130129 - demilio v citizens deutsche rfc et al

7/28/2019 130129 - Demilio v Citizens Deutsche RFC Et Al

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INTHEUNITEDSTATESDISTRICTCOURTFORTHE

MIDDLEDISTRICTOFGEORGIA

ATHENSDIVISION

THOMASJ.DEMILIO, :

:

Plaintiff, :

:

v. : CIVILACTION

: No.3:12CV81(CAR)

CITIZENSHOMELOANS,INC.; :

RALI2007QH9TRUSTas :

administeredbyDEUTSCHEBANK :

TRUSTCOMPANYAMERICAS,its :

Trustee;RESIDENTIAL

FUNDING

:

COMPANY,LLC;AURORABANK :

FSB,RUSSELLMAYS,etal., ::

Defendants. :

___________________________________ :

ORDERONDEFENDANTSMOTIONTODISMISS

This

matter

arises

out

Plaintiff

Thomas

J.

Demilios

petition

to

acquire

unencumbered title to a fiveacre parcel of property in Loganville, Georgia by

remov[ing] a particular cloud or clouds to his purported title. Now, two of the

abovecaptioneddefendants,AuroraBankFSB (AuroraBank)andDeutscheBank

Trust Company Americas as Trustee for RALI 2007QH9 (Deutsche Bank)

(collectively,Defendants)

move

this

Court

to

dismiss

Plaintiffs

Complaint

pursuant

toRule12(b)(6)oftheFederalRulesofCivilProcedure.

Having considered relevant law, Defendants Motion, and the parties

responsesand replies thereto, theCourtconcludes thatPlaintiffsComplaint fails to


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stateaclaimuponwhichreliefcanbegranted. Thus,DefendantsMotiontoDismiss

[Doc.4]isGRANTED,andPlaintiffsComplaintisDISMISSEDwithprejudiceasto

all Defendants. Defendants remaining Motions to Strike [Docs. 14 and 32] are

TERMINATEDasMOOT.

BACKGROUND

Plaintiff ThomasJ. Demilios case exemplifies the complexity ofmodern day

financing, involving a veritable host of legal entities that claim various, successive

propertyinterests

in

Plaintiffs

Promissory

Note

and

Security

Deed.

Unfortunately,

Plaintiffsparticularcircumstancesarefurthercomplicatedbyhisvoluminousexhibits,

convolutedexplanations,andoftirrelevantlegalarguments.

AsfarastheCourtcandiscernfromthepleadingsandappropriateexhibits,the

generalfactsareasfollows:PlaintiffandhiswifeexecutedaPromissoryNotetoobtain

a$42,000,000 loan fromDefendantCitizensHomeLoans, Inc. (Citizens)onAugust

20,2007. ThisPromissoryNotewas,inturn,securedbyaSecurityDeedonfiveacresof

PlaintiffspropertyinLoganville,Georgia(theLoganvilleparcel). TheSecurityDeed

signedbyPlaintiffexpressly identifiedMortgageElectronicRegistrationSystems, Inc.

(MERS)asnomineeofCitizensanditssuccessorsandassigns,andasagranteeofthe

SecurityDeed. Following execution, thePromissoryNote andSecurityDeedpassed

throughseveralotherfinancialinstitutionsbeforeAuroraBankobtainedtheLoganville

parcelby foreclosure saleonNovember1,2011. Now,Plaintiffseeksunencumbered


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title to this propertyby pursuing a quiet title action against Citizens and some its

successors,apriortrustee,andoneservicerofPlaintiffsloan.

This is not, however, Plaintiffs first attempt to obtain the Loganville parcel

through legal proceedings against his original lender and various interested parties.

Prior to foreclosure, Plaintiff and hiswife filed suit against Citizens,Aurora Bank,

