United States District Court, W.D. North Carolina, Charlotte Division
ROBERT W. SAYMAN and MARY B. SAYMAN, Plaintiffs,
LEHMAN BROTHERS FSB, VOLKSWAGEN USA, NATIONSTAR MORTGAGE, LCC, Defendants.
ROBERT J. CONRAD, Jr., District Judge.
THIS MATTER comes before the Court on Defendant's Motion to Dismiss Amended Complaint and supporting Memorandum (Docs. 24, 25), Defendant Volkswagen USA's (Volkswagen) Request for Judicial Notice (Doc. 26), the Magistrate Judge's Memorandum and Recommendation (M&R), (Doc. 32), recommending that this Court grant Defendants' Motion to Dismiss Amended Complaint and Request for Judicial Notice, and Defendants' Objections to the M&R (Doc. 38). These matters are now ripe for review.
A. Procedural Background
On May 10, 2013 Plaintiffs filed their Complaint which as amended purports to state claims for breach of contract, tort, and federal RICO violations. (Doc. 1). After obtaining an extension by the Court, Plaintiffs filed their Amended Complaint on October 8, 2013. (Doc. 14). Thereafter, Defendant filed its Motion to Dismiss the Amended Complaint and Request for Judicial Notice. (Docs. 24, 26). The matter was referred to Magistrate Judge David S. Cayer pursuant to 28 U.S.C. § 636(b)(1). The M&R granted Defendant's Request for Judicial Notice and recommended to this Court that the Motion to Dismiss be granted. (Doc. 32). On March 31, 2014, Defendants submitted a thirty page document listing various objections to the M&R as well as an affidavit. (Docs. 38; 38-1).
B. Factual Background
Plaintiffs' claims arise from a real estate closing that occurred on May 10, 2006. (Docs. 14, 16). At closing, Plaintiffs executed Notes and Deeds of Trust. (Doc. 14). Plaintiffs' Loan #2 with Defendant was to be used to pay off the second and previous contractual agreement with Main Street Mortgage Corporation. (Doc. 14 ¶ 21). Plaintiffs contend that Defendant did not loan anything to Plaintiffs but rather concealed the fact that they "created" checkbook money by "monetizing" the full face value of the two contractual mortgage documents (note and deed of trust) assigned. (Doc. 14 ¶ 26). Plaintiffs also contend the Defendants "deposited" and "monetized" notes into an Asset account and simultaneously created a "demand deposit account" in a swap of value of said notes. Id.
A review of the records of the Register of Deeds of Mecklenburg County provides:
As recorded on March 9, 2004 at Book 16877, Page 264, Plaintiffs executed a Deed of Trust to Market Street Mortgage Company, as lender, for $489, 000;
As recorded on March 9, 2004 at Book 16877, Page 291, and re-recorded on April 25, 2006 at Book 20324, Page 197, Plaintiffs executed an Equity Line of Credit Deed of Trust to Market Street Mortgage Corporation, as lender, in an amount not to exceed $139, 900;
As recorded on May 19, 2006 at Book 20453, Page 70, Plaintiffs executed a Deed of Trust to Volkswagen Bank USA, as lender, in an amount not to exceed $200, 000;
As recorded on June 6, 2006 at Book 1684, Page 618 and May 8, 2007 at Book 1860, Page 988, Certificates of Satisfaction were recorded for the Deeds of Trust securing the debt to not exceed $139, 900;
As recorded on July 27, 2007 at Book 22587, Page 695, Plaintiffs executed a Note and Deed of Trust securing the debt due and owing to Lehman in the amount of $521, 000; and
As recorded on August 2, 2007 at Book 1909, Page 346, Mortgage Electronic Registration Systems, Inc. as nominee for Market Street Mortgage Corporation filed a Satisfaction of Security Instrument for a Deed of Trust ...