United States District Court, N.D. Georgia, Atlanta Division
LORI G. BRANDENSTEIN, Plaintiff,
PENNYMAC LOAN SERVICES, LLC, Defendant.
FINAL REPORT AND RECOMMENDATION
F. KING UNITED STATES MAGISTRATE JUDGE
Lori G. Brandenstein (“Brandenstein”), proceeding
Pro Se (and asserting that she is “Suis
Juris in Propria Persona”), commenced this civil
action in the Superior Court of Cobb County, Georgia, with
the filing of her Verified Complaint. [Doc. 1-1, Exhibit A -
Verified Complaint (“Compl.”), State Court Civil
Action No. 17-1-4682-53]. Defendant PennyMac Loan Services,
LLC (“PennyMac”), removed the complaint to
federal court. [Doc. 1]. Pending before the court is
PennyMac's motion to dismiss the complaint pursuant to
Rule 12(b)(6) of the Federal Rules of Civil Procedure for
failure to state a claim for which relief can be granted as
well as pursuant to Rules 4(m) and 9, and PennyMac's
October 26, 2017, Supplement expressly waiving its
service-related defense under Rule 12(b)(5). [Docs. 3, 6].
Plaintiff Brandenstein has not filed a
response. The matter has been submitted to the
undersigned for a report and recommendation to the District
initial matter, the Complaint includes a number of conclusory
allegations and citations to legal authorities that are not
appropriate for inclusion in a complaint and will not be set
forth in the following statement of facts. See Moore v.
McCalla Raymer, LLC, 916 F.Supp.2d 1332, 1342 (N.D.Ga.
2013) (“The complaint contains whole paragraphs of
legal argument, quotations, and citations which have no place
in a complaint.”) (citing Chevy Chase Bank, F.S.B.
v. Carrington, 2010 WL 745771, at *4 (M.D. Fla. March 1,
2010) (“Huge swaths of the . . . Complaint are improper
irrespective of their relevance, consisting of lengthy legal
arguments, case citations, and quotations from
treatises-material proper in legal memoranda, but almost
never proper in a complaint.”)).
undersigned also notes that the complaint in this case is
remarkably similar to the complaints filed in several other
cases within this district and, in each instance, dismissal
was found to be warranted. See, e.g., Winston v.
360 Mortg. Group, LLC, 2017 WL 4356918 (N.D.Ga. October
2, 2017) (dismissing complaint alleging fraudulent
conversion, mortgage servicing fraud, “declaratory
judgment (credit default swap)[, ]” “unfair and /
or deceptive business practices[, ]” “fraud
and/or attempted fraud[, ]” and intentional infliction
of emotional distress); Pessini v. Nationstar Mortg.,
LLC, 2017 WL 2197136 (N.D.Ga. April 25, 2017)
(dismissing complaint as shotgun pleading and listing cases
with “virtually identical” form complaints);
Samuel v. Nationstar Mortg., LLC, 2015 WL 12227731
(N.D.Ga. July 27, 2015), report and recommendation
adopted by 2015 WL 12434315 (N.D.Ga. August 13, 2015).
“[P]laintiff's use of a form complaint evidences
that her claims are not brought in good faith.”
Pessini, 2017 WL 2197136, at *4 (citing Martin
v. Citimortgage, 2010 WL 3418320, at *6 n.8 (N.D.Ga.
August 3, 2010), report and recommendation adopted
by 2010 WL 3418322 (N.D.Ga. August 25, 2010)).
motion to dismiss under Rule 12(b)(6), the complaint's
factual allegations are assumed true and construed in the
light most favorable to the plaintiff. Hardy v. Regions
Mortg., Inc., 449 F.3d 1357, 1359 (11th Cir.
2006); M.T.V. v. DeKalb County School Dist., 446
F.3d 1153, 1156 (11th Cir. 2006). “However,
conclusory allegations, unwarranted deductions of facts or
legal conclusions masquerading as facts will not prevent
dismissal.” Oxford Asset Mgmt., Ltd. v.
Jaharis, 297 F.3d 1182, 1188 (11thCir. 2002)
(citations omitted). The following factual allegations are
drawn from the Complaint, certain attachments to the
Complaint, and relevant public records.
