United States District Court, W.D. Virginia, Charlottesville Division
GLEN E. CONRAD, Chief District Judge.
Kathy and Warren Lewis (collectively, "the Lewises") filed this action against Nationstar Mortgage, LLC ("Nationstar") and Professional Foreclosure Corporation of Virginia ("PFC"). Nationstar has moved to dismiss the complaint for failure to state a claim, pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. For the reasons set forth below, Nationstar's motion will be granted and the complaint will be dismissed as to both defendants.
On September 6, 2006, the Lewises obtained a home mortgage loan from Nationstar for property located at 100 Edgemont Lane, Locust Grove, Virginia. The loan was evidenced by a note and secured by a deed of trust. The deed of trust named Mary K. Bell and Joan E. Friend as trustees.
At some point thereafter, the Lewises "fell into arrears, " thereby defaulting on their mortgage loan. (Compl. ¶ 18.) On October 27, 2010, Nationstar appointed Professional Foreclosure Corporation of Virginia ("PFC") as substitute trustee in place of Bell and Friend. Due to the Lewises' default, Nationstar instructed PFC to foreclose on the property. PFC conducted a foreclosure auction on December 1, 2010, at which Nationstar submitted the highest bid. On January 7, 2011, a trustee's deed was recorded in the land records of Orange County, Virginia, conveying the property to Nationstar.
After the Lewises refused to vacate the property, Nationstar instituted an unlawful detainer action against the Lewises in the General District Court of Orange County, and the General District Court awarded possession of the property to Nationstar. The Lewises subsequently appealed to the Circuit Court of Orange County. On June 24, 2012, the Circuit Court entered a final order awarding possession of the property to Nationstar.
On March 18, 2011, the Lewises filed a complaint against Nationstar and PFC in the Circuit Court of Orange County. On October 12, 2012, the Circuit Court entered an order of nonsuit. Six months later, the Lewises filed the instant action against Nationstar and PFC in the Circuit Court of Orange County. On July 24, 2013, Nationstar removed the case to this court.
Upon removal, Nationstar moved to dismiss the complaint pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. The court held a hearing on the motion on September 17, 2013. The parties subsequently requested and received leave to file supplemental authority in support of their respective positions. The supplemental authority has been submitted, and the motion to dismiss is now ripe for review.
Standard of Review
When deciding a motion to dismiss for failure to state a claim, the court must accept as true all well-pleaded allegations and draw all reasonably factual inferences in the plaintiffs' favor. Vitol, S.A. v. Primerose Shipping Co. , 708 F.3d 527, 539 (4th Cir. 2013). "While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the grounds of his entitlement to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Bell Atl. Corp. v. Twombly , 550 U.S. 544, 555 (2007) (internal citation and quotation marks omitted). To survive dismissal for failure to state a claim, "a complaint must contain sufficient factual matter, accepted as true, to state a claim for relief that is plausible on its face.'" Ashcroft v. Iqbal , 556 U.S. 662, 678 (2009) (quoting Twombly , 550 U.S. at 570). "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 . In reviewing a Rule 12(b)(6) motion, the court may consider the complaint, its attachments, and documents "attached to the motion to dismiss, so long as they are integral to the complaint and authentic." Sec'y of State for Defence v. Trimble Navigation Ltd. , 484 F.3d 700, 705 (4th Cir. 2007).
I. Counts One and Two: Breach of the Deed of Trust and Related Statutory Provisions
In Count One of their complaint, the Lewises claim that Nationstar breached the provisions of paragraphs 16, 22, and 24 of the deed of trust, which allow a lender to appoint a substitute trustee, require the trustee to give public notice of a foreclosure sale by advertisement, and require the lender and the trustee to comply with applicable laws when foreclosing on the property. In Count Two, the Lewises claim that Nationstar breached related state statutory provisions, which allow a lender to appoint a substitute trustee and describe the requisite contents of a foreclosure sale advertisement. The thrust of both counts is that the notarized document purporting to establish PFC's appointment as substitute trustee is "bogus, " because the second page of the two-page document shows a staple mark that is not present on the first page. The Lewises allege that the staple marks indicate that the second page was not attached to the first page when the document was signed, and that the second page was later signed by a "robosigner." Based on these allegations, the Lewises claim that Nationstar's appointment of PFC as substitute trustee was invalid, and that Nationstar breached the deed of trust and the applicable statutory provisions, by instructing PFC to foreclose on the home as substitute trustee and by identifying PFC as the substitute trustee in the advertisements for the foreclosure sale.
In moving to dismiss Count One, Nationstar argues that the Lewises do not have standing to challenge the validity of PFC's appointment, since the Lewises were not parties to the document appointing PFC as substitute trustee, and since the Lewises' purported injuries stem solely from their failure to make payments on the note. Nationstar also argues that Count One should be dismissed because the Lewises' ...