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Scully v. Chase Bank USA, NA

United States District Court, E.D. New York

July 7, 2017



          Nicholas G. Garaufis United States District Judge.

         In this action, pro se Plaintiff Winston Scully alleges misconduct relating to a residential mortgage by Defendants Chase Bank USA, NA (a.k.a. JP Morgan Chase, Chase Bank, and Chase) ("Chase"); and U.S. Bank National Association ("U.S. Bank"). (See Am. Compl. (Dkt. 16).) On October 17, 2016, Defendants filed a motion to dismiss or, in the alternative, for summary judgment ("Defendants' Motions"). (Defs. Mots. (Dkt. 24).) The court referred Defendants' Motions to Magistrate Judge Robert M. Levy for a report and recommendation ("R&R"). (Nov. 28, 2016, Order (Dkt. 25) (citing 28 U.S.C. § 636(b)(1)(B); Fed.R.Civ.P. 72(b)(1)).) On May 31, 2017, Judge Levy issued an R&R recommending that Defendants' Motions be granted. (R&R (Dkt. 26).) Plaintiff then moved to withdraw the Amended Complaint and dismiss all claims without prejudice. (Pl. Mot. to Withdraw (Dkt. 27).) Plaintiff also filed objections to the R&R. (Pl. Objs. (Dkt. 28).) For the reasons stated below, Plaintiffs motion to withdraw is DENIED; Plaintiffs objections to the R&R are OVERRULED; and the R&R is ADOPTED IN PART. The court GRANTS Defendants' motion to dismiss and DENIES AS MOOT Defendants' motion for summary judgment. The case is DISMISSED.

         I. BACKGROUND

         The court assumes the parties' familiarity with the prior proceedings in this action, and reviews the factual and procedural background only as necessary to adjudicate the parties' pending motions.

         A. Plaintiff s Allegations

         Plaintiff resides at a property located on the Grand Central Parkway in Queens County, New York (the "Property"). (Am. Compl. ¶ 1.) The Property was encumbered by a mortgage. (See id. ¶ 5(iv) (referring to "plaintiffs note and mortgage"); Pl. Ltrs. (Am. Compl., Ex. 6) (referring to a "Promissory Note made payable to VirtualBank").) The court discerns five distinct legal claims in Plaintiffs allegations, [1] all of which rest on the premise that neither Defendant ever had a valid claim to the promissory note underlying mortgage, and that Defendants therefore did not have a valid claim to collect on or reassign the mortgage itself. (See, e.g., Pl. Mot. to Am. (Dkt. 13) at 1 (arguing that Chase "was never the owner of the promissory note and [therefore] had no legal right to assign [the] mortgage to U.S. Bank").)

         First, from October 2008 to November 2013, Chase allegedly "engaged in an unlawful and illegal act to collect mortgage payments from Plaintiff totaling $164, 917.80" (the "Payment Claim"). (Id. ¶ 5 (i).)

         Plaintiffs second claim concerns an "Assignment of Mortgage" filed in February 2013 with the City Register of the City of New York, which purported to reassign a mortgage on the Property from Chase to U.S. Bank. (Id. ¶ 5(ii); see also Assignment of Mortgage (Am. Compl., Ex. 4) (Dkt. 16 ECF p. 16-19).) Plaintiff asserts that this reassignment was "without any legal basis" (the "Assignment Claim"). (Am. Compl. ¶ 5(ii).)

         Plaintiffs third and fourth claims relate to an attempted foreclosure on the Property. In April 2014, U.S. Bank "filed a Notice of Pendency with the county Clerk, Queens County, " and also "filed a Summons and Foreclosure Complaint [] against the Plaintiff' in New York Supreme Court. (Am. Compl. ¶ 5(iv).) On March 13, 2015, the state court dismissed the action for lack of standing, and offered the following explanation:

[U.S. Bank] did not submit an affidavit by someone with personal knowledge of the facts that stated how and when it became the holder or assignee of the note and mortgage . . . . Without evidence that it possessed or was assigned the original note at the time [the foreclosure action was initiated, U.S. Bank] cannot rely on its possession of a copy of the note to establish its standing.

U.S. Bank Nat'l Assoc, v. Scully (the "Foreclosure Dismissal"), No. 5436/14, slip op. at 3 (N.Y. Sup. Ct, Mar. 13, 2015).[2] Plaintiff argues that, dismissal notwithstanding, he suffered "irreparable harm" as a result of "the Wrongful Foreclosure" action (the "Wrongful Foreclosure Claim"). (Am. Compl. at 3.) In particular, he alleges that his "credit rating was adversely affected" by the foreclosure proceedings (the "Credit Rating Claim"). (Id. ¶ 5(v).)

         Plaintiff requests the following relief: compensatory and punitive damages; quiet title to the Property (the "Quiet Title Claim"); and an order removing the foreclosure from Plaintiffs credit report. (Id.)

         B. The R&R and Subsequent Filings

         On March 31, 2017, Judge Levy issued an R&R recommending that the case be dismissed. (See generally R&R.) Judge Levy recommended that the Payment and Assignment Claims be dismissed for lack of standing (id. at 7-10), and that the Credit Rating and Quiet Title Claims be dismissed based on Plaintiffs failure to plead sufficient facts (id. at 10-11). The R&R did not construe the Wrongful Foreclosure Claim as a separate cause of action, and therefore did not address it.

         The parties had 14 days from receipt of the R&R to file any objections. (Id. at 12.) See also 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 72(b)(2). Within that 14-day window, Plaintiff not only filed objections, but also moved to withdraw the Amended Complaint and dismiss the action without prejudice. (Pl. Objs.; PL Mot. to Withdraw.) Defendants responded to Plaintiffs objections and also oppose the motion to withdraw. (Defs. Opp'n to Pl. Mot to Withdraw & Resp. to Pl. Objs. (Dkt. 30).)


         The court denies Plaintiffs motion to withdraw the Amended Complaint. Plaintiff has not offered any justification for the court to dismiss the action without prejudice in lieu of adjudicating Defendants' Motions. Turning to the R&R, the court finds Plaintiffs objections to be without merit except insofar as Plaintiff points out the R&R's silence on Plaintiffs Wrongful Foreclosure Claim. The court finds that Plaintiffs claims must all be dismissed under Federal Rule of Civil Procedure 12(b). In light of this holding, the court need not address Defendants' motion for summary judgment or the portions of the R&R that discuss it.

         A. Plaintiffs Motion to Withdraw

         1. Le ...

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