19, 2017, Plaintiff Brandenstein initiated this litigation
against Defendant PennyMac challenging PennyMac's conduct
as it relates to the July 5, 2017, foreclosure of
Plaintiff's former residence, real property located at
2244 Josephine Court, Marietta, Georgia, 30062
(“Property”). [Compl.]. PennyMac was the servicer
of Plaintiff Brandenstein's mortgage loan on the
Property. [Compl. ¶ 8].
January 30, 2010, Plaintiff Brandenstein, along with Richard
W. Brandenstein (“R. Brandenstein”), who is not a
complainant or party to the instant suit, obtained a mortgage
loan from First Option Mortgage, LLC (“First
Option” or “Lender”), in the principal
amount of $213, 776.00 (“Loan”). [Compl. ¶
6]. In connection with and to secure payment on the Loan,
Plaintiff and R. Brandenstein executed a Security Deed in
favor of Mortgage Electronic Registration Systems, Inc.
(“MERS”), as nominee for First Option, the
lender, and its successors and assigns. [Compl. ¶ 7;
Doc. 1-3, Exhibit C - Security Deed]. The Security Deed was
recorded on February 15, 2010, in Deed Book 14754, Pages
4296-4307 of the Cobb County, Georgia, records. [Security
October 29, 2014, the Security Deed was assigned to Bank of
America, N.A. (“BANA”) by MERS. [Doc. 3-2,
Exhibit A - Assignment; Compl. ¶ 7]. The assignment
was recorded on November 19, 2014, in Deed Book 15199, Pages
4869-70 of the Cobb County, Georgia, records. [Assignment].
about May 2, 2017, due to Plaintiff's alleged default on
the Loan, Defendant PennyMac, through the law firm of Rubin
Lublin, LLC, advertised its first Notice of Sale Under Power
(“Notice”) of Plaintiff's Property scheduled
to occur on July 5, 2017. [Compl. ¶ 8]. According to
Plaintiff, the Notice did not identify the holder of the
Security Deed and identified PennyMac as the loan servicer.
[Compl. ¶ 8].
12, 2017, Plaintiff sent PennyMac a request for disclosure,
rescission, and validation of debt under TILA and a
“qualified written request” (“QWR”)
under RESPA. [Compl. ¶ 10]. According to Plaintiff,
Defendant PennyMac did not respond to her QWR. [Compl.
point following Plaintiff's default on the Loan, BANA
exercised the power of sale in the Security Deed and
foreclosed on the Property July 5, 2017. The Property was
transferred to Arch Property Holdings, LLC, via a Deed Under
Power. [Doc. 4, Exhibit 1 - Deed Under Power]. On August 20,
2017, the Deed Under Power was recorded in Deed Book 15472 at
Pages 3016-19 in the Cobb County, Georgia, records. [Deed
Complaint, Plaintiff identifies six causes of action,
described as Counts I-VI. [Compl.]. Plaintiff Brandenstein
identifies her claims as follows: Count I - Fraudulent
Conversion, Count II - Mortgage Servicing Fraud, Count III -
Declaratory Judgment (Credit Default Swap), Count IV - Unfair
and Deceptive Trade Practices / Fair Debt Collection
Practices Act, Count V - Fraud / Attempted Fraud, and Count
VI - Intentional Infliction of Emotional Distress
(“IIED”). [Compl.]. Within the Fact Section,
Plaintiff alleges violation of the Truth in Lending Act
(“TILA”) and the Real Estate Settlement
Procedures Act (“RESPA”). [Compl. ¶¶
10-12]. In her prayer for relief, Brandenstein also requests
prelitigation discovery and injunctive relief. [Compl.,
Prayer for Relief ¶¶ a, b, d].
19, 2017, Defendant PennyMac properly and timely removed the
case to this federal district court pursuant to 28 U.S.C.
§§ 1331, 1332, 1441, and 1446.[Doc. 1 - Notice
of Removal (“Notice”)]. Defendant asserts that
Plaintiff's Complaint is subject to dismissal on multiple
grounds, including Rules 4(m), 9, and 12(b)(6) of the Federal
Rules of Civil Procedure, but has since expressly waived its
service-related defense pursuant to Rule 12(b)(5) in favor of
a ruling on the merits pursuant to Rule
12(b)(6). [Docs. 3-1, 6 at 1]. Defendant further
contends that the relief Plaintiff seeks is moot given that
foreclosure has already occurred. [Doc. 3-1].
