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Walsh v. Bank of New York Mellon

United States District Court, D. Maryland, Southern Division

January 19, 2017

BANK OF NEW YORK MELLON, et al, Defendants.


          George J. Hazel United States District Judge.

         Plaintiffs Gregory Walsh and Christina Walsh (collectively. "Plaintiffs") bring this action against Bank of New York Mellon. N.A. ("BNY Mellon"), Select Portfolio Servicing, Inc. ("SPS"), MERSCORP, Inc. ("MERSCORP"), and JP Morgan Chase Bank. N.A. ("Chase"') (collectively. "Defendants") alleging violations of the Truth in Lending Act. 15 U.S.C. § 1601 el seq. and various state common law claims. In the Court's previous Memorandum Opinion dated March 25. 2016, the Court granted Defendants' Motions to Dismiss, ECF Nos. 5. 6, and 16. but allowed Mr. Walsh to amend his Complaint. ECF No. 27. Mr. Walsh added his wife Christina Walsh as a plaintiff, and Plaintiffs filed an Amended Complaint on April 8. 2016. Now pending before the Court is Defendant Chase's Motion to Dismiss, ECF No. 30. Defendant MERSCORP Holdings, Inc.'s[1] Motion to Dismiss. ECF No. 35. and Defendants BNY Mellon and SPS's Motion to Dismiss. ECF No. 36. No hearing is necessary. See Log. R. 105.6 (D. Md.). For the following reasons. Defendants' Motions to Dismiss are granted.

         I. BACKGROUND

         The facts of this case were set forth in the Court's earlier Memorandum Opinion. ECF No. 27 at 1-2.[2] On November 12. 2004, Gregory and Christina Walsh purchased the property located at 8913 56th Avenue, College Park, Maryland 20740 (the "Property") for $340, 000. See ECF No. 1 ¶ 13: ECF No. 5-7 at 1.[3] Plaintiffs obtained two mortgage loans for the Property from Greenpoint Mortgage Funding Corp. ("Greenpoint" or the "Lender"), an entity that is now-defunct. ECF No. 1 ¶¶ 15-18. The mortgages were secured by a Deed of Trust (the "Deed of Trust") naming Mortgage Electronic Registration Systems. Inc. ("MERS")[4] as the beneficiary of the Deed and the nominee "for Lender and Lender's successors and assigns." ECF No. 5-8 at 2. Plaintiffs conveyed the Property "in fee simple absolute" to the 56th Avenue Family Holding and Improvement Trust on May 27. 2005. ECF No. 5-2 at 1. According to Prince George's County land records dated May 26. 2015. the 56th Avenue Family Holding and Improvement Trust is the current owner of the Property. ECF No. 5-3 at 1.

         On June 8, 2012, MERS, as "Nominee for Greenpoint Mortgage Funding, Inc.. its Successors and Assigns." signed an Assignment of Deed of Trust (the "Assignment") conveying the Deed of Trust to the "Bank of New York, as Successor-in-interest to JP Morgan Chase Bank." ECF No. 35-3 at 1.[5] This Assignment was signed by two individuals. Iquisha Criff and Ashley Clegg. purportedly as "Vice Presidents" of MERS. Id. Much of this dispute has centered on the authenticity of these signatures and the validity of the Assignment, and therefore the authority of various Defendants to enforce the Deed of Trust.

         In construing Plaintiffs first Complaint, ECF No. 1, the Court analyzed the claims as ones of fraud and quiet title. ECF No. 27 at 2. The Court held in its earlier Memorandum Opinion that Plaintiff did not plead his claims of fraud with particularity, because Plaintiff failed to specify which Defendants allegedly forged the signatures on the Assignment and failed to provide sufficient factual allegations as to the circumstances of the fraud. Id. at 6. Plaintiff further failed to show how he relied on such fraudulent signatures, as he was not an actual party to the Assignment. Id. The Court also held that Plaintiff did not have standing to challenge the Assignment, because he was neither the record owner of the Property, nor a party or beneficiary to the Assignment. Id. at 7. finally, the Court held that the Plaintiff failed to plead his injury with specific facts and did not provide proper notice to Defendants as to which claims were asserted against them. Id. The Court thus dismissed Plaintiffs claims, but allowed him time to submit an amended complaint. ECF No. 27 at 8.

