Schayes et al v. BAC Home Loans Servicing LP

Filing 31

ORDER Defendants' Motion to Dismiss, Doc. 11, is granted with leave for Plaintiff to seek leave of court to amend their complaint. If no such motion is filed by August 15, 2011, the Clerk is directed to terminate Case No. CV-10-1893-PHX-GMS. Plaintiffs' Motion to Sequester, Doc. 12, is denied as moot. Signed by Judge G Murray Snow on 7/15/2011. (KMG)

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1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA 8 9 ) ) ) Plaintiffs, ) ) vs. ) ) ) BAC Home Loans Servicing, LP, ) ) Defendant. _________________________________ ) ) ) Daniel and Wendy Schayes, ) ) Plaintiffs, ) ) vs. ) ReconTrust Company; BAC Home Loans) Servicing, LP; Countrywide Home Loans,) Inc.; Fidelity National Title Insurance) ) Company; MERS and Does 1-100, ) ) Defendants. ) Daniel L. and Wendy L. Schayes , 10 11 12 13 14 15 16 17 18 19 20 21 No. CV-10-1893-PHX-GMS No. CV-11-1074-PHX-GMS (Consolidated) ORDER 22 23 Pending before this Court filed under Case No. CV-10-1893-PHX-GMS are (1) 24 Defendants’ Motion to Dismiss Case by BAC Home Loans Servicing LP, Doc. 11, Plaintiff’s 25 Motion (Replevin in Detinet) to Sequester the Genuine Original Adjustable Rate Note Until 26 Final Adjudication of this Matter, Doc. 12, and (3) Plaintiff’s Notice of Voluntary Dismissal, 27 Doc. 22, that is contested by Defendant, Doc. 23. For the reasons stated in this Order, 28 Defendant’s Motion to Dismiss Case is granted in part and denied in part, and (2) Plaintiff’s 1 Motion to Sequester the Genuine Original Adjustable Rate Note is denied as moot. 2 Defendant BAC Home loan Servicing, LP (BAC) is the current servicer of a loan 3 taken out by Plaintiffs to acquire property located at 7035 E. Berneil Drive in Paradise 4 Valley. The loan was secured by a deed of trust. The successor trustee on the deed of trust 5 has noticed a trustee’s sale on the property. The Plaintiffs filed their original complaint in 6 this matter together with motions for a Temporary Restraining Order, Docs. 3 and 4 to halt 7 that sale. These motions were denied. Doc 13. 8 BAC which is the only defendant in the matter, moved to have the matter dismissed. 9 Doc. 10. While originally opposing that motion, see Doc 16, Plaintiffs hired an attorney who 10 attempted to file a notice of voluntary dismissal pursuant to Fed. R. Civ. P. 41(a). The notice 11 was stricken, however, because the attorney had not yet entered his appearance with the 12 Court. During the two-day interim that it took the attorney to enter his appearance, 13 Defendant filed an answer to the complaint apparently so that Plaintiffs could not voluntarily 14 dismiss their complaint pursuant to Fed. R. Civ. P. 41(a) . When Plaintiffs subsequently 15 renewed their notice of voluntary dismissal, Defendant objected unless such a dismissal was 16 with prejudice. 17 In such circumstances the Court may dismiss the complaint on terms that “the Court 18 considers proper.” Fed. R. Civ. P. 41(a)(2). The Court is disinclined to wholly foreclose 19 Plaintiffs from bringing any legitimate claims that they may have against Defendant, by 20 crediting Defendant’s attempt to file an answer just so that Defendant could not dismiss his 21 complaint without prejudice. On the other hand, Plaintiffs’ complaint, in its current iteration 22 is wholly meritless, and Defendant should not be subjected to the expense of repeatedly 23 responding to such meritless claims. 24 The Defendant that Plaintiffs name is the servicer of the loan. Defendant is not the 25 lender or originator of the loan. In their Complaint Plaintiffs make a number of allegations 26 about the lender and about Defendants (plural) acting in concert with others to induce 27 Plaintiffs to enter into a predatory loan agreement with the Defendant. Plaintiffs allege that 28 Defendants did so by committing numerous acts of fraud against the Plaintiffs, charging false -2- 1 fees at loan settlement, and breaching their fiduciary duty. They also seem to allege that 2 Defendants cannot foreclose on the property absent the original promissory note, because 3 “lender” is not a real party in interest it has no standing to conduct a non-judicial foreclosure, 4 and the deed of trust is invalid. They further apparently allege claims for quiet title, unjust 5 enrichment, intentional infliction of emotional distress, breach of fiduciary duty, negligence, 6 breach of covenant of good faith and fair dealing, and breaches of statutory obligations 7 Nevertheless, as Defendant correctly states in its motion, it is the servicer of the note, 8 not the original lender. There are no sufficient facts plead to make any of Plaintiffs’ claims 9 against Defendant plausible. Many, if not all, of the allegations seem to be focused on 10 possible Defendants that were never named. For example, it is not apparent from the 11 Complaint how the Defendant, the servicer of the loan, could have committed RESPA or 12 TILA violations arising from the loan’s origination. Nor to the extent that Plaintiffs have 13 attempted to assert causes of action in fraud, conspiracy, quiet title, or unjust enrichment 14 have they alleged sufficient facts to make such claims plausible. The Complaint is drafted 15 in such a way as to deprive Defendant of the knowledge of what claims and factual 16 allegations the Complaint asserts against it. Thus, the Court believes, the Defendant would 17 be unable to draft a meaningful answer to Plaintiffs’ existing Complaint. 