AuroraLoanServices,LLC(ALS),MERS,andMerscorp,Inc.intheSuperiorCourtof

WaltonCounty,GeorgiaonOctober28,2011. In thisFirstAction,Plaintiffasserted

claimsfor

wrongful

foreclosure

and

challenged

Aurora

Banks

standing

to

pursue

foreclosure. OnFebruary9,2012,thedefendantsproperlyremovedtheFirstActionto

thisCourt. DefendantsthenmovedtodismisstheFirstActionpursuanttoRule12(b)(6)

for failure to state a claim uponwhich relief couldbe granted. Plaintiff failed to

respondtothismotion,andJudgeClayD.LanddismissedtheFirstActiononApril12,

2012,initsentiretybaseduponPlaintiffsfailuretoprosecuteherclaims.1

OnMarch2,2012,a littlemore thanonemonthbeforeJudgeLandsdismissal,

Plaintiff filed a SecondAction in the SuperiorCourt ofWalton County,Georgia,

seekingtoquiettitleoftheLoganvilleparcel. DefendantsAuroraBankandDeutsche

BanktimelyremovedtheSecondActiontothisCourt,andtheysubmittedyetanother

motiontodismissonMay2,2012. WithDefendantsmotiontodismisspendingbefore

1Demiliov.AuroraBankFSB,No.3:12CV17CDL,Doc.5at1(M.D.Ga.Apr.12,2012).


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theCourt,PlaintiffvoluntarilydismissedtheSecondActionwithoutprejudiceonJune

3,2012.

Thenextday,PlaintiffinitiatedtheinstantThirdAction,onceagainfilinghis

petition in theSuperiorCourtofWaltonCounty,Georgia. PlaintiffsThirdAction is

substantivelyidenticaltohisSecondwithoneexception:Plaintiffjoinedanondiverse

individualdefendant,AuroraBanksevictioncounselattorney,RussellMays,whowas

laterdismissedbystipulationoftheparties. Infamiliarfashion,Defendantsremoved

Plaintiffspetition

to

this

Court

and

filed

the

instant

Motion

to

Dismiss

on

June

22,

2012.

After additional briefing by the parties, the Court is now prepared to render its

judgment.

DISCUSSION

I. StandardonMotiontoDismissOnamotiontodismiss,thecomplaintisconstruedinthelightmostfavorableto

the nonmoving party, and all facts alleged by that party are accepted as true.2

However,acomplaintmustcontainsufficientfactualmatter,acceptedastrue,tostate

aclaimtoreliefthatisplausibleonitsface.3 Thisfacialplausibilitytestissatisfied

whentheplaintiffpleadsfactualcontentthatallowsthecourttodrawthereasonable

2SeeHishonv.King&Spalding,467U.S.69,73(1984);Wrightv.Newsome,795F.2d964,967(11thCir.1986).3Ashcroftv.Iqbal,556U.S.662,678(2009)(quotingBellAtlanticCorp.v.Twombly,550U.S.544,570(2007));

Sinaltrainalv.CocaColaCo.,578F.3d1252,1261(11thCir.2009)(adoptingtheIqbalpleadingstandards).


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inferencethatthatthedefendantisliableforthemisconductalleged.4 Simplyput,the

factualallegations ina complaintmust possessenoughheft to set forth aplausible

entitlement to relief.5 If a complaint contains mere labels and conclusions or

formulaicrecitationsoftheelementsofacauseofaction,itmustbedismissed.6

When testing the sufficiency of a plaintiffs complaint, a courtmust limit its

consideration to the pleadings and any appropriate exhibits attached thereto.7

However,acourtmay takejudicialnoticeof thepleadingsandorders inaplaintiffs

prioractions

as

matters

of

public

record,

which

are

not

subject

to

reasonable

dispute

because theywere capable of accurate and ready determinationby resort to sources

whose accuracy could notbe reasonablyquestioned.8 A courtmay also consider a

documentattachedtoamotiontodismissif(1)itiscentraltotheplaintiffsclaim,and

(2) its authenticity is undisputed.9 If a court considers any documents that do not

satisfy this twopart test, themotion to dismissmustbe converted to amotion for

summaryjudgment,requiringthepartiestoparticipateinextensivediscovery.10

Despitethepartiesexcessivefilings,neithersidehasaskedtheCourttoconvert

DefendantsMotionintoamotionforsummaryjudgment,andtheCourtdeclinestodo

4Iqbal,556U.S.at678.5Fin.Sec.Assurance,Inc.v.Stephens,Inc.,500F.3d1276,128283(11thCir.2007) (quotingTwombly,550

U.S.at55759).6Twombly,550U.S.at555.7Horsleyv.Feldt,304F.3d1125,1134(11thCir.2002).8Hornev.Potter,392F.Appx800,802(11thCir.2010)(internalquotationmarksomitted).9Id.10

Id.;seealsoGrossmanv.Nationsbank,N.A.,225F.3d1228,1231(11thCir.2000).


