(BK) Dick v. American Home Mortgage Servicing Inc., et al, No. 2:2013cv00201 - Document 40 (E.D. Cal. 2013)
Court Description: MEMORANDUM and ORDER granting 33 Motion to Dismiss signed by Senior Judge William B. Shubb on 9/18/13: Plaintiffs have twenty days from the date of this Order to file an amended complaint, if they can do so consistent with this Order. (Kaminski, H)
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(BK) Dick v. American Home Mortgage Servicing Inc., et al Doc. 40 1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 ----oo0oo---11 12 GABRIEL DICK and JILL DICK, Plaintiffs, 13 14 15 16 17 18 19 20 CIV. NO. 2:13-00201 WBS CKD BK. NO. 2:11-45476 ADV. PRO. NO. 12-2007 v. AMERICAN HOME MORTGAGE SERVICING, INC., AMERIQUEST MORTGAGE CO., AMERIQUEST MORTGAGE SECURITIES, INC., DEUTSCHE BANK NATIONAL TRUST, TOWN AND COUNTRY TITLE SERVICES, CITI RESIDENTIAL LEDNING, and POWER DEFAULT SERVICES, INC., MEMORANDUM AND ORDER RE: MOTION TO DISMISS Defendants. 21 22 23 ----oo0oo---Plaintiffs Gabriel Dick and Jill Dick brought this 24 action against defendants Homeward Residential, Inc., formerly 25 known as American Home Mortgage Servicing, Inc.; Ameriquest 26 Mortgage Co.; Ameriquest Mortgage Securities, Inc.; Deutsche Bank 27 National Trust; Town and Country Title Services; Citi Residential 28 Lending; and Power Default Services, Inc., arising from the 1 Dockets.Justia.com 1 foreclosure of their home. 2 Services, Ameriquest Mortgage Company, and Ameriquest Mortgage 3 Securities, Inc. (collectively, “moving defendants”) now move to 4 dismiss plaintiffs’ First Amended Complaint (“FAC”) pursuant to 5 Federal Rule of Civil Procedure 12(b)(6) for failure to state a 6 claim upon which relief can be granted.1 7 I. Factual and Procedural Background 8 9 Defendants Town and Country Title In January 2003, plaintiffs obtained a loan in the amount of $270,000 from Ameriquest Mortgage Company.2 (Req. for 10 Judicial Notice (“RJN”) Ex. 1 (“FAC”) Ex. A (Docket No. 35).) 11 security, plaintiffs executed a Note and Deed of Trust on the 12 property located at 11603 Northern Lights Drive in Grass Valley, 13 California (“Northern Lights property” or “property”). 14 15 As (Id.) Plaintiffs allege that the note was to be transferred into a securitized trust, with a closing date of July 1, 2003. 16 1 17 18 19 20 21 22 23 24 25 26 27 28 Because oral argument will not be of material assistance, the court orders this matter submitted on the briefs. E.D. Cal. L.R. 230(g). 2 A court may take judicial notice of facts “not subject to reasonable dispute” because they are either “(1) generally known within the territorial jurisdiction of the trial court or (2) capable of accurate and ready determination by resort to sources whose accuracy cannot reasonably be questioned.” Turnacliff v. Westly, 456 F.3d 1113, 1120 n.5 (9th Cir. 2008) (quoting Fed. R. Evid. 201) (internal quotations omitted). Plaintiffs filed their First Amended Complaint in the bankruptcy adversary proceeding in the Bankruptcy Court for the Eastern District of California, (No. 12-02007). Defendants request that the court judicially notice the complaint as well as various recorded documents pertaining to the property located at 11603 Northern Lights Drive in Grass Valley, California. (See Req. for Judicial Notice Exs. 1-5 (Docket No. 35).) The court will take judicial notice of these documents, since they are matters of public record whose accuracy cannot be questioned. See Lee v. City of Los Angeles, 250 F.3d 668, 689 (9th Cir. 2001). 2 1 (FAC at 6, ¶ 5.) 2 assignment would be void under the terms of the trust instrument. 3 (Id. at 6, ¶ 7.) 4 Plaintiffs claim any subsequent transfer or In January 2009, Ameriquest Mortgage Company assigned 5 all beneficial interest in the Note and Deed of Trust to Deutsche 6 Bank National Trust (“Deutsche Bank”), as Trustee. 7 4; 8, ¶ 8.) 8 9 (Id. at 7, ¶ A Notice of Default and Election to Sell Under Deed of Trust was recorded on October 12, 2010, listing the default as 10 $15,379.31. 