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Davidson v. Bank of America, N.A.

United States District Court, D. Colorado

March 10, 2016

KENNETH R. DAVIDSON, Plaintiff,
v.
BANK OF AMERICA, N.A., and GREEN TREE SERVICING, LLC, Defendants.

ORDER ACCEPTING THE MAGISTRATE JUDGE’S FEBRUARY 1, 2016 RECOMMENDATION (DOC. # 127)

CHRISTINE M. ARGUELLO UNITED STATES DISTRICT JUDGE.

Currently before the Court is Magistrate Judge Kathleen Tafoya’s February 1, 2016 recommendation to: (1) grant Defendant Green Tree Servicing, LLC’s motion to dismiss (Doc. # 83); (2) grant Defendant Bank of America, N.A.’s motion to dismiss (Doc. # 92); (3) deny Plaintiff Kenneth R. Davidson’s motion for leave to file a third amended complaint (Doc. # 109); and (4) deny Plaintiff’s motion for a temporary restraining order/permanent injunction (Doc. # 122). (Doc. # 127.) Plaintiff filed an objection to Magistrate Judge Tafoya’s recommendation on February 15, 2016 (Doc. # 131), and Defendant Green Tree filed a response to that objection on March 3, 2016 (Doc. # 132). For the reasons set forth below, the Court accepts the magistrate judge’s recommendations.

I. BACKGROUND

Plaintiff, proceeding pro se, challenges the foreclosure on his residential property located in Littleton, Colorado. (Doc. # 127 at 2.) Magistrate Judge Tafoya’s recommendation sets forth in detail the underlying facts, which are incorporated herein by reference. (Doc. # 127 at 2-4.)

A. Defendants’ Motions to Dismiss (Doc. ## 83, 92)

In his complaint, Plaintiff asserts the following causes of action: (1) breach of contract; (2) breach of the implied duty of good faith and fair dealing; (3) wrongful foreclosure; (4) a constitutional challenge to Colorado’s foreclosure procedure; and (5) intentional infliction of emotional distress. (Doc. # 127 at 4.) Both Bank of America and Green Tree moved to dismiss Plaintiff’s complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). (Doc. ## 83, 92.)

Magistrate Judge Tafoya recommended the dismissal of Plaintiff’s breach of contract and breach of the implied duty of good faith and fair dealing claims against Green Tree because Plaintiff fails to allege the existence of a contract between himself and Green Tree. (Doc. # 127 at 7.) Magistrate Judge Tafoya based this conclusion on Plaintiff’s own contention that “the Note supporting Green Tree’s foreclosure actions was voided, via his Notice of Right to Cancel, prior to its transfer from [Bank of America] to Green Tree.” (Doc. # 127 at 7.)

Because Plaintiff’s contention that he “voided the Note” forms the basis of several of his claims for relief, Magistrate Judge Tafoya’s recommendation analyzed that contention in greater detail. (Doc. # 127 at 7.) Magistrate Judge Tafoya concluded that the “right to rescind” provision in the Truth in Lending Act is not applicable here because the right to rescind “does not apply to . . . a residential mortgage transaction.” 15 U.S.C. § 1635(e)(1). Magistrate Judge Tafoya also concluded, in the alternative, that even if the rescission provision did apply, Plaintiff’s invocation of that provision was untimely because it occurred more than three years after the execution of the underlying note. (Doc. # 127 at 8-9.) Lastly, Magistrate Judge Tafoya concluded that, even if the provision did apply and Plaintiff’s invocation of it was timely, Plaintiff’s unilateral notice “does not automatically void the loan contract.” (Doc. # 127 at 9.) Based on this analysis, Magistrate Judge Tafoya found that “Plaintiff’s contract claims against either Green Tree or [Bank of America] based on an argument that he unilaterally voided the Note [are] without merit.” (Doc. # 127 at 9.)

Magistrate Judge Tafoya also found that Plaintiff’s contract claims against Bank of America are barred by the three-year statute of limitations set forth in Colo. Rev. Stat. § 13-80-101(1)(a). (Doc. # 127 at 13.) Magistrate Judge Tafoya based this conclusion on her finding that Plaintiff was aware of the alleged facts giving rise to his claims “by, at the very latest, March 2011.” (Doc. # 127 at 13.) Thus, Plaintiff’s contract claims against Bank of America are untimely because they were not filed until June 4, 2014. (Doc. # 127 at 13.) Magistrate Judge Tafoya rejected the application of the “continuing violation” doctrine on the ground that, in Colorado, such doctrine applies only in employment discrimination cases. (Doc. # 127 at 15.)

With regard to Plaintiff’s wrongful foreclosure claim, Magistrate Judge Tafoya first noted that “Colorado does not recognize a claim for damages based on wrongful foreclosure” and, even if it did, “it would be barred by the economic loss rule.” (Doc. # 127 at 16.) Magistrate Judge Tafoya also found that, to the extent that Plaintiff argues that both Green Tree and Bank of America lacked standing to initiate foreclosure proceedings, his claim fails as a matter of law. (Doc. # 127 at 16.) This is because, “[b]ased on the record, it does not appear that [Bank of America] ever initiated a foreclosure action against Plaintiff.” (Doc. # 127 at 16.) In addition, Plaintiff’s argument that Green Tree did not pay sufficient consideration for the note fails because, as a non-party to that transaction, “[Plaintiff] is barred from attacking it collaterally.” (Doc. # 127 at 16.) Magistrate Judge Tafoya also found that, contrary to Plaintiff’s contention, “Colorado law does not require production of the original promissory note to initiate or complete a non-judicial foreclosure proceeding[ ].” (Doc. # 127 at 17.)

With regard to Plaintiff’s constitutional challenge, Magistrate Judge Tafoya found that Plaintiff’s claim should be dismissed because “the constitutionality of Colorado’s foreclosure procedures has already been fully considered and upheld by this court, as well as the Tenth Circuit Court of Appeals.” (Doc. # 127 at 18 (citing Mbaku v. Bank of Am., No. 12-cv-00190, 2014 WL 4099313, at *3-9 (D. Colo. Aug. 20, 2014), aff’d by Mbaku v. Bank of Am., ___F. App’x. ___, 2015 WL 3651596, at *2-4 (10th Cir. 2015)).)

Lastly, Magistrate Judge Tafoya found that Plaintiff failed to state a claim for intentional infliction of emotional distress because his “allegations that the underlying events related to the foreclosure actions have caused him emotional distress are insufficient to state a claim for intentional infliction of emotion distress.” (Doc. # 127 at 19-20.)

The Court notes that Magistrate Judge Tafoya also addressed in her recommendation the fact that, throughout his filings, Plaintiff “attempts to rely on consent orders entered in other courts between Defendants and third-parties, generally federal agencies/entities, as support for various allegations.” (Doc. # 127 at 20.) Magistrate Judge Tafoya found that such reliance was misplaced because the consent orders ...


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