MEMORANDUM OPINION
This matter comes before the Court on the Amended Complaint to Determine Validity, Priority or Extent of Lien filed by counsel on behalf of the above-captioned Plaintiff on September 11, 2014 (the “Amended Complaint”). Bank of New York Mellon, flk/a The Bank of New York, as Trustee for the Certificateholders' of CWALT, Inc., Alternative Loan Trust 2007-OH2, Mortgage Pass-Through Certificates Series 2007-OH2 (“Bank of New York Mellon”) and Bank of America, N.A. (“Bank of America” and, collectively with Bank of New York Mellon, the “Defendants”) filed a joint answer to the Amended Complaint on October 6, 2014 (the “Answer”).
The Amended Complaint is styled as a complaint to determine extent, validity, and priority of lien pursuant to Federal Rule of Bankruptcy Procedure 7001(2).
(A) determin[e] the true holder of the Note; (B) modify[ ] the order approving the [loan modification], as necessary, to ensure that the true holder of the [n]ote is included in [the loan modification’s] definition of “Lender,” and confirming [Bank of America’s] authority to enter into the [loan modification] on behalf of the < true holder of the [n]ote; and (C) grant[ ] such other and further declaratory and equitable relief as this honorable Court may deem meet.
Amended Complaint at 8-9.
The Defendants consented to the relief requested in Count I as' memorialized by an amended order approving the loan modification entered -in the main' bankruptcy case (the “Amended Loan Modification Order”). See Amended Loan Modification Order, ECF No. 147; see also Transcript of January 6, 2015 Pretrial Conference (hereinafter '“Tr. (1/6)”) at 8, APN 20. The only cldim- for relief set forth in thé Amended Complaint that remains unresolved is Count II. ’
Since the filing-of this adversary proceeding, the Court has convened a plethora of hearings and pretrial' conferences.
The Court has jurisdiction over this adversary proceeding pursuant to 28 U.S.C. §§ 157(b) and 1334(b). This is a core mat-ter. 28 U.S.C. § 157(b)(2)(K).
I. The Amended Complaint and Answer
The central theme of the Amended Complaint is the Plaintiffs uncertainty regarding the identity of the holder of the Note secured by the Deed of Trust on the Property.
The Amended Complaint highlights several alleged discrepancies between the Loan Modification Order and Bank of New York Mellon’s original and amended proofs of claim that the Plaintiff believes call into question the identity of the holder of the Note and beneficiary of the Deed-of Trust, the holder of the Note’s intention to abide by the terms of the underlying loan modification agreement, and the validity of the Loan Modification Order. See Amended
The Amended Complaint also describes the Plaintiff’s past attempts to participate in the National Mortgage Settlement (the “NMS”), which proved unsuccessful because (1) Bank of America maintained that it does not hold the Note and (2) the Plaintiff was not in default on the relevant date as a result of the loan modification. See Amended Complaint at 5; see also United States v. Bank of Am. Corp., No. 1:12-cv-00361-RMC, Doc. 11 (D.D.C. April 4, 2012) (setting out the terms of the NMS as to Bank of America, et al.). Based upon research the Plaintiff, undertook following Bank of America’s determination that she was ineligible for NMS relief, the Amended Complaint alleges that the transfer of the Plaintiffs Note and Deed of Trust (collectively, .the “Mortgage Documents”) from Bank of America’s predecessor in interest, Countrywide Home Loans, Inc.,
Finally, the Plaintiff asserts the Note and Deed of Trust may have become sepa
In the Answer, the Defendants deny the Plaintiffs allegations of deficiencies with respect to Countrywide’s transfer of the Note to the. trust and the Plaintiffs contentions regarding the effect of these alleged deficiencies on the validity of the transfer.- See Answer ¶¶18, 26-27. The Defendants respond to the allegations of the Amended Complaint by asserting that Bank of America services the Note arid Bank of New’York Mellon is the owner'of the Note, which is endorsed in blank and payable to the bearer. Id. ¶¶ 28(a), 28(b), 28(c). As a ’result of the loan modification approved by the Loan Modification Order, the Defendants state that the Plaintiff is not in default under the Note. Id. ¶ 28(d). As to the validity of the Loan Modification Order, the Defendants contend the order is valid and adequate, but would assent to an amended- order that clearly identifies both the owner and servicer of the Note. Id. ¶ 29.
