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Alexander v. Nationstar Mortgage, LLC

United States District Court, S.D. New York

December 22, 2017




         Donald R. Alexander and Earleen W. Alexander (together, “Plaintiffs”), proceeding pro se, bring this lawsuit against Nationstar Mortgage, LLC (“Nationstar”), Deutsche Bank National Trust Company (“Deutsche Bank”) as trustee for GS Home Equity Trust 2007-5, et al., and Does 1 through 100 Inclusive (collectively, “Defendants”), seeking declaratory relief invalidating encumbrances upon and the foreclosure sale of a home, and damages. Plaintiffs assert federal claims, for violation of the Truth in Lending Act, 15 U.S.C. § 1601 et seq. (“TILA”), the Consumer Credit Protection Act, 15 U.S.C. § 1601 et seq. (“CCPA”), and the Real Estate Settlement Procedures Act, 12 U.S.C. §§ 2601-17 (“RESPA”), in addition to eight state law claims. This Court has subject matter jurisdiction of this action pursuant to 28 U.S.C. § 1331.

         Defendants move, pursuant to Federal Rule of Civil Procedure 12(b)(6), to dismiss the Third Amended Complaint (Docket Entry No. 28) (“Complaint”) with prejudice for failure to state a claim. (Docket Entry No. 30.) The Court has considered the parties' submissions in connection with the instant motion carefully and, for the reasons below, grants Defendants' motion to dismiss.


         The following recitation of facts is drawn from the Complaint, the factual content of which is taken as true for purposes of this motion, and a Deed of Trust securing Plaintiffs' mortgage which is referred to in the Complaint as “Assignment No. 1.” The Deed of Trust is explicitly referred to in the Complaint, is integral to Plaintiffs' claims and, furthermore, is a publicly recorded document of which the Court may take judicial notice. Staehr v. Hartford Fin. Servs. Grp., Inc., 547 F.3d 406, 425 (2d Cir. 2008) (in deciding a Rule 12(b)(6) motion, a court may consider matters of which judicial notice may be taken); DiFolco v. MSNBC Cable L.L.C., 622 F.3d 104, 111 (2d Cir. 2010) (in considering a 12(b)(6) motion, a court may consider documents incorporated by reference in the complaint); L-7 Designs, Inc. v. Old Navy, LLC, 647 F.3d 419, 422 (2d Cir. 2011) (when deciding a motion to dismiss, courts may consider documents integral to a complaint).

         On December 15, 2006, Plaintiffs executed “a mortgage loan in the sum of $600, 000 originated by Ryland Mortgage Company.” (Compl. ¶ 10.) Plaintiffs assert that “[t]he original beneficiary and nominee of the [p]romissory [n]ote and [m]ortgage was MERS [(Mortgage Electronic Registration Systems, Inc.)].” (Id.) The Deed of Trust identifies MERS as beneficiary “(solely as nominee for Lender [(defined as Ryland Mortgage Company)] and Lender's successors and assigns).” (Document No, 2006-270887, recorded December 29, 2016, filed in this action as Docket Entry No. 19-1, at 4.) Plaintiffs nonetheless characterize the Deed of Trust as an “assignment” to MERS (“Assignment No. 1.”). (See Complaint ¶ 11.) Three notices of default were recorded against Plaintiffs' property, in 2009, 2012 and 2014, respectively. (Id. ¶¶ 12, 17, 18.) On February 15, 2015, Nationstar Mortgage, LLC, foreclosed on Plaintiffs' home. (Id. ¶ 19.)

         Plaintiffs make several allegations of wrongdoing by Defendants. Many of the allegations appear to rely on the theory that a defect in what Plaintiffs characterize as “Assignment No. 1” of the Deed of Trust has rendered “all of the actions that occurred as a result of the void assignment, including the foreclosure of the subject Mortgage . . . also void.” (Id. ¶¶ 20-24, 26.) According to Plaintiffs, “Assignment 1 was from MERS as [n]ominee to Ryland Mortgage Company. Assignment 2, whereby MERS attempted to assign its interest, . . . was invalid since MERS had already assigned any and all of its interest in Assignment 1.”[1] (Id. ¶ 21.) Plaintiffs further allege that “Assignment 1 was to a non-existent entity which rendered Assignment 2 void.” (Id. ¶22.) Plaintiffs allege that Assignment 1 occurred in 2006, and that Assignment 2 occurred in 2011. (Id. ¶¶ 11, 16.) Plaintiffs allege that legal notice requirements were violated in connection with both alleged assignments such that both assignments were concealed until October 24, 2014, the date on which Plaintiffs obtained a Securitization Analysis Report, [2] a loan audit, from “expert Michael Carrigan.” (Id. ¶ 13.)[3]

         In addition to the claims based on their allegations of improper assignments, Plaintiffs allege violations of federal law, California State law, and of their Pooling and Servicing Agreement under New York law, during the foreclosure process. (Compl.)

         Plaintiffs filed their Initial Complaint on April 7, 2016 (Docket Entry No. 1.), followed by three subsequent amended complaints (Docket Entry Nos. 22, 27, 28) in response to Defendants' motions to dismiss (Docket Entry Nos. 18, 23).


         “To survive a motion to dismiss, a complaint must contain 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) (citing Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A proper complaint cannot simply recite legal conclusions or bare elements of a cause of action; there must be factual content plead that “allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678.

         TILA and CCPA Claims

         Defendants seek dismissal of Plaintiffs' third and fifth causes of action as time barred. In Plaintiffs' third and fifth causes of action, they allege Defendants violated TILA when they failed to disclose the assignments of their Deed of Trust and Promissory Note to the Plaintiffs.[4] “TILA provides that, ‘not later than 30 days after the date on which a mortgage loan is sold or otherwise transferred or assigned to a third party, the creditor that is the new owner or assignee of the debt shall notify the borrower in writing of such transfer.' The ‘statute of limitations for causes of action brought under TILA . . . is one year from the date of the alleged violation.'” Nationstar Mortgage, No. 16-cv-2943(KBF), 2017 WL 570941, at *5 (S.D.N.Y. Feb. 13, 2017) (quoting 15 U.S.C. § 1641(g)(1)) (internal citations omitted). The alleged assignments of the Deed of Trust occurred in 2006 and 2011. (Compl. ¶¶ 11, 16.) Plaintiffs filed their Initial Complaint in 2016, almost five years after the most recent purported assignment. (Docket Entry No. 1.) Thus, Plaintiffs' claims are time barred on their face.

         Plaintiffs nonetheless assert that they are entitled to invoke equitable tolling and the claims should be treated as timely, alleging that Defendants did not record, and concealed, the 2006 assignment. (Compl. ¶ 58.) Plaintiffs allege their October 24, 2014, loan audit outlined the chain of title and made each assignment “reasonably ascertainable.” (Compl. ¶¶ 13, 59.) Therefore, even if the statute of limitations had been tolled by reason of Defendants' conduct, Plaintiffs' discovery of the alleged TILA violations in 2014 eliminated any continuing basis for such tolling. This suit was not filed until 2016, more than one year after Plaintiffs were apprised of the assignments, and thus is still time barred. Accordingly, the Court dismisses counts three and five of the Complaint as barred by the statute of limitations. See ...

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