United States District Court, D. New Mexico
MEMORANDUM OPINION AND ORDER
matter comes before the Court upon “Defendant Monica
Wellington's Motion to Dismiss Complaint of MTGLQ
Investors, LP” (“Motion to Dismiss
Complaint”) filed on June 23, 2017. (Doc. 9). Plaintiff
MTGLQ filed its response on July 7, 2017, and Ms. Wellington
filed her reply on July 21, 2017. (Docs. 18 and 27). The
Court conducted a hearing on March 28, 2018, in which it
briefly explained its reasons for denying this motion. That
same day, the Court entered an Order noting its tentative
ruling. (Doc. 69). This Memorandum Opinion and Order
constitutes the full written opinion mentioned at the hearing
and in the Order.
a foreclosure case. On February 20, 2007, Profolio Home
Mortgage Corporation (“Profolio”) loaned Ms.
Wellington $134, 500.00 for the purchase of real property in
Albuquerque, New Mexico. (Doc. 1-1) at 2, ¶ 7;
Id. at 8. The Note for this loan contains an
“Allonge to Note, ” created on the same date as the
Note, detailing an undated special indorsement from Profolio
to Ohio Savings Bank signed by Baron Wilhelm,
President. Id. at 11 (stating “[p]ay
to the order of Ohio Savings Bank, without recourse”).
The Allonge to Note also contains an undated blank
indorsement from Ohio Savings Bank which states “PAY TO
THE ORDER OF, ” signed by Authorized Agent Christian
Flowers. Id. MTGLQ allegedly possesses the
Note at this time. Id. at 2, ¶ 7.
Note details the “Maturity Date” for the loan is
March 1, 2037. Id. at 8. The Note also states,
“[i]f I am in default, the Note Holder may send me
written notice telling me that if I do not pay the overdue
amount by a certain date, the Note Holder may require me to
pay immediately the full amount of Principal which has not
been paid and all the interest that I owe on that
amount.” Id. at 9. The date in the notice
requiring full payment of the principal and accrued interest
“must be at least 30 days after the date on which the
notice is mailed to me or delivered by other means.”
Id. The Note defines default status: “[i]f I
do not pay the full amount of each monthly payment on the
date it is due, I will be in default.” Id.
secured the Note with a Mortgage on the purchased real
property. Id. at 12-28. The Mortgage names Mortgage
Electronic Registration Systems, Inc. (“MERS”) as
a nominee for Profolio and its “successors and
assigns.” Id. at 12. MERS is also named as the
mortgagee. Id. The Mortgage was recorded with the
Bernalillo County Clerk on March 20, 2007. Id.;
id. at 3, ¶ 11.
alleges that MERS erroneously released the Mortgage, as
recorded on November 1, 2012. Id. at 3, ¶ 12.
MTGLQ also alleges that MERS erroneously assigned the
Mortgage to JPMorgan Chase Bank, N.A., as recorded on
November 13, 2012. Id. at 3, ¶ 13.
February 19, 2016, MERS, through Assignment of Mortgage,
assigned the Mortgage to MTGLQ. Id. at 45-47. This
assignment was recorded on March 2, 2016, with the Bernalillo
County Clerk. Id. The Mortgage was re-recorded with
the Bernalillo County Clerk on September 27, 2016, to correct
the legal description of the property. Id. at 3,
¶ 11; id. at 29-44.
January 25, 2017, MTGLQ filed its “Complaint for Debt
and Money Due and for Foreclosure”
(“Complaint”) in the Second Judicial District
Court, County of Bernalillo, State of New Mexico against Ms.
Wellington and others. Id. at 1. In Count I, MTGLQ
seeks damages from Ms. Wellington under the Note.
Id. at 2, ¶ 7. MTGLQ attached copies of the
Note, Allonge to Note, Mortgage, and Assignment of Mortgage
to its Complaint. Id. at 8-47. MTGLQ alleges Ms.
Wellington last paid on the Note on February 1, 2011, and
that she has been in default for failure to make payments
thereafter. Id. at 2, ¶ 8. MTGLQ also alleges
that it provided Ms. Wellington notice of her default,
demanding payment. Id. MTGLQ does not allege
specifically when it provided Ms. Wellington with notice of
default or the date certain for payment in the notice.
Id. Because Ms. Wellington failed to cure her
default, MTGLQ elected to make the entire remaining principal
with accrued interest due and payable. Id.
Count II of its Complaint, MTGLQ seeks foreclosure on the
Mortgage. Id. at 2-5, ¶¶ 10-21. MTGLQ
alleges that Altura Village Homeowners' Association,
Inc., JP Morgan Chase Bank, N.A., and the “Unknown
Spouse of Monica L. Wellington” (“Unknown
Spouse”) may individually claim an interest in the
property. Id. at 4-5, ¶¶ 19-21. On April
26, 2017, Ms. Wellington removed this case to this Court.
(Doc. 1) at 1.
Standard of Review
ruling on a Fed.R.Civ.P. 12(b)(6) motion to dismiss, the
Court must accept all well-pleaded allegations as true and
must view them in the light most favorable to the plaintiff.
See Zinermon v. Burch, 494 U.S. 113, 118 (1990);
Swanson v. Bixler, 750 F.2d 810, 813 (10th Cir.
1984). Rule 12(b)(6) requires that a complaint set forth the
grounds of a plaintiff's entitlement to relief through
more than labels, conclusions and a formulaic recitation of
the elements of a cause of action. See Bell Atlantic
Corp. v. Twombly, 550 U.S. 544, 555 (2007).
survive a Rule 12(b)(6) motion to dismiss, a plaintiff must
allege facts sufficient to state a plausible claim of relief.
Id. at 570. A claim is facially plausible if the
plaintiff pleads facts sufficient for the court to reasonably
infer that the defendant is liable for the alleged
misconduct. Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009) (citing Twombly, 550 U.S. at 556). “The
plausibility standard is not akin to a ‘probability
requirement, ' but it asks for more than a sheer
possibility that a defendant has acted unlawfully.”
Wellington raises three significant issues in her Motion to
Dismiss Complaint. First, she argues that MTGLQ lacks
standing to pursue a personal judgment on the Note or
foreclose on the Mortgage. (Doc. 9) at 5-9. Ms. Wellington
supports her argument by asserting that the documents
attached to the Complaint are either altered, fabricated, or
inauthentic and, therefore, MTGLQ should be sanctioned with
dismissal of its claims. Id. at 5. Further, she
contends that MTGLQ's allegations that MERS erroneously
released or assigned the Mortgage are insufficient to state a
claim for fraud under Fed.R.Civ.P. 9(b). Id. at 6.
Second, she argues that Count I of MTGLQ's Complaint is
barred by the California statute of limitations. Id.
at 11-13. Third, Ms. Wellington argues that the Court should
dismiss the Unknown Spouse from this case. For the reasons
explained below, these arguments fail to show why MTGLQ's
Complaint should be dismissed or why the Unknown Spouse
should be dismissed.
MTGLQ's Standing to Enforce the Note and Foreclose the
Standing at the Time of the ...