EDISON S. DICION, Plaintiff,
MANN MORTGAGE, LLC; et al, Defendants.
ORDER (A) GRANTING IN PART AND DENYING IN PART DEFENDANTS NATIONSTAR MORTGAGE LLC, MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., AND FEDERAL NATIONAL MORTGAGE ASSOCIATION'S MOTION (1) TO DISMISS COMPLAINT FILED MAY 28, 2014, AND (2) FOR SANCTIONS AGAINST PLAINTIFF'S COUNSEL, DOC. NO. 28; AND (B) GRANTING DEFENDANTS BANK OF AMERICA, N.A., AND MARTHA MUNOZ' MOTION TO DISMISS COMPLAINT FILED SEPTEMBER 8, 2014, DOC. NO. 31
J. Michael Seabright, United States District Judge
This action is one of the myriad cases filed in this district by Plaintiff Edison S. Dicion (“Plaintiff”)’s counsel Robert Stone (“Stone”), alleging a state-law quiet title claim on the basis that the mortgagor is unsure to whom mortgage payments should be made. Many of these cases have been dismissed for lack of subject matter jurisdiction -- mere uncertainty as to whom to pay does not establish an injury-in-fact.
The main difference setting this action apart from Stone’s other actions is that this is the second action Stone has filed on behalf of Plaintiff against these same Defendants. In the first action, Dicion v. Mann Mortgage, LLC, Civ. No. 13-00533 JMS-KSC (“Dicion I”), Plaintiff asserted a single claim for quiet title on the basis that he was unsure of the mortgagee for his loan. Like Stone’s other actions alleging a quiet title claim, Dicion I dismissed Plaintiff’s claim for lack of standing and failure to establish an amount in controversy sufficient to invoke diversity jurisdiction. Dicion I, 2014 WL 1366151 (D. Haw. Apr. 4, 2014). Rather than appeal from the final judgment, Plaintiff filed this action (“Dicion II”), making the same basic allegations of uncertainty as to the true mortgagee. Plaintiff included in this action, however, two additional claims --slander of title and violation of the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692 et seq.
Currently before the court are Motions to Dismiss brought by Defendants Nationstar, MERS, and FNMA (collectively “Nationstar Defendants”), Doc. No. 28, and by BANA, as successor to BAC, and Munoz (collectively, “BANA Defendants”). Doc. No. 31. Nationstar Defendants seek dismissal of Plaintiff’s Complaint with prejudice because the claims are barred by issue preclusion and/or the court lacks subject matter jurisdiction, and further seek sanctions against Plaintiff for filing a second baseless action. BANA Defendants argue that the Complaint should be dismissed for lack of subject matter jurisdiction and/or for failure to state a plausible claim upon which relief may be granted. Based on the following, the court GRANTS in part and DENIES in part Nationstar Defendants’ Motion, and GRANTS BANA Defendants’ Motion.
A. Factual Background
1. Allegations in the Complaint
As alleged in the Complaint, on May 15, 2009, Plaintiff obtained a loan for $230, 500 from Mann, secured by real property located at 67-160 Kuoha Street, Waialua, Hawaii 96791 (the “subject property”), as evidenced by a mortgage and promissory note. Doc. No. 1, Compl. ¶ 15; Doc. Nos. 1-1, 1-2, Exs. A, B. Both the note and mortgage identify Mann as the Lender, id., and the mortgage identifies MERS as “a separate corporation that is acting solely as a nominee for Lender and Lender’s successors and assigns. MERS is the mortgagee under this Security Instrument.” Doc. No. 1-2, Ex. B ¶ C. The note provides that “the Lender may transfer this Note. The Lender or anyone who takes this Note by transfer and who is entitled to receive payments under this Note is called the ‘Note Holder.’” Doc. No. 1-1, Ex. A ¶ 1.
The mortgage provides that “[t]he Note or a partial interest in the Note (together with this Security Instrument) can be sold one or more times without prior notice to Borrower.” Doc No. 1-2, Ex. B ¶ 20. In addition, the mortgage defines the role of the Loan Servicer -- an “entity . . . that collects Periodic Payments due under the Note and this Security Instrument and performs other mortgage loan servicing obligations under the Note, this Security Instrument, and Applicable Law” -- and provides that “[i]f there is a change of the Loan Servicer, Borrower will be given written notice of the changes which will state the name and address of the new Loan Servicer [and] the address to which payments should be made[.]” Id.
On February 24, 2012, Munoz executed an Assignment of Mortgage on behalf of MERS, as nominee for Mann, to BANA, which was recorded in the State of Hawaii Bureau of Conveyances on April 13, 2012. Doc. No. 1-3, Ex. C. The Complaint alleges that this assignment was “false and deceptive” to the extent it asserts that BANA acquired the Note from MERS. Doc. No. 1, Compl. ¶ 17. The Complaint explains that Munoz, who “signed the false and deceptive Assignment, ” was not the “Vice President of Defendant MERS, ” as indicated on the Assignment, but is “actually an employee of [BANA].” Id. ¶¶ 18-19.