Rule 12(b)(6) Standard of Law
Federal Rules of Civil Procedure include no requirement that
a plaintiff detail the facts upon which the plaintiff bases a
claim. Rule 8(a)(2) requires a complaint to contain “a
short and plain statement of the claim showing that the
pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2)
(as amended 2007). “While a complaint attacked by a
Rule 12(b)(6) motion to dismiss does not need detailed
factual allegations, . . . a plaintiff's obligation to
provide the ‘grounds' of his ‘entitle[ment]
to relief' requires more than labels and conclusions, and
a formulaic recitation of the elements of a cause of action
will not do[.]” Bell Atlantic Corp. v.
Twombly, 127 S.Ct. 1955, 1964-65 (2007) (citations
omitted); accord Financial Sec. Assurance, Inc. v.
Stephens, Inc., 500 F.3d 1276, 1282-83 (11th
Cir. 2007) (recognizing that “while notice pleading may
not require that the pleader allege a specific fact to cover
every element or allege with precision each element of a
claim, it is still necessary that a complaint contain either
direct or inferential allegations respecting all the material
elements necessary to sustain a recovery under some viable
legal theory”) (citations and internal quotation marks
allegations must be enough to raise a right to relief above
the speculative level, ” i.e., they must do more than
merely create a “‘suspicion [of] a legally
cognizable right of action, ' on the assumption that all
the allegations in the complaint are true (even if doubtful
in fact).” Twombly, 127 S.Ct. at 1965
(citations omitted; emphasis omitted). “Stated
differently, the factual allegations in a complaint must
‘possess enough heft' to set forth ‘a
plausible entitlement to relief[.]'”
Stephens, 500 F.3d at 1282 (quoting
Twombly, 127 S.Ct. at 1966-67). “Threadbare
recitals of the elements of a cause of action, supported by
mere conclusory statements, do not suffice.”
Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009)
(citation omitted). A plaintiff's complaint will be
dismissed if it does not contain “factual content that
allows the court to draw the reasonable inference that the
defendant is liable for the misconduct alleged.”
court's inquiry at this stage of the proceedings focuses
on whether the challenged pleadings “give the defendant
fair notice of what the . . . claim is and the grounds upon
which it rests.” Erickson v. Pardus, 127 S.Ct.
2197, 2200 (2007) (citations and internal quotation marks
omitted). A court reviewing a motion to dismiss must keep in
mind that a “motion to dismiss for failure to state a
claim upon which relief can be granted merely tests the
sufficiency of the complaint; it does not decide the merits
of the case.” Wein v. American Huts, Inc., 313
F.Supp.2d 1356, 1359 (S.D. Fla. 2004) (citing Milburn v.
United States, 734 F.2d 762, 765 (11th Cir.
1984)). “Regardless of the alleged facts, however, a
court may dismiss a complaint on a dispositive issue of
law.” Bernard v. Calejo, 17 F.Supp.2d 1311,
1314 (S.D. Fla. 1998) (citing Marshall County Bd. of
Educ. v. Marshall County Gas Dist., 992 F.2d 1171, 1174
(11th Cir. 1993) (“[T]he court may dismiss a
complaint . . . when, on the basis of a dispositive issue of
law, no construction of the factual allegations will support
the cause of action.”)); see also Glover v. Liggett
Group, Inc., 459 F.3d 1304, 1308 (11th Cir.
2006); Aque v. Home Depot U.S.A., Inc., 629
F.Supp.2d 1336, 1350 (N.D.Ga. 2009).
establishes that “[a] document filed pro se is
‘to be liberally construed' . . . and ‘a
pro se complaint, however inartfully pleaded, must
be held to less stringent standards than formal pleadings
drafted by lawyers[.]'” Erickson, 127
S.Ct. at 2200 (citations omitted). Nevertheless, nothing in
that leniency excuses a plaintiff from compliance with
threshold requirements of the Federal Rules of Civil
Procedure. “Even though a pro se complaint
should be construed liberally, a pro se complaint
still must state a claim upon which the Court can grant
relief.” Grigsby v. Thomas, 506 F.Supp.2d 26,
28 (D. D.C. 2007).
court will apply these standards in ruling on the motion
[Doc. 3] to dismiss the complaint.
