ORDER
The above matter came before the Court on the Report and Recommendation of United States Magistrate Judge Janie S. Mayeron dated November 17, 2014. Plaintiff objects to the recommendation that this Court grant Defendants’ motion to dismiss.
Pursuant to statute, the Court has conducted a de novo review of the record. 28 U.S.C. § 636(b)(1); Local Rule 72.2(b). Based on the Court’s de novo review and upon all of the files, records and proceedings herein, the Court will adopt the Report and Recommendation.
IT IS HEREBY ORDERED that:
1. Defendants’ Motion to Dismiss [Docket No. 3] is GRANTED;
2. This matter is dismissed with prejudice.
LET JUDGMENT BE ENTERED ACCORDINGLY.
REPORT AND RECOMMENDATION
The above matter came before the undersigned on defendants’ Motion to Dismiss [Docket No. 3]. Jonathan L.R. Drewes, Esq. appeared on plaintiffs behalf. Curtis D. Ripley, Esq. appеared on defendants’ behalf. This matter has been referred to the undersigned Magistrate Judge for a Report and Recommendation by the District Court pursuant to 28 U.S.C. § 636(b)(1)(A), (B), and Local Rule 72.1.
I. BACKGROUND
Plaintiff seeks to invalidate the foreclosure óf the mortgage on his home. Plaintiff asserts two claims against defendants: failure to comply with Minn.Stat. § 580.02 and an injunction to prevent defendant JP Morgan Chase from proceeding with an eviction it initiated against plaintiff in Hen-nepin County, Minnesota.
For the reasons, described below, the Court recommends that defendants’ Motion to Dismiss be granted and plaintiffs claims be dismissed with prejudice.
Plaintiff sued JP Morgаn Chase Bank, N.A. (“Chase”) and Federal National Mortgage Association (“Fannie Mae”) (collectively, “defendants”) in state district court on June 18, 2014. Notice of Removal, Ex. 1 (Summons and Complaint) [Docket No. 1-1]. Based on diversity jurisdiction, defendants removed the suit to Federal District Court pursuant to 28 U.S.C. 1332(a). Notice of Removal [Docket No. 1]. Defendants moved to dismiss the Complaint in lieu of answering. Motion to Dismiss [Docket No. 3].
The facts bearing on defendants’ motion to dismiss are as follows. Plaintiff executed a mortgage in favor of Washington Mutual Bank, FA (“WAMU”) on November 28, 2006, for property located in Hennepin County, Minnesota (“Proрerty”). Complaint, ¶¶ 1, 6. The mortgage was recorded with the Hennepin County Registrar of Titles on January 5, 2007. Id., ¶ 6. On September 25, 2008, the Federal Deposit Insurance Corporation (“FDIC”) was appointed as WAMU’s receiver. Id., ¶ 7. That same day, Chase and the FDIC entered into a Purchase and Assumption Agreement (“PAA”). Affidavit of Curtis Ripley in Support of Motion to Dismiss (“Ripley Aff.”), Ex. l(PAA) [Docket No. 6-1]. Pursuant to the PAA, the FDIC transferred WAMU’s mortgage assets to Chase. Id. On October 29, 2008, Chase recorded an affidavit from the FDIC with the Hen-nepin County Registrar of Titles. Complaint, ¶ 7, Ripley Aff., Ex. 2 (recorded Affidavit of Robert C. Schoppe, Receiver in Charge for FDIC as Receiver for Washington Mutual Bank). This Affidavit stated “[a]s authorized by Section ll(d)(2)(G)(i)(II) of the Federal Deposit Insurance Act, 12 U.S.C. § 1821(d)(2)(G)(i)(II),
Plaintiff defaulted on his mortgage payments
Plaintiff did not redeem the Property during the statutory redemption period and failed to vacate the Property, claiming that he was the “rightful owner of the Subject Property.” Complaint, ¶24. In June, 2014, Chase commenced an eviction action in Hennepin County Housing Court. Id., ¶ 25. Plaintiff contended that Chase failed to comply with Minnesota’s foreclosure-by-advertisement statute, Minn.Stat. § 580.02, because there is no recorded assignment of the mortgage to Chase. Complaint, ¶¶ 16, 20. Consequently, Chase
B. Defendants’ Motion to Dismiss and Plaintiff’s Response
Defendants moved to dismiss the Complaint, contending that plaintiffs sole theory regarding the alleged viоlation of Minn. Stat. § 580.02 — that Chase foreclosed without recording an assignment from the FDIC — was meritless and rejected by the district court in Luzaich v. JP Morgan Chase, Civ. No. 13-1869 (DWF/JSM),
the Court is persuaded that Chase was not obligated to record an assignment. Pursuant to the Financial Institutions Reform, Recovery, and Enforcement Act of 1989, the mortgage was assigned to Chasе by operation of federal law, which specifically authorizes the FDIC to transfer assets of a failed financial institution “without ... assignment.” 12 U.S.C. § 1821(d)(2)(G)(i)(II). Through operation of the Supremacy Clause, U.S. Const, art. VI, cl. 2, “a transfer of a mortgage, authorized by federal law, obviates the need for the specific written assignment that state law would otherwise require.” Demelo v. U.S. Bank Nat’l Ass’n,727 F.3d 117 , 125 (1st Cir.2013). If no assignment was required to effectuate the transfer of plaintiffs’ mortgage to Chase, then it follows that no assignment was required to be recorded prior to the foreclosure sale of the Property.
