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Cuomo v. U.S. Bank N.A.

United States District Court, D. Rhode Island

August 21, 2018

STEPHEN B. CUOMO, Plaintiff,
v.
U.S. BANK, N.A., as trustee for BEAR STEARNS ASSET BACKED SECURITIES I, LLC, 2006-HE5; SELECT PORTFOLIO SERVICING, INC.; AMERIQUEST MORTGAGE COMPANY; MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC.; JPMORGAN CHASE BANK, N.A., Defendants.

          ORDER

          WILLIAM E. SMITH, Chief Judge.

         Magistrate Judge Patricia A. Sullivan filed a Report and Recommendation (ECF No. 15) in this case, recommending the Court grant JPMorgan Chase Bank’s Motion to Dismiss (ECF No. 9).

         After careful review of the papers attending JPMorgan’s Motion, and of the R. & R., and having heard no objection, the Court ACCEPTS the R. & R. and adopts its recommendations and reasoning. JPMorgan’s Motion is therefore GRANTED. Count II of Cuomo’s Complaint - insofar as it concerns JPMorgan - is dismissed, without leave to amend, and JPMorgan is dismissed from the case.

         IT IS SO ORDERED.

         REPORT AND RECOMMENDATION

         PATRICIA A. SULLIVAN, United States Magistrate Judge.

         Plaintiff Stephen B. Cuomo originally filed his two-count complaint in state court to challenge the foreclosure sale of property located in West Warwick, Rhode Island. Count I of the complaint alleges that Defendants U.S. Bank, N.A., as trustee for Bear Stearns Asset Backed Securities I, LLC 2006-HE5 (“U.S. Bank”), and Select Portfolio Servicing, Inc. (“SPS”) breached their mortgage contract with Plaintiff. Count II challenges a series of assignments of the mortgage to Defendants Ameriquest Mortgage Company (“Ameriquest”), Mortgage Electronic Registration Systems, Inc. (“MERS”), JPMorgan Chase Bank, N.A. (“Chase”), and U.S. Bank. Based on the allegation that each of the assignments is void, Plaintiff contends that U.S. Bank’s foreclosure sale is a legal nullity.

         The matter is now before the Court on Chase’s motion to dismiss the claims against it in Count II, pursuant to Fed. R Civ. P. 12(b)(1) and 12(b)(6). ECF No. 9. The other defendants have answered and do not join in Chase’s motion. For the reasons explained below, I recommend that Chase’s motion to dismiss Count II be granted.

         I. BACKGROUND

         In his complaint, Plaintiff alleges that, on February 23, 2006, he executed a mortgage and note to Town and Country Credit Corp. (“T&C”) on property located at 10 Sweet Briar Lane, West Warwick, Rhode Island (“the property”), in the amount of $292,000. ECF No. 1-1 at ¶¶ 14, 61. On February 21, 2008, two assignments of the mortgage were executed, one from T&C to Ameriquest, and the other from Ameriquest to MERS. Id. at ¶¶ 17, 19, 62, 64. These assignments were both duly recorded in “Town of West Warwick Clerk’s Office Land Evidence Records” (“Land Records”) on the same day, April 1, 2008. Id. Based on the pagination of the Land Records, the first to be recorded assigned the mortgage from Ameriquest to MERS, on page 276; while the second, recorded on page 281, is the assignment from T&C to Ameriquest. Chase has attached to its motion copies of the pertinent pages from the Land Records.[1] ECF Nos. 9-2, 9-3. The time-stamps on these undisputed public documents reveal that these two assignments were recorded two minutes and four seconds apart. Apart from his challenge based on the sequence of recording, Plaintiff does not allege that either of these assignments fails to conform to statutory requirements; nor does he argue that the execution of the assignments was faulty in any way.

         Six years later, on September 16, 2014, MERS assigned the mortgage to Chase; like the two prior assignments, it was duly recorded in the Land Records and there is no allegation that it fails to conform to the requirements for a proper assignment. ECF No. 1-1 at ¶¶ 20, 65. On the same day, Chase assigned the mortgage to U.S. Bank; again, this fourth assignment has the indicia of being in proper form and was appropriately recorded.[2] Id. at ¶¶ 22, 67. After U.S. Bank took over the mortgage following the assignment by Chase, SPS became the servicer. Id. at ¶ 26. In 2017, SPS, acting on behalf of U.S. Bank, sent Plaintiff a Notice of Mortgage Foreclosure Sale; the property was sold at foreclosure on May 3, 2017. Id. at ¶¶ 27-28.

         In Count II, Plaintiff seeks a declaratory judgment as to Ameriquest, MERS and Chase that all four assignments, starting with the one first recorded – from Ameriquest to MERS – are void “as Ameriquest had nothing to assign in the first place.” Id. at ¶ 71. The gravamen of Count II is Plaintiff’s argument that the assignment from Ameriquest to MERS (and, consequently, all subsequently recorded assignments, including the assignment by MERS to Chase) is void because it was recorded in the Land Records moments before, rather than after, the foundational T&C assignment to Ameriquest. Id. at ¶ 18. In addition to a declaration that all four assignments are void, Plaintiff also asks the Court to require these Defendants, including Chase, to restore his legal title to the property and pay him actual and punitive money damages. Id. at ¶¶ 72, 75.

         II. STANDARD OF REVIEW

         Pursuant to Fed. R. Civ. P. 12(b)(1) and (b)(6), Chase moves to dismiss Plaintiff’s claims based on lack of standing and for failure to state a claim upon which relief may be granted. In considering a motion under either prong of Fed. R. Civ. P 12(b), a court must accept as true the complaint’s plausible factual allegations and draw all reasonable inferences from those factual allegations in the plaintiff’s favor. Ho ...


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