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Baker v. CitiMortgage, Inc.

United States District Court, D. Minnesota

December 21, 2017

Michelle A. Baker, Plaintiff,
CitiMortgage, Inc.; and Christian Bank & Trust, as Trustee for Securitized Trust Citigroup Mortgage Loan Trust Inc 2015-PS1 Trst, Mortgage Electronic Registration System “MERS”; Defendants.

          Michelle A. Baker, plaintiff

          Christopher Steven Comstock, Joseph Martin Callaghan, Lucia Nale, and Thomas Vangel Panoff, Mayer Brown LLP; Cameron A. Lallier and Thomas W. Pahl, Foley & Mansfield, PLLP; counsel for defendant CitiMortgage Inc.



         This matter is before the Court on the motion to dismiss the Complaint filed by the Defendants CitiMortgage, Inc., and Mortgage Electronic Registration System, Inc. (“MERS”), pursuant to Federal Rule of Civil Procedure 12(b)(6). [Defs.' Mot., ECF No. 20.] In the Complaint, the Plaintiff, Michelle A. Baker, who is appearing pro se, asserts several claims against the Defendants based on allegedly wrongful conduct in connection with the securitization of a mortgage loan Ms. Baker received for the purchase of her home. [Compl., ECF No. 1-1.] Based on the facts alleged in the complaint, the Defendants' motion, Ms. Baker's response and on the entire record of this proceeding, the Court concludes that Ms. Baker has failed to state a claim upon which relief can be granted and this action should be dismissed.

         I. Background

         For purposes of considering the Defendants' motion to dismiss, the Court must take all the factual allegations in the Complaint to be true. Morton v. Becker, 793 F.3d 185, 187 (8th Cir. 1986). However, the Court is not required to accept as true any wholly conclusory statements, Hanten v. Sch. Dist. of Riverview Gardens, 183 F.3d 799, 805 (8th Cir. 1999), or legal conclusions drawn from the facts alleged, Westcott v. City of Omaha, 901 F.2d 1486, 1488 (8th Cir. 1990). The Court may also consider certain matters in the record that are attached to or embraced by the Complaint. See Porous Media Corp. v. Pall Corp., 186 F.3d 1077, 1079 (8th Cir. 1999) (the court considering a motion to dismiss for failure to state a claim may consider materials that are part of the public record as well as materials necessarily embraced by the pleadings).

         Liberal Construction

Ms. Baker is representing herself in this litigation, and as such, her pleading is entitled to a liberal construction. Though this does not permit the Court to add factual allegations that are not included, it means that the Court construes the Complaint “in a way that permits the layperson's claim to be considered within the proper legal framework.” Solomon v. Petray, 795 F.3d 777, 787 (8th Cir. 2015) (citing Stone v. Harry, 364 F.3d 912, 914 (8th Cir. 2004)).

         Understanding that Ms. Baker is not a trained lawyer, the Court notes that the Complaint contains numerous conclusory statements, and sections that are difficult to follow. She also uses a host of legal jargon that lacks a discernible and clear meaning. These features of the Complaint make it challenging to understand the nature of Ms. Baker's claims. And unfortunately, her response to the motion to dismiss [ECF No. 30], restates the same sort of arguments and conclusory statements that characterize the Complaint without engaging with the legal arguments raised by Defendants. Nonetheless, the Court has endeavored to read Ms. Baker's Complaint in the best possible light.

         The Complaint

         Ms. Baker owns real property in Andover, Minnesota. [Compl. ¶ 3.] On March 3, 2010, she obtained financing for the purchase of the home through a loan from CitiMortgage. [See Id. ¶¶ 11, 15-16, 8(2)[1] (referring to a “Tangible Note” regarding the mortgage loan at issue); see also id., Ex. A ¶ 6; Promissory Note, Defs.' Ex. 1, ECF No. 23-1.] The loan was secured with a mortgage, which made MERS the nominee for CitiMortgage, and Ms. Baker is listed as the mortgagor. [Mortgage, Defs.' Ex. 2, ECF No. 23-2.]

