United States District Court, D. Colorado
BROOKE JACKSON UNITED STATES DISTRICT JUDGE.
order addresses defendants' motion to dismiss [ECF No.
12]. The motion is granted, and the case is dismissed.
November 2004 plaintiff Albert Murry borrowed about $150, 000
from Olympus Mortgage Company. ECF No. 1, Williams Aff.
¶ 6.A. Mr. Murry executed a promissory note and a
deed of trust encumbering his real property at 2494 F 1/4
Road in Grand Junction, Colorado (the Property). Id.
¶¶ 6.A-B. The deed was eventually assigned to
defendant Wells Fargo Bank, N.A. (Wells Fargo). ECF No. 1 at
5. Defendant Ocwen Loan Servicing, LLC (Ocwen) apparently
claims to be Mr. Murry's loan servicer. See Id.
at 2; ECF No. 1, Schramm Aff. ¶¶ 4-6.
February 20, 2013 Ocwen sent a notice of default to Mr.
Murry. Id. at 5. On September 22, 2014 Wells Fargo
initiated a foreclosure proceeding against the Property under
Rule 120 of the Colorado Rules of Civil Procedure.
See ECF No. 1 at 5; Motion for Order Authorizing
Sale, Wells Fargo Bank National Association v. Al
Murry, No. 2014CV30683 (Mesa Cnty., Colo. Dist. Ct.
Sept. 22, 2014). Mr. Murry does not contest that he
defaulted on his mortgage. See ECF No. 1 at 4.
Instead, he argues defendants have no legal right to seek
foreclosure. Id. at 16. Nevertheless, the Mesa
County District Court issued an Order Authorizing Sale of the
Property on October 10, 2014. See ECF No. 1 at 5;
Order Authorizing Sale, Wells Fargo, No. 2014CV30683
(Mesa Cnty., Colo. Dist. Ct. Oct. 10, 2014).
Murry brought this action in May 2016 to prevent defendants
from foreclosing on the Property. ECF No. 1. Defendants have
filed a motion to dismiss. ECF No. 12.
survive a 12(b)(6) motion to dismiss, the complaint must
contain “enough facts to state a claim to relief that
is plausible on its face.” Ridge at Red Hawk,
L.L.C. v. Schneider, 493 F.3d 1174, 1177 (10th Cir.
2007) (quoting Bell Atl. Corp. v. Twombly, 550 U.S.
544, 570 (2007)). While the Court must accept the
well-pleaded allegations of the complaint as true and
construe them in the light most favorable to the plaintiff,
Robbins v. Wilkie, 300 F.3d 1208, 1210 (10th Cir.
2002), purely conclusory allegations are not entitled to be
presumed true, Ashcroft v. Iqbal, 556 U.S. 662, 681
(2009). However, so long as the plaintiff offers sufficient
factual allegations such that the right to relief is raised
above the speculative level, he has met the threshold
pleading standard. See Twombly, 550 U.S. at 556.
“The court's function on a Rule 12(b)(6) motion is
not to weigh potential evidence that the parties might
present at trial, but to assess whether the plaintiff's
complaint alone is legally sufficient to state a claim for
which relief may be granted.” Sutton v. Utah State
Sch. for Deaf & Blind, 173 F.3d 1226, 1236 (10th
Cir. 1999) (quoting Miller v. Glanz, 948 F.2d 1562,
1565 (10th Cir. 1991)).
as here, a case involves a pro se party, the court will
“review his pleadings and other papers liberally and
hold them to a less stringent standard than those drafted by
attorneys.” Trackwell v. U.S. Gov't, 472
F.3d 1242, 1243 (10th Cir. 2007). Nevertheless, it is not
“the proper function of the district court to assume
the role of advocate for the pro se litigant.” Hall
v. Bellmon, 935 F.2d 1106, 1110 (10th Cir. 1991). A
“broad reading” of a pro se plaintiff's
pleadings “does not relieve the plaintiff of the burden
of alleging sufficient facts on which a recognized legal
claim could be based.” Id. Pro se parties must
“follow the same rules of procedure that govern other
litigants.” Green v. Dorrell, 969 F.2d 915,
917 (10th Cir. 1992).
Murry raises six claims against defendants for (1)
declaratory judgment that defendants have no interest in the
Property that would allow them to enforce the promissory
note; (2) declaratory judgment that the note and deed were
rescinded; (3) wrongful foreclosure; (4) mortgage fraud; (5)
violation of 42 U.S.C. § 1985(3); and (6) fraud on the
court. Based on these claims, Mr. Murry argues that he is
entitled to a preliminary injunction. The Court will address
each argument in turn.
Mr. Murry contends that neither Ocwen nor Wells Fargo has an
interest in the Property because the purported assignment of
the promissory note to Wells Fargo is invalid. ECF No. 1 at
6. Because this Court sits in diversity jurisdiction, it
follows Colorado's substantive law. See Erie R.R. Co.
v. Tompkins, 304 U.S. 64, 78 (1938). Under Colorado law,
the person in physical possession of a note is the note
holder. Colo. Rev. Stat. § 38-38-100.3(10). A promissory
note holder can freely transfer the note, see Colo.
Rev. Stat. § 4-3-104, and enforce it, id.
§ 4-3-301. Indeed, a person may be “entitled to
enforce the instrument even though the person . . . is in
wrongful possession of the instrument.” Id.
Mr. Murry does not dispute that Wells Fargo holds his
promissory note. See ECF No. 1 at 6; ECF No. 16 at
4-5 (“Defendants' [sic] hold only a void deed and
cancelled note by operation of federal law.”).
Therefore, his claim to a declaratory judgment that
defendants cannot enforce the note fails as a matter of law.
alternative, Mr. Murry argues that he voided the note and
deed by mailing a rescission letter to Ocwen on May 6, 2013.
ECF No. 1 at 13. The Truth in Lending Act lets consumers
rescind a loan under certain circumstances. See 15
U.S.C. § 1635 (2012). But the Act exempts
“residential mortgage transaction[s].”
Id. § 1635(e)(1). And, in any event, the Act
makes clear that this “right of rescission shall expire
three years after the date of consummation of the transaction
or upon the sale of the property, whichever occurs
first.” Id. § 1635(f). Consummation of
the transaction “means the time that a consumer becomes
contractually obligated on a credit transaction.” 12
C.F.R. § 226.2(a)(12). Here, Mr. Murry became