Mendible v. Special Proceeding Div. of Wake Cnty. Clerk

ANN-MARIE MENDIBLE, Plaintiff, v. SPECIAL PROCEEDINGS DIVISION OF WAKE COUNTY CLERK; U.S. BANK TRUST, N.S., AS TRUSTEE OF LSF9 MASTER PARTICIPATION TRUST; TRUSTEE SERVICES OF CAROLINA, L.L.C.; MORTGAGE ELECTRONIC REGISTRATION SYSTEMS INC.; CALIBER HOME LOANS, INC.; et al, Defendants.

No. 5:21-CV-00087-M

United States District Court, E.D. North Carolina, Western Division

February 11, 2022

ORDER

RICHARD E. MYERS II., CHIEF UNITED STATES DISTRICT JUDGE.

These matters come before the court on the Defendants' motions to dismiss [DE 11, 19, 23, 33, 41] and the Plaintiff's motion for leave to amend [DE 45]. The court finds its lacks subject-matter jurisdiction over certain of the Plaintiff's claims, Plaintiff otherwise fails to state plausible claims for relief, and the Plaintiff's motion does not cure the deficiencies. Therefore, Defendants' motions are granted, and the Plaintiff's motion is denied as futile.

I. Background

This is not the Plaintiff's first attempt to sue for equitable relief and economic damages based on a foreclosure order issued May 9, 2018; Plaintiff filed a lawsuit against Defendants Mortgage Electronic Registration Systems Inc. (“MERS”), Trustee Services of Carolina, LLC (“Trustee”), and Caliber Home Loans, Inc. (“Caliber”) on October 9, 2020, in Wake County Superior Court, alleging claims of negligence, fraud, void or cancel assignment, breach of the implied covenant of good faith and fair dealing, slander of title, and wrongful foreclosure. See DE 15-7.^[1] In that case, the Honorable Paul C. Ridgeway granted the defendants' motions pursuant to N.C. R. Civ. P. 12(b)(1), (b)(6), and (b)(7), and dismissed Plaintiffs claims with prejudice. DE 15-9.

In this action, Plaintiff alleges the same claims against the same Defendants; has added two Defendants, U.S. Bank Trust, N.A. (“U.S. Bank”) and “Special Proceedings Division of Wake County Clerk” (“Clerk”); and has added three claims for relief against all Defendants, due process in violation of the Fourteenth Amendment, violations of the Fair Debt Collection Practices Act (“FDCPA”), and violations of the Truth in Lending Act (“TILA”). Compl., DE 7. The factual allegations set forth in the Complaint here are identical to those alleged in the state court complaint. Compare DE 7 with DE 15-7.

Essentially, Plaintiff alleges that certain documents-i.e., promissory note, deed of trust, assignments of deeds of trust, and appointments of substitute trustees-have been executed and filed with respect to a mortgage loan initiated on June 1, 2007 (Compl. at ¶¶ 14-19). On December 21, 2016, Caliber sent a notice of default and election to sell to Plaintiff, which “did [not] identify the owner or ‘Holder in Due Course' of Plaintiff s Deed of Trust and Note or who had authorized Caliber to enforce default” and “[s]aid notice was not filed in the Wake County Recorder's Office.” In addition, an undated notice of foreclosure sale, which did not identify the owner or holder in due course of Plaintiff's Deed of Trust and Note or who had authorized Trustee to conduct a foreclosure sale, was sent to Plaintiff and filed in the Wake County Recorder's Office. On June 6, 2018, Trustee sold the subject property to U.S. Bank. Plaintiff avers that “at no time did Defendants know, in fact, who the actual beneficiary of the Deed of Trust was” and “the actual beneficiary of the Deed of Trust NEVER provided a declaration to Caliber stating that Plaintiff was in default.”

Defendants responded to Plaintiff's Complaint by filing the present motions arguing that the court lacks subject-matter jurisdiction pursuant to the Eleventh Amendment or the Rooker-Feldman doctrine and that any claims not subject to these doctrines are barred by issue and/or claim preclusion and/or the applicable statute of limitations. Plaintiff counters that Rooker-Feldman and the preclusion doctrines do not apply and she otherwise states plausible claims for relief.

Plaintiff also filed the present motion for leave to amend, seeking to correct the name of Defendant “Special Proceedings” to “Wake County Clerk of Superior Court” (“Clerk”), add to and assert her due process claim solely against the Clerk, and add the following factual allegations:

25. Plaintiffs Deed of Trust and Note or who had authorized Caliber to enforce default, pursuant to N.C. G.S.A. § 25-3-301. Said Notice was not filed in the Wake County Recorder's Office.

26. May 9, Defendant Wake County Clerk of Superior Court granted Trustee Services of Carolina. LLC. the right to foreclosure [sic] on Plaintiffs property.

