The opinion of the court was delivered by: Royce C. Lamberth, Chief Judge
Before the Court today are defendants' motions to dismiss and intervenor's motion for declaratory relief. For the reasons set forth below, the Court will grant defendants their motions to dismiss and deny intervenor's motion for declaratory relief.
On or about September 29, 2004, Karissa Leake purchased property located at 1428 Newton Street, NW, Washington, D.C. 20010 ("Property"). Compl. ¶ 6. To finance her purchase, plaintiff executed a Note in the amount of $150,500.00 and a Deed of Trust ("Deed") to secure the Note. Def. Capital One's Mot. Dismiss Ex. A at 1, Jan. 21, 2011, ECF NO. 6-1 ("Note").*fn1
Leake recorded the Deed of Trust securing the Note on September 29, 2004, with B.F. Saul. Mortgage Co. ("B.F. Saul") listed as the lender and defendant David N. Prensky listed as Trustee. Compl. ¶¶ 6--9.
At some point in time plaintiff became delinquent on her payments; she was served with several Notices of Foreclosure, and at the time of the most recent one owed $167,739.34 on the Note and was in default by more than $29,665.21. Def. Capital One's Mot. Dismiss Ex. D at 1, Jan. 21, 2011, ECF No. 6-4 ("Notice of Foreclosure"). Defendants Prensky and Capital One conducted a foreclosure sale on the Property, which plaintiff alleges was improper because the chain of title from B.F. Saul to Capital One is not recorded in the District of Columbia Recorder of Deeds or otherwise established. Compl. ¶ 10--15. Plaintiff asks the Court to (1) quiet title in her favor, (2) declare the foreclosure proceedings defective based on defendants' failure to record assignment of their interest in the Property, and (3) set aside the foreclosure proceedings because U.S. Treasury rules set forth in the Home Affordable Modification Program ("HAMP") say that a lender shall cease all foreclosure activities when the homeowner is in the loan modification process. Notice Removal Ex. A, at 1--2, Dec. 28, 2010, ECF No. 1 ("Compl."). Defendants have moved to dismiss for failure to state a claim upon which relief can be granted, arguing that they are entitled as Note holders to institute foreclosure proceedings and that HAMP does not give plaintiff a right to a private cause of action.
Intervenor 1900 11th ST NW LLC ("Intervenor" or "Foreclosure Purchaser") was the highest bidder at the auction and agreed to purchase the Property for $508,000.00. Mot. Intervene ¶ 4, Apr. 4, 2011, ECF No. 12 ("Mot. Inter."). The terms of sale required that Intervenor tender a $15,000 deposit, and stated that the balance of the purchase price would "accrue interest at the rate of 6.125% per annum from the date of sale to the date of receipt of the balance of the purchase price." Mot. Decl. Rel. ¶¶ 7--8. Intervenor argues that plaintiff's suit has interfered with its ability to settle on the Property and seeks declaratory relief to set aside its contractual obligation to pay interest on the purchase price. Mot. Declaratory Relief ¶ 14, May 2, 2011, ECF No. 13 ("Mot. Decl. Rel.").
A motion to dismiss under Rule 12(b)(6) tests the legal sufficiency of a complaint. Browning v. Clinton, 292 F.3d 235, 242 (D.C. Cir. 2002). To satisfy this test, a complaint must contain "a short and plain statement of the claim showing that the pleader is entitled to relief, in order to give the defendant fair notice of what the . . . claim is and the grounds upon which it rests." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). "[W]hen ruling on a defendant's motion to dismiss, a judge must accept as true all of the factual allegations contained in the complaint," Atherton v. District of Columbia, 567 F.3d 672, 681 (D.C. Cir. 2009), and grant a plaintiff "the benefit of all inferences that can be derived from the facts alleged." Kowal v. MCI Commc'ns Corp., 16 F.3d 1271, 1276 (D.C. Cir. 1994). However, a court may not "accept inferences drawn by plaintiffs if such inferences are unsupported by the facts set out in the complaint." Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009). In other words, "only a complaint that states a plausible claim for relief survives a motion to dismiss." Id.; see also Atherton, 567 F.3d at 681 (holding that a complaint must plead "factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged").
