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Prescott v. PHH Mortgage Corporation

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

February 6, 2017

PATRICIA A. PRESCOTT, Plaintiff,
v.
PHH MORTGAGE CORPORATION, et al., Defendants.

          MEMORANDUM OPINION

          Robert E. Payne Senior United States District Judge

         This matter is before the Court on the PLAINTIFF'S MOTION FOR SUMMARY JUDGEMENT [sic] (ECF No. 44) and several motions to dismiss filed by the Defendants: PHH MORTGAGE CORPORATION'S MOTION TO DISMISS (ECF No. 9) ("PHH Mot."), DEFENDANT, SPROUSES CORNER, LLC'S MOTION TO DISMISS PLAINTIFF'S COMPLAINT (ECF No. 16) ("Sprouses Mot."), and the MOTION TO DISMISS ("PCF Mot.") (ECF No. 25) filed jointly by Defendants Shapiro, Brown, & Alt and the Professional Foreclosure Corporation of Virginia. For the reasons set forth below, the Defendants' motions will be granted, the Plaintiff's motion will be denied as moot, and this action will be dismissed.

         BACKGROUND

         Patricia Prescott filed the Complaint -in this action on June 6, 2016. (ECF No. 4) . The Complaint names a number of Defendants, but only four have been properly served in this case: PHH Mortgage Corporation ("PHH"), the Professional Foreclosure Corporation of Virginia ("PFC"), Shapiro, Brown & Alt ("Shapiro"), and Sprouses Corner, LLC ("Sprouses")-[1] These four Defendants (hereinafter "Defendants") have all filed motions to dismiss. For purposes of determining the motions, the facts alleged in the Complaint must be assumed true, and the Complaint must be read liberally in light of Prescott's status as a pro se plaintiff. See Erickson v. Pardus, 551 U.S. 89, 94 (2007) ("[A] pro se complaint, however inartfully pleaded, must be held to less stringent standards than formal pleadings drafted by lawyers.").

         A. Relevant Facts

         Prescott purchased the property in question in December of 2003, secured by a Deed of Trust and Note in the amount of $130, 000. (Compl. ¶ 4). At some point PHH became the servicer on the loan, and Prescott made timely payments to them until 2009. (Compl. ¶ 12) . In 2008, Prescott applied for but was denied a loan modification. (Compl. ¶ 14) . In November of 2009, Prescott and PHH entered into a "vaguely specified" six-month trial-period loan modification program. (Compl. ¶¶ 13-15).

         After the trial program concluded, Prescott received the terms of a new loan modification offer in April of 2010, but rejected them because "the terms were not as previously agreed to and did not place the Plaintiff's [sic] in a better position than the original note." (Compl. ¶¶ 15-16). Prescott alleges that she began making back payments, made inquiries as to the amount owed, and submitted double-payments in an attempt to get current, but that PHH did not "properly account for any money submitted after April, 2009." (Comp. ¶ 16).

         Prescott specifically alleges that PHH did not account for a series of payments made in May and June of 2010 (four payments of $850, $425.91, $850, and $425). (Compl. ¶ 20). Prescott contends that PHH's failure to credit these payments "put in motion their claim of delinquency." Icl. She further claims that she continued to submit monthly payments despite the improper accounting, but that, beginning in December of 2010, PHH began returning her checks because they provided an "[i]nsufficient amount to clear default." (ECF No. 29, Attach. 20); see also Compl. at ¶¶ 21-22. Between December 2010 and February 2011, three checks were returned to Prescott for that reason. (Compl. ¶¶ 22-24). In the attachments to the "Addendum" (ECF No. 29) Prescott filed in response to the motions to dismiss, letters from PHH to Prescott indicate that a fourth check dated March 1, 2011 was also returned (as it was approximately half of what PHH alleged at the time was due). (ECF No. 29, Attach. 24). In April of 2011, Shapiro informed Prescott on behalf of PHH that PHH intended to foreclose. (Compl. ¶ 25) Although Prescott disputes that PHH was the noteholder at this time, the documents that she attached to her addendum confirm that PHH was the holder. (ECF No. 29, Attach. 27). Despite the foreclosure letter, foreclosure did not occur on Prescott's property until after a second letter received in 2013. (Compl. ¶¶ 35-36).

         Between April of 2011 and June of 2013, Prescott claims that PHH (which was still being represented by Shapiro) fraudulently filed notices of assignment and a document of rescission that replaced a previously filed certificate of satisfaction. (Compl. ¶ 27-33).[2] Notwithstanding this claim, the attachments provided in Prescott's Addendum (ECF No. 29) indicate that the Document of Rescission was filed in April of 2011 in order to correct a certificate of satisfaction that had been executed in error (by Bank of America, which never held the property and swore as much in the Document of Rescission) . (ECF No. 29, Attach. 30-31).

         Prescott received a second foreclosure letter dated July 17, 2013 (but allegedly sent July 29, 2013), and an advertisement of the foreclosure was placed in the Times-Dispatch. (Compl. ¶¶ 35-36). Prescott filed a final "loan modification attempt" with PHH on "October 21, 2014, "[3] but the foreclosure sale proceeded and she received an eviction letter. (Compl. ¶¶ 37, 43) . Sprouses was the high bidder at auction and acquired the property. (Compl. ¶ 41) . PFC was the substitute trustee. (Compl. ¶ 44).

         Prescott alleges that the sale to Sprouses violated the terms of the Deed of Trust and the terms of the advertisement of sale, which respectively required sale within 30 days of the last advertisement for the property and within 15 days of November 14, 2013. (Compl. ¶¶ 37-40). The basis of this allegation appears to be that the Substitute Trustee's Deed was not recorded within those timeframes. Id.. Prescott states that she contacted the substitute trustee, PCF, was told that settlement was due to occur on November 29, 2013, and that she then "ceased attempts for a loan modification . . . and secured legal representation." (Compl. ¶ 45).

         On December 13, 2013, Prescott appeared in the Circuit Court for Chesterfield County in an action that resulted in Sprouses obtaining an immediate writ of possession, albeit one (according to Prescott) "based on fraudulent documents." (Compl. ¶ 4 6). Prescott specifies that the writ was "authorized pursuant to a trustee's deed following foreclosure, " but that Sprouses had not recorded the deed, and otherwise "did not have a signed and/or notarized valid copy of a trustee's deed on November 21, 2013, when he swore to the summons." (Compl. ¶ 47). She also asserts that Sprouses has continued to assert legal ownership of the property into 2015, despite reselling the property, and thus has "defrauded not only the Plaintiff, but every person willing and able to purchase the property." (Compl. ¶ 49).

         The property was re-sold in February of 2014, and that transaction was recorded on April 1, 2014. (Compl. ¶ 55). Prescott received a check for Plaintiff's equity in the property, but asserts that it "falsely represent[ed]" the true amount that she deserved. (Compl. ¶ 58). Prescott maintains that she had the funds to satisfy her debt completely at the time of foreclosure, but was not given the opportunity to do so (Compl. ¶ 56); however, this claim (and many other allegations in the Complaint) are refuted by the documents provided in Prescott's Addendum (ECF No. 29), which Prescott has asked the Court to consider for purposes of these motions. (Id., at 1, Attach. 25-32). Prescott claims "this complaint is timely" because "the debt has not been properly adjudicated" and "because fraud is present and ongoing." (Compl. ¶ 58).

         B. ...


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