Court Opinion

ID: 2661862
Source: CourtListenerOpinion
Date Created: 2014-04-03 11:25:55.919789+00
Date Added: 2024-06-11T13:01:14.414005
License: Public Domain

UNITED STATES DISTRICT COURT
                   FOR THE DISTRICT OF COLUMBIA
_______________________________
                                )
ARAYA HENOK,                    )
                                )
     Plaintiff,                 )
                                )
     v.                         )   Civil Action No. 12-335 (RWR)
                                )
CHASE HOME FINANCE, LLC,        )
et al.,                         )
                                )
     Defendants.                )
_______________________________)

                   MEMORANDUM OPINION AND ORDER

     Pro se plaintiff Araya Henok brings this action against

Chase Home Finance, LLC (“Chase”), Shapiro & Burson, LLP, Fannie

Mae, and Dorothy Ihuoma, challenging the legality of the

foreclosure on a property he owned on Myrtle Avenue N.E. in

Washington, D.C. (“the property”).   Ihuoma purchased the property

after the foreclosure sale, and moves to dismiss the complaint

against her under Fed. R. Civ. P. 12(b)(6) for failure to allege

a cause of action against her.   Because Henok has failed to plead

facts showing any wrongdoing by Ihuoma or that would overcome the

defendant’s bona fide purchaser status, the motion to dismiss

will be granted.

                            BACKGROUND

     Henok purchased the property in 2005.   (Compl. ¶ 6.)    After

Chase gave notice of foreclosure, Henok allegedly attempted to

cure the foreclosure, but the property was sold to Fannie Mae in

a foreclosure sale on March 24, 2010.    (Id. ¶¶ 8-14, Ex. 5.)
                                -2-

Ihuoma purchased the property after the foreclosure sale.    (Id.

¶ 5; Def.’s Mem. of P. and A. (“Def.’s Mem.”) at 2.)   In

paragraph five of the complaint, Henok states that he includes

Ihuoma, a party with an interest in the property, as a defendant

in this action under D.C. Super. Ct. R. Civ. P. 19 (Compl. ¶ 5),

which governs joinder of required parties.   The only mention of

Ihuoma in the complaint appears in paragraph five, and the

complaint alleges no facts reflecting any misconduct by Ihuoma.

Ihuoma moves to dismiss the complaint, arguing that she is a bona

fide purchaser of the property and that Henok has failed to state

any claim against her.

                            DISCUSSION

     In reviewing a motion brought under Rule 12(b)(6), a court

accepts as true all well-pleaded allegations in the complaint and

interprets them in the light most favorable to the plaintiff.

Howerton v. Ogletree, 466 F. Supp. 2d 182, 183 (D.D.C. 2006).

Pleadings filed by pro se litigants are entitled to leniency, and

“the Court must make a concerted effort to discern a cause of

action from the record presented if an action is in fact

discernable.”   Id. (citing Haines v. Kerner, 404 U.S. 519, 520

(1972)).   “In order to survive a motion to dismiss under Rule

12(b)(6), the allegations stated in the . . . plaintiff’s

complaint ‘must be enough to raise a right to relief above the

speculative level[.]’”   Demery v. Montgomery County, 602 F. Supp.
                                  -3-

2d 206, 212 (D.D.C. 2009) (quoting Bell Atl. Corp. v. Twombly,

550 U.S. 544, 555 (2007)).   Courts need not accept the truth of

“legal conclusions cast in the form of factual allegations.”

Cornish v. Dudas, 715 F. Supp. 2d 56, 60 (D.D.C. 2010).     Further,

“[t]hreadbare recitals of the elements of a cause of action,

supported by mere conclusory statements, do not suffice.”

Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).

I.   BONA FIDE PURCHASER STATUS

     A bona fide purchaser is one “who acquires an interest in

property for a valuable consideration and without notice of any

outstanding claims which are held against the property by third

parties.”   Clay Properties Inc. v. Washington Post Co., 604 A.2d

890, 894 (D.C. 1992); see also Chen v. Bell-Smith, 768 F. Supp.

2d 121, 134 (D.D.C. 2011) (adopting this definition).   A bona

fide purchaser is “protected from outstanding interests in the

property of which it has no notice.”    Chen, 768 F. Supp. 2d at

134 (quoting Smith v. Wells Fargo Bank, 991 A.2d 20, 26 (D.C.

