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Lagrant v. U.S. Bank National Association

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

March 16, 2015

U.S. BANK NATIONAL ASSOCIATION as Trustee for BNC Mortgage Loan Trust 2007-1, Mortgage Pass Through Certificate Series 2007-1, NECTAR PROJECTS, INC., and JOHN AND JANE DOES 1-10, Defendants.


HENRY E. HUDSON, District judge.

Ronald L. LaGrant, a plaintiff proceeding pro se, filed suit seeking various forms of relief in connection with the alleged wrongful foreclosure of his home in 2012. The matter is before the Court on a Motion to Dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6), filed by Defendant U.S. Bank National Association, as Trustee for BNC Mortgage Loan Trust 2007-1, Mortgage Pass Through Certificates, Series 2007-1 ("U.S. Bank"). For the reasons stated herein, the Motion to Dismiss will be granted in part. Plaintiffs state law claims will be remanded to the Circuit Court of Chesterfield County, Virginia, as this Court lacks originaljurisdiction over such claims and the Court declines to exercise supplemental jurisdiction over those claims.


As required by Rule 12(b)(6) of the Federal Rules of Civil Procedure, the Court assumes Plaintiffs well-pleaded allegations to be true, and views all facts in the light most favorable to him. T.G. Slater & Son v. Donald P. & Patricia A. Brennan, LLC, 385 F.3d 836, 841 (4th Cir. 2004) (citing Mylan Labs, Inc. v. Matkari, 7 F.3d 1130, 1134 (4th Cir. 1993)). Viewed through this lens, the facts are as follows.

On approximately, December 14, 2006, Ronald L. LaGrant ("LaGrant") refinanced his home with Americor Lending ("Americor" or the "Lender"), secured by a promissory note (the "Note") and Deed of Trust. (Compl. ¶¶ 4, 7.) LaGrantdescribes his loan as subprime and complains ofvarious predatoryelements, including a three-year prepayment penalty, shifting interest rates and monthly payments, and a negative amortization feature. ( Id. at ¶¶ 4, 6.) LaGrant claims that Americor disregarded his ability to repay the loan, and induced him into making the loanthrough fraud, deceit, and misrepresentation. ( Id. at ¶¶ 6, 16.) He also claims that Americor overlooked federal guidelines regarding subprime lending, as well as federal and Virginia state statutes regardingdisclosures to the borrower. ( Id. at ¶¶ 6, 8.) In particular, LaGrant alleges that he never received the "Right to Cancel" disclosure required by the Truth in Lending Act ("TILA"), nor did he ever receive a copy of the Note or "closing package." ( Id. )

Although it appears LaGrant's loan was conveyed multiple times, as applicable here, his Note and Deed of Trust were subsequently transferred and assigned to BNC Mortgage Loan Trust 2007-1, Mortgage Pass Through Certificates, Series 2007-1 for which U.S. Bank serves as Trustee. ( Id. at ¶¶ 10-13, 16.) Ocwen Loan Servicing, LLC ("Ocwen") became the servicer of LaGrant's loan. ( Id. ) Ocwen also served as attorney-in-fact for U.S. Bank and appointed Nectar Projects, LLC ("Nectar") as substitute trustee on July 12, 2012. ( Id. at ¶¶ 23, 28, Ex. 6.)[1] LaGrant, however, claims that Nectar's appointment was a nullity, as theLender failed to provide him with proper notice, and because the signature on the Substitution of Trustee document "appears fake." ( Id. at ¶¶ 23-24, 28.) Thereafter, Nectar foreclosed on LaGrant's home, and U.S. Bank purchased the property at a foreclosure sale. ( Id. at ¶ 29.) LaGrant claims that U.S. Bank wrongfully obtained its deed to his home by fraudulently appointing Nectar as the substitute trustee to conduct the foreclosure. ( Id. at ¶¶ 29, 31.)

