Bean v. BAC Home Loans Servicing LP et al

Filing 28

ORDER that Plaintiff's Motion for Reconsideration (Doc. 25 ) is denied. Signed by Judge G Murray Snow on 1/20/2012.(KMG)

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WO

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IN THE UNITED STATES DISTRICT COURT

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FOR THE DISTRICT OF ARIZONA

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Plaintiff,
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vs.
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BAC Home Loans Servicing, L.P., f/k/a)
Countrywide Home Loans Servicing, L.P.;)
Mortgage Electronic Registration Systems,)
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Inc.,
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Defendants.
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Cecilia M. Bean,

No. CV-11-553-PHX-GMS
ORDER

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On January 3, 2011, the Court issued an order granting in part and denying in part

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Defendants’ Motion to Dismiss. (Doc. 20). Pending before the Court is Plaintiff’s Motion for

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Reconsideration of the Court’s order. (Doc. 25). For the reasons stated below, Plaintiff’s

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motion is denied.

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Generally, motions to reconsider are appropriate only if the Court “(1) is presented

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with newly discovered evidence, (2) committed clear error or the initial decision was

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manifestly unjust, or (3) if there is an intervening change in controlling law.” School Dist.

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No. 1J, Multnomah County, Or. v. ACandS, Inc., 5 F.3d 1255, 1263 (9th Cir. 1993). A

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motion for reconsideration should not be used to ask a court “to rethink what the court had

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already thought through, rightly or wrongly.” Above the Belt, Inc. v. Mel Bohannon Roofing,

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Inc., 99 F.R.D. 99, 101 (E.D.Va. 1983)). Rather, such arguments should be directed to the

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court of appeals. Sullivan v. Faras–RLS Group, Ltd., 795 F. Supp. 305, 309 (D. Ariz. 1992).

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Plaintiff contends that the Court improperly applied the Ninth Circuit’s holding in

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Cervantes v. Countrywide Home Loans, 656 F.3d 1034 (9th Cir. 2011) to “rule[ ] against

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Plaintiff’s argument concerning the bifurcation of the Note and Deed of Trust.” (Doc. 25 at

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2). In particular, Plaintiff contends that it has adequately alleged that MERS was not acting

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as an agent of the lender when MERS assigned its interest as beneficiary in the Deed of Trust

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to Defendant BAC Home Loans. In Cervantes, the plaintiffs claimed that “all transfers of the

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interests in the home loans within the MERS system are invalid because the designation of

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MERS as a beneficiary is a sham and the system splits the deed from the note.” 656 F.3d at

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1044. The court rejected such a widespread attack on the MERS system, holding that “the

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notes and deeds are not irreparably split,” and that “the split only renders the mortgage

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unenforceable if MERS or the trustee, as nominal holders of the deeds, are not agents of the

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lender.” Id. (emphasis added). For instance, the court postulated that “[t]he legality of

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MERS’s role as a beneficiary may be at issue where MERS initiates foreclosure in its own

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name.”Id.

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In the instant case, Plaintiff alleges that because the Deed of Trust calls MERS the

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“nominee” of the lender rather than using the term “agent” or “agency,” “[n]o agency was

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created” between MERS and the lender. (Doc. 1, Ex. 1 at ¶ 39). In Cervantes, however, the

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deed of trust likewise stated that MERS was acting “solely as a nominee for Lender and

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Lender’s successors and assigns.” 656 F.3d at 1042 (emphasis added). Moreover, based on

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the term “nominee” and the general relationship of MERS to lenders, courts have routinely

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“interpreted the relationship of MERS and the lender as an agency relationship.” Landmark

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Nat. Bank v. Kesler, 289 Kan. 528, 539, 216 P.3d 158, 166 (2009) (collecting cases). The

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Court therefore rejects Plaintiff’s argument that, as a lender’s nominee, MERS cannot act as

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a lender’s agent. See Fontenot v. Wells Fargo Bank, N.A., 198 Cal. App. 4th 256, 271, 129

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Cal. Rptr. 3d 467, 479–80 (2011) (“[T]he allegation that MERS was merely a nominee is

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insufficient to demonstrate that MERS lacked authority to make a valid assignment of the

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note on behalf of the original lender.”).

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Plaintiff further alleges in her Complaint that “the record contains no evidence that
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the original holder of the note, Duxford, authorized MERS to transfer the note” to Defendant

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BAC Home Loans. (Doc. 1, Ex. 1, ¶ 58). The Assignment of Deed of Trust between MERS

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and BAC, however, states that MERS is acting “as nominee” