916 F. Supp. 2d 1332
N.D. Ga.2013Background
- Plaintiff Moore obtained a loan from Countrywide in 2005 and granted MERS, as nominee, a security interest in her property in Georgia.
- MERS assigned the Security Deed and note to BACHLS (Bank of America Home Loans Servicing) in 2010 to secure the loan.
- Foreclosure sale occurred on July 6, 2010; a Deed Under Power and later a corrective deed reflected borrower name corrections.
- Plaintiff alleged wrongful foreclosure, constructive fraud, and an FDCPA claim in amended complaint filed April 10, 2012.
- Defendants moved to dismiss for failure to state a claim; MERS moved to dismiss for lack of service before removal and lack of personal jurisdiction after removal.
- Magistrate Judge recommended dismissal of the amended complaint against all defendants, with MERS dismissed without prejudice and others dismissed with prejudice; district court adopted and granted the motions.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether service on MERS was proper pre-removal or post-removal | Moore served a nonregistered individual and contends post-removal service suffices. | Service was improper under Georgia law and Fed. R. Civ. P. 4(h); re-service required; failure to re-serve merits dismissal. | MERS dismissed without prejudice for improper service. |
| Whether the amended complaint states a legal claim for wrongful foreclosure | Foreclosure was wrongful due to misidentification and defective assignment. | MERS had right to foreclose; assignments valid; no tender requirement shown for wrongful foreclosure claim. | Count I dismissed with prejudice for failure to state a claim. |
| Whether plaintiff has standing to challenge the assignment | Plaintiff can attack the assignment to challenge foreclosure. | Borrower lacks standing to challenge assignment absent beneficiary status. | Plaintiff lacks standing; assignment challenge dismissed. |
| Whether the FDCPA claims against McCalla and BACHLS survive | Defendants were debt collectors for the foreclosure and violated FDCPA. | There was an enforceable security interest; FDCPA claims not applicable except possibly §1692f(6). | FDCPA claim dismissed with prejudice. |
| Whether constructive fraud and emotional distress claims survive | Signatures of officers on the assignment were fraudulent; warrantries breached. | No fiduciary duty; misstatements lack particularity and damages causal link; distress claims subsumed by wrongful foreclosure. | Counts II and related emotional distress claims dismissed with prejudice. |
Key Cases Cited
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (U.S. 2007) (complaint must plead plausible entitlement to relief)
- Erickson v. Pardus, 551 U.S. 89 (U.S. 2007) (short, plain complaint standard; notice pleading)
- Hardy v. Regions Mortg., Inc., 449 F.3d 1357 (11th Cir. 2006) (pleading standards; notice required but not detail)
- Albra v. Advan, Inc., 490 F.3d 826 (11th Cir. 2007) (actual notice cannot cure insufficient service)
- Piggly-Wiggly Ga. Co. v. May Investing Corp., 189 Ga. 477 (Ga. 1939) (service of process requirements strict; preclusion of cure by knowledge)