Id., p. 5 (quoting Luzaich,
Plaintiff did not address the holdings of Luzaich or Robinson in his opposition to Chase’s motion. Plaintiffs Memorandum in Opposition to Motion to Dismiss (“PL Mem. in Opp.”), pp. 4-12 [Docket No. 10]. Plaintiff argued that the PAA was an assignment and was required to be recorded before Chase could foreclose. Id., pp. 5-6. Plaintiff cited no cases to support this characterization of the PAA and instead relied on the definitions of “assignmеnt” and “instrument” from Black’s Law Dictionary. Id., p. 5. Plaintiff submitted that while it “may potentially be technically possible for the FDIC to transfer the assets of Washington Mutual Bank to JPMorgan — pursuant to 12 U.S.C. § 1821(d)(2)(G)(i)(II) — without ‘a written legal document’ ‘of transfer,’ such an event is practically unlikely and nevertheless did not happen here.” Id., p. 6.
Plaintiff conceded that the Anti-Injunction Act, 28 U.S.C. § 2283, imposed an absolute prohibition on federal courts from enjoining state court proceedings unless the injunction fell within one of three exceptions described by the statute. Id., p. 2. Consequently, plaintiff admitted that “Count II seeking injunctive relief cannot succeed here in federal court.” Id.
Defendants replied that plaintiff was simply wrong that Ruiz required the recording of an assignment, because FIR-REA expressly provided that no assignment was necessary and federal law trumps the state recording requirement. Defendants’ Reply Memorandum (“Defs.’ Reply”), p. 1 [Docket No. 14], Defendants reiterated the significant of Luzaich and Robinson. Id., p. 4. Defendants also submitted a copy of a state district court order granting summary judgment to Chase on virtually the same claims plaintiff has alleged in the instant case. Second Affidavit of Curtis Ripley, Ex. A (summary judgment order dated August 18, 201, Bakri v. JP Morgan Chase et al., 02-cv-11-4667 (Tenth Judicial District, Anoka County, Minnesota) [Docket Nos. 15, 15-1] ).
Plaintiffs extensive citation of 19th century holdings of the Minnesota Supreme Court misses the point. Plaintiff is surely correct that a foreclosing party must have an interest in the mortgage and any assignments must be recorded before foreclosure. Neither of thesepropositions encumbers the pоwer of Congress to carve out an exception pursuant to its authority to regulate interstate commerce. Here, the federal statute supersedes state law and prevents application of Minn.Stat. § 580.02(3) where the transfer of the mortgage occurs pursuant to the FDIC’s receivership powers.
Id., p. 7. According to defendants, this recent case “is in line with the holdings from this District and across the nation, and further confirms that Chase did not need to record a mortgage assignment before foreclosing by advertisement under this circumstance.” Defs.’ Reply, p. 5.
Defendants rejected plaintiffs argument about the availability of judicial foreclosure as “wholly irrelevant” because Chase was entitled to proceed with the foreclosure by advertisement. Id., p. 8.
Lastly, defendants contended that it was impossible to draw any conclusions based on the print-outs plaintiffs counsel submitted. Id., p. 9. Defendants noted that nothing was known about the circumstances of these mortgages or what role the FDIC played in the mortgages. Id., p. 9. As a result, the “information is not credible evidence of anything.” Id.
