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Orban v. Nationwide Trustee Services, Inc.

United States District Court, W.D. North Carolina, Statesville Division

November 19, 2014



RICHARD L. VOORHEES, District Judge.

THIS MATTER is before the Court upon Defendants Bank of America, N.A. ("BANA") and Bank of New York Mellon's ("BNYM") joint Motion to Dismiss, filed on February 9, 2012 (Doc. 2); Defendants Nationwide Trustee Services, Inc. ("Nationwide Services") and Kerrie A. Verstrate's ("Verstrate") joint Motion to Dismiss, filed on February 13, 2012 (Doc. 3); pro se Plaintiffs Harold N. Orban and Victoria L. Orban's (collectively, "the Orbans") Motion for Summary Judgment, filed on May 4, 2012. (Doc. 21.)


A. Procedural Background

This matter was originally filed in the Superior Court of Catawba County, North Carolina on January 6, 2012. (Doc. 1-1). On February 7, 2012, BANA filed a Notice of Removal to this Court under 28 U.S.C. §§ 1331, 1367, 1441, and 1446. (Doc. 1). Co-Defendants BNYM, Nationwide Services, and Verstrate all consented to removal. (Doc. Pg. 2 ¶ 3). Removal is proper under 28 U.S.C. § 1331 federal question jurisdiction because the Orbans have alleged violations under the Fair Debt Collection Practices Act, 15 U.S.C. § 1692, et seq., and the Real Estate Settlement Procedure Act, 12 U.S.C. § 2601, et seq .[1] (Doc. 1-1, ¶¶ 7, 17, 18). This Court exercises its supplemental jurisdiction over the state law claims as they make up the same case and controversy of the alleged violations of federal law. 28 U.S.C. § 1367(a).

On March 5, 2012, the Orbans objected to removal and moved to remand the case. (Doc. 9). The Orbans argued that mere consent of every Defendant to removal was not enough and that 28 U.S.C. § 1446(b) required each Defendant to either join in the removal petition or file a removal action of their own. (Doc. 9, Pg. 3, ¶ 5). On March 31, 2014, this Court denied the Motion to Remand under the Fourth Circuit's holding in Mayo v. Bd. of Educ. of Prince George's Cnty., 713 F.3d 735, 742 (4th Cir. 2013) cert. denied, 134 S.Ct. 901, 187 L.Ed.2d 777 (U.S. 2014) ("[a]ccordingly. we conclude that a notice of removal signed and filed by an attorney for one defendant representing unambiguously that the other defendants consent to the removal satisfies the requirement of unanimous consent for purposes of removal."))

A. Factual Background

On December 13, 2006, the Orbans executed a Home Equity Credit Line Agreement and Disclosure Statement (the "note" or "HELOC" - Home Equity Line of Credit). (Doc. 4-1, Pg. 2). Pursuant to the note, a deed of trust was filed with the Catawba County Register of Deeds at book 2802, page 984, loan no. XXXXXXXXX. (Doc. 4-1).[2] The line of credit was for a maximum of $200, 000.00, and was secured by a mortgage on the premises located at 2320 Bluestone Court, Sherills Ford, North Carolina ("the Property"). Id. The deed of trust lists "Trustee Services of Carolina, LLC" as the trustee, acting for the beneficiary, Mortgage Electronic Registration Systems, Inc. ("MERS"). Id. The deed of trust states that MERS is acting solely as nominee for the lender, America's Wholesale Lender, and its successors and assigns. Id .

A document signed on June 17, 2011, filed in Catawba County on July 18, 2011 at book 3083, page 1932, but with a stated effective date of on or before May 6, 2010, provides that MERS assigned the Deed of Trust to "THE BANK OF NEW YORK MELLON FKA THE BANK OF NEW YORK, AS INDENTURE TRUSTEE FOR THE NOTEHOLDERS OF CWHEQ, INC., REVOLVING HOME EQUITY LOAN ASSET-BACKED NOTES, SERIES 2006-I" ("BNYM"). (Doc. 4-2). This document is signed by Mercedes Judilla as assistant secretary of MERS. Id.

A document entitled "Appointment of Substitute Trustee" signed on June 21, 2010, and filed in Catawba County on June 24, 2010, provides that BNYM removed the original trustee, Trustee Services of Carolina, LLC, and appointed Nationwide Services, Wendy B. Cole, Matressa Morris, and Defendant Verstrate as substitute trustees. (Doc. 4-3).

On or about September 24, 2010, Nationwide Services and Verstrate filed a foreclosure action on the HELOC loan in the office of the Catawba County Clerk of Superior Court, case No. 10-SP-947. On July 7, 2011, the action was dismissed pursuant to N.C. G.S 1A-1 Rule 41(b), for failure to prosecute. (Doc. 101, Ex. H).

The Court will now discuss correspondence between the Orbans and Defendants which underlies the Orbans' claims. These instances of correspondence were attached to the Complaint and are presented here in chronological order.

On January 21, 2011, the Orbans sent a letter to BANA[3] entitled, QUALIFIED WRITTEN REQUEST ("QWR").[4] (Doc. 1-1, Ex. B at 18). This letter referred to two mortgages[5] on the Property with account numbers XXXXXXXXX and XXXXXXXXX. ( Id. ) This letter requested that specific information[6] be provided and the Orbans claimed that they had a right to be provided this information under N.C. G.S. § 45-93, 12 U.S.C. § 2601, and the Truth in Lending Act, 15 U.S.C. § 1601 et seq . ("TILA"). ( Id. at 18-19).