On approximately November 7, 2014[2], LaGrant filed his Complaint in the Circuit Court of Chesterfield County, Virginia, seeking various forms of relief from a number of parties-some named in the suitand some not. The named Defendants include U.S. Bank, Nectar, and "John and Jane Does 1-10." To the extent that LaGrantseeks relief from any party other thanthose named inthe Complaint, the Court has no authority to grant relief against parties not before this Court. This Court has carefully reviewed Plaintiffs requests forreliefagainst the named defendants, and construes his Complaint as asserting the following claims: (1) a permanent injunction preventing U.S. Bank from taking possession of the property; (2) common law breach of contract, based on U.S. Bank's alleged breach of the Deed of Trust; (3) equitable relief to set aside the foreclosure sale based on alleged fraud; (4) common law fraud; (5) rescission and money damages under TILA, 15 U.S.C. §§ 1601, et seq. based on inadequate disclosures; (6) money damages under Section 2605 of the Real Estate Settlement Procedures Act ("RESPA"), 12 U.S.C. §§ 2601, etseq., for failing to respond to Plaintiffs qualified written request; (7) common law intentional misrepresentation; (8) common law negligentmisrepresentation; and (9) common law negligence.

U.S. Bank removed LaGrant's case to this Court on December 1, 2014 (ECF No. 1), and filed a Motion to Dismiss pursuant to Rule 12(b)(6)of the Federal Rules of Civil Procedure with the appropriate Roseboro Notice to the plaintiff on December 8, 2014 (ECF Nos. 3, 3-1). See E.D. Va. Loc. Civ. R. 7(K); see also Roseboro v. Garrison, 528 F.2d 309 (4th Cir. 1975). U.S. Bank filed an Addendum to the Motion to Dismiss on January 21, 2015, to provide the Court with copies of the exhibits to Plaintiffs Complaint to which U.S. Bank made reference in its motion. (ECF No. 5.) As of the date of this Memorandum Opinion, LaGrant has failed to file a response, has not requested additional time in which to do so, and has not otherwise indicated any interest in opposing U.S. Bank's Motion to Dismiss. This Court, nevertheless, is obligated to ensure that dismissal is proper even when a motion to dismiss is unopposed. See Stevenson v. City of Seat Pleasant, Md, 743 F.3d 411, 416 n.3 (4th Cir. 2014).

This Court is also obligated to consider whether it has subject matter jurisdiction before turning to the merits of a case. Because removal raises significant federalism concerns, this Court must strictly construe removal jurisdiction. Mulcahey v. Columbia Organic Chems. Co., 29 F.3d 148, 151 (4th Cir. 1994). If federal jurisdiction is doubtful, remand to state court is appropriate. Md. Stadium Auth. v. EllerbeBecket Inc., 407 F.3d 255, 260 (4th Cir. 2005).


U.S. Bank removed this matter, alleging the existence of federal question jurisdiction under28 U.S.C. § 1331, basedon Plaintiffs claims under TILA and RESPA. Consequently, U.S. Bank asserts that this Courtmayexercise supplemental jurisdiction over LaGrant's state law claims under 28 U.S.C. § 1367 because those claims arose from issues common to the TILA and RESPA claims.

Alternatively, as to the remaining claims, U.S. Bank asserts the existence of jurisdiction under 28 U.S.C. § 1332(a) basedon diversity of citizenship, as the amount in controversy exceeds the $75, 000 threshold. It also maintains that Plaintiff is a citizenof Virginia, U.S. Bankis a citizen of Ohio, and although Nectar is a citizen of Virginia, its citizenship should be disregarded because Nectar is merely a nominal defendant and/or has been fraudulentlyjoined. ( Id. at ¶¶ 9-11.) Based on its assertion that Nectar is improperly joined, U.S. Bankargues that Nectar's consent to removal is unnecessary. ( Id. at ¶ 16.)

A. Federal Question Jurisdiction

Pursuant to 28 U.S.C. 1331, "[t]he district courts shall have original jurisdiction of all civil actions arising underthe Constitution, laws, or treaties of the United States." The Supreme Court has recognized federal question jurisdiction under Section 1331 in a variety of cases, including, as is the case here, when "federal law creates the cause of action." Verizon Md., Inc. v. Global Naps, 371 ...

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