Case 1:10-cv-03831-MHS Document 43 Filed 07/20/15 Page 1 of 8 UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF GEORGIA ATLANTA DIVISION DUSTIN ROLLINS and all others similarly situated, v. Plaintiff, MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., and MERSCORP, INC., CIVIL ACTION NO. 1:10-CV-03831-MHS Defendants. ORDER This wrongful foreclosure action is before the Court on defendants' motion to dismiss the remaining claims in the FirstAmended Complaint, the Magistrate Judge's Report and Recommendation (HR&R") recommendingthat the motion be granted, plaintiffs objections to the R&R, and defendants' response to plaintiffs objections. For the following reasons, the Court overrules plaintiffs objections, adopts the Magistrate Judge's R&R, grants defendants' motion to dismiss, and dismisses this action. (Rev.a/a2)
Case 1:10-cv-03831-MHS Document 43 Filed 07/20/15 Page 2 of 8 Background PlaintiffDustin Rollins filed this putative class action in the Superior Court of Fulton County on October 15, 2010, against defendants Mortgage Electronic Registration Systems, Inc. ("MERS"), and MERS's parent corporation, MERSCORP, Inc. Defendants removed the case to this Court on November 19, 2010 [Doc. 11. On January 3, 2011, the Judicial Panel on Multidistrict Litigation ("JPML") transferred the case to the United States District Court for the District of Arizona for inclusion in In re Mortg. Elec. Registration Sys. (MERS) Litigation, MDL No. 09-2119, before U. S. District Judge James A. Teilborg [Doc. 91. According to the allegations ofthe First Amended Complaint, which is the operative pleading, on or about May 6, 2004, plaintiff executed a promissory note in the amount of $176,000 in connection with a loan from GreenPoint Mortgage Funding, Inc. FirstAm. CompI. [Doc. 33-1], Ex. A. The note was secured by a security deed executed by plaintiff and recorded against the property located at 905 Moreland Avenue SE, Atlanta, Georgia 30316 (the "Property"). Id., Ex. B. In the security deed, MERS was named as a "nominee for Lender and Lender's successors and assigns" and the "grantee under this Security Instrument." Id., Ex. B at 1. Plaintiff alleges 2
Case 1:10-cv-03831-MHS Document 43 Filed 07/20/15 Page 3 of 8 that in April 2010, MERS sent him correspondence claiming it was the creditor on his residential mortgage loan and that his failure to comply with the terms of the loan created a default. Id. ~ 3. Plaintiff alleges that MERS conducted a foreclosure sale of the Property on August 3, 2010. Id. Plaintiff claims that the foreclosure was wrongful Specifically, plaintiff alleges that the security deed was void as a matter of Georgia law and that MERS lacked authority to foreclose the Property because (1) MERS did not possess the promissory note, (2) the security deed called upon MERS to act as a corporate fiduciary or trustee in violation ofgeorgia law, (3) MERS failed to comply with O.C.G.A. 14-14-162.2 when it sent notice offoreclosure to plaintiff because it was not the secured creditor and the notice was otherwise defective, and (4) MERS failed to exercise the power of sale fairly and in good faith. Id. Based on these allegations, plaintiff asserted claims for (1) declaratory judgment (Count I), wrongful foreclosure by operation of O.C.G.A. 44-14-162.2 (Count II), wrongful foreclosure as a tort (Count 111), equitable relief (Count IV), punitive damages (Count IV), 1 and attorney's fees (Count V). Id. ~~ 127-149. 1 The complaint contains two Count IVs. 3
Case 1:10-cv-03831-MHS Document 43 Filed 07/20/15 Page 4 of 8 Defendants moved to dismiss the First Amended Complaint for failure to state a claim upon which relief could be granted. On May 25,2012, Judge Teilborg entered an Order granting defendants' motion with respect to all of plaintiffs claims except for that part ofplaintiffs wrongful foreclosure claim in Count III based on MERS's alleged violation of Georgia's corporate fiduciary statute, O.C.G.A. 7-1-242, and the related claims for relief (the "corporate fiduciary claims"), which Judge Teilborg concluded should be remanded to this Court. In re Mortg. Elec. Registration Sys. (MERS) Litigation, MDL No. 09-2119-PHX-JAT, 2012 WL 1912133 (D. Ariz. May 12, 2012). Plaintiffappealed the dismissal order. After a limited remand for entry of a Rule 54(b) order, Rollins v. Mortg. Elec. Registration Sys., Inc., 737 F.3d 1250 (9th Cir. 2013), the Ninth Circuit affirmed but remanded for entry ofan order permitting plaintiff to file a motion for leave to amend to assert a specific theory regarding statutory notice unrelated to the corporate fiduciary claims. Id., 578 F. App'x 700 (9th Cir. 2014). The parties then asked Judge Teilborg to send the remainder ofthe case back to this Court. Judge Teilborg noted that remand was appropriate, and on September 12, 2014, the JPML issued an Order remanding the case to this Court [Doc. 14,]. 4
