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Araya Henok v. Chase Home Finance

September 11, 2012


The opinion of the court was delivered by: Richard W. Roberts United States District Judge


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.


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.)

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.


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. 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).


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 defendant is not a bona fide purchaser. IA Const. Corp. v. Carney, 656 A.2d 369, 375 (Md. Ct. Spec. App. 1995).*fn1

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 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.*fn2


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).

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 ...

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