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Mahjor v. Greenpoint Mortgage Funding, Inc.

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

June 23, 2017

HAMID MAHJOR, Plaintiff,


          Leonie M. Brinkema United States District Judge.

         This civil action arises out of plaintiff Hamid Mahjor's ("plaintiff" or "Mahjor") 2007 purchase of a home financed by a mortgage. According to plaintiff, his mortgage broker procured the loan by adding a fictitious name to the loan documents submitted to the lender, which plaintiff argues rendered the note and deed of trust void. Nevertheless, plaintiff occupied the house for nearly ten years without making any payments. In March 2017, defendant Greenpoint Mortgage, Inc., ("Greenpoint"), identified as the "lender" in the complaint, initiated foreclosure proceedings, with defendant Brock & Scott, PLLC ("Brock & Scott"), acting as the debt collector; defendant Trustee Services of Virginia, LLC ("TSV"), acting as the substitute trustee for the deed of trust; and defendant Mortgage Electronic Registration Systems ("MERS"), acting as nominee for the lender. Defendant FFC Properties, LLC ("FFC"), purchased the property at the March 2017 foreclosure sale.

         On the theory that the underlying debt is void, plaintiff has brought this four count civil action seeking to invalidate the foreclosure sale, [1] alleging in Count 1 an Equitable Action to Rescind Void / Unlawful Foreclosure Sale [sic] against all defendants; in Count 3 slander of title against all defendants; in Count 4 violations of the Fair Debt Collection Practices Act ("FDCPA") against Brock & Scott and TSV; and in Count 5 a quiet title action against all defendants. Defendants have filed two motions to dismiss[2] in which they argue that plaintiffs complaint is untimely, that previous decisions in bankruptcy proceedings preclude him from relitigating the validity of the debt, and that he has failed to state a claim as to any of the counts. For the reasons that follow, the motions to dismiss will be granted.

         I. BACKGROUND

         In early 2007, Mahjor applied for a loan with Greenpoint to finance his purchase of 21 Pickett Lane ("the Property"). 1st Am. Compl. ("Compl.") ¶ 9. His broker, Michael Milan ("Milan"), approved him for the loan. Id. ¶¶ 12-13, 21. The total purchase price was $696, 000.00, with a $184, 000.00 down payment. Id. ¶ 14.

         On June 29, 2007, Mahjor signed a deed of trust for the property securing the mortgage. The deed of trust lists Edwin J. Vasquez ("Vasquez") as a borrower along with Mahjor, and Vasquez's signature appears just above Mahjor's on the last page. According to the complaint, "Vasquez is a fictitious individual whose information was fictitious and fraudulently relied on to process the loan / Note on June 29, 2007, " allegedly without Mahjor's knowledge. Compl. ¶ 34. Although the deed of trust states that both Vasquez and Mahjor executed a promissory note in connection with the mortgage, [Dkt. 1-1] at 24, in fact only the Vasquez signature is on the promissory note, Id. at 21, which is for $548, 750.00, [3] Id. at 17. The same day, Mahjor signed an Adjustable Rate Rider, on which Vasquez's signature also appears. Id. at 43.

         Mahjor took possession of the Property in June 2007, and alleges he began making monthly payments to Greenpoint. Compl. ¶ 16-17. After five months, [4] a statement arrived identifying Vasquez as the borrower. Id. ¶ 20. The complaint alleges that Mahjor called Milan to ask who Vasquez was, and Milan replied not to worry because "this was a "quitclaim situation."' Id. ¶¶ 21-22. Mahjor did not understand this statement and asked additional questions, after which Milan became "angry and hostile." Id. ¶¶ 22-24. After Mahjor said he was going to call the Federal Bureau of Investigation ("FBI"), Milan responded "by threatening to cut off plaintiff s legs at the knees with a chain if he ever brought it up again or mentioned it to anyone." Id. ¶¶ 25-26. Mahjor immediately called the FBI, which launched an investigation. Id. ¶¶ 27-28. Milan was ultimately convicted of wire fraud and sentenced to 108 months' imprisonment. United States v. Milan, l:09-cr-228 (TSE), [Dkt. 200] (E.D. Va. Mar. 12, 2010). According to the complaint, "the loans identified as having been procured via the fraud of Greenpoint, Milan and others, were all declared void by the federal court, " Compl. ¶ 36, but plaintiff has not provided any court records to support that contention, nor has plaintiff explained how a court could issue such a declaratory judgment through a criminal case.

