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O'Connor v. Sand Canyon Corporation

United States District Court, W.D. Virginia, Lynchburg Division

January 16, 2015

JANIS O'CONNOR, Plaintiff,


NORMAN K. MOON, District Judge.

This matter is before me on a renewed motion to dismiss filed by Defendants American Home Mortgage Servicing, Inc. ("AHMSI"), Deutsche Bank National Trust Company ("Deutsche Bank"), and Sand Canyon Corporation ("Sand Canyon") (collectively, "Defendants") (docket no. 30), in which they seek dismissal of pro se Plaintiff Janis O'Connor's ("Plaintiff" or "O'Connor") amended complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). For the following reasons, I will grant Defendants' "motion.


A. Statement of Alleged Facts[1]

Plaintiff entered into a loan agreement with Option One Mortgage Corporation ("Option One") in October of 2005 in the amount of $161, 000 (the "loan"). Defs.' Mem. in Supp. ("Def. Mem."), Ex. 1. at 1. To secure Plaintiff's promise to repay the loan, Plaintiff executed a promissory note in favor of Option One which was secured by a Deed of Trust. Id. The Deed names David W. Draper as trustee and Option One as beneficiary. Id. The property subject to the Deed of Trust is located in Appomattox County, Virginia (the "Appomattox property"). Id.

By signing the Deed of Trust, Plaintiff "accept[ed] and agree[d] to the terms and covenants contained in [the] Security Instrument...." Id. at 8. Plaintiff further agreed to "promptly pay when due the principal of, and interest on, the debt evidenced by the Note and any prepayment charges and late charges due under the Note." Id. at ¶ 8. The Deed also provides for the recovery of certain costs related to acceleration. Specifically, the Deed states:

If any installment under the Note ... secured hereby is not pain when due, or if Borrower should be in default under any provision of this Security Instrument... all sums secured by this Security Instrument and accrued interest thereon shall at once become due and payable at the option of Lender without prior notice, except as otherwise required by applicable law, and regardless of any prior forbearance. In such event, Lender, at its option, and subject to applicable may, may then or thereafter invoke the power of sale and/or any other remedies or take any other actions permitted by applicable law. Lender will collect all expenses incurred in pursuing the remedies described in this Paragraph 21, including, but not limited to, reasonable attorneys' fees and costs of title evidence.

Id. at ¶ 21 (emphasis added). Further, in the event Plaintiff defaulted and Option One invoked its power of sale, Option One agreed to "give to [Plaintiff]... notice of sale in the manner prescribed by applicable law." Id. The Deed of Trust required no other notice to be given to Plaintiff in the event the lender invoked its power of sale. It did, however, require the "Trustee [to] give public notice of sale by advertising... once a week for two successive weeks in a newspaper having general circulation in the county... in which... the property is located." Id.

The parties to the Deed of Trust also agreed that it and the accompanying note could be sold to other parties without prior notice to Plaintiff. Specifically, the Deed of Trust provides:

The 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. A sale might result in a change in the entity (known as the "Loan Servicer") that collects Periodic Payments due under the Note and this Security Instrument. There also may be one or more changes of the Loan Servicer unrelated to a sale of the note. If there is a change of the Loan Servicer, Borrower will be given written notice of the change in accordance with paragraph 14 above and applicable law.

Id. at ¶ 19. It also allowed the "Lender, at its option... to... remove Trustee and appoint a successor trustee to any Trustee appointed hereunder. Id. at ¶ 23.

Plaintiff's factual allegations are unclear as to what happened after she signed the Deed of Trust. At some point thereafter, AHMSI allegedly became successor in interest to Option One and the servicer of the loan. Pl.'s Compl. ¶ 8. Thereafter, "[o]n or about July 28-30, 2009, defendant AHMSI placed [Plaintiff's] property in foreclosure.'" Id. at ¶ 30. The foreclosure action was then "withdrawn" after Plaintiff paid "demands" by AHMSI. Id. One year later, an undisclosed entity made another "demand, " which Plaintiff "refused to pay." Id.

During the time in which Plaintiff dealt with these various entities, AHMSI allegedly executed a Notice of Assignment of Deed of Trust (the "Assignment") in favor of Deutsche Bank. Pl.'s Compl. ¶ 8; Defs.' Mem., Ex. 2. Deutsche Bank also executed a Deed of Appointment of Substitute Trustee (the "Substitution"), appointing Equity Trustees, LLC as substitute trustee. Pl.'s Compl. ¶ 8; Defs.' Mem., Ex. 3. Thereafter, on March 31, 2011, Defendant Deutsche Bank foreclosed on Plaintiff's Appomattox property. Pl.'s Compl. ¶ 31.

Just days after Defendants foreclosed on Plaintiff's property, the TV show "60 Minutes" ran an expose on fraud in the mortgage industry. Pl.'s Compl. ¶ 75. The segment detailed the manner in which lending institutions often forged the signatures of its executives in order to expedite the transfer of mortgage interests. Id. The episode went on to expose Linda Green, a purported executive of various lending institutions, as one of those executives whose signature was commonly forged. Id. Notably, Linda Green's signature appears on the Assignment, in which she signed on behalf of AHMSI in her capacity as "Vice President." Id. Based ...

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