Dolores-Rose Dauenhauer v. The Bank of New York Mellon
562 F. App'x 473
6th Cir.2014Background
- Borrowers challenge foreclosure by five institutions after their loan was securitized; they allege clouded title and improper assignments, seeking six claims and declaratory relief to block foreclosure.
- Borrowers signed a Deed of Trust naming MERS as nominee and agent for the lender; the Note and Deed of Trust allegedly were separated through securitization.
- District court dismissed the entire complaint for failure to state a claim; foreclosure proceeds remained pending or scheduled.
- On appeal, Borrowers challenge securitization, assignment, and pooling theories, and press six statutory and common-law claims.
- Court addresses whether MERS was valid as nominee, whether securitization affected enforceability, and whether Borrowers state viable claims under quiet title, fraud, TCPA, FDCPA, slander of title, and civil conspiracy.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Securitization and assignment validity | Borrowers contend the Note was securitized and properly assigned; they claim the Trust lacked valid authority to foreclose. | Defendants rely on MERS as nominee; transfer of the Note carries the lien; securitization does not void obligations. | District court’s securitization/assignment analysis affirmed; securitization did not void debt or foreclosure. |
| MERS as nominee and validity of assignment | Borrowers argue the MERS assignment and status as beneficiary were invalid. | MERS validly served as nominee/agent; Deed of Trust language permits transfers. | Court affirmed validity of MERS assignment and denied challenge to MERS’s role. |
| Pooling and Servicing Agreement standing | Borrowers claim violations of pooling agreement and lack of standing to challenge foreclosure. | Borrowers not parties or intended beneficiaries; no standing to enforce the pooling agreement. | Borrowers lack standing; dismissal affirmed for failure to state a claim. |
| Fraudulent misrepresentation pleading | Borrowers allege misrepresentations and demand disclosure under TILA/RESPA. | Fraud claims not pled with particularity; no cognizable duty to disclose as alleged. | Fraud claim dismissed for failure to plead with particularity; no TILA/RESPA duty shown. |
| Quiet title claim | Borrowers seek title cure via quiet title against defendants. | No payment of debt shown; MERS remained title holder until debt paid in full. | Quiet title claim dismissed; no show of owner's title by Borrowers. |
Key Cases Cited
- Hoyal v. Bryson, 53 Tenn. 139 (1871) (requires rightful title for quiet title action)
- Waterhouse v. McPheeters, 145 S.W.2d 766 (Tenn. 1940) (malice essential for slander of title)
- Coffey v. Foamex LP, 2 F.3d 157 (6th Cir. 1993) (fraud pleading requires particularity under state rule analogous to Rule 9)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (requiring plausible pleading; no bare legal conclusions)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (requires more than mere speculation to state a claim)
- Lewis v. ACB Bus. Servs., Inc., 135 F.3d 389 (6th Cir. 1998) (definition of debt collector under FDCPA)
- W.C. Early Co. v. Williams, 186 S.W.2d 102 (Tenn. 1916) (transfer of note carries with it lien of deed of trust)
- Clark v. Jones, 27 S.W. 1009 (Tenn. 1894) (note transfer carries lien; no need for separate recordation)