Suit challenging mortgage default dismissed

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A suit alleging various claims arising out of a mortgage default and subsequent receipt of notice of foreclosure was dismissed because the various counts were not cognizable or supported by sufficient factual allegations.

Background

Dion Robinson sues Abby Moynihan, McCabe Weisberg & Conway LLC, Glen A. Messina and the PHH Mortgage Corporation, asserting various claims arising out of Robinson’s mortgage default and subsequent receipt of a notice of foreclosure. The McCabe defendants (Moynihan and McCabe Weisberg) and the PHH defendants (Messina and PHH) both move to dismiss Robinson’s claims against them.

Standing

Because Robinson did not disclose any potential lawsuit to challenge the debt in the schedules submitted as part of his bankruptcy, and because potential causes of action the debtor should know about during the bankruptcy’s pendency are property of the bankruptcy estate, the McCabe defendants believe the court should dismiss Robinson’s lawsuit. However, as a Chapter 13 debtor, Robinson has standing to maintain a nonbankruptcy cause of action on his estate’s behalf.

Res judicata

The McCabe defendants assert that res judicata bars Robinson from alleging the invalidity of debt secured by the subject property because Robinson’s Chapter 13 bankruptcy plan confirmed the mortgage’s existence and validity and because the bankruptcy court issued a final order confirming the plan that is binding as to the validity of the debt. The court agrees. But because Robinson’s complaint makes it difficult to discern which counts concern the validity of the original loan, the court still must examine each count.

Wrongful foreclosure

Virginia does not recognize a separate cause of action for wrongful foreclosure. Moreover, even if Virginia recognized a wrongful foreclosure claim, the complaint does not sufficiently allege that any foreclosure occurred. Second, Robinson appears to base this section of the complaint on an internet form containing false information. The form used by Robinson advances several sovereign citizen conspiracy theories. Other parts of this section of the complaint are simply false, not conspiratorial.

Third, the complaint relies on a misunderstanding of Virginia law regarding property sales. Finally, Robinson alleges that the defendants lacked standing to foreclose on the property. In Virginia, a nonjudicial foreclosure state, a foreclosure may happen without a lawsuit.

FDCPA

Robinson’s only clear allegations regarding the FDCPA violations relate to the alleged invalidity of the underlying mortgage. Because the bankruptcy court validated Robinson’s mortgage in the preceding bankruptcy action, Robinson cannot deny its validity now. In addition, mortgage loan lenders, mortgage loan servicers and their employees are not “debt collectors” under the FDCPA.

TILA

Robinson alleges that the defendants violated the TILA by failing to provide the accurate material disclosures the statute requires. Robinson cites no authority, nor can the court find any, that says lenders must disclose that they may securitize the mortgage. Nor does the complaint explain what disclosures defendants should have made. In addition, Robinson does not specify what provision of the TILA the defendants allegedly violated. And because the alleged violation took place almost 15 years ago, the deadline to file suit has long passed.

Breach of contract

Robinson fails to state a breach of contract claim. From the facts alleged in the complaint, the court cannot discern what contractual obligation Robinson alleges the defendants have breached, which defendants have breached the contract and what conduct gave rise to the breach.

Remaining claims

Robinson claims that one of the defendants violated federal trust and lien laws when he/she signed on behalf of the trustee without legal authorization. It is unclear what this allegation means or what document or defendant to which it refers. This claim’s vagueness violates Fed. R. Civ. P. 8.

Robinson has failed to state a claim for slander of title. The complaint does not allege that the defendants published any false statements. Nor does it allege that the defendants issued the notice of foreclosure because of ill will, spite, a desire to injure Robinson or in wanton or willful disregard of Robinson’s rights. And because Virginia does not recognize a cause of action for slander of credit, the court will dismiss this claim.

Next, Robinson’s intentional infliction of emotional distress claim fails because Robinson does not state any facts to support that he suffered severe emotional distress, fails to establish a causal connection between the defendants’ actions and any resulting emotional distress and does not allege that the defendants acted outrageously.

Robinson fails to state a fraud claim for several reasons. First, Robinson refers to fraud in several places in the complaint, but he makes no specific allegations to support any fraud claim. Second, any failure to inform Robinson that some entity might securitize his mortgage is immaterial because securitization of a mortgage has no bearing on the terms and obligations of the underlying mortgage. Third, Robinson does not identify what statements he considers fraudulent.

Defendants’ motions to dismiss granted.

Robinson v. Moynihan, Case No. 3:21-cv-122, June 8, 2021. EDVA at Richmond (Gibney). VLW 021-3-288. 15 pp.