Busby v. Capital One, N.A.
2013 U.S. Dist. LEXIS 41163
| D.D.C. | 2013Background
- Busby, pro se, amended complaint in DC Superior Court asserting claims about a 1996 loan, note, and deed of trust; Capital One removed the action to federal court.
- Busby alleges Capital One lacked authority to foreclose, misrepresented its status, misapplied payments, and that the Deed of Appointment and Notice of Foreclosure are fraudulent.
- Busby previously litigated related claims in Busby I; Judge Urbina dismissed most claims without prejudice, leaving only breach of fiduciary duty against Prensky, then Busby’s appeal was dismissed as premature.
- In the current action, Busby added the Recorder as a defendant seeking declaratory and injunctive relief to strike records; Capital One contends removal is proper and the case is diverse with enough amount in controversy.
- The court ultimately denies the remand and grants in part Capital One’s 12(b)(6) motion, dismissing multiple counts with prejudice but allowing conversion (Count VI) and certain relief against the Recorder and Prensky to proceed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether removal was proper and jurisdiction exists | Busby contends removal was improper and lacks jurisdiction. | Capital One asserts proper removal and federal jurisdiction. | Removal proper; complete diversity exists and amount in controversy exceeds $75,000. |
| Whether Recorder is a proper diversity-destroying defendant | Busby argues Recorder destroys complete diversity. | Recorder is a nominal party with no real stake; should be disregarded for diversity. | Recorder is nominal; diversity exists between Busby and Capital One/Prensky. |
| Whether fraud claims were sufficiently pled under Rule 9(b) and Rule 8 | Busby pled multiple misrepresentations by Capital One and fraudulent documents. | Allegations lack particularity and fail to show detrimental reliance and timing. | Counts II and III dismissed for failure to plead fraud with particularity; Counts VIII–X also fail; Counts II and III dismissed with prejudice. |
| Whether conspiracy and related nuisance counts survive | Busby alleges conspiracy to defraud and civil conspiracy. | Lack of underlying fraud and missing pleading of an agreement defeat these claims. | Counts III and VII dismissed with prejudice. |
| Whether conversion claim can survive | Capital One misapplied payments and asserted control over funds. | Any conversion claim must be evaluated against the loan documents and alleged default. | Conversion survives in part as to misapplied loan payments; Deed of Trust conversion dismissed; claims against Prensky dismissed in full. |
Key Cases Cited
- Navarro Sav. Ass’n v. Lee, 446 U.S. 458 (1980) (ignore nominal parties for diversity; focus on real parties)
- Lincoln Prop. Co. v. Roche, 546 U.S. 81 (2005) (real party inquiry for jurisdiction; ministerial acts)
- Brown v. Brown & Williamson Tobacco Corp., Brown v. Brown & Williamson Tobacco Corp., 26 F. Supp. 2d 74 (1998) (fraudulent joinder standards for removing party)
- Baker v. Director, U.S. Parole Comm’n, 916 F.2d 725 (D.C. Cir. 1990) (sua sponte Rule 12(b)(6) dismissal when failure to plead beyond possibility)
- Davis v. World Savings Bank, 869 F. Supp. 2d 159 (D.D.C. 2011) (amount in controversy in loan-related rescission/foreclosure cases)