         “On October 28, 2011, a Notice of Default was filed with the Anoka County Recorder's Office as ins# 2011.2025249007.” [Compl. ¶ 38.] Ms. Baker alleges that the same day “MERS recorded an Assignment of Warranty Deed, ” which was “signed by Brenda Enriquez as Assistant Secretary for MERS.” [Id. ¶¶ 34-35.] Ms. Baker asserts that Ms. Enriquez “was not employed by MERS.” [Id. ¶ 36.] Three Notices of Sale were also recorded on May 9, 2012; July 16, 2015; and November 22, 2016. [Id. ¶ 39.]

         Ms. Baker makes several allegations concerning 26 U.S.C. § 1031. She alleges that she “was issued an Uncertificated Security to execute in the capacity of (Accommodation Party) to a Tangible Note Bill of Exchange on March 3, 2010 regarding a purported loan to (Accommodated Party) CITIMORTGAGE, INC for $154, 849.00.” [Compl. ¶ 29.] CitiMortgage, she asserts, “is an account debtor Accommodated Party to a 26 U.S. Code § 1031 - Exchange of property held for productive use or investment.”[2] [Id. ¶ 30.] As part of this exchange, CitiMortgage “deployed MERS as an electronic agent under the Constructive Warranty Deed as nominee/beneficiary. . . .” [Id. ¶ 18.] However, on information and belief, Ms. Baker asserts that “MERS only tracks and updates ownership of the Payment Intangible registered with the MERS database software system[, but] MERS cannot transfer the beneficial right to the Tangible Accommodated Note instrument. . . .” [Id.] She asserts that MERS “does not have the requisite title [or] perfected security interest . . . to proceed in a foreclosure” of the real property at issue. [Id. ¶ 20.]

         Ms. Baker further alleges that CitiMortgage improperly securitized the mortgage loan at issue. She asserts that CitiMortgage sold the loan to CMLT 2015-PS1 Trust. [Compl. ¶ 29(2).] CitiMortgage allegedly assigned or transferred a security interest in the property to a Sponsor of the CMLT 2015-PS1 trust before the trust's closing date. [Id. ¶ 16.] CitiMortgage allegedly did not receive full value in exchange for securitization of the loan, but “delivered a converted . . . unsecured Tangible Note as ‘order paper' to Sponsor for Accommodated Party services rendered associated to originating the exchange transaction. . . .” [Id. ¶ 17.]

         Ms. Baker also alleges that she “hired CERTFIED FORENSIC LOAN AUDITORS, LLC, out of Los Angeles, CA to perform a Forensic Chain of Title Securitization Analysis (“the Audit”) completed by a court qualified expert to verify” her claims and that her loan was securitized. [Compl. ¶ 24.] She states that “[t]he results of the Audit clearly show that Plaintiff's Note and Security Deed was never transferred[, but instead, ] was . . . pooled, sold, transferred with other loans and mortgages.” [Id. ¶ 25.] She asserts that this is problematic because the Note and the Mortgage cannot be separated. [Id. ¶¶ 26-27.]

         From these allegations, Ms. Baker asserts the following claims:

(1) “Lack of Standing/Wrongful Foreclosure, ” [Compl. ¶¶ 2(2)-15(2)];
(2) “Fraud in the Concealment, ” [id. ¶¶ 16(2)-26(2)];
(3) “Fraud in the Inducement, ” [id. ¶¶ 27(2)-34(2)];
(4) “Unconscionable Contract, ” [id. ¶¶ 35(2)-42(2)];
(5) “Breach of Contract, ” [id. ¶¶ 43(2)-47(2)];
(6) “Breach of Fiduciary Duty, ” [id. ¶¶ 48(2)-53(2)];
(7) “Quiet Title, ” [id. ¶¶ 54(2)-61(2)];
(8) “Slander of Title, ” [id. ¶¶ 62(2)-69(2)];
(9) “Temporary Restraining Order and For Injunctive Relief, ” [id. ...

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