II. Subsequent Proceedings . and Briefing
At the initial pretrial conference held on January 6, 2015 (the “January Pretrial Conference”), Defendants’ counsel represented that Bank of New York Mellon holds the Note and Bank of America services the Note and maintains possession of the original Note only in its capacity 'as servicer, .which Note could be provided to be inspected. See Tr. (1/6) at 4; see also Answer ¶¶ 28(a), 28(b), 28(c).
To address the Plaintiffs concern surrounding the fact that Bank of America is identified as the “Lender” in the Loan Modification Order, Defendants’ counsel agreed to the entry of an amended order approving the loan modification that would identify Bank of New York Méllon as the holder of the Note and bind Bank óf New York Mellon to the terms' of the Loan Modificatiori Order, consistent with Defendants’ representations in the Answer. Tr. (1/6) at 7-8; see Answer ¶ 29.
At the January Pretrial Conference, the Court rejected the Plaintiffs theory asserted in the Amended Complaint that the Note and Deed of Trust could have become “bifurcated'’ such that the holder of the Note would lose its security interest in the Property. See Tr. (1/6) at 9.
As' the result of the January Pretrial Conference, the Court directed the parties to jointly submit an order, holding, in pertinent part, that Bank of New York Mellon holds the Note and Bank of America services the Note. See id. The Court also directed the parties to submit an order amending the Loan Modification Order in the main bankruptcy case to clarify that Bank of New York Mellon is the holder of
Plaintiffs counsels subsequently prepared and presented the Amended Loan Modification Order to the Court, endorsed by Defendants’ counsel and counsel for the Chapter 13 Trustee, establishing that (i) Bank of New York Mellon holds the Note, (ii) Bank of America services the .Note; and (iii) Bank of New York Mellon agrees to be bound by the terms contained in the Loan Modification Order.. See Amended Loan Modification Order, ECF No. 147.- .The Amended Loan Modification Order was entered by the Court. Id. The Amended Loan Modification Order, therefore, affords the relief requested by Count I.
Defendants’ counsel presented a 'separate proposed order in the adversary proceeding memorializing thé Court’s ruling with respect to the identities of thé holder and servicer of the Note, which Plaintiffs counsel endorsed with objection. See Transcript of March 17, 2015 Hearing (hereinafter “Tr. (3/17)”) at 2, APN 61. Given that the Court had affordéd the Plaintiff the relief she requested in the Amended Complaint and that the Amended Loan Modification Order — an order both requested by and submitted on behalf of the Plaintiff — established' that' Bank of New York Mellon holds' the Note and Bank of America services the Note, the Court declined to enter the order and instead convened a hearing on' March 17, 2015 (the “March Hearing”), to better understate the Plaintiffs apparent unwillingness to take “yes” for an answer.
