Fontaine v. Jpmorgan Chase Bank, N.A.Fontaine v. Jpmorgan Chase Bank, N.A.
Mark Anthony Smith, Smith Cowett, LLP, Washington, DC, for Defendants.
MEMORANDUM OPINION
KETANJI BROWN JACKSON, United States District Judge
Plaintiff Julie Elice Fontaine (“Plaintiff” or “Fontaine“), proceeding pro se, has filed a complaint challenging the potential future foreclosure of property that she owns in Jacksonville, Florida. (See Compl., ECF No. 1.) Fontaine seeks an injunction to prevent two institutional defendants—JP Morgan Chase Bank, N.A. (“Chase“) and Federal National Mortgage Association (“Fannie Mae“) and ten John Does (collectively, “Defendants“) from foreclosing on 4544 Deer Valley Drive (“the Property“) at some point in the future, and she also claims that Defendants’ past actions
As explained further below, this Court concludes that it does not have subject matter jurisdiction to consider Fontaine‘s challenge to a hypothetical potential future foreclosure proceeding—which is the only foreclosure-related injury that the instant complaint alleges. Moreover, given existing precedent in this jurisdiction and elsewhere, Fontaine‘s claims and allegations regarding Defendants’ wrongful treatment of the mortgage Note plainly fail to state a claim upon which relief can be granted. Consequently, despite the fact that Defendants have elected to file an answer containing myriad affirmative defenses rather than moving to dismiss the complaint (see Chase Answer, ECF No. 10, at 8-9; Fannie Mae Answer, ECF No. 11, at 8-9), Fontaine‘s complaint must be DISMISSED in its entirety sua sponte. A separate order consistent with this opinion will follow.
I. BACKGROUND
Fontaine‘s 44-page complaint, which was filed on November 27, 2013, is exceedingly difficult to decipher. Relevant to the Property at issue here, the complaint alleges that Fontaine initially entered into a mortgage agreement with PHH Mortgage Corporation (“PHH“) and that PHH later assigned the mortgage to Chase (id. ¶¶ 3, 6; Assignment of Mortg., Ex. 3 to Compl., ECF No. 1-3 at 2), but it purportedly did not pass the physical Note to Chase at that time of the assignment. (See Compl. ¶¶ 8, 16.)1 That assignment was recorded in the Clerk‘s Office for Duval County, Florida (see Ex. 3 to Compl.), and at some point thereafter, one of the defendants securitized the Note and passed ownership of it to a different party. (See Compl. ¶¶ 17, 21, 25, 44.)
These basic allegations of fact are the basis for the complaint‘s contention that the assignment and securitization of Fontaine‘s mortgage Note—in particular, the fact that the assignment allegedly was not accompanied by a physical transfer of the Note and securitization further separated the mortgage from the Note—was wrongful. (See id. ¶ 48). Fontaine contends that, because the original Note was not physically transferred, the assignment of the Note was invalid and fraudulent such that Defendants would not have standing to foreclose on the Property if they do attempt to do so in the future. (See, e.g., id. ¶¶ 45-49.) Fontaine also alleges that Defendants’ handling of the Note, and any possible future foreclosure action, violated her due process rights under the Fifth and Fourteenth Amendments of the Constitution (id. ¶ 83), as well as the Consent Orders issued in United States v. Bank of America, No. 12-361 (D.D.C. Apr. 4, 2012) (Compl. ¶¶ 3, 34, 37), and additionally constituted intentional infliction of emоtional distress (id. ¶ 51). Based on these claims, Fontaine requests compensatory and punitive damages; a cease and desist order admonishing Defendants not to engage in any future foreclosure proceedings related
Notably, the complaint does not state that any foreclosure proceedings have been initiated, or even threatened, with respect to the Property. Although the complaint repeatedly alleges that Defendants “claim authority to foreclose and hold a foreclosure sale” (Compl. ¶ 53 (emphasis supplied); see also id. ¶¶ 14, 43)—a proposition that Fontaine vehemently denies—the complaint also emphatically maintains that Fontaine has not already defaulted on her mortgage obligations. (See, e.g., id. ¶ 15 (“Plaintiff is not in foreclosure nor ha[s she] been late with mortgage payments for any significant period or significant number of times.“)). Therefore, the gravamen of Fontaine‘s complaint appears to be that Defendants might at some point in the future decide to foreclose on the Property if Fontaine happens to default on her mortgage obligations, and that the Court should determine now whether Defendants’ actions (i.e., assignment of the mortgage without physical possession of the Note and securitization of the Note) destroyed the mortgage interest such that any such future foreclosure would be inappropriate. (See, e.g., Compl. ¶ 52 (“The Defendants have a duty to refrain from рroceeding in the future with claims of ownership of the Note or Mortgage when they lack standing and capacity because they do not have the Note in their possession as required [by law].“); see also id. ¶ 17 (“Plaintiff may eventually be evicted from [her] home if Plaintiff is not successful in achieving a court order of cease and desist in this case if Defendants, et al., conspire to move forward with a foreclosure, albeit illegally.“); id. ¶ 19 (asserting that “the securitization process” has caused “confusion and uncertainty about who the Note-holder” is)).
