United States District Court, E.D. Virginia, Alexandria Division
CHARLES A. POWELL, et al., Plaintiffs,
BSM FINANCIAL, L.P., et al., Defendants.
M. HILTON UNITED STATES DISTRICT JUDGE
MATTER comes before the Court on Defendants' JP Morgan
Chase Bank ("JP Morgan"); Bank of America, N.A.
("Bank of America"); Specialized Loan Services
("SLS"); Mortgage Electronic Registration System
("MERS"); The Bank of New York Mellon FKA The Bank
of New York ("BONY"); and Aurora Loan Services LLC
("Aurora") (collectively, "Defendants")
Motions to Dismiss the Amended Complaint.
matter arises from a loan extended to the Plaintiffs in 2006
by BSM Financial in the original principal amount of $329,
000. The loan was secured by a deed of trust on the
Plaintiffs' home, located at 8462 Summer Breeze Lane,
Springfield, Virginia. The Plaintiffs allege that BSM made
certain errors in connection with the 2006 loan. They claim
that BSM may not have accounted for their payments properly,
even though they allege to have made timely loan payments. In
addition, only one of the Plaintiffs-Charles A.
Powell-executed the 2006 deed of trust, while Plaintiff
Janice F. Powell failed to do so. Furthermore, the 2006 deed
of trust was apparently not recorded in the land records of
Fairfax County, Virginia.
2014, in an attempt to correct these errors by BSM, Bank of
America brought suit against the Plaintiffs in Fairfax County
Circuit Court (the "Prior Case") to, among other
things, seek declaratory relief that the deed of trust is a
valid, first priority lien on the property. The Prior Case
resulted in the entry of Summary Judgment in favor of Bank of
America, followed by the entry of a Consent Judgment in
furtherance of the grant of Summary Judgment.
Circuit Court's Summary Judgment Order granted Bank of
America a constructive trust against the property, deemed the
deed of trust to have been signed by both Plaintiffs, and
declared the deed of trust to be a valid and enforceable lien
and security interest encumbering the fee simple interests of
the Plaintiffs. The Summary Judgment Order further declared
that the deed of trust may be enforced pursuant to its terms
as a valid and enforceable lien security interest and as a
mortgage encumbering the fee simple interests in the Property
held by the Plaintiffs. The Consent Order, signed by
Plaintiffs' counsel, affirmed that the relief granted in
the Summary Judgment Order applied retroactive to the date on
which Bank of America recorded its lis pendens among the Land
received a notice of default from BONY during the week of
September 5, 2016. BONY is attempting to foreclose on the
Property. Shortly thereafter, on September 15, 2016,
Plaintiffs filed a nine-count complaint in this Court, which
was amended in October. The amended complaint asserts general
allegations of fraud against nine defendants. These
allegations relate to faulty securitization, fraudulent
assignments of the mortgage loan, and wrongful foreclosure.
Plaintiffs claim that they are entitled to rescind the loan
extended to them by BSM in 2006-which they defaulted on prior
to 2014-and are entitled to keep the home secured by that
loan free and clear of any liens.
amended complaint presents nine claims: lack of standing to
foreclose (Count 1); fraud in the concealment (Count 2);
fraud in the inducement (Count 3); quiet title (Count 4);
slander of title (Count 5), declaratory relief (Count 6);
violations of the Truth in Lending Act ("TILA")
(Count 7); violations of the Real Estate Settlement
Procedures Act ("RESPA") (Count 8); and rescission
of the deed of trust (Count 9). Count 1 is brought against
Defendants BONY and Bank of America; Counts 2, 3, 7, and 8
are brought against Defendant BSM Financial; and the rest of
the counts are brought against all Defendants. Six of the
nine Defendants now move to dismiss the Second Amended
survive a motion to dismiss, a complaint must contain
"sufficient factual matter, accepted as true, to state a
claim to relief that is plausible on its face."
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).
Although a court considering a motion to dismiss must accept
all well-pled factual allegations as true, this deference
does not extend to legal conclusions. Neither "naked
assertions devoid of further factual enhancement" nor
"[t]hreadbare recitals of the elements of a cause of
action, supported by mere conclusory statements"
suffice. Id. After Iqbal, complaints are
required to allege "a plausible claim for
relief" instead of merely stating facts that leave open
"the possibility that a plaintiff might later
establish some set of undisclosed facts to support
recovery." McCleary-Evans v. Md. Dep't of
Transp., State Highway Admin., 780 F.3d 582, 587 (4th
Cir. 2015) (emphasis in original).
must be dismissed because lack of standing to foreclose and
wrongful foreclosure are not recognized causes of action in
Virginia. See Hien Pham v. Bank of New York, 856
F.Supp.2d 804, 811 (E.D. Va. 2012) ("Virginia does not
recognize a cause of action for wrongful foreclosure.").
Furthermore, Virginia is a non-judicial foreclosure state and
there is no burden of proof imposed on a lender or servicer
to proceed with a non-judicial foreclosure. Gallant v.
Deutsche Bank Nat'l Trust Co., 766 F.Supp.2d 714,
720-21 (W.D. Va. 2011).
2 and 3 must be dismissed because Plaintiff fails to state
claims on which relief could be had. Plaintiffs'
arguments in these counts boil down to a claim that they were
defrauded when they received a loan product that the original
lender should have known they could not afford. However,
Plaintiffs do not explain what false statements were made,
when those statements were made, or how they detrimentally
relied on those statements. See Fed.R.Civ.P. (9(b).
Plaintiffs' vague averments that they were somehow
defrauded are not sufficient to give rise to a viable cause
4, 6, and 9 must be dismissed pursuant to the doctrine of
collateral estoppel. To preclude a claim under the doctrine
of collateral estoppel, a party must show:
(1) that the issue sought to be precluded is identical to one
previously litigated; (2) that the issue was actually
determined in the prior proceeding; (3) that the issue's
determination was a critical and necessary part of the
decision in the prior proceeding; (4) that the prior judgment
is final and valid; and (5) that the party against whom
collateral estoppel is asserted had a full and fair
opportunity to litigate the issue in the previous forum.
Westmoreland Coal Co. v. Sharpe ex rel. Sharpe, 692
F.3d 317, 330-31 (4th Cir. 2012). These elements are met
here. Plaintiffs allege that the Deed of Trust is invalid,
and that Defendants do not have standing to enforce the deed
of trust. However, the validity of the Deed of Trust was the
same primary issue addressed and adjudicated with the entry
of Summary Judgment and the final Consent Order in the Prior
Case. In that action, Bank of America was the plaintiff, the
Plaintiffs in this action were represented by counsel, and
Plaintiffs had a full and fair opportunity to litigate the
same theories they assert here in the Prior Case. Plaintiffs
further fail to articulate why they could not have raised
their theories in the prior action, nor they assert any new
factual allegations unknown previously. As a result,
Plaintiffs are precluded and estopped from challenging the
validity of the deed of trust.
must be dismissed because slander of title is not
sufficiently pled. Plaintiffs have not alleged that they
suffered any special damages as a result of the publications
relating to the foreclosure, a required element of a properly
pled slander of title claim, much less with the specificity
required by Federal Rule of Civil Procedure 9(g). See