Mbaku, et al. v. Bank of America, et al.
- Summarized by Lars Fuller , BakerHostetler
- 9 years 7 months ago
- Citation:
- Mbaku, et al. v. Bank of America, et al., No. 14-1379 (10th Cir. 2015)
- Tag(s):
-
- Ruling:
- Tenth Circuit affirmed Rule 12 dismissal of pro se plaintiffs' due process, equal protection, and Colorado Fair Debt Procedures Collections Act (CFDPCA) claims asserted based on bank's foreclosure on plaintiffs' condo. Tenth Circuit agreed with district court (D. Colo.) ruling that plaintiffs failed to state claim upon which relief could be granted on the three claims.
Tenth Circuit agreed that Colorado public trustee foreclosure system did not violate substantive or procedural due process. Allowing holder of promissory note standing to foreclose based on blank indorsement comported with Colorado and fundamental commerical paper law, and did not violate due process. Debtors had opportunity for hearing to contest holder's standing, including validity of copy of note based on "best evidence rule." Plaintiffs' due process claims against bank failed because bank was not a state actor, and vague arguments regarding former attorney of former noteholder being involved in drafting foreclosure statutes did not create a state actor nexus.
Tenth Circuit found that Colorado foreclosure laws do not violate equal protection because public trustee foreclosure process differs from judicial foreclosure process. Under rational basis review, court found that Colorado public trustee foreclosure process satisfied rational basis review for legitimate public policy of providing efficient procedure for foreclosure.
Tenth Circuit found that plaintiffs' failed to state a CFDPCA claim based on arguments that blank endorsement was a forgery where plaintiffs provided no evidence of forgery to meet burden of alleging fraud with particularity. Plaintiffs' request for judicial notice of difference in signatures was insufficient to introduce evidence of forgery. Further, district court's grant of leave to amend complaint to include CFDPCA did not create "law of the case" finding that claim was adequate to survive Rule 12 objection by defendant. Denial of plaintiff's motion for leave to assert federal FDCPA claim was not in error where plaintiffs had not actually sought to include claim in motion to amend complaint.
Pro se plaintiffs asserted multiple other requests for relief, including motions to strike, requests to incorporate filings of other parties and orders of the district court, requests to incorporate purported "findings" of the district court without evidence in the record, and a motion to supplement record, all of which were denied as baseless.
- Procedural context:
- Pro se debtors facing foreclosure sued bank in US District Court. Court granted bank's motion to dismiss and plaintiffs appealed to Tenth Circuit.
- Facts:
- In 2008, debtors borrowed approximately $170,000 to refinance their condo. The loan was secured by a deed of trust in the condo. The beneficiary of the deed of trust was "MERS." In 2010, "BAC" sought to foreclose, stating that it held the note and debtors had defaulted. BAC recorded a Notice of Election and Demand for Sale. Debtors filed bankruptcy, staying the foreclosure, and obtained their discharge in April 2011. MERS then assigned the deed of trust and note to BAC, which merged into Bank of America. In October 2011, Bank of America sought to foreclose on the deed of trust. Bank of America produced the original note, which included an endorsement by original holder TBW. The Colorado state court approved the foreclosure sale.
One week before the scheduled sale, pro se debtors sued Bank of American asserting numerous federal and state claims. Bank of America moved to dismiss, and the U.S. District Court (D. Colo.) dismissed all enumerated claims, but found that complaint contained a non-enumerated due process claim, which bank had not addressed.
Plaintiffs filed an amended complaint, and district court accepted due process, equal protection, and Colorado Fair Debt Collection Practices Act (CFDCPA) claims. Bank of American moved to dismiss those claims. Magistrate judge recommended dismissal of due process and equal protection claims, but not CFDCPA claim. Bank failed to serve objection to magistrate's recommendation on plaintiffs, so court extended plaintiffs' period to reply to objection. After considering arguments, district court dismissed all three claims. Debtors apealed.
- Judge(s):
- Briscoe, McKay, Phillips
ABI Membership is required to access the full summary. Please Sign In using your ABI Member credentials. Not a Member yet? Join ABI now - it is absolutely worth it!