The institutional Defendants answered Fontaine‘s complaint on February 4, 2014. (See Answers, ECF No. 10-11.)2 They assert seven affirmative defenses, including failure to state a claim upon which relief may be granted, Fontaine‘s own breach of contract and unclean hands, and lack of standing. (See id. at 8-9.) With respect to Plaintiff‘s request for an injunction specifically, Defendants maintain that Fontaine lacks irreparable injury and that she has an adequate remedy at law, both of which bar injunctive relief. (See id.) Finally, with respect to Fontaine‘s due process allegations, Defendants’ answer asserts that the lack of government action bars the claim. (See id.)
The issue for the Court at present is whether there is subject matter jurisdiction in this case, and also whether the complaint so patently fails tо state a claim that it may be dismissed sua sponte at this point in the litigation, despite the fact that there is no pending motion to dismiss. See Kidwell v. FBI, 813 F.Supp.2d 21, 27-28 (D.D.C. 2011) (citing Best v. Kelly, 39 F.3d 328, 331 (D.C. Cir. 1994)); see, e.g., Strunk v. Obama, 880 F.Supp.2d 1, 4-5 (D.D.C. 2011); Perry v. Discover Bank, 514 F.Supp.2d 94, 95 (D.D.C. 2007). As explained below, the Court concludes that Fontaine‘s complaint can, and must, be dismissed.
A. Dismissal For Lack Of Subject Matter Jurisdiction
As courts of limited jurisdiction, federal courts are required to assess their own jurisdiction over any controversy they hear, even when the parties have not asserted any jurisdictional question. See Noel Canning v. NLRB, 705 F.3d 490, 496 (D.C. Cir. 2013) (citation omitted). Fоr that reason, doubts about “subject matter jurisdiction may be raised at any time, even by the court sua sponte.” Jerez v. Republic of Cuba, 777 F.Supp.2d 6, 15 (D.D.C. 2011) (citations omitted); see also Evans v. Suter, No. 09-5242, 2010 WL 1632902, at *1 (D.C. Cir. Apr. 2, 2010); G. Keys PC/Logis NP v. Pope, 630 F.Supp.2d 13, 15 (D.D.C. 2009) (“When it perceives that subject matter jurisdiction is in question, the Court should address the issue sua sponte.” (citation omitted)). Moreover, under
In assessing its jurisdiction over the claims presented pursuant to
Although pro se complaints must be liberally construed, see Haines v. Kerner, 404 U.S. 519, 520 (1972), United States v. Byfield, 391 F.3d 277, 281 (D.C. Cir. 2004), this “benefit is not [ ] a license to ignore the
B. Dismissal For Failure To State A Claim
“Ordinarily, the sufficiency of a complaint is tested by a motion brought under
In deciding whether to dismiss a complaint for failure to state a claim, the court “must treat the complaint‘s factual allegations—including mixed questions of law and fact—as true and draw all reasonable inferences therefrom in the plaintiff‘s favor.” Epps v. U.S. Capitol Police Bd., 719 F.Supp.2d 7, 13 (D.D.C. 2010) (citing Holy Land Found. for Relief & Dev. v. Ashcroft, 333 F.3d 156, 165 (D.C. Cir. 2003) and Browning v. Clinton, 292 F.3d 235, 242 (D.C. Cir. 2002)). However, the court need not accept as true inferences unsupported by the facts set out in the complaint or legal conclusions cast as factual allegations. Browning, 292 F.3d at 242.