At the March Hearing, Plaintiffs counsel explained that she endorsed the ordér memorializing the Court’s ruling with objection because the Plaintiff believed the Court’s ruling at the January Pretrial Conference had circumscribed the relief requested by the Amended Complaint. See id. at 3. The Plaintiff argued that, the Court’s ruling at the January Pretrial Conference did not determine whether Bank of America’s
The March Hearing — held six months after the Amended Complaint was filed— marked the first point at which the Plaintiff articulated and the Court understood that the relief requested in Count II is entirely founded on Countrywide’s alleged noncotopliance with the' PSA. Indeed, because the Amended' Complaint never references the PSA, the Court could not comprehend the relief requested in Count II from the Plaintiff’s coriclusoiy allegations in the1 Amended Complaint' that Countrywide failed to complete required documentation and missed unspecified deddlines with respect to the transfer of the Plaintiffs Mortgage Documents. See Amended Complaint at 5-6, 7. ,
The Defendants filed the affidavit with a copy of the Note. See APN 28. On April 24, 2015, counsel for the Plaintiff subsequently filed a Memorandum of Law on Standing and Choice of Law. See Memorandum of Law on Standing and Choice of Law, APN 29 (hereinafter “First Brief’). The Defendants’ timely filed a response to the First Brief on May 15, 2015. See Response to Debtor’s Memorandum of Law on Standing and Choice, of Law, APN 44 (hereinafter “Response Brief’). By oral ruling, the Court permitted the Plaintiff to file a supplemental- brief on the standing issue. See Transcript of June 30, 2015. Hearing (hereinafter “Tr. (6/30)”) at 22, APN 62. The Plaintiff filed the supplemental brief pro se
The Court carefully limited the scope of the issues in the initial briefing to the Plaintiffs standing to' enforce the terms of the PSA as a nonparty to the agreement and related issues of choice of law and conflicts of law. " The Second Brief presented the Plaintiff an opportunity to supplement her argument on the standing issue. While the Plaintiffs’ briefs do, in part, address the legal issues of concern to the Court, the First Brief, Second Brief, and Affidavit all seek to expand the factual allegations and legal theories in support of Count II of the Amended Complaint. The Briefing Order provided a forum only to address the legal'issues presented by the Court and the facts related to those narrow issues. . The Court did not authorize the- Plaintiff, either by counsel or pro se, to amend the Amended Complaint defacto by raising new claims or alternative legal theories in.,support of the ultimate relief she seeks in Count II. See Pegram v. Herdrich,
Following the pretrial scheduling conference on July 21, 2015, the Court advised it
III. Analysis
A. Standing
In Count II, the Plaintiff requests a judicial determination of the validity of the lien of the. Deed of Trust securing the Note on the Property pursuant to Federal Rule of Bankruptcy Procedure 7001(2). Under the structure of the Bankruptcy Code (11 U.S.C. § 101 et seq.) and the Federal Rules of Bankruptcy Procedure, the Plaintiff may bring this action. ■ However, the authority to bring this action is not unlimited. The Plaintiffs standing to obtain this relief is limited by the allegations of the Amended Complaint. Specifically, Count II is founded upon the Plaintiffs ability to assert noncompliance with the PSA. Thus, the Court must determine the Plaintiffs standing to maintain her claim on this theory.
Standing is a threshold issue in federal litigation because it determines “the propriety of judicial intervention.” Warth v. Seldin,
To obtain constitutional standing, a party must satisfy three requirements:
(1) [the party] has suffered an ’injury in fact’ that is (a) concrete and particularized and (b) actual or imminent, not conjectural or hypothetical; (2) the injury is fairly traceable to the challenged action of the defendant; and (3) it is likely, as opposed to merely speculative, that' the injury will be redressed by a favorable decision.
Id. at 423 (quoting Friends of the Earth, Inc. v. Laidlaw Envtl. Servs. (TOC), Inc.,
By comparison, prudential standing. is the product of three self-imposed nonconstitutional limitations on the federal courts’ adjudicative authority. Id. (citing Allen,
First, “when the asserted harm is a ’generalized grievance’ shared in substantially equal measure by all or a large class of citizens, that harm alone normally does not warrant exercise of jurisdiction.” Warth,422 U.S. at 499 ,95 S.Ct. 2197 ; see, e.g., United States v. Richardson,418 U.S. 166 ,94 S.Ct. 2940 ,41 L.Ed.2d 678 (1974). Second, “the plaintiff generally must assert his own legal rights and interests, and cannot rest his claim to relief on the legal rights or interests of third parties.” Warth,422 U.S. at 499 ,95 S.Ct. 2197 ; accord Valley Forge,454 U.S. at 474 ,102 S.Ct. 752 . Third, “a plaintiffs grievance must arguably fall within the zone of interests protected or regulated by the statutory provision or constitutional guarantee invoked in the suit.” Bennett v. Spear, 520 U.S. 154 , 162,117 S.Ct. 1154 ,137 L.Ed.2d 281 (1997); see, e.g., Ass’n of Data Processing Serv. Orgs., Inc. v. Camp,397 U.S. 150 , 153,90 S.Ct. 827 ,25 L.Ed.2d 184 (1970).
Id.
The second prudential standing consideration is relevant here because Count II rests on the Plaintiffs ability to enforce a contract to.which she is not a party.
