Order: Order Regarding Motion to Dismiss for Failure to State a Claim

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Solomon Emory Adams
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1 DISTRICT COURT, BOULDER COUNTY, COLORADO Court Address: 1777 Sixth Street P.O. Box 4249, Boulder, CO, Plaintiff(s) TOBIAH FERNSLER v. Defendant(s) THE BANK OF NEW YORK MELLON et al. DATE FILED: November 4, :49 AM CASE NUMBER: 2014CV106 COURT USE ONLY Case Number: 2014CV106 Division: 5 Courtroom: Order: Order Regarding Motion to Dismiss for Failure to State a Claim The motion/proposed order attached hereto: GRANTED. Defendants motion is granted without prejudice. The court notes for the plaintiff that there are legal resources that may be available to assist him. See, e.g., Colorado Legal Services, the Boulder County Bar Association (and related organizations), and the Colorado Bar Association, index.cfm/id/ Issue Date: 11/4/2014 ANDREW HARTMAN District Court Judge Page 1 of 1

2 District Court, Boulder County, Colorado th Street Boulder, CO Plaintiff: TOBIAH FERNSLER Defendants: REAL TIME RESOLUTIONS; BANK OF AMERICA; BANK OF AMERICA, NA; Megastar Financial Corp.; Countrywide Home Loans; Mortgage Electronic Registration Systems, Inc.; MERSCORP, Inc.; The Bank of New York Mellon FKA The bank of New York, as Trustee for the Certificateholders of Cwalt, INC. Alternative Loan Truat CB Mortgage Pass- Through Certificates, Series CB; The Bank of New York Mellon fka the Bank of New York, as Trustee (Cwalt CB); Boulder County Public Trustee; Unknown Defendants/Claimants whether individuals, corporations, trusts or other entities COURT USE ONLY Case No CV 106 ORDER REGARDING MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM COMES NOW THE COURT, on motion of The Bank of New York Mellon fka The Bank of New York, as Trustee (CWALT CB) aka The Bank of New York Mellon fka The Bank of New York, as Trustee for the Certificateholders CWALT, Inc., Alternative Loan Trust CB Mortgage Pass-Through Certificates, Series CB ( BNYM, Trustee ), Mortgage Electronic Registration Systems, Inc. ( MERS ), Merscorp, Inc. properly known as Merscorp Holdings, Inc. ( Merscorp ), and Bayview Loan Servicing, LLC ( Bayview ) (collectively Defendants ) to dismiss this matter for failure to state a claim, and being fully advised as to the premises FINDS and ORDERS as follows: STANDARD OF REVIEW A motion to dismiss for failure to state a claim upon which relief can be granted tests the sufficiency of a plaintiff's complaint. Bedard v. Martin, 100 P.3d 584, 588 (Colo. App. 2004) O MTD Page 1 of 6

3 A motion to dismiss for failure to state a claim is looked upon with disfavor, and a complaint should not be dismissed unless it appears beyond a doubt that a claimant can prove no set of facts in support of the claim which would entitle the claimant to relief. Id. In ruling on a motion to dismiss, a court may consider only the matters stated within the four corners of the complaint and must not go beyond the confines of the pleading. Jenner v. Ortiz, 155 P.3d 563, 564 (Colo. App. 2006). The court must accept all well-pleaded facts as true, but is not required to accept as true legal conclusions couched as factual allegations. Western Innovations, Inc. v. Sonitrol Corp., 187 P.3d 1155, 1158 (Colo.App. 2009). A document referred to in the complaint, even if not formally incorporated or attached to the complaint, is not considered a matter outside the pleading and an authentic copy submitted by the defendant may be considered on a motion to dismiss. Yadon v. Lowry, 126 P.3d 332, 336 (Colo.App. 2005). A complaint need not express a complete recitation of all facts that support the claim, but need only serve notice of the claim asserted. Story v. Bly, 217 P.3d 872, 876 (Colo.App. 2008). Plaintiff alleges 1 : FACTS 1. Plaintiff is the owner of the subject property; 2. Each defendant may claim some unspecified interest in the subject property; 3. Defendants Bank of America, Bank of America, NA and Countrywide Home Loans collected payments but failed to transfer those funds to the holder in due course (presumably BNYM, Trustee), and failed to maintain a proper accounting. 4. Plaintiff s claims have something to do with past and current foreclosure proceedings; 1 Pursuant to C.R.C.P. 8, the complaint need only contain a short and plain statement of the claim showing that the pleader is entitled to relief. However, C.R.C.P. 10(b) requires that all averments of claim or defense shall be made in numbered paragraphs, the contents of each of which shall be limited as far as practicable to a statement of a single set of circumstances. If Plaintiff s Amended Complaint complies with C.R.C.P. 10(b), only the first three items in this statement of facts are well pleaded. However, for purposes of the Motion, the Court infers Items 4 to 11 from pages 3-4 of the Amended Complaint, which are after Plaintiff s signature O MTD Page 2 of 6

