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Nolan v. Saxon Mortgage, Inc.

United States District Court, D. Maryland, Southern Division

February 16, 2017

VICKI R. NOLAN, Plaintiff,
SAXON MORTGAGE, INC., et al., Defendants.


          GEORGE J. HAZEL, United States District Judge

         This removal action stems from pro se Plaintiff Vicki Nolan's ("Plaintiff* or "Nolan") fraud claims against Defendants Saxon Mortgage. Inc. ("Saxon Mortgage") and Deutsche Bank National Trust Company ("Deutsche Bank") regarding a mortgage Nolan received in 2007. Several dispositive motions are pending hefore the Court: Saxon Mortgage's Motion to Dismiss. ECF No. 11. Deutsche Bank's Motion to Dismiss, ECF No. 14. and Saxon Mortgage's "Suggestion that the Court lacks subject-matter jurisdiction over Plaintiffs claims." ECF No. 35. which the Court will construe as a Supplemental Motion to Dismiss. A hearing is unnecessary. Loc. R. 105.6 (D. Md. 2016). For the reasons stated below, the Court will grant Defendant Saxon Mortgage's Supplemental Motion to Dismiss. ECF No. 35. and deny the Defendants" remaining Motions to Dismiss as moot.

         I. BACKGROUND

         On July 11. 2007. Nolan obtained a $192, 500.00 loan from Saxon Mortgage. Inc.. ECF No. 2 ¶ 6. and signed a deed of trust, securitizing the loan with property located at 6906 Mountain Lake Place. Capitol Heights, Maryland 20743. Id. ¶¶ 7-9: see also ECF No. 2 at 25- 26.[1] On the same day. Saxon Mortgage assigned the loan and deed of trust to Deutsche Bank National Trust Company as Trustee for Saxon Asset Securities Trust 2007-4. Id. ¶ 10; see also ECF No. 2 at 48. Several years later, on July 29. 2011. Nolan, represented by counsel. Hied a Voluntary Petition for Chapter 7 Bankruptcy with the United States Bankruptcy Court for the District of Maryland. See In re Nolan. No. 11-25662-TJC (Bankr. D. Md. 2011). B. Dkt. No. I.[2]As part of her Bankruptcy Petition. Plaintiff was required to list all of her assets, including "other contingent and unliquidated claims of every nature." B. Dkt. No. 47 at 6. On January 9. 2012. the Bankruptcy Court issued an order discharging Plaintiff. B. Dkt. No. 61.

         Plaintiff initiated the present proceedings on February 18, 2016, by filing a Complaint in the Circuit Court for Prince George's County. ECF No. 2. In her Complaint. Plaintiff appears to argue that the July 11. 2007 assignment of her loan from Saxon Mortgage. Inc. to Deutsche Bank National Trust Company as Trustee for Saxon Asset Securities was void because the loan needed to be assigned first to two other companies, Saxon Funding Management, PLC and Saxon Asset Securities Company, before it could be assigned to Deutsche Bank. ECF No. 2 ¶¶ 10-12; see also ECF No. 2 at 58.[3] Plaintiff argues that because the assignment is void, the Court should declare that the Defendants have no interest in the property and that she is the sole owner. ECF No. 2 ¶ 67. In conjunction with this request for declaratory relief. Plaintiff brings several claims against each Defendant regarding the allegedly fraudulent assignment of the loan. Specifically, she brings four claims against Saxon Mortgage alone alleging: (1) Fraud in the Concealment; (2) Unconscionable Contract; (3) Breach of Contract; and (4) Breach of Fiduciary Duty. Id. ¶¶ 18- 48. In addition, she brings her final two claims. (5) Slander of Title and (6) Intentional Infliction of Emotional Distress against both Defendants. Id. ¶¶ 49-64. While not stated as a specific claim. Plaintiff also appears to allege that Saxon Mortgage violated a section of the Truth in Lending Act. 15 U.S.C. § 1641(g), by failing to record and notify Plaintiff of the assignment of her loan within thirty days of the assignment taking place. ECF No. 2 ¶ 14.

