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PLS Investments, LLC v. Ocwen Loan Servicing, LLC

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

April 1, 2015

PLS INVESTMENTS, LLC, Plaintiff,
v.
OCWEN LOAN SERVICING, LLC, HSBC BANK USA, NATIONAL ASSOCIATON, as Trustee for Fremont Home Trust 2004-B Asset Backed Certificates, Series 2004-B, and REAL HOME SERVICES AND SOLUTIONS, INC., Defendants.

MEMORANDUM AND ORDER

RICHARD VOORHEES, District Judge.

THIS MATTER is before the Court on Defendants' Motion to Dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure and Memorandum of Law in Support. (Docs. 11, 12). Plaintiff filed a Response in Opposition. (Doc. 16). Defendants elected not to file a reply brief. (Doc. 17).

I. Factual Background

On July 16, 2014, Plaintiff PLS Investments, LLC ("PLS") commenced litigation against Defendants OCWEN Loan Servicing, LLC ("Ocwen"), HSBC Bank USA, National Association ("HSBC"), as Trustee for Fremont Home Trust 2004-B Asset Backed Certificates, Series 2004-B ("Fremont"), and Real Home Services and Solutions, Inc. ("RealHome") (collectively "Defendants"), in the North Carolina General Court of Justice, Ashe County Superior Court. (State Case No.: 14-CVS-282). (Doc. 1/Exh. A). Plaintiff's Complaint alleges Defendants erroneously and falsely listed its property as a foreclosure property twice - the second time after being placed on notice that Plaintiff PLS was never a borrower of any of the Defendants and that the PLS Lot was not, in fact, subject to foreclosure.

Unless expressly identified as an assertion of the Defendants, the following factual allegations are taken from the Plaintiff's Complaint and are accepted as true for purposes of resolving the instant motion.

On or around March 10, 2008, by way of a North Carolina General Warranty Deed, Plaintiff PLS purchased a parcel of real property located in Jefferson Township of Ashe County, North Carolina, from James Kevin Jordan and his wife, Sherry D. Jordan ("Jordans"). (Compl., ¶¶ 10, 11). The property purchased by PLS is approximately three acres, has a home on it, and is more particularly described in the deed recorded at Book 379, Page 1587, of the Ashe County Registry and identified by the Ashe County Tax Office as parcel ID number XXXXX-XXX-XXX. (Compl., ¶ 10). For purposes of this Memorandum and Order, the undersigned will refer to this parcel as the "PLS Lot."

At the time PLS purchased the property, the Jordans owned two smaller vacant lots adjacent to Plaintiff's PLS Lot. (Compl., ¶ 12). The Jordans' other lots are more particularly described in the deed recorded at Book 392, Page 1943, of the Ashe County Registry as a one-acre lot and another two-acre lot and identified by the Ashe County Tax Office as parcel ID number XXXXX-XXX-XXXA and XXXXX-XXX-XXXB.[1] (Compl., ¶ 12). For purposes of this Memorandum and Order, the undersigned will refer to these parcels as "Jordan Lots A and B."

The Jordans' executed a Deed of Trust on or about February 11, 2004 in connection with the real estate described in the Complaint.[2] The lender under the Jordans' Deed of Trust was originally Fremont Investment and Loan. (Compl., ¶ 13). The Deed of Trust was subsequently assigned to Defendant HSBC. (Compl., ¶ 13).

The Jordans subsequently defaulted on their loan, which was secured by the Deed of Trust. (Compl., ¶ 14). On or about September 12, 2012, the Substitute Trustee, David Caudill, on behalf of the Caudill Law Firm, PA, filed an Amended Notice of Substitute Trustee's Sale of Real Estate. (Compl., ¶ 14). This Notice of Sale specifically referenced the two tracts owned by the Jordans bearing parcel ID numbers XXXXX-XXX-XXXA and XXXXX-XXX-XXXB or Jordan Lots A and B. (Compl., ¶ 14). On or about October 16, 2012, the Substitute Trustee, acting in his capacity as Substitute Trustee and on behalf of the mortgagee HSBC, sold Jordan Lots A and B at a foreclosure sale. (Compl., ¶ 15). A Report of Foreclosure Sale was filed the same day reflecting that HSBC, through Defendant OCWEN, was the highest bidder and purchased Jordan Lots A and B for $705, 526.96. (Compl., ¶ 16). The Final Report and Account of Foreclosure Sale filed in November 2012 verified that the foreclosure sale was for Jordan Lots A and B, formerly secured by the Deed of Trust assigned to HSBC. (Compl., ¶ 16).

