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Blick v. Shapiro & Brown, LLP

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

January 5, 2017

Harold Blick, Plaintiff,
Shapiro & Brown, LLP, Professional Foreclosure Corporation of Virginia, Select Portfolio Servicing, Inc., Defendants.



         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.

         I. Background

         a. Facts as Alleged

         This 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. (Id.)

         A 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.)

         b. Prior Proceedings

         The present litigation is the fourth in a series of cases that Plaintiff has brought seeking to invalidate the foreclosure and sale of the Property.[1] Additionally, Plaintiff brought two similar cases related to the foreclosure of his adjacent property.[2] Because res judicata is applicable to several of Plaintiff's claims, a review of the prior proceedings is prudent.

         In 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).

         In 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).

         In 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.

         Finally, 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.

         II. Standard of Review

         This 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 ...

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