United States District Court, W.D. Virginia, Charlottesville Division
K. MOON, UNITED STATES DISTRICT JUDGE
Norman K. Moon Plaintiff has moved this Court to grant him
leave to amend his complaint after most of his claims were
dismissed upon Defendant's prior motion. However,
Plaintiff fails to remedy the flaws in his complaint that
caused those claims to be dismissed in the first place.
Plaintiff's amended complaint, therefore, fails for the
largely same reasons that his claims were previously
dismissed. While this Court must freely grant amendment if
justice so requires, it will not do so when such amendment
would be futile. Accordingly, Plaintiff's motion to amend
will be denied.
Facts as Alleged
controversy stems from the foreclosure sale of
Plaintiff's property located at 6525 Dick Woods Road,
Charlottesville, Virginia (“the Property”). (Dkt.
15 at 5.) Plaintiff and his then wife obtained a loan in 2005
secured by a Deed of Trust on the Property (“Deed of
Trust”). (Id.) In 2013, servicing on the loan
associated with the Deed of Trust was transferred to Select
Portfolio Servicing, Inc. (“SPS”). (Id.)
Professional Foreclosure Corporation of Virginia (“Pro
Foreclosure”) is the substitute trustee for the
Property, which gives it the right to foreclose upon the
Property in the event of a default. (Id.) Shapiro
& Brown LLC (“Shapiro”) is a law firm
associated with Pro Foreclosure that was retained with
respect to enforcement of the Deed of Trust on the Property.
(Id.) Deutsche Bank National Trust Company
(“Deutsche”) is a prior trustee for the Property.
series of letters creates the basis of Plaintiff's
claims. On August 2, 2013, Plaintiff received a letter from
SPS in response to his request for validation of the debt
associated with the Deed of Trust. (Id. at 6.)
Because the copy of the original promissory note
(“Note”) attached to the response letter
contained a specific endorsement to the Long Beach Mortgage
Company (“Long Beach”) - and no further
endorsements - Plaintiff contends that later holders of the
Note other than Long Beach cannot enforce it against him.
(Id.) Plaintiff also alleges he never received the
notice of default required under the Deed of Trust, because
notice was sent to his former wife but not to him on August
3, 2015. (Id.) However, eleven days later, Plaintiff
sent a letter to Shapiro in which he explicitly responded to
the August 3rd letter and disputed the validity of the debt.
(Id.) Shapiro never responded to this request for
validation (Id. at 7.) On May 11, 2016, Shapiro sent
a letter to Plaintiff notifying him of the foreclosure sale
on the Property by Pro Foreclosure scheduled for June 6,
2016. (Id.) However, on its last two pages, the
letter mistakenly described a different property and
different substitute trustee. (See dkt. 9-7.) After
Plaintiff wrote complaining of this discrepancy, Shapiro sent
another notice dated May 23, 2016, but which was sent on May
24th and did not reach Plaintiff until May 27th.
(See dkt. 9-13.) Pro Foreclosure sold the Property
at auction on June 6, 2014. (Dkt. 15 at 7.)
present litigation is the fourth in a series of cases that
Plaintiff has brought seeking to invalidate the foreclosure
and sale of the Property. Additionally, Plaintiff brought two
similar cases related to the foreclosure of his adjacent
property. Because res judicata is
applicable to several of Plaintiff's claims, a review of
the prior proceedings is prudent.
Blick I, Plaintiff brought four claims against two
defendants: (1) to quiet title on the property; (2) improper
foreclosure on the property because he had not been shown the
original Note, and because the Note had been improperly
securitized; (3) violations of the Fair Debt Collection
Practices Act (“FDCPA”); and (4) derogatory
reporting of debt to credit agencies under the Fair Credit
Reporting Act (“FCRA”). Blick I at *2.
The claims were brought against mortgage servicer JP Morgan
Chase, N.A. (“JP Morgan”) and substitute trustee
Deutsche. Id. at *1-2. Ultimately, this Court
rejected Plaintiff's core theory that transfer of a note
and inability to produce the original note invalidated the
foreclosure, and was subsequently affirmed by the Fourth
Circuit. See 475 F. App'x 852 (4th Cir. 2012).
Blick II, Plaintiff brought similar claims against
the trust itself, rather than the trustee that was sued in
Blick I. See Blick II at *3. This Court
held that all claims were barred by res judicata.
Id. at *12. Applying the relevant Virginia factors,
this Court found that the trust and trustee were in privity
for purposes of res judicata, and that all claims
brought in Blick II could have been brought in the
earlier action. Id. at *9. Again, the Fourth Circuit
affirmed. See 539 F. App'x 126 (4th Cir. 2013).
Blick III, Plaintiff brought another claim against
Deutsche, alleging that invalid documents submitted in the
Blick I litigation constituted fraud. Blick
III at *1. This Court dismissed the claims upon the
defenses of res judicata and statute of limitations.
Id. at *7. Under the statute of limitations
analysis, the dispositive factor was that the claim accrued
when the allegedly fraudulent document was submitted to the
court more than two years prior. Id. at *5.
in an Order and Memorandum Opinion on December 2, 2016, I
dismissed all but one of Plaintiff's claims in the
current litigation. (Dkts. 12, 13). Plaintiff's breach of
contract claims were dismissed without prejudice because he
failed to allege any damages resulting from the breach.
Plaintiff's claims under Virginia Code § 18.2-59.1
were dismissed with prejudice because they relied on a legal
claim that this Court previously rejected in Blick
I. Plaintiff's claim under 15 U.S.C. § 1692e
was dismissed without prejudice because Plaintiff did not
specify the nature of the misrepresentations made. His claim
under 15 U.S.C. 1692g was adequately pled and is currently
being litigated before this court.
Standard of Review
matter is before the Court upon Plaintiff's motion for
leave to amend his complaint. Under Federal Rule of Civil
Procedure 15(a)(2), leave to amend should be given
“freely . . . when justice so requires.”
Accordingly, leave to amend should only be denied “when
the amendment would be prejudicial to the opposing party,
there has been bad faith on the part of the moving party, or
the amendment would be futile.” Johnson v. Oroweat
Foods Co., 785 F.2d 503, 509-10 (4th Cir. 1986).
“Futility is apparent if the proposed amended complaint
fails to state a claim under the applicable rules and
accompanying standards: A district court may deny leave if
amending the complaint would be futile-that is, if the
proposed amended complaint fails to satisfy the ...