United States District Court, D. Rhode Island
252 WOLFROCK ROAD REALTY REDEMPTION COMPANY; JOHN AINSWORTH AND LAUREN DALEY-AINSWORTH A/K/A LAUREN DALEY, Plaintiffs,
v.
WELLS FARGO BANK N.A. AS TRUSTEE FOR OPTION ONE MORTGAGE LOAN TRUST 2005-5, Defendant.
ORDER
John
J. McConnell, Jr. United States District Judge
Plaintiffs
252 Wolfrock Road Realty Redemption Company, [1] John Ainsworth,
and Lauren Daley-Ainsworth ("Plaintiffs") filed a
complaint against Defendant Wells Fargo Bank N.A. as trustee
for Option One Mortgage Loan Trust 2005-5 ("Wells
Fargo"), alleging that Wells Fargo illegally foreclosed
on their property because it failed to provide Plaintiffs
with a notice of sale prior to acceleration of the loan.
Wells Fargo moved to dismiss Plaintiffs' complaint,
arguing that Rhode Island law does not require the lender
itself to issue the notice of sale prior to
acceleration.[2] ECF No. 7. Because Plaintiffs did receive
this notice from counsel for Ocwen Loan Servicing, LLC, the
mortgage servicer, Wells Fargo argues that Plaintiffs
received proper notice under the terms of the mortgage
contract and the foreclosure sale was valid.
In
reviewing a motion to dismiss filed pursuant to Rule 12(b)(6)
of the Federal Rules of Civil Procedure, a court accepts as
true the factual allegations of the complaint and draws all
reasonable inferences in favor of the plaintiff. See Cook
v. Gates, 528 F.3d 42, 48 (1st Cir. 2008) (citation
omitted); McCloskey v. Mueller, 446 F.3d 262, 266
(1st Cir. 2006) (citations omitted). To withstand a motion to
dismiss, "a complaint must allege 'a plausible
entitlement to relief."' ACA Fin. Guar. Corp. v.
Advest, Inc., 512 F.3d 46, 58 (1st Cir. 2008) (quoting
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 559
(2007)); see also Ashcroft v. Iqbal, 556 U.S. 662,
679 (2009) (citations omitted). Consequently, although the
complaint does not need "detailed factual
allegations", it does need to have sufficient facts to
state a belief that is plausible. See Twombly, 550
U.S. at 555. These "minimal requirements are not
tantamount to nonexistent requirements. The threshold may be
low, but it is real - and it is the plaintiffs burden to take
the step which brings his case safely into the next phase of
the litigation." Gooley v. Mobil Oil Corp., 851
F.2d 513, 514 (1st Cir. 1988).
Plaintiffs
allege that Wells Fargo was required under the notice
provisions in ¶ 21 of the mortgage contract to give them
notice of sale prior to acceleration. ECF No. 1-2 at
¶¶ 23-23. In their opposition to Wells Fargo's
motion, Plaintiffs rely on the Massachusetts District Court
case of Paiva v. Bank of New York Mellon, 120
F.Supp.3d 7, 10 (D. Mass. 2015), which held that the lender,
not the servicer, was required to fulfill the terms of ¶
21. Urging this Court to agree with the court in
Paiva, Plaintiffs argue that the notice from counsel
for Ocwen, the servicer, was not proper and therefore, the
foreclosure sale is void.
Plaintiffs'
reliance on Massachusetts law is misplaced. Rhode
Island's power of sale statute allows the mortgagee to
issue the notice of sale to mortgagors in order to initiate
foreclosure. R.I. Gen. Laws § 34-11-22. Moreover, the
Rhode Island Supreme Court in Ingrain v. Mortg. Elec,
Regis. Sys,, Inc., 94 A.3d 523, 529 (R.I. 2014) affirmed
the validity of a foreclosure where the mortgagee's
servicer, acting under power of attorney, properly mailed the
notice of sale to the borrowers and properly advertised the
foreclosure. See also Breggia v. Mortg. Elec.
Registration Sys., Inc., 102 A.3d 636, 641 (R.I. 2014).
The servicer, as a lender's agent, acquired all the
rights that the lender possessed, including the right to
exercise the power of sale. Therefore, under Rhode Island
law, an agent of a lender may initiate and complete
foreclosure.
In this
case, Plaintiffs allege that Wells Fargo is the lender, Ocwen
became the servicer of the mortgage, and Ocwen's counsel
sent the notice of sale and published the notice in the
newspaper. ECF No. 1-2 at ¶¶ 11-13. Because Ocwen,
as an agent of the lender, notified Plaintiffs of the
foreclosure, the notice was in accordance with ¶ 21 of
their mortgage and in line with Rhode Island Supreme Court
precedent. Therefore, this Court finds that the foreclosure
was properly noticed and Plaintiffs' claims must be
dismissed. Defendant's Motion to Dismiss (ECF No. 7) is
GRANTED.
IT IS
SO ORDERED.
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Notes:
[1] Wolfrock comes into play because the
two individual Plaintiffs created this entity
post-foreclosure in order to transfer their title in the
property to Wolfrock.
[2] Defendants also argue that Wolfrock
lacks standing to pursue these claims because it did not
exist until after the foreclosure that forms the basis of the
complaint. The Court need not reach this argument in light of
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