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Olabode v. Caliber Home Loans, Inc.

United States District Court, D. Massachusetts

July 8, 2015

OMOLARE R. OLABODE and GERALD KELLY, Plaintiffs,
v.
CALIBER HOME LOANS, INC., Defendants.

ORDER ON DEFENDANT'S MOTION TO DISMISS

ALLISON D. BURROUGHS, District Judge.

Plaintiffs Omolare R. Olabode and Gerald Kelly ("Plaintiffs") challenge an attempted mortgage foreclosure on a residence in Dorchester, Massachusetts. Plaintiffs originally filed their complaint in Suffolk Superior Court. The Defendant, Caliber Home Loans, Inc. ("Caliber") removed the action to this Court on January 21, 2015, based on diversity of citizenship. See 28 U.S.C. § 1332. Presently before the Court is Caliber's Motion to Dismiss Plaintiffs' Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). For the reasons that follow, Caliber's Motion is denied, and the Court will permit the parties to engage in limited discovery.

I. THE COMPLAINT'S FACTUAL ALLEGATIONS

The operative complaint in this matter was filed in Suffolk Superior Court on December 31, 2014 [See ECF No. 11, State Court Record pp. 3-83 ("Complaint")]. Plaintiffs' Complaint alleges the following relevant facts, which the Court accepts as true for purposes of this Motion.[1]

Plaintiff Olabode is the original mortgagor and borrower on the mortgage loan at issue. She currently resides in Middlesex County, Massachusetts [Complaint ¶ 2]. On October 14, 2005, Olabode executed a promissory note made payable to Bank of America, N.A. ("BoA") in the amount of $375, 000 (the "Note") [Id. ¶ 4]. To secure the Note, Olabode executed a mortgage on a property located at 31-33 Burgoyne Street, Dorchester, Massachusetts (the "Property"), naming BoA as mortgagee [Id. ¶ 5]. The documents attached to Plaintiffs' Complaint suggest that the Mortgage was executed on October 14, 2005 and recorded at the Registry of Deeds on October 19, 2005 [Complaint Exhibit B].

Critical to Plaintiffs' claims is their allegation that "shortly after the origination of [Olabode's] loan, [BoA] immediately divested ownership of this loan for sale into the secondary mortgage market.'" [Complaint ¶ 6]. Plaintiffs further allege that, after the sale of the Note, BoA remained the third-party servicer for the new Note owner [Id.]. Plaintiffs do not allege to whom the Note was purportedly sold. Plaintiffs have attached a copy of the Note to their Complaint, which suggests that the Note has two Allonges - both dated October 14, 2005 [Complaint Exhibit A]. The first Allonge purports to endorse the Note as payable to the order of Vericrest Financial, Inc., without recourse, by "Bank of America, N.A., by Vericrest Financial, Inc." [Id.]. The second Allonge appears to endorse the Note in blank, without recourse, by Vericrest Financial, Inc. [Id.].

The Mortgage securing the Note was also purportedly assigned to Vericrest although Plaintiffs contest the validity of this assignment [Complaint ¶ 8]. Documents attached to the Complaint suggest that on December 21, 2012, a BoA representative executed an Assignment purportedly assigning the Mortgage to Vericrest Financial, Inc. [Id.; see also Complaint Exhibit D]. The Assignment recites that the note or notes referred to in the Mortgage were also being assigned to Vericrest Financial, Inc. [Complaint Exhibit D]. However, Plaintiffs allege that when BoA executed this Assignment, BoA was merely acting in the capacity of a third party servicer for the true Note owner [Complaint ¶ 9].

Sometime after the December 21, 2012 Assignment to Vericrest Financial, Inc., Vericrest Financial, Inc. was acquired by Defendant Caliber Home Loans, Inc.[2] [Id. ¶ 11].

More than a year later, on January 31, 2014, Caliber sent Olabode a "Certification Pursuant to Massachusetts 209 CMR 18.21A(2)(c), " which recited that Olabode had defaulted on the terms of the Note, and advised Olabode that Caliber planned to foreclose on the mortgaged Property, pursuant to a notice of sale [Complaint ¶¶ 34, 59 & Exhibit F]. The Certification further stated that that "Caliber Home Loans, Inc. services the mortgage loan on the property, " and separately, that "[t]he promissory note is currently owned by Caliber Home Loans, Inc., [formerly known as] Vericrest Financial, Inc., " and that "Caliber Home Loans, Inc., the servicer and authorized agent, is in possession of the note or otherwise has the authority to enforce payment and pursue foreclosure of the mortgaged property on behalf of the owner." [Complaint Exhibit F].

On April 10, 2014, a Caliber Default Service Officer named Daniel McCelland made an Affidavit Regarding Note Secured By A Mortgage To Be Foreclosed ("McCelland Affidavit"), which was recorded on May 6, 2014 [Complaint Exhibit E].[3] The McCelland Affidavit identified the Property, the Mortgage, and further identified the "Foreclosing Entity" as Caliber Home Loans, Inc. In the Affidavit, McCelland certified that based upon his review of the business records of Caliber Home Loans, Inc., he believed that the requirements of G.L. c. 244, § 35B were met [Id.]. McCelland further stated that "[o]n this date the Foreclosing Entity is:" and he selected a box marked "the authorized agent of the holder of said promissory note, for purposes, inter alia, of foreclosing said mortgage on behalf of said note holder." [Id.] (emphasis in original). Notably, McCelland did not select another box on the form which was marked "the holder of the promissory note secured by the above mortgage." [Id.] (emphasis in original). Viewing this fact in the light most favorable to Plaintiffs, the McCelland Affidavit may suggest that Caliber was foreclosing as the servicing agent, and was not the actual holder of the Note.

On October 21, 2014, Caliber's attorney sent Olabode a Notice of Intent to Foreclose Mortgage, notifying her that a foreclosure auction was scheduled for November 14, 2014 [Complaint ¶ 37 & Exhibit G]. On November 4, 2014, Olabode allegedly transferred title to the Property to Plaintiff Gerald Kelly by way of a quit claim deed [Complaint ¶ 38].[4] The deed was recorded at the registry on November 6, 2014 [Complaint Exhibit H]. The scheduled foreclosure auction has been postponed several times by mutual agreement of the parties.

II. PROCEDURAL HISTORY AND ADDITIONAL SUBMISSIONS

Based on the facts alleged above, Plaintiffs seek a declaratory judgment holding that Caliber lacks authority to enforce the power of sale and foreclose on the property pursuant to G.L. c. 244, § 14.[5] More specifically, Plaintiffs allege that Caliber has failed to establish that it is a "mortgagee" as the term is used in G.L. c. 244, § 14 [Complaint ¶ 57].

After removing this action to federal court, Caliber filed a Motion to Dismiss Plaintiffs' Complaint for failure to state a claim on which relief may be granted, pursuant to Federal Rule of Civil Procedure 12(b)(6) [ECF No. 12]. Caliber argues that the factual basis for Plaintiffs' claims (that Caliber is not the holder of the Note) is "contradicted and negated by" the documents attached to Plaintiffs' Complaint [Id. ¶¶ 10-11]. Those documents, Caliber argues, demonstrate ...


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