A. Plaintiff's Quiet Title and Defective Foreclosure Claims
Plaintiff's first and second claims-as well as defendants' motions to dismiss those two claims-depend on the same legal arguments, so the Court will consider them together.*fn2 In essence, plaintiff argues that because defendant Capital One was not the Note holder of record and did not properly record the assignment of the Note, the foreclosure was defective and invalid. Compl. ¶¶ 17, 24. Defendants have moved to dismiss, arguing (1) that because the District of Columbia is a non-judicial foreclosure jurisdiction, they are not required to demonstrate their standing to foreclose, and (2) that because they were the Note holder, the foreclosure was proper. In her opposition, plaintiff argues (1) that the Note was not properly assigned to Capital One, and (2) that the D.C. Attorney General's Statement of Enforcement Intent Regarding Deceptive Foreclosure Sale Notices, Reply Mem. Supp. Capital One, N.A.'s Mot. Dismiss. Pl.'s Compl. Ex. A, Feb. 22, 2011, ECF No. 10-1 ("Statement of Enforcement Intent"), introduced a binding requirement that the assignment of all notes must be recorded for a foreclosure action to be valid. These arguments fail, and plaintiff's first two claims will be dismissed.
The District of Columbia is a non-judicial foreclosure jurisdiction, which allows foreclosure pursuant to a "power of sale provision contained in any deed of trust." D.C. Code § 42-815. Plaintiff does not challenge this assertion, and the Deed here unquestionably contains such a provision. Deed ¶ 22 ("If the default is not cured on or before the date specified on the notice, Lender at its option . . . may invoke the power of sale and any other remedies permitted by Applicable Law."). Neither does plaintiff contest the fact that Capital One is in possession of the Note, instead questioning how Capital One came into possession. According to the Note, B.F. Saul negotiated it to Chevy Chase Bank, F.S.B. ("Chevy Chase"), and at some point Chevy Chase indorsed it in blank.*fn3 Note at 2. In February 2009, Capital One purchased Chevy Chase, assuming the rights and obligations of Chevy Chase as part of that purchase, including plaintiff's Note, of which Capital One became holder. Def. Capital One's Mot. Dismiss at 6, Jan. 21, 2011, ECF No. 6 ("Cap. Mot. Dismiss"). This transfer was expressly permitted by the terms of the Note: "the Lender may transfer this Note. The Lender or anyone who takes this Note by transfer and who is entitled to receive payments under this Note is called the 'Note Holder.'" Note ¶ 1. Plaintiff does not argue that the Note was not transferred to Capital One when it purchased Chevy Chase, but instead that an endorsement in blank is not an endorsement under the terms of D.C. Code § 28:3-201, and that because the Note was indorsed in blank, the transfer from Chevy Chase to Capital One was not one which-in the absence of recordation-gave Capital One "holder" status. This is incorrect. A person becomes the holder of an instrument when it is negotiated to them, with negotiation defined as "a transfer of possession, whether voluntary or involuntary, of an instrument by a person other than the issuer to a person who thereby becomes its holder." D.C. Code § 28:3-201. If an instrument is indorsed in blank-as was the Note here- it "may be negotiated by transfer of possession alone until specially indorsed." D.C. Code § 28:3-205 (emphasis added).
It is not true, as plaintiff argues, that "there is no endorsement on the Note at all, just an invalid recording of the mortgage instrument with the Record of Deeds." Pl.'s Opp. at 3. The Note is indorsed, albeit in blank, Note at 3, and was transferred to Capital One when it purchased Chevy Chase. The D.C. Code provides that "[t]ransfer of an instrument, whether or not the transfer is a negotiation, vests in the transferee any right of the transferor to enforce the instrument," D.C. Code § 28:3-203(b), and under D.C. law the Note's transfer carries with it the security for its payment. See Smith v. Wells Fargo Bank, 991 A.2d 20, 29--30 n. 19 (D.C. 2010) ("The transfer of the note carries with it the security, without any formal assignment or delivery, or even mention of the latter."). Capital One was thus the rightful Note holder and a party that could properly enforce its provisions. The D.C. Code permits foreclosure proceedings under a power of sale provision where the "holder of the note secured by such deed ...