Plaintiff Cannot Directly Challenge Foreclosure
initial matter, to the extent that Plaintiff Brandenstein is
challenging the foreclosure itself (and no independent
wrongful foreclosure claim is alleged), the underlying Loan
documents reveal that BANA - not PennyMac - was the
foreclosing entity. [Doc. 3-1 at 8, n.5; Assignment]. And
see O.C.G.A. § 23-2-114 (“[p]owers of sale in
deeds of trust, mortgages, and other instruments . . . shall
be fairly exercised”); see also Mbigi v. Wells
Fargo Home Mortg., 336 Ga.App. 316, 318, 785 S.E.2d 8,
13 (2016). And to the extent Plaintiff contends that there
was no authority to foreclose, the terms of the Security
Deed, “grant[ed] and convey[ed] to MERS . . . and the
successors and assigns of MERS with power of sale, [the
Property].” [Security Deed]. The Assignment states that
MERS “hereby assign[s] and transfer[s] . . . all its
right, title, and interest in” the Security Deed to
BANA and its successors.[Assignment]. BANA was entitled to
exercise the power of sale in the Security Deed, see
§ 23-2-114, and Plaintiff's underlying challenge of
the foreclosure is flawed. See Winston, 2017 WL
4356918, at **3-4 (citations omitted).
addition, Brandenstein does not (and cannot) allege that she
timely made all of her mortgage payments and does not allege
that she ever tendered payment of the amount due on the Loan
which is a prerequisite under Georgia law for stating a claim
for wrongful foreclosure. See Heritage Creek Development
Corp. v. Colonial Bank, 268 Ga.App. 369, 601 S.E.2d 842,
844-45 (2004) (stating the elements of wrongful foreclosure
claim under Georgia law and holding that plaintiff's own
acts and omissions such as defaulting on the loan, failing to
cure default, and failing to bid on the property at
foreclosure despite receiving a foreclosure notice caused
plaintiff's alleged damages); accord Harvey v.
Deutsche Bank Nat'l Trust Co., 2012 WL 3516477, at
*2 (N.D.Ga. August 14, 2012) (“Failure to make the
proper loan payments defeats any wrongful foreclosure
because Plaintiff does not allege that she made the tender
required to have the foreclosure sale set aside, Plaintiff is
precluded from seeking equitable relief. See Calhoun
First Nat'l Bank v. Dickens, 264 Ga. 285, 285-86,
443 S.E.2d 837, 838 (1994); see also Sajous v.
Specialized Loan Servicing, 2015 WL 11347597, at *5
(N.D.Ga. July 22, 2015) (plaintiff not entitled to equitable
or injunctive relief where plaintiff did not plead that she
is in compliance with her loan obligations and / or has
tendered payment for the amount due on the loan) (citations
omitted), report and recommendation adopted in
part (all but “Alternative Recommendations”)
by 2015 WL 11492542 (N.D.Ga. August 10, 2015); and
see Stewart v. Suntrust Mortg., Inc., 331 Ga.App. 635,
640-41, 770 S.E.2d 892, 898 (2015) (affirming trial
court's dismissal of request for injunctive relief where
plaintiff's complaint revealed that the debt was in
default at the time of foreclosure).
Claims Based Upon Fraud / Fed.R.Civ.P. 9(b)
Brandenstein asserts fraud-based claims in Counts I, II, and
V alleging fraudulent conversion, mortgage servicing fraud,
and fraud or attempted fraud. Defendant moves to dismiss for
failure to plead fraud with specificity as required by Rule
9(b) of the Federal Rules of Civil Procedure. [Doc. 3-1 at
9(b) provides in pertinent part that, “In alleging
fraud . . ., a party must state with particularity the
circumstances constituting fraud . . . .” Fed.R.Civ.P.
9(b) (as amended 2007). The circumstances constituting fraud
typically include “the time, place, and content of the
false misrepresentations, the facts misrepresented, and the
nature of the detrimental reliance[.]” Elster v.