At the motion hearing, plaintiffs counsel continued to insist that the PAA was an assignment that had to be recorded. Transcript of Hearing (“Tr.”), pp. 13-14 [Docket No. 20]. As evidence, counsel pointed to Article 3.1 of the PAA, which stated:
Subject to Sections 3.5, 3.6 and 4.8, the Assuming Bank hereby purchases from the Receiver and the Receiver hereby sells, assigns, transfers, conveys, and delivers to the Assuming Bank, all right, title and interest of the Receiver in and to all of the assets (real, personal and mixed, wherever located and however acquired) including all subsidiaries, joint ventures, partnerships and any and all other business combinations or arrangements, whether active, inactive, dissolved or terminated, of the Failed Bank whether or not reflected on the books- of the Failed Bank as of Bank Closing.
Tr. 19 (citing Ripley Aff., Ex. 1, p. 9) (emphasis added). According to counsel, the use of the word “assigns” in this passage established that the PAA was an assignment. Tr. 20.
Further, at the hearing, plaintiffs counsel raised for the first time a new argument regarding preemption, which was not reflected in his responsive brief.
C. Defendants ’ Supplemental Brief
Defendants responded to plaintiffs preemption argument by first arguing that the PAA was not an assignment that would trigger Minn.Stat. § 580.02. Defendants’ Supplemental Memorandum in Support of Motion to Dismiss (“Def. Suppl. Mem.”), 3-7 [Docket No. 21]. Defendants noted that FIRREA expressly states that the FDIC may transfer assets “without assignment” and courts considering the application of the statute in connection with WAMU’s transfer of assets have recognized the distinction between transfers under FIRREA and mortgage assignments. Id. Defendants contended that consistent with FIRREA, the FDIC and Chase did not execute an assignment. Id., pp. 4-5. Instead, the FDIC transferred WAMU’s assets through the PAA. Id., p. 5. Furthermore, merely because the PAA used the word “assigns” in Article III did not make the PAA an “assignment.” Id., pp. 5-7. That word appeared in a laundry list of terms intended to show that the FDIC was transferring all of WAMU’s assets to Chase. Not a single court to consider the PAA has treated it as a “mortgage assignment.” Id., p. 6 (citing Drobny,
Consequently, defendants submitted that no preemption analysis was necessary because there is no conflict between state and federal law. Id. FIRREA states that the FDIC can transfer assets “without assignment,” which is what the FDIC did when it transferred WAMU’s assets to Chase pursuant to the PAA. Id. Therefore, according to defendants, there was no assignment that Chase failed to record.
However, even if the Court conducted a preemption analysis, defendants contended that the result would be the same. Id., pp. 11-17. Because FIRREA does not expressly preempt Minn.Stat. § 580.02, defendants argued that the Court should analyze the issue under conflict preemption. Id., pp. 12-13. Applying that analysis, FIRREA provides broad authority to the FDIC to dispose of a failed bank’s assets freе from any approval, assignment or consent requirements that might apply. Id., p. 14. Any requirement that a transfer pursuant to FIRREA had to comply with state recording requirements would frustrate the purpose of the statute and conflict with the FIRREA provision that permits the FDIC to “transfer any asset or liability of the institution in default ... without any approval, assignment or consent with respect to such transfer.” Id., pp. 16-17. Therefore, even if the Court construed the PAA as an assignment, conflict preemption rendered recording the assignment unnecessary. Id., pp. 11-17.
D. Plaintiff’s Response to Defendants’ Supplemental Brief
In plaintiffs letter responding to defendants’ supplemental brief, plaintiff took issue with defendants’ statement that “no court has used or relied upon a preemption analysis to And that, notwithstanding the express provision of federal law that FDIC transfers are ‘without assignment,’ a foreclosing party must nonetheless record a
II. LEGAL STANDARD
In considering a motion to dismiss under Rule 12(b)(6), the pleadings are construed ■in the light most favorable to the non-moving party, and the facts alleged in the complaint must be taken as true. Morton v. Becker,
As a general rule, the Court may not consider materials “outside the pleadings” on a motion to dismiss, without converting the motion to dismiss to a motion for summary judgment. Fed.R.Civ.P. 12(d). “The court, however, ‘may consider some materials that are part of the public record or do not contradict the complaint, as well as materials that are necessarily embraced by the pleadings,’ ” without converting thе motion into one for summary judgment. See Little Gem Life Sciences, LLC v. Orphan Medical, Inc.,
For the reasons set forth below, the Court concludes that plaintiff has failed to state a claim for relief and therefore, defendants’ motion should be granted.
