Leake v. PRENSKY
798 F. Supp. 2d 254
| D.D.C. | 2011Background
- Karissa Leake purchased the property at 1428 Newton Street NW in 2004, financing with a $150,500 promissory note and securing it with a Deed of Trust.
- The Deed named B.F. Saul Mortgage Co. as lender and David N. Prensky as Trustee; the Note was indorsed in blank and later transferred through Chevy Chase Bank to Capital One.
- Capital One acquired Chevy Chase Bank's rights in February 2009 and thus became the holder of the Note with the ability to enforce its terms.
- After defaults and notices of foreclosure, Capital One and Prensky conducted a foreclosure sale; Leake challenged the sufficiency of the chain of title and the recording of assignments.
- Intervenor 1900 11th St NW LLC purchased the property at the foreclosure sale for $508,000 and seeks to avoid accruing interest during pending litigation while awaiting settlement.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the foreclosure was defective for lack of proper assignment/recording of the Note. | Leake argues Capital One lacked standing due to improper assignment/recordation. | Capital One was the Note holder and proper to foreclose; no requirement to record assignment for standing. | Foreclosure valid; claims dismissed. |
| Whether the action can be grounded on HAMP as a private right of action. | Leake asserts HAMP requires lenders to halt foreclosures during modification. | HAMP does not create a private right of action for borrowers. | HAMP does not provide a private right of action; claim dismissed. |
| Whether the intervenor is entitled to declaratory relief to abate interest accrual. | Intervenor seeks relief to stop interest during litigation. | Contractual terms fix interest accrual regardless of litigation posture. | Relief denied; contract controls. |
Key Cases Cited
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (U.S. 2007) (plausibility standard for pleading claims)
- Ashcroft v. Iqbal, 556 U.S. 662 (U.S. 2009) (plausibility requirement applied to complaints)
- Atherton v. District of Columbia, 567 F.3d 672 (D.C. Cir. 2009) (accept facts as true and draw reasonable inferences)
- Kowal v. MCI Commc'ns Corp., 16 F.3d 1271 (D.C. Cir. 1994) (pleading standards in the circuit)
- Hinton v. Corrections Corp. of Am., 624 F.Supp.2d 45 (D.D.C. 2009) (consideration of materials outside the complaint on motion to dismiss)
- Smith v. Wells Fargo Bank, 991 A.2d 20 (D.C. 2010) (note transfer carries with it security for payment)