Notably, a pro se litigant‘s complaint is generally held to less stringent standards than formal pleadings that lawyers draft. See Haines, 404 U.S. at 520. But the procedural rules must be followed nonetheless, and district courts have discretion to dismiss a pro se plaintiff‘s complaint sua sponte for non-compliance. See Kidwell, 813 F.Supp.2d at 27-28 (citation omitted); see, e.g., Strunk, 880 F.Supp.2d at 3; Perry, 514 F.Supp.2d at 95. Courts may dismiss a complaint sua sponte where there is simply “no factual or legal basis for alleged wrongdoing by defendants,” Perry, 514 F.Supp.2d at 95, such that it is patently obvious that thе plaintiff cannot prevail on her claims. See Best, 39 F.3d at 331; Baker, 916 F.2d at 726; see, e.g., Jessup v. Progressive Funding, No. 13-0248, 35 F.Supp.3d 25, 36, 2014 WL 1268809, at *7 (D.D.C. Mar. 28, 2014); cf. Vahidallah v. Chase Bank, No. 13cv590, 2013 WL 3777181, at *1 (S.D. Cal. July 16, 2013) (sua sponte dismissing pro se mortgage and foreclosed-related complaint pursuant to Rules 8 and 12(b)(6)); Sainte v. Suntrust Mortg., Inc., No. 10-cv-1637, 2010 WL 4639242, at *1 (N.D.Ga. Sept. 15, 2010) (recommending sua sponte dismissal under
III. ANALYSIS
A. Fontaine‘s Challenge To Potential Future Foreclosure
As explained above, Fontaine‘s complaint asks this Court to block a potential future foreclosure that has not yet happened, and indeed, has not even seriously been contemplated given the circumstances alleged here. But it is clear beyond cavil that federal courts only have subject matter jurisdiction if there is a “Case” or “Controvers[y]” to be decided,
The instant complaint clearly misses the mark as far as injury allegations are concerned. Far from establishing that Fontaine has already lost her house in foreclosure, or even that foreclosure is a realistic possibility, the complaint alleges that Fontaine is not delinquent on her mortgage payments. (Compl. ¶ 15.) Thus, the complaint raises only the specter of potential foreclosure—i.е., that Fontaine could “eventually be evicted from [her] home . . . if Defendants . . . conspire to move forward with a foreclosure” sometime in the future. (Id. ¶ 17.) Such an eviction possibility is purely hypothetical, which means that Fontaine has failed to allege the requisite injury in fact for the purpose of establishing constitutional standing. See, e.g., Molina v. FDIC, 870 F.Supp.2d 123, 130-32 (D.D.C. 2012) (holding that plaintiff lacked standing to sue loan servicer on the basis of allegedly discriminatory foreclosurе practices when the complaint did not allege that the plaintiff was delinquent on his mortgage payments, or “that plaintiff lost his house in a foreclosure[,]” or even that he was funneled toward foreclosure” by the defendant, so there was no injury in fact); Dicion v. Mann Mortg., LLC, No. 13-0533, 2014 WL 1366151, at *1, 4 (D.Haw. Apr. 4, 2014) (holding that plaintiff lacked standing to sue defendant mortgagors and loan servicers to challenge foreclosure and assignment of the mortgage note because plaintiff did not allege that the loan was in default or that any defendant had initiated foreclosure proceedings, so there was no injury in fact). Consequently, this Court lacks subject matter jurisdiction over Fontaine‘s claim for injunctive relief and that
B. Fontaine‘s Challenge To Defendants’ Securitization Of The Mortgage Note And Alleged Violation Of The Consent Order
The remaining allegations in the complaint are focused on PHH‘s assignment of the Note to Chase and on a Consent Judgment that was entered in the matter of United States v. Bank of America Corp., No. 12-0361, ECF No. 14 (D.D.C. Apr. 4, 2012). To the extent that Fontaine‘s claim that she is entitled to an injunction, damages, and declaratory relief rests on these allegations, her complaint must be dismissed for failure to state a plausible claim for relief.3