On May 9, 2013, Nationstar sent Plaintiff an email message claiming that it “owns the servicing rights to [Plaintiff’s] Mortgage.” Id. ¶ 22; see Doc. No. 1-5, Ex. E. On May 14, 2014, Plaintiff allegedly searched MERS’ ServicerID website which indicated that Fannie Mae is the Mortgage “investor, ” or Note holder, and BANA is the “servicer.” Doc. No. 1, Compl. ¶ 20; see Doc. No. 1-4, Ex. D (providing a “MIN” number for Plaintiff’s loan, specifying “MIN Status: Inactive, ” and identifying BANA as the loan “Servicer” and Fannie Mae as the loan “Investor”). Fannie Mae has not provided any documentation to this effect to Plaintiff, has not responded to Plaintiff’s correspondence, and has not recorded any document in connection with the subject property. Doc. No. 1, Compl. ¶ 21.
In support of the quiet title claim in particular, Plaintiff alleges that each of the Defendants “has confused its interest in the Mortgage, ” id. ¶¶ 25-28, and that “[Plaintiff] has [both] a legal duty to pay his mortgage to the correct party[, and] the right to negotiate with the owner of his mortgage to obtain a modification.” Id. ¶ 29. The Complaint further alleges that “absent a declaration by this Court” determining the true mortgagee, Plaintiff “will be liable to double or triple liability for his mortgage debt.” Id.
In support of his Slander of Title claim, Plaintiff alleges that BANA published the Assignment by recording it with the Bureau of Conveyances, and that this Assignment is false to the extent Munoz asserted she was an agent of MERS when she was in fact an agent of BANA. Id. ¶ 34. According to Plaintiff, this Assignment “disparaged the title to [Plaintiff’s] property, ” and caused Plaintiff $235, 000 damages in lost equity in his property. Id. ¶¶ 37-38.
Finally, Plaintiff alleges that Defendants violated the FDCPA where MERS never owned the Note or Mortgage, BANA recorded a false assignment, Nationstar contacted Plaintiff as an agent of BANA, and all Defendants have communicated to third parties information about [Plaintiff’s] credit, which information is known, or which should be known to be false.” Id. ¶¶ 44-49.
2. Allegations That Are Not Made in the Complaint
The allegations contained in the Complaint stand in sharp contrast with what the Complaint does not allege, and what this action apparently does not involve. In particular, the Complaint does not allege that Plaintiff’s loan is in default, much less that any Defendant is seeking to foreclose on the subject property. Nor does the Complaint allege that the mortgage loan is an invalid debt, or that any Defendant other than BANA asserts that it is entitled to Plaintiff’s mortgage payments. Thus, given what is not alleged, the gist of the Complaint is that Plaintiff questions whether BANA was validly transferred the mortgage loan, which is based not on any conflicting claims by Defendants seeking Plaintiff’s mortgage payments, but rather simply MERS’ assignment of the mortgage loan to BANA.
B. Procedural Background
On October 15, 2013, Plaintiff filed his Complaint in Dicion I, styled as a declaratory action, alleging one Count for quiet title to “clarify the legal relations between the parties.” Dicion I, Doc. No. 1, Compl. ¶ 33. On April 4, 2014, the court dismissed the Complaint for lack of subject matter jurisdiction, and the Clerk of Court closed the case file. Id., Doc. Nos. 42, 43. On May 15, 2014 -five weeks after judgment entered in that action -- Plaintiff attempted to file an Amended Complaint in Dicion I, Doc. No. 44, which the court struck on May 19, 2014 because judgment had already entered. Dicion I, Doc. No. 45.
2. Dicion II
On May 28, 2014 -- nine days after the court struck his Amended Complaint in Dicion I - Plaintiff filed this action. Doc. No. 1. On July 7, 2014, the court issued a sua sponte Order to Show Cause Why Action Should Not Be Dismissed (“OSC”) on the basis that the current action is barred by doctrines of claim preclusion and/or issue preclusion. Doc. No. 9. The court subsequently vacated the OSC, determining it was more appropriate for the Defendants to file an appropriate motion to dismiss. Doc. No. 13.
On October 1, 2014, Nationstar Defendants filed their Motion to Dismiss. Doc. No. 28. On October 2, 2014, BANA Defendants filed their Motion to Dismiss. Doc. No. 31. Plaintiff filed an Opposition to BANA Defendants’ Motion on October 20, 2014, Doc. No. 34, but did not file a response to the Nationstar Defendants’ Motion. BANA Defendants filed their Reply on October 24, 2014, Doc. No. 35, and ...