Green v. Bank of America Mortgage Capital Corporation et al, No. 1:2010cv01251 - Document 17 (E.D. Cal. 2010)

Court Description: MEMORANDUM OPINION and ORDER on Defendants' Motion to Dimiss 6 , signed by Chief Judge Anthony W. Ishii on 10/12/2010. CASE CLOSED. (Verduzco, M)
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Green v. Bank of America Mortgage Capital Corporation et al Doc. 17 1 2 3 4 5 6 7 IN THE UNITED STATES DISTRICT COURT FOR THE 8 EASTERN DISTRICT OF CALIFORNIA 9 ) ) Plaintiff, ) ) v. ) ) BANK OF AMERICA MORTGAGE ) CAPITAL CORPORATION, BANK OF ) AMERICA, RECONTRUST ) COMPANY, and Does 1 through 10, ) ) Defendants. ) ____________________________________) VERNON GREEN, 10 11 12 13 14 15 CV F 10 – 1251 AWI GSA MEMORANDUM OPINION AND ORDER ON DEFENDANTS’ MOTION TO DISMISS Doc. # 6 16 17 This is an action for injunctive relief by plaintiff Vernon Green (“Plaintiff”), 18 representing himself in pro per, against defendants Recontrust Co., and BAC Home Loans 19 Servicing (“Defendants”).1 Plaintiff’s complaint requests the court issue injunctive orders to 20 prevent the foreclosure sale of Plaintiff’s residence on the ground Defendants are not in 21 possession of the original promissory note and therefore lack standing to foreclose on 22 Plaintiff’s property. In the instant motion, Defendants move pursuant to Rule 12(b)(6) of the 23 Federal Rules of Civil Procedure to dismiss Plaintiff’s complaint on the ground California’s 24 comprehensive scheme of non-judicial foreclosure grants the trustee of a Deed of Trust the 25 right to initiate the foreclosure process without having to produce the original note. Although 26 27 28 1 Defendants state that BAC Home Loans Servicing is erroneously named in this suit as two entities, “Bank of America Mortgage Capital Corp., and Bank of America.” “Defendants” hereinafter refers to Recontrust Co. and BAC Home Loans Servicing. Dockets.Justia.com 1 Defendants do not dispute the court’s jurisdiction over this action, the court finds it necessary 2 to address the issue jurisdiction for the reasons that follow. Venue is proper in this court. 3 FACTUAL BACKGROUND AND PROCEDURAL HISTORY 4 5 Plaintiff’s complaint alleges the following with regard to the court’s jurisdiction over this action: 6 Jurisdiction in this action in equity is based on the Constitution for [sic] The United States of America and in particular Article 1, Section 10 and the [First], [Fourth], [Ninth] and [Tenth], [Eleventh], [Fourteenth] Amendments. Jurisdiction is further invoked under the 1849 Constitution for the state of California and under [Federal Rule of Civil Procedure] 17, [California Code of Civil Procedure] 2924, 15 U.S.C. § 1601 et seq.2 [Truth in Lending Act (“TILA”)] and 12 U.S.C. [§] 2601 [Real Estate Settlement Practices Act (“RESPA”)] concerning the obligation of contracts. Defendant/Respondent Bank of America is located in North Carolina and is organized under 31 U.S.C. and is subject to 12 U.S.C. [sic.]. 7 8 9 10 11 Doc. # 1 at ¶ 1. 12 Plaintiff purchased a residence in Mokelumne Hill in Calaveras County. Plaintiff 13 alleges he executed a promissory note and Deed of Trust securing his residence on September 14 21, 2006. Plaintiff alleges that on or about January 27, 2010, he sent Defendants a document 15 titled “Notice of Request for Clarification and Notice of Private International Remedy 16 Demand” (hereinafter the “Request”). A copy of the Request is appended to Plaintiff’s 17 complaint at Exhibit “A”. By inspection, the Request appears to be a list of questions aimed 18 mostly at eliciting responses from Defendants that bolster Plaintiff’s theories regarding the 19 legitimacy of Defendants’ authority to foreclose on Plaintiff’s home. It does not appear that 20 the Request was served on Defendants in connection with any judicial proceeding that had 21 been commenced at the time. It is clear that this action was not commenced until after the 22 Request had been served on Defendants. Based on Defendants’ non-response to Plaintiff’s 23 Request, Plaintiff represents the allegations set forth in the Request are conclusively admitted 24 or denied, depending on the wording of the particular question. For the most part, the 25 26 27 28 2 15 U.S.C. § 1601 states the general findings and declares the purpose of consumer credit provisions. The court assumes that Plaintiff intended to invoke the jurisdictional provisions of 15 U.S.C. § 1640. 