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Baker v. CitiMortgage, Inc.

United States District Court, D. Minnesota

April 18, 2018

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

          Michelle A. Baker, pro se

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

          MEMORANDUM OPINION AND ORDER ADOPTING REPORT AND RECOMMENDATION

          SUSAN RICHARD NELSON United States District Judge

         This matter is before the Court on the Objection [Doc. Nos. 37 & 39][1] to Magistrate Judge Katherine Menendez's Report and Recommendation (“R&R”) [Doc. No. 34] issued on December 21, 2017. In the R&R, Magistrate Judge Menendez recommended that the Motion to Dismiss pursuant to Federal Rules of Civil Procedure 8, 9(b), and 12(b)(6) [Doc. No. 20] filed by Defendants CitiMortgage, Inc. (“CitiMortgage”) and Mortgage Electronic Registration Systems, Inc. (“MERS”) (collectively, “Defendants”) be granted because Plaintiff Michelle Baker (“Plaintiff”) has failed to state a claim upon which relief may be granted. As explained below, after conducting a de novo review of all the files, records, and proceedings herein, this Court overrules Plaintiff's Objection, adopts the R&R in its entirety, and dismisses this action with prejudice.

         I. BACKGROUND

         At the outset, this Court notes that Plaintiff is appearing pro se, and, as such, her pleadings are entitled to a liberal construction. Solomon v. Petray, 795 F.3d 777, 787 (8th Cir. 2015) (“When we say that a pro se complaint should be given liberal construction, we mean that if the essence of an allegation is discernible . . . then the district court should construe the complaint in a way that permits the layperson's claim to be considered within the proper legal framework.” (alteration in original) (quoting Stone v. Harry, 364 F.3d 912, 914 (8th Cir. 2004))). That notwithstanding, this Court echoes the magistrate judge in noting that Plaintiff's Complaint and subsequent filings are in some sections very difficult to follow and understand. As the magistrate judge noted, Plaintiff “uses a host of legal jargon that lacks a discernible and clear meaning.” (R&R at 2.) But like the magistrate judge, this Court has endeavored to read all of Plaintiff's submissions in the best possible light.

         A. Factual Background

         This Court assumes-as it must when ruling on a motion to dismiss under 12(b)(6)-that all the factual allegations pleaded in the complaint are true. Hager v. Ark. Dep't of Health, 735 F.3d 1009, 1013 (8th Cir. 2013). This Court does not, however, accept as true wholly conclusory allegations, Hanten v. Sch. Dist. of Riverview Gardens, 183 F.3d 799, 805 (8th Cir. 1999), or legal conclusions that a plaintiff draws from the facts pled, Westcott v. City of Omaha, 901 F.2d 1486, 1488 (8th Cir. 1990).

         The R&R thoroughly and accurately describes relevant factual background of this case, so this Court incorporates it herein by reference. In 2010, Plaintiff obtained a loan from CitiMortgage to purchase a home in Andover, Minnesota. (See R&R at 3.) On March 3rd of that year, Plaintiff executed a promissory note (“Note”) for $154, 849 in favor of CitiMortgage. (Id.) The loan was secured with a mortgage in favor of MERS, “acting solely as nominee” for CitiMortgage and CitiMortgage's successors and assigns. (Mortgage, Defs.' Ex. 2 [Doc. No. 23-2] at 3; see also R&R at 3.) Plaintiff presumably defaulted on her loan, and on October 28, 2011, a “Notice of Default” was filed with the Anoka County Recorder's Office. (See R&R at 3.) Also on October 28, MERS recorded an “Assignment of Warranty Deed, ” signed by Brenda Enriquez as Assistant Secretary for MERS. (See id.) According to Plaintiff, however, Enriquez was not employed by MERS. (See id.) Thereafter, three Notices of Sale were recorded-on May 9, 2012; July 16, 2015; and November 22, 2016. (Id.)