2010)).   So long as the bona fide purchaser had no notice, the

purchaser is protected even when he or she acquires the interest

in the real property from someone who acquired it originally

through fraudulent means.    Chen, 768 F. Supp. 2d at 134 (quoting

Haley v. Corcoran, 659 F. Supp. 2d 714, 722 (D. Md. 2009)).      In

this case, the burden is on the plaintiff to prove that the
                                  -4-

defendant is not a bona fide purchaser.       IA Const. Corp. v.

Carney, 656 A.2d 369, 375 (Md. Ct. Spec. App. 1995).1

     Henok represents that Ihuoma “has not been sued for fraud or

breach of contract. . . .   She is only a party to this case as

someone that ‘might’ have interest on a property that was ‘sold’

fraudulently thus making her purchase void ab initio.”

(Plaintiff’s Second Opposition (“Pl.’s Opp’n”) at 1.)       D.C. Rule

19 is identical in relevant part to federal Rule 19, and governs

the “Joinder of Persons Needed for Just Adjudication.”      D.C.

Super. Ct. R. Civ. P. 19(a)(1).    “A federal court should not

hesitate to require joinder of absentees whose interest may be

affected by the action . . . .”    7 Charles A. Wright et al.,

Federal Practice and Procedure § 1621 (3d ed. 2012).

     Ihuoma argues that she acquired her interest in the property

from the foreclosure purchaser and the plaintiff does not allege

that she had knowledge of any defects in the foreclosure sale.

(Def.’s Mem. at 1.)   The burden lies with Henok to overcome

Ihuoma’s bona fide purchaser status by pleading facts that if

proven would show Ihuoma’s knowledge of defects.      See IA Const.

Corp. v. Carney, 656 A.2d at 375.       Henok’s filings acknowledge

Ihuoma’s purchase after the foreclosure sale (Compl. ¶ 5; Pl.’s

     1
       The D.C. Court of Appeals has not spoken on this issue.
“[C]ourts applying D.C. law may look to Maryland law when there
is no controlling D.C. authority directly on point.” Chen, 768
F. Supp. 2d at 134 n.8.
                                -5-

Opp’n at 1), but none of Henok’s filings provides any evidence

that Ihuoma was aware of any alleged fraud underlying the

foreclosure on the property.   Therefore, Henok fails to meet his

burden to demonstrate that Ihuoma is not entitled to bona fide

purchaser status and not protected from his asserted interest in

the property.2

II.   WHETHER FORECLOSURE SALE IS VOID AB INITIO

      Bona fide purchaser status does not protect a buyer from a

judgment against the property if it is demonstrated that the

conveyances underlying the buyer’s interest were void ab initio.

Smith, 991 A.2d at 26.   District of Columbia courts have

recognized a property conveyance as void ab initio where it was

based on a forgery, on fraud in the factum, or in violation of

the automatic stay imposed by a bankruptcy filing.   See Chen, 768

F. Supp. 2d at 134-35; Langley v. FDIC, 484 U.S. 86, 93 (1987)

(stating that fraud in the factum is “the sort of fraud that

procures a party’s signature to an instrument without knowledge

of its true nature or contents”); In re Stancil, 473 B.R. 478,

483-84 (Bankr. D.D.C. 2012).

      2
       Henok has moved to amend his complaint and that motion is
pending. The proposed Amended Complaint does not allege new
facts that relate to Ihuoma. The proposed Amended Complaint,
like the original, notes that Ihuoma is included “as required by
Rule 19 of the superior court rules.” (Mot. for Leave to Am.
Compl., proposed Am. Compl. ¶ 5.)
                                -6-

     Henok fails to allege any facts that would support an

inference that the relevant property conveyance in this case --

the foreclosure sale -- was void ab initio.     Henok does not argue

that the mortgage that was foreclosed or any deed to Fannie Mae

was a forgery.   Further, he does not allege that he entered into

the mortgage without knowledge of its nature or contents or that

any deed to Fannie Mae was executed unknowingly.    Nor does he

allege that he had filed for bankruptcy triggering an automatic

stay on foreclosure proceedings in this case.

