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Steward v. Goldman Sachs Mortgage Co., L.P.

United States District Court, District of Columbia

August 31, 2016

ESTHER STEWARD and KARIM STEWARD, Plaintiffs,
v.
GOLDMAN SACHS MORTGAGE COMPANY, L.P., and LITTON LOAN SERVICING, L.P., Defendants. U.S. BANK NATIONAL ASSOCIATION, et al., Plaintiff,
v.
STEWARD, et al., Defendants.

          MEMORANDUM OPINION

          Honorable Royce C. Lamberth United States District Court

         I. INTRODUCTION

         The motions before the Court concern two cases which one of the parties has moved to consolidate. The defendants in Civil Action No. 14-1868 have moved to dismiss and the plaintiffs in Civil Action No. 15-2041 have moved to remand.

         Esther Steward and Karim Steward ("the Stewards") are suing Goldman Sachs Mortgage Company, L.P. ("Goldman Sachs") and Litton Loan Servicing, L.P. ("Litton") for quiet title and declaratory relief as to the interests in 715 S Street NW, Washington, D.C. Goldman Sachs and Litton have filed a motion to dismiss Civil Action No. 14-1868.

         U.S. Bank National Association ("U.S. Bank") is suing the Stewards in Civil Action No. 15-2041 for judicial foreclosure on the same property and the case was removed to this Court, but U.S. Bank has filed a motion to remand the case to D.C. Superior Court. The Stewards have filed a motion to consolidate the two cases.

         The motions to dismiss and remand are granted, rendering the motion to consolidate moot.

         II. BACKGROUND

         The Stewards obtained the deed to 715 S Street NW, Washington, D.C, in November 2004 and used a mortgage loan to finance their purchase. Steward Compl. ¶¶ 3, 7, ECF No. 1. They used Fremont Investment & Loan ("Fremont" or "Fremont Investment"), which did not have a license to engage in mortgage lending in D.C. to refinance their home for a lump sum cash payment in February 2006. Id. ¶¶ 8-10. The Stewards executed two Deeds of Trust ("Deed I" and "Deed II") with Fremont Investment for loans of $624, 000 and $156, 000, respectively. Defs.' Mem. in Supp. of Mot. Dismiss Exs. B, C, ECF No. 6. The deeds state that Fremont Investment is the lender and/or original payee on the Stewards' Note and that Fremont possesses a security interest in the property. Steward Compl. ¶ 15.

         In August 2008, Mortgage Electronic Registration Systems, Inc. ("MERS"), as nominee for Fremont Investment, transferred Fremont's interest under Deed I to U.S. Bank. U.S. Bank Compl. ¶ 13, ECF No. 1. After the Stewards missed several loan payments, U.S. Bank sent a demand letter to the Stewards in April 2009 regarding their default. Id. at ¶¶ 16-17. The Stewards failed to cure their default and U.S. Bank attempted to foreclose on the property. Id. at ¶ 18; Steward Compl. ¶ 18. In July, the D.C. Superior Court enjoined U.S. Bank from selling the property on the scheduled date, Steward Compl. ¶ 26, but the case was later dismissed by the District Court due to the lack of responsiveness by the Stewards' attorney, id. at ¶ 31.[1] U.S. Bank is the current holder and beneficiary under Deed I.. U.S. Bank Compl. ¶ 15.

         In September 2011, MERS assigned Deed II to Goldman Sachs and Goldman Sachs nominated Litton as its servicer. Steward Compl. ¶¶ 40-41.

         The Stewards filed this action against Goldman Sachs and Litton in D.C. Superior Court on October 10, 2014. Goldman Sachs and Litton removed this case to the District Court in November 2014 and moved the court to dismiss the case. The Court requested and received supplemental memoranda regarding the D.C. Mortgage Lender and Broker Act of 1996, D.C. Code §§26-1100 et. seq.

         In October 2015, U.S. Bank filed Civil Action No. 15-2041 against the Stewards in the Superior Court for the District of Columbia. In November 2015, the Stewards removed the case to this Court and moved to consolidate this case with Civil Action No. 14-1868, in which the Stewards are plaintiffs. U.S. Bank has moved to remand Civil Action No. 15-2041 back to D.C. Superior Court.

         III. STANDARD OF REVIEW

         "Under Rule 12(b)(6), a plaintiff need only plead 'enough facts to state a claim to relief that is plausible on its face' and to 'nudge[ ] [his or her] claims across the line from conceivable to plausible.'" Hunter v. District of Columbia,64 F.Supp.3d 158, 165 (D.D.C. 2014) (quoting Bell Atl. Corp. v. Twombly,550 U.S. 544, 570 (2007)). "To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face."' Ashcrofi v. Iqbal, 556 U.S. 662, 678 (2009). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. The Court must accept as true all factual allegations contained in the complaint and ...


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