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Young v. Ditech Financial, LLC

United States District Court, D. Maryland

July 19, 2017

DALE YOUNG, Plaintiff,
v.
DITECH FINANCIAL, LLC, et al., Defendants.

          MEMORANDUM OPINION

          Paula Xinis United States District Judge.

         Pending before the Court are motions to dismiss pursuant to Rules 12(b)(1) and 12(b)(6) of the Federal Rules of Civil Procedure filed by Defendants Ditech Financial LLC (“Ditech”), ECF No. 12, BWW Law Group, LLC (“BWW”), ECF No. 20, Ocwen Loan Servicing, LLC (“Ocwen”), ECF No. 27, and U.S. Bank, National Association (“US Bank”), Mark Runkel and P.W. Parker, ECF No. 29. The issues are fully briefed, and the Court now rules pursuant to Local Rule 105.6 because no hearing is necessary. For the reasons stated below, the Defendants' motions are granted pursuant to Rule 12(b)(6).

         I. BACKGROUND

         A. Factual and Procedural History[1]

         On July 27, 2007, Plaintiff Dale Young executed an Adjustable Rate Note in the amount of $216, 000.00 to Homecomings Financial, LLC, fka Homecomings Financial Network, Inc. (“Homecomings”). ECF No. 27-2. The Note includes a special indorsement from Homecomings to Residential Funding Company, LLC; an allonge containing a special indorsement from Residential Funding Company, LLC to GMAC Mortgage, LLC; and a blank indorsement from GMAC Mortgage, LLC making the Note payable to the bearer. See ECF No. 27-2 at 5-6. Plaintiff alleges that during the foreclosure action, Ditech held the Note. See Affidavit of Dale Young, ECF No. 1-6 at 10 (“They have breeched [sic] the Deed of Trust agreement for the ALLEGED DITECH FINANCIAL, LLC ACCOUNT # 3738762 . . . They have no legal standing to further collect on the [Ditech Account], and all collection activity will cease with no further payments collectable or due on the [Ditech Account] . . .[they] forever waive any right to collect, sell or transfer the alleged debt regarding the [Ditech Account] through or by any judicial or non-judicial means.”).

         The Note was secured by a Deed of Trust for a property located at 1314 Dillon Court, Capitol Heights, Maryland 20743 (“the Property”). ECF No. 29-4 at 1. The Deed of Trust was also executed on July 27, 2007 by Plaintiff to Homecomings and was recorded among the Land Records of Prince George's County, Maryland. ECF No. 29-4. The Deed of Trust, signed by Plaintiff, named Mortgage Electronic Registration Systems, Inc. (“MERS”) the beneficiary under the security interest as the nominee for Homecomings, its successors, and assigns. ECF No. 29-4. On December 10, 2014, MERS executed and recorded an Assignment of Deed of Trust in the Land Records of Prince George's County, Maryland, which granted all beneficial interest under the Deed of Trust to Defendant Ocwen. See ECF No. 1-2.

         On September 9, 2015, Defendant BWW was recorded as the substitute trustees for the Deed of Trust, see ECF No. 29-1, and they initiated a foreclosure action in the Circuit Court of Prince George's County, Maryland. Ward v. Young, Case No. CAEF15-25198, (the “State Foreclosure Action”); see also Maryland Judiciary Case Search, ECF No. 27-7.[2] On January 11, 2016, Plaintiff filed a Motion to Dismiss the State Foreclosure Action in circuit court. See ECF No. 29-1 at 1-5, 25-31. The substitute trustees, BWW, filed a Report of Sale on February 16, 2016. ECF No. 27-7. On March 1, 2016, the circuit court denied Plaintiff's Motion to Dismiss. ECF No. 29-2.