     In a pro se filing, it is appropriate to make “a concerted

effort to discern a cause of action.”   Howerton, 466 F. Supp. 2d

at 183.   In this case, the partial allegations in the complaint

might be intended to advance an argument that the foreclosure

proceedings were generally deficient, so the foreclosure should

be considered void.   In this regard, Henok contends that the

notice of foreclosure (“the notice”) failed to provide the

accurate minimum balance required to cure the default and that

the court should find that “it is a defective Notice of

foreclosure and the foreclosure is void ab initio.”    (Compl.,

Count 4.)   The notice stated the “[m]inimum balance required to

cure default obligation pursuant to D.C. Law 5-85 . . . :

$26,577.29 APPROXIMATELY, PLUS ATTORNEY FEES, FORECLOSURE COSTS

AND OTHER CHARGES OR PAYMENTS WHICH BECOME DUE.”    (Id. at Ex. 5.)

Although Henok alleges that this figure is incorrect, he offers
                                -7-

no evidence to support that claim, or any alternative minimum

balance figure.   He alleges that he asked what the other costs

were without receiving a response, and objects that notice was

improper because the figure quoted is incomplete.   Henok argues

that “[h]ad [the defendants] replied [regarding other fees], that

total amount would have been the Min required to cure the default

and that would have been the proper notice.”   (Compl., Count 4.)

     This argument is not persuasive.   Henok offers no authority

establishing that the figure quoted as the minimum required to

cure default must be inclusive of every possible fee or cost that

is not yet due.   See D.C. Code § 42-815.01 (2001) (requiring that

to cure a default, a residential mortgage debtor shall “[p]ay or

tender in the form of cash, cashier’s check, or certified check

all sums, including any reasonable late penalty, required to

bring the account current”); see also Bank-Fund Staff Federal

Credit Union v. Cuellar, 639 A.2d 561, 576 (D.C. 1994) (remanding

a case to trial court because it was not clear from the record if

the minimum was accurately stated, but accepting the statement of

the minimum as some figure “plus interest, advances, and

expenses”).3

     3
       Henok also fails to plead facts that suggest that he is
entitled to a right to cure. Henok argues that the right to cure
applies because, even if he did not live in the property, he had
“personal use of the property.” (Pl.’s Opp’n at 2.) The right
to cure, however, is limited to “the principal place of abode of
the debtor or his immediate family.” D.C. Code § 42-815.01(a).
                                  -8-

       Henok also alleges that the notice of foreclosure, dated

February 17, 2010, expired before the foreclosure took place and

“[t]herefore, . . . the foreclosure is void.”   (Compl., Count

13.)   Here, Henok misunderstands the text of the notice, which

reads in relevant part, “THE REAL PROPERTY . . . WILL BE SOLD AT

A FORECLOSURE SALE TO BE HELD ON March 24, 2010 . . . .   THIS

SALE DATE IS SUBJECT TO POSTPONEMENT FOR A PERIOD NOT TO EXCEED

THIRTY (30) CALENDAR DAYS FROM THE ORIGINAL DATE OF FORECLOSURE

SALE, AFTER WHICH TIME THIS NOTICE OF FORECLOSURE SALE SHALL

EXPIRE.”   (Id. at Ex. 4.)   The notice was to expire 30 days after

the stated sale date (March 24, 2010), not the date of the

notice.

       Henok asserts generally that the property was “‘sold’

fraudulently, thus making [the defendant’s] purchase void ab

initio.”   (Pl.’s Opp’n at 1.)   Henok’s complaint contains general

allegations that representations and actions were “fraudulent”

(see, e.g., Compl., Counts 6, 7, 10), but does not plead fraud

with the requisite specificity.    See Evans v. First Mount Vernon,

ILA, 786 F. Supp. 2d 347, 352 (D.D.C. 2011) (stating that

allegations of fraud must be “pleaded with particularity”)

(citing Fed. R. Civ. P. 9(b)); see also Acosta Orellana v.

CropLife Int’l., 711 F. Supp. 2d 81, 96 (D.D.C. 2010) (asserting

that allegations of fraud must include “(1) a false

representation, (2) concerning a material fact, (3) made with
                                -9-

knowledge of its falsity, (4) with the intent to deceive, and (5)

upon which reliance is placed”).   Thus, Henok pleads no facts

supporting a claim that the foreclosure sale is void on the basis

of fraudulent conduct.

