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Terry v. Mortgage Electronic Registration Systems, Inc.

United States District Court, Fourth Circuit

April 30, 2013

ROBERT TERRY et al., Plaintiffs,


ALEXANDER WILLIAMS, Jr., District Judge.

Pending before the Court is Defendant's Motion to Dismiss. The Court has reviewed the entire record and deems a hearing unnecessary. For the following reasons, the Court GRANTS Defendant's Motion to Dismiss.


Plaintiffs Robert Terry and Shirley Atkins are natural persons who reside in Clinton, Maryland. Defendant Mortgage Electronic Registration Systems, Inc. (MERS) is a corporate entity that does business in Maryland. Defendant Freedom Mortgage Corporation (Freedom) is likewise a corporate entity that does business in Maryland. Plaintiff has voluntarily dismissed MERS from this suit.

On April 15, 2009, Plaintiffs executed a Note (Note or Home Loan) pursuant to which they borrowed $355, 530 dollars from Freedom to refinance their Clinton property (the Property). Doc. No. 8-1. On or around the same day, and in connection with the same transaction, Plaintiffs executed a Refinance Deed of Trust (Refinance Deed) securing the Home Loan against the Property. The Refinance Deed refers to MERS as "beneficiary... solely as nominee for Lender" and names a trustee. Doc. No. 8-2 at 1. The Refinance Deed of Trust further states that it secures to Freedom, inter alia, "repayment of the debt evidenced by the Note" and that, for this purpose, Plaintiffs grant the trustee the Property in trust with the power of sale. See id. at 1-2.

Plaintiffs later defaulted on their Home Loan. During the foreclosure proceedings, Plaintiffs discovered that MERS and Freedom had executed an Assignment of Deed of Trust (Assignment Deed) on January 26, 2012. The Assignment Deed states that MERS "grants, assigns and transfers unto [Freedom] all beneficial interest under [the Refinance Deed]." Doc. No. 8-3 (emphasis added).

On or around January 29, 2013, Plaintiffs filed the instant Complaint in state court. Plaintiffs asserted a TILA claim pursuant to 15 U.S.C. § 1641(g), the gist of which is that Defendants failed to notify them when they executed the Assignment Deed. Defendants removed the case on March 13, 2013. Shortly after removing the case, Defendants filed a Motion to Dismiss. Doc. No. 8. Defendants argue that Plaintiffs' TILA claim is time-barred. Defendants also argue that Plaintiff's TILA claim is not cognizable. Plaintiff filed an Opposition on March 31, 2013. Doc. No. 10. Although Freedom has yet to reply, Freedom's time for doing so has expired.


The purpose of a 12(b)(6) motion to dismiss is to test the sufficiency of the plaintiff's complaint. See Edwards v. City of Goldsboro, 178 F.3d 231, 243 (4th Cir. 1999). In two recent cases, the U.S. Supreme Court has clarified the standard applicable to Rule 12(b)(6) motions. Ashcroft v. Iqbal, 129 S.Ct. 1937 (2009); Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007). These cases make clear that Rule 8 "requires a showing, ' rather than a blanket assertion, of entitlement to relief." Twombly, 550 U.S. at 556 n.3 (quoting Fed.R.Civ.P. 8(a)(2)). This showing must consist of at least "enough facts to state a claim to relief that is plausible on its face." Id. at 570.

In deciding a motion to dismiss, the court should first review the complaint to determine which pleadings are entitled to the assumption of truth. See Iqbal, 129 S.Ct. at 1949-50. "When there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief." Id. at 1950. In so doing, the court must construe all factual allegations in the light most favorable to the plaintiff. See Harrison v. Westinghouse Savannah River Co., 176 F.3d 776, 783 (4th Cir. 1999). The Court need not, however, accept unsupported legal allegations, Revene v. Charles County Commissioners, 882 F.2d 870, 873 (4th Cir. 1989), legal conclusions couched as factual allegations, Papasan v. Allain, 478 U.S. 265, 286 (1986), or conclusory factual allegations devoid of any reference to actual events, United Black Firefighters v. Hirst, 604 F.2d 844, 847 (4th Cir. 1979).[1]


The Court analyzes only Freedom's argument that Plaintiffs' TILA § 1641(g) claim is not cognizable because (1) it is meritorious and (2) Freedom's statute of limitations argument does not appear to be well-taken.[2]

TILA § 1641(g) generally requires creditors assuming home loans to provide notice to borrowers in writing of the transfer. See 15 U.S.C. § 1641(g). In full, section ...

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