11 recorded on February 24, 2011. 12 Trustee’s Deed Upon Sale was recorded, declaring that the 13 Northern Lights property had been sold to Deutsche Bank. 14 Ex. 5.) (RJN Ex. 2.) A Notice of Trustee’s Sale was (Id. Ex. 4.) On May 6, 2011, a (Id. 15 In October 2011, plaintiffs filed a Chapter 7 16 bankruptcy petition in the United States Bankruptcy Court for the 17 Eastern District of California, (No. 11-45476). 18 2012, plaintiffs filed a complaint to commence a bankruptcy 19 adversary proceeding, (No. 12-02007). 20 amended complaint in that proceeding on February 9, 2012. 21 On January 5, Plaintiffs filed the (FAC.) Plaintiffs obtained a discharge in bankruptcy on 22 February 13, 2012. 23 withdraw the reference of the adversary complaint to bankruptcy 24 court on July 16, 2013. 25 moving defendants filed the instant motion to dismiss. 26 No. 33.) 27 II. 28 This court granted plaintiffs’ motion to (Docket No. 32.) On August 26, 2013, (Docket Legal Standard On a motion to dismiss, the court must accept the 3 1 allegations in the complaint as true and draw all reasonable 2 inferences in favor of the plaintiff. 3 U.S. 232, 236 (1974), overruled on other grounds by Davis v. 4 Scherer, 468 U.S. 183 (1984); Cruz v. Beto, 405 U.S. 319, 322 5 (1972). 6 plead “only enough facts to state a claim to relief that is 7 plausible on its face.” 8 544, 570 (2007). 9 for more than a sheer possibility that a defendant has acted Scheuer v. Rhodes, 416 To survive a motion to dismiss, a plaintiff needs to Bell Atl. Corp. v. Twombly, 550 U.S. This “plausibility standard,” however, “asks 10 unlawfully,” and where a complaint pleads facts that are “merely 11 consistent with” a defendant’s liability, it “stops short of the 12 line between possibility and plausibility.” 13 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 556–57). 14 III. Analysis 15 Ashcroft v. Iqbal, Plaintiffs’ FAC, filed pro se, lists inconsistently the 16 claims it asserts throughout various parts of the FAC. 17 construing the pleadings, and in light of the briefs filed after 18 plaintiffs obtained counsel, the court reads the FAC to assert 19 the following claims: wrongful foreclosure, declaratory relief, 20 cancellation of instrument, fraud, quiet title, and injunctive 21 relief. 22 (9th Cir. 2003) (“Courts have a duty to construe pro se pleadings 23 liberally . . . .”). 24 A. Liberally See Bernhardt v. Los Angeles County, 339 F.3d 920, 925 Statute of Limitations 25 The moving defendants first contend that all of 26 plaintiffs’ claims are barred by the relevant statutes of 27 limitations. 28 33).) (Defs.’ Mem. of P. & A. at 5:25-6:14 (Docket No. According to the moving defendants, plaintiffs concede 4 1 that the moving defendants’ interest in the property was assigned 2 in July 2003, and, as such, plaintiffs cannot proceed in light of 3 California statutes of limitations proscribing the plaintiffs’ 4 claims after four years. 5 based on a misreading of the FAC. 6 (Id.) This, however, appears to be The FAC refers to a “Corporate Assignment of Deed of 7 Trust with Citi Residential Lending Inc. as Attorney in Fact for 8 Ameriquest Mortgage Company to Deutsche Bank National Trust as 9 Trustee for Ameriquest Mortgage Securities Inc. Asset Backed Pass 10 Through Certificates Series 2003-7 under PSA agreement on July 11 13, 2003.” 12 13, 2003” date referenced above refers to the pooling and 13 servicing agreement for the creation of the “Ameriquest Mortgage 14 Securities Inc. Asset Backed Pass Through Certificates Series 15 2003-7” security, not the date of an assignment. 16 (FAC at 8, ¶ 8.) It appears, though, that the “July Accordingly, in light of this ambiguity, and drawing 17 all reasonable inferences in favor of the plaintiffs, the court 18 cannot find that plaintiffs’ claims are barred by the applicable 19 statutes of limitationsr. 20 B. 21 Wrongful Foreclosure Plaintiffs allege the foreclosure of their property was 22 improper. 