Alexander, 75 F.R.D. 458, 461 (N.D.Ga. 1977); and
see Burgess v. Religious Technology Center, Inc., 600
Fed.Appx. 657, 663 (11th Cir. 2015) (holding that
plaintiff's allegations that did not indicate the date,
time or place of the misrepresentation did not meet
heightened fraud pleading requirement). “Notably, the
‘[f]ailure to satisfy Rule 9(b) is a ground for
dismissal of a complaint.'” FindWhat Investor
Group v. FindWhat.com, 658 F.3d 1282, 1296
(11thCir. 2011) (quoting Corsello v. Lincare,
Inc., 428 F.3d 1008, 1012 (11th Cir. 2005)).
order to state a claim for common law fraud under Georgia
law, Plaintiff must allege facts in support of the following
elements: “(1) false representation by defendant; (2)
with scienter, or knowledge of falsity; (3) with intent to
deceive plaintiff or to induce plaintiff into acting or
refraining from acting; (4) on which plaintiff justifiably
relied; (5) with proximate cause of damages to
plaintiff.” WESI, LLC v. Compass Environmental,
Inc., 509 F.Supp.2d 1353, 1358 (N.D.Ga. 2007) (citations
and internal quotation marks omitted).
Court agrees with Defendant that Plaintiff's conclusory
allegations of fraud do not state a claim and do not comport
with the strict pleading requirements of Rule 9(b). See
Elster, 75 F.R. D. at 461; and see Burgess, 600
Fed.Appx. at 663; see also Cooke v. BAC Home Loans
Servicing, LP, 2011 WL 4975386, at *3 (N.D.Ga. October
18, 2011) (dismissing unfair and deceptive act practices
claim based upon alleged fraud where complaint contained
legal conclusions that defendant engaged in
“fraudulent, deceptive, unfair, and other wrongful
conduct[, ]” did not specify “facts and
circumstances” that defendants allegedly failed to
disclose, generally alleged defendants used “various
rates and charges to disguise the actual payment schedule and
loaned amount” but no specific rates or charges and,
therefore, did not satisfy Rule 9(b)) (citations and internal
quotation marks omitted).
Count I, Plaintiff alleges fraudulent conversion.
Plaintiff's fraudulent conversion claim is a nonsensical
challenge to the banking system, the validity of the Loan
itself, and foreclosure of the Property. [Compl. ¶¶
17-61]. For instance, in an effort to support her claim that
there was no default at the time of foreclosure and that
foreclosure amounted to conversion, Plaintiff alleges that
the promissory note executed in connection with the Loan was
“altered and converted into a negotiable
instrument” that the banks do not account for and that
created no actual money, that no loan was actually made and
no debt existed, that the mortgage should be set aside as
null and void because the bank or lender provided no
consideration to support the contract, and that the Security
Deed should be set aside for lack of consideration and
disclosure violations of the truth in lending law. [Compl.
¶¶ 17, 19, 26, 31, 37, 40, 46]. Relying on the same
premise, Brandenstein alleges that she was deceived “to
believe that the lender really made a loan.” [Compl.
¶ 31]. These are mere conclusory allegations not
supported by any facts, and courts have routinely rejected
such “‘vapor money'” claims.
Winston, 2017 WL 4356918, at *4 (quoting McCrary
v. Nationstar Mortg., LLC, 2015 WL 11422301, at
*4 (N.D.Ga. November 25, 2015) (“So-called ‘vapor
money' claims are based on the notion that a
borrower's repayment obligation is negated, because of
the allegation that the lending bank did not fund the loan
through actual deposits of legal tender but rather
‘created' the appearance of a loan through
bookkeeping entries.”), report and recommendation
adopted as modified by 2015 WL 11492547 (N.D.Ga.
December 16, 2015)).
Georgia law, in order to establish a claim for conversion,
“a plaintiff must show ‘title to the property [in
the plaintiff], possession by the defendant, demand for
possession, and refusal to surrender the property, or an
actual conversion prior to the filing of the
suit.'” Powell v. Bank of America, N.A.,
2014 WL 2118821, at *3 (N.D.Ga. May 21, 2014) (quoting
Habel v. Tavormina, 266 Ga.App. 613, 615, 597 S.E.2d
645, 648 (Ga.Ct.App. 2004)). Notably, under Georgia law,
Plaintiff is precluded from asserting a claim for conversion
of real property. Old Atlanta Road, LLC v. Specialized
Loan Serv., LLC, 2015 WL 570753, at *9 (N.D.Ga. January
26, 2015) (citations omitted). Therefore, to the extent
Plaintiff's fraudulent conversion claim is based upon
foreclosure of real property, it must be dismissed as a
matter of law.
support of Count II alleging mortgage servicing fraud,
Plaintiff challenges the use and roles of third-party
servicers by mortgage lenders generally as well as the post-
closing practices employed by servicers. [Compl.
