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Lister v. Bank of America, N.A.

United States District Court, District of Rhode Island

March 30, 2014

DEBORAH A. LISTER, et al., Plaintiffs,
v.
BANK OF AMERICA, N.A., et al., Defendants.

MEMORANDUM AND ORDER

JOHN J. McCONNELL, JR., United States District Judge.

Deborah A. Lister and Leon Blais ("Plaintiffs") filed a complaint alleging an invalid foreclosure of their home against Defendants Bank of America, Homeward Residential, Inc. ("Homeward"), Mortgage Electronic Registration Systems, Inc. ("MERS"), and OCWEN Loan Servicing, LLC ("OCWEN") (collectively, "Defendants"). (ECF No. 1.) Before the Court are Defendants' motions to dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. (ECF Nos. 13, 32.)

On or about October 31, 2000, Deborah A. Lister purchased a parcel of property in Lincoln, Rhode Island and recorded her interest in the Town of Lincoln's Land Evidence Records. (ECF No. 1 at ¶ 23.)[1] In 2006, Ms. Lister decided to refinance and secured a new mortgage with Mortgage Lenders Network ("MLN"). (Id. at ¶ 25.)

Ms. Lister alleges that neither the note[2] nor the mortgage are executed, witnessed, or notarized, and she does not have any recollection of signing the mortgage. (Id. at ¶ 28.) Nevertheless, she began making payments to the address listed on a document entitled "First Payment Notice." (Id. at ¶ 31.) Subsequently, after MLN filed for bankruptcy in Delaware, Ms. Lister received notice to forward her mortgage payments to Bank of America, and she did so.[3] (Id., at ¶ ¶ 4, 33.)

In 2008, Ms. Lister "grew suspicious" about the handling of the note and mortgage, so she "slowed" her payments. (Id. at ¶ 34.) In November of 2008, Countrywide Home Loans ("Countrywide") contacted Ms. Lister and threatened to foreclose. (Id. at ¶ 35.) Shortly thereafter, Harmon Law Offices ("Harmon") contacted Ms. Lister, who informed her that it represented Countrywide and reiterated the threat to foreclose. (Id. at ¶ 36.) On November 5, 2008, Ms. Lister's counsel (who is also her husband), Leon Blais, demanded verification from Harmon under the Fair Debt Collection Practices Act[4] and requested an accounting of funds previously paid. (Id. at ¶ 37.) Almost two years later, on September 10, 2010, under continued threats of foreclosure, Mr. Blais again requested verification and an accounting. (Id. at ¶ 38.) Each request was ignored and Harmon pressed forward with foreclosure proceedings until Mr. Blais threatened to initiate a lawsuit against Harmon and its attorneys. (Id. at¶ ¶ 39-41.) On November 4, 2010, Harmon "put on hold" the scheduled foreclosure sale. (Id. at ¶ 42.)

Subsequently, Homeward began to communicate with Ms. Lister. Again, Homeward ignored Mr. Blais' requests for verification. (Id. ¶44.) Ms. Lister's most recent communication came from OCWEN, who inserted itself as the loss payee on her homeowner insurance policy. (Id. at ¶45.)

In an attempt to determine the note holder, Mr. Blais wrote to Neil Luria, the liquidating trustee of MLN. (Id. at ¶ 47.) Mr. Luria explained that after filing for bankruptcy, all of MLN's documents had been destroyed. (Id.) Plaintiffs allege that since MLN's documents were destroyed and subsequent "holders" are not able to produce the documents, then it is unlikely that the documents exist. (Id. at ¶48.)

Under threat of foreclosure, Plaintiffs filed suit, alleging three causes of action. Count I seeks "Interim Relief, " in which they agree to sell the house, place the proceeds in the court registry or in escrow, and the debt to the holder of the note will be satisfied. (Id. at ¶¶52-53.) In Count II, they seek "Quieting of Title" in order to nullify the note and mortgage. (Id. at ¶¶ 54-55.) In Count III, they request a "Credit Reporting, " where the Court would declare that Plaintiffs owe nothing to Defendants and that Defendants remove all delinquent reports from their credit. (Id. at ¶¶ 56-58.)

Defendants filed motions to dismiss, arguing that Plaintiffs have failed to state a claim upon which relief can be granted. (ECF Nos. 13, 32.) Defendants move to dismiss the "Interim Relief cause of action, as it is a remedy not a cause of action; and the "Quieting of Title" and "Credit Reporting" causes of action because Plaintiffs' allegations are not sufficiently plausible. Plaintiffs objected, asserting their complaint's factual sufficiency. (ECF Nos. 22, 34.) The matter is ripe for review on the papers.

I. STANDARD OF REVIEW

On a motion to dismiss for failure to state a claim under Rule 12(b)(6) of the Federal Rules of Civil Procedure, the Court "must assume the truth of all well-plead facts and give the plaintiff the benefit of all reasonable inferences there from." Ruiz v. Bally Total Fitness Holding Corp., 496 F.3d 1, 5 (1st Cir. 2007). "To avoid dismissal, a complaint must provide 'a short and plain statement of the claim showing that the pleader is entitled to relief.'" Garcia-Cataldn v. United States, 734 F.3d 100, 102 (1st Cir. 2013) (quoting Fed.R.Civ.P. 8(a)(2)). "At the pleading stage, the plaintiff need not demonstrate that she is likely to prevail, but her claim must suggest 'more than a sheer possibility that a defendant has acted unlawfully.'" Id. at 102-03. (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). A complaint that states "[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, " will not suffice. Iqbal, 556 U.S. at 678 (citing Twombly, 550 U.S. at 555). While a complaint needs only "a short and plain statement of the claim showing that the pleader is entitled to relief, " Fed.R.Civ.P. 8(a)(2), it "must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 570). Therefore, a court should dismiss a case when a plaintiff fails to allege "enough facts to state a claim to relief that is plausible on its face." Twombly, 550 U.S. at 570.

II. ANALYSIS

The Court will first address Count Two because it is the substantive cause of action in the Complaint, and a finding on that Count will be determinative of Plaintiffs' remaining Counts. In their "Quieting of Title" claim, Plaintiffs seek a "declaration that the note and mortgage, if ever in enforceable form, are null and void ab initio." (ECF No. 1 at ¶ 55.) Defendants argue that Plaintiffs' complaint fails to assert any plausible facts to support their claims. Citing R.I. Gen. Laws § 34-16-4, Plaintiffs aver that Rhode Island statutory law allows a person, who has or is claiming title to real estate, to initiate a lawsuit to determine the validity of their title, to remove a cloud from the title, and to affirm or quiet title to real estate. Plaintiffs assert that they have sufficiently pled in support of this claim that the note and mortgage are not signed, and therefore, not valid (ECF No. 1 at ¶¶28, 29); the note and mortgage were not produced upon demand (Id. at ΒΆΒΆ37-39, 47-48); and the assignment from ...


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