United States District Court, E.D. Virginia, Alexandria Division
M. Brinkema United States District Judge.
the Court is defendants' Ocwen Loan Servicing, LLC
("Ocwen") and Mortgage Electronic Registration
Systems, Inc. ("MERS") Motion to Dismiss [Dkt. No.
5], in which they argue that plaintiffs' Amrik and Seemin
Hendiazad ("plaintiffs") Complaint should be
dismissed as an impermissible "show-me-the-note"
claim. Plaintiffs, proceeding pro se, have responded to
defendants' Motion. Finding that oral argument would not
further the decisional process, the defendants' Motion to
Dismiss will be granted without oral argument for the reasons
Complaint, plaintiffs allege that defendants MERS and Ocwen
have attempted to unlawfully foreclose on their property by
fraudulently transferring the Note and Deed of Trust, failing
to provide them with a notice of acceleration, and lacking
the authority to foreclose at all.
Complaint alleges that on April 19, 2010, plaintiffs obtained
a home mortgage loan from U.S. Mortgage Finance Corp. for
$682, 411 through a promissory Note ("Note")
secured by real property located at 35376 Glencoe Court,
Round Hill, Loudoun County, Virginia ("Property").
Compl. [Dkt. No. 1-1] ¶¶ 4-5, Exs. A, B. This
agreement was evidenced by a Deed of Trust
("Deed"), which named MERS as the Beneficiary and
Palma Collins as the Trustee. Id. ¶ 6, Ex. A.
18, 2014, MERS assigned its interest in the Deed to Ocwen.
Id. Ex. D. On October 14, 2016, Ocwen appointed
Surety Trustees, LLC as substitute trustee. Id. Ex.
C. On November 30, 2017, Ocwen removed Surety Trustees, LLC
and appointed Equity Trustees, LLC as substitute trustee.
Defs.' Mem. in Supp. of Mot. to Dismiss Third Am.
Compl. [Dkt. No. 6] ("Mem.") 2-3, Ex.
allege that plaintiffs have defaulted on the loan.
Id. at 3. On October 25, 2018, plaintiffs received a
Notice of Foreclosure from BWW Law Group, allegedly acting on
behalf of Equity Trustees, informing them that the Property
would be sold on November 13, 2018. Compl. ¶ 30 (citing
Ex. D). Although plaintiffs are unsure whether the sale
occurred, defendants allege that Equity Trustees voluntarily
cancelled the sale. Mem. 3.
filed this action in the Circuit Court of Loudoun County on
December 20, 2018. Dkt. No. 1-1. Defendants removed the
action to this court on January 24, 2019. Dkt. No. 1. In
essence, plaintiffs argue that Ocwen cannot foreclose because
it has not presented plaintiffs with the original Note and
because the assignment by MERS of its interest in the Deed to
Ocwen was fraudulent. Specifically, plaintiffs assert five
causes of action: (1) trespass quare clausum fregit (2)
trover, (3) covenant, (4) declaratory judgment, and (5)
breach of contract. Plaintiffs also seek injunctive relief,
to include a temporary restraining order ("TRO").
Specifically, Count I alleges that defendants have trespassed
on plaintiffs' Property because defendants do not have
any evidence of ownership of the loan. Compl. ¶¶
46-50. Count II alleges that defendants are not entitled to
seek title to the Property because they have received full
payment of the mortgage from the mortgage insurance carrier.
Id. ¶¶ 51-54. Count III asks the Court to
grant declaratory relief to enforce the covenant that only
the original lender or a valid assignee be allowed to enforce
the Note and Deed. Id. ¶¶ 55-57. Count IV
seeks a declaration that Ocwen does not have standing to
conduct a foreclosure sale on the Property and that the
mortgage debt has been paid. Id. ¶¶ 58-63.
Count V alleges that Ocwen breached the Note and Deed when it
failed to give plaintiffs notice of acceleration, a change in
loan servicer, and foreclosure. Id. ¶ 64. Count
VI requests injunctive relief, including a TRO forbidding
Ocwen from foreclosing on the Property. Id.
¶¶ 65-68. In addition to the requested
declarations, plaintiffs seek damages in the amount of $888,
0000, plus $2, 664, 000 treble damages if defendants are
found to have made false claims against the Property.
Id. ¶¶ 69-75.
have moved to dismiss [Dkt. No. 5], arguing that under
Virginia's nonjudicial foreclosure laws, they cannot be
compelled to produce documentation authorizing foreclosure on
the Property. Mem. 2. Additionally, because the foreclosure
was voluntarily cancelled, plaintiffs have yet to suffer
harm. Id. Plaintiffs have responded, although not in
a timely fashion,  and have also represented that they will
move for leave to file a first amended complaint "as
soon as [they] are done with this Response." Pis.'
Resp. in Opp'n to Defs.' Mot. to Dismiss Original
Compl. [Dkt. No. 9] ("Opp'n") 11. In a separate
letter to the Court, plaintiffs allege that the Note has been
securitized and offered on the market and they demand
"full disclosure." Notice and Demand [Dkt. No. 10].
Standard of Review
Rule of Civil Procedure 12(b)(6) provides that 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.
extent that plaintiffs are claiming defendants must
"bring forward the original note for  inspection"
and that the law "makes the production of the note
mandatory," Compl. ¶ 27, they are making a
"show-me-the-note" claim, which Virginia
"courts have roundly rejected" as "plainly
contrary to Virginia's non-judicial foreclosure
laws." Davis v. White, No. 3:13cv780, 2014 WL
1604270, at *10 (E.D. Va. Apr. 21, 2014) (internal quotation
marks omitted) (citing Hien Pham v. Bank of N.Y.,856 F.Supp.2d 804, 810 (E.D. Va. 2012)). In Virginia, a
trustee may "foreclose on a loan in default, even if the
original note cannot be found, without first seeking a court
order." Hien Pham, 856 F.Supp.2d at 810 (citing
Horvath v. Bank of N.Y., N.A.,641 F.3d 617, 623 n.3
(4th Cir. 2011)). A noteholder is not required to come to
court to prove its authority to foreclose because if this
were permissible, borrowers would "compel judicial