III. DISCUSSION
A. The PAA Was Not An Assignment
Plaintiffs argument that the PAA was an аssignment that had to be recorded pursuant to Minn.Stat. § 580.02 is rejected. The Court agrees that the word “assigns” in Article III of the PAA did not make the PAA an assignment. That word appears in a list of words, all of which are plainly .intended to state that the FDIC was transferring all of WAMU’s assets to Chase. See Ripley Aff., Ex. 1, Article III. Additionally, it is abundantly clear that the FDIC’s transfer WAMU’s assets to Chase was based on FIRREA, which explicitly states that the FDIC can transfer the assets of a failed bank “without assign- ■ ment.” This is precisely the basis of the holdings in Luzaich and Robinson — that no recording of an assignment was necessary because the transfers of assets took place “without assignment” and by operation of law. Plaintiff did not cite a single case in which a court has concluded that the PAA was an assignment required to be recorded. Courts to consider the transfer of WAMU’s assets from the FDIC to Chase have generally concluded that
First, as to Chase’s failure to supply a mortgage assignment, there is no such requirement, as made clear both by federal and state law. Federally, the FDIC, as receiver of Washington Mutual Bank, was empowered to transfer the Bank’s assets without an assignmеnt. See 12 U.S.C. § 1821(d)(2)(G)(i)(II) (receiver may “transfer any asset or liability of the institution in default (including assets and liabilities associated with any trust business) without any approval, assignment, or consent with respect to such transfer”); FTBK Investor II v. Mercy Holding,36 Misc.3d 1219(A) ,2012 WL 3064864 at *5 (N.Y.Sup.Ct. July 24, 2012) (citing 12 U.S.C. § 1821(d)(2)(G)(i)(II) and rejecting borrowers’ argument “that the note had to have been individually negotiated and physically indorsed to Chase [by the FDIC] through an allonge”).
Id. at 845.
In Beka Realty, LLC,
Consistent with this statutory provision, the FDIC transferred all of WaMu’s loans and loan commitments to Chase pursuant to the September 25, 2008 PAA. As noted above, sections 2.1 and 3.1 of the PAA provided that “[.Chase] specifically assume[d] all of the mortgage servicing rights and obligations of [WaMu].” Courts have, therefore, consistently held that Chase became the owner of all of WaMu’s loans and loan commitments by operation of law and that Chase is entitled to enforce the acquired WaMu loans ... [t]hus, by virtue of the PAA, Chasе became the assignee of the Note and Mortgage. Id. at *3 (citations omitted).
The court in Trice reached the same conclusion when a property owner challenged a foreclosure on the ground that Chase failed to produce an assignment of her mortgage:
The district court correctly found that no assignment was necessary, as respondent obtained ownership of appellant’s loan from the Federal Deposit Insurance Corporation as part of a large-scale acquisition of Washington Mutual’s assets. See 12 U.S.C. § 1821(d)(2)(G)® (2006)' (affording the FDIC the power to “transfer any asset or liability of the institution in default ... without any apprоval, assignment, or consent with respect to such transfer”); Drobny v. JP Morgan Chase Bank, NA, [929 F.Supp.2d 839 , 845-46],2013 WL 888628 , *5 (N.D.Ill.2013) (indicating that the FDIC’s power to transfer assets under 12 U.S.C. § 1821(d)(2)(G)® obviates the need for an assignment of each individual loan).
Lastly, in FTBK Invest., the court rejected a defendant’s argument that plaintiff, a successor-in-interest to Chase, lacked standing to foreclose on a mortgage because plaintiff lacked written proof of an assignment to Chase from WAMU or the
Plaintiff correctly points out that the FDIC clearly had the authority to transfer the loans in bulk to Chase pursuant to 12 U.S.C. § 1821(d)(2)(G)(i)(II), and that an individual negotiation, i.e. assignment, of each loan was not required. Pursuant to 12 U.S.C. § 1821(d)(2)(G)(i)(II), the FDIC, as reсeiver of a failed bank, is authorized to “transfer any asset or liability of the institution in default ... without any approval, assignment, or consent with respect to such transfer.” According to the express terms of the statute, a valid transfer of the assets of a failed bank from the FDIC occurs even without a formal assignment instrument. As evidenced by the terms of the PAA, Chase acquired all assets of WaMu, with certain exceptions not applicable to this action. Specifically, Section 3.1 of the PAA provides that ... “[Chase] hereby purchases from the receiver [FDIC], and the Receiver hereby sells, assigns, transfers, conveys, and delivers to the Assuming Institution, all right, title, and interest of the Receiver in and to all of the assets ... of the Failed Bank [WaMu],
Id., at *14 (emphasis in original) (citation omitted).
In the final analysis, plaintiffs only evidence that the PAA was an assignment is the use of the word “assigns” in Article III. That single word is completely inadequate to support a finding that the PAA was an assignment that needed to be recorded pursuant to Minn.Stat. § 580.02. The PAA was not an assignment and the FDIC transferred WAMU’s assets to Chase through operation of law. Therefore, there is no conflict between Minn. Stat. § 580.02, Ruiz, and FIRREA and no preemption analysis is necessary.
