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Mori El v. Nationstar Mortgage

United States District Court, M.D. North Carolina

August 12, 2019

NATIONSTAR MORTGAGE, et al., Defendants.


          L. Patrick Auld United States Magistrate Judge.

         This case comes before the Court on Plaintiff's Application for Leave to Proceed In Forma Pauperis (Docket Entry 1), filed in conjunction with her pro se Complaint (Docket Entry 2). The Court will grant Plaintiff's Application (Docket Entry 1) for the limited purpose of recommending dismissal of this action.


         “The federal in forma pauperis [‘IFP'] statute, first enacted in 1892 [and now codified at 28 U.S.C. § 1915], is intended to guarantee that no citizen shall be denied access to the courts ‘solely because his poverty makes it impossible for him to pay or secure the costs.'” Nasim v. Warden, Md. House of Corr., 64 F.3d 951, 953 (4th Cir. 1995) (en banc) (quoting Adkins v. E.I. DuPont de Nemours & Co., 335 U.S. 331, 342 (1948)). “Dispensing with filing fees, however, [is] not without its problems. Parties proceeding under the statute d[o] not face the same financial constraints as ordinary litigants. In particular, litigants suing [IFP] d[o] not need to balance the prospects of successfully obtaining relief against the administrative costs of bringing suit.” Nagy v. Federal Med. Ctr. Butner, 376 F.3d 252, 255 (4th Cir. 2004).

         To address this concern, the IFP statute provides, in relevant part, that “the court shall dismiss the case at any time if the court determines that . . . the action . . . (i) is frivolous or . . . (ii) fails to state a claim on which relief may be granted . . . .” 28 U.S.C. § 1915(e)(2)(B). Under the latter provision, the Court must dismiss any complaint that “does not “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) (emphasis added) (internal citations omitted) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). This standard “demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation.” Id. In other words, “the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions. Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Id.[1]

         Alternatively, “a complaint, containing as it does both factual allegations and legal conclusions, is frivolous where it lacks an arguable basis either in law or in fact.” Neitzke v. Williams, 490 U.S. 319, 325 (1989). “The word ‘frivolous' is inherently elastic and not susceptible to categorical definition. . . . The term's capaciousness directs lower courts to conduct a flexible analysis, in light of the totality of the circumstances, of all factors bearing upon the frivolity of a claim.” Nagy, 376 F.3d at 256-57 (some internal quotation marks omitted). In determining frivolousness, the Court may “apply common sense.” Nasim, 64 F.3d at 954.

         Furthermore, federal courts possess limited jurisdiction, such that they may “exercise only the authority conferred by Article III of the Constitution and affirmatively granted by federal statute.” In re Bulldog Trucking, Inc., 147 F.3d 347, 352 (4th Cir. 1998). No. presumption of jurisdiction applies, Pinkley, Inc. v. City of Frederick, 191 F.3d 394, 399 (4th Cir. 1999); instead, federal courts must determine if a valid jurisdictional basis exists and “dismiss the action if no such ground appears, ” Bulldog Trucking, 147 F.3d at 352; see also Constantine v. Rectors & Visitors of George Mason Univ., 411 F.3d 474, 480 (4th Cir. 2005) (“A federal court has an independent obligation to assess its subject-matter jurisdiction . . . .”); Fed.R.Civ.P. 12(h)(3) (“If the court determines at any time that it lacks subject-matter jurisdiction, the court must dismiss the action.”). Facts supporting jurisdiction must appear in the complaint, Pinkley, 191 F.3d at 399, and the party asserting federal jurisdiction bears the burden of “show[ing] that jurisdiction does, in fact, exist, ” Davis v. Pak, 856 F.2d 648, 650 (4th Cir. 1988) (internal quotation marks omitted). “Article III [constitutional] standing is an issue of subject matter jurisdiction, which relates to the power of this Court to hear a case.” Keith Bunch Assocs., LLC v. La-Z-Boy Inc., No. 1:14CV850, 2015 WL 4158760, at *4 (M.D. N.C. July 9, 2015) (unpublished) (Biggs, J.) (citing Beyond Systems, Inc. v . Kraft Foods, Inc., 777 F.3d 712, 715-16 (4th Cir. 2015)). The Court may consider subject-matter jurisdiction in assessing frivolity under Section 1915(e)(2)(B)(i). See Cummings v. Rahmati, No. 1:17CV196, 2017 WL 1194364, at *1 (M.D. N.C. Mar. 30, 2017), recommendation adopted, slip op. (M.D. N.C. Apr. 20, 2017) (Biggs, J.).