2 1 allegations set forth in Plaintiff’s complaint consist of factual allegations, and legal 2 conclusory statements that were set forth in the Request and to which Defendants did not 3 respond. 4 Defendant’s motion to dismiss or, in the alternative for a more definite statement was 5 filed on August 19, 2010. As of this writing, Plaintiff has filed no opposition. On September 6 23, 2010, the court vacated the date set for hearing on Defendants’ motion to dismiss and 7 took the matter under submission as of September 27, 2010. 8 9 LEGAL STANDARD A federal court is “obliged to inquire sua sponte whenever a doubt arises as to the 10 existence of federal jurisdiction.” Mt. Healthy City School Dist. Bd. Of Educ. v. Doyle, 429 11 U.S. 274, 278 (1977). "A plaintiff suing in a federal court must show in his pleading, 12 affirmatively and distinctly, the existence of whatever is essential to federal jurisdiction, and, 13 if he does not do so, the court, on having the defect called to its attention or on discovering 14 the same, must dismiss the case, unless the defect be corrected by amendment." Smith v. 15 McCullough, 270 U.S. 456, 459 (1926). It is a fundamental precept that federal courts are 16 courts of limited jurisdiction. Limits upon federal jurisdiction must not be disregarded or 17 evaded. Owen Equipment & Erection Co. v. Kroger, 437 U.S. 365, 374 (1978). The plaintiff 18 has the burden to establish that subject matter jurisdiction is proper. Kokkonen v. Guardian 19 Life Ins. Co., 511 U.S. 375, 377 (1994). This burden, at the pleading stage, must be met by 20 pleading sufficient allegations to show a proper basis for the court to assert subject matter 21 jurisdiction over the action. McNutt v. General Motors Acceptance Corp., 298 U.S. 178, 189 22 (1936); Fed. R. Civ. P. 8(a)(1). 23 For purposes of federal question jurisdiction, a case arises under federal law if a right 24 or immunity created by the Constitution or laws of the United States is “an element, and an 25 essential one, of the plaintiff's cause of action.” Gully v. First Nat'l Bank, 299 U.S. 109, 112 26 (1936). Jurisdiction exists if a plaintiff makes a “substantial claim under an act of Congress.” 27 28 3 1 Carlson v. Principal Financial Group, 320 F.3d 301 (2d Cir.2003) (citing Fair v. Kohler Die 2 & Specialty Co., 228 U.S. 22, 25 (1913)). “The jurisdictional inquiry is rather 3 straightforward and depends entirely upon the allegations in the complaint.” Carlson, 320 4 F.3d at 306. “[W]here the complaint ... is so drawn as to seek recovery directly under the 5 Constitution or laws of the United States, the federal court, but for two possible exceptions 6 later noted, must entertain the suit.” Bell v. Hood, 327 U.S. 678, 681-82 (1946). The two 7 exceptions occur “where the alleged claim under the Constitution or federal statutes clearly 8 appears to be immaterial and made solely for the purpose of obtaining jurisdiction or where 9 such a claim is wholly insubstantial and frivolous.” Id. at 682-83. “Thus, in order to sustain 10 federal jurisdiction, the complaint must allege a claim that arises under the Constitution or 11 laws of the United States and that is neither made solely for the purpose of obtaining 12 jurisdiction nor wholly insubstantial and frivolous.” Carlson, 320 F.3d at 306. 