1. The Court’s Authority to Examine Prudential Standing
Other courts have reached the issue of whether a borrower has standing't'o dispute compliance with a pooling and servicing agreement in the context of a motion to: dismiss or a motion for summary judgment filed by a defendant.: See, e.g., Grenadier v. BWW Law Grp., No. 1:14-cv-00827-LMB-TCB,
The circuits are divided regarding whether a court’s consideration of prudential standing, is " permissive or mandatory when.the parties have failed to properly raise the issue. Several circuits have concluded that prudential standing is jurisdictional .in nature such that the issue cannot be waived and the court’s inquiry is mandatory. See, e.g., Ass’n of Battery Recyclers, Inc. v. EPA,
Other circuit, courts have determined that the issue of .prudential standing., is waivable, holding that a court may either examine prudential standing sua sponte or deem it waived if a party fails to assert the issue. See,, e.g., Hobby Lobby Stores, Inc. v. Sebelius,
Further, in circuits that have hot yet considered the issue, federal district courts have also determined that a court is, at minimum, authorized to raise prudential standing on its own when the parties have not. See, e.g., Ohio Valley Envtl. Coal., Inc. v. U.S. Army Corps of Eng’rs, No. 2:12-cv-06689,
While, the Fourth Circuit Court of Appeals has not directly addressed the narrow issue of a court’s capacity to consider prudential standing when the parties have failed to raise it, the court has observed that prudential standing is not jurisdictional in nature. See United States v. Day,
Accordingly, to the extent the Defendants waived the issue of prudential standing in this case, the Court elects to consider the Plaintiffs standing to assert the PSA as the basis for relief under Count II on its own initiative.
2. Choice of Law
In framing the choice of law analysis, the Court must emphasize that it is not resolving the Plaintiffs claim regarding the effect of alleged noncompliance with the PSA on the identity óf the holder of the Note secured by the Deed of Trust on the Property; rather,, the question before the Court is whether the Plaintiff has standing to enforce the terms of the PSA as the basis for her claim. The PSA provides that it will be construed and governed in accordance with -substantive New York law, and that New York law will dictate the obligations, rights, and remedies of the parties and .certificateholders. PSA § 10.03 (the “Choice of Law Provision”). However, the parties do not agree that the Choice of Law Provision should dictate the substantive law the Court will apply to determine the Plaintiffs standing to enforce the PSA.
The Plaintiff contends in the First Brief the Choice of Law Provision would govern a determination .of the identity of the holder of the Note, but the Plaintiff does not clearly address whether the Choice of Law Provision governs the threshold issue of her standing to enforce the PSA to seek such a determination. First Brief at 12; see also Affidavit ¶3 (generally contending New York law is applicable). The Defendants assert, without offering any supporting authority, that the Choice of Law Provision is wholly inapplicable in this adversary proceeding because the Plaintiff is neither a party to the PSA nor a certificateholder. Response Brief ¶ 15. The Court is not persuaded by the Defendants’ argument, which- is based on an assumed conclusion • regarding the ■ substantive issue the .Court seeks to resolve. It will thus undertake an .independent analysis of the issue.
A bankruptcy court applies the choice of law rules of the forum state, which in the instant case is the law of Virginia. Compliance Marine, Imc. v. Campbell (In re Merritt Dredging Co.)
Accordingly, when a contract contains a choice of law provision, a court that is applying Virginia law will invoke that provision to determine whether nonparties qualify to enforce the terms of the contract. See, e.g., Canal Ins. Co. v. Lebanon Ins. Agency, Inc.,
It follows then that the Choice of Law Provision dictates the substantive law the Court will apply in this case to analyze the Plaintiffs standing to enforce the PSA as a nonparty to the agreement. The Choice of Law Provision directs that New York law applies. Accordingly, the Court will look to New York law to determine whether the Plaintiff may allege noncompliance with the terms' of the PSA as the basis for Count II.
