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Arnold v. Nationstar Mortgage, LLC

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

November 8, 2017

BRIGITTA D. ARNOLD and RODERICK ARNOLD, Plaintiffs,
v.
NATIONSTAR MORTGAGE LLC, Defendant.

          ORDER AND FINAL REPORT AND RECOMMENDATION

          JOHN K. LARKINS, III UNITED STATES MAGISTRATE JUDGE

         This case is before the Court on Defendant Nationstar Mortgage, LLC's Motion to Dismiss [Doc. 3] and Motion to Stay Pretrial Deadlines and Discovery Doc. 4]. Plaintiffs, who are proceeding pro se, have not filed a response to either motion or otherwise corresponded with the Court. For the reasons stated below, I RECOMMEND that the motion to dismiss be GRANTED. It is further ORDERED that the Motion to Stay be GRANTED.

         I. BACKGROUND

         Plaintiffs filed this lawsuit to enjoin the foreclosure of their residence located in Cobb County, Georgia. [See Doc. 1-1.[1] Best I can tell, Nationstar is the servicer of a loan secured by the residence. The foreclosure sale was scheduled to occur on August 2, 2017.

         Plaintiffs allege that Nationstar should be enjoined from “collecting, foreclosing or attempting to collect any mortgage payments, interest, late fees, restricting, [and] modifying [the] mortgage contract in this instant case” because (1) it is not registered to do business in Georgia, even though it regularly conducts business here; (2) it is not a holder in due course under Article 3 of the UCC; (3) the underlying security deed was not properly assigned to Nationstar, and therefore, Nationstar lacks standing to foreclose on the property; (4) Nationstar violated the “Fair Debt Collections Act” (presumably, a reference to the Fair Debt Collections Practices Act, hereinafter the “FDCPA”); (5) Nationstar violated O.C.G.A. § 44-14-161.2 by conducting foreclosure proceedings “below true market value of the property”; and (6) Nationstar violated O.C.G.A. § 44-14-162.2. [Id. at 6-10.] Plaintiffs also seek punitive damages. [Id. at 8.]

         On August 28, 2017, Nationstar moved to dismiss the complaint. [Doc. 3.] Nationstar presents several arguments as to why the Plaintiffs' complaint should be dismissed, including: (1) the complaint is a “shotgun pleading”; (2) the complaint fails to comport with the pleading requirements of Federal Rule of Civil Procedure 8(a); (3) Plaintiffs' claims fail because they failed to tender the amount owed on the loan; (4) Plaintiffs lack standing to challenge the assignment of the security deed; (5) Plaintiffs' wrongful foreclosure claim fails because it has standing to assist with the foreclosure sale, Plaintiffs have not made proper loan payments, and no foreclosure sale has taken place; (6) Plaintiffs' claims for violations of Article 3 of the UCC are meritless; (7) the complaint fails to state a claim for a violation of the FDCPA; (8) Plaintiffs have not shown a substantial likelihood of success on the merits, therefore any request for injunctive relief in inappropriate; and (9) since Plaintiffs' substantive claims fail as a matter of law, Plaintiffs' claim for punitive damages fails as a matter of law. [Id. at 7-18.]

         II. ANALYSIS

         A. Standard on Motion to Dismiss

         In evaluating a Rule 12(b)(6) motion to dismiss, a court must determine whether the complaint contains “sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A complaint need not provide “detailed factual allegations, ” but it must provide factual allegations sufficient to set forth the plaintiff's entitlement to relief. Twombly, 550 U.S. at 555. Providing only “labels and conclusions” is insufficient, “and a formulaic recitation of the elements of a cause of action will not do.” Id. In evaluating a complaint, courts should disregard any allegations that are mere legal conclusions. Am. Dental Ass'n v. Cigna Corp., 605 F.3d 1283, 1290 (11th Cir. 2010) (discussing Iqbal and Twombly).

         B. Discussion

         Nationstar argues that the complaint is a “shotgun pleading” because “[t]he Complaint fails to separate each cause of action or claim for relief into separate counts, and is replete with conclusory, vague, and immaterial facts not obviously connected to any particular cause of action.” [Doc. 3-1 at 3.] I am not convinced, however, that the complaint really qualifies as a shotgun pleading. Shotgun pleadings are defined by “the failure to identify claims with sufficient clarity to enable the defendant to frame a responsive pleading, ” Beckwith v. Bellsouth Telecomms., Inc., 146 F. App'x 368, 371 (11th Cir. 2005), and typically “contain[] several counts, each one incorporating by reference the allegations of its predecessors, leading to a situation where most of the counts . . . contain irrelevant factual allegations and legal conclusions, ” Strategic Income Fund, L.L.C. v. Spear, Leeds & Kellogg Corp., 305 F.3d 1293, 1295 (11th Cir. 2002). Here, the six-page complaint contains virtually no relevant factual allegations regarding the circumstances giving rise to the claims. Nor does the complaint state the claims in sequentially numbered counts (or even present logically and/or non-repeating numbered paragraphs). A majority of the complaint is simply citation to irrelevant legal authority or other “legalese” that the Court should disregard. The flaw in the complaint is not that it alleges too much information in a haphazard fashion; rather, the complaint fails to satisfy the rudimentary pleading requirements of Federal Rules of Civil Procedure 8(a) and 10(b). See Sinaltrainal v. Coca-Cola Co., 578 F.3d 1252, 1261 (11th Cir. 2009) (holding that a complaint fails to state a claim unless the well-pled factual allegations of the complaint nudge the claims across the line from conceivable to plausible); see also Calhoun v. Nationstar, No. 1:13-CV-2581-TWT, 2013 WL 5493311 (N.D.Ga. Sept. 30, 2013) (summarily dismissing foreclosure action because the generic form complaint did not include factual allegations); Ponder v. Bank of N.Y. Mellon, No. 5:10-CV-144, 2010 WL 2950681, at *1 (M.D. Ga. July 21, 2010) (same).

         I have attempted to construe Plaintiffs' complaint as leniently as possible in light of their pro se status; however, I have no hesitation in finding that the complaint is frivolous and completely devoid of legal merit.[2]

         First, Plaintiffs' allegation that Nationstar is not registered to do business in Georgia, even though it regularly conducts business here, is simply wrong and cannot provide a plausible basis for enjoining Nationstar. The publicly-available records of the Georgia Secretary of State reflect that Nationstar is in fact registered to conduct business in the state of Georgia. See https://ecorp.sos.ga.gov/BusinessSearch/DownloadFile?filingNo=14186999 (last visited Nov. 8, 2017) (2017 annual registration).[3]

         Second, Plaintiffs' suggestion that Nationstar is not a holder in due course under Article 3 of the UCC fails as a matter of law because a security deed is not a negotiable instrument and is, therefore, not governed by Article 3 of the UCC. You v. JP Morgan Chase Bank, 293 Ga. 67, 73 (2013) (holding that security deed is not a negotiable instrument and is therefore not governed by Article 3); see also Williams-Grady v. Muller Real Estate Holdings, LLC, No. 3:15-CV-55-TCB-RGV, 2015 WL 11457695, at *4 (N.D.Ga. Aug. 7, 2015), report and ...


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