United States District Court, S.D. Mississippi, Northern Division
WILLIAM F. JORDAN AND RITA J. JORDAN, Plaintiffs,
NATIONWIDE TRUSTEE SERVICES, INC.; CHASE HOME FINANCE LLC A/K/A JPMORGAN CHASE BANK, N.A.; JPMORGAN CHASE BANK NATIONAL ASSOCIATION A/K/A JPMORGAN CHASE BANK, N.A.; AAMES FUNDING CORPORATION D/B/A AAMES HOME LOAN; DEUTSCHE BANK NATIONAL TRUST COMPANY, A NATIONAL CORPORATION AS TRUSTEE FOR MORGAN STANLEY ABS CAPITAL 1 INC. TRUST 2003-HE3 MORTGAGE PASS THROUGH CERTIFICATE SERIES 200 2003-HE3; MORGAN STANLEY; MORGAN STANLEY ABS CAPITAL 1 INC. TRUST 2003-HE3 MORTGAGE PASS THROUGH CERTIFICATES SERVICES 200-2003-HE3; PROMMIS SOLUTIONS, LLC; STEPHANIE C. JOHNSON; JOHNSON & FREEDMAN, LLC; ELIZABETH JOLLY; MICHAEL IOCOVO; RICHETTA MILTON; LAQUENIA TREZEVANT; ADRIENE SINGLETON; AND JOHN DOES 1-20, Defendants.
MEMORANDUM OPINION AND ORDER
TOM S. LEE, District Judge.
This cause is before the court on the motion of defendants JPMorgan Chase Bank, N.A., JP Morgan Chase Bank, N.A. s/b/m to Chase Home Finance, LLC (Chase) and Deutsche Bank National Trust Company, as Trustee for Morgan Stanley ABS Capital 1 Inc. Trust 2003-HE3 Mortgage Pass Through Certificate Series 200 2003-HE3, for judgment on the pleadings pursuant to Federal Rule of Civil Procedure 12(c). Plaintiffs William F. Jordan and Rita J. Jordan have not responded to the motion and the time for doing so has passed. The court, having considered the memorandum of authorities submitted by the movants in support of their motion, concludes that the motion is well taken and should be granted.
In 2003, plaintiffs refinanced their Jackson, Mississippi home, obtaining a loan for $334, 560 from Aames Funding Corporation d/b/a Aames Home Loan. According to their complaint in this cause, beginning in March 2009, after they fell behind in their mortgage payments, they received solicitations from Chase Home Finance LLC, which serviced the loan, telling them their account "may be eligible for modification" and advising that "Changes to Your Chase Mortgage under the new federal loan modification program could help you avoid foreclosure." In April 2009, plaintiffs submitted to Chase a request for loan modification with supporting documentation. From time to time over the next year or so, plaintiffs provided additional information and documentation requested by Chase for consideration of their loan modification request. And throughout most of this time, from June 2009 through June 2010, they sent monthly payments to Chase of $2, 573 via Western Union for their mortgage payment. However, on September 2, 2010, plaintiffs received a notice from Nationwide Trustee Services, Inc., substituted Trustee on the Deed of Trust, that a payment of $77, 626.47 was required to reinstate their loan. This was followed by a notice dated November 3, 2010, reflecting a payoff figure of $366, 000. Shortly thereafter, on November 16, 2010, plaintiffs were informed by Chase that their loan was now owned by Deutsche Bank National Trust Company, which did not allow loan modifications under any circumstances. Plaintiffs were further told they would have to pay a "huge lump sum payment" ($77, 626.47) to avoid foreclosure. Within a few weeks of that notice, Nationwide issued a notice of foreclosure sale scheduled for January 13, 2011, following which it commenced publication of notice of foreclosure in the local newspaper.
On the day of the scheduled foreclosure, plaintiffs filed suit against Nationwide in the Chancery Court of Hinds County, Mississippi, seeking to enjoin the foreclosure based on allegations that they were not given proper notice and that they were entitled to an accounting as they disputed the reinstatement figure provided by Nationwide because, inter alia, it did not credit the payments they had made during the year their modification request was ostensibly being processed. The same day, the chancellor granted their petition without notice, ordering Nationwide to "cease foreclosure proceedings immediately." Two weeks later, Nationwide again commenced foreclosure proceedings. Following a March 3, 2011 publication of notice of sale, counsel for plaintiff and for Nationwide discussed an accounting of the reinstatement amount being demanded of plaintiffs. Plaintiffs allege that defendants, without providing them a full accounting, yet again began foreclosure proceedings in June 2011 for a foreclosure sale scheduled for July 14, 2011. On July 13, 2011, plaintiffs again filed a petition to enjoin foreclosure; and again, the chancery court issued an injunction without notice ordering Nationwide to "cease all contact with Plaintiffs... until the requested itemized accounting has been furnished to Plaintiff's counsel and/or all of the matter(s) of the case are finally adjudicated." Thereafter, on July 20, an agreed order was entered in which Nationwide agreed "to postpone the foreclosure of the property... until a complete and itemized accounting has been produced to the Plaintiffs and/or the matter is resolved."