3. Plaintiff Lacks Standing to Enforce Noncompliance with the PSA Because She is Neither a Party to nor an Intended Third-Party Beneficiary of the PSA
The Amended Complaint makes no explicit reference to the PSA, yet the relief the Plaintiff seeks under Count II is nevertheless entirely dependent upon her ability to enforce various terms of the PSA. This is because the Plaintiff alleges in the Amended Complaint that, if Countrywide failed to timely complete the required documentation to transfer the Mortgage Documents to the trust, the transfer to the trust was ineffective. Amended Complaint at 5-6, 7, Despite the vague and attenuated allegations in the Amended Complaint, it is now apparent to the Court that the Plaintiffs contentions are based upon the terms of the PSA governing the; trust, which she asserts required Countrywide to transfer the Mortgage Documents to the trust (1) by a date certain and (2) with an assignment of the Deed of Trust in compliance with the PSA. See Tr, (3/17) at 3-4. Simply put, the Plaintiff argues that a PSA-compliant assignment of the Deed of Trust was necessary to complete the transfer of the Note and Deed of Trust to Bank of New York Mellon, as trustee, even if the Note was negotiated to the trust.- First Brief at 10-11; see also Tr. (3/17) at 16.
As a general matter, courts have arrived at a “judicial consensus” that homeowners lack standing to assert noncompliance with pooling and servicing agreements or related contracts between lenders as the basis for a claim for relief:
Whatever the context, it appears that a judicial consensus has developed holding that a borrower lacks standing to (1) ■challenge the validity of mortgage securitization or (2) request a judicial :determination that a loan assignment is invalid due to noncompliance with a pooling and servicing agreement, when the borrower is.neither a party to nor a third party beneficiary of the securitization agreement, ie., the PSA.
In re Walker,
Multiple circuit courts have expanded the “judicial consensus.” See, e.g., Rogers v. Bank of Am.,
The Court concludes that, in- accordance with the Second Circuit’s decision in Raja-min and the wider judicial consensus, the Plaintiff — who is a nonparty to the PSA— must establish that she is • an intended third-party beneficiary of the PSA to maintain Count II.
First, rather than assert that she is an intended third-party beneficiary to, the PSA contract upon which Count II is founded, the Plaintiff instead argues that, she has standing to enforce the PSA because Count II is a proceeding to determine the validity of the lien on her. residence, which she believes will enhance her ability to pursue relief under the NMS, and, therefore, she is raising her own legal rights and contends that “a more particularized grievance is difficult to imagine.. ...” See First Brief at 9-10. However, the Plaintiffs argument misses the mark. Regardless of whether this proceeding implicates her personal residence or the ultimate relief the Plaintiff wished to pursue under the NMS, Count II nevertheless rests upon, her ability to enforce the PSA as the basis for her claim. Therefore, the Court finds that, neither the nature of this proceeding nor' its subject matter confers, standing to enforce the
In the alternative, based upon reasoning adopted by an Alabama state court in Horace v. LaSalle Bank, No. CV 08-362 (Ala. Cir.Ct. Mar. 30, 2011) (unpublished decision), the Plaintiff asserts that she has standing to enforce the PSA as an intend^ed third-party beneficiary because she and other borrowers would have been unable to obtain mortgage financing if not for the ultimate pooling and securitization of loans under the PSA. See Affidavit ¶ 3; see also Tr. .(6/30) at 17-18. The United States District Court for the Western District of Virginia rejected a homeowner’s argument, also founded upon the reasoning in Horace, that her lender reduced its underwriting standards based upon, its future intention to securitize her loan: “[T]his Court is unpersuaded that the reduction of underwriting standards based upon an intent to securitize a loan automatically makes the borrower an intended beneficiary of a later-established pooling and servicing agreement.” Wittenberg v. First Indep. Mortg. Co., No. 3:10-CV-58,
The Plaintiff has not offered any other argument or pointed, to any provision in the PSA that suggests that- she is an intended beneficiary of the agreement. Instead, the Plaintiff focuses primarily on her eligibility for NMS, relief.
