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Nooh v. Cit Group Consumer Finance, Inc.

United States District Court, W.D. Tennessee, Western Division

May 23, 2018

ABDUL NOOH, Plaintiff,
v.
CIT GROUP CONSUMER FINANCE, INC., MORTGAGE ELECTRONIC REGISTRATION SYSTEM, INC., BANK OF AMERICA, NATIONAL ASSOCIATION, DITECH FINANCIAL, LLC, BANK OF NEW YORK MELLON, BAYVIEW LOAN SERVICING, LLC, WILSON & ASSOCIATES, PLLC., BELGRAVIA SQUARE, LLC, Defendants.

          ORDER ADOPTING THE REPORT AND RECOMMENDATIONS AND ORDERING CASE DISMISSED WITH PREJUDICE

          JOHN T. FOWLKES, JR. UNITED STATES DISTRICT JUDGE

         Before the Court are Motions to Dismiss separately filed by all of the Defendants in this case. (ECF Nos. 16, 19, 23, 26, 30 & 33.)[1] The motions were referred to the assigned United States Magistrate Judge for management of all pretrial matters pursuant to 28 U.S.C. § 636(b)(1)(A) and 28 U.S.C. §§ 636 (b)(1)(B) & (C) and West Tenn. L.R. 4.1(b)(1). On April 5, 2018, the Chief Magistrate Judge issued a Report and Recommendations on the Defendants' Motions to Dismiss in which she recommended that all of the motions to dismiss be granted and that all of Nooh's claims against the Defendants be dismissed. (ECF No. 42.) To date, Plaintiff has not filed any objections to the Chief Magistrate Judge's Report and Recommendations and the time allowed for doing so has expired. Accordingly, the Court adopts the Report and Recommendations and finds that the Defendants' Motions to Dismiss should be Granted.

         I. STANDARD OF REVIEW

         Congress passed 28 U.S.C. § 636(b) “to relieve some of the burden on the federal courts by permitting the assignment of certain district court duties to magistrates.” See e.g. Baker v. Peterson, 67 Fed.Appx. 308, 311, 2003 WL 21321184 (6th Cir. 2003) and Fed.R.Civ.P. 72(a). When a Magistrate Judge submits to a district judge proposed findings of fact and recommendations, any party may serve and file written objections to such proposed findings and recommendations in accordance with the rules of court. 28 U.S.C. §§ 636(b)(1)(B)-(C). After reviewing the evidence, the Court may accept, reject, or modify, in whole or in part, any findings or recommendations made by a Magistrate Judge. Id. A Court need not review any portion of the recommendation to which a plaintiff does not specifically object. Therefore, it may adopt the findings and rulings of a Magistrate Judge to which a specific objection is not filed. Thomas v. Arn, 474 U.S. 140, 149-52 (1985). As noted, Plaintiff has not filed any objections to the Chief Magistrate Judge's Report and Recommendations in this case.

         II. FINDINGS OF FACT

         On December 30, 2005, Plaintiff Abdul Nooh obtained a loan from Defendant CIT in the amount of $259, 200 to purchase property located at 9757 Woodland Edge Lane in Cordova, Tennessee. The Note and Deed of Trust were subsequently assigned to other parties, including Bank of New York Mellon. However, Wilson and Associates foreclosed on the property on November 17, 2017, causing the property to be sold to Belgravia Square, LLC. Recognizing the limited facts that are alleged by Nooh in his Complaint and the subsequently filed “Replevin Complaint, ” the Chief Magistrate Judge generally construed this case as fifteen purported claims against seven separately-named Defendants in an effort to set aside the foreclosure.[2] (ECF No. 1, 11-34.) As there are no objections, the Court adopts the factual history provided in the Report and Recommendations. (ECF No. 42, 1, 3-7 fn. 8.)

         III. ANALYSIS

         The Chief Magistrate Judge addressed all of Plaintiff's claims and recommended dismissal of the case for the following reasons:

         Nooh's Claims of Fraud and Breach of Contract Against CIT

         First, the Chief Magistrate Judge asserted that Nooh's causes of action against CIT for fraud and fraudulent inducement should be dismissed as barred by the three year statute of limitations. Although the loan, Note and Deed of Trust were issued by CIT on December 30, 2005, Plaintiff did not file his Complaint until November 13, 2017. (ECF Nos. 16-1 & 16-2.) The three year time period for filing the claims of fraud or fraudulent inducement precludes these claims. See Tenn. Code Ann. § 28-3-105.

