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Stephens v. Bank of America Home Loans, Inc.

United States District Court, E.D. North Carolina, Western Division

September 28, 2017



          W. Earl Britt, Senior U.S. District Judge.

         On 7 July 2016, plaintiffs, proceeding pro se, initiated this action alleging federal and state law claims based on the foreclosure of their home following default of their mortgage obligations. (DE # 1.) Subsequently, Bank of America, N.A. (“BANA”), Countrywide Home Loans, Inc. (“Countrywide”) (collectively, the “BANA defendants”), Hutchens Law Firm (“Hutchens”), and BSI Financial Services, Inc. (“BSI”), among others, filed motions to dismiss pursuant to Rule 12(b)(1) and Rule 12(b)(6) of the Federal Rules of Civil Procedure. (DE ## 16, 25, 28.) On 25 January 2017, Senior United States District Judge James C. Fox dismissed plaintiffs' original complaint pursuant to Rule 12(b)(6) with leave to amend certain federal claims only (“January Order”). (DE # 34.) On 15 February 2017, plaintiffs filed an amended complaint against the BANA defendants and BSI. (DE # 35.) This matter is now before the court on the motions to dismiss of the BANA defendants, (DE # 36), and Hutchens and BSI, (DE # 38), and plaintiffs' opposition thereto, (DE # 42). Also before the court is plaintiffs' “supplemental pleading, ” defendants' responses, and plaintiffs' reply. (DE ## 43, 44-46.)

         I. BACKGROUND

         The second amended complaint sets forth no factual allegations with limited exceptions. Accordingly, the court identifies the relevant facts gathered from documents attached to the motions to dismiss and which are matters of public record or otherwise integral to the amended complaint. (See January Order, DE # 34, at 2 n.2 (identifying documents court may consider in ruling on a motion to dismiss).)

         This matter concerns alleged federal law violations associated with two mortgage loans - the first consummated in 2005 and the second in 2006 - both of which were secured by a deed of trust on 998 West Durness Court, Wake Forest, North Carolina (“the property”). (BANA Defs.' Mem., Exs. B, D, DE ## 37-2, 37-4.)

         On 10 August 2005, plaintiff Ms. Elliot executed a promissory note evidencing a loan in the amount of $154, 800.00 for the benefit of Countrywide Bank, a Division of Treasury Bank, N.A. (“the priority loan”), which was secured by a deed of trust signed by both plaintiffs on the property listing Mortgage Electronic Registration Services, Inc. (“MERS”) as nominee for the lender and the lender's successors and assigns. (Id., Ex. B, DE # 37-2.) That deed of trust subsequently underwent two assignments. In particular, MERS assigned it to Bank of America, N.A., successor by merger to BAC Home Loans Servicing, LP f/k/a Countrywide Home Loans Servicing, LP, which in turn assigned it to Wilmington Savings Fund Society, FSB, d/b/a Christiana Trust as Trustee for Ventures Trust 2013-I-H-R. (Id., Ex. C, DE # 37-3.)

         On 10 March 2006, plaintiffs executed a home equity line of credit (“HELOC”) promissory note in the amount of $20, 423.00 for the benefit of Countrywide secured by a deed of trust on the property, listing MERS as nominee for the lender and the lender's successors and assigns. (Id., Ex. D, DE # 37-4.) In September 2015, MERS assigned the HELOC deed of trust to Bank of New York Mellon f/k/a the Bank of New York, as successor trustee to JP Mortgage Chase Bank, N.A., as trustee on behalf of the certificate holders of the CWHEQ Inc., CWHEQ Revolving Home Equity Loan Trust, Series 2006-E. (Id., Ex. E, DE # 37-5.)

         On an unspecified date, MS. Elliott defaulted on the priority loan. Subsequently, Hutchens, on behalf of BSI, sent Ms. Elliot a pre-foreclosure notice dated 20 April 2016. (Hutchens & BSI's Mem., Ex. G, DE # 39-7.) At the time, the total amount past due on the priority loan was $12, 264.20. (Id.) The pre-foreclosure notice advised Ms. Elliot of the required process in order to cure her default and avoid foreclosure. (Id.) The amended complaint is silent as to the status of the HELOC and the foreclosure proceeding.


         In order to defeat defendants' motions to dismiss, the amended 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). “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.” Id. Legal conclusions, recitations of the elements of a cause of action, and bare assertions devoid of further factual enhancement do not constitute well-pled facts for motion to dismiss purposes. See Iqbal, 556 U.S. at 678. While the court must liberally construe a pro se plaintiff's pleadings, Erickson v. Pardus, 551 U.S. 89, 94 (2007), it “cannot ignore a clear failure to allege facts” that set forth a cognizable claim. Johnson v. BAC Home Loans Servicing, LP, 867 F.Supp.2d 766, 776 (E.D. N.C. 2011).


         A. TILA and RESPA Claims

         In the January Order, Judge Fox dismissed without prejudice plaintiffs' Truth in Lending Act (“TILA”) and Real Estate Settlement Procedures Act (“RESPA”) claims against the original defendants and permitted plaintiffs to file an amended complaint, instructing them to (1) “provide specific factual allegations in support of the TILA [ ] and RESPA claims and the equitable tolling thereof;” and (2) “exclude any allegations, discussion or insinuations regarding the securitization of loans, the separation of a deed of trust from the promissory notes, or the lawfulness of MERS.”[1] (DE # 34, at 16-17.) Plaintiffs' amended complaint wholly fails to comply with these directives. Moreover, plaintiffs' “supplemental pleading” is an attempt to circumvent the January Order's directive to exclude any discussion related to the loan securitization process and contains irrelevant matter.

         In their amended complaint, without any specific supporting factual allegations, plaintiffs assert that the BANA defendants and BSI failed to provide a good faith estimate and “a notice of Right To Obtain Written Itemization” in violation of TILA.[2] (Am. Compl., DE # 35, at 2.) At the outset, the court notes that once again, plaintiffs fail to provide any allegations that give rise to the plausible inference that BSI is a “creditor” or “assignee” within the meaning of TILA. (See January Order, DE # 34, at 6-7.) Indeed, there ...

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