         On April 19. 2016. Defendant Deutsche Bank removed the case to this Court. ECF No. 1. Saxon Mortgage filed a Motion to Dismiss on April 25. 2016, ECF No. 11. In its Motion, Saxon Mortgage argues that the case should be dismissed pursuant to either Federal Rule of Civil Procedure 12(b)(5) for failure to properly serve the Defendant, or 12(b)(6) for failure to state a claim for relief. ECF No. 11-1 at 7-8: 10-21. Alternatively. Saxon Mortgage argues that the Court should abstain from the case because of prior, on-going foreclosure proceedings against Plaintiff in Maryland state court. Id. at 9-10. Deutsche Bank makes similar arguments in its Motion to Dismiss. ECF No. 14. and also expressly adopts and incorporates the arguments of its co-defendant into its Motion. ECF No. 14 at 10.

         On August 1, 2016. the Court granted Plaintiff's Motion for Extension of Time. ECF No. 27. providing Plaintiff with seven additional days to respond to Defendants' pending motions. ECF No. 29. On August 24. 2016. Plaintiff filed a Response in Opposition to Saxon Mortgage's Motion to Dismiss. ECF No. 31. On November 30, 2016. Defendant Saxon Mortgage filed a Supplemental Motion to Dismiss. ECF No. 35, arguing that Plaintiff lacked standing to assert her claims because they were the property of the bankruptcy estate, ECF No. 35 at 1, and thus, the Court lacked subject matter jurisdiction over the case. On January 23, 2017. the Court mailed Plaintiff a letter notifying her that failure to respond to Saxon Mortgage's Supplemental Motion to Dismiss could result in dismissal of her case. ECF No. 36. On February 10. 2017, Plaintiff filed an opposition to Defendant's Motion to Dismiss and Objection to Summary Judgment and Plaintiff Motion for Declaratory Relief and Damages. ECF No. 37.[4]


         "[C]ourts generally analyze issues of standing pursuant to Rule 12(b)(1)." Borlo v. Navy Fed. Credit Union. 458 B.R. 228. 231 (D. Md. 2011). which governs motions to dismiss for lack of subject matter jurisdiction. Fed. R. Civ. Pro. 12(b)(1). "It is well established that before a federal court can decide the merits of a cldm. the claim must invoke the jurisdiction of the court." Miller v. Brown, 462 F.3d 312. 316 (4th Cir. 2006) (citation omitted). Thus, "[t]he objection that a federal court lacks subject matter jurisdiction may be raised by a party, or by a court on its own initiative, at any stage in:he litigation ...." Arbaugh v. Y& HCorp.. 546 U.S. 500. 506 (2006) (citations omitted). Once a challenge is made to subject matter jurisdiction, the plaintiff bears the burden of proving that the Court has subject matter jurisdiction. See Evans v. B.F. Perkins Co.. a Div. of Standex Int'l Corp., 166 F.3d 642. 647 (4th Cir. 1999); see also Ferdinand-Davenport v. Children's Guild 742 F.Supp.2d 772. 777 (D. Md. 2010).

         The court should grant a Rule 12(b)(1) motion "only if the material jurisdictional facts are not in dispute and the moving party is entitled to prevail as a matter of law." Evans, 166 F.3d at 647. In ruling on a motion under Rule 12(b)(1), the court "should "regard the pleadings as mere evidence on the issue, and may consider evidence outside the pleadings without converting the proceeding to one for summary judgment."" Ferdinand-Davenport, 742 F.Supp.2d at 777 (quoting Evans. 166 F.3d at 647); see also Richmond, Fredericksburg & Potomac R.R. Co. v. United States. 945 F.2d 765. 768 (4th Cir. 1991).


         A. Lack of Subject Matter Jurisdiction

         Defendant Saxon Mortgage argues that Plaintiff lacks standing to pursue her claims because they accrued before she filed for bankruptcy and. thus, became part of the bankruptcy estate when she initiated bankruptcy proceedings in 2011. ECF No. 35 at 3-6. Therefore, Saxon Mortgage argues, only the trustee of the bankruptcy estate has standing to assert the claims that Plaintiff raises in her Complaint. Id. While Plaintiff makes general denials in her response, she fails to assert any specific facts to refute Defencanf s claim that she lacks standing. ECF No. 37.

         When an individual files a petition for bankruptcy, a bankruptcy estate is created. This estate "consists of all of the property that will be subject to the jurisdiction of the bankruptcy court" and is used to pay the debtor's creditors. 5-541 Collier on Bankruptcy P 541.01 (16th 2016). The Bankruptcy Code construes property broadly and specifically notes that the estate should include "all legal or equitable interests of the debtor in property as of the commencement of the case." 11 U.S.C. § 541 (a)(1). "Such property interests include nombankruptcy causes of action that arose out ...

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