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Hardnett v. M&T Bank

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

August 31, 2016



          M. Hannah Lauck Judge.

         This matter comes before the Court on the Motion to Dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6)[1] filed by Defendant M&T Bank. (ECF No. 4). Plaintiffs Fredicia Hardnett and Wilbert A. Hardnett (collectively, the "Hardnetts"), proceeding pro se, responded, and M&T Bank replied.[2] (ECF Nos. 7, 8.) The matter is ripe for disposition. The Court exercises jurisdiction pursuant to 28 U.S.C. § 1332.[3] The Court dispenses with oral argument because the materials before the Court adequately present the facts and legal contentions, and argument would not aid the decisional process. For the reasons that follow, the Court will grant the Motion to Dismiss. (ECF No. 4.)

         I. Standard of Review

         "A motion to dismiss under Rule 12(b)(6) tests the sufficiency of a complaint; importantly, it does not resolve contests surrounding the facts, the merits of a claim, or the applicability of defenses." Republican Party of N.C. v. Martin, 980 F.2d 943, 952 (4th Cir. 1992) (citing 5A Charles A. Wright & Arthur R. Miller, Federal Practice and Procedure § 1356 (1990)). In considering a motion to dismiss for failure to state a claim, a plaintiffs well-pleaded allegations are taken as true and the complaint is viewed in the light most favorable to the plaintiff. Mylan Labs., Inc. v. Matkar, 7 F.3d 1130, 1134 (4th Cir. 1993); see also Martin, 980 F.2d at 952. This principle applies only to factual allegations, however, and "a court considering a motion to dismiss can choose to begin by identifying pleadings that, because they are no more than conclusions, are not entitled to the assumption of truth." Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009).

         The Federal Rules of Civil Procedure "require[ ] only 'a short and plain statement of the claim showing that the pleader is entitled to relief, ' in order to 'give the defendant fair notice of what the ... claim is and the grounds upon which it rests.'" Bell Atl Corp. v. Twombly, 550 U.S. 544, 555 (2007) (omission in original) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)). Plaintiffs cannot satisfy this standard with complaints containing only "labels and conclusions" or a "formulaic recitation of the elements of a cause of action." Id. (citations omitted). Instead, a plaintiff must assert facts that rise above speculation and inconceivability to those that "show" a claim that is "plausible on its face." Iqbal 556 U.S. at 678-79 (citing Twombly, 550 U.S. at 570; Fed.R.Civ.P. 8(a)(2)). "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. at 678 (citing Twombly, 550 U.S. at 556). Therefore, in order for a claim or complaint to survive dismissal for failure to state a claim, the plaintiff must "allege facts sufficient to state all the elements of [his or] her claim." Bass v. E.I DuPont de Nemours & Co., 324 F.3d 761, 765 (4th Cir. 2003) (citations omitted).

         "If, on a motion under Rule 12(b)(6).. ., matters outside the pleadings are presented to and not excluded by the court, the motion must be treated as one for summary judgment under Rule 56, " and "[a]ll parties must be given a reasonable opportunity to present all the material that is pertinent to the motion." Fed.R.Civ.P. 12(d); see Laughlin v. Metro. Wash Airports Auth., 149 F.3d 253, 260-61 (4th Cir. 1998); Gay v. Watt, 761 F.2d 175, 177 (4th Cir. 1985). However, "a court may consider official public records, documents central to plaintiffs claim, and documents sufficiently referred to in the complaint [without converting a Rule 12(b)(6) motion into one for summary judgment] so long as the authenticity of these documents is not disputed." Witthohn v. Fed. Ins. Co., 164 F.App'x 395, 396-97 (4th Cir. 2006) (citing Alt. Energy, Inc. v. St. Paul Fire & Marine Ins. Co., 267 F.3d 30, 33 (1st Cir. 2001); Phillips v. LCI Int'l, Inc., 190 F.3d 609, 618 (4th Cir. 1999); Gasner v. Cty. of Dinwiddle, 162 F.R.D. 280, 282 (E.D. Va. 1995)).

