Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-almd-2_14-cv-00872/USCOURTS-almd-2_14-cv-00872-0/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:2201 Declaratory Judgement

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IN THE DISTRICT COURT OF THE UNITED STATES

FOR THE MIDDLE DISTRICT OF ALABAMA

NORTHERN DIVISION

WAYNE MCKAY and SHONDRA )

MCKAY, )

 )

 )

 Plaintiffs, )

)

v. ) CASE NO.2:14-cv-872-TFM

 ) 

 ) [WO]

U.S. BANK, NATIONAL ASSOCIATON, )

as trustee for the Certificate Holders of the ) 

LXS 2007-15N Trust Fund, )

 )

 )

 Defendant. )

)

___________________________________ 

 

MEMORANDUM OPINION and ORDER

I. Introduction

Plaintiffs filed this declaratory judgment action against Defendant U.S. Bank, National 

Association, as trustee for the Certificate Holders of the LXZ 2007-15N Trust Fund (“U.S. 

Bank”) asking this Court to declare “that Defendant is not a party in interest as against Plaintiffs 

and or Plaintiff’s [sic] real property.” and seeking “a declaration to quiet title in favor of 

Plaintiffs and against Defendants [sic].” (Doc. 1 p. 2). The defendant filed a Motion to Dismiss

and Brief in Support (Docs. 12 and 13) to which it attached as exhibits the following: a copy of 

the Plaintiffs’ Mortgage on the property identified as 2722 Albemarle Road Montgomery, 

Alabama 36107 (Doc. 13-1)1

; a copy of the Adjustable Rate Note for the property identified 

above (Doc. 13-2); and a copy of the Assignment of Mortgage from MERS as nominee for 

 

1 The Lender identified in the Mortgage is Bayrock Mortgage Corporation for whom Mortgage Electronic

Registration Systems, Inc. (“MERS”) acts as nominee. (Doc. 13-1 pp. 2-3).

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Bayrock Mortgage Corporation to Defendant U.S Bank. (Doc. 13-3). The plaintiffs filed a 

Response to the Motion to Dismiss (Doc. 17) to which they attached an affidavit from Rosemary 

A. Parks, “the substitute of the holder of the power of Attorney” for Plaintiffs. (Doc. 17-1). 

II. Standard of Review 

When considering the appropriate standard to apply on a motion to dismiss where parties 

have filed documents outside the complaint with the Court, the Eleventh Circuit has held that

“the court may consider a document attached to a motion to dismiss without 

converting the motion into one for summary judgment if the attached document is (1) 

central to the plaintiff’s claim and (2) undisputed. In this context, ‘undisputed’ means 

that the authenticity of the document is not challenged.” 

D.L. Day, v. Taylor, 400 F.3d 1272, 1276 (11th Cir. 2005) citing Horsley v. Feldt, 304 F.3d 

1125, 1134 (11th Cir. 2002). Further, “[a] Rule 12(b)(6) motion tests the legal sufficiency of the 

complaint. . . .[I]n order to survive a motion to dismiss for failure to state a claim, the plaintiff 

must allege ‘enough facts to state a claim to relief that is plausible on its face.’” Coggins v. 

Abbett, 2008 WL 2476759 *4 citing Bell Atlantic Corp., v. Twombly, 550 U.S. 544, 127 S.Ct. 

1955) (2007). 

The standard for a motion to dismiss under Rule 12(b)(6) was explained in Twombly and 

refined in Ashcroft v. Iqbal, 129 S.Ct.1937, 1949 (2009) as follows:

Two working principles underlie our decision in Twombly. First, the tenet that a 

court must accept as true all the allegations contained in a complaint is 

inapplicable to legal conclusions. Threadbare recitals of the elements of a cause 

of action, supported by mere conclusory statements, do not suffice. Rule 8 marks 

a notable and generous departure from the hypertechnical, code-pleading regime 

of a prior era, but it does not unlock the doors of discovery for a plaintiff armed 

with nothing more than conclusions. Second, only a complaint that states a 

plausible claim for relief will . . . be a context-specific task that requires the 

reviewing court to draw on its judicial experience and common sense. But where 

the well-pleaded facts do not permit the court to infer more than the mere 

possibility of misconduct, the complaint has alleged - but it has not shown - that 

the pleader is entitled to relief.

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Iqbal, 129 S.Ct. at 1949-50 (citations and internal edits omitted).

The Twombly-Iqbal two-step analysis begins “by identifying the allegations in the 

complaint that are not entitled to the assumption of truth” because they are conclusory. Id., at 

195; Mamani v. Berzain, 2011 U.S. App. Lexis 17999, at *12 (11th Cir. Aug. 29, 2011) 

(“Following the Supreme Court’s approach in Iqbal, we begin by identifying conclusory 

allegations in the Complaint.”). After conclusory statements are set aside, the Twombly-Iqbal 

analysis requires the Court to assume the veracity of well-pleaded factual allegations, and then to 

determine whether they “possess enough heft to set forth ‘a plausible entitlement to relief.’” 