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so sua sponte. Accordingly, the Court excludes all disputed and nonessential

documents, including, but not limited to, Plaintiffs Affidavit and accompanying

exhibits[Doc.10];Exhibit1toPlaintiffsBriefRegardingPrivityoftheParties[Doc.31

1];andtheallongesandassignmentsattachedtoDefendantsMotion toDismiss[Doc.

41, at 810; Doc. 42, at 3740].11 In addition, the Court disregards any factual

allegations that do not appear on the face of the Complaint or in appropriate

attachments,includinganynewallegationsinthepartiesoriginalandsupplemental

briefsin

response

to

the

instant

Motion.12

II. FailuretoStateaClaimHavingreviewedtheComplaintandallappropriateexhibits,theCourtfindsthat

Plaintiffhasfailedtosetforthsufficientfactstoshowheisentitledtoreliefonanyofhis

assertedclaims. Infact,ratherthanalleginganymaterialfactsinhispleading,Plaintiff

attempts to lodge [t]he facts and statements made in the securitization audit

attachedherein.13 Frankly,theCourtisastonishedbyPlaintiffsaudacity. Insteadof

11TheCourtcannotconsideradditionalfactualallegationsinPlaintiffsAffidavit,whichisessentiallya

misguidedattempt tobolster theComplaintandcure [factual]deficiencies identified in theMotion to

Dismiss. SeeLeedomMgmt.Grp.v.Perlmutter,No.8:11cv2108T33TBM,2012WL503904,at*2(M.D.

Fla.Feb.15,2012). Likewise,PlaintiffsExhibit1,apoolingandservicingagreement(PSA),pertainsto

a

wholly

distinct

securitized

trust

that

is

not

implicated

in

the

instant

proceeding,

and

it

is

therefore

not

centralto the instantMotion. In fact,anyPSA iswholly irrelevanttothevalidityofasecurity interest

andlaterconveyancesofthesame. See,e.g.,Sellersv.BankofAm.,Nat.Assn,No.1:11CV3955RWS,2012

WL1853005,*45(N.D.Ga.May21,2012). Finally,Plaintiffchallenges thevalidityandauthenticityof

Defendants attached allonges and assignments; therefore, thesedocuments cannotbe considered for

purposesoftheinstantMotion.12

Seeid.13

[Doc.11at7]. Oddlyenough,PlaintifffailedtoattachtheaudittohisComplaint;however,Defendant

hasprovidedanauditinitssupplementalbrieftotheinstantMotion[Doc.283].Whereaplaintifffailsto


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providingtheshortandplainstatementoffactsrequiredbytheFederalRulesofCivil

Procedure,14 Plaintiff requires theCourt to scour a poorlycopied, 45page Certified

ForensicLoanAudit inanattempt todiscern thebasic factsofhiscase. Thisalone

would be sufficient for dismissal.15 However, the Court is equally concerned by

Plaintiffsattempttoincorporatesuchanaudit,whichismorethanlikelytheproduct

of charlatanswho prey upon people in economically dire situation, rather than a

legitimaterecitationofPlaintiffsfactualallegations.16 Asonebankruptcyjudgebluntly

explained,[the

Court]

is

quite

confident

there

is

no

such

thing

as

aCertified

Forensic

LoanAuditora certifiedforensicauditor.17 Infact,theFederalTradeCommission

has issued aConsumerAlert regarding such ForensicLoanAudits.18 TheCourt

will not, in good conscience, consider any facts recited by such a questionable

authority.19

introduceapertinentdocumentaspartofhispleading,adefendantmayintroducetheexhibitaspartof

hismotionattackingthepleading. SeeInreTheragenicsCorp.Sec.Litig.,105F.Supp.2d1342,1348(N.D.

Ga.2000). BecausethisdocumentwasattachedtoPlaintiffsComplaintinhisSecondAction,Demiliov.

CitizensHomeLoans,Inc.,3:12CV52,Doc.11at9(M.D.Ga.Apr.25,2012),andbecausethePlaintiffdoes

notcontest theauditsauthenticity, theCourtconcludes that this is thesecuritizationauditPlaintiff

referencesinhisComplaint.14

SeeFed.R.Civ.P.8(a)(2).15

Fidelv.DeutscheBankNatlTrustCo.,No.C102094RSL,2011WL2436134,at*1(W.D.Wash.June14,

2011).16

In

re

Norwood,

2010

WL

4642447,

at

*2.

17Id.