Following the foreclosure sale of Jordan Lots A and B, in or around late November 2012 or early December 2012, "Defendants HSBC and Ocwen caused a Notice of Eviction to be posted by the Ashe County Sheriff's Department upon the Plaintiff's home located on the Plaintiff's property." (Compl., ¶ 18). Defendants HSBC and Ocwen also "listed the Plaintiff's property for sale as a foreclosure sale with the Defendant RealHome, " who "acted as an agent of Defendants HSBC and Ocwen." (Compl., ¶ 19). Defendant RealHome advertised the PLS Lot as a foreclosure available for purchase "at a value substantially less than its actual fair market value on numerous foreclosure websites including, but not limited to, Foreclosure.com, Hubzu and Realtytrac." (Compl., ¶ 20). The advertisements included pictures of the exterior and interior of Plaintiff's home. (Compl., ¶ 21). The advertisements represented that the Listing Agent, RealHome, could be contacted via its agent, Linda McCauley. (Compl., ¶ 21).

Plaintiff PLS "has never borrowed money from Fremont Investment & Loan or the Defendant HSBC." (Compl., ¶ 17). Similarly, Plaintiff PLS "has never executed any Deed(s) of Trust or any other type of security instrument [] giving the Defendants the legal right to sell the Plaintiff's property." (Compl., ¶ 17). The PLS Lot has "never been subject to foreclosure or foreclosed upon." (Compl., ¶ 29). Plaintiff has never given any of the Defendants "the right to post any advertisement of the Plaintiff's property on any internet sites or any other print medium for sale." (Compl., ¶ 29).

In December 2012, Plaintiff PLS, through counsel, notified Defendants, through the Substitute Trustee, that "the Plaintiff's home [the PLS Lot] was not part of the property which was subject to foreclosure and that Plaintiff's home should not be listed for sale as a foreclosure." (Compl., ¶ 24). Plaintiff alleges that "[a]ll the Defendants were put on notice and became aware of the unlawful eviction and false advertising of Plaintiff's property...." (Compl., ¶ 25). As a result, Defendants removed the advertisements for the PLS Lot from the internet. (Compl., ¶ 25).

In or around October 2013, Plaintiff learned that Defendants had again posted and advertised the PLS Lot for sale "on numerous foreclosure websites such as Foreclosure.com, Hubzu and Realtytrac." (Compl., ¶ 26). Defendant RealHome, through its broker in charge, Linda McCauley, was designated the Listing Agent. (Compl., ¶ 26). As before, the advertisement included pictures of the exterior and interior of Plaintiff's home. (Compl., ¶ 26). The advertisements "falsely stated" that the home "was for sale and was a foreclosure" and "could be purchased for figures ranging from approximately $350, 000 to $600, 000." (Compl., ¶ 27).

Plaintiff alleges that the advertisements concerning the PLS Lot were false and that "Defendants caused this false information regarding Plaintiff's property to be disseminated and published throughout the world through the internet." (Compl., ¶¶ 22, 23, 27, 30). As a result, PLS "received offers to purchase the property which are significantly lower than its fair market value." (Compl., ¶ 32). As of the filing of the Complaint, Plaintiff PLS alleges that the PLS Lot "continues to be listed for sale on various websites for a substantially lower value than the actual fair market value." (Compl., ¶ 28). With respect to injury, Plaintiff alleges that "Defendants' false advertisement of the [PLS Lot] at values substantially lower than its fair market value has reduced the fair market value of the Plaintiff's property."[3] (Compl., ¶ 33). Plaintiff PLS further alleges that Defendants' actions in 2013 (the second erroneous foreclosure listing) were "malicious, willful, wanton, and in reckless disregard of the rights and interests of the ...


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