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Baird v. Federal Home Loan Mortgage Corp.

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

November 4, 2016

TODD A. BAIRD, et al, Plaintiffs,
v.
THE FEDERAL HOME LOAN MORTGAGE CORPORATION, Defendant.

          MEMORANDUM OPINION

          Hon. Glen E. Conrad Chief United States District Judge

         Plaintiffs Todd A. Baird and Dana G. Baird bring this action against defendant The Federal Home Loan Mortgage Corporation ("Freddie Mac"), arising out of the foreclosure of their home and subsequent eviction. This case is presently before the court on Freddie Mac's motion to dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. For the following reasons, Freddie Mac's motion will be granted.

         Factual Background

         The following facts, taken from the plaintiffs' amended complaint, are accepted as true for purposes of the defendant's motions to dismiss. See Erickson v. Pardus, 551 U.S. 89, 94 (2007).

         On June 9, 2004, plaintiffs entered into a mortgage loan agreement for their home located at 3934 Campbell Road in Troy, Virginia (the "Property"). Am. Compl. ¶ 5-6. Through various transactions, The Federal Home Loan Mortgage Corporation ("Freddie Mac") became the holder of the mortgage note. GMAC Mortgage, LLC ("GMAC Mortgage") serviced the note on behalf of Freddie Mac. GMAC Mortgage appointed Professional Foreclosure Corporation of Virginia ("PFC") as trustee.

         Plaintiffs eventually defaulted on their mortgage, and GMAC Mortgage sent plaintiffs notice of default in a letter dated June 1, 2009. GMAC Mortgage then instructed PFC to foreclose on the Property. Am. Compl. ¶ 23. On October 7, 2009, PFC conducted a foreclosure sale, whereby Freddie Mac became the record owner of the Property through a recorded trustee's deed. Id. ¶ 27-29. According to the complaint, notice of foreclosure was defective. Consequently, plaintiffs allege that they did not become aware of the foreclosure sale until November of 2009. Id. ¶ 24.

         Plaintiffs assert that Freddie Mac knew or should have known of the potential challenge to the validity of the foreclosure sale because of the defective notice and another issue related to the appointment of PFC as trustee. Plaintiffs contend that these defects motivated Freddie Mac, through its agent Titanium Solutions, Inc. ("Titanium"), to encourage plaintiffs to apply for loan modification. Id. ¶ 33. In response to this encouragement, plaintiffs submitted what amounted to a written application for loan modification (the "Hardship Letter"). Id. ¶ 34.

         Plaintiffs allege that Titanium, acting as Freddie Mac's agent, approved the application via an email sent by Titanium's agent, Trey Durham ("Durham"). Id. ¶ 36. The email states: "Homeowner was qualified for reinstatement and all paperwork was sent to Freddie Mac on 11-03-2009." Durham also wrote, "Freddie Mac told evicting attorney to hold off on eviction on 1-21-10." Id. Despite their general contention that other evidence tending to demonstrate a valid loan modification agreement exists, plaintiffs have failed to provide any documents other than Durham's email evincing written acceptance of plaintiffs' purported loan modification application.

         Procedural History

         On July 13, 2015, plaintiffs filed a four-count complaint in the Circuit Court of Louisa County, alleging that neither Freddie Mac nor GMAC Mortgage was entitled to foreclose on the Property. Plaintiffs also asserted various claims related to the foreclosure of the Property and their subsequent eviction, including a claim for breach of the loan modification agreement. On August 11, 2015, Freddie Mac filed a notice of removal pursuant to 42 U.S.C. §§ 1441, 1442.

         On March 29, 2016, after Freddie Mac filed its first motion to dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, the court dismissed all counts except for plaintiffs claim of a breach of the loan modification agreement. The court found that plaintiffs had not established the first element of this claim, that a valid and enforceable contract to modify the loan existed, but nevertheless allowed plaintiffs time to engage in limited discovery for the purpose of finding a written copy of such agreement. On May 31, 2016, plaintiffs filed an amended complaint, attaching Durham's email as evidence of a written loan modification agreement. On June 14, 2016, Freddie Mac filed a motion to dismiss the amended complaint pursuant to Rule 12(b)(6). The motions have been fully briefed and are ripe for review.

         Standard of Review

         "The purpose of a Rule 12(b)(6) motion is to test the sufficiency of a complaint." Edwards v. City of Goldsboro, 178 F.3d 231, 243 (4th Cir. 1999). When deciding a motion to dismiss under this rule, the court must accept as true all well-pleaded allegations and draw all reasonable factual inferences in the plaintiffs' favor. Erickson v. Pardus, 551 U.S. 89, 94 (2007); see also 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 plaintiffs 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 ...


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