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Newsom v. Branch Banking and Trust Co.

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

October 10, 2019

NELLIE NEWSOM, Plaintiff,
v.
BRANCH BANKING AND TRUST COMPANY; MORGAN STANLEY MORTGAGE CAPITAL, INC.; MORGAN STANLEY MORTGAGE CAPITAL HOLDINGS, LLC; FV-1, INC.; IGLOO SERIES II TRUST; and U.S. BANK TRUST NATIONAL ASSOCIATION, Defendants.

          ORDER

          Louise W. Flanagan United States District Judge

         This matter comes before the court upon defendants' motions to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief can be granted. (DE 38, 41, 44). Plaintiff has failed to respond to these motions, and the time for doing so has elapsed. In this posture, the issues raised are ripe for ruling. For the following reasons, the court grants defendants' motions.

         STATEMENT OF THE CASE

         Plaintiff, proceeding pro se, commenced this action on June 25, 2018, asserting, as pertinent here, that defendants Branch Banking and Trust Company (“BB&T”); Morgan Stanley Mortgage Capital, Inc.; FV-1, Inc.; Morgan Stanley Mortgage Capital Holdings, LLC; U.S. Bank Trust National Association; and Igloo Series II Trust violated the Truth in Lending Act (“TILA”), 15 U.S.C. § 1601, et seq, in connection with a residential mortgage loan transaction.[1] For this violation, plaintiff seeks monetary relief including compensatory and punitive damages between $100, 000.00 and $2, 000, 000.00; pre and post judgment interest; attorney's fees; and the refund of wrongfully collected sums. Additionally, plaintiff seeks rescission of the loan transaction.

         On June 3, 2018, defendant BB&T filed the instant motion to dismiss for failure to state a claim upon which relief can be granted. On June 6, 2018, defendants FV-1, Inc., Morgan Stanley Mortgage Capital Holdings, LLC, and Morgan Stanley Mortgage Capital, Inc. filed the instant motion to dismiss on similar grounds also for failure to state a claim upon which relief can be granted. Finally, on June 6, 2018, defendants Igloo Series II Trust and U.S. Bank Trust National Association filed the instant motion to dismiss also for failure to state a claim upon which relief can be granted.

         STATEMENT OF FACTS

         The facts alleged in the complaint may be summarized as follows. On July 7, 2005, plaintiff obtained a mortgage on her property located at 544 Pine Ridge Road, Roanoke Rapids, North Carolina (“the property”), by executing a negotiable promissory note and deed of trust with BB&T for $249, 000. (Compl. ¶¶ 36-38, 59). According to the complaint, BB&T failed to disclose material information during this transaction. (Id. ¶¶ 87, 92). Due to a series of allegedly unlawful and fraudulent transfers, defendants FV-I, Inc.; Morgan Stanley Mortgage Capital Holdings, LLC; U.S. Bank Trust National Association; and Igloo Series II Trust became holders of the negotiable promissory note and deed of trust. (Id. ¶¶ 11-14, 43-44, 53).[2] Despite allegedly lacking a lawful ownership interest in the property, defendants foreclosed on the property on June 20, 2018. (Id. ¶ 121).

         DISCUSSION

         A. Standard of Review

         “To survive a motion to dismiss” under Rule 12(b)(6), “‘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, 663 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “Factual allegations must be enough to raise a right to relief above the speculative level.” Twombly, 550 U.S. at 555. In evaluating whether a claim is stated, “[the] court accepts all well-pled facts as true and construes these facts in the light most favorable to the plaintiff, ” but does not consider “legal conclusions, elements of a cause of action, . . . bare assertions devoid of further factual enhancement[, ] . . . unwarranted inferences, unreasonable conclusions, or arguments.” Nemet Chevrolet, Ltd. v. Consumeraffairs.com, Inc., 591 F.3d 250, 255 (4th Cir. 2009) (citations omitted).

         B. Analysis

         Defendants argue the one-year statute of limitations under TILA bars plaintiff's claim for monetary relief. Additionally, defendants argue that TILA's three-year statute of repose bars plaintiff's claim for rescission of the loan transaction.

         1. Plaintiff's claim for monetary damages under TILA

         TILA requires creditors to disclose material information to borrowers during the execution of a loan. 15 U.S.C. § 1638(a). If a creditor violates this disclosure requirement, a borrower can seek monetary damages by filing suit “within one year ...


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