Tashiro-Townley et al v. Bank of New York Mellon, No. 2:2010cv01720 - Document 184 (W.D. Wash. 2016)

Court Description: ORDER granting defendants' 158 Motion to Dismiss with prejudice by U.S. District Judge John C Coughenour.(RS) Modified on 6/30/2016 /cc Townley (RS).

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Tashiro-Townley et al v. Bank of New York Mellon Doc. 184 THE HONORABLE JOHN C. COUGHENOUR 1 2 3 4 5 6 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT SEATTLE 7 8 9 STEPHANIE A TASHIRO-TOWNLEY and SCOTT C. TOWNLEY, 10 Plaintiffs, 11 CASE NO. C10-1720-JCC ORDER GRANTING DEFENDANTS’ MOTION TO DISMISS v. 12 BANK OF NEW YORK MELLON, et al., 13 14 Defendants. 15 This matter comes before the Court on Defendants’ motion to dismiss (Dkt. No. 158). 16 Having thoroughly considered the parties’ briefing and the relevant record, the Court hereby 17 18 GRANTS the motion for the reasons explained herein. 19 I. BACKGROUND 20 On July 26, 2005, Plaintiffs Scott C. Townley and Stephanie A. Tashiro-Townley 21 executed a promissory note for the purchase of their home, payable to Countrywide Home 22 Loans, as well as a deed of trust. (Dkt. No. 68 at 3.) Plaintiffs were unable to make their monthly 23 payments, and on July 8, 2009, they were in default. (Id. at 5.) Shortly afterwards, Mortgage 24 25 Electronic Registration Services (MERS) executed an assignment of the deed of trust. (Id.) 26 Northwest Trustee’s Services (NWTS), an agent for Bank of New York (BoNY) and MERS ORDER GRANTING DEFENDANTS’ MOTION TO DISMISS PAGE - 1 Dockets.Justia.com 1 recorded an amended notice of trustee’s sale concerning Plaintiffs’ property on September 14, 2 2010, and it conducted the trustee’s sale on December 3, 2010. (Id. at 6.) 3 Plaintiffs filed their original complaint on November 16, 2010 against Defendants BAC 4 Home Loans Servicing f/k/a Countrywide Home Loans, MERS, Litton Loan Servicing LLP, and 5 BoNY, seeking declaratory and injunctive relief and alleging violations of the Washington 6 Consumer Protection Act (WCPA). (Dkt. No. 10.) Plaintiffs brought the action to prevent the 7 trustee’s sale of their home, but they did not request restraint of the sale. (Id.) 8 9 The Court granted Defendant BAC Home Loans Servicing’s motion to dismiss on June 10 29, 2011. (Dkt. No. 85 at 4.) Because Plaintiffs failed to restrain the trustee’s sale, all claims 11 unrelated to the WCPA were deemed waived, and because they failed to allege a public interest 12 impact, the WCPA claims were also dismissed. (Dkt. Nos. 86 and 87.) Shortly afterwards, 13 14 counsel for Plaintiffs withdrew, and Plaintiffs appealed pro se. (Dkt. Nos. 88 and 93.) The Ninth Circuit Court of Appeals affirmed this Court’s decision to dismiss Plaintiffs’ claims for 15 16 injunctive and declaratory relief, but it remanded the case so that this Court could reevaluate 17 Plaintiffs’ WCPA claims in light of the Washington Supreme Court’s decision in Bain v. Metro. 18 Mortgage Grp., Inc., 285 P.3d 34 (Wash. 2012) (Dkt. No. 116 at 2). In Bain, the Court held that 19 the public interest element of a WCPA claim may be met by alleging that MERS was unfairly or 20 deceptively characterized as the beneficiary of a deed of trust. 285 P.3d 34, 49 (Wash. 2012); 21 Proceedings at this Court were stayed, however, pending the decision in the Washington 22 Court of Appeals in a similar action brought by the Plaintiffs. (Dkt. Nos. 129 and 142.) The 23 24 Court of Appeals affirmed the decision of the King County Superior Court, which dismissed or 25 denied all of Plaintiffs’ claims for exceeding the scope of the unlawful detainer proceedings. 26 ORDER GRANTING DEFENDANTS’ MOTION TO DISMISS PAGE - 2 1 (Dkt. No. 147 at 2–3.) This case was re-opened, and Defendants BoNY and MERS moved to 2 dismiss Plaintiffs’ WCPA claims pursuant to Fed. R. Civ. P. 12(b)(6). (Dkt. Nos. 152 and 158.) 