4 5. Plaintiff has owned the subject property since March 2001; 6. Plaintiff has made significant improvements to the property; 7. Plaintiff is an active and contributing member of the local community; 8. Plaintiff resides in the subject property with his wife and daughter; 9. Plaintiff was provided with various financial summaries in the course of various foreclosure proceedings; 10. Plaintiff made certain payments that are not properly accounted for; 11. Plaintiff applied for but has not been given a loan modification; Plaintiff has also attached numerous documents 2 unspecified manner, including: which apparently involve Defendants in some 12. Deed of Trust ( First DOT ) dated March 3, 2006 from Tobiah Peter Fernsler to the Public Trustee of Boulder County, Colorado for the benefit of MERS acting solely as nominee for Megastar Financial Corp., recorded April 3, 2006 at Reception No of the County Records; 13. Deed of Trust ( Second DOT ) dated March 3, 2006 from Tobiah Peter Fernsler to the Public Trustee of Boulder County, Colorado for the benefit of MERS acting solely as nominee for Megastar Financial Corp., recorded April 3, 2006 at Reception No of the County Records; Based on the above allegations, Plaintiff requests a complete adjudication of the rights of all parties in the property. 3 DISCUSSION I. Plaintiff has not made any allegation regarding Merscorp. As an initial matter, Merscorp is entitled to a dismissal of all claims because Plaintiff fails to make any allegation of any involvement by Merscorp with anything to do with this matter. 2 The documents were attached to the Complaint, but not the Amended Complaint. Nevertheless, the documents were referred to by the Amended Complaint on page 5 as LIST OF EXHIBITS. 3 On the fourth page of the Amended Complaint (after Plaintiff s signature) Plaintiff also asserts Payments made by the plaintiff to defendants Countrywide, Bank of America, and Bank of America appear to be unjust enrichment which were not delivered to the original lender or current investor. He then goes on to claim[] these payments as damages, to be repaid to defendants in full [emphasis supplied]. It is unclear whether Plaintiff is requesting relief, and if so, what relief. Plaintiff also requests discovery ; however, there is no cause of action for discovery O MTD Page 3 of 6

5 Nor can Merscorp s involvement be inferred because Merscorp is not a party to any document referred to by the Amended Complaint. Rather, it appears that Plaintiff has named Merscorp solely because Merscorp is affiliated with MERS. However, Plaintiff has not alleged anything that would create any vicarious liability on the part of Merscorp for any action of MERS (or any actionable claim against MERS). Accordingly, the Court dismisses all claims against Merscorp. II. Plaintiff has not alleged anything that would make either Deed of Trust invalid. The plaintiff in a quiet title action has the burden of establishing title that is superior to that claimed by the defendant. Hinojos v. Lohmann, 182 P.3d 692, 697 (Colo.App. 2008). Here, other than his ownership of the property, Plaintiff makes no allegations regarding the status of title. Nevertheless, Plaintiff referred the First DOT, the Second DOT, and other documents in the Amended Complaint. Presumably, Plaintiff named (1) MERS as a defendant herein because it is the named beneficiary as nominee for the original lenders; (2) BNYM, Trustee because it commenced foreclosure of the First DOT; and (3) Bayview because it is the current servicer for BNYM Trustee. 4 Plaintiff alleges that he made payments to Bank of America and Countrywide Home Loans, who failed to transfer those funds to the holder in due course, and that he applied for but was not given a loan modification. The implication of the documents and Plaintiff s 4 Plaintiff does not specifically allege any particular interest of any Defendant in the subject property, only that the Defendants may claim some interest. In the absence of specifying what interest Defendants may claim Plaintiff fails to alleged facts which, if true, would establish the superiority of his title over the unspecified claim. See Hinojos. That is, in the absence of any allegation as to what documents of record purport to create an interest in the Defendants that would cause a cloud on Plaintiff s title, the Court cannot say which interest is superior. If there are no documents of record that purport to create an interest in the Defendants, no relief is necessary. Nevertheless, the analysis herein gives Plaintiff the benefit of reasonable inferences available from his allegations and the documents attached or referred to in the Amended Complaint O MTD Page 4 of 6