         M&T Bank attaches a May 4, 2007 deed of trust (the "Deed of Trust"), a February 11, 2013 assignment of the Deed of Trust (the "Assignment"), and a 2010 bankruptcy petition filed by the Hardnetts in the United States Bankruptcy Court for the District of Maryland (the "Bankruptcy Petition"). (ECF No. 5-1.) No party contests the authenticity of these documents. The Hardnetts do not mention the Bankruptcy Petition, or the facts contained therein, in any of their filings.[4] However, the Hardnetts do refer to both the Deed of Trust and the Assignment in the Complaint. Deeming these two documents central to the claims, the Court will consider the Deed of Trust and the Assignment. See Witthohn, 164 F.App'x at 396-97 (citations omitted).

         District courts have a duty to construe pro se pleadings liberally. Bracey v. Buchanan, 55 F.Supp.2d 416, 421 (E.D. Va. 1999). A pro se plaintiff must nevertheless allege sufficient facts to state a cause of action. Id. (citing Sado v. LelandMem 7 Hosp., 933 F.Supp. 490, 493 (D. Md. 1996)). The Court cannot act as a pro se litigant's "advocate and develop, sua sponte, statutory and constitutional claims" that the litigant failed to raise on the face of the complaint. Newkirk v. Circuit Court of Hampton, No. 3:14cv372, 2014 WL 4072212, at * 1 (E.D. Va. Aug. 14, 2014).

         II. Procedural and Factual Background

         A. Summary of Allegations in the Complaint[5]

         The Hardnetts own a house at 17501 Owens Landing Road, King George, Virginia 22485 (the "Property"). On May 4, 2007, the Hardnetts entered into a mortgage loan with K Bank to purchase the Property. The Deed of Trust secured the loan. On February 11, 2013, the Federal Deposit Insurance Corporation, as receiver for K Bank, assigned its interest under the Deed of Trust to M&T Bank, which now claims ownership over the Deed of Trust. On February 20, 2013, a New York notary stamped the assignment.

         The Complaint lacks focus and the Hardnetts' claims are difficult to deconstruct. Essentially, the Hardnetts contend that defendants M&T Bank and the Atlantic Law Group (collectively, the "Defendants") engaged in wrongful conduct by scheduling a foreclosure sale for October 20, 2015.[6] The Hardnetts do not dispute that they defaulted on their loan, instead attempting to void their debt in various ways. The Complaint does not follow a linear pattern and does not list causes of action. However, heeding the obligation to construe the Complaint liberally, the Court interprets the Complaint to raise six claims:

Count I: Wrongful foreclosure because of an improper assignment of the Deed of Trust and securitization of the loan;
Count II: Fraud based on statements by the Defendants' representatives that the foreclosure sale would be canceled while a loan modification was pending;
Count III: Violation of the Fair Debt Collection Practices Act, 15 U.S.C. § 1592, et seq. ("FDCPA");
Count IV: Breach of contract for violations of the Home Affordable Modification Program ("HAMP");
Count V: Injunction to prevent foreclosure; and,
Count VI: Declaratory Judgment that the foreclosure sale is "[w]rongful in letter and spirit, '' (Compl. ¶ 42).

         B. Procedural History

         On October 19, 2015, the Hardnetts filed their Complaint in this Court, which generously discerns it as articulating the six claims outlined above. The Hardnetts seek the following relief: (1) damages of not less than $1, 000, 000; (2) injunctive relief to protect or grant relief from the foreclosure sale; and, (3) a declaration that the foreclosure against the Property is "[w]rongful in letter and spirit." (Compl. ¶¶ 23, 31, 33, 41, 43.)

         In response to the Complaint, M&T Bank filed its Motion to Dismiss. (ECF No. 4.) The Hardnetts responded to the motion. (ECF No. 7.) M&T Bank filed a reply in support of its Motion to Dismiss. (ECF No. 8.) The matters are ripe for disposition. For the reasons that follow, the Court will grant M&T Bank's Motion to Dismiss. (ECF No. 4.) The Court will further order the Clerk to send a notice to the Hardnetts regarding a lack of service upon defendants Atlantic Law Group and John Does 1-10.

         III. Analysis: Motion to Dismiss

         At base, the Hardnetts contend that the scheduled foreclosure on the Property was unlawful. To recover their losses for the alleged failures, they bring various claims against M&T Bank, Atlantic Law Group, and John Does 1-10.

         A. The Hardnetts Fail to State a Claim for Wrongful Foreclosure

         The Hardnetts fail to state a claim for wrongful foreclosure because Virginia law[7] does not recognize such a cause of action. Further, the Hardnetts have no standing to challenge the basis for their wrongful foreclosure claim, namely, ...

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