13 14 DISCUSSION Although Defendants have moved to dismiss Plaintiff’s complaint for failure to state 15 a claim upon which relief can be granted pursuant to F.R.C.P. 12(b)(6), even a cursory 16 reading of Plaintiff’s complaint raises the court’s concern as to its jurisdiction over this 17 action. The document the court has construed as Plaintiff’s complaint is titled “Petition to 18 Show Cause to Determine the True Creditor with Standing to Foreclose and Take 19 Possession.” Plaintiff’s pleading is essentially a rather lengthy argument for the proposition 20 that an entity seeking to foreclose on a deed of trust must be holder in due course of the 21 originals of both the promissory note and the deed of trust (mortgage) in order to effect 22 foreclosure on the property secured by the deed of trust. At the end of the pleading, Plaintiff 23 requests that “an injunction order be issued to estop [Defendants] from exercising power of 24 sale rights that they have admitted they do not have” (presumably pursuant to Defendant’s 25 non-reply to Plaintiff’s Request). Doc. # 1 at 10:5-6. 26 Neither Plaintiff’s prayer for relief nor any of the argument contained in the body of 27 28 4 1 Plaintiff’s pleading invokes the United States Constitution or any discernable act of Congress 2 either directly or by implication. Plaintiff invokes Article I, section 10 of the Constitution 3 and several of the Amendments but his pleading gives no hint of how any right or immunity 4 arising thereunder could have been infringed by Defendants’ actions. Article I, section 10 of 5 the Constitution, as well as the First, Fourth, and Fourteenth Amendments limit state action. 6 No state action is involved in anything Plaintiff has alleged. See Geist v. California 7 Reconveyance Co., 2010 WL 1999854 (N.D. Cal. 2010) at *1 (“it is well settled law that 8 non-judicial foreclosure proceedings do not involve state action”). Similarly, the Ninth, 9 Tenth and Eleventh Amendments reserve rights to the states or to the people. Plaintiff’s 10 pleadings give no indication how any rights arising under these Amendments might possibly 11 be implicated. 12 In addition, it is impossible to see how anything Plaintiff has alleged has anything to 13 do with either of the two federal statutes Plaintiff invoked in his statement of jurisdiction, 15 14 U.S.C. § 1601 et seq., TILA, or 12 U.S.C. § 2601, RESPA. “TILA is only a ‘disclosure 15 statute’ and ‘does not substantively regulate consumer credit but rather requires disclosure of 16 certain terms and conditions of credit before consummation of a consumer credit transaction.’ 17 [Citation.]” Hauk v. JP Morgan Chase Bank, 552 F.3d 1114, 1120 (9 Cir. 2009) (quoting 18 Rendler v. Corus Bank, 272 F.3d 992, 996 (7 Cir. 2001) (internal quotations omitted)). 19 Plaintiff does not make any allegations that Defendants make any false representations with 20 regard to any terms and conditions of the mortgage. 21 Similarly, Plaintiff’s allegations have no discernable connection to the more diffuse 22 purposes of RESPA. Those purposes include “(1) [. . .] more effective advance disclosure to 23 home buyers and sellers of settlement costs; (2) [. . .] the elimination of kickbacks or referral 24 fees that tend to increase unnecessarily the costs of certain settlement devices; (3) [. . .] a 25 reduction in the amounts home buyers are required to place in escrow accounts established to 26 insure the payment of real estate taxes and insurance; and (4) [. . .] significant reform and 27 28 5 1 2 modernization of local record keeping of land title information.” 12 U.S.C. § 2601(b). By extraordinary stretch of the imagination one could possibly infer that Plaintiff’s 3 pleading was intended to convey some sense in which his “Request” was a qualified written 4 request (“QWR”) within the meaning of 12 U.S.C. § 2605(e)(1)(A), in which case the party 5 servicing Plaintiff’s loan account would be required to respond pursuant to subdivision 6 (e)(1)(B). Such inference is undercut, however, by the fact that Plaintiff’s request does not 7 seek information about the status of his loan account nor does Plaintiff’s Request purport to 8 challenge or question Defendant’s determination of the status of Plaintiff’s loan account. 9 See 12 U.S.C. § 2605(e)(1)(B)(ii) (defining QWR as a written statement by the borrower of 10 the reasons for the borrower’s belief that the loan account is in error). Because Plaintiff’s 11 “Request” does not relate in any obvious way to the status of Plaintiff’s loan account, the 12 court cannot construe the Request as a QWR within the meaning of 12 U.S.C. 13 §2605(e)(1)(A). 