 2010), and (b) the claim is meritless because there are no viable allegations concerning false or misleading statements in the notices that were sent. Plaintiffs' opposition brief does not contest these grounds for dismissal. That omission is fatal. See Lipton v. County of Orange, N.Y., 315 F.Supp.2d 434, 446 (S.D.N.Y. 2004) ("This Court may, and generally will, deem a claim abandoned when a plaintiff fails to respond to a defendant's arguments that the claim should be dismissed."). The FDCPA claim is dismissed.

B. Other Claims

Beyond that, Count One asserts wrongful collection practices on the note and mortgage because of legally invalid transfers of title to the instrument and the obligation. Count Two seeks to quiet title to the Florida real property on the same basis. Any residual allegations in Count Three can, at best, be construed to assert common law fraud through collection notices sent without any legal ...


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