         Plaintiffs submitted their Amended Complaint on April 8. 2016. and now assert claims under the Truth in Lending Act. 15 U.S.C. § 1601 et .seq. (Count 1). breach of fiduciary duty (Count II). common law fraud and intentional infliction of emotional distress (Count III), and cancellation of instruments under the Uniform Commercial Code § 3-501 (Count IV). ECF No. 29. Plaintiffs also request "declaratory and injunctive relief in the nature of an order of cease and desist ordering the Defendants to stop foreclosure proceedings and eviction." id. at 1. and that they bring this suit as a "class action." id. at 28. The majority of Plaintiffs' Amended Complaint discusses MERS*s authority or lack thereof to effectuate the Assignment of Deed of Trust. Plaintiffs contend that "the signer of the Assignment appears to be an employee of .IP Morgan Chase Bank. NA and not a MERS executive, as alleged." ECF No. 29 at 19. Plaintiffs allege that "in court proceedings MERS has publicly disavowed any ownership interest in mortgage notes" and "there is no power of attorneys from the lenders giving MERS authority to assign the mortgages or deeds of trust." Id. at 8-9. Plaintiffs further claim that "MERS does not have a sufficient agency relationship with the lender [Greenpoint]" and "there is no agreement in writing, as required by the Maryland Statute of Frauds, between MERS and Greenpoint." Id. at 10. Plaintiffs argue that "MERS never owned the note and had no right to payments made on the note." Id. at 11. Plaintiffs also make allegations relating to their obligations to pay on the mortgage loans. Specifically, they argue that because BNY Mellon and Chase do not have the original note in their possession, but rather a scanned copy, there is no chain of title from the Lender to Defendants, and BNY Mellon and Chase cannot enforce the note. Id. at 20.

         Defendant Chase submitted a Motion to Dismiss on April 26. 2016. ECF No. 30. Defendant MERSCORP filed a Motion to Dismiss on May 11. 2016. ECF No. 35. Defendants BNY Mellon and SPS also submitted their Motion to Dismiss on May IE 2016. ECF No. 36. the Court sent letters describing Plaintiffs" rights under Fed.R.Civ.P. 12 and 56 to Plaintiffs on April 27. 2016 and May 1 2. 2016. As of January 9. 2017. Plaintiffs have not filed a Response to any of Defendants" Motions to Dismiss. Upon review of the relevant pleadings, the Court will now dismiss Plaintiffs' Amended Complaint with prejudice.


         "A defendant may test the adequacy of a complaint by way of a motion to dismiss under Rule 12(b)(6)." Maheu v. Bank of Am., N.A., No. 12-CV-508. 2012 WE 1744536. at *4 (D. Md. May 14. 2012) (citing German v. Fox, 267 F.App'x 231. 233 (4th Cir. 2008)). To overcome a Rule 12(b)(6) motion, a complaint must allege enough facts to state a plausible claim for relief. Ashcroft v. Iqbal. 556 U.S. 662. 678 (2009). A claim is plausible when "the plaintiff pleads factual content that allows the Court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id.

         In evaluating the sufficiency of the Plaintiffs' claims, the Court accepts factual allegations in the Complaint as true and construes the factual allegations in the light most favorable to the plaintiff. Albright v. Oliver. 510 U.S. 266. 268 (1994): Lambeth v. Bd of Comm 'rs of Davidson Cty., 407 F.3d 266. 268 (4th Cir. 2005). Complaints filed by pro se plaintiffs, as here, are "to be liberally construed" and "must be held to less stringent standards than formal pleadings drafted by lawyers." Erickson v. Pardus. 551 U.S. 89, 94 (2007). However, the Complaint must contain more than "legal conclusions, elements of a cause of action, and bare assertions devoid of further factual enhancement." Nemet Chevrolet. Ltd v. Inc., 591 F.3d 250. 255 (4th Cir. 2009).

         Further, in claims "alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake." Fed.R.Civ.P. 9(b). Rule 9(b) requires "that a plaintiff alleging fraud must make particular allegations of the time, place, speaker, and contents of the allegedly false acts or statements." Adams v. NVR Homes. Inc., 193 F.R.D. 243. 249-50 (D. Md. 2000): U.S. ex rel Wilson v. Kellogg Brown & Root, Inc.. 525 F.3d 370. 379 (4th Cir. 2008) (describing the "'who. what. when, where, and how of the fraud claim")."Even where a plaintiff is proceeding pro se. the particularity requirements of Rule 9(b) apply." Coulibay v. J.P. Morgan Chase Bank. N.A.. No. DKC 10-3517. 2011 WL 3476994. at *19 0.23 (D.Md. Aug. 8, 2011).

         III. ANALYSIS

         A. Violations of Truth in Lending Act ...

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