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Emmons v. Bank of America, N.A.

United States District Court, W.D. Missouri, Western Division

August 30, 2016

CHARLES EMMONS, Plaintiff,
v.
BANK OF AMERICA, N.A., PRLAP, INC., and OCWEN FINANCIAL CORPORATION and JUDITH KUHLMAN Defendants.

          ORDER

          FERNANDO J. GAITAN, JR. UNITED STATES DISTRICT JUDGE

         Currently pending before the Court is defendant Bank of America, N.A.'s (“BANA”) and Ocwen Financial Corporation's (“Ocwen”) Motion to Consolidate Cases (Doc. # 4) and Defendants' Motions to Dismiss (Doc. # 8).

         I. BACKGROUND

         On December 4, 2007, Judith A. Kuhlman and Paul W. Kuhlman, entered into a promissory note in the principal amount of $165, 243.12. The Note was secured the same day by a Deed of Trust. The Note and Deed of Trust related to real property located at 3000 NE 76th Street, Gladstone, Missouri 64119 (“Tract 1”). There is a parcel of property adjoining the northern border of Tract 1, which is also the subject of the lawsuit. This parcel will be referred to as the “Adjacent Property” or “Tract 2.” A residence straddles both of these properties. Approximately 40% of the residence is located on Tract 1 and the remaining 60% is located on Tract 2.

         Mr. Kuhlman died on August 9, 2010. On or about April 2012, the Kuhlmans defaulted on the payment obligations under the Note. In May 2013, plaintiff states that he contacted Judith Kuhlman about the property located at 3000 N.E. 76th Street, Gladstone, Missouri. Plaintiff states he agreed to make all necessary repairs to the property in exchange for equity in the property. Plaintiff states that he agreed to take a Quitclaim Deed to the property and assume any and all responsibility for liens on the property, finish repairs at his own expense and assist Judith Kuhlman in other matters. Plaintiff also alleges that Judith Kuhlman does not recall signing any note or deed or trust regarding securing this property for a mortgage to Bank of America. Plaintiff states that since acquiring the properties, he has furnished goods and services to the Residence thereby making significant, material, valuable and beneficial improvements to the property. Plaintiff alleged that Judith Kuhlman quitclaimed her interests in the property to him on June 1, 2013 and he filed the quitclaim with the Clay County Recorder of Deeds on June 3, 2013. On June 7, 2013 plaintiff filed a “Petition to Remove Lien” in the Clay County District Court. Defendants removed the first case to this Court on October 28, 2013. (Case No. 13-1055). In that case, plaintiff Charles Emmons sued Bank of America, PRLAP, Inc. and Ocwen Financial Corp. for Quiet Title and Quantum Meruit. On May 5, 2014, Bank of America filed a counterclaim against plaintiff Charles Emmons and a third-party complaint against Judith Kuhlman and other entities. On July 7, 2014 Bank of American and Ocwen Financial Corporation filed a Motion to Dismiss for Failure to State a Claim. Plaintiff's counsel failed to file a response to the motion or to an Order to Show Cause. On September 3, 2014, the Court dismissed plaintiff's First Amended Complaint in Case No. 13-1055. The claims which remain in that case are Bank of America's counterclaim for Quiet Title against Charles Emmons and Bank of America's Third-Party Complaint against Emmons, Judith Kuhlman and the Kuhlman Estate for Reformation of Instruments, Quiet Title, Judicial Foreclosure and Breach of Contract. On October 1, 2015, the Court stayed the proceedings in Case No. 13-1055 in order to give the parties an opportunity to resolve the matter. The parties have been unsuccessful in resolving the litigation.

         On September 2, 2015, Charles Emmons filed a petition in the Circuit Court of Clay County to Review Lien and Quiet Title and in the alternative for Compensation Quantum Meruit. Named as defendants were Bank of America, Ocwen, PRLAP, Inc. and Judith Kuhlman. Defendants removed that case to this Court on October 14, 2015 (Case No. 15-799). Bank of America and Ocwen have filed the instant Motion to Dismiss this action and have also moved to consolidate Case No. 15-799 with Case No. 13-1055.

         II. STANDARD

         To survive a motion to dismiss under 12(b)(6), “a complaint must contain sufficient factual matter, accepted as true, to state a claim for relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). A pleading that merely pleads “labels and conclusions” or a “formulaic recitation” of the elements of a cause of action, or Anaked assertions” devoid of “further factual enhancement” will not suffice. Id. (quoting Twombly). “Determining whether a complaint states a plausible claim for relief will . . . be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.” Id. at 1950. Under Fed.R.Civ.P. 12(b)(6) we must accept the plaintiff's factual allegations as true and grant all reasonable inferences in the plaintiff's favor. Phipps v. FDIC, 417 F.3d 1006, 1010 (8th Cir. 2005).

         III. DISCUSSION

         A. Defendants' Motion to Dismiss

         Defendants state that on December 4, 2007, Judith A Kuhlman and Paul W. Kuhlman entered into a promissory note. Defendants state that the promissory note was secured by a Deed of Trust. The Note and the Deed of Trust relate to real property commonly referred to as 3000 NE 76th Street, Kansas City, Missouri 64119 (“Tract 1”).

         The parcel of property adjoining the northern border of the Property is also the subject of the lawsuit (“Tract 2”). Defendants argue that plaintiff is unable to assert a claim for quiet title, because he “has made the cardinal error of attempting to use an alleged infirmity in another party's interest to establish his own interest.” (Suggestions in Support of Motion to Dismiss, p. 4).

Under Missouri law, any person claiming title or interest in real property “may institute an action against any person or persons having or claiming to have any title, estate or interest in such property.” Mo.Rev.Stat. § 527.150(1). To maintain a cause of action for quiet title, a plaintiff must plead: (1) ownership of the described real estate; (2) that the defendant claims title or interest in the subject premises; and (3) such claim is adverse and prejudicial to plaintiff.

White v. CTX Mortgage, LLC, No. 13-0335-CV-W-DGK, 2014 WL 1806705, *6 (W.D.Mo. May 7, 2014). Plaintiffs must plead “facts showing they, in fact, have a superior title to the property at issue.” Dufrenne v. Citimortgage, Inc., No. 4:09CV1524 HEA, 2009 WL 5103275, *3 (E.D.Mo. Dec.17, 2009). Defendants state that while a quitclaim deed is effective for purposes of conveying title, an individual who takes title by quitclaim deed does so subject to all outstanding interests and liens. Because Emmons interest in the property is subject to a first priority ...


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