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Tarhawi v. Ocwen Loan Servicing

United States District Court, E.D. Virginia, Alexandria Division

September 18, 2014

ROLA TARHAWI, Plaintiff,
v.
OCWEN LOAN SERVICING, et al., Defendants.

MEMORANDUM OPINION

JAMES C. CACHERIS, District Judge.

This matter is before the Court on Defendant Ocwen Loan Servicing LLC's ("Ocwen") Motion to Dismiss [Dkt. 9] and Defendant McCabe, Weisberg & Conway LLC's ("McCabe") Motion to Dismiss [Dkt. 3]. For the reasons set forth below, the Court will grant both Defendants' motions.

I. Background

In order to purchase their home in Sterling, Virginia (the "Property"), Rola Tarhawi ("Plaintiff") and her husband, Justin Dibbs, took out a loan for $315, 000.00 as evidenced by a promissory note. Repayment of the note was secured by the Property pursuant to a deed of trust. (Notice of Removal [Dkt. 1], Ex. A, Compl. ¶ 7 [hereinafter "Compl."].) The deed of trust named First Savings Mortgage Corporation ("First Savings") as lender, Mortgage Electronic Registration Systems ("MERS") as beneficiary, and Larry F. Pratt as trustee. ( Id. ¶ 4.)

The deed of trust[1] states:

The beneficiary of this Security Instrument is MERS (solely as nominee for Lender and Lender's successors and assigns) and the successors and assigns of MERS. This Security Instrument secures to Lender: (i) repayment of the Loan, and all renewals, extensions, and modification of the Note; and (ii) the performance of the Borrower's covenants and agreements under this Security Instrument and the Note.

(Notice of Removal, Ex. A., at 14.)[2] It also states:

Borrower understands and agrees that MERS holds only legal title to the interests granted by Borrower in this Security Instrument, but if necessary to comply with law or custom, MERS (as nominee for Lender and Lender's successors and assigns) has the right: to exercise any or all of those interests, including, but not limited to, the right to foreclose and sell the Property; and to take any action required of Lender including, but not limited to, releasing and canceling this Security Instrument. ( Id. ) Per the deed of trust, Lender had the ability to freely transfer its security interest as well as appoint substitute trustees in its discretion. ( Id. at 22, 24.)

On October 20, 2011, MERS executed an assignment of the deed of trust purporting to transfer its beneficial interest in the instrument to Deutsche Bank. (Compl. ¶ 13.) On June 7, 2013 Deutsche Bank executed a deed of appointment of substitute trustee appointing Surety as trustee. ( Id. ¶ 4.) It is unclear from the complaint when Plaintiff began to fall behind in her payments, but the complaint acknowledges that the house was sold at a foreclosure auction on August 2, 2013. ( Id. ¶ 20.)[3]

According to Defendants, this action represents the latest in a round of judicial challenges to the foreclosure of Plaintiff's home.[4] Plaintiff filed the instant action in the Circuit Court for Loudoun County on July 14, 2014 alleging three causes of action: a claim for declaratory relief against Ocwen to determine what, if any, rights Ocwen had in the foreclosed property ("Count 1"); quiet title to remove documents relating to the foreclosure sale from the land records ("Count 2"); and a negligence claim against McCabe for failing to perform due diligence when Ocwen requested to proceed with foreclosure. (Compl. ¶¶ 43, 49, 54.) Pursuant to 28 U.S.C. § 1441, Ocwen removed the action to this court on the basis of both federal question and diversity jurisdiction. (Notice of Removal [Dkt. 1] at 1.)

McCabe filed its instant motion on August 12, 2014 with accompanying Roseboro notice [Dkt. 5] as required under Local Rule 7(K).[5] Ocwen filed its motion to dismiss, including a Roseboro notice, on August 18, 2014. Plaintiff's response to Ocwen was due September 5, 2014, and her response to McCabe was due September 11, 2014.[6] Plaintiff has not filed a response. Having been briefed, Defendants' motions are now before the Court.

II. Standard of Review

Federal district courts are "vested with the inherent power to control and protect the administration of court proceedings." Porter Hayden Co. v. Century Indem. Co. , 939 F.Supp. 424, 429 (D. Md. 1996) (citing White v. Raymark Indus., Inc. , 783 F.2d 1175, 1177 (4th Cir. 1986)). "The authority to dismiss a party's case sua sponte is "governed not by rule or statute but by the control necessarily vested in courts to manage their own affairs so as to achieve the orderly and expeditious disposition of cases." Link v. Wabash R.R. Co. , 370 U.S. 626, 630-31 (1962); see also United States v. Shaffer Equip. Co. , 11 F.3d 450, 461 (4th Cir. 1993).

Additionally, Federal Rule of Civil Procedure 41(b) has been interpreted to vest authority in the district court to dismiss a case with prejudice, on its own motion, for failure to prosecute. Link , 370 U.S. at 630 ("The authority of a federal trial court to dismiss a plaintiff's action with prejudice because of his failure to prosecute cannot be seriously doubted... It has been expressly recognized in Federal Rule of Civil Procedure 41(b)."); Davis v. Williams , 588 F.2d 69, 70 (4th Cir. 1978). A dismissal with prejudice is a harsh sanction and is not invoked lightly in view of the "sound policy of deciding cases on their merits." Davis , 588 F.2d at 70 (citations omitted) (internal quotation marks omitted). Courts are especially hesitant to dismiss a complaint with prejudice in cases brought by pro se plaintiffs. Diamond v. Mohawk Indus., Inc. , No. 6:12-cv-00057, 2014 WL 1404563, at *4 (W.D. Va. Apr. 10, 2014). Balanced against these policies are principles of sound judicial administration. In determining whether to dismiss a case under Rule 41(b), district courts should consider: "(1) the degree of personal responsibility on the part of ...


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