         According to plaintiff, Milan also stole his $ 184, 000 down payment, and took out an unauthorized second mortgage on the Property with Citibank to cover the purchase price. Id. ¶ 35. Beginning in 2009, plaintiff began receiving demands for payment from Countrywide. Id. ¶ 41. Plaintiff contacted the U.S. Attorney's Office ("USAO"), which reached out to Country wide's lawyers, after which the demands stopped. Id. ¶ 43. A similar pattern ensued with Bank of America and Capital One. Id. ¶¶ 43-47.

         At some point, [5] Brock & Scott began to contact plaintiff demanding payment on behalf of Greenpoint. Id.¶48. This time, the USAO declined to intervene on plaintiff s behalf. Id. ¶ 49. On February 2, 2017, Brock & Scott notified plaintiff that a trustee's sale would take place at a public auction on March 9, 2017. [Dkt. 1-1] at 48. Plaintiff sought an emergency injunction in state court, which was denied. Compl. ¶¶ 58-59. Plaintiff recorded a lis pendens on the property, but TSV still conducted the sale on March 9, 2017, and FFC purchased the Property. Id. ¶¶ 61-62. Plaintiff, acting pro se, filed the original complaint in the Stafford County Circuit Court on February 21, 2017, which his counsel amended on April 3, 2017, to add Greenpoint and MERS along with all four of the instant counts. [Dkt. 1] ¶¶ 1-2; [Dkt. 1-2] at 2.[6] It is this First Amended Complaint which is presently before this Court.

         Throughout these events, but unmentioned in the complaint, plaintiff was engaged in serial bankruptcy proceedings in this district. As Judge Ellis found on April 17, 2017, in affirming the bankruptcy court's dismissal of plaintiff's most recent Chapter 13 petition:

Debtor, Hamid R. Mahjor, is a serial bankruptcy filer. The record reflects, as the Bankruptcy Judge concluded, that the underlying purpose of these bankruptcy filings has been to frustrate collection efforts by Debtor's creditors, who include (i) the lien holder(s) on Debtor's home, where he has resided for the past decade without making any mortgage payments, and (ii) the victim of a crime the Debtor committed, who is now entitled to restitution payments pursuant to a criminal judgment entered against the Debtor by the Stafford County Circuit Court.

[Dkt. 11-3] at 2. Judge Ellis then walked through the eight bankruptcy petitions that Mahjor has filed since 2008. See Id. at 2-4. Each of those petitions was dismissed-two voluntarily and six by the bankruptcy court.[7] See Id. The seventh and eighth petitions, which were 'Virtually identical, were dismissed by the bankruptcy court based on a finding that Mahjor was acting in bad faith and had a history of abusing the bankruptcy process. Id. at 4-5. During the hearing on his eighth petition, Mahjor gave inconsistent testimony on the status of his mortgage debt, "[a]t times ... appear[ing] to acknowledge borrowing money to purchase his home, and at others...argu[ing] that he owes no money on his home." Id. at 8.


