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Gray v. Brown

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

April 23, 2018

SANDRA GRAY, individually and as executrix of the estate of Nathan Gray, Plaintiff,
v.
PEGGY L. BROWN, et al., Defendants.

          ORDER

          CLAY D. LAND, CHIEF U.S. DISTRICT COURT JUDGE

         ORDER Presently pending before the Court is the motion to dismiss of Defendants Ocwen Loan Servicing, LLC (“Ocwen”), The Bank of New York Mellon f/k/a The Bank of New York, Successor in Interest to JPMorgan Chase Bank, as Trustee for Novastar Mortgage Funding Trust, Series 2005-2, Novastar Home Equity LOA Asset-Backed Certificates, Series 2005-2 (“Mellon”), JPMorgan Chase Bank, as Trustee for Novastar Mortgage Funding Trust, Series 2005-2, Novastar Home Equity LOA Asset-Backed Certificates, Series 2005-2 (“Chase”), and Mortgage Electronic Registration Systems, Inc. (“MERS”). These Defendants contend that Plaintiff's First Amended Complaint fails to state a claim against them. As discussed below, their motion to dismiss (ECF No. 24) is granted in part and denied in part. These Defendants also seek to strike Plaintiff's response to their motion to dismiss because Plaintiff filed it a week late without leave to do so. But they also argue that the Court should consider the content of the response and deem certain claims to be abandoned. The motion to strike (ECF No. 34) is denied.

         MOTION TO DISMISS STANDARD

         “To survive a motion to dismiss” under Federal Rule of Civil Procedure 12(b)(6), “a complaint must contain 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)). The complaint must include sufficient factual allegations “to raise a right to relief above the speculative level.” Twombly, 550 U.S. at 555. In other words, the factual allegations must “raise a reasonable expectation that discovery will reveal evidence of” the plaintiff's claims. Id. at 556. But “Rule 12(b)(6) does not permit dismissal of a well-pleaded complaint simply because ‘it strikes a savvy judge that actual proof of those facts is improbable.'” Watts v. Fla. Int'l Univ., 495 F.3d 1289, 1295 (11th Cir. 2007) (quoting Twombly, 550 U.S. at 556).

         FACTUAL ALLEGATIONS

         Plaintiff alleges the following facts in support of her claims. The Court must accept these allegations as true for purposes of the pending motion.

         In 1987, Plaintiff and her husband Nathan Gray purchased a house located at 1540 Old Athens Highway, Monroe, Georgia 30656 (“Property”). They financed the purchase with a loan from Countrywide Funding Corporation. The next year, Nathan transferred all of his interest in the Property to Plaintiff. The year after that, Plaintiff executed a new security deed with Countrywide, and she was listed as the sole borrower and signatory for the $69, 505.72 loan. Nathan made the monthly Countrywide loan payment from his individual bank account.

         In 2005, Nathan applied for a refinance loan from Emmco, LLC. The loan application listed both Plaintiff and Nathan as joint titleholders of the Property. It did not list Plaintiff as a borrower or co-borrower. Plaintiff asserts that she did not know about this loan application. Emmco knew that Plaintiff was the sole owner of the Property, but it accepted the loan application and originated a loan for $112, 500.00 to be secured by the Property “despite knowing that Nathan Gray had no legal interest in the Property.” 1st Am. Compl. ¶ 24, ECF No. 20. At the closing of the loan on May 27, 2005, Nathan executed a promissory note to Emmco. He also signed a finalized loan application similar to the one he initially submitted to Emmco. Plaintiff was not present at the closing and did not sign the promissory note. Nathan also executed a security deed, which listed him and Plaintiff as the borrowers, Emmco as the lender, and MERS as the grantee “as a nominee for Lender and Lender's successors and assigns.” 1st Am. Compl. Ex. 6, Security Deed 1, ECF No. 20-6. The security deed contains a signature for “Sandra Gray, ” but Plaintiff asserts that it is not her authentic signature and that she did not sign any closing documents, authorize the loan, or attend the closing.