4. Plaintiff Lacks Standing to Enforce the Terms of the PSA to Challenge the Underlying Assignment of the Deed of Trust as Void
In the Second Brief and Affidavit filed in further support of Plaintiff’s standing .to base Count II on.the alleged noncompliance; ivith the PSA, the Plaintiff, asserts she has standing to enforce violations of the PSA to the extent that these violations rendered the assignment of the Deed of Trust void. See Second Brief at 2; Affidavit ¶8. Thus, the Plaintiff seeks to accomplish indirectly what she could not
Courts have recognized that a homeowner may assert defects in an assignment if such defects render an assignment “invalid, ineffective, or void.” See Culhane v. Aurora Loan Servs. of Neb.,
With respect to the interplay between assignments and pooling and servicing agreements, homeowners lack standing to enforce the terms of a pooling and servicing agreement to challenge an underlying assignment because noncompliance with a pooling and servicing agreement does not render an assignment void. See, e.g., Ferguson v. Bank of N.Y. Mellon Corp.,
In .Rajamin, the Second Circuit considered homeowners’ standing to enforce pooling and servicing agreements to challenge the validity of assignments to securitized trusts under both a breach of contract theory and a breach of trust theory. Id. at 86-87, 87-90. The court first recognized that, under principles of New York contract law, contract rights may be waived by the parties for whose benefit they were intended, limiting their enforcement to parties and intended third-party beneficiaries and preventing strangers from vindicating the rights of those who choose • not to assert them. Id. at 86. Accordingly, “[although noncompliance with [pooling and servicing agreement] provisions might have made the assignments unénforceable at the instance of parties to those agreements',” only those entities can enforce the agreement for that purpose. Id. at 87.
In further consideration of homeowners’ standing to challenge allegedly void assignments, thé Second Circuit evaluated whether homeowners had standing to contend under a breach of trust theory that the trusts’ acquisition of their loans was void for failure to comply with pooling and servicing agreements. Id. at 88. The Rajamin ' court’s examinátion of New York trust law gave rise to the same result: “[W]e conclude that as unauthorized acts of a trustee may be ratified by the trust’s beneficiaries, such acts are not void but voidable; and that under New York law
There is limited authority that adopts an alternate view of New York trust law. A New York state trial court determined that a borrower may assert that an assignment to a securitization trust is void for failure to comply with the terms of a pooling and servicing agreement because “under New York Trust Law, every sale, conveyance . or other act of the trustee in contravention of the trust is void.” Wells Fargo Bank v. Erobobo, No. 31648/2009,
In support of 'her argument that she may enforce the PSA to ’ challenge the underlying assignment as void, the Plaintiff looks to the Vermont Supreme Court’s decision in Dernier v. Mortgage Network, Inc.,
In the Affidavit, the Plaintiff cites an Illinois Appellate-Court decision irt Bank of America v. Bassman FBT, L.L.C.,
The Plaintiff also references an unpublished Michigan circuit court decision in HSBC Bank USA v. Young, 11-000693-AV (Mich.Cir. Ct. Oct. 26, 2012) (unpublished decision) for the proposition that a homeowner has standing to enforce PSA violations to challenge the assignment of a mortgage and note. Second Brief at 2. However, the circuit- court’s decision was reversed by the Michigan Court of Appeals because the plaintiff lacked standing to challenge the assignment’under Michigan law. HSBC Bank USA v. Young, No. 313212,
Therefore, the Court finds that the Second Circuit’s application of New York law in Rajamin is both persuasive and applicable in the instant case. The Court holds that violations "of a pooling and servicing agreement merely render an assignment to a securitization trust voidable either by a party or an intended beneficiary as a matter of New York law. As dis'cussed above, the Plaintiff is not a party to the PSA or established that she is'an intended third-party beneficiary of the agreement. Accordingly, the Court concludes that the Plaintiff lacks standing to maintain Count II on the basis that noncompliance with the PSA renders the underlying assignment of the Deed of Trust invalid. -
In the First Brief, the Plaintiff contends the Rajamin ease is distinguishable and her claim should not be barred for lack of standing because she is “not challenging an act of the Trustee, but rather [Bank of Americans use of its ’insider’ status to avoid becoming the Noteholder....” First Brief at 9. The Plaintiff further asserts this distinction is dispositive. Id. It is the Plaintiffs perception that Bank of America somehow exploited its position as both successor to the seller and master servicer under the PSA to deliberately evade an obligation, which was triggered by the alleged violations of the PSA, to assume ownership of the Plaintiffs loan, thereby denying the Plaintiff access to ÑMS relief. Id. at 9-10. In essence, the Plaintiff seeks a determination that she has standing to maintain Count II on the basis of Bank of America’s alleged bad faith in its performance under the PSA.
