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Dixon v. Nationstar Mortgage

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

November 7, 2018

MERRICK L. DIXON, Plaintiff,
NATIONSTAR MORTGAGE, et al., Defendants.



         Before the Court is defendants' Nationstar Mortgage ("Nationstar") and Mortgage Electronic Registration Systems, Inc. ("MERS") Motion to Dismiss [Dkt. No. 17] in which they argue that plaintiffs Complaint should be dismissed as an impermissible "show-me-the-note" claim. Pro se plaintiff Merrick L. Dixon ("Dixon") has not responded to defendants' Motion.[1]Finding that oral argument would not further the decisional process, the defendants' Motion to Dismiss will be granted without oral argument for the reasons discussed below.

         I. BACKGROUND

         In his Complaint, Dixon alleges that defendants Nationstar and MERS fraudulently foreclosed on the real property known as 13348 Pelican Road, Woodbridge, Virginia 22193 (the "Property"). Compl. [Dkt. No. 1].[2] Specifically, he alleges that defendants have made a claim against the Property but have failed to provide proof of said claim, and he seeks either their withdrawal of all claims against the Property or production of documentation and witness testimony to prove their claim. Id. ¶¶ 13-14, 21-23.

         The Complaint alleges that on April 1, 1993, plaintiff executed a mortgage promissory note secured by a Deed of Trust, which named parties other than the defendants as Trustee and named MERS as beneficiary, and seeks a declaration that the original party named on the Deed of Trust is the only party entitled to foreclose upon the Property. Id. ¶¶ 49-52.

         Defendants identify a home mortgage loan, evidenced by a promissory note in the principal amount of $360, 000 and a Deed of Trust encumbering the Property, obtained on October 30, 2006. Defs.' Mem. Supp. Mot. Dismiss Pl.'s Compl. [Dkt. No. 18] ("Defs.' Mem.") 2; Exs. A & B.[3] The Deed of Trust identifies "NFM, Inc. d/b/a Fidelity Mortgage Corporation" as the original lender, Ex. A, and MERS as the original beneficiary. Ex. B.

         On June 10, 2011, MERS transferred its interest in the Deed to Aurora Loan Services LLC, Ex. C, which then transferred its interest to Nationstar on October 4, 2012. Id. at 3; Ex. D. On December 17, 2014, Nationstar transferred its interest to U.S. Bank National Association, as Trustee, Successor in Interest to Wilmington Trust Company, as Trustee, Successor in Interest to Bank of America National Association, as Trustee, Successor by Merger to LaSalle Bank National Association, as Trustee of Lehman XS Trust Mortgage Pass-Through Certificates, Series 2006-20. Id; Ex. E.

         Plaintiff failed to make the required mortgage payments and, in 2017, he began to receive demands for payments and threats of foreclosure from MERS and a law firm on behalf of Nationstar. Compl. ¶ 62. The Complaint claims that Nationstar "allegedly acts as Trustee in the securitization of the loan pool to which this Property has been allegedly tied." Id. ¶ 28. Plaintiff was advised that the Property would be foreclosed upon in December 2017. Id. ¶ 66. On December 12, 2017, a foreclosure sale occurred. Defs.' Mem. 3. On May 18, 2018, the Property was conveyed to Paramount Investments, LLC and the conveyance was recorded on May 23, 2018. Id. at 3-4; Ex. F.

         Plaintiff filed his Complaint on June 4, 2018, seeking $3, 328, 000 in damages. Compl. ¶ 99. Defendants have moved to dismiss because, under Virginia's non-judicial foreclosure laws, they cannot be compelled to produce documentation authorizing the foreclosure on the Property.


         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 contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). Pleadings filed by a prose party must be "liberally construed" and will not be held to the same standards as those filed by lawyers. Erickson v. Pardus, 551 U.S. 89, 94 (2007) (internal quotation marks and citations omitted). Nevertheless, whether a complaint states a claim on which relief may be granted is determined by "the familiar standard for a motion to dismiss under Fed.R.Civ.P. 12(b)(6)." Sumner v. Tucker, 9 F.Supp.2d 641, 642 (E.D. Va. 1998). 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, 556 U.S. at 678. Plausibility requires "more than a sheer possibility that a defendant has acted unlawfully"; instead, the plaintiff must plead "factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id.

         B. Analysis

         The Complaint, construed liberally, states several causes of action;[4] however, none has merit. Although defendants make multiple meritorious arguments for dismissal, only one needs to be considered because it is clear that all of the issues in the Complaint are based on a theory which cannot sustain a cause of action in Virginia. The thrust of plaintiff s Complaint is that defendants must prove their authority to foreclose on the Property by producing original documentation. This theory has no merit in Virginia because "courts have roundly rejected" "show-me-the-note" claims as "plainly contrary to Virginia's non-judicial foreclosure laws." Davis v. White, No. 3:13cv780, 2014 WL 1604270, at *7-8 (E.D. Va. Apr. 21, 2014) (citing Brown v. HSBC Mortg. Corp., No. 1:10cv 1427, 2011 WL 3101780, at *2 (E.D. Va. July 22, 2011) and Pham v. Bank of N.Y.,856 F.Supp.2d 804, 810 (E.D. Va. 2012)). Virginia unequivocally does not require a foreclosing lender or trustee to prove their authority before foreclosure, see Webb v. Equifirst Corp., No. 7:15cv00413, 2016 WL 1274618, at *7 (W.D. Va. Mar. 31, 2016), by producing original documents, as plaintiff is demanding. See Compl. ¶ 21. These claims have been so "widely rejected" that the Eastern District of Virginia has questioned how they could be brought in good faith. Pham, 856 F.Supp.2d at 810, 815. Plaintiffs allegation that the Note and Deed of Trust are unenforceable because they have been split has also been rejected by Virginia courts. See Webb, 2016 WL 1274618, at *7 (citing Horvath v. Bank of N.Y., N.A.,641 F.3d 617, 624 (4th Cir. 2011) (explaining that transferring a note does not "strip it from the security that gives it value" because to so hold would "render the note largely worthless")). Furthermore, as plaintiff is not a party to the assignments of the Deed of Trust, he lacks standing to challenge those documents.[5] The Fourth Circuit has held that a homeowner cannot attack the assignment of the Deed of Trust because it is not a party to that assignment or an intended beneficiary. Wolf v. Fed. Nat'l Mortg. Ass'n,512 Fed.Appx. 336, 432 (4th Cir. 2013); see also Hardnett v. M&T Bank, 204 F.Supp.3d 851, 858 (E.D. Va. 2016) (finding that homeowner ...

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