Case 1:10-cv-03831-MHS Document 43 Filed 07/20/15 Page 5 of 8 Following remand ofthe case to this Court, plaintiff indicated that he did not intend to move for leave to amend, and that the case on remand would center on the corporate fiduciary claims. Joint Status Report Regarding Remand from MDL Proceedings [Doc. 22] at 6. Pursuant to a consent scheduling order entered by the Magistrate Judge, defendants then filed a motion to dismiss the remaining claims. After the motion was fully briefed, the Magistrate Judge issued an R&R recommending that the motion be granted [Doc. 34]. Plaintiff filed timely objections to the R&R [Doc. 41], to which defendants filed a response [Doc. 42]. Discussion The R&R recommends dismissal of plaintiffs claims on two separate and independent grounds. First, the Magistrate Judge found that plaintiff was not entitled to have the foreclosure sale set aside because he had not tendered the amount due under the security deed and note. The Magistrate Judge cited numerous Georgia cases holding that tender of the amount due was required to have a foreclosure sale set aside because "he who would have equity must do equity," and because, without tender, there was no causal connection between the lender's action and the borrower's damages, which were due instead to the borrower's own failure to pay. R&R [Doc. 34] at 8-11. 5 (Rev.S/S2)
Case 1:10-cv-03831-MHS Document 43 Filed 07/20/15 Page 6 of 8 Second, the Magistrate Judge found that, even if tender was not required, plaintiff failed to state a claim based on MERS's alleged violation of O.C.G.A. 7-1-242, which places restrictions on corporate fiduciaries. First, the Magistrate Judge found that violation ofo.c.g.a. 7-1-242 did not give rise to a private civil cause of action because "[t] here is no indication that the legislature intended to impose civil liability in addition to the criminal sanction[] set forth in the statute[.]" R&R [Doc. 34] at 18 (quoting Murphy v. Bajjani, 647 S.E.2d 54,58 (Ga. 2007». Second, the Magistrate Judge found that, in any event, plaintiffs claim that MERS violated the statute by acting as a corporate fiduciary/trustee was without merit as a matter of law, citing eight prior decisions by this Court rejecting precisely the same claim. Id. at 19-21. Plaintiffs objections to the R&R are a classic "cut & paste" job. Except for the introduction, they merely repeat, almost verbatim, the arguments plaintiffmade in opposition to defendants' motion to dismiss. Compare Pl.' s Objections [Doc. 41-1] at 6-7 with Pl.'s Opp'n Br. [Doc. 30] at 4-5 (discussing Georgia foreclosure law); comparealsopl's Objections at 7-8 with Pl.'s Opp'n Br. at 6 (arguing that security deed is void and unenforceable because it requires MERS to act as fiduciary/trustee); compare also Pl.'s Objections at 6 (Rev.a/a2)
Case 1:10-cv-03831-MHS Document 43 Filed 07/20/15 Page 7 of 8 8-10 with Pl.'s Opp'n Br. at 8-10,6-7 (same); compare also Pl.'s Objections at 10-13 with Pl.'s Opp'n Br. at 10-12, 15 (arguing that MERS was acting as fiduciary/trustee); compare also Pl.'s Objections at 13-17 with Pl.'s Opp'n Br. at 20-24 (discussing prior cases); compare also Pl.'s Objections at 17-19 with Pl.'s Opp'n Br. at 24-27 (arguing that MERS was prohibited from conducting foreclosure sale); compare also Pl.'s Objections at 20 with Pl.'s Opp'n Br. at 28-29 (discussing whether O.C.G.A. 7-1-242 provides private right of action); and compare also Pl.'s Objections at 21-22 with Pl.'s Opp'n Br. at 29 31 (arguing that tender not required). As for the introduction, it essentially asserts that the Magistrate Judge "got it wrong" but fails to identify any specific error in her analysis or cite any legal authority in support of plaintiffs contentions. These are not proper objections to an R&R. See Vandiver v. Martin, 304 F. Supp. 2d 934, 937 (E.D. Mich. 2004) ("A general objection, or one that merely restates the arguments previously presented is not sufficient to alert the court to alleged errors on the part ofthe magistrate judge" and therefore "is not an 'objection' as that term is used in this context."). The Court need not, and will not, address again the same arguments already presented to and fully considered by the Magistrate Judge. See Inman v. Astrue, No. 3:10-CV 7
Case 1:10-cv-03831-MHS Document 43 Filed 07/20/15 Page 8 of 8 305,2011 WL 3490193, at *1 (E.D. Tenn. Aug. 9, 2011) (H[n]enovoreview of plaintiffs arguments would make the original referral to the magistrate judge useless and would waste judicial resources.") (citation omitted). Instead, in the absence of any proper objections, the Court reviews the R&R for clear error. See Johnson v. Connolly, No. 9:07-CV-1237, 2010 WL 2628747, at *1 (N.D. N.Y. Jun. 25, 2010) (HGeneral or conclusory objections, or objections which merely recite the same arguments presented to the magistrate judge, are reviewed for clear error."). Upon careful review of the Magistrate Judge's thorough and well-reasoned R&R, the Court finds no such error. Summary For the foregoing reasons, the Court OVERRULES plaintiffs objections [Doc. 40, 41], ADOPTS the R&R [Doc. 34] as the order ofthe Court, GRANTS defendants' motion to dismiss [Doc. 27], and DISMISSES WITH PREJUDICE the remaining claims in this action. 1ft IT IS SO ORDERED, this 7:::P.- day of July, 2015. arvin. Shoob, Senior Judge United States District Court Northern District of Georgia 8