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Harris v. Wells Fargo Bank N.A.

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

March 3, 2017



          John A. Gibney, Jr. United States District Judge

         The pro se plaintiff, Horace Harris, brings this wrongful foreclosure case against the defendant, Wells Fargo Bank, National Association ("Wells Fargo"). Harris contests the foreclosure of his home and alleges seven counts including breach of contract, breach of the covenant of good faith and fair dealing, conversion, wrongful acceleration, and intentional infliction of emotional distress. Harris seeks a declaratory judgment invalidating the foreclosure as well as damages of at least 1.4 million dollars. Wells Fargo moved to dismiss Harris's claims pursuant to Fed.R.Civ.P. 12(b)(6). The Court grants the motion to dismiss. Res judicata, or claim preclusion, bars Harris's claims because they arise from the same conduct, transaction, or occurrence as a previous case Harris filed challenging the foreclosure of his home.

         I. BACKGROUND

         In 2005, Harris took out a mortgage with Washington Mutual Bank FA ("WaMu") by executing a Deed of Trust on 6655 St. Pauls Road ("the Property"). The Deed of Trust secured a Note for $388, 297. Harris, his wife, and Keith Coleman signed the Deed of Trust; however, only Coleman signed the Note. In 2006, WaMu formed the WAMU Mortgage Pass-Through Certificates Series 2006-PR-l Trust ("the WaMu Trust"). Harris says that WaMu cannot prove that it ever sold the Note to the WaMu Trust.[1] In 2008, the Federal Deposit Insurance Corporation ("FDIC") took over WaMu. On August 5, 2013, JPMorgan Chase Bank, National Association ("Chase"), as attorney in fact for the FDIC, executed a Notice of Corporate Assignment of Deed of Trust ("the Assignment"), assigning the Deed of Trust on the Property to Wells Fargo as trustee for the WaMu Trust. The Assignment shows Chase as the servicer of the Note. Harris then defaulted on the mortgage, and Wells Fargo appointed a substitute trustee to foreclose on the property. Wells Fargo bought the property at the foreclosure sale in January 2014, with a credit bid of $388, 297. Harris claims that he never received notice of default or an acceleration warning before the foreclosure, as required by his mortgage.

         From the same set of facts, Harris and Mr. Coleman, who is not a party here, sued Chase in this Court in 2014 (the "2014 Litigation").[2] Harris and Coleman alleged that Chase lacked authority to foreclose on the Property and alleged breach of contract, fraud, and trespass. Harris and Coleman claimed that (1) they had never entered into a contract with Chase and had not accepted any loan from Chase; and (2) Chase's failure to provide a "wet signature" copy of any assignment of the Note negated Chase's claim to the Note. Notably, the complaint in the 2014 Litigation specifically alleged that "plaintiffs admit receiving a default notice. Plaintiffs are without knowledge as to whether the default notice is lawful." Judge Spencer dismissed Harris's claims on a 12(b)(6) motion. On May 11, 2016, Harris filed his amended complaint in this case, again challenging the validity of the Assignment.

         II. STANDARD

         A plaintiffs complaint must contain "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed.R.Civ.P. 8(a)(2). Where, as here, a defendant brings a motion to dismiss for failure to state a claim, the Court must analyze the plaintiffs complaint to determine whether it states sufficient facts to state a claim to relief that is plausible on its face. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. (quoting Bell Atl Corp. v. Twombly, 550 U.S. 544, 565 (2007)). When considering the complaint itself, courts must accept all allegations as true and must draw all reasonable inferences in favor of the plaintiff. Nemet Chevrolet, Ltd. v., Inc., 591 F.3d 250, 253 (4th Cir. 2009) (citing Edwards v. City of Goldsboro, 178 F.3d 231, 244 (4th Cir. 1999)). The principle that a court must accept all allegations as true, however, does not apply to legal conclusions. IqbaU 556 U.S. at 678.

         In certain circumstances, a court may look beyond the complaint itself and (1) take judicial notice of public records, such as state court records, and (2) consider documents submitted by the movant if the documents are integral to the complaint and indisputably authentic. Goines v. Valley Cmty. Servs. Bd, 822 F.3d 159, 165 (4th Cir. 2016).

         In cases where the plaintiff appears pro se, or without an attorney, courts do not expect the plaintiff to frame legal issues with the clarity and precision expected from lawyers. Accordingly, courts construe pro se complaints liberally. Beaudett v. City of Hampton, 775 F.2d 1274, 1278 (4th Cir. 1985) Courts do not, however, need to discern the unexpressed intent of the plaintiff or conjure up issues on the plaintiffs behalf. See Laber v. Harvey, 438 F.3d 404, 413 n.3 (4th Cir. 2006); Beaudett, 775 F.2d at 1276.


         Harris brings seven counts in his complaint: Count I: breach of contract; Count II: breach of the covenant of good faith and fair dealing; Count III: conversion; Count IV: conversion of an instrument; Count V: wrongful acceleration; Count VI: negligent or intentional infliction of emotional distress ("NIED" or "IIED"); and Count VII: declaratory judgment the sale was void ab initio. As stated below, res judicata bars these claims and, even if res judicata did not bar them, Harris's complaint fails to state a claim for all counts except counts one and five for breach of contract.

         A. Res Judicata Bars the Plaintiffs Suit

         Res judicata, or claim preclusion, bars the plaintiffs asserted claims. The Court applies Virginia's res judicata laws. See Q Int'l Courier Inc. v. Smoak, 441 F.3d 214, 218 (4th Cir. 2006) ("[T]he preclusive effect, if any, of the first action on the second action should have been decided under the res judicata law of the state of Virginia-the law of the state where the federal district court sat in the first action.") (citation omitted). Under Virginia law amended in 2006:

A party whose claim for relief arising from identified conduct, a transaction, or an occurrence, is decided on the merits by a final judgment, shall be forever barred from prosecuting any second or subsequent civil action against the same opposing party or parties on any claim or cause of action that arises from that same conduct, transaction or occurrence, whether or not the legal theory ...

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