Sampson v. U.S. Bank N.A.

115 F. Supp. 3d 191, 2015 U.S. Dist. LEXIS 96891, 2015 WL 4506468
CourtDistrict Court, D. Massachusetts
DecidedJuly 24, 2015
DocketCivil Action No. 15-11064-NMG
StatusPublished
Cited by4 cases

This text of 115 F. Supp. 3d 191 (Sampson v. U.S. Bank N.A.) is published on Counsel Stack Legal Research, covering District Court, D. Massachusetts primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Sampson v. U.S. Bank N.A., 115 F. Supp. 3d 191, 2015 U.S. Dist. LEXIS 96891, 2015 WL 4506468 (D. Mass. 2015).

Opinion

MEMORANDUM & ORDER

GORTON, United States District Judge.

Here we have a case involving a dispute over the legality of a scheduled foreclosure of a residential property. Plaintiff Francis J. Sampson, Jr. (“Sampson”) brought suit in Massachusetts state court against defendant U.S. Bank N.A. as Trustee, Successor in Interest to Bank of America, N.A., Successor in Interest by Merger to LaSalle Bank, N.A., as Trustee for WaMu Pass-Through Certificates, Series 2007-OA4 Trust (“U.S.Bank”) seeking, inter alia, a declaratory judgment that U.S. Bank lacks authority to exercise a “power of sale” foreclosure under M.G.L.A. 244, § 14.

Defendant promptly removed the case to this Court and moved to dismiss for failure to state a claim under Fed.R.Civ.P. 12(b)(6). For the reasons that follow, that motion will be allowed.

I. Factual Background

In March, 2007, Sampson purchased residential property at 85 Heritage Lane, Duxbury, Massachusetts (“the Property”). In conjunction with the purchase, Sampson borrowed $432,000 secured by a promissory note (“the Note”) from Washington Mutual Bank (“WaMu”). Sampson granted WaMu a mortgage (“the Mortgage”) on the Property to secure the Note (together, “the mortgage loan”). In April, 2007, WaMu sold the underlying mortgage loan and other assets to the Washington Mutual Mortgage Pass-Through Certificates, Series 2007-OA4 Trust (“the Trust”). WaMu endorsed the Note in blank which has since been in possession of the Trust. WaMu continued, however, to hold the Mortgage itself.

In September, 2008, WaMu failed as an institution and the Federal Deposit Insurance Corporation (“the FDIC”) was appointed receiver over its remaining assets. The FDIC then sold all WaMu assets to JPMorgan Chase Bank N.A. (“JPMor-gan”), which in May, 2010, assigned the Mortgage to the Trust. At that time, Bank of America served as trustee of the Trust. In April, 2013, defendant U.S. Bank succeeded Bank of America as trustee.

After the economic downturn of 2008, Sampson fell behind on his mortgage payments. Eventually, Sampson was notified by the Trust that it intended to utilize the “power of sale” foreclosure remedy made available to mortgagees under M.G.L.A. 244, § 21 in March, 2014. Pursuant to M.G.L.A. Í84, § 18, the Trust sent Sampson a Notice of Auction Sale (“the Notice of Sale”) in July, 2014, with an intended auction sale date of March 24, 2015. The foreclosure sale has yet to occur.

II. Procedural History

On March 19, 2015, five days before the scheduled auction sale of the Property, Sampson brought the subject suit against U.S. Bank in the Massachusetts Superior Court for Plymouth County. In a three-count complaint, Sampson seeks 1) declaratory judgment that defendant lacks the authority to enforce the power of sale under M.G.L. c. 244, § 14, 2) damages for wrongful foreclosure pursuant to § 14 and 3) damages for slander of title against JPMorgan which was not named as a party in the subject suit or served with process.

U.S. Bank timely removed the suit to this Court in March, 2015, based on diversity jurisdiction. Plaintiff is a Massachusetts resident while U.S. Bank is a national [193]*193bank with a principal place of business in Cincinnati, Ohio and serves as trustee of a Delaware trust.

In April, 2015, defendant moved to dismiss for failure to state a claim pursuant to Fed.R.Civ.P. 12(b)(6). Plaintiff opposes the motion.

III. Defendant’s Motion to Dismiss

A. Legal Standard

To survive a 12(b)(6) motion to dismiss, a pleading must contain a claim to relief that is “plausible”, not just a “sheer possibility that a defendant has acted unlawfully.” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (citing Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). A district court assesses a complaint’s sufficiency in two steps. Manning v. Boston Medical Ctr. Corp., 725 F.3d 34, 43 (1st Cir.2013). First, a court ignores conclusory allegations mirroring legal standards. Id. Second, it accepts the remaining factual allegations as true and draws all reasonable inferences in the plaintiffs favor, thereafter deciding if the plaintiff would be entitled to relief. Id. A court may also consider documents attached to or incorporated in the complaint and other undisputed documents, Wil-born v. Walsh, 584 F.Supp.2d 384, 386 (D.Mass.2008).

B. Application

1. Claims predicated on Wrongful Foreclosure (Counts I and II)

Sampson avers that M.G.L. c. 244, § 14 bars U.S. Bank as trustee of the Trust from enforcing its power of sale in the Mortgage now within the trust corpus. In order to be entitled to either declaratory relief or damages, Sampson must plausibly claim that U.S. Bank lacks authority to carry out the foreclosure under the subject statute. See U.S. Bank Nat’l Ass’n v. Ibanez, 458 Mass. 637, 647, 941 N.E.2d 40 (2011). According to the plain language of the statute, U.S. Bank had such authority only if it was the mortgagee at the time the Notice of Sale was issued in July, 2014. Id. at 648, 941 N.E.2d 40 (citing In re Schwartz, 366 B.R. 265, 269 (Bankr.D.Mass.2007)). Thus, to survive the bank’s motion under Fed.R.Civ.P. 12(b)(6), Sampson’s complaint must include a plausible claim that U.S. Bank was not the valid mortgagee in July, 2014.

Sampson has offered nothing beyond conclusory allegations of law in support of this claim. Moreover, the facts of the case, even after drawing ail reasonable inferences in Sampson’s favor, render less than plausible the claim that the Trust was not the valid mortgagee and thus did not have authority to foreclose on the mortgage loan in July, 2014.

The Trust was the proper mortgagee if it held both the Mortgage and the Note, or acted on behalf of the Note holder. Eaton v. Fed. Nat’l Mortg. Ass’n, 462 Mass. 569, 571, 969 N.E.2d 1118 (2012). In Massachusetts, the Mortgage and Note may travel independently of one another. Id. at 576, 969 N.E.2d 1118. The Trust has been the possessor of the Note since it was endorsed in blank by WaMu in April, 2007. WaMu’s blank endorsement makes the Note payable to the present possessor. M.G.L.A. 106, § 3-205(b). Therefore, the Note is now payable to the Trust through transfer of possession. Sampson’s contention that the Note is not a legal asset of the Trust is thus not plausible on its face.

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Bluebook (online)
115 F. Supp. 3d 191, 2015 U.S. Dist. LEXIS 96891, 2015 WL 4506468, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sampson-v-us-bank-na-mad-2015.