MacKenzie v. Federal National Mortgage Association et al, No. 3:2012cv08092 - Document 14 (D. Ariz. 2012)

Court Description: ORDER granting 11 Defendants' Motion to Dismiss. This case is dismissed in its entirety. Signed by Judge James A Teilborg on 10/2/12.(DMT)
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MacKenzie v. Federal National Mortgage Association et al 1 Doc. 14 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA 8 9 10 11 12 13 No. CV 12-8092-PCT-JAT Bernice MacKenzie Plaintiff, ORDER v. Federal National Mortgage Association; Wells Fargo Home Mortgage, Inc.; Tiffany & Bosco; MERS 14 Defendants. 15 16 Currently pending before the Court is the Motion to Dismiss of Defendants 17 Federal National Mortgage Association (“Federal”), Wells Fargo Bank, N.A. (“Wells 18 Fargo”), and Mortgage Electronic Registration Systems, Inc. (“MERS”). (Doc. 11.) The 19 Court now rules on the Motion. 20 I. 21 Plaintiff Bernice MacKenzie purchased property located at 1030 South Foothills 22 Drive, Dewey, Arizona (the “Property”) on November 14, 2006 with a loan in the amount 23 of $361,000 (the “Loan”) secured by a Deed of Trust (the “DOT”).1 The DOT names the 24 lender as nonparty Crestar Mortgage and the Trustee as Michael A. Bosco, Jr. The DOT 25 provides that, in the event of default, the Lender, or its successors and assigns, may BACKGROUND 26 27 28 1 The Court can consider publicly recorded documents, like the Deed of Trust, without converting this motion to dismiss into a motion for summary judgment. Lee v. City of Los Angeles, 250 F.3d 668, 688-89 (9th Cir. 2001). 1 invoke the DOT’s power of sale and sell the Property at public auction to the highest 2 bidder. 3 On March 24, 2010, Mr. Bosco, as Trustee, recorded a Notice of Trustee’s Sale. 4 Plaintiff neither reinstated her loan nor had the sale enjoined, so the Trustee’s Sale took 5 place on April 11, 2011. Mr. Bosco recorded a Trustee’s Deed upon Sale conveying the 6 Property to Fannie Mae on April 15, 2011. On May 31, 2011, Fannie Mae obtained a 7 forcible entry and detainer judgment against Plaintiff requiring Plaintiff to surrender the 8 Property by June 13, 2011. 9 Plaintiff filed the pending case on May 14, 2012. (Doc. 1.)2 Plaintiff’s Complaint 10 does specifically delineate her claims, but the Complaint appears to contain claims 11 frequently found in mortgage foreclosure litigation. Defendants Federal, Wells Fargo, 12 and MERS filed the pending Rule 12(b)(6) Motion to Dismiss on June 26, 2012, arguing 13 that Plaintiff has failed to state a claim. 14 II. LEGAL STANDARD 15 The Court may dismiss a complaint for failure to state a claim under Federal Rule 16 of Civil Procedure 12(b)(6) for two reasons: 1) lack of a cognizable legal theory and 2) 17 insufficient facts alleged under a cognizable legal theory. Balistreri v. Pacifica Police 18 Dep’t, 901 F.2d 696, 699 (9th Cir. 1990). 19 To survive a 12(b)(6) motion for failure to state a claim, a complaint must meet 20 the requirements of Federal Rule of Civil Procedure 8(a)(2). Rule 8(a)(2) requires a 21 “short and plaint statement of the claim showing that the pleader is entitled to relief,” so 22 that the defendant has “fair notice of what the . . . claim is and the grounds upon which it 23 rests.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007)(quoting Conley v. 24 Gibson, 355 U.S. 41, 47 (1957)). 25 Although a complaint attacked for failure to state a claim does not need detailed 26 27 28 2 Plaintiff previously filed a very similar complaint in this Court, which eventually was dismissed when Plaintiff failed to respond to a motion to dismiss. MacKenzie v. Wells Fargo Bank, N.A., et al., Case No. CV11-8114-PCT-DGC. -2- 1 factual allegations, the pleader’s obligation to provide the grounds for relief requires 2 “more than labels and conclusions, and a formulaic recitation of the elements of a cause 3 of action will not do.” Twombly, 550 U.S. at 555 (internal citations omitted). The factual 4 allegations of the complaint must be sufficient to raise a right to relief above a 5 speculative level. Id. Rule 8(a)(2) “requires a ‘showing,’ rather than a blanket assertion, 6 of entitlement to relief. Without some factual allegation in the complaint, it is hard to see 7 how a claimant could satisfy the requirement of providing not only ‘fair notice’ of the 8 nature of the claim, but also ‘grounds’ on which the claim rests.” Id. (citing 5 C. Wright 9 & A. Miller, Federal Practice and Procedure §1202, pp. 94-95 (3d ed. 2004)). 10 Rule 8’s pleading standard demands more than “an unadorned, the defendant- 11 unlawfully-harmed-me accusation.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)(citing 12 Twombly, 550 U.S. at 555). A complaint that offers nothing more than naked assertions 13 will not suffice. To survive a motion to dismiss, a complaint must contain sufficient 14 factual matter, which, if accepted as true, states a claim to relief that is “plausible on its 15 face.” Iqbal, 556 U.S. at 678. Facial plausibility exists if the pleader pleads factual 16 content that allows the court to draw the reasonable inference that the defendant is liable 17 for the misconduct alleged. Id. Plausibility does not equal “probability,” but plausibility 18 requires more than a sheer possibility that a defendant acted unlawfully. Id. “Where a 19 complaint pleads facts that are ‘merely consistent’ with a defendant’s liability, it ‘stops 20 short of the line between possibility and plausibility of entitlement to relief.’” Id. (citing 21 Twombly, 550 U.S. at 557). 