23 “the theory that the [assignment] was void, and as such, none of 24 the Defendants in this case had the right or authority to 25 foreclose” upon the property. 26 (Docket No. 38).) According to plaintiffs, “the crux” of their claims is (Pls.’ Mem. of P. & A. at 4:5-7 27 A majority of district courts in California have held 28 that borrowers do not have standing to challenge the assignment 5 1 of a loan because borrowers are not party to the assignment 2 agreement. 3 SKO, 2013 WL 2318890, at *3 (E.D. Cal. May 28, 2013) (listing 4 cases). 5 Court of Appeal that allowed a borrower to challenge an 6 assignment as void. 7 Cal. App. 4th 1079, 1095 (5th Dist. 2013) (“We reject the view 8 that a borrower’s challenge to an assignment must fail once it is 9 determined that the borrower was not a party to, or third party 10 11 See Gilbert v. Chase Home Fin., LLC, 1:13-CV-265 AWI Plaintiffs rely on a recent decision of a California See Glaski v. Bank of Am., Nat’l Ass’n, 218 beneficiary of, the assignment agreement.”). The court need not reach the issue, as plaintiffs’ 12 wrongful foreclosure claim fails because plaintiffs cannot allege 13 that the foreclosure was prejudicial. 14 Fargo Bank, N.A., 198 Cal. App. 4th 256, 272 (1st Dist. 2011) 15 (“[A] plaintiff in a suit for wrongful foreclosure has generally 16 been required to demonstrate the alleged imperfection in the 17 foreclosure process was prejudicial to the plaintiff’s 18 interests.”) 19 borrower is in default and cannot show that the allegedly 20 improper assignment interfered with the borrower’s ability to pay 21 or that the original lender would not have foreclosed under the 22 circumstances. 23 Inc., No. B240531, 2013 WL 4522474, at *5 (Cal. Ct. App. 2d Dist. 24 Aug. 27, 2013) (“The assignment of the deed of trust and the note 25 did not change [plaintiffs’] obligations under the note, and 26 there is no reason to believe that . . . the original lender 27 would have refrained from foreclosure in these circumstances.”); 28 Herrera v. Fed. Nat’l Mortg. Ass’n, 205 Cal. App. 4th 1495, 1508 See Fontenot v. Wells California courts find a lack of prejudice when a See Silga v. Mortg. Elec. Registration Sys., 6 1 (4th Dist. 2012) (finding no prejudice from assignment of loan 2 where borrowers defaulted on the loan and failed to tender and 3 cure default); Fontenot, 198 Cal. App. 4th at 272 (finding no 4 prejudice where borrower was in default and did not allege that 5 transfer of note interfered with borrower’s ability to pay). 6 Plaintiffs acknowledge they were in default of their 7 loan. 8 allegedly improper transfer interfered with their ability to pay 9 their note, or that the original lender would have refrained from (FAC at 9, ¶¶ 10-11.) They do not allege that the 10 foreclosure under the circumstances. 11 “assignment merely substituted one creditor for another, without 12 changing [plaintiffs’] obligations under the note.” 13 198 Cal. App 4th at 272. 14 have met these obligations, and thus any defects in the 15 foreclosure were not prejudicial to plaintiffs. 16 court will grant the moving defendants’ motion to dismiss 17 plaintiffs’ claim for wrongful foreclosure.3 18 C. 19 The allegedly improper Fontenot, Plaintiffs do not allege they could Accordingly, the Declaratory Relief Plaintiffs seek a declaration that “the entire loan 20 which includes the Deed of Trust and the associated Promissory 21 Note be deemed null and void,” as well as a “determination that 22 the Plaintiffs are the sole and rightful owner of Title in the 23 subject property, and that the Defendants be stripped of any and 24 3 25 26 27 28 To the extent that plaintiffs allege that the foreclosure was improper because the mortgage was securitized, the claim nonetheless fails. See Lane v. Vitek Real Estate Indus. Grp., 713 F. Supp. 2d 1092, 1099 (E.D. Cal. 2010) (Shubb, J.) (“The argument that parties lose their interest in a loan when it is assigned to a trust pool has also been rejected by many district courts.”). 