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McColligan v. State Home Mortgage

United States District Court, M.D. Georgia, Macon Division

August 15, 2017




         Plaintiff Rodney M. McColligan, a self-proclaimed sovereign citizen, [1');">1');">1');">1" name="FN1');">1');">1');">1" id="FN1');">1');">1');">1">1');">1');">1');">1] filed this pro se action against Defendants State Home Mortgage and Georgia Housing and Finance Authority (“GHFA”). Plaintiff bring a federal claim for rescission under the Truth In Lending Act (“TILA”), 1');">1');">1');">15 U.S.C. § 1');">1');">1');">16');">601');">1');">1');">1 et seq., and state-law claims for wrongful foreclosure, fraud, intentional infliction of emotional distress, slander of title, and declaratory relief. Before the Court are Defendants' Motion to Dismiss under Rule 1');">1');">1');">12(b)(6');">6). For the reasons set forth below, the Court HEREBY GRANTS Defendants' Motion [Doc. 3] and DISMISSES Plaintiff's Complaint [Doc. 1');">1');">1');">1-1');">1');">1');">1] for failure to state a claim upon which relief can be granted. The Court also DENIES as MOOT Plaintiff's Motion to Recover Original Documents [Doc. 1');">1');">1');">11');">1');">1');">1], Plaintiff's Motion for Jury Trial and Issuance of Subpoena [Doc. 1');">1');">1');">14], Plaintiff's Motion to Confirm Jury Trial [Doc. 20], Defendants' Motion to Dismiss Plaintiff's “Amendment One to Complaint” [Doc. 8], and Defendants' Motion to Strike Plaintiff's “Second Amended Complaint” [Doc. 22].


         This suit arises out of the foreclosure of Plaintiff's home. Although Plaintiff's Complaint contains numerous pages of rambling irrelevancies, the Court accepts all factual allegations in the Complaint as true and construes them in the light most favorable to Plaintiff.[2" name="FN2" id="FN2">2]

         On August 20, 2007, Plaintiff signed a Promissory Note and Security Deed to obtain a $95, 6');">66');">63.00 mortgage from Market Street Corporation (“Market Street”).[3" name="FN3" id= "FN3">3] The Security Deed granted Market Street the power to foreclose on Plaintiff's home in Warner Robins, Georgia, upon Plaintiff's default.[4] On September 5, 2007, Market Street assigned the Security Deed to Defendant GHFA.[5]

         In January of 201');">1');">1');">17, Plaintiff hired a “Certified Forensic Loan Auditor, ” who informed him that his mortgage was securitized and transferred to a trust.[6');">6" name="FN6');">6" id="FN6');">6">6');">6] The auditor also told Plaintiff his mortgage was not assigned to certain intermediary parties before its transfer to the trust, in violation of the Pooling and Servicing Agreement (“PSA”) governing the securitization process.[7] Plaintiff subsequently defaulted on his mortgage payments, and Defendants sent Plaintiff a Notice of Default.[8]

         On March 27, 201');">1');">1');">17, Plaintiff filed this action in the Houston County Superior Court. On April 4, 201');">1');">1');">17, Defendants foreclosed on Plaintiff's home.[9] On April 26');">6, 201');">1');">1');">17, Defendants removed the case to this Court, invoking the Court's original jurisdiction over Plaintiff's TILA claim pursuant to 28 U.S.C. § 1');">1');">1');">1331');">1');">1');">1 and supplemental jurisdiction over Plaintiff's state law claims pursuant to 28 U.S.C. § 1');">1');">1');">136');">67. On May 1');">1');">1');">1, 201');">1');">1');">17, Defendants filed their Motion to Dismiss.

         On May 1');">1');">1');">17, 201');">1');">1');">17, Plaintiff filed an “Amendment One to Complaint” [Doc. 6');">6]. Plaintiff's Amendment consists of incoherent pronouncements and adds no new allegations to the original Complaint.[1');">1');">1');">10" name="FN1');">1');">1');">10" id="FN1');">1');">1');">10">1');">1');">1');">10] On July 1');">1');">1');">11');">1');">1');">1, 201');">1');">1');">17, Plaintiff filed a “Second Amended Complaint” [Doc. 21');">1');">1');">1] without Defendants' consent or the Court's leave, in violation of Federal Rule of Civil Procedure 1');">1');">1');">15(a). Regardless, Plaintiff's “Second Amended Complaint” is identical to his original Complaint. Although Defendants moved for dismissal before Plaintiff filed his Amended Complaints, Plaintiff's amendments do not change the substance of his allegations. Thus, the Court can consider Defendants' Motion to Dismiss Plaintiff's original Complaint.[1');">1');">1');">11');">1');">1');">1" name="FN1');">1');">1');">11');">1');">1');">1" id="FN1');">1');">1');">11');">1');">1');">1">1');">1');">1');">11');">1');">1');">1]


         Rule 8 of the Federal Rules of Civil Procedure requires that a pleading contain “a short and plain statement of the claim showing that the pleader is entitled to relief.”[1');">1');">1');">12" name="FN1');">1');">1');">12" id= "FN1');">1');">1');">12">1');">1');">1');">12] Although a complaint “does not need detailed factual allegations, ” it must provide “more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.”[1');">1');">1');">13" name="FN1');">1');">1');">13" id= "FN1');">1');">1');">13">1');">1');">1');">13] In the same vein, a complaint may not rest on “naked assertions devoid of further factual enhancement.”[1');">1');">1');">14" name="FN1');">1');">1');">14" id= "FN1');">1');">1');">14">1');">1');">1');">14] “Factual allegations must be enough to raise a right to relief above the speculative level.”[1');">1');">1');">15" name="FN1');">1');">1');">15" id= "FN1');">1');">1');">15">1');">1');">1');">15]

