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Bernard Ladem and Joshua Emanuel El-Bey v. Mortgage Electronic Registration System

April 17, 2012

BERNARD LADEM AND JOSHUA EMANUEL EL-BEY, PLAINTIFFS,
v.
MORTGAGE ELECTRONIC REGISTRATION SYSTEM, INC., FREMONT INVESTMENT AND LOAN, AND U.S. BANK ASSOCIATION, DEFENDANTS.



The opinion of the court was delivered by: Robert F. Kelly, Sr. J.

MEMORANDUM

Presently before the Court is Defendants, Mortgage Electronic Registration System, Inc. ("MERS"), Fremont Investment and Loan ("Fremont"), and U.S. Bank Association's ("U.S. Bank") (collectively, "Defendants") "Motion to Dismiss for Failure to State a Claim and for Lack of Subject Matter Jurisdiction" against Plaintiffs, Bernard Ladem ("Ladem") and Joshua Emanuel El-Bey ("El-Bey") (collectively, "Plaintiffs"). Also before this Court is El-Bey's pro se "Request for a Default Judgment" against Defendants. For the reasons stated below, we will deny El-Bey's Request for a Default Judgment, and grant Defendants' Motion to Dismiss.*fn1

I. FACTS

On October 12, 2005, Ladem obtained a residential mortgage loan from Fremont in the amount of $340,000 ("Mortgage") which Ladem intended to use toward the contract price of $425,000 to purchase a residence located at 5324 Wynnefield Avenue, Philadelphia, Pennsylvania ("Property"). (Compl. ¶¶ 17, 23, 28; Defs.' Mot. Dismiss, Ex. B.) On December 12, 2005, Ladem purchased the Property for $425,000 using the mortgage loan in the amount of $340,000. (Defs.' Mot. Dismiss, Ex. B.) The Mortgage was originated by Fremont, and Ladem entered into a written contract with Fremont which included the Mortgage and the promissory note. (Compl. ¶¶ 12, 17.) Ladem received disclosures from Fremont, but Plaintiffs assert that such financial disclosures did not reflect the true terms of the legal obligations between the parties as required by the Truth-in-Lending Act ("TILA") Regulation 12 C.F.R. § 226.17(c)(1). (Compl. ¶ 42.) El-Bey was not a party to this transaction on October 12, 2005. ( Defs.' Mot. Dismiss, Ex. C.)

Ladem alleges that he received a disclosure that was incorrect. Specifically, he claims:

Plaintiffs was [sic] the depositor in this transaction and the Defendant prepared the note and mortgage agreements in writing, but failed or refused to disclose a material fact in either instrument. The material fact was that Plaintiff was the depositor and that the Defendant risked none of its assets in the exchange, nor any other assets of other depositors. (Compl. ¶ 22.) Ladem further claims that:

For the Plaintiff believing and relying on the representation of Defendant's [sic] or the Mortgagee/Lender believing that the Promissory Note draft was money given to him by the original lender from his private assets, But the promissory note was PAY [sic] TO THE ORDER OF THE MORTGAGE COMPANY WHICH IS FRAUD IN THAT THE LENDER WAS THE BUYER OF THE PROPERTY; BUT USE THE DEFENDANT SOCIAL SECURITY NUMBER IN A ILLEGAL WAY TO RECEIVE THE CREDITS AND PLACE A LIEN ON THE PROPERTY WHICH WAS HELD AS COLLATERAL BASE ON THE PLAINTIFF NON DISCLOSURE TO THE DEFENDANT OF THESE FACTS AND PLAINTIFF RECEIVING THEE [sic] PROCEEDS FROM DEFENDANT PAYING THE MONTH PAYMENT FOR THE DEFENDANT TO LIVE ON THE PREMISES WOULD PAY THE INSTALLMENTS ON THE DEED OF TRUST, AND THAT THE TITLE OF THE PROPERTY WAS FREE AND CLEAR OF ALL ENCUMBRANCE EXCEPT FOR THE DEED OF TRUST, WAS INDUCED TO ENTER INTO THE AGREEMENT. (Id. ¶ 28.)

On January 11, 2007, U.S. Bank initiated a foreclosure action in the Court of Common Pleas of Philadelphia County naming Ladem as the defendant. U.S. Bank Nat'l Ass'n v. Ladem, No. 07-1356, January Term, 2007 (Pa. Ct. Com. Pl. Phila. County). According to a quitclaim deed recorded on August 13, 2007, in Philadelphia, Ladem owned the property until February 22, 2006, when he sold it to El-Bey for $1.00. (Defs.' Mot. Dismiss, Ex. D.) On May 22, 2008, U.S. Bank withdrew the foreclosure action without prejudice. (Id.) On June 4, 2008, U.S. Bank initiated a second foreclosure action in the Philadelphia Court of Common Pleas.*fn2 (Id., Ex. E.) The docket of this foreclose action indicates that El-Bey participated in this action, and filed various motion papers. (Id. at 6-8, 10-11, 13-14.) The docket also reflects that U.S. Bank obtained a judgment in the foreclosure and the Property was sold at a Sheriff's sale on May 13, 2010. (Id. at 15.) Thereafter, on March 22, 2010, U.S. Bank initiated an ejectment action in the Philadelphia Court of Common Pleas*fn3 seeking to eject Ladem and El-Bey from the property.