Mack v. City of High Springs, 486 Fed. App’x 3, 6 (11th Cir. 2012) (quotation omitted.) “To 

survive a motion to dismiss, a complaint need not contain ‘detailed factual allegations’ but 

instead the complaint must contain ‘only enough facts to state a claim to relief that is plausible 

on its face.’” Maddox v. Auburn Univ. Fed. Credit Union, 2010 U.S. Dist. Lexis 127043 at *4. 

Establishing facial plausibility, however, requires more than stating facts that establish mere

possibility. Mamani,, 2011 U.S. App. Lexis 17999, at *22-*23 (“The possibility that -if even a 

possibility has been alleged effectively - these defendants acted unlawfully is not enough for a 

plausible claim.”). Plaintiff is required to “allege more by way of factual content to nudge [her] 

claim . . . across the line from conceivable to plausible.” Iqbal, 129 S. Ct. at 1952 (internal 

editing and citation omitted.) 

III. Discussion

The claims in this case arise from U.S. Bank’s status as mortgagee of Plaintiffs’

Mortgage. (Doc. 1 para. 2). On December 12, 2006, Plaintiffs executed a Mortgage in favor of 

MERS, as nominee for Bayrock Mortgage Corporation (“Bayrock”) to secure a Note evidencing 

an $82,400.00 home loan from Bayrock to Plaintiffs. The defendant has filed with the Court a 

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copy of the Mortgage, the Note and the Assignment at issue in this case (Docs. 13-1, 13-2, 13-3). 

The Plaintiffs have not objected to the authenticity of these documents; nor does the Court have 

any reason to doubt that these documents are anything other than what they appear to be on their 

face. Thus, the authenticity of these documents is “undisputed”. Furthermore, these documents 

form the basis of Plaintiffs’ claim and as such are “central” to Plaintiffs’ claim. D.L. Day, 400 

F.3d at 1276. Accordingly, the Court concludes that these documents are properly before the 

Court for its consideration on the Motion to Dismiss. Id.

Plaintiffs allegedly mailed U.S. Bank a “notarial presentment” on July 17, 2014, which U.S. 

Bank allegedly received on July 21, 2014. (Doc. 1 para. 4). This “notarial presentment” 

purportedly asserted that U.S. Bank was not the party of interest to enforce Plaintiff’s Mortgage, 

and apparently requested that U.S. Bank produce the original Note and Mortgage. (Id. at para.

5). Plaintiffs also allegedly mailed U.S. Bank a “notarial notice of Dishonor” on August 4, 2014, 

which was allegedly received by U.S. Bank on August 11, 2014. (Id. at para. 7). Plaintiffs 

alleged that U.S. Bank has not responded to either the “notarial presentment” or the “notarial 

notice of dishonor.” (Id. paras. 6, 8). Plaintiffs claim that U.S. Bank is not in possession of the 

original Note or original Mortgage – notwithstanding that U.S. Bank has attached copies of the 

same to this motion. (Id. para. 9); see (Doc. 13-1 and 13-2). Plaintiffs’ Note and Mortgage are 

now part of a securitized pool, of which U.S. Bank is Trustee. (Doc. 1, paras. 2, 10); see (Doc. 

13-3). Plaintiffs now seek a declaratory judgment (1) against U.S. Bank declaring that U.S. 

Bank is not a party in interest as to Plaintiffs or Plaintiffs’ property, and (2) to quiet title in favor 

of Plaintiffs and against U.S. Bank. (Id. at p.2). 

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It is undisputed that Plaintiffs have not made a mortgage payment since June 2013, yet 

are still living in their house. Defendant argues that the Plaintiffs’ Complaint is due to be 

dismissed for three reasons. First, Plaintiffs incorrectly argue that the principles of presentment 

and dishonor of negotiable instruments apply to this case. Second, Plaintiffs incorrectly argue 

that U.S. Bank is not a party in interest to this case. Third, Plaintiffs fail to adequately plead a 

quiet title claim. The Court will address each of these arguments below. The Court notes that 

Plaintiffs’ response to Defendant’s Motion to Dismiss is simply a restatement, almost verbatim, 

of the claims in their complaint and offers no factual or legal argument to rebut those arguments 

presented by Defendant . (Doc. 17). The Court will address each of Defendants arguments in 

turn below.

(1) Ala. Code §§ 7-3-501 to 503 do not apply to this case.

Plaintiffs claim that U.S. Bank has “admitted that it is not the party to enforce the note 

and mortgage on Plaintiffs’ property and [U.S. Bank] is not in possession of the original note.” 