7 1 all rights, title, liens or interests in the subject property.” 2 (FAC at 15, ¶¶ 1-2.) 3 Under 28 U.S.C. § 2201(a), “any court of the United 4 States, upon the filing of an appropriate pleading, may declare 5 the rights and other legal relations of any interested party 6 seeking such declaration, whether or not further relief is or 7 could be sought.” 8 “neither serve a useful purpose in clarifying and settling the 9 legal relations in issue nor terminate the proceedings and afford Declaratory relief should be denied if it will 10 relief from the uncertainty and controversy faced by the 11 parties.” 12 (9th Cir. 1985). 13 United States v. Washington, 759 F.2d 1353, 1356–57 Here, a nonjudicial foreclosure sale has already taken 14 place, and moving defendants disclaim any interest in the 15 property. 16 validity of that sale. 17 declaratory relief would only address past wrongs and would add 18 nothing to the proceeding in terms of either issues addressed or 19 relief sought, it is inappropriate.” 20 Fin., LLC, No. CIV. 2:12-1771 WBS CKD, 2012 WL 3778970, at *4 21 (E.D. Cal. Aug. 31, 2012). 22 moving defendants’ motion to dismiss this claim. 23 24 D. The remainder of plaintiffs’ claims challenge the “Because plaintiffs’ claim for Burachek v. Chase Home Accordingly, the court will grant the Cancellation of Instrument “A written instrument, in respect to which there is a 25 reasonable apprehension that if left outstanding it may cause 26 serious injury to a person against whom it is void or voidable, 27 may, upon his application, be so adjudged, and ordered to be 28 delivered up or canceled.” Cal. Civ. Code § 3412. 8 “To plead a 1 cause of action for cancellation of instrument, plaintiff must 2 show that he will be injured or prejudiced if the instrument is 3 not cancelled, and that such instrument is void or voidable.” 4 Zendejas v. GMAC Wholesale Mortg. Corp., No. 1:10–CV–00184 OWW 5 GSA, 2010 WL 2629899, at *7 (E.D. Cal. June 29, 2010). 6 As with their wrongful foreclosure claim, plaintiffs do 7 not allege that allowing the Deed of Trust to stand will cause 8 them any injury. 9 12-1413 KJM AC, 2013 WL 1310589, at *8 (E.D. Cal. Mar. 28, 2013) See Wilson v. Household Fin. Corp., No. CIV S- 10 (“A party is not prejudiced by an irregularity if he is unable to 11 pay his reasonable indebtedness.”). 12 they defaulted on their loan, and their property has already been 13 sold in a nonjudicial foreclosure sale. 14 11.) 15 below, plaintiffs do not state how the allegedly improper 16 assignment caused their inability to make payments on their loan. 17 See Cornell v. That Certain Instrument Entitled Deed of Trust, 18 No. CIV. 2:12-330 WBS CKD, 2012 WL 1869689, at *5 (E.D. Cal. May 19 22, 2012) (requiring causal relationship between alleged 20 deficiency and circumstances leading to foreclosure). 21 Accordingly, the court will grant the moving defendants’ motion 22 to dismiss plaintiffs’ cancellation claim. 23 24 Plaintiffs acknowledge that (See FAC at 9, ¶¶ 10- Moreover, aside from vague allegations of fraud, analyzed E. Fraud In California, the essential elements of a claim for 25 fraud are “(a) a misrepresentation (false representation, 26 concealment, or nondisclosure); (b) knowledge of falsity (or 27 ‘scienter’); (c) intent to defraud, i.e., to induce reliance; (d) 28 justifiable reliance; and (e) resulting damage.” 9 In re Estate of 1 Young, 160 Cal. App. 4th 62, 79 (4th Dist. 2008). 2 heightened pleading requirements for claims of fraud under 3 Federal Rule of Civil Procedure 9(b), “a party must state with 4 particularity the circumstances constituting the fraud.” 5 Civ. P. 9(b). 6 where, and how” of the fraud. 7 F.3d 1097, 1106 (9th Cir. 2003) (citation omitted). Under the Fed. R. A plaintiff must include the “who, what, when, Vess v. Ciba–Geigy Corp. USA, 317 8 Here, plaintiffs make only vague and general 9 allegations of fraudulent conduct regarding the moving 10 defendants. 