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Federspiel v. Bank of New York Mellon

United States District Court, N.D. Georgia, Atlanta Division

August 5, 2014

ERIC FEDERSPIEL, et al., Plaintiffs,
v.
THE BANK OF NEW YORK MELLON formerly known as The Bank of New York, as Trustee for CWMBS, Inc., CHL Mortgage Pass-Through Trust 2007-HYA Mortgage Pass-Through Certificates, Series 2007-HY4, et al., Defendants.

OPINION AND ORDER

THOMAS W. THRASH, Jr., District Judge.

This is an action for wrongful attempted foreclosure. It is before the Court on the Defendants' Motion to Dismiss [Doc. 6]. For the reasons set forth below, the Defendants' Motion to Dismiss [Doc. 6] is GRANTED.

I. Background

A. Procedural History and Facts

The Plaintiffs, Eric and Laura Federspiel, filed suit against Defendants The Bank of New York Mellon, f/k/a The Bank of New York as Trustee for CWMBS, Inc., CHL Mortgage Pass-Through Trust 2007-HYA Mortgage Pass-Through Certificates, Series 2007-HY4 and Bank of America, NA, on August 1, 2013, in the Superior Court of Fulton County alleging various causes of action related to several attempted foreclosures on the Plaintiffs' property. The Defendants removed the suit to this Court on September 3, 2013, and filed the instant motion to dismiss.

The Court draws the facts from those alleged in the complaint. The Plaintiffs, Eric and Laura Federspiel, own the Property at 515 Rippling Water Lane, Duluth, Georgia, 30097.[1] Eric Federspiel purchased the Property on July 31, 2007, with a $30, 000 down payment and a first mortgage of $480, 000 and an additional second mortgage.[2] The initial holder of the Security Deed was RBC Centura Bank. [3] The servicing agent for the mortgage is Defendant Bank of America.[4] On October 22, 2007, the second mortgage was refinanced with the grantors of the Security Deed listed as both Eric and Laura Federspiel.[5]

In 2009, the Plaintiffs sought a modification of the loan through Bank of America "which required Plaintiffs to make reduced payments during the trial period."[6] Sometime later in 2009, Bank of America informed the Plaintiffs that it was going to foreclose and an advertisement of foreclosure was published in November 2009.[7] The proposed foreclosure sale did not take place.[8]

In 2012, the Plaintiffs again sought modification of their mortgage through Bank of America.[9] Bank of America advertised foreclosure again in September 2012, but that foreclosure sale was also withdrawn.[10]

The Plaintiffs have continued to negotiate for a loan modification through Bank of America.[11] As late as June 2013, the Plaintiffs provided requested information to Bank of America.[12] Bank of America continued to evaluate the Plaintiffs' application.[13] However, the Property was listed for foreclosure again on August 6, 2013.[14] This foreclosure advertisement stated that Bank of New York Mellon is the holder of the Security Deed and Promissory Note.[15]

On July 2, 2013, Laura Federspiel spoke with an agent of Bank of America named Dewana Baltimore concerning her application for modification.[16] Ms. Baltimore told Mrs. Federspiel that the Plaintiffs met the initial requirements for modification and that the Plaintiffs would receive further information about the approval of the loan modification in the mail.[17] Mrs. Federspiel spoke with Ms. Baltimore again on July 22, 2013, and she told Mrs. Federspiel that she was continuing to work on the loan modification process and she would get back in touch with the Plaintiffs soon.[18] Ms. Baltimore never called the Plaintiffs again.[19]

The "Plaintiffs have a substantial income, which is wholly sufficient to pay the mortgage, taxes and insurance on their family home, as well as all other reasonable living expenses."[20] The "Plaintiffs have done everything asked of them in the loan modification process, but it does not appear that BOA is the party with the ability to modify the mortgage, despite their [sic] promises to the contrary."[21]

The Plaintiffs' first alleged cause of action is for breach of contract/wrongful foreclosure.[22] The Plaintiffs appear to contend that the contracts at issue are the Security Deed and the Promissory Note.[23] The Plaintiffs contend that "only the secured party has the ability to foreclose on a mortgage loan."[24] The Plaintiffs aver that an "unsecured party" is attempting to foreclose which is a breach of contract.[25] The Plaintiffs also claim that Ms. Baltimore, as agent of Bank of America, promised that the Plaintiffs met the initial requirements of the loan modification program and additional information would be sent along.[26] "It is a breach of the verbal agreement for Defendants to proceed with foreclosure when BOA promised that it was still considering Plaintiffs' applications."[27]

In their fraud cause of action, the Plaintiffs contend the Defendants have committed fraud under O.C.G.A. §§ 51-6-1, 23-2-51, and 23-2-52.[28] The Plaintiffs assert that "more than one entity claims to be the secured party."[29] Bank of America "claims to be the party with the authority and ability to modify the mortgage, but apparently BOA is not the secured party."[30] The Plaintiffs contend that because the Security Deed and the Promissory Note were "separated" it is impossible to determine who holds the Security Deed.[31] The Plaintiffs claim it is "unclear" how Bank of New York Mellon came to hold the Security Deed.[32] The Plaintiffs claim Bank of New York Mellon knowingly made false and material statements when it said on two previous occasions that it was authorized to foreclose and did not foreclose.[33] Ms. Baltimore's statement that the Plaintiffs had met the initial criteria for modification was also a material and knowingly false statement when made.[34] "BOA also represented that it was the party with authority and ability to modify the mortgage, but BOA is not in fact the secured party."[35] The Plaintiffs claim that the Defendants made these material representations in order "to lull Plaintiffs into complacency so that Plaintiffs could not/would not take other measure [sic] to ensure the Plaintiffs [sic] ability to save their home from foreclosure."[36] The Plaintiffs claim they have always been ready, willing, and able to make payments on the subject Property.[37]

The Plaintiffs also seek an emergency temporary restraining order and injunctive relief.[38] The Plaintiffs claim negligence.[39] The Plaintiffs allege that Bank of New York Mellon and Bank of America have a duty to service the mortgage loan in good faith pursuant to O.C.G.A. ¶ 7-1-1013, as well as a duty to service the mortgage loan in keeping with a reasonable standard of care.[40] The Plaintiffs claim that Bank of New York Mellon has a duty to honor its contractual obligations and refrain from wrongfully foreclosing on the Plaintiffs' property.[41] Bank of America has a duty to perform in good ...


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