3 II. DISCUSSION 4 A. 5 A defendant may move for dismissal when a plaintiff “fails to state a claim upon which 6 Legal Standards relief can be granted.” Fed. R. Civ. P. 12(b)(6). To grant a motion to dismiss, the court must be 7 able to conclude that the moving party is entitled to judgment as a matter of law, even after 8 9 accepting all factual allegations in the complaint as true and construed in the light most favorable 10 to the non-moving party. Fleming v. Pickard, 581 F.3d 922, 925 (9th Cir. 2009). The plaintiff, 11 however, must cite sufficient facts to support a claim that is “plausible on its face.” Bell Atlantic 12 Corp. v. Twombly, 550 U.S. 544, 570 (2007). A facially plausible claim will survive a motion to 13 14 dismiss when the plaintiff “pleads factual content that allows the court to draw the reasonable inference that defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 15 16 17 678 (2009). Thus, although the factual allegations need not be “detailed,” the standard requires “more than an unadorned, the-defendant-unlawfully-harmed-me accusation.” Id. A “formulaic 18 recitation of a cause of action’s elements will not do.” Twombly, 550 U.S. at 545. 19 To prevail under the WCPA, a plaintiff must establish each of the following elements: 20 “(1) unfair or deceptive act or practice; (2) occurring in trade or commerce; (3) public interest 21 impact; (4) injury to plaintiff in his or her business or property; (5) causation.” Hangman Ridge 22 Training Stables, Inc. v. Safeco Title Ins. Co., 719 P.2d 531, 533–35 (Wash. 1986) (en banc). 23 24 25 B. Analysis Because the Ninth Circuit remanded the case to this Court to reconsider Plaintiffs’ 26 WCPA claims after the Washington Supreme Court’s decision in Bain, a brief background on ORDER GRANTING DEFENDANTS’ MOTION TO DISMISS PAGE - 3 1 that case may be helpful. The Washington Supreme Court ruled on three questions of law, 2 certified by this Court. 285 P.3d at 36. First, based on the plain language of the Deed of Trust 3 Act, the court concluded that MERS is not a lawful beneficiary because it never held the 4 promissory note. Id. at 47. The court made no decision as to the legal effect of MERS not being a 5 lawful beneficiary. Id. at 49. Finally, the court held that a homeowner may have a cause of action 6 under the WCPA if MERS acts as an unlawful beneficiary, depending on whether the 7 homeowner can produce evidence on each element of a WCPA claim. Id. at 51. 8 Unfair or Deceptive Act or Practice 9 An unfair or deceptive act or practice for the purposes of the WCPA need not necessarily 10 11 be intended to deceive; it need only have the capacity to deceive a significant portion of the 12 public. Hangman Ridge, 719 P.2d 531 at105 Wash.2d at 535. The Washington Supreme Court 13 14 ruled in Bain that while the characterization of MERS as the beneficiary is not per se deceptive, it has the capacity to deceive. Id. Because the characterization of MERS as the beneficiary, 15 16 despite the fact that it is not a lawful beneficiary under Washington law, has the capacity to 17 deceive, the Bain court held the first element of a WCPA claim to be presumptively met. Bain, 18 285 P.3d at 51; see also Bavand v. OneWest Bank, F.S.B., 309 P.3d 636, 651 (Wash. Ct. App. 19 2013). 20 21 In their amended complaint, Plaintiffs plead a violation of the Deed of Trust Act, Wash. Rev. Code § 61.24.040(1), which requires that a party seeking to foreclose a deed of trust record 22 a notice at least 90 days before the sale. (Dkt. No. 68 at 5.) Defendants argue that Wash. Rev. 23 24 Code § 61.24.040 is supplemented by Wash. Rev. Code § 61.24.130, which they argue allows 25 the trustee to record a notice not less than 45 days prior to the sale date after the date of the 26 bankruptcy court’s order. See Wash. Rev. Code. § 61.24.130(4)(a). The record before us states ORDER GRANTING DEFENDANTS’ MOTION TO DISMISS PAGE - 4 1 that Plaintiffs filed for Chapter 13 bankruptcy on November 18, 2009, and when a the trustee’s 2 sale is stayed as a result of the filing of a petition in federal bankruptcy court, the trustee may 3 record a notice of trustee’s sale at least 30 days before the sale. (Dkt. 10 at 20); Wash. Rev. Code 4 § 61.24.130(4). Because this supplementary provision applies in this case, Defendants did not 5 violate the DTA, and the only deceptive act or practice that Plaintiffs have pleaded would be that 6 which Bain presumptively found—the characterization of MERS as the beneficiary. Therefore, 7 the characterization of MERS as the beneficiary is the only pleaded deceptive act that we are 8 9 10 11 considering in evaluating Plaintiffs’ WCPA claim. Occurring in Trade or Commerce The WCPA defines trade and commerce as including “the sale of assets or services, and 12 any commerce directly or indirectly affecting the people of the state of Washington.” Wash. Rev. 13 14 Code § 19.86.010(2). The term “assets” includes any property including real property. Wash. Rev. Code. § 19.86.010(3). The terms “trade” and “commerce” are given broad meaning by the 15 16 courts in order to support the legislative intent that trade and commerce be interpreted broadly. 