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Bhatti v. Federal National Mortgage Association

United States District Court, N.D. New York

January 10, 2018

EQEEL BHATTI, Plaintiff,

          FOR THE PLAINTIFF: Eqeel Bhatti Pro Se

          FOR THE DEFENDANTS: Federal National Mortgage Association, Green Tree Servicing, LLC, and Mortgage Electronic Registration Systems, Inc.



          Gary L. Sharpe Senior District Judge

         I. Introduction

         Plaintiff Eqeel Bhatti commenced this diversity action against defendants Federal National Mortgage Association (Fannie Mae), Green Tree Servicing, LLC (Green), and Mortgage Electronic Registration Systems, Inc. (MERS) alleging breach of contract and seeking declaratory relief. (See generally Compl., Dkt. No. 1.)

         Pending are defendants' motion to dismiss for lack of subject matter jurisdiction, (Dkt. No. 19), and Bhatti's motion for leave to file an amended complaint, (Dkt. No. 24). For the following reasons, defendants' motion is granted and Bhatti's motion is denied.

         II. Background [1]

         In 2005, Bhatti executed a note promising to repay $169, 200 to non-party Countrywide Home Loans, Inc. and secured the loan's repayment by transferring a security interest in the parcel of real property located at 731 Western Avenue in Albany, New York to Countrywide via a mortgage. (Compl. ¶¶ 1-2, 22-24.) Bhatti's later search regarding the property revealed that defendant Fannie Mae owns his mortgage, [2] even though defendant Green, the current loan servicer, claims “that it is the holder in due course.”[3] (Id. ¶¶ 26, 30.) Fannie Mae never recorded its acquisition of the mortgage, [4] and Bhatti “was never notified, and is yet to see any tangible [a]ssignment of the [m]ortgage to [d]efendant [Fannie Mae].” (Id. ¶¶ 27, 39, 42, 44) (emphasis omitted). Bhatti contends this constituted a breach of contract and voided the note and mortgage, which entitles him to the original property price, with interest, and other special damages to be determined at trial. (Id. ¶¶ 45, 91; id. at 13.)

         Secondly, Bhatti takes issue with the process by which Fannie Mae came to “own” the mortgage. In sum, he argues that Countrywide invalidly assigned his loan to Fannie Mae via Country wide's nominee, defendant MERS, and then Green created phony records in an attempt to validate this assignment. (Id. ¶¶ 26-27, 32, 53.) As such, Bhatti contends that this “render[s] any assignments by [d]efendant MERS a nullity . . . and utter fraud.” (Id. ¶ 21.) Moreover, Bhatti asserts that the note was never properly transferred or endorsed to any of the named defendants, (id. ¶ 32), and thus “none of the named [d]efendants own this loan, ” (id. ¶ 28), which “mak[es] full title insurance impossible and a difficult sale of the home, ” (id. ¶ 36). Nonetheless, Green initiated foreclosure proceedings against Bhatti related to the subject mortgage. (Id. ¶ 21.) As such, Bhatti also seeks a “judicial determination and declaration of the rights, obligations[, ] and interest of the parties with regard to the [s]ubject [p]roperty.” (Id. ¶ 99.)

         III. Standard of Review

         To survive dismissal for failure to state a claim, a complaint must plead enough facts to state a claim that is “plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). Although Rule 8(a) of the Federal Rules of Civil Procedure “does not require detailed factual allegations, . . . it demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation.” Id. (internal quotation marks and citation omitted). In determining whether a complaint states a claim upon which relief may be granted, “the court must accept the material facts alleged in the complaint as true and construe all reasonable inferences in the plaintiff's favor.” Hernandez v. Coughlin, 18 F.3d 133, 136 (2d Cir. 1994) (internal quotation marks and citation omitted). However, this tenet “is inapplicable to legal conclusions.” Iqbal, 556 U.S. at 678.

         Where a plaintiff proceeds pro se, the pleadings must be read liberally and construed to raise the strongest arguments they suggest. See Sealed Plaintiff v. Sealed Defendant, 537 F.3d 185, 191 (2d Cir. 2008). Additionally, a pro se complaint should not be dismissed “without granting leave to amend at least once when a liberal reading of the complaint gives any indication that a valid claim might be stated, ” Gomez v. USAA Fed. Sav. Bank, 171 F.3d 794, 795 (2d Cir. 1999) (internal quotation marks and citation omitted), unless the problem with the pro se complaint is substantive, such that the plaintiff's request is futile because “better pleading will not cure it, ” Cuoco v. Moritsugu, 222 F.3d 99, 112 (2d Cir. 2000).

         In determining a Rule 12(b)(6) motion to dismiss, the court may consider the complaint, any exhibit attached to the complaint, materials incorporated by reference, and documents that are integral to the complaint. See Sira v. Morton, 380 F.3d 57, 67 (2d Cir. 2004). A document is integral to the complaint if the complaint “relies heavily upon its terms and effect.” Chambers ...

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