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U.S. Bank National Association v. Gunn

United States District Court, D. Delaware

March 25, 2014

U.S. BANK NATIONAL ASSOCIATION as Trustee for the Holders of the EQCC Home Equity Loan Asset Backed Certificates, Series 1998-3 and SELECT PORTFOLIO SERVICING, INC., Plaintiffs,
v.
LA MAR GUNN, Defendant

Page 637

Francis G. X. Pileggi, Dorothy Davis, and Jill Kornhauser Agro, Esquires; Eckert Seamans Cherin & Mellott, LLC, Wilmington, Delaware; Counsel for Plaintiffs.

La Mar Gunn, Defendant, Pro se, Camden Wyoming, Delaware.

Page 638

MEMORANDUM OPINION

ANDREWS, U.S. District Judge.

Pending before the Court is Defendant's motion to dismiss (D.I. 159), opposed by Plaintiffs (D.I. 163). The Court has jurisdiction pursuant to 28 U.S.C. § 1332. For the reasons given below, the Court will deny Defendant's motion.

At issue is property located in Bear, Delaware. Defendant La Mar Gunn asserted that he was the owner of property, but Delaware State Courts have ruled he was not. The property was the subject of a foreclosure action commenced in July 2002 by Plaintiff U.S. Bank as the Trustee for the holders of the EQCC Home Equity Loan Asset Backed Certificates, Series 1998-3. On December 9, 2008, the property was sold to U.S. Bank, and it was the record owner of the property when this cause of action was commenced on November 21, 2011. The property was sold to a third party in 2012. Plaintiff Select Portfolio Servicing, Inc. is the servicing agent and attorney-in-fact for U.S. Bank.

In the Court's March 4, 2014 Memorandum Opinion and Order (D.I. 174, 175), it ruled on all pending motions, but held in abeyance the instant motion to dismiss pending additional submissions by the parties in support of their positions on two issues: (1) the constitutional standing of SPS and how it has been injured; [1] and (2) which particular subsection of Fed.R.Civ.P. 17 is applicable to U.S. Bank.[2] ( See D.I. 174 at 20). The parties made the additional submissions. (D.I. 176, 177).[3]

A Pooling and Servicing Agreement created the EQCC Home Equity Loan Trust 1998-3, by and among Equicredit Corporation of America, as representative and as servicer, EQCC Receivables Corporation and EQCC Asset Backed Corporation as depositors, and U.S. Bank National Association as Trustee. See http://www.secinfo. com/dRSm6.7Qa.d.htm. Legal title to the Trust's assets, including the mortgage on the property at issue, was transferred to U.S. Bank as Trustee. (D.I. 159, exs. 1, 2). According to Plaintiffs, on December 6, 2001, Equicredit entered into a subservicing agreement with SBS (formerly known as Fairbanks Capital Corporation), and SBS began acting as the subservicer for Equicredit for the Trust in accordance

Page 639

with the terms of the Pooling and Servicing Agreement.[4] (D.I. 177 at 2). Plaintiffs represent that Equicredit ultimately purchased the Trust's assets (the date was not provided) which resulted in repayment of the bond and transfer of the Trust's assets to Equicredit. ( Id. ) The bond issue made its final payment on December 15, 2005. (D.I. 159, ex. 3). Plaintiffs further represent that Equicredit is now the holder of the assets of the Trust, including the loan associated with this action, the underlying note, mortgage, related collateral property, and all rights and interests therein. (D.I. 177 at 2). SPS continues to service the loan for Equicredit and to hold powers of attorney to act on behalf of Equicredit and U.S. Bank. (D.I. 1, ¶ 2; D.I. 177, ex.).

SPS Standing

Under Fed.R.Civ.P. 12(b)(1), a court must grant a motion to dismiss if it lacks subject-matter jurisdiction to hear a claim. " A motion to dismiss for want of standing is . . . properly brought pursuant to Rule 12(b)(1), because standing is a jurisdictional matter." Ballentine v. United States, 486 F.3d 806, 810, 48 V.I. 1059 (3d Cir. 2007). In evaluating a Rule 12(b)(1) motion, a court must first determine whether the movant presents a facial or factual attack. Mortensen v. First Fed. Sav. & Loan Ass'n, 549 F.2d 884, 891 (3d Cir. 1977).

Here, Gunn presents a factual attack as to the standing of SPS. In reviewing a factual challenge to the Court's subject matter jurisdiction, the Court is not confined to the allegations of the complaint, and the presumption of truthfulness does not attach to the allegations in the complaint. Mortensen, 549 F.2d at 891. Instead, the Court may consider evidence outside the pleadings, including affidavits, depositions and testimony, to resolve any factual issues bearing on jurisdiction. Gotha v. United States, 115 F.3d 176, 179, 36 V.I. 392 (3d Cir. 1997). Once the Court's ...


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