     Henok makes other arguments that are ultimately unavailing.

Henok argues that “[t]he trustee’s deed fail [sic] formal

requisite of an instrument (DC 42-404) . . . .”     (Id., Count 9.)

Although § 42-404 of the D.C. Code generally describes the

failures of a formal instrument that may be cured under § 42-403,

Henok does not explain which formal requisite he believes is

lacking.   D.C. Code §§ 42-403, 404 (2001).    Moreover, Henok’s

failure to challenge the alleged omission within 6 months renders

any defect under section 404 irrelevant.      D.C. Code § 42-403

(2001) (stating that any instrument “shall be effective

notwithstanding the existence of 1 or more of the failures in the

formal requisites listed in § 42-404, unless the failure is

challenged in a judicial proceeding commenced within 6 months

after the instrument is recorded.”)

     Henok also alleges that “[t]he defendant’s motion must be

dismissed as she did not get leave of court to file her motion

nor did she contact me prior to filing her motion.”     (Pl.’s Opp’n

at 1.)   Henok cites no authority that would require leave of

court for Ihuoma to file a motion to dismiss his complaint.        And

Local Civil Rule 7(m) imposes a duty to confer with opposing
                                -10-

counsel “[b]efore filing any nondispositive motion in a civil

action.”   Local Civil Rule 7(m).   Since a motion to dismiss under

federal Rule 12(b)(6) is a dispositive motion, Local Rule 7(m)

imposed no duty on Ihuoma to confer with Henok before filing her

motion.

     Finally, Henok alleges that “[h]er response is 2 months late

and she was served on time and properly.”     (Pl.’s Opp’n at 1.)

However, Henok has failed to demonstrate when, if ever, Ihuoma

was served, and her motion is unlikely to have been 2 months late

in any event.   He filed no proof of service upon Ihuoma in either

the Superior Court (see Docket Sheet from Superior Court [Dkt.

No. 8]) or this court.   Henok filed his complaint in Superior

Court on February 2, 2012, and had 60 days within which to serve

Ihuoma.    D.C. Super. Ct. R. Civ. P. 4(m).   After Henok’s case

was removed from Superior Court to this court on March 1, 2012,

he had 120 days from then to serve Ihuoma.4    Since Ihuoma’s

motion to dismiss was filed in this court on March 5, 2012, four

     4
       When a case is timely removed and one of the defendants
has not been served, service may be completed “in the manner as
in cases originally filed in such district court.” 28 U.S.C.
§ 1448; see also 14C Wright et al., Federal Practice and
Procedure § 3738 (4th ed. 2012) (stating that after removal,
“[t]he case will proceed as if it originally had been brought in
the federal court”). The Federal Rules of Civil Procedure “apply
to a civil action after it is removed from a state court[,]” Fed.
R. Civ. P. 81(c)(1), and service must be complete within 120 days
of the date of removal, not the original filing in state court.
See Wallace v. Microsoft Corp., 596 F.3d 703, 706 (10th Cir.
2010); Cardenas v. City of Chicago, 646 F.3d 1001, 1004-05 (7th
Cir. 2011); Fed. R. Civ. P. 4(m).
                               -11-

days after removal, two months had not even passed between his

filing the complaint and Ihuoma’s filing her motion to dismiss.

Henok’s bare assertion of untimeliness is unlikely and is

insufficient to void Ihuoma’s motion to dismiss.

                       CONCLUSION AND ORDER

     Henok has failed to show that the foreclosure sale was

defective in a way that would make it void ab initio.     He

therefore has failed to meet the burden to overcome the

presumption of bona fide purchaser status to which Ihuoma is

entitled.   Because Ihuoma is protected as a bona fide purchaser

and is not alleged to have committed any wrongdoing, Henok has

pled no sufficient facts which, if proven, would establish that

he has a claim against Ihuoma upon which relief can be granted.

Accordingly, it is hereby

     ORDERED that Ihuoma’s motion [7] to dismiss be, and hereby

is, GRANTED.   The complaint is dismissed as to defendant Dorothy

Ihuoma.

     SIGNED this 11th day of September, 2012.

                                         /s/
                               RICHARD W. ROBERTS
                               United States District Judge