However, absent enforceable contract rights to support this claim, the Court need not inquire into the nature of Bank of America’s performance of its obligations under the PSA. For the reasons discussed in Section III.A.3, the Plaintiff is, at most, an incidental beneficiary to the PSA, and incidental beneficiaries have no standing to enforce a pooling and servicing agreement. See Rajamin,
Thus, the Plaintiffs attempt to distinguish Rajamin by directing her attack as one against Bank of America is not persuasive or dispositive. The Court has already determined that' the Plaintiff is neither a party to nor an intended beneficiary of the PSA. Therefore, regardless of any incidental benefit that may be at stake, the Plaintiff lacks standing to enforce noneompliance with the PSA based upon.Bank of America’s “insider” status. Accordingly, the Court concludes that the Plaintiff cannot maintain Count II on this basis.
IV. Conclusion
Count I of the Amended Complaint was previously resolved by consent with the entry of the Amended Loan Modification Order in the main bankruptcy case, leaving only Count II unresolved. Count II is
A separate Order will be entered by the Court consistent with the findings and conclusions contained in this Memorandum Opinion.
The Plaintiff is advised that an appeal lies from this matter to the United States District Court for the Eastern District of Virginia. Except as provided in Federal Rules of Bankruptcy Procedure 8002(b)-(d), any notice of appeal must be filed with the Clerk of this Court within fourteen (14) days of the date of entry of the Order to be enteréd by the Court. The filing fee for a notice of appeal is $298.00.
The Clerk' shall deliver copies of this Memorandum Opinion to Sheryl S.: Stan-worth, Plaintiff; D. Carol Sasser and Johnie R. Muncy, counsel for the Defendants;' Michael P. Cotter, Chapter 13 Trustee; and to the; unrepresented parties themselves.-
Notes
. A duplicate copy of the Answer was also filed on October 6, 2014.
. The Amended Complaint also references Federal Rule of Bankruptcy Procedure 3012, which provides for the valuation óf a claim secured by a lien on property pursuant to 11 U.S.C. § 506(a). See Amended Complaint at 1. This is inapposite here as the Plaintiff seeks to challenge the basis of a lien itself.
. As the Amended Complaint contains both numbered and unnumbered, narrative paragraphs, all citation will be to the page where the relevant information can be found.
. The request for an order "granting such other and further declaratory and equitable relief as this honorable Court may deem meet” is a vague, boilerplate request that does not amount to a separate claim for;relief.
. The Loan Modification Order approves a modification of the loan secured by the Property. See Loan Modification Order at 1-3. Bank of America is identified in the Loan Modification Order as the "Lender.” See id. at 1. (
. "ECF No.” refers to a docket entry in the above-captioned main bankruptcy case, and "APN” refers to a docket entry in the adversary proceeding.
.The PSA is included as part of a Form 8-K filed by the Plaintiff on April 25, 2015, as Exhibit 2 to her Memorandum of Law on Standing and Choice of Law. See Exhibit 2, APN 31. The defendants agree that the PSA can be found in Exhibit 2 from pages 8 through 167. See Response td Debtor’s Memorandum of Law on Standing and Choice of Law, at 3, APN 44.
. The Court convened hearings in this adversary proceeding on January 6, 2015; March 17, 2015; June 30, 2015; July 8, 2015; and July 21,-2015.
. To the extent this not a-core matter, this Memorandum Opinion contains proposed findings of fact and conclusions of law.
. The Court will assume for purposes of this Memorandum Opinion that Bank of America is Countrywide’s successor in interest through its acquisition of Countrywide Financial Corporation on July 1, 2008. Bank of America Completes Countrywide Financial Purchase, http://investor.bankofamerica,com/phoenix. zhtml?c=71595&p=irol-newsArticle&ID
= 1171009# fbid=mGDAK7EcloZ (last visited Dec. 17, 2015).
