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Brett Sullivan v. Quality Loan Service Corporation

January 11, 2011

BRETT SULLIVAN, PLAINTIFF,
v.
QUALITY LOAN SERVICE CORPORATION, DEFENDANTS.



The opinion of the court was delivered by: Honorable B. Lynn Winmill Chief U. S. District Judge

MEMORANDUM DECISION AND ORDER

INTRODUCTION

Before the Court are (1) Plaintiff Brett Sullivan's motions for a temporary restraining order and injunction (Dkts. 3&4) and (2) Plaintiff JPMorgan Chase & Co.'s Motion to Intervene (Dkt. 8).

On August 27, 2010, Sullivan, proceeding pro se, filed a Complaint, alleging that he "entered into a consumer contract for the refinance of a primary residence located at 107 Arapahoe Lane Hailey ID 83333." Compl. at 1, Dkt. 3. In the Complaint, Sullivan identifies six causes of action: (1) breach of fiduciary duty; (2) negligence/negligence per se; (3) agent: common law fraud; (4) breach of the implied covenant of good faith and fair dealing; (5) violation of the Truth In Lending Act (TILA)(15 U.S.C. § 1601 et seq.); and (6) intentional infliction of emotional distress. He also alludes to possible claims for civil conspiracy, unjust enrichment, quiet title, and violations of § 2607 of the Real Estate Settlement Procedures Act (RESPA) and the Home Ownership Equity Protection Act (HOEPA). None of these claims, however, fall under the "Cause of Action" heading in his Complaint. JPMorgan Chase & Co. has moved to intervene as a defendant.

The Court finds the matter appropriate for decision without oral argument. See Fed.R.Civ.P. 78; L.R. 7-15. For the reasons set forth below, the Court will grant Chase's motion to intervene but dismiss Sullivan's Complaint and deny his request for an injunction.

BACKGROUND

1. Plaintiffs' Allegations

As noted above, Sullivan alleges in his Complaint that he "entered into a consumer contract for the refinance of a primary residence located at 107 Arapahoe Lane Hailey ID 83333." Compl. at 1, Dkt. 3. Sullivan does not specify whether he refinanced the loan on the property with Defendant Quality Loan Service Corp. Nor does Sullivan indicate when or where this transaction occurred. And he does not provide any underlying documentation.

Under the heading, "Statement of Cause," Sullivan further alleges:

C Defendants*fn1 , acting in concert and collusion with others, induced Sullivan to enter into a predatory loan agreement with Defendant. C Defendants committed numerous acts of fraud against Sullivan in furtherance of a carefully crafted scheme intended to defraud him. C Defendants failed to make proper notices to Petitioner that would have given warning of the types of tactics used by Defendants to defraud Sullivan.

C Defendants charged false fees to Sullivan at settlement.

Id. at 1-2.

To remedy the wrongs allegedly committed against him, Sullivan asks for (1) an emergency restraining order enjoining "lender and any successor in interest" from foreclosing on his property; (2) a permanent injunction "enjoining Defendants from engaging in the fraudulent, deceptive, predatory and negligent acts and practices alleged" in the Complaint; (3) quiet title to the property; (4) rescission of the loan contract and restitution by "Defendants"; (5) "disgorgement of all amounts wrongfully acquired by Defendants according to proof at trial"; (6) actual damages in the amount $645,000.00;

(7) "pain and suffering due to extreme mental anguish in an amount to be determined at trial"; (8) "pre-judgment and post-judgment interest according to proof at trial"; (9) "punitive damages according to proof at trial in an amount equal to $1,935,000"; and (10) attorneys' fees and costs. Id. at 21-22.

2. JPMorgan Chase & Co.JPMorgan Chase & Co. has moved to intervene as a defendant and has filed an opposition to Sullivan's request for a restraining order and injunction. While Sullivan speaks in generalities of the wrongs committed by various players in the real estate industry, Chase provides a background of the specific loan transaction at issue here.

According to Chase, in 2007, Sullivan, with the assistance of Liberty Financial Group, Inc. as his mortgage broker, obtained a loan from Washington Mutual Bank, FA to refinance his Hailey property. Lowry Aff. ¶ 5, Dkt. 8-2. In connection with the refinance, on October 29, 2007, Sullivan received a loan from Washington Mutual and executed a promissory note in favor of Washington Mutual for the principal amount of $2,010,000 with interest accruing at a variable interest rate. Id., Ex. A, Dkt. 8-3. Pursuant to the promissory note, Sullivan agreed to make monthly interest payments beginning January 1, 2008.

Also in connection with the refinancing, Washington Mutual and Sullivan each agreed to pay certain broker fees to Liberty Financial. Washington Mutual sent Sullivan a Disclosure Letter dated October 19, 2007, advising him that Liberty Financial would be charging him broker fees, which were detailed in an enclosed Good Faith Estimate. Id., Ex. B, Dkt. 8-4. Washington Mutual further advised Sullivan that it had no part in calculating the broker fees and would not receive any of the fees.

At the same timeSullivan executed the promissory note, he executed a deed of trust on the Hailey property in favor of Washington Mutual to secure the obligations owed under the note. Id., Ex. C, Dkt. 8-5. The Deed of Trust, which named Sun Valley Title as the Trustee was recorded as Instrument No. 552941, in the official records of Blaine County, Idaho. Id.

In September 2008, Chase purchased Washington Mutual's assets from the Federal Deposit Insurance Corporation receivership. The assets purchased included Sullivan's Note and Deed of Trust. Sullivan failed to make his regularly scheduled loan payment on February 1, 2009, and he has not made any payments since January 31, 2009. Id. at ¶ 9.

On March 31, 2009, Chase sent a Notice of Collection Activity, informing Sullivan that he had failed to make monthly payments pursuant to the Note.Sullivan was also informed that "WaMu is becoming Chase." Id., Ex. D, Dkt. 8-6.

On May 26, 2009, Chase appointed Pioneer Lender Trustee Services, LLC as successor trustee under the Deed of Trust and listed Pioneer Lender's address as Quality Loan ...


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