6 allegations is that the First DOT and Second DOT are security for an admitted indebtedness that has not been paid in full. 5 A deed of trust is a security instrument containing a grant to a public trustee together with a power of sale. C.R.S (7). A deed of trust may be foreclosed by the holder of the note. C.R.S (1). For purposes of foreclosure, the holder is the person in actual possession of or person entitled to enforce an evidence of debt. C.R.S (10). Transfer or assignment of a negotiable promissory note carries with it, as an incident, the deed of trust or mortgage upon real estate that secures it payment. Fassett v. Mulock, 5 Colo. 466, 469 (1880) ( a mortgage is but an incident of the debt it secures, and an assignment of the debt carries the mortgage with it ); Denver Brick and Mfg. Co. v. McAllister, 6 Colo. 261, 263 (1882); Stetler v. Winegar, 226 P. 858, 859 (Colo. 1924) (transfer or assignment of note carries mortgage with it; a transfer or assignment of a deed of trust need not be recorded to remain enforceable); Columbus Investments v. Lewis, 48 P.3d 1222, 1226 (Colo. 2002); Kenney v. The Jefferson County Bank, 54 P. 404, 407 (Colo. App. 1898) (an assignment of a deed of trust is not required to be recorded to remain enforceable); McGovney v. Gwillim, 65 P. 346, (Colo. App. 1901). It follows that under Colorado law the holder of the Note is entitled to enforce the Deed of Trust, regardless of whether there has been a formal assignment of the Deed of Trust. 6 Here, Plaintiff s allegations affirmatively show that the First DOT and Second DOT are valid security interests for debts that have not been paid in full. Consequently, Plaintiff cannot 5 Plaintiff also attached or referred to other title documents that, on their face, have nothing to do with any named defendant. 6 Whether or not there is a formal assignment is not relevant, and need not be considered for purposes of this motion to dismiss, because a formal assignment is not necessary for the note holder to enforce a deed of trust. As Plaintiff has alleged facts that show the Deeds of Trust are security for a valid and unpaid debt, the Court must leave title as it exists O MTD Page 5 of 6

7 show that (1) any interest that MERS, as nominee, has or had in the subject property under either Deed of Trust, (2) any interest that BNYM, Trustee, may have as holder of the note secured by the First DOT, 7 and/or (3) any interest that Bayview may have as servicer for BNYM, Trustee is without foundation or merit. Accordingly, Plaintiff fails to state a claim to invalidate or otherwise quiet title with respect to any interest any Defendant may have with respect to the either DOT, and the Court must leave title as it currently exists. WHEREFORE, the Court orders that Plaintiff s Complaint is hereby DISMISSED. The Court awards Defendants their costs. DONE this day of BY THE COURT: By: District Court Judge 7 The Court makes no finding as to whether BNYM, Trustee holds the note. Rather, as the Complaint makes no allegations which, if true, would entitle Plaintiff to a declaration that either Deed of Trust is without foundation or merit, the Court leaves title to the subject property as is O MTD Page 6 of 6

IN THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF TENNESSEE NASHVILLE DIVISION MEMORANDUM

IN THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF TENNESSEE NASHVILLE DIVISION LORRIE THOMPSON ) ) v. ) NO. 3-13-0817 ) JUDGE CAMPBELL AMERICAN MORTGAGE EXPRESS ) CORPORATION, et al. ) MEMORANDUM