(Doc. 1, paras 4-8). This claim is not supported by any relevant law or fact. First, Plaintiffs 

claim that they mailed U.S. Bank a “notarial presentment alleging that [U.S. Bank] was not the 

party of interest to enforce the mortgage and that for [U.S. Bank] to produce the original 

mortgage and note under Code of Alabama 7-3-501.” (Doc. 1, para. 4). This section defines 

“presentment” as follows:

“a demand made by or on behalf of a person entitled to enforce an instrument (i) 

to pay the instrument made to the drawee or party obliged to pay the instrument, 

or in the case of a note or accepted draft payable at a bank, to the bank, or (ii) to 

accept a draft made to the drawee.” 

Ala. Code 7-3-501 (emphasis added). By the clear terms of the statute, presentment is a power to 

be exercised “by or on behalf of a person entitled to enforce the instrument,” and against “a party 

obliged to pay the instrument”. Id. Plaintiffs appear to claim that they are entitled to make a 

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demand for presentment, and that they are entitled to demand payment from U.S. Bank. This is a 

backwards reading and interpretation of the statute. As the parties indebted under their home 

loan and obliged to pay the Note, Plaintiffs are the parties to whom presentment could be made. 

There is no allegation that U.S. Bank, as the party entitled to enforce the Note, has made any 

demand for presentment on Plaintiffs. Thus the doctrine of presentment is inapplicable to the 

facts of this case and is not a basis for this Court to conclude that U.S. Bank has “admitted” 

anything related to Plaintiffs’ Mortgage as Plaintiffs claim. (Doc. 1, paras 4-8).

Similarly, Plaintiffs’ contentions related to dishonor are inapplicable and without merit. 

(Doc. 1 paras. 6-8). Ala. Code 7-3-502(a)(1)-(3) provides generally that a note is dishonored if 

the note is not paid on the day of presentment (if necessary) or on the day it becomes payable. 

For the concept of dishonor to apply, the party obligated to pay it, must fail to pay it. Thus, 

Plaintiffs, as the parties obligated to pay the amount of the Note, are the only parties who could 

dishonor the Note. Thus the doctrine of dishonor is inapplicable2 to the facts of this case and is 

not a basis for this Court to conclude that U.S. Bank has “admitted” anything related to 

Plaintiffs’ Mortgage as Plaintiffs claim. (Doc. 1, paras 4-8).

(2) 12 U.S.C. § 2605(k)(1)(d) does not apply.

Plaintiffs cite 12 U.S.C. § 2605(k)(1)(d) for the proposition that U.S. Bank had “ten (10) 

business days to rebut the Notarial Presentment of Plaintiffs or the same is deemed admitted as 

presented. “ (Doc. 1, para. 5). This Section states as follows:

(k) Servicer prohibitions

(1) In general

A servicer of a federally related mortgage shall not –

 (D) fail to respond within 10 business days to a request from a borrower to 

provide the identity, address, and other relevant contact information about the owner or 

assignee of the loan.

 

2 Further, Ala. Code 7-3-503 which relates to notice of dishonor, is similarly inapplicable to this case.

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By its clear terms, this statute applies to a “servicer of a federally related mortgage”. Plaintiffs 

have not alleged that U.S. Bank is the servicer of their Mortgage; nor do Plaintiffs allege in their 

Complaint that they ever actually requested identity and contact information about the owner or 

assignee of the loan. Rather they assert that their “Notarial Presentment alleg[ed] that [U.S. 

Bank] was not the party of interest to enforce the mortgage and that for [U.S. Bank] to produce 

the original mortgage or note.” (Doc. 1, para. 4). The information sought by Plaintiff is clearly 

not contemplated by this Code section. Thus, this Code section is inapplicable to the facts of this 

case and is not a basis for this Court to conclude that U.S. Bank has “admitted” anything related 

to Plaintiffs’ Mortgage as Plaintiffs claim. (Doc. 1, paras. 4-8).

(3) U.S. Bank is a party in interest as to Plaintiffs’ Mortgage

Plaintiffs seek declaratory relief that U.S. Bank “is not a party in interest as against 

Plaintiffs and or Plaintiff’s [sic] real property.” (Doc. 1, p. 2). Plaintiffs first theory to support 

this argument is that U.S. Bank failed to comply with the statutory requirements relating to 

presentment, dishonor, and information requests. For the reasons stated in sections (1) and (2) 

above, the Court concludes this theory has no merit. 

Plaintiffs’ second theory to support their request for declaratory relief is based partly 

upon their claim that U.S. Bank “must possess both [the Note and Mortgage] to be the party in 

interest to enforce the mortgage.” (Doc. 1 para. 9). The law is clear; this “split the note” theory 

has been consistently rejected by Alabama courts. See, e.g., Coleman v. BAC Servicing, 104 So.