¶¶ 63-81]. More specifically, Plaintiff complains
that, as a practice, servicers manipulate the
accounting of loans to make it appear as if the loan is in
default, refuse to accept properly tendered payments, charge
fees for collection letters, inspections and BPOs, charge
excessive interest, and place payments into suspense accounts
without cause. [Compl. ¶ 64]. Plaintiff complains about
the lack of incentive for servicers to assist borrowers with
staying current on monthly payments and the absence of risk
undertaken by the servicer contrasted with the vulnerable
position of the borrower / homeowner. [Compl. ¶¶
66, 72]. However, the Plaintiff does not identify any
specific action taken by PennyMac in connection with her
Loan that she contends amounts to fraud. The Complaint
purports “to explain to the Court how the Defendant is
committing servicing fraud” but then reads like an
editorial on the adverse impact of servicers in the mortgage
industry, minus any related facts. [Compl. ¶ 63].
Similarly, beyond the foreclosure sale itself, Plaintiff does
not allege any specific harm allegedly caused by PennyMac
during the time it serviced her Loan.
respect to Count V, alleging fraud and / or attempted fraud,
Plaintiff asserts that PennyMac “misrepresented the
true balance of the Loan and their true status as servicer
not the true creditor of the Loan, with knowledge or reckless
disregard of the statements' falsity, in each of the
Monthly Statements, Notices of Default, Payoff Letter and
Notice(s) of Foreclosure.” [Compl. ¶ 93].
Plaintiff next alleges that she relied upon the
representations by continuing to deal with Defendant as [her]
lender, including directing [her] modification
application(s).” [Compl. ¶ 94]. However,
Plaintiff does not identify in Count V (or in any of her
fraud-based claims) specifically who made the purported
representations, what the content of the alleged
representations were, or when and where any alleged
representations were made. Given these deficiencies,
Plaintiff's Complaint does not satisfy Rule 9(b)'s
pleading requirement. See Sampson v. Washington Mutual
Bank, 453 Fed.Appx. 863, 866-67 (11th Cir.
2011) (dismissal of fraud claim affirmed where complaint did
not allege who made the misrepresentations or the content of
the same or when and where the misrepresentations occurred);
see also Matthews v. JPMorgan Chase Bank, N.A., 2013
WL 12106937, at *6 (N.D.Ga. January 14, 2013), report and
recommendation adopted by 2013 WL 12110528 (N.D.Ga.
February 20, 2013) (dismissing fraud claim due to failure of
plaintiff to allege the “who, what, when, where &
how” in complaint).
addition, to the extent Plaintiff Brandenstein's
Complaint could be construed to allege a negligence claim,
Georgia does not recognize an independent cause of action for
negligent mortgage servicing. See Anderson v. Deutsche
Bank Nat'l Trust Co., 2012 WL 3756512, at *9
(N.D.Ga. August 6, 2012) (rejecting plaintiff-borrower's
claim that defendant had a duty to service the mortgage loan
in good faith pursuant to provision within the Georgia
Residential Mortgage Act governing the conduct of mortgage
brokers or lenders in connection with the loan application,
renewal, and refinancing, see O.C.G.A. §
7-1-1013), report and recommendation adopted by 2012
WL 3756435 (N.D.Ga. August 27, 2012). In fact, Georgia does
not recognize any fiduciary duty in the mortgagor-mortgagee
context. Id. (citations omitted). And Plaintiff
fails to allege any duty owed to her by PennyMac or any
special circumstances that could arguably support an
exception to the general rule that no such duty exists. [Doc.
3-1 at 9-10]. In sum, Plaintiff's Complaint lists her
fraud-based causes of action but does not explain how any of
her sparse ...