. The express language of the Amended Complaint references the assignment of the Note. Amended Complaint at 6. The Court observes that the PSA — which is critical to the Amended Complaint, but' never expressly referenced therein — uses the word “assign,” in conjunction with words including "sell”' and “transfer,” to reference the conveyance of mortgage loans to the trust. ■ See PSA § 2.01. This is distinct from the assignment of the related mortgage, which transfers the security for the indebtedness. See, e.g., id. § 2.01(c)(ii), (iii).
Although the Amended Complaint observes there are multiple endorsements to the Note, the Amended Complaint does not allege that any of the endorsements — including the final endorsement in blank — are invalid. See Amended Complaint at 5. Further, the Plaintiff does not dispute the Note is being held by Bank of New York Mellon, as trustee. See Transcript of March 17, 2015 Hearing at 3, APN 61 (“The problem is that the loan, while it’s acknowledged as being held by the trust, is-tThe trust is not a legitimate holder---[A]ll matters that had to be accomplished in order for this note and deed of trust to come ... into the trust, were not accomplished timely.”). Instead, the Plaintiff contends that, irrespective of the validity of the endorsements or the trust's possession of the Note that is payable to the bearer, the transfer of the Mortgage Documents to the trust failed and the trust cannot be the holder of the Note because the Deed of Trust was not timely and properly assigned in compliance with the PSA. See id. at 3, 16.
Thus, the Court construes the Plaintiff's allegations in the Amended Complaint regarding the transfer of the Note as derived from her theory that assignment of the Deed of Trust pursuant to the -terms of the PSA is a necessary condition to affect-the transfer of the Mortgage Documents-including the Note-to the trust.
. This theory has no basis in law! "If there has been a ’split’ between the Note and Deed (of Trust] .,. the transferee of the Note nevertheless receives the debt in equity as a secured party.” Upperman v. Deutsche Bank Nat’l Trust Co., No. 1:10-cv-00149-CMHIDD,
. At this stage in the proceedings, the Court was unable to discover the PSA!s critical part with respect to the Plaintiff’s claim for relief because the Amended Complaint neither specifically references nor attaches the PSA.
. The Court notes that Bank of America and Countrywide were often used .synonymously during proceedings and in the pleadings.
. See also supra n.M.
. Plaintiff’s counsel filed a motion to withdraw as counsel following the pretrial conference held June 30, 2015. See Motion to Withdraw, APN 47, ECF 167. Following an expedited hearing, the Court granted counsel’s request to withdraw by orders entered July 20,-2015, in both the adversary proceeding ánd main'' bankruptcy case. See Order Granting Motion to Withdraw as Counsel, APN 58, ECF 172. Thereafter, the Plaintiff elected to proceed pro se.
. Several bankruptcy courts have also invoked their authority to examine prudential standing sua sponte. See e.g., In re Grason,
. See Pyramid Transp., Inc. v. Greatwide Dallas Mavis, LLC, No. 3:12-CV-0149-D,
. Although the Fourth Circuit is not among the circuits that have addressed the issue, district courts within the Fourth Circuit have likewise concluded that homeowners lack standing to enforce terms of a pooling and servicing agreement because they are neither
. The distinction between,, intended third-party beneficiaries and incidental beneficiaries, who may be unintentionally benefitted by the performance of a contract, is widely recognized across jurisdictions. See 13 Williston On Contracts^ 37:21 (4th ed.2015) (collecting cases):
. The Defendants dispute that the Plaintiff would qualify for relief under the NMS because, even if Bank of America was the holder of the Plaintiff’s loan, the loan was not in default on the relevant date. See Response Brief ¶ 10 n.l.
. In a recent opinion, the Honorable Mary Jane Hall of the Circuit Court for the City of Norfolk, Virginia considered whether a borrower could obtain relief relating to a foreclosure of her real property on the basis that the foreclosing entity was not the holder of the note because its acquisition of the note violated the terms of a securitized trust, which operated under New York law. Burgest v. HSBC Bank, USA, No. CL14-8747,
. In the Affidavit, the Plaintiff also cites a decision of the Court of Civil Appeals of Texas in Tri-Cities Construction, Inc. v. American National Insurance Co.,