         In addition, the Chief Magistrate Judge concluded that Nooh's fraud claims fail to meet the Rule 9(b) pleading requirement. Plaintiff clearly fails to explicitly assert what statements were fraudulent and who made them despite the explicit provisions within the note and deed allowing a transfer and assignment of the note. Furthermore, Nooh executed an Adjustable Rate Promissory Note that provides: “I understand that You may transfer this Note.” (ECF No. 16-1, 1, Exhibit A). The Chief Magistrate Judge properly concluded that in executing the note, Nooh agreed that CIT was the owner and holder of the note at issue and beneficiary of the Deed of Trust. (ECF No. 42, 10.) The Deed of Trust also provided that successors and assigns would be bound by the covenants of the deed of trust. (ECF No. 16-2, 4, ¶ 12.) Plaintiff merely avers that “defendant CIT intentionally made material misstatements, and/or omissions in relation to the alleged mortgage loan which Plaintiff relief upon to his detriment.” (ECF No. 1, ¶ 36.) Therefore, any assertions that CIT misrepresented its ability to assign or transfer the note are insufficiently pled and therefore should be dismissed under Rule 12(b)(6). Payne v. Sec'y of Treas., 73 Fed.Appx. 836, 837 (6th Cir. 2003).

         The Chief Magistrate Judge correctly concluded that the Tennessee six-year statute of limitations bars Nooh's alleged breach of contract claims against CIT. (ECF No. 42, 12-13 & ECF No. 1, 5-6, ¶¶ 18-20.) Plaintiff's complaint was filed almost twelve years after the Note and Deed of Contract were executed with CIT and therefore, this claim is barred by the applicable statute of limitations. As noted by the Chief Magistrate Judge, Plaintiff's claims regarding a failure to extend a loan, honor the loan commitment, or breach a fiduciary duty, ECF No. 1, 18-19, are all equally without merit. Generally, a fiduciary relationship does not exist between a lender and borrower absent special facts and circumstances and would nevertheless, be barred by the applicable three year statute of limitations. See Keller v. Colgems-EMI Music, Inc. et al, 924 S.W.2d 357, 360 (Tenn.App. 1996) and SecurAmerica Business Credit v. Schledwitz, No. W2012-02605-COA-R3-CV, 2014 WL 1266121, at *23 (Tenn.App. March 28, 2014) (quoting Oak Ridge Precision Industries, Inc. v. First Tennessee Bank Nat. Ass'n, 835 S.W.2d 25, 30 (Tenn.App. 1992)). The Chief Magistrate Judge properly recommended dismissal of these claims.

         Nooh's State Law Claims Against all of the Defendants Regarding Securitization and Assignment

         The Chief Magistrate Judge recommended dismissal of Plaintiff's fraud claim against all of the Defendants for failure to disclose that the loan was securitized because: (1) Plaintiff has failed to plead this claim under the heightened standard of Rule 9(b); (2) there was no fiduciary relationship between the parties that imposed a duty to disclose this fact; (3) Plaintiff's obligations under the Note were not absolved by securitization or protected from foreclosure; and (4) the securitization of the loan did not render the Note or Deed of Trust unenforceable. (ECF No. 42, 14-16.) As noted, securitization is a separate contract having separate obligations from a Note or Deed of Trust. Lorrie Thompson v. Bank of America, N.A., et al., 773 F.3d 741, 747-50 (6th Cir. 2014)(“securitization of a note does not alter the borrower's obligation to repay the loan); and Dauenhauer v. Bank of New York Mellon,562 Fed.Appx. 473, 478-81 (6th Cir. 2014). The Chief Magistrate Judge also found that Nooh's claims of non-compliance with the associated “Pooling and Servicing Agreements” (“PSAs”) and challenges to the assignments of the Note and Deed of Trust fail due to his lack ...


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