         Defendant Peggy L. Brown was the closing attorney for the 2005 refinance loan. Defendant Ellen McDorman and Brown both notarized the documents that contained Plaintiff's signature, including the security deed and an acknowledgement and waiver of borrower's rights. According to Plaintiff, her signature is forged, and neither Brown nor McDorman verified the identity of the person who signed the documents.[1] Plaintiff alleges that Brown knew that Nathan did not hold title to the Property and was not authorized to sign the closing documents on behalf of Plaintiff. She further alleges that Emmco and Brown knew or should have known (by conducting a title search) that Plaintiff was the sole titleholder of the property but closed the refinance loan to Nathan anyway. Finally, Plaintiff contends that there were irregularities with the closing documents- including two documents purporting to be the original security deeds and two documents purporting to be the original acknowledgment and waiver of borrower's rights. Brown recorded the security deed on behalf of Emmco. Plaintiff believes that Emmco assigned the loan to Mellon through MERS. At some point, Ocwen became the loan servicer for the 2005 refinance loan.

         Plaintiff alleges that she did not know about or receive any benefit from the 2005 refinance loan, although she does acknowledge that part of the loan proceeds were used to pay off the original Countrywide loan. Nathan paid the monthly payments from his individual checking account, and Plaintiff did not have access to that account. Nathan also received the mortgage statements at his private post office box, so Plaintiff did not see them. Nathan died in February 2016, and Plaintiff was named executor of his estate on March 1, 2016. At that time, she discovered the 2005 refinance loan.

         On March 2, 2016, Plaintiff wrote a letter to Ocwen asking for proof of its right to service a loan associated with the Property. In response, on March 10, 2016, Ocwen sent Plaintiff copies of the security deed, a commitment for title insurance, and an acknowledgment and waiver of borrower's rights that contained only Nathan's signature. On March 30, 2016, Ocwen sent Plaintiff copies of an allonge listing Nathan as the borrower for the loan, the note executed by Nathan, two Forms 4506-T (Request for Tax Return) signed by Nathan, and the loan applications listing Nathan as the borrower for the loan. Ocwen also informed Plaintiff that Mellon “currently owns the loan and holds the Note.” 1st Am. Compl. Ex. 7, Letter from Ocwen to S. Gray (Mar. 29, 2016), ECF No. 20-7 at 2. On April 11, 2016, Ocwen sent Plaintiff additional copies of these documents.

         Plaintiff resumed paying the mortgage in April 2016, although she asserts that she did so under protest. Ocwen accepted her payments. Later in 2016, Plaintiff retained a lawyer to help her investigate the loan issue and notified Ocwen of a potential lawsuit. At that point, Ocwen stopped communicating directly with Plaintiff and began sending her mortgage statements and other documents to her attorney. Plaintiff and her attorney have both asked that these documents be sent directly to Plaintiff instead. In early 2017, Plaintiff sent Ocwen an affidavit of identity theft. In response, Ocwen stated that it compared the signature on the affidavit to the account documents and determined that they matched; Ocwen suggested that if Plaintiff wished to pursue her claim of identity theft, she should file a court case.

         In June 2017, Ocwen returned a payment made by Plaintiff and later sent her a default notice. Plaintiff then demanded that Ocwen return all the money she had paid on the refinance loan since April 2016. Later that summer, Plaintiff filed this action.

         Plaintiff asserts the following claims:

1. Count I: Negligence against Emmco, Brown, McDorman, Chase, Mellon, and Ocwen. 1st Am. Compl. ¶¶ 61-72.
2. Count II: Slander of Title against Emmco, Chase, and Mellon. Id. ¶¶ 73-81.
3. Count III: Declaratory Relief against Emmco, Chase, Mellon, and Ocwen. Id. ...

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