(Id., Ex. F.) The docket of this ejectment action indicates that El-Bey participated in the action filing several motions. (Id. at 4, 7.) On November 8, 2010, U.S. Bank obtained a judgment for possession of the Property, and on September 7, 2011, the court denied a Motion to Strike the Judgment. (Id.) On September 14, 2011, Plaintiffs initiated a replevin action in the Philadelphia Court of Common Pleas. (Id., Ex. G.) However, Plaintiffs filed a praecipe discontinuing this action on November 14, 2011. (Id., Ex. G, Docket.)

El-Bey has also filed three previous pro se federal lawsuits in this District regarding the Property. On April 27, 2009, El-Bey filed an action here claiming that the foreclosure action of the Property was improperly commenced. See El-Bey v. Ladem, Fremont Inv., Chase Home Fin. LLC and McCabe Weisberg & Conway, No. 09-1774. Judge William H. Yohn, Jr. dismissed this action, with prejudice on July 30, 2009, because El-Bey failed to respond to a motion to dismiss and failed to appear at oral argument. (Id., Docket No. 8.) On November 30, 2009, ElBey filed a second federal action asserting that U.S. Bank and foreclosure counsel violated his civil rights by pursuing a fraudulent foreclosure action regarding the Property. El-Bey v. U.S. Bank Nat'l Ass'n, et al., No. 09-5656, 2010 WL 2471681, at *1 (E.D. Pa. June 14, 2010). Judge Yohn also dismissed this action concluding that "El-Bey's amended complaint lacks merit even construed liberally in his favor because of his status as a pro se litigant."*fn4 Id. at 5. El-Bey filed a third federal action concerning this Property on April 19, 2010, asserting a RICO action against U.S. Bank. El-Bey v. U.S. Bank Nat'l Ass'n, et al., No. 10-1716. Judge Yohn dismissed this action with prejudice on June 9, 2010.*fn5 Id.

Plaintiffs filed the instant Complaint on December 8, 2011, and seem to attempt to raise three separate causes of action namely, TILA, 15 U.S.C. § 1601, et seq.; the Home Ownership and Equity Protection Act ("HOEPA"), 15 U.S.C. § 1639; and the Real Estate Settlement Procedures Act ("RESPA"), 12 U.S.C. § 2605, et seq. Although it is difficult to recognize from Plaintiffs' Complaint exactly what relief they are demanding, it seems apparent that they are seeking rescission and/or modification of the mortgage note and purchase agreement regarding the sale of the Property, as well as a release from liability under the mortgage agreement. Plaintiffs state in their Complaint that they ask this Court: "[t]o Decree the lien-judgment to invalidate and/or render void ab initio, nunc pro tunce [sic], the Loan and Mortgage Agreement or as to such other relief deemed just and appropriate by the court under the Truth in Lending violation." (Compl., Demand for Equitable Relief, ¶ C.)

On January 6, 2012, MERS and U.S. Bank filed a Motion for an extension of time to respond to the Complaint. (Doc. No. 2). On January 11, 2012, El-Bey filed a "Request for Default" against MERS and U.S. Bank for failure to file an answer to their Complaint. (Doc. No. 5). On January 13, 2012, this Court granted MERS and U.S. Bank's Motion for an extension of time to file an answer to the Complaint and to the Request for a Default Judgment.*fn6 (Doc. Nos. 7-8). Defendants filed the instant Motion to Dismiss on February 2, 2012. (Doc. No. 9). El-Bey filed an Affidavit on February 7, 2012, asserting that a default judgment should be entered against Defendants for failure to respond to his Complaint. (Doc. No. 11). However, to date, Plaintiffs have neither filed a response to Defendants' Motion to Dismiss, nor filed a Motion for an extension of time to file a response.

II. STANDARD OF REVIEW

A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) tests the sufficiency of a complaint. Kost v. Kozakiewicz, 1 F.3d 176, 183 (3d Cir. 1993). Under Rule 12(b)(6), the defendant bears the burden of demonstrating that the plaintiff has not stated a claim upon which relief can be granted. Fed. R. CIV. P. 12(b)(6); see also Hedges v. United States, 404 F.3d 744, 750 (3d Cir. 2005). In Bell Atl. Corp. v. Twombly, the Supreme Court stated that "a plaintiff's obligation to provide the 'grounds' of his 'entitle[ment] to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." 550 U.S. 544, 555 (2007). Following Twombly, the Third Circuit has explained that the factual allegations in the complaint may not be "so undeveloped that it does not provide a defendant the type of notice which is contemplated by Rule 8." Phillips v. County of Allegheny, 515 F.3d 224, 233 (3d Cir. 2008). Moreover, "it is no longer sufficient to allege mere elements of a cause of action; instead 'a complaint must allege facts suggestive of [the proscribed] conduct.'" Id. (alteration in original) (quoting Twombly, 550 U.S. at 563 n.8). Furthermore, the complaint's "factual allegations must be enough to raise a right to relief ...


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