3d 195, 205 (Ala. Civ. App. 2012) (holding that “Alabama law specifically contemplates that 

there can be a separation” of the note and mortgage); See, also, Orton v. Matthews, 2013 WL 

5890167 * 4 (N.D. Ala. Nov 1, 2013) (granting motion to dismiss on basis that the “’split the 

note’ theory has been roundly rejected by Alabama courts”). Thus, the Court concludes that this 

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theory does not support the conclusion that U.S. Bank is not a party in interest to Plaintiffs’ 

mortgage, as Plaintiffs claim.

Further, the Court recognizes Plaintiffs acknowledge that U.S. Bank is Trustee of the 

Trust (Doc. 1 para. 2). Under the law, if a trustee possesses “customary powers to hold, manage, 

and dispose of assets,” then that trustee is a real party in interest. Navarro Sav. Ass’n v. Lee, 446 

U.S. 458, 464 (1980). Section Q of the Mortgage provides as follows:

“MERS (as nominee for Lender and Lender’s successors and assigns) has the 

right: to exercise any or all of those interests, including, but not limited to, the 

right to foreclose and sell the property . . . [or] releasing and cancelling this 

Security Instrument.”

(Doc. 13-1 p. 4). Additionally, the Mortgage provides that 

“[t[he Note or a partial interest in the Note (together with this Security 

Instrument) can be sold one or more times without prior notice to [Plaintiffs].”

(Doc. 13-1 p. 16 para. 20). Also, the recorded U.S. Bank assignment provides that the Mortgage 

was assigned to U.S. Bank, as trustee. (Doc. 13-3). Thus, the facts are undisputed that U.S. 

Bank is now the mortgagee of Plaintiffs’ Mortgage, and Plaintiffs agreed to terms in the 

Mortgage establishing that the mortgagee has the power to exercise enforcement rights granted 

in the Mortgage. Thus, the Court concludes that Plaintiffs claim that U.S. Bank is not a real 

party in interest fails; and thus no declaratory relief is due on this claim. 

(4) Plaintiffs’ Quiet Title claim is due to be dismissed.

Plaintiffs also seek “a declaration to quiet title in favor of Plaintiffs and against 

Defendants.” (Doc. 1 p.2). An action to quiet title is the appropriate test to determine which

among the parties claiming right of title and possession holds superior title. Gardner v. Key, 594 

So. 2d 43, 44 (Ala. 1991). Plaintiffs quiet title claim is based, in whole or in part, on the 

arguments made pursuant to Alabama and federal law as discussed above in sections (1), (2) and 

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(3). To the extent that these arguments serve as the basis for Plaintiffs’ quiet title claim, the 

Court concludes that the quiet title claim is due to be dismissed. 

Furthermore, the Court concludes that Plaintiffs’ quiet title claim should be dismissed 

because it does not meet the required pleading standards for a quiet title action. Under Alabama 

law, any person “in peaceable possession of lands [and] . . . claiming to own the same, . . . 

[whose] title thereto, or any party thereof, is . . . disputed . . . , may commence an action to 

settle the title to such land and to clear up all doubts or disputes concerning the same.” Ala. 

Code § 6-6-540. A plaintiff establishes a prima facie case to quiet title when “it is shown that 

[the plaintiff] is in peaceable possession of the land, either actual or constructive, at the time of 

the filing of the bill and that there was no suit pending to test the validity of the title. Woodland 

Grove Baptist Church, v. Woodland Grove Cmty. Cemetery Ass’n, Inc., 947 So. 2d 1031, 1036 

(Ala. 2006) (citations omitted.) 

Indeed, in order to meet the “plausibility” pleading standard articulated by Twombly and 

Iqbal, a plaintiff’s complaint must include enough factual allegations to lift the stated claim out 

of the realm of mere speculation. Twombly, 550 U.S. at 555. Here, Plaintiffs fail to identify or 

attempt to connect factual allegations to any of the elements of a quiet title cause of action. 

Indeed, the only part of the Complaint that remotely relates to such a claim is the factual 

allegation that Plaintiff’s “own a home”. (Doc. 1 para. 1). Thus, the Court concludes that under 

the “plausibility” standard of Twombly and Iqbal, Plaintiffs fail to adequately plead a cause of 

action to quiet title.

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IV. Conclusion

Accordingly, the Court concludes that Defendant U.S. Bank’s Motion to Dismiss the 

Complaint (Doc. 12) is GRANTED and that this case is due to be dismissed with prejudice. A 

separate Order will be issued.

DONE this 24th day of September, 2015.

 /s/Terry F. Moorer

TERRY F. MOORER

UNITED STATES MAGISTRATE JUDGE

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