22 In deciding a motion to dismiss under Rule 12(b)(6), a court must construe the 23 facts alleged in the complaint in the light most favorable to the drafter of the complaint 24 and the court must accept all well-pleaded factual allegations as true. See Shwarz v. 25 United States, 234 F.3d 428, 435 (9th Cir. 2000). Nonetheless, courts do not have to 26 accept as true a legal conclusion couched as a factual allegation. Papasan v. Allain, 478 27 U.S. 265, 286 (1986). 28 -3- 1 III. 2 Plaintiff’s Complaint lists several federal statutes, but does not allege how 3 Defendants violated those statutes. Her actual allegations boil down to the following 4 arguments: Defendants did not have “standing” to foreclose her home and were not “real 5 parties in interest” because Defendants are not the holders of the note evidencing the 6 Loan; the Deed and Note were impermissibly “separated;” the Note was illegally 7 securitized; and MERS cannot have a real interest in a mortgage. Plaintiff also implicitly 8 alleges a claim for wrongful foreclosure. 9 ANALYSIS AND CONCLUSION A. A.R.S. §33-811(C) 10 This Court previously has rejected all the legal theories asserted by Plaintiff. 11 Arizona courts and this Court repeatedly have held that a party does not have to produce 12 the original note before the party can foreclose in Arizona, which is a statutory deed of 13 trust state. See, e.g., Hogan v. Washington Mut. Bank, N.A., 277 P.3d 781, 783-84 (Ariz. 14 2012). Courts also have rejected foreclosure plaintiffs’ “impermissible separation of the 15 deed and note” theory of liability. See, e.g., Owens v. Reconstruct Co., 2011 WL 16 3684473 at *3 (D. Ariz. August 23, 2011). Nor have courts recognized a cause of action 17 for the sale of loans into the secondary market or “securitization.” See, e.g., Harding v. 18 U.S. Bank, N.A., 2012 WL 3871506 at *3 (D. Ariz. Sept. 6, 2012). Finally, courts have 19 rejected the argument that MERS is a “sham” beneficiary because it has no actual interest 20 in the loan. Cervantes v. Countrywide Home Loans, Inc., 2009 WL 3157160 at *10 (D. 21 Ariz. Sept. 24, 2009). 22 But even if any of those legal theories were viable, Plaintiff waived them because 23 she did not obtain an injunction at least one day before the Trustee’s Sale of the Property. 24 Section 33-811(C) of the Arizona Revised Statutes reads in pertinent part: 25 26 27 28 The trustor . . . and all persons to whom the trustee mails a notice of a sale under a trust deed pursuant to §33-809 shall waive all defenses and objections to the sale not raised in an action that results in the issuance of a court order granting -4- 1 relief pursuant to Rule 65, Arizona rules of civil procedure, entered before 5:00 p.m. mountain standard time on the last business day before the scheduled date of sale. 2 3 4 Plaintiff indisputably did not obtain injunctive relief before the Trustee Sale of the 5 Property. 6 A trustor, like Plaintiff, waives all defenses and objections to the trustee sale not 7 raised in an action resulting in injunctive relief awarded at least one business day before 8 the trustee sale. Because Plaintiff did not obtain an order enjoining the Trustee Sale of 9 the Property, she waived all claims that would have provided defenses or objections to 10 the sale. Madison v. Groseth, 279 P.3d 633, 637-38 (Ariz. Ct. App. 2012). The Court 11 finds Plaintiff could have raised all the arguments she makes in her Complaint, except for 12 the wrongful foreclosure claim, in a motion to enjoin the Trustee Sale. Because all those 13 arguments could have provided defenses or objections to the Trustee Sale, Plaintiff has 14 waived them. 15 B. Wrongful Foreclosure 16 Plaintiff asserts throughout the Complaint that Defendants had no right to 17 foreclose on the Property, which the Court will construe as an attempt to state a claim for 18 wrongful foreclosure. Although Arizona state courts have not yet explicitly recognized a 19 cause of action for wrongful foreclosure, this Court has. See, e.g., Schrock v. Federal 20 Nat’l Mortg. Assoc., 2011 WL 3348227 at *6 (D. Ariz. August 3, 2011). The Court has 21 held that the tort of wrongful foreclosure is not waived by A.R.S. section 33-811(C) 22 because it is only ripe once a foreclosure sale has occurred. Id. 23 To establish a claim for wrongful foreclosure, Plaintiff must prove that either she 24 was not in default at the time of the foreclosure or that the foreclosing party caused her 25 default. See, e.g., Holt v. Countrywide Home Loans, Inc., 2012 WL 369591 at *4 (D. 26 Ariz. Feb. 6, 2012); Jada v. Wells Fargo Bank, N.A., 2011 WL 3267330 at *3 (D. Ariz. 27 July 29, 2011). Plaintiff never alleges that she was not in default on the Loan at the time 28 of the foreclosure or that the foreclosing party caused her failure to make Loan payments. -5- 1 Rather, her allegations center on Defendants not being the appropriate parties, for various 2 reasons, to foreclose on the Property. Because Plaintiff does not allege that she was 3 current on the Loan at the time of the Trustee Sale, she cannot state a claim for wrongful 4 foreclosure. 5 Accordingly, 6 IT IS ORDERED GRANTING Defendants’ Motion to Dismiss (Doc. 11). This 7 8 case is dismissed in its entirety. Dated this 2nd day of October, 2012. 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -6-