17 Hangman Ridge, 719 P.2d at 535. 18 Under the plain language of the statute, it is clear that the trustee’s sale of the property at 19 issue falls under the category of trade or commerce. MERS argues that its assignment of interest 20 to BoNY took place in Texas and therefore, is not a transaction that affects “any Washington 21 consumer” “in any way.” (Dkt. No. 158 at 8.) It is wrong. This transaction, while it may have 22 occurred in Texas, substantially affects Plaintiffs in Washington, because the property at issue is 23 24 in Washington. (Dkt. No. 10 at 5.) The “trade or commerce” prong has been met. 25 26 ORDER GRANTING DEFENDANTS’ MOTION TO DISMISS PAGE - 5 Public Interest Impact 1 2 The Ninth Circuit remanded this case back to this Court following the Bain decision, 3 which held that the public interest element was presumptively met. (Dkt. No. 116 at 2). The Bain 4 court presumptively found the public interest impact element met because of “considerable” 5 6 evidence that MERS is involved in an “enormous number” of mortgages. 285 P.3d at 51. Thus, this prong is met. 7 8 9 Injury to Plaintiff While Defendants dispute that Plaintiffs have suffered an injury, common sense and 10 previous case law indicate that the loss of one’s family home is a great injury. See Meyer, 530 11 B.R. 767 at 782 (“Plaintiffs have undeniably suffered a great loss” in losing their home); Bavand, 12 309 P.3d 636 at 508 (holding that when one’s property has been sold, one can show an injury to 13 property under the WCPA). This prong of the test has also been met. 14 Causation 15 16 To prevail on a WCPA claim, a plaintiff must show that injury in his or her business or 17 property was caused by a defendant’s unfair or deceptive act. Hangman Ridge, 719 P.2d at 539. 18 Whether an injury occurred depends on the facts of an individual case. Bain, 285 P.3d at 51. The 19 causation element must be satisfied by proximate causation, “a cause in which direct sequence 20 [unbroken by any new independent cause] produces the injury complained of and without which 21 such injury would not have happened.” Indoor Billboard/Wash., Inc. v. Integra Telecom of 22 Wash., Inc., 170 P.3d 10, 21 (Wash. 2007) (en banc). 23 24 Plaintiffs do not plead sufficient facts to establish causation between Defendants’ unfair 25 or deceptive acts and their injury, and this is where their pleading fails. They simply have not 26 pleaded sufficient plausible facts to demonstrate that Defendants, by characterizing MERS as the ORDER GRANTING DEFENDANTS’ MOTION TO DISMISS PAGE - 6 1 beneficiary, proximately caused their injury to their property. Bain explicitly states that “the 2 mere fact MERS is listed on the deed of trust as a beneficiary is not itself an actionable injury”; 3 the characterization must have somehow caused the injury to plaintiffs. 285 P.3d at 52. While the 4 Court acknowledges that Plaintiffs have suffered a great loss, Judge Jones put it best when he 5 said, “The [C]ourt can chide Defendants for abysmal customer service in a business tied 6 intimately to its customers’ financial and emotional well-being. The [C]ourt cannot, however, 7 change the basic truth that if a homeowner cannot pay her mortgage, she will ultimately lose her 8 9 home.” Singh v. Federal Nat. Mortg. Ass’n, 2014 WL 504820 at *7 (W.D. Wash. Feb. 7, 2014). 10 III. CONCLUSION 11 For the foregoing reasons, Defendants’ motion to dismiss (Dkt. No. 158) is GRANTED. 12 Plaintiffs’ WCPA claims are DISMISSED with prejudice. The Clerk is DIRECTED to close this 13 case. 14 DATED this 30th day of June 2016. 15 16 17 18 A 19 20 21 John C. Coughenour UNITED STATES DISTRICT JUDGE 22 23 24 25 26 ORDER GRANTING DEFENDANTS’ MOTION TO DISMISS PAGE - 7

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