With respect to the Note, Fontaine appears to make two separate assertions: first, that the assignment was invalid because PHH did not transfer physical possession of the Note; and second, that securitization was legally improper. Fontaine‘s first argument—that the law requires one who claims to be a mortgage holder to take physical possession of the mortgage note and to produce the Note in order to prove his interest in the property (see, e.g., Compl. ¶ 18 (complaining that there “was no evidence” that Chase “was in possession of the Note or security instrument“))—fails as а matter of law. Notably, in Florida, where Fontaine‘s property is located, the law does not require the physical possession of the original note in order to proceed to foreclosure. See
Fontaine‘s related argument—that, when the initial holder of the Note securitized it, that act separated the Note from the Deed of Trust in a manner that somehow altered the property interest (see Compl. ¶ 9 (challenging the “confusion and uncertainty about who the Note-holder” is because of “the securitization process“); id. ¶ 13 (contending that “the Note and Mortgage cannot be split” and that splitting results in fraudulent assignment); see also id. ¶¶ 14, 17, 25, 42, 48, 57)—fares no better. This Court has already jоined every other court that has considered this issue in rejecting this specious argument. See, e.g., Jessup, 35 F.Supp.3d at 33, 2014 WL 1268809, at *4 (noting that “[c]ourts across the country have already uniformly rejected [the] argument” that securitization destroys the note, stripping the holder of ability to execute an assignment (citations omitted)); Flores v. GMAC Mortg., LLC, No. 12cv794, 2013 WL 2049388, at *2 (N.D. Cal. May 14, 2013); Boyter v. Wells Fargo Bank, N.A., No. 11cv03943, 2012 WL 1144281, at *5 (N.D. Cal. Apr. 4, 2012); Velez v. The Bank of N.Y. Mellon, No. 10cv468, 2011 WL 572523, at *4 (D. Haw. Feb. 15, 2011); Lane v. Vitek Real Estate Indus. Grp., 713 F.Supp.2d 1092, 1099 (E.D. Cal. 2010); Upperman v. Deutsche Bank Nat‘l Trust Co., No. 10cv149, 2010 WL 1610414, at *3 (E.D. Va. Apr. 16, 2010); Chavez v. Cal. Reconveyance Co., No. 10cv325, 2010 WL 2545006, at *2 (D. Nev. June 18, 2010). Thus, to the extent that Fontaine‘s due process and emotional distress claims rely on the fact that Defendants may not have physical possession of the original Note documents, or the contention that securitization invalidated the Note, these claims must be dismissed because they do not state a plausible basis for relief under existing law. See Busby, 932 F.Supp.2d 114; Preston, 931 F.Supp.2d at 757; Garcia, 2009 WL 2579057, at *2-3.
Similarly, there is no legal basis for Fontaine to seek relief in this matter based on a contention that Defendant Chase is in violation of the Consent Judgmеnt entered in the Bank of America case. Other courts have held—and this Court agrees—that “by its terms, this Consent Judgment is not enforceable by individual third-party beneficiaries” because it “specifically states that enforcement actions may be brought by a ‘Party to this Consent Judgment or the Monitoring Committee.‘” Conant v. Wells Fargo Bank, N.A., No. 13-572, 24 F.Supp.3d 1, 16, 2014 WL 575758, at *9 (D.D.C. Feb. 14, 2014) (citation omitted). (See also Consent J., Ex. 2 to Compl., ECF No. 1-2.) In response to similar actions that individual homeowners have filed seeking to enforce the terms of the Consent Judgment, judges in this very district have concluded that individual borrowers, such as Fontaine, are neither par-
IV. CONCLUSION
For the foregoing reasons, this Court has no jurisdiction to enjoin Defendants from engaging in a hypothetical future foreclosure; therefore, the complaint‘s claim for injunctive relief must be dismissed under