According to plaintiffs' amended complaint herein, in April 2013, nearly three years after the agreed order was entered, Chase sent them an Accelerated Warning/Notice of Intent to Foreclose, threatening foreclosure if plaintiffs did not pay $187, 271.56 on or before May 27, 2014. In response, on May 27, 2014, plaintiffs filed an amended complaint in the state chancery court action adding a number of additional defendants, including Chase and Deustche Bank. The amended complaint included a petition to hold Nationwide and Chase in contempt for alleged violation of the chancery court's July 2011 orders, and included the following counts: quiet title; fraudulent misrepresentation and/or omission; constructive fraud; fraudulent inducement; fraudulent deceit; cancellation and removal of clouds from titles; fraudulent conveyance; rescission and cancellation; injunction; accounting; unjust enrichment; breach of implied covenants of good faith and fair dealing; negligence; violations of Mississippi Consumer Loan Broker Act and Mortgage Consumer Protection Act; and infliction of emotional distress. Chase, joined by the then-served diverse defendants, removed the case to this court on the basis of diversity jurisdiction. Chase and Deutsche Bank filed their answers to the amended complaint and have now moved for judgment on the pleadings, contending that each of plaintiffs' putative claims for relief fails as a matter of law for one or more reasons.
"The standard for deciding a Rule 12(c) motion is the same as a Rule 12(b)(6) motion to dismiss." Guidry v. Am. Pub. Life Ins. Co., 512 F.3d 177, 180 (5th Cir. 2007) (citing In re Katrina Canal Breaches Litig., 495 F.3d 191, 205 (5th Cir. 2007)). All well-pleaded facts are accepted as true and "[t]he plaintiff must plead enough facts to state a claim to relief that is plausible on its face.'" Id . (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). Here, having considered the movants' arguments, the court concludes that dismissal of plaintiffs' claims against them is in order for the reasons that follow.
The July 13, 2011 and July 20, 2011 chancery court orders that are the subject of plaintiffs' petition for contempt prohibited Nationwide from instituting foreclosure proceedings. Chase cannot be found in contempt for violation of those orders as Chase was not a party to the action when the court's orders were entered and the orders do not apply to Chase.
Quiet Title/Remove Cloud:
Plaintiffs allege in count one of their complaint that since "the Defendants are not in possession of all of the original documents related to the debt allegedly owed to them by the Jordans, " then defendants are not entitled to assert their rights to collect the debt and the court should find that the debt is in effect null and void. However, the "show-me-the-note theory has been repeatedly discredited' by the district courts in Mississippi." Brisby v. Moynihan, No. 3:14cv47-DPJ-FKB, 2014 WL 2940874, at *3 (S.D.Miss. June 30, 2014) (citations omitted); see also Casterline v. OneWest Bank, F.S.B., 537 Fed.App'x 314, 316 (5th Cir. 2013) (applying Texas law to reject same theory).
In count five, plaintiffs allege that the note and deed of trust securing the note, and defendants' foreclosure notice, constitute clouds on their title, and they contend that as a result of defendants' fraud, "[i]t would be inequitable and unjust to require [them] to give up their title since the Defendants accepted [their] title as good and complete at the time the Defendants fraudulently obtained [plaintiffs'] entry into the modification program." In other words, plaintiffs assert that the court should vest title in them based on defendants' alleged fraud. While the court concludes infra that plaintiffs have failed to state a viable claim for fraud, even had they done so, the court would find they have not stated a viable claim for removal of cloud and to quiet title. In Greene v. Indymac Bank, FSB, No. 3:12cv347-DPJ-FKB, 2012 WL 5414097 (S.D.Miss. Nov. 6, 2012), the court concluded that the plaintiffs' quiet title claim failed because the plaintiffs did not include in their complaint the deraignment of title required by section 11-17-35 of the Mississippi Code, which states:
In bills to confirm title to real estate, and to cancel and remove clouds therefrom, the complainant must set forth in plain and concise language the deraignment of his title. If title has passed out of the sovereign more than seventy-five (75) years prior to the filing of the [Complaint], then the deraignment shall be sufficient if it show title out of the sovereign and a deraignment of title for not less than sixty (60) years prior to the filing of the [Complaint]. A mere statement therein that complainant is the real owner of the land shall be insufficient, unless good and valid reason be given why he does not deraign his title.
Id. at 4-5 (quoting Miss. Code Ann. § 11-17-35). See also 7 G. Ogletree & D. Rueff, Encyclopedia of Mississippi Law § 60:117 ("This generally requires proof that title passed from the sovereign by reference to the patent and a deraignment of title for at least 60 years prior to the filing of the complaint.") (cited in Greene). As in Greene, "[p]laintiffs' amended complaint contains nothing more than [a] mere statement... that [Plaintiffs are] the real owner[s] of the land, ' which is ...