         On September 21, 2016, following the circuit court's denial of his motion and while the sale of the property was pending ratification, Plaintiff sent correspondence to his new loan servicer, Specialized Loan Servicing LLC. See Letter from Loan Servicer, ECF No. 1-3 at 2. In its October 7, 2016 response, Specialized Loan Servicing LLC notified Plaintiff that U.S. Bank was the current noteholder “as Indenture Trustee of the GMACM Home Equity Loan Trust 2006-HE4.” Letter from Loan Servicer, ECF No. 1-3 at 2; see also Complaint, ECF No. 1 at 21- 22.

         On December 12, 2016, the circuit court entered an Order ratifying the sale of the Property. ECF No. 29-3. Two days later, on December 14, 2016, Plaintiff filed the instant Complaint in this Court. See Complaint, ECF No. 1. On January 9, 2017, after Plaintiff filed his federal Complaint, he appealed the state court order ratifying the foreclosure sale. See State Foreclosure Action, Dkt. No. 21. On March 31, 2017, the Court of Special Appeals dismissed Plaintiff's appeal, id. at Dkt. No. 30, and on May 12, 2017, dismissed his Petition to Vacate the Order Dismissing the Appeal, id. at Dkt. No. 32.

         B. Plaintiff's Claims in the Instant Action

         Liberally construed, Plaintiff asserts four primary factual allegations in his Complaint. First, Plaintiff avers that Defendants are barred from foreclosing on the Property because the securitization of Plaintiff's loan resulted in the mortgage being paid off via an unknown mortgage insurer, thereby wholly satisfying the debt to Defendants. See Complaint, ECF No. 1 at 4, 14-15. Second, Plaintiff alleges that because the Note and Deed of Trust were separated when the Note was sold into a loan pool, the chain of title was broken. See Id. at 4, 7. Third, Plaintiff claims that the Deed of Trust could not be assigned while GMAC-a prior holder of the Note- was in bankruptcy. See Id. at 3. Finally, Plaintiff contends that Defendants lacked standing to foreclose because the Assignment of Deed of Trust was forged and false. See Id. at 13.

         Based on these allegations, Plaintiff asserts causes of action against all Defendants for: (1) violation of the Racketeer Influenced and Corrupt Organizations Act (“RICO”); (2) fraud; (3) unjust enrichment; (4) insurance fraud; (5) breach of contract; (6) bad faith; (7) violation of the Fair Debt Collection Practices Act (“FDCPA”); and (8) negligent misrepresentation. See Complaint, ECF No. 1. Additionally, Plaintiff's Complaint “seek[s] an emergency Temporary Restraining Order to take effect immediately, ” ECF No. 1 at 52, a declaration that the Note is “null, void, [and] legally unenforceable, ” id. at 55, and “an order halting the foreclosure of all real estate in the United States of America by any of the Defendants . . . which includes injunctions on any post-foreclosure activities, ” id. at 52.

         II. ANALYSIS

         A. Lack of Subject Matter Jurisdiction

         Defendants argue that Plaintiff's Complaint lacks subject matter jurisdiction under the Rooker-Feldman doctrine, [3] or alternatively, the Younger abstention doctrine. Plaintiff bears the burden of proving the existence of subject matter jurisdiction. See Evans v. B.F. Perkins, Co., 166 F.3d 642, 647 (4th Cir. 1999). When a defendant argues lack of subject matter jurisdiction, the allegations in the complaint are assumed to be true under the same standard as in a Rule 12(b)(6) motion, and “the motion must be denied if the complaint alleges sufficient facts to invoke subject matter jurisdiction.” Kerns v. United States, 585 F.3d 187, 192 (4th Cir. 2009). When a defendant asserts that facts outside of the complaint deprive the court of jurisdiction, the Court “may consider evidence outside the pleadings without converting the proceeding to one for summary judgment.” Velasco v. Gov't of Indonesia, 370 F.3d 392, 398 (4th Cir. 2004); Kerns, 585 F.3d at 192. The court should grant a Rule 12(b)(1) motion based on a factual challenge to subject matter jurisdiction “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 (quoting Richmond, Fredericksburg & Potomac R. Co. v. United States, 945 F.2d 765, 768 (4th Cir. 1991)).

         1. Rooker-Fe ...


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