11 with fraud”); 14-15 (“the mortgage, into which the Defendants had 12 coerced the Plaintiffs, was blighted with deception on every 13 level and executed with calculated intentions to defraud the 14 Plaintiffs”).) 15 only names individuals engaged in alleged “Robosigning fraud,” 16 who plaintiffs admit are not employees of the moving defendants. 17 (Id. at 8-9.) 18 explanation of the “who, what, when, where, and how” of the 19 alleged fraud, and fall well short of Rule 9(b)’s requirement of 20 particularity. 21 Mortg. Servs., Inc., 687 F. Supp. 2d 1191, 1200 (E.D. Cal. 2009) 22 (Shubb, J.) (dismissing fraud allegations without “any specific 23 representation made by any defendant at any time”). 24 the court will dismiss the fraud claim against the moving 25 defendants. 26 27 28 F. (See, e.g., FAC at 10, ¶ 4 (“the mortgage is plagued To the extent the FAC offers any specifics, it Such conclusory allegations do not approach an See Vess, 317 F.3d at 1106; Castaneda v. Saxon Accordingly, Quiet Title A claim to quiet title requires: (1) a verified complaint, (2) a description of the property, (3) the title to 10 1 which a determination is sought, (4) the adverse claims to the 2 title against which a determination is sought, (5) the date as of 3 which the determination is sought, and (6) a prayer for the 4 determination of the title. 5 (citing Cal. Code Civ. Proc. § 761.020). 6 Buracheck, 2012 WL 3778970, at *7 Plaintiffs fail to allege that moving defendants make 7 any “adverse claims to the title against which a determination is 8 sought.” 9 of adverse possession actions by entities that may claim to be of Id. The FAC only makes general allegations of a “risk 10 interest.” 11 been sold, and Deutsche Bank, rather than any of the moving 12 defendants, has taken title. 13 Plaintiffs acknowledge that moving defendants had already 14 assigned any interest in the property prior to the foreclosure. 15 (See FAC at 8, ¶ 8.) 16 title that plaintiffs seek to defeat. 17 Bank, N.A., 214 Cal. App. 4th 780, 802-03 (4th Dist. 2013) 18 (holding mortgage borrower could not quiet title to home against 19 creditor after trustee’s sale, where creditor no longer held 20 title to the property). 21 defendants’ motion to dismiss the quiet title claim. 22 G. 23 (FAC at 6, ¶ 6.) Plaintiffs’ property has already (See RJN Ex. 5 (Trustee’s Deed).) Moving defendants make no adverse claims to See West v. JPMorgan Chase Accordingly, the court will grant moving Injunctive relief Under California law, requests for injunctive relief 24 have been consistently classified as remedies and not valid 25 causes of action in their own rights. 26 v. Richter, 52 Cal. App. 2d 164, 168 (4th Dist. 1942) 27 (“Injunctive relief is a remedy and not, in itself, a cause of 28 action.”). See, e.g., Shell Oil Co. Accordingly, the court will grant the moving 11 1 de efendants motion to dism s’ n miss plai intiffs’ separate claim for 2 in njunctive relief. e . 3 H. 4 Leave to Amend o Although leave to amend must be freely given, the court h t 5 is not req s quired to allow futile am o f mendments s. 6 Fr reight Sy ys., Inc. 957 F. ., .2d 655, 658 (9th Cir. 1992). h 7 cl lear that further amendme t r ent will not help plaintiffs adequately p 8 pl lead at least som causes of acti l me s ion. 9 de eclarator relief and inj ry f junctive relief a are remedies and not d See DeSoto v Yellow v. w It is As discussed above, 10 ca auses of action in their own righ i ht. 11 of action, plainti f , iffs are admonish hed that failure to cure the 12 de efects id dentified in this Order w d s will be g grounds for dism missal 13 wi ithout fu urther le eave to amend. a 14 15 As t the remaining causes to g IT IS TH HEREFORE ORDERED that def fendants’ motion to di ismiss be and th same hereby is GRANTE e, he h s, ED. 16 Plaintif ffs have twenty d days from the date of th m his Order 17 to file an amended complai o n d int, if t they can do so consistent with 18 th his Order r. 19 Da ated: Se eptember 18, 2013 3 20 21 22 23 24 25 26 27 28 12 2
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