27. June 22, final sale of Plaintiffs property to U.S. Bank of Trust NA as Trustee for LSF9 Master Participation Trust.

Prop. Am. Compl., DE 49. Defendants contend that Plaintiffs proposed amendments are futile.

II. Legal Standards

A. Rule 12(b)(1)

The Supreme Court instructs that

[f]ederal courts are courts of limited jurisdiction. They possess only that power authorized by Constitution and statute, which is not to be expanded by judicial decree. It is to be presumed that a cause lies outside this limited jurisdiction, and the burden of establishing the contrary rests upon the party asserting jurisdiction.

Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994) (citations omitted); see also Brickwood Contractors, Inc. v. Datanet Eng'g, Inc., 369 F.3d 385, 390 (4th Cir. 2004). “[T]he party who seeks the exercise of jurisdiction in his favor .. . must allege in his pleading the facts essential to show jurisdiction.” McNutt v. Gen. Motors Acceptance Corp, of Indiana, 298 U.S. 178, 189 (1936); see also Bowman v. White, 388 F.2d 756, 760 (4th Cir. 1968) (“[T]he complaint must state on its face the grounds for its jurisdiction.”).

The Fourth Circuit has recognized that a defendant may challenge subject matter jurisdiction in one of two ways. Kerns v. United States, 585 F.3d 187, 192 (4th Cir. 2009) (citing Adams v. Bain, 697 F.2d 1213, 1219 (4th Cir. 1982)). First, the defendant may contend “that a complaint simply fails to allege facts upon which subject matter jurisdiction can be based.” Id. When a defendant makes a facial challenge to subject matter jurisdiction, the facts alleged in the complaint are taken as true, and the motion must be denied if the complaint alleges sufficient facts to invoke subject matter jurisdiction. Second, the defendant may contend “that the jurisdictional allegations of the complaint [are] not true.” Id. If the defendant challenges the factual predicate of subject matter jurisdiction, “[a] trial court may then go beyond the allegations of the complaint and in an evidentiary hearing determine if there are facts to support the jurisdictional allegations, ” without converting the motion to a summary judgment proceeding. Id. “In that situation, the presumption of truthfulness normally accorded a complaint's allegations does not apply, and the district court is entitled to decide disputed issues of fact with respect to subject matter jurisdiction.”

Further, if a district court “determines at any time that it lacks subject-matter jurisdiction, the court must dismiss the action[, ]” regardless of whether the relevant defendant against whom the claim was brought has moved the court seeking dismissal. Fed.R.Civ.P. 12(h)(3).

B. Rule 12(b)(6)

When considering a Rule 12(b)(6) motion to dismiss, the court must accept as true all of the well-pleaded factual allegations contained within the complaint and must draw all reasonable inferences in the plaintiffs favor, Hall v. DIRECTV, LLC, 846 F.3d 757, 765 (4th Cir. 2017), but any legal conclusions proffered by the plaintiff need not be accepted as true, Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (“[T]he tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions. Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.”). The Iqbal Court made clear that “Rule 8 marks a notable and generous departure from the hypertechnical, code-pleading regime of a prior era, but it does not unlock the doors of discovery for a plaintiff armed with nothing more than conclusions.” Id. at 678-79.

To survive a Rule 12(b)(6) motion, the plaintiffs well-pleaded factual allegations, accepted as true, must “state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). Twombly's plausibility standard requires that a plaintiffs well-pleaded factual allegations “be enough to raise a right to relief above the speculative level, ” i.e., allege “enough fact to raise a reasonable expectation that discovery will reveal evidence of illegal [conduct].” Id. at 555-56. A speculative claim resting upon conclusory allegations without sufficient factual enhancement cannot survive a Rule 12(b)(6) challenge. Iqbal, 556 U.S. at 67879 (“where the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged-but it has not ‘show[n]'-‘that the pleader is entitled to relief.'” (quoting Fed.R.Civ.P. 8(a)(2)); Francis v. Giacometti, 588 F.3d 186, 193 (4th Cir. 2009) (“‘naked assertions' of wrongdoing necessitate some ‘factual enhancement' within the complaint to cross ‘the line between possibility and plausibility of entitlement to relief.'” (quoting Twombly, 550 U.S. at 557)).

C. Pro Se Litigants

In analyzing motions to dismiss, “pro se pleadings are ‘to be liberally construed,' and ‘a pro se complaint, however inartfully pleaded, must be held to less stringent standards than formal pleadings drafted by lawyers.'” King, 825 F.3d at 214 (quoting Erickson v. Pardus, 551 U.S. 89, 94 (2007)).

III. Analysis

Before proceeding to determine whether Plaintiff states plausible...