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Palacios v. U.S. Bank National Association

United States District Court, D. Maryland

June 23, 2016



          Ellen Lipton Hollander United States District Judge

         Jaime Palacios, who is self-represented, filed suit on July 16, 2015, against U.S. Bank, National Association ("U.S. Bank") and the law firm of Samuel I. White, P.C. ("White"), defendants, alleging that defendants made "unlawful attempts to collect delinquent home mortgage debts" (ECF 1 ¶ 1), submitted false evidence to a federal court, and engaged in civil conspiracy. See ECF 1. U.S. Bank and White moved to dismiss the complaint. ECF 8; ECF 13. With leave of court (ECF 21), plaintiff filed a "First Amended Complaint" (ECF 22), supported by five exhibits. ECF 22-1 through ECF 22-5. Plaintiff seeks declaratory relief (Count I) and alleges claims for civil fraud (Count II and Count III); "civil RICO" (Count IV); "civil cospiracy [sic]" (Count VI);[1] bad faith (Count VII); and "negligence and gross negligence" (Count VIII). ECF 22 ¶¶ 44-81.

         Pursuant to rules 12(b)(1), 12(b)(6), and 56 of the Federal Rules of Civil Procedure, White has moved to dismiss or, in the alternative, for summary judgment (ECF 23). The motion is supported by a memorandum of law (ECF 23-1) (collectively, the "White Motion") and five exhibits. ECF 23-2 through ECF 23-6. Pursuant to Fed. R Civ. P. 12(b)(6), U.S. Bank has moved to dismiss plaintiff's "First Amended Complaint" (ECF 25), supported by a memorandum of law (ECF 25-1) (collectively, the "U.S. Bank Motion"), and eleven exhibits. ECF 25-2 through ECF 25-12.

         Plaintiff has not responded to the White Motion (ECF 23) or to the U.S. Bank Motion (ECF 25), and the time to do so has expired.[2] See Local Rule 105.2(a). Instead, plaintiff has filed a "Motion for Leave to File Second Amended Complaint" (ECF 27, "Motion to Amend"). See also ECF 27-1, proposed Second Amended Complaint, as corrected by ECF 28-1. Both White (ECF 29) and U.S. Bank (ECF 30) oppose the Second Motion to Amend, and plaintiff has replied. ECF 31; ECF 32.

         No hearing is necessary to resolve the motions. See Local Rule 105.6. For the reasons that follow, I will construe the White Motion (ECF 23) as a motion to dismiss and grant it. I will also grant the U.S. Bank Motion. ECF 25. And, I will deny the Second Motion to Amend. ECF 27.

         I. Factual and Procedural Background[3]

         On July 31, 2003, plaintiff purchased a residential property in Falls Church, Virginia (the "Property"). ECF 25-2 at 3-4. In connection with the purchase, plaintiff executed a deed of trust that secured a mortgage of $320, 000 as a lien on the Property. ECF 25-3 at 3-10. On May 30, 2006, plaintiff executed a "Gift Deed" (ECF 25-4 at 3-4), which vested the Property in the names of Jaime Palacios and Monica Palacios as "Tenants by the Entirety." Id. at 3. Monica Palacios is the wife of Jaime Palacios.[4] Jaime and Monica Palacios refinanced the mortgage on June 9, 2006, obtaining a loan in the amount of $455, 000. ECF 25-5 at 3-18. A "Note" as to the Property in the amount of $455, 000, dated June 9, 2006, identifies the "Lender" as "First National Bank of Arizona." ECF 22-3 at 6-8. Monica Palacios alone signed the "Note" as "Borrower." Id. at 8.

         Pursuant to a "Loan Modification Agreement" dated November 19, 2009, between Monica and Jaime Palacios and "Wells Fargo Bank, N.A., d/b/a/ America's Servicing Company" (ECF 22-2), the "‘Unpaid Principal Balance'" increased to $479, 045.30. See Id . at 1-2. As discussed, infra, plaintiff vigorously contests the authenticity of the "Loan Modification Agreement." See ECF 22 ¶ 17.

         By way of an "Assignment" dated April 1, 2011 (ECF 25-6 at 3), the deed of trust for the Property was transferred from "Mortgage Electronic Registration Systems, Inc. (‘MERS'), as nominee for First National Bank of Arizona . . ." to U.S. Bank, "as Trustee, successor in interest to Bank of America, National Association, as Trustee (successor by merger to LaSalle Bank National Association) as Trustee for Morgan Stanley Mortgage Loan Trust 2006-12XS, its successors . . . ." Id. Wells Fargo Bank, N.A. ("Wells Fargo") served as U.S. Bank's mortgage servicer. See ECF 22 at 2; see also In Re Jaime Palacios, 13-11200-RGM (Bankr. E.D. Va.) (ECF 21). At some unspecified point, Monica and Jamie Palacios ceased to make payments on the mortgage and foreclosure proceedings commenced.

         U.S. Bank asserts, ECF 25-1 at 2: "Plaintiff . . . has engaged in a multi-court, multi-year campaign" against U.S. Bank, White, and others "in an effort to prevent the foreclosure of his property." From the parties' submissions, it is not possible to ascertain the complete history of plaintiff's legal battles to stave off foreclosure as to the Property.[5] However, the relevant procedural history is as follows:

         On July 27, 2011, in the United States Bankruptcy Court for the Eastern District of Virginia, Monica Palacios filed a voluntary petition for bankruptcy under Chapter 7 of the United States Bankruptcy Code. In re Monica Palacios, 11-15499-RGM (Bankr. E.D. Va.) (ECF 1). She received a discharge on November 23, 2011.[6] Id., ECF 34.

         On July 25, 2012, [7] plaintiff, as next friend of his minor children, Vittorio Palacios and Vanessa Palacios, as well as Alexandra Palacios, plaintiff's adult child, [8] filed a "Complaint to Enjoin Foreclosure" in the Circuit Court of Fairfax County, Virginia. ECF 25-7. The "Complaint to Enjoin Foreclosure" named as defendants Professional Foreclosure Corporation of Virginia ("PFC"), the substitute trustee, and U.S. Bank. Id. at 1. The "Complaint to Enjoin Foreclosure" stated, in relevant part, id. at 1-2:

This is a complaint to stop a foreclosure on a property under a deed of trust that secures a note on which there is no liability by the current owners. The complaint claims that the current owners are minors and therefore there must be a court hearing on the issues of the case, that underlying [sic] deed of trust is flawed and invalid and that the appointment of the substitute trustee to conduct the foreclosure sale (which has been noticed to July 31, 2012) was improperly appointed and lacks authority.

         In particular, the "Complaint to Enjoin Foreclosure" contended that U.S. Bank did not hold a valid promissory note as to the Property. ECF 25-7 at 3 ¶ 8. It ...

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