Frederick A. Johnson, Plaintiff,
The Bank of New York Mellon f/k/a The Bank of New York as Trustee for Certificate Holders of CWMBS, Inc. CHL Mortgage Pass-Through Trust 2006-3, Mortgage Pass-Through Certificates, Series 2006-3; Mortgage Electronic Registration Systems, Inc.; MERSCORP, Inc., and also all other persons, unknown claiming any right, title, estate, interest, or lien in the real estate described in the complaint herein, Defendants.
REPORT AND RECOMMENDATION ON DEFENDANTS' MOTION TO DISMISS
ARTHUR J. BOYLAN, Chief Magistrate Judge.
This matter is before the Court, United States Chief Magistrate Judge Arthur J. Boylan, on a Motion to Dismiss by Defendants The Bank of New York Mellon f/k/a The Bank of New York as Trustee for Certificate Holders of CWMBS, Inc. CHL Mortgage Pass-Through Trust 2006-3, Mortgage Pass-Through Certificates, Series 2006-3 ("BONYM"), Mortgage Electronic Registration System, Inc. ("MERS"), and MERSCORP Holdings, Inc. (together, "Defendants"). (Docket No. 5.) The matter has been referred to the magistrate judge for report and recommendation to the district court under 28 U.S.C. § 636 and Local Rule 72.1(b). The Court took the matter under advisement on the papers submitted on October 7, 2013.
Plaintiff Frederick A. Johnson seeks to invalidate the foreclosure of the mortgage on his home. Plaintiff asserts three claims against Defendants: (1) quiet-title, to determine adverse claims under Minn. Stat. § 559.01; (2) declaratory judgment; and (3) slander of title. For the reasons below, the Court recommends that Defendants' Motion to Dismiss be granted and Plaintiff's claims be dismissed with prejudice.
Plaintiff resides in and is in possession of real property located in Minnetrista, Minnesota. (Compl. ¶ 1.) Plaintiff acquired his interest in the property via warranty deed in 1997. ( Id. at ¶ 2.) On November 9, 2005, Plaintiff executed and delivered a promissory note to Countrywide Bank, N.A. ("Countrywide"). ( Id. at ¶ 6.) The promissory note was secured by a mortgage Plaintiff executed in favor of MERS, as nominee for Countrywide. ( Id., Ex. 1.)
On August 22, 2011, MERS assigned Plaintiff's mortgage to BONYM. (Compl. ¶ 24, Ex. 5.) The assignment was recorded on August 30, 2011. ( Id. ) Alice Rowe, Assistant Secretary for MERS, executed the assignment of mortgage on behalf of MERS. ( Id. ) Plaintiff alleges that Rowe did not have legal authority to execute the assignment because she was not an employee of MERS. ( Id. at ¶ 24.)
Plaintiff's loan was securitized into a trust entitled Certificate Holders of CWMBS, Inc. CHL Mortgage Pass-Through Trust 2006-3, Mortgage Pass-Through Certificates, Series 2006-3. (Compl. ¶ 8.) Plaintiff alleges that the securitization was governed by a Pooling and Servicing Agreement ("PSA") which required numerous assignments of mortgage to be prepared and delivered to and from various entities. ( Id. at ¶¶ 8-11.) Plaintiff alleges either that these assignments did not take place in violation of the PSA or that the assignments did occur but that none of these purported required assignments were recorded. ( Id. at ¶¶ 30-32.)
The Complaint contains no allegations regarding the foreclosure proceedings on Plaintiff's property, but Plaintiff's opposition to this motion states that BONYM commenced foreclosure proceedings in October 2012. (Docket No. 11, Plaintiff's Mem. at 4-5.)
STANDARD OF REVIEW
Federal Rule of Civil Procedure 12(b)(6) provides that a complaint must be dismissed if it fails to state a claim upon which relief can be granted. To survive a motion to dismiss, "a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). In reviewing a motion to dismiss under Fed.R.Civ.P. 12(b)(6), a court must accept as true all factual allegations in the complaint and draw all reasonable inferences in the plaintiff's favor. Blankenship v. USA Truck, Inc., 601 F.3d 852, 853 (8th Cir. 2010). It must not, however, give effect to conclusory allegations of law. Stalley ex rel. United States v. Catholic Health Initiatives, 509 F.3d 517, 521 (8th Cir. 2007). The plaintiff must do more than offer "labels and conclusions" or a "formulaic recitation of the elements of a cause of action...." Twombly, 550 U.S. at 555. Instead, the "[f]actual allegations must be enough to raise a right to relief above the speculative level...." Id.
Ordinarily, if the parties present, and the court considers, matters outside of the pleadings, a Rule 12(b)(6) motion must be treated as a motion for summary judgment. Fed.R.Civ.P. 12(d). But the court may consider exhibits attached to the complaint and documents that are necessarily embraced by the complaint without converting the motion into one for summary judgment. Mattes v. ABC Plastics, Inc., 323 F.3d 695, 697 n.4 (8th Cir. 2003).
I. QUIET TITLE
Plaintiff brings a quiet title claim to determine adverse claims under Minn. Stat. § 559.01. Minnesota's quiet title statute provides that "[a]ny person in possession of real property... may bring an action against another who claims an estate or interest therein, or a lien thereon, adverse to the person bringing the action, for the purpose of ...