William B. Butler, Esq., Butler Liberty Law, LLC, Minneapolis, MN, on behalf of Plaintiffs.
Mark G. Schroeder, Esq., Briggs and Morgan, P.A., Minneapolis, MN, on behalf of Defendants.
MEMORANDUM OPINION AND ORDER
ANN D. MONTGOMERY, District Judge.
This matter is before the undersigned United States District Judge for a ruling on Plaintiffs' Objection [Docket No. 16] to Magistrate Judge Janie S. Mayeron's December 19, 2013 Report and Recommendation [Docket No. 14] ("R&R"). Judge Mayeron recommends granting Defendants' Motion to Dismiss [Docket No. 3] Plaintiffs' complaint. For the reasons stated below, Plaintiffs' Objections are overruled, Judge Mayeron's R&R is adopted, and Defendants' motion to dismiss is granted.
The factual history of this dispute is more fully recited in Judge Mayeron's R&R and is incorporated here by reference. In brief summary, Plaintiffs borrowed money from Encore Credit Corporation, which is not a party to this case. Plaintiffs executed a mortgage secured by Plaintiffs' property in Andover, Minnesota. Not. of Removal, [Docket No. 1] Attach. 1 (Complaint) ¶ 6. Plaintiffs' mortgage note was sold on the secondary market and the mortgage was eventually sold to Bank of New York Mellon. Id . ¶ 21. Plaintiffs defaulted on their mortgage payments. The Bank of New York Mellon noticed a sheriff's sale for the property, which was conducted on September 26, 2012. Plaintiffs allege that between Encore Credit Corporation and Bank of New York Mellon, Defendants failed to follow Minnesota law. Plaintiffs allege Defendants failed to record mortgage assignments, allowed unauthorized persons to exercise power of attorney ("POA"), drafted and recorded false documents, and failed to honor the terms of purchase agreements made between Defendants. As a result of these failings, Plaintiffs allege Bank of New York Mellon cannot have a legal title to the foreclosed property, and the property should revert back to the Plaintiffs, notwithstanding their uncontested default.
A. Standard of Review
In reviewing a magistrate judge's report and recommendation, the district court "shall make a de novo determination of those portions of the report or specified proposed findings or recommendations to which objection is made." 28 U.S.C. § 636(b)(1)(C); see also D. Minn. L.R. 72.2(b). A district judge "may accept, reject, or modify, in whole or in part, the findings or recommendations made by the magistrate judge." Id.
B. Motion to Dismiss Standard
A motion to dismiss a complaint for failure to state a claim is governed by Rule 12(b)(6) of the Federal Rules of Civil Procedure. In considering a Rule 12(b)(6) motion, the court views the pleadings in the light most favorable to the nonmoving party and treats the alleged facts as true. See Ossman v. Diana Corp. , 825 F.Supp. 870, 879-80 (D. Minn. 1993). Conclusions of law made by the nonmoving party, however, are not "blindly accept[ed]." Westcott v. City of Omaha , 901 F.2d 1486, 1488 (8th Cir. 1990). A Rule 12(b)(6) motion to dismiss is granted when the factual allegations, even assumed to be true, do not entitle that party to relief. See, e.g., Taxi Connection v. Dakota, Minn. & E.R.R. Corp. , 513 F.3d 823, 826-27 (8th Cir. 2008). On a motion to dismiss, a court may refer to public records and documents to which the complaint refers. Illig v. Union Elec. Co. , 652 F.3d 971, 976 (8th Cir. 2011); Porous Media Corp. v. Pall Corp. , 186 F.3d 1077, 1079 (8th Cir. 1999).
Under Rule 8(a) of the Federal Rules of Civil Procedure, pleadings "shall contain a short and plain statement of the claim showing that the pleader is entitled to relief." A pleading must allege "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly , 550 U.S. 544, 570 (2007). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw a reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal , 556 U.S. 662, 678 (2009). Determining whether a complaint states a plausible claim for relief is "a context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Id . "But where the well-pleaded facts do ...