         A. Standard of Review

         According to Federal Rule of Civil Procedure 12(b)(6), a complaint should be dismissed if it fails to state a claim upon which relief can be granted. "To survive a motion to dismiss, a complaint must set forth sufficient factual matter, accepted as true, to 'state a claim for relief that is plausible on its face.'" Ashcroft v. Iabal 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombry, 550 U.S. 544, 547 (2007)). The Court must "assume that the facts alleged in the complaint are true and draw all reasonable inferences in the plaintiffs favor, " Burbach Broad. Co. of Del v. Elkins Radio Corp., 278 F.3d 401, 406 (4th Cir. 2002), but only to the extent that those allegations pertain to facts rather than to legal conclusions, Iqbal 555 U.S. at 678. Moreover, although a court may not ordinarily "consider any documents that are outside of the complaint" without converting the motion "into one for summary judgment, -----[t]here is... a narrow exception 'for... official public records[, ]'" among other documents. Alternative Energy. Inc. v. St. Paul Fire & Marine Ins. Co., 267 F.3d 30, 33 (4th Cir. 2001) (quoting Watterson v. Page. 987 F.2d 1, 3 (1st Cir. 1993)).

         B. Timeliness

         Defendants argue that plaintiffs claims are untimely based on Virginia's two-year statute of limitations for actions sounding in fraud. Plaintiffs only response is that his note is "void ab initio" and therefore can "be challenged at any time by anyone." PI. Opp., [Dkt. 26] at 4. Although defendants' argument does not address each count with sufficient specificity, their position is largely correct.

         Counts 1 and 5 are equitable in nature. In Virginia, "[i]t is a well-established principle uniformly acted upon by courts of equity, that in respect to the statute of limitations equity follows the law; and if a legal demand be asserted in equity which at law is barred by statute, it is equally barred in equity." Kappa Sigma Fraternity. Inc. v. Kappa Sigma Fraternity, 266 Va. 455, 467 (2003) (internal quotation omitted). The shared premise of plaintiff s equitable action to rescind the foreclosure sale and his quiet title action is that the promissory note was secured by fraud-namely, the inclusion of the fictitious Vasquez as a party-and therefore void ab initio, PI. Opp., [Dkt. 26] at 3-4, 6. Setting aside the viability of this theory for the moment, it is clear that the appropriate legal analog is fraud.

         In Virginia, a fraud action must be brought within two years of the date that the fraud occurred, or one year of the date on which plaintiff should reasonably have discovered the fraud, whichever results in the longer period. Va. Code. § 8.01-243. Because plaintiff acknowledges receiving the statement with Vasquez's name on it within five months of signing the loan documents on June 29, 2007, Compl. ¶ 20, the longer of the periods is two years from the date on which the fraud allegedly occurred-June 29, 2007. Because these claims were not brought until April 6, 2017, nearly eight years too late, Counts 1 and 5 are clearly time barred.[8]

         Count 3, the remaining state law claim, is for slander of title. Currently, "there is no controlling authority indicating which statute of limitations applies to slander of title actions" in Virginia. Koz v. Wells Fargo Home Mortg., 83 Va. Cir. 96, at *5 (Va. Cir. 2011). There are three options for the applicable limitations period: the one-year period for defamation; the two-year "catch-all" period in Va. Code § 8.08-248; or the five-year period applicable to injury to property. Id. at *5-*6. This cause of action is titled "slander of title" because it "involves allegations of 'falsehoods which are not personally defamatory, and yet cause pecuniary loss, '" Id. at *5 (quoting Prosser and Keeton on the Law of Torts., § 128 at 962 (5th ed. 1984)), meaning it is more properly considered "a form of interference with economic relations, and that the one-year statute of limitations for defamation is not applicable, " Id. Similarly, the injury to property limitation is "narrowly defined to include only those acts which 'involve allegations of wrongful exercise of control over the property of another, '" Id. (quoting Willard v. Moneta Bldg. Supply, 262 Va. 473, 480 (2001)), rather than conduct that "does not alter the condition or availability for use of the property[J" Id. Accordingly, the two-year catch-all provision is the correct limitations period for slander of title. See id.

         Plaintiff has identified six allegedly "slanderous documents, " identified as Exhibits B, C, D, F, G, and H to the complaint. Compl. 12. Exhibits B and C were created (and signed by plaintiff) in 2007, meaning they are time-barred. Similarly, Exhibit F was created in 2008, Exhibit G in 2011, and Exhibit H in 2013, making all of them time-barred as well. Only Exhibit D, which was created in 2016, is recent ...

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