Finally, the Court agrees with defendants that the print-outs plaintiff submitted in response to defendants’ motion to dismiss do not prove plaintiffs point regarding the alleged necessity of reсording an assignment from the FDIC to Chase. As defendants observed, the Court has no information on these mortgages, why they were assigned, and under what circumstances. But assuming for the sake of argument that these assignments were made under exactly the same circumstances as presented in this case (and there is no evidence that is true), the Court’s conclusion would be the same. Any assignment would be redundant because the FDIC’s assignment of its interests to Chase occurred by operation of law. If other banks “are wasting time and money doing what Chase insists is unnecessary,” that is the business of the other banks and does not change the Court’s
B. Plaintiff Is Not Entitled to In-junctive Relief
Count II of the Compliant is entitled “Injunction.” Complaint, ¶¶ 23-27. An injunction is a remedy, not a cause of action. Great-West Life & Annuity Ins. Co. v. Knudson,
Additionally, as plaintiff conceded, his claim for an injunction is barred by the Anti-Injunction Act, which states that “[a] court of the United States may not grant an injunction to stay proceedings in a State court except as expressly authorized by Act of Congress, or where necessary in aid of its jurisdiction, or to protect or effectuate its judgments.” 28 U.S.C. § 2283. “The Supreme Court has interpreted the Act as ‘an absolute prohibition against enjoining state court proceedings, unless the injunction falls within one of three specifically defined exceptions’ included in the language of the statute.” Canady v. Allstate Ins. Co.,
IV. RECOMMENDATION
For the reasons set forth above, it is recommended that:
1. Defendants’ Motion to Dismiss [Docket No. 3] be GRANTED.
2. This matter be dismissed with prejudice.
Notes
. The Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (“FIR-REA”) is codified at 12 U.S.C. § 1821 et seq.
. The Complaint does not state that plaintiff defaulted on his mortgage payments, but plaintiff has not denied that is the case.
. Plaintiff has filed a Notice of Appeal in Bakri. http://pa.cdurts.state.mn.us/CaseDetail. aspx?CaseID=1614611359.
. The Court is referring to the page numbers assigned through the court's electronic filing system.
. The Court could have refused to consider this argument. See, e.g., American Prop. Dev. Sw., LLC v. Landform Eng’g. Co., Civ. No. 07-3556 (DWF/AJB),
. Even if assuming the PAA was an assignment, conflict preemption mandates that Chase could not be compelled to record the assignment pursuant to Minn.Stat. § 580.02 because doing so would conflict with FIR-REA. “Conflict preemption occurs when compliance with both federal and state laws is impossible, and when a state law 'stands as an obstacle to the accomplishment and execution of the full purpose and objectives of Congress.’ ” Keller v. City of Fremont,
In a purchase and assumption transaction pursuant to FIRREA, the FDIC is entitled to transfer the assets of the failed bank "without assignment” and in that regard, any restrictions on this power to transfer imposed by state law are preempted. See Sahni v. American Diversified Partners, Inc.,
Also, this Court was not persuaded by the Michigan court’s reasoning in Kim v. JPMorgan Chase Bank, N.A.,
The dissent emphasized the language of 12 U.S.C. § 1821(d)(2)(G)(i), which permits the transfer of assets “without any approval, assignment, or consent with respect to such transfer” and rejected the majority’s characterization of the PAA as an ordinary contract. Id. at 342. In fact, the PAA was intended to transfer WAMU's аssets by operation of law, and without an assignment. Id. at 341. The dissent stated:
Chase was exempt from the requirements of MCL 600.3204(3) because it obtained the mortgage by operation of law.
[T]he statute implies that when no assignment has occurred, the party holding the mortgage has stepped into the shoes of the original mortgagee. When there has been no assignment of a mortgage, there can be no assignment to record. Accordingly, because Chase acquired the plaintiffs' mortgage by operation of law instead of by assignment, and was thus legally considered the original mortgagee, it was not required to record anything in the chain of title.
Id. at 346. At any rate, whether Kim was wrongly or rightly decided has no bearing on the Court’s decision in the instant case because the case is not precedential, devoid of any conflict preemption analysis, and the majority opinion was based on Michigan state law not at issue in this case.
. When a complaint is so deficient or defective that the court is convinced that its defects cannot be cured through re-pleading, dismissal with prejudice is appropriate. Such is the case here. See McLean v. United States,