18Id.at*2n.2;see(Mar.2010),http://www.consumer.ftc.gov/articles/0130 forensicloanaudits. TheState

ofCaliforniaDepartmentofRealEstate issuedasimilaralertentitledFraudWarningRegardingForensic

LoanAudits(Feb.2010),http://www.dre.ca.gov/Consumers/ConsumerAlerts.html. 19

See, e.g., Fidel, 2011WL 2436134, at *1 (disregarding a SecuritizationAudit and Forensic Audit

attachedasexhibits toplaintiffscomplaint);accordHewettv.Shapiro& Ingle,No.1:11CV278,2012WL

1230740,at*4,n.4(M.D.N.C.Apr.12,2012)(discussingvariousauditsandnotingthatsuchdocuments

confirmtheemptygimmickeryofthesetypesofclaims.).


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Without Plaintiffs securitization audit, his pleadings are reduced to the

PromissoryNote,theSecurityDeed,aquitclaimdeed,anda[t]hreadbarerecitalofthe

elementsofacauseofaction,supportedbymereconclusorystatements.20 TheCourt

construestheseremainingsourcesinthelightmostfavorabletoPlaintiffandfindsthem

insufficienttostateaclaimforrelief.

In his Complaint, Plaintiff presents three separate mechanisms to quiet title

underGeorgia law,stating thathedesiresand isentitled toajudicialdeclaration

quietingtitle

in

[him]

as

of

the

date

on

which

the

loan

transaction

was

consummated.

Title shallbe titled ant [sic] vested in the Petitioner for violation of the law of this

state.21 However, Plaintiff fails to provide any information regarding any alleged

violationsof state law. Moreover,Plaintiff fails toallege (1) themeansbywhichhe

claimstoholdfreeandcleartitletotheLoganvilleparcel;(2)howandinwhatmanner

thesecurityinstrumentsinfavoroftheDefendantsarevoid22;(3)whatthenatureof

thepurportedcloud(s)onsaidtitleare;or,(4)whothepurportedadverseclaimantsare

and the source(s) of their adverse claims. Without this essential information, the

Court cannot make a reasonable inference that Defendants are liable for any

misconduct.23 Infact,coupledwithPlaintiffspriorlegalproceedings,thesedocuments

tend to establishAurora Banks rightful ownership of the Loganville parcel. Thus,

20Iqbal,556U.S.at663.

21[Doc.11at6].

22Id.

23Seeid.at678.


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PlaintiffsComplaintmustbeDISMISSEDforfailuretostateaclaimuponwhichrelief

canbegranted.24Forallpracticalpurposes,theaboveanalysisconcludestheCourtsconsideration

ofDefendantsMotion toDismiss. However,theCourtnotesthat if itcouldconsider

theadditionalfactsandattachmentspresentedinthepartiessupplementalbriefstothe

instantMotion,Plaintiffsactionwouldbebarredbythedoctrineofresjudicatabasedon

hispriorwrongfulforeclosureactioninthisCourt. Ofcourse,thisconclusionislimited

tothe

parties

allegations

in

the

present

case,

and

this

analysis

in

no

way

dictates

the

Courtsconsiderationofanynewcauseofactionwithdistinctoradditionalfacts.

CONCLUSION

For the foregoing reasons, theCourtGRANTSDefendantsMotion toDismiss

[Doc. 4], and PlaintiffDemiliosComplaint isDISMISSEDwith prejudice as to all

Defendantsforfailuretostateaclaimuponwhichreliefmaybegranted.25 Defendants

remainingMotionstoStrike[Docs.14and32]areTERMINATEDasMOOT.

SOORDERED,this29thdayofJanuary,2013.

S/ C.AshleyRoyal

C.ASHLEYROYAL,CHIEFJUDGE

UNITEDSTATESDISTRICTCOURT

BBP/lmh

24This ruling shouldcomeasno surprise toPlaintiffconsideringhisResponse to the instantMotion,

whereinhestatesthat[i]ntheeventtheCourtdeniesDefendantsMotion[toDismiss],theCourtandall

Partiescan expect thatPlaintiffwill immediately seek to fileanAmendedComplaintwithadditional

detail.[Doc.11at9,n.5].25

TheCourtdeclinestoprovideanyotherrelieftoDefendantsinthepresentOrderasneithersidehas

sufficientlyaddressedDefendantsrequestsforattorneysfees,costs,andsanctions.

130129 - demilio v citizens deutsche rfc et al

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