On the same day, January 21, 2014, the Orbans sent a similar letter to Nationwide Services and Verstrate. (Doc. 1-1, Ex. F). This letter differed in that it specifically referred to the second mortgage on the Property with the account number XXXXXXXXX. The references to state and federal statutes and requests for information made in this letter were identical to those made in the QWR to BANA.

Nineteen business days later, on February 16, 2011, the Orbans sent another letter to Nationwide Services and Verstrate. (Doc. 1-1, Ex. G). This letter, entitled "NOTICE OF DEFAULT, " refers to "foreclosure action 10-SP-947." ( Id. ). The letter referenced the previously mailed QWR and alleges that Nationwide Services and Verstrate are in default[7] for failure to comply with N.C. G.S § 45-93, RESPA, and TILA.

On April 5, 2011, the Orbans received a letter from BAC Home Loans[8] responding to the January 21 and February 16 letters sent by the Orbans. (Doc. 1-1, Ex. C at 20). This letter from BAC Home Loans referenced a number of enclosures providing some of the information requested by the Orbans. The letter refused to provide part of the information requested by the Orbans, characterizing the denied requests as beyond the scope of the cited statutory provisions, overly broad, not related to payment/disbursement of funds, and inappropriate as the Orbans have made "no allegations whatsoever of any wrongdoing by BAC Home Loans." (Doc. 1-1, Ex. C, Pg. 21). Paragraph five of this letter provides the names and addresses of the current holders of the two Notes. ( Id. )[9][10] The letter concluded by providing points of contact for general foreclosure matters and specific foreclosure matters. ( Id. )[11]

On April 5, 2011, Mr. Orban sent another QWR to BNYM referencing the loan identified with the account number XXXXXXXXX. (Doc. 1-1, Ex. D). This letter requested information similar to that requested in previous QWR's. (See supra footnote 2). Twenty-nine business days later, on May 14, 2011, Mr. Orban sent another "NOTICE OF DEFAULT" to BNYM for failure to respond to this QWR.[12] (Doc. 1-1, Ex. E).

At the outset, it is important to construe what claims Plaintiffs are bringing. In Count One, Plaintiffs appear to bring claims arguing that the foreclosure was wrongful because the deed of trust made from MERS to BNYM was improper, that BANA violated North Carolina General Statute Section 45-93, and that BANA, Nationwide Services, and Verstrate violated provisions of the FDCPA. In Count Two, Plaintiffs are bringing a breach of a loan modification agreement against BANA. They also allege that BANA violated RESPA along with North Carolina General Statute 75-54. Elsewhere, Plaintiffs alleged that Defendants have committed fraud, request injunctive relief, emotional distress damages, and punitive damages.


BANA, BNYM, Nationwide Services, and Verstrate have moved to dismiss the Orbans' claims under Rule 12(b)(6). (Doc. 2 at 1); (Doc. 3 at 3). Additionally, Verstrate has moved to dismiss the Orbans' claim under Rule 12(b)(5) for insufficient service of process, which will be discussed in the "ANALYSIS" section. (Doc. 3 at 3.)

"A motion to dismiss under Rule 12(b)(6) tests the sufficiency of a complaint; importantly, it does not resolve contests surrounding the facts, the merits of a claim, or the applicability of defenses." Republican Party of N. Carolina v. Martin, 980 F.2d 943, 952 (4th Cir. 1992) (citing 5A Charles A. Wright & Arthur R. Miller, Federal Practice and Procedure § 1356 (1990)). "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)(quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 550 (2007)). The facial plausibility standard requires "the plaintiff to articulate facts, when accepted as true, that show' that the plaintiff has stated a claim entitling him to relief." Francis v. Giacomelli, 588 F.3d 186, 193 (4th Cir. 2009)(quoting Twombly, 550 U.S. at 570.) "To emphasize the Federal Rules' requirements for stating claims that are warranted and therefore form a plausible basis for relief, the Supreme Court has held that a complaint must contain more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.'" Id.

Where the Plaintiff is proceeding pro se, the Court will construe the pleadings liberally in order to allow for the development of a potentially meritorious claim. Boag v. MacDougall, 454 U.S. 364, 365 (1982) (citing Gordon v. Leeke, 574 F.2d 1147, 1151 (4th Cir.1978)). However, this principle is not without limits, and the proper role of the district court is that of a legitimate advisor, and not as an advocate for the plaintiff. Beaudett v. City of Hampton, 775 F.2d 1274, 1278 (4th Cir. 1985)(citing Gordon, 574 F.2d at 1151).


A. Service of Process

Verstrate has moved to dismiss the Orbans' claim under Rule 12(b)(5) for insufficient service of process. (Doc. 3 at 3). Federal Rule of Civil Procedure 4(e) provides that "an individual... may be served in a judicial district of the United States" by "following the state law for serving a summons in an action, " personally delivering the summons to the individual, leaving a copy of the summons at the individual's "dwelling or usual place of abode, " or delivering a copy of the summons to an agent authorized to receive service of process. Fed.R.Civ.P. 4(e). North Carolina also allows service of summons by any of these methods provided by Rule 4(e). N.C. Gen. Stat. § 1A-1, Rule 4(j)(1)(a)-(b). Additionally, North Carolina permits service by "mailing a copy of the summons and of the complaint, registered or certified mail, return receipt requested, ...

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