         On a motion to dismiss, the Court must accept as true all well-pleaded facts in a Plaintiff's complaint.[1');">1');">1');">16');">6" name="FN1');">1');">1');">16');">6" id= "FN1');">1');">1');">16');">6">1');">1');">1');">16');">6] To avoid dismissal pursuant to Rule 1');">1');">1');">12(b)(6');">6) of the Federal Rules, “a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.”[1');">1');">1');">17" name="FN1');">1');">1');">17" id= "FN1');">1');">1');">17">1');">1');">1');">17] A claim is plausible where the plaintiff alleges factual content that “allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.”[1');">1');">1');">18" name= "FN1');">1');">1');">18" id="FN1');">1');">1');">18">1');">1');">1');">18] The plausibility standard requires that a plaintiff allege sufficient facts “to raise a reasonable expectation that discovery will reveal evidence” that supports a Plaintiff's claims.[1');">1');">1');">19" name="FN1');">1');">1');">19" id= "FN1');">1');">1');">19">1');">1');">1');">19]


         Defendants contend all of Plaintiff's claims-rescission under TILA, wrongful foreclosure, fraud, intentional infliction of emotional distress, slander of title, and declaratory relief-should be dismissed for failure to state a claim. The Court agrees.

         I. Rescission under TILA

          First, Plaintiff requests the Court rescind the mortgage transaction under TILA because Defendants failed to disclose the fact that the mortgage “would ultimately benefit Defendants.”[20" name="FN20" id= "FN20">20] Plaintiff's rescission claim, however, is barred by TILA's three- year statute of limitations. When a lender fails to comply with TILA's disclosure requirements, the borrower's “right of rescission shall expire three years after the date of consummation of the transaction or upon the sale of the property, whichever occurs first.”[21');">1');">1');">1" name="FN21');">1');">1');">1" id="FN21');">1');">1');">1">21');">1');">1');">1] Here, Plaintiff alleges the mortgage transaction was consummated on August 20, 2007-over nine years before Plaintiff filed this action.[22" name="FN22" id= "FN22">22] Accordingly, Plaintiff is not entitled to rescission under TILA.[23" name= "FN23" id="FN23">23]

         Having dismissed Plaintiff's only federal claim, the Court must now determine whether to exercise supplemental jurisdiction over the remaining state law claims. A district court may decline to exercise supplemental jurisdiction over such claims if it has dismissed all claims over which it has original jurisdiction.[24" name="FN24" id="FN24">24] In deciding whether to exercise supplemental jurisdiction, the district court should consider factors such as judicial economy, convenience, fairness to the litigants, and comity.[25" name= "FN25" id="FN25">25] Having fully considered the matter, the Court will exercise supplemental jurisdiction over Plaintiff's state law claims.

         II. Wrongful Foreclosure

         Plaintiff bases his wrongful foreclosure claim on two theories: (1');">1');">1');">1) Defendants do not hold the Promissory Note, and (2) Defendants did not comply with the terms of the PSA. To state a claim for wrongful foreclosure under Georgia law, a plaintiff must establish (1');">1');">1');">1) a legal duty owed to the plaintiff by the foreclosing party; (2) a breach of that duty; (3) a causal connection between the breach of that duty and the injury sustained by the plaintiff; and (4) damages.[26');">6" name="FN26');">6" id= "FN26');">6">26');">6]

         Here, Plaintiff fails to state a claim under either of his wrongful foreclosure theories. First, Georgia law authorizes the holder of a security deed to foreclose on property even if it does not hold the promissory note.[27" name="FN27" id="FN27">27] Because Defendant GHFA held the Security Deed, it was authorized to foreclose on Plaintiff's home when he defaulted.[28" name="FN28" id="FN28">28] Second, Plaintiff has no standing to challenge an alleged violation of the PSA, to which he is not a party.[29" name="FN29" id="FN29">29] Accordingly, his wrongful foreclosure claim must be dismissed.

         III. Fraud

         Next, Plaintiff contends Defendants fraudulently induced him to obtain the mortgage by concealing the fact that the mortgage would be securitized.[30" name="FN30" id="FN30">30] To state a claim for fraud under Georgia law, a plaintiff must establish (1');">1');">1');">1) a false representation by the defendant; (2) scienter; (3) an intention to induce the plaintiff to act or refrain from acting; (4) justifiable reliance by the plaintiff; and (5) damage to the plaintiff.[31');">1');">1');">1" name="FN31');">1');">1');">1" id="FN31');">1');">1');">1">31');">1');">1');">1]Additionally, “[a]n obligation to disclose must exist before a party may be held liable for fraud based upon the concealment of material facts.”[32" name="FN32" id= "FN32">32]

         Here, Plaintiff cannot establish any of these elements because Defendants did not originate the mortgage-Market Street did.[33" name="FN33" id= "FN33">33] Indeed, Plaintiff fails to allege he had any contact whatsoever with Defendants before obtaining the mortgage from Market Street.[34" name= "FN34" id="FN34">34] Thus, Plaintiff's fraud claim must be dismissed.

         IV. Intentional Infliction ...

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