         According to Plaintiff, the day she executed the Note, she “was issued an Uncertificated Security to execute in the capacity of (Accommodation Party) to a Tangible Note Bill of Exchange . . . regarding a purported loan to (Accommodated Party) CITIMORTGAGE, INC for $154, 849.00.” (Id. (quoting Compl. [Doc. No. 1-1] ¶ 29).) According to Plaintiff, CitiMortgage is thus “an account debtor Accommodated Party to a 26 U.S.C[.] § 1031 Exchange of property held for productive use or investment.” (Id. (quoting Compl. ¶ 30).)[2] According to Plaintiff, “[a]s part of the transaction scheme of 26 U.S.[C.] § 1031 - Exchange, Defendant [CitiMortgage] deployed MERS as an electronic agent under the Constructive Warranty Deed as nominee/beneficiary . . . .” (Id. (quoting Compl. ¶ 18).) According to Plaintiff, however, “MERS cannot transfer the beneficial right to the Tangible Accommodated Note instrument, ” (id. (quoting Compl. ¶ 18)), and “does not have the requisite title, perfected security interest or standing to proceed in a foreclosure” of her home, (id. (quoting Compl. ¶ 20)).

         In addition to these allegations, Plaintiff contends that CitiMortgage improperly securitized the Mortgage.[3] (Id. at 4.) She avers that CitiMortgage sold the loan to CMLT 2015-PS1 Trust (“the Trust”). (Id.) According to Plaintiff, CitiMortgage assigned or transferred a security interest in the property to a “Sponsor” of the Trust. (Id.) However, Plaintiff contends, CitiMortgage did not receive full value in exchange for securitization of the loan. (Id.)

         Finally, Plaintiff alleges that she “hired CERTIFIED FORENSIC LOAN AUDITORS, LLC, . . . to perform a Forensic Chain of Title Securitization Analysis (‘the Audit') completed by a court qualified expert to verify” her claims. (Id. (quoting Compl. ¶ 24).) According to Plaintiff, the Audit shows that Plaintiff's loan was securitized. (Compl. ¶ 24.) Plaintiff further asserts 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.” (R&R at 4 (alteration in original) (quoting Compl. ¶ 25).)

         B. Plaintiff's Prior Action Against Defendants

         On March 29, 2016, Plaintiff filed an action against CitiMortgage in state court, which CitiMortgage removed to federal court (“Baker I”). (See Notice of Removal, Baker v. CitiMortgage, Inc., No. 16-cv-01103 (DSD/JSM) (D. Minn. Apr. 27, 2016), ECF No. 1.) At issue in that case was the same $154, 849 loan that Plaintiff obtained from CitiMortgage. (Id.) In Baker I, Plaintiff sought “to void the mortgage, alleging: (1) the lending officer did not have authority to approve the loan; (2) the loan violated state usury laws; (3) CitiMortgage defrauded her in violation of 12 U.S.C. § 24(7); and (4) CitiMortgage inflicted emotional distress.” Baker v. CitiMortgage, Inc., No. 16-cv-1103 (DSD/JSM), 2016 WL 4697334, at *1 (D. Minn. Sept. 7, 2016). CitiMortgage moved to dismiss under Rule 12(b)(6), and on September 7, 2016, the Honorable David Doty dismissed Plaintiff's complaint with prejudice. Judge Doty found (1) that Plaintiff “ha[d] not alleged any facts indicating that the loan officers acted without authority or that CitiMortgage did not have authority under its charter to enter into the mortgage agreement;” (2) that Plaintiff had neither plausibly alleged a claim of usury nor that “the loan was predatory or that the terms of the mortgage were unconscionable;” (3) that Plaintiff had not pleaded a plausible claim for fraud; and (4) that she had “fail[ed] to plead sufficient facts supporting a plausible claim under a theory of either intentional or negligent infliction of emotional distress.” Id. at *3.

         C. Plaintiff's Second Case Against Defendants (This Action)

         Plaintiff did not appeal Judge Doty's decision in Baker I. Instead, she filed the instant suit, again in state court, on June 5, 2017. (See Compl. at 4.) Defendants timely removed to federal court. Plaintiff's new Complaint asserts eleven “causes of action:”

1. Count I: Lack of Standing/Wrongful Foreclosure
2. Count II: Fraud in the Concealment
3. Count III: Fraud in the Inducement
4. Count IV: Unconscionable Contract
5. Count V: Breach of Contract
6. Count VI: Breach of Fiduciary Duty
7. Count VII: Quiet Title
8. Count VIII: Slander of Title
9. Count IX: Temporary Restraining Order and for Injunctive Relief
10. Count X: Declaratory Relief 11. Count XI: Intentional Infliction of ...

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