18 To the extent that Plaintiffs seek to assert claims of fraud against Defendant they must 19 “state with particularity the circumstances constituting fraud or mistake.” Fed. R. Civ. P. 20 9(b). There are nine elements required to plead common law fraud in Arizona. Nielson v. 21 Flashberg, 101 Ariz. 335, 338, 419 P.2d 514, 517 (1966). Each fraud claim must be plead 22 with particularity as to each Defendant against which Plaintiff raises such claims. A Plaintiff 23 must “state the time, place and specific content of the false representation as well as the 24 identities of the parties to the misrepresentations.” Schreiber Distrib. Co. v. Serv-Well 25 Furniture Co., 806 F2d 1393, 1401 (9th Cir. 1986); A.G. Edwards & Sons, Inc. v. Smith, 736 26 F. Supp. 1030, 1033 (D. Ariz. 1989) (holding that “[m]ere conclusory allegations of fraud 27 will not suffice; the complaint must contain statements of the time, place and nature of the 28 alleged fraudulent activities.”). -3- 1 To survive dismissal for failure to state a claim pursuant to Federal Rule of Civil 2 Procedure 12(b)(6), a complaint must contain more than “labels and conclusions” or a 3 “formulaic recitation of the elements of a cause of action[;]” it must contain factual 4 allegations sufficient to “raise a right to relief above the speculative level.” Bell Atl. Corp. 5 v. Twombly, 550 U.S. 544, 555 (2007). “A claim has facial plausibility when the plaintiff 6 pleads factual content that allows the court to draw the reasonable inference that the 7 defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 8 (2009) (citing Twombly, 550 U.S. at 556). 9 10 The Plaintiffs have not adequately plead sufficient facts to make any of their claims plausible. 11 The same holds true for Plaintiffs' assertion that Defendant is incapable of foreclosing 12 absent actual possession of the note, Diessner v. MERS, 618 F. Supp. 2d 1184, 1187-8 (D. 13 Ariz. 2009), the deed of trust is invalid, or that BAC does not have standing to conduct a 14 non-judicial foreclosure. Id. The Court, as noted, has repeatedly held that such claims are 15 legally insufficient. 16 As a result Plaintiffs’ complaint is dismissed with leave to seek to amend. 17 Should Plaintiffs seek to bring a new amended complaint, however, they shall file a 18 motion for leave to file an amended complaint no later than August 15, 2011. The motion 19 shall attach the proposed amended complaint and shall otherwise follow the requirements of 20 Arizona Local Rules of Civil Procedure 15.1. 21 Plaintiffs are advised that the Court will not authorize the filing of an amended 22 complaint that is similar to the original Complaint. Unlike the original Complaint, the 23 proposed amended complaint should not contain legal argument, historical assertions, or 24 discovery requests. Pursuant to Fed. R. Civ. P. 8(a) (2), a complaint must set forth “a short 25 and plain statement of the claim showing that the pleader is entitled to relief.” “Each 26 allegation must be simple concise and direct.” Fed. R. Civ. P. 8(d)(1). And, a party must 27 state its claims . . . in numbered paragraphs, each limited as far as practicable to a single set 28 of circumstances.” Fed. R. Civ. P. 10(b). Plaintiff’s current complaint fails in these -4- 1 requirements. 2 Thus, any amended complaint filed by Plaintiffs should separately identify in a single 3 heading with numbered paragraphs each legal claim that the Plaintiffs bring against the 4 Defendant. Plaintiffs should then set forth in plain, direct, clear and simple statements each 5 fact that Plaintiffs allege demonstrate that Plaintiffs have a right to recover on the specified 6 claim. Each separate factual allegation should be set forth in a separately and consecutively 7 numbered paragraph. Examples of different types of complaints demonstrating the proper 8 form can be found in the appendix of forms that is contained with the Federal Rules of Civil 9 Procedure (forms 11-21). 10 11 Any claim set forth in any amended complaint shall not set forth claims that this Court has already rejected as insufficient as a matter of law. 12 IT IS THEREFORE ORDERED: 13 1. Defendants’ Motion to Dismiss, Doc. 11, is granted with leave for Plaintiff to 14 seek leave of court to amend their complaint. If no such motion is filed by August 15, 2011, 15 the Clerk is directed to terminate Case No. CV-10-1893-PHX-GMS. 16 2. Plaintiffs’ Motion to Sequester, Doc. 12, is denied as moot. 17 DATED this 15th day of July, 2011 18 . 19 20 21 22 23 24 25 26 27 28 -5-

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