14 As something of a side note, the court points out that two conclusions flow from the 15 observation that Plaintiff’s Request does not meet the statutory definition of QWR. First, the 16 court concludes that Plaintiff has not alleged a federal claim under RESPA. Second, because 17 Plaintiff’s Request is not a QWR within the meaning of the statute, Defendants have no legal 18 obligation to respond to the Request under any law the court is aware of and consequently 19 Defendants’ failure to respond does not establish the truth or falsity of any fact alleged by 20 Plaintiff. The court mentions this because any future pleading by Plaintiff that references the 21 “Request” in order to establish any fact or legal conclusion will receive little, if any, 22 consideration by this court. 23 The court concludes Plaintiff’s pleading does not allege a claim under any law of the 24 United States or any constitutional provision. The court also finds the complaint does not 25 allege the elements of diversity jurisdiction. The court therefore concludes it lacks subject 26 matter jurisdiction over Plaintiff’s action. 27 28 6 1 If a complaint is dismissed for failure to state a claim, leave to amend should be 2 granted unless the court determines that the allegation of other facts consistent with the 3 challenged pleading could not possibly cure the deficiency.” Schreiber Distributing Co. v. 4 Serv-Well Furniture Co., Inc., 806 F.2d 1393, 1401 (9th Cir. 1986). The formal conclusion 5 the court reaches in dismissing Plaintiff’s action for lack of federal subject matter jurisdiction 6 is that Plaintiff’s pleading fails to allege any claim for relief that arises under the Constitution 7 or laws of the United States. The court also reaches a second conclusion with regard to 8 Plaintiff’s pleadings that is not necessary to the court’s determination of its jurisdiction and 9 so requires only minimal discussion. Simply and briefly stated, Plaintiff’s pleading fails to 10 assert a claim under either federal or California law that is cognizable in federal court. The 11 legal basis for Plaintiff’s request for injunctive relief against foreclosure is his contention that 12 Defendants lack authority to foreclose because they have not, and perhaps cannot, produce 13 the original signed note. District courts in California have uniformly rejected such claims 14 noting that “[u]nder California law, there is no requirement for the production of the original 15 note to initiate a non-judicial foreclosure.” Blanco v. American Home Mortgage Servicing, 16 Inc., 2009 WL 4674904 (E.D. Cal. 2009) at *9 (citing Oliver v. Countrywide Home Loans, 17 Inc., 2009 WL 3122573 (E.D. Cal. 2009) at *3, and listing additional cases). 18 The court recognizes that Plaintiff is representing himself and therefore the court does 19 not lightly reach the conclusion that further amendment of Plaintiff’s pleading would be 20 futile. However, the court has reviewed the entirety of Plaintiff’s Pleading and of the 21 “Request” and can only conclude that any action Plaintiff could file that would be cognizable 22 in this court would bear absolutely no relationship to anything Plaintiff has filed up to this 23 point. To put it colloquially, Plaintiff is barking up the wrong tree by attempting to advance 24 his theories concerning the legitimacy of Defendant’s legal authority to carry out a non- 25 judicial foreclosure proceeding under California law. The court concludes that any action 26 Plaintiff could file that would be cognizable in this court would be a fundamentally different 27 28 7 1 action than the one now before the court – a different case entirely rather than an amendment 2 of the present case. The court will therefore dismiss Plaintiff’s action without leave to 3 amend. 4 5 THEREFORE, in accordance with the foregoing discussion, it is hereby ORDERED 6 that Plaintiff’s action is DISMISSED in its entirety without leave to amend. The Clerk of the 7 Court shall CLOSE the CASE. 8 9 IT IS SO ORDERED. 10 11 Dated: 0m8i78 October 12, 2010 CHIEF UNITED STATES DISTRICT JUDGE 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 8