         Plaintiff initiated this action against eight defendants: (1) “Nationstar Mortgage, ” (2) “Bank of America, N.A. LLC” (“Bank of America”), (3) “H.S.B.C., U.S.A., N.A., as Trustee for Ace Securities Corporation” (“HSBC Bank, Trustee”), (4) “HSBC Bank USA, N.A.” (“HSBC Bank”), [2] (5) “Issuing Entity Trust Ace Securities Corporation Home Equity Loan Trust, Series 2006-CW1” (“Ace Securities”), (6) “Ray M. Warner” (“Defendant Warner”), (7) “Christy Morse” (“Defendant Morse”), and (8) “Does 1-100 Inclusive.” (Docket Entry 2 at 1.) Plaintiff's Complaint alleges that Defendants violated the Fair Credit Extension Uniformity Act, the Fair Debt Collection Practices Act, and federal racketeering laws. (See Id. at 1, 6, 16, 17, 32.) The Complaint also asserts the following related state-law claims: “unjust enrichment” (id. at 1, 15), “negligent and intentional infliction of emotional distress” (id. at 1, 32), “lack of standing/wrongful foreclosure” (id. at 19), “quiet title” (id. at 22), “slander of title” (id. at 23), “fraud in the concealment” (id. at 24), “fraud in the inducement” (id. at 26), “unconscionable contract” (id. at 28), “breach of contract” (id. at 30), and “rescission” (id. at 31). Plaintiff has requested “[a] declaratory judgment, injunctive and equitable relief, and [ ] compensatory, special, general, and punitive damages.” (Id. at 7.)

         The Complaint alleges that, “[a]t least since March 15, 2006, [ ]Defendants have engaged in a scheme where by [sic] they issue [h]ome [l]oans to consumers and then seek to collect the amounts allegedly due to them which are not legally due to them.” (Id. at 1-2.)[3] More specifically, the Complaint describes the purchase of a piece of real property, as well as events that occurred during and following a related “securitization process” (id. at 7), resulting in Defendant Nationstar Mortgage selling an account to other entities, but

still servic[ing] the account by sending out bills and accepting payment. However, [Defendant Nationstar Mortgage] has given up ownership rights . . . because [it] intentionally sold and relinquished [its] beneficial interest in [its] accounts. Despite this fact, [Defendant Nationstar Mortgage] . . . ha[s] continued to pursue, along with [its] affiliates . . ., collection lawsuits against Plaintiff to recover the obligations allegedly owed on [the] accounts.

(Id. at 5-6.) The Complaint “disputes Defendants' superior colorable claim to legal title and equitable title of the . . . [real p]roperty in question” (id. at 7) and asserts that Plaintiff “is the owner of the property by Deed of Trust” (id. (internal parenthetical citation omitted)).

         Additionally, the Complaint further describes Defendants' “home loan securitization and debt collection scheme” (id.), as follows:

In order to earn securitization income from the [h]ome [l]oan securitization, [Defendant Nationstar Mortgage] sold its [h]ome [l]oan receivables to [Defendant Ace Securities].
The [h]ome [l]oan securitization process is set forth in the amended and restated Pooling and Servicing Agreement (the “PSA”) between [Defendant Nationstar Mortgage], as seller, and [Defendant HSBC Bank], trustee of [Defendant Ace Securities].

(Id. at 7-8.) According to the Complaint, Plaintiff obtained a “Forensic Chain of Title Securitization Analysis completed by a qualified expert[, Certified Forensic Loan Auditors, LLC, ] to verify the claims of this [C]omplaint.” (Id. at 11; see also Docket Entry 2-4 at 1-4.) Based upon that analysis, the Complaint asserts the following:

1. “Plaintiff pledged a Constructive Deed of Trust granting Legal Title to Accommodate [Defendant Nationstar Mortgage] to file against Plaintiff's Superior Claim to Title filed in the Official Records of the Guilford County Recorder's Office on March 20, 2006 . . . .” (Docket Entry 2 at 11.)
2. “On June 21, 2012, MERS [Mortgage Recording Electronic System[4] recorded an Assignment of Deed of Trust in the Guilford County Recorder's Office . . . . The Assignment was signed by Laresa Post, as Assistant Secretary of MERS. Laresa Post is actually employed as [a]n AV Production Specialist 11 since 2007 [to the] present by Bank of America. The notarization was signed by [Defendant] Morse who has committed fraud upon the court and notarization fraud by attesting to [an individual's] employment as a MERS Assistant Secretary knowing full well [that individual] was actually employed by Bank of America.” (Id. at 12.)
3. “The Note was sold, transferred, assigned and securitized into [Defendant Ace Securities] with a Closing Date of July 25, 2006.” (Id.)
4. “The June 21, 2012 assignment purports to assign Plaintiff's Deed of Trust to [Defendant HSBC Bank] as Trustee for [Defendant Ace Securities] having sold the Note to [Defendant Ace Securities] on or before July 25, 2006.” (Id. at 13.)
5. “The June 21, 2012 assignment was fraudulently executed by Larisa Post as Assistant Secretary of MERS without disclosure of her employment as an agent for the Assignee.” (Id.)
6. “The June 21, 2012 assignment of the Deed of Trust is an illegal unilateral transfer of real property . . . [and] is void.” (Id.)
7. “On August 19, 2013, an Assignment of Deed of Trust was filed with the Guilford County Recorder's Office . . . . The notary was [Defendant] Warner who attest[ed] [that] [an individual] [w]as an Assistant Vice President of Bank of America, N.A. when [the individual] actually [was] employed by notorious foreclosure mill Core Logic . . . . [Defendant] Warner has committed notarization fraud and fraud upon the court.” (Id. at 13-14) (internal quotation marks omitted).)
8. “The August 19, 2013 Assignment of Deed of Trust is dependent upon the void June 21, 2012 assignment of the Deed of Trust and ...

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