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Dean J. Welk v. Federal National Mortgage Association

May 17, 2013


The opinion of the court was delivered by: Susan Richard Nelson, United States District Judge


This matter is before the Court on Defendant Federal National Mortgage Association's Motion to Dismiss [Doc. No. 6]; Defendants Reiter & Schiller, P.A. and Curt Trisko's Motion to Dismiss [Doc. No. 13]; and Plaintiff's Motion to Remand [Doc. No. 16]. For the reasons stated below, the Court grants the Motions to Dismiss, denies the Motion to Remand, and dismisses the Amended Complaint [Doc. No. 25] with prejudice.


Plaintiff Dean J. Welk challenges the foreclosure proceedings on his home for at least the third time in this Court.*fn1 His first challenge was as part of a multi-plaintiff action, Cartier v. Wells Fargo Bank, N.A., Civ. No. 11-2168 (JRT/AJB). In that lawsuit, Mr. Welk and his wife, Heather Welk, claimed to reside at "P.O. Box 9188, North St. Paul." (Cartier Compl. [Doc. No. 1-2] ¶ 23.) The property, located in Ramsey County, Minnesota, was described in the Complaint as

The South 160.7 feet of the Westerly 133.5 feet of the Easterly 261.22 feet of the South Half of the Southeast Quarter of the Southwest Quarter of the Northeast Quarter of Section 14, Township 29, Range 22. (Id.)

Less than two months later, Mrs. Welk was the first named plaintiff in another multi-plaintiff lawsuit, Welk v. GMAC Mortgage, LLC, Civ. No. 11-2676 (PJS/JJK) (Welk I). In the Welk I Complaint, Mrs. Welk claimed to "own[] the property at 2130 Cowern Place East, North St. Paul." (Welk I Compl. [Doc. No. 1-1] ¶ 1.) The legal description of the property is East 127.72 feet of the South 1/2 of the Southeast 1/4 of the Southwest 1/4 of the Northeast 1/4 of Section 14, Township 29, Range 22 (except part acquired for right of way of St. Paul & Stillwater Road) also described as Block 38 of Fifth Addition to North St. Paul together with so much of streets and alleys as accrued to said Block 7 reason of vacation thereof, according to the United States Government Survey thereof and situate [sic] in Ramsey County, Minnesota.

(Id.) At first glance, this appears to be a different property than that described in Cartier, but subtracting the Cartier property's 133.5 westerly feet from the 261.22 easterly portion of that property results in the "East 127.72 feet" described in Welk I. There is no explanation for Welk I's failure to name Dean Welk as a plaintiff, given that he presumably owns the property in joint tenancy with his wife.

Finally, in the first paragraph of the instant Amended Complaint, Plaintiff Dean Welk claims to "reside[] at 2121 Holloway Avenue East, North Saint Paul." (Welk II Am. Compl. [Doc. No. 25] ¶ 1.) The legal description of the property that follows is identical to the legal description of the Welks' property in Cartier. The difference in address between Welk II and the property in Welk I might give one pause, until one reads the second paragraph of the Welk II Amended Complaint, which states, curiously, that Dean Welk "is a natural person currently residing at 2120 E Cowern Place, North St. Paul." (Id. ¶ 2.)*fn2 There is no explanation for Mr. Welk's residence at two different addresses, nor is there any mention of Mrs. Welk. Both Cartier and Welk I were dismissed at the pleading stage for failure to state a claim on which relief could be granted.

In this matter, Mr. Welk's first claim challenges the assignment of his mortgage from the Mortgage Electronic Registration System ("MERS") to Wells Fargo, contending that the person who signed the assignment did not have the authority to do so, rendering the foreclosure invalid under Minnesota law. (Am. Compl. ¶¶ 12-15.) Similarly, Mr. Welk also contends that the individual who signed a power of attorney allowing Defendant Reiter & Schiller, P.A. to commence non-judicial foreclosure proceedings did not have the legal authority to do so. (Id. ¶¶ 23-24.) Mr. Welk also alleges that Defendant Federal National Mortgage Association (known colloquially as Fannie Mae) acquired an interest in the mortgage from Wells Fargo in February 2004 but no assignment of the mortgage from Wells Fargo to Fannie Mae was ever recorded. (Id. ¶¶ 20-21.) Because the purported assignment was never recorded, Mr. Welk contends that the foreclosure and subsequent sheriff's sale of the property is void. (Id. ¶ 27.)

The Amended Complaint does not allege when the foreclosure and sheriff's sale of Mr. Welk's property occurred, but Mr. Welk's memorandum states that a sheriff's sale was accomplished on August 24, 2010, and that Wells Fargo was the successful bidder on the property. (Pl.'s Opp'n Mem. [Doc. No. 14] at 4.) The Amended Complaint contends that Wells Fargo executed a quitclaim deed to the property in favor of Fannie Mae on March 11, 2011. (Am. Compl. ¶ 28.) This deed was recorded three days later, on March 14, 2011. (Id.)

The Amended Complaint raises six causes of action, although there are only five numbered Counts because there are two Count 3s. Count 1 seeks a "Determination of Adverse Interests" under Minnesota's quiet title statute, Minn. Stat. § 559.01. (Id. ¶ 38-41.) Count 2 asks for a declaratory judgment that the sheriff's sale and quitclaim deed are void, whether "Plaintiffs [sic] owe any obligation to Defendant Fannie Mae," that the assignment from MERS to Wells Fargo is void, and that Mr. Welk "remains the owner of the property in fee title." (Id. ¶ 44.) The first Count 3 claims "Penalties for Deceit or Collusion" under Minn. Stat. § 481.07; the second Count 3 claims slander of title under Minn. Stat. § 504B.231. Count 4 claims negligence per se and Count 5 claims wrongful ouster and treble damages under Minn. Stat. § 504B.231. The claims for slander of title and negligence per se appear to be against the law firm and Defendant Trisko only; the claim for deceit or collusion is apparently brought against Fannie Mae, the law firm, and Trisko, and the remaining claims are against Fannie Mae alone.

All Defendants have brought motions to dismiss, and Mr. Welk has moved to remand. Although in the usual case, the Court would take up the motion to remand first, in this instance, the Court will first examine the merits of Mr. Welk's claims. Consideration of the nondiverse Defendants' argument that they were fraudulently joined "requires consideration of the merits of the claims made against the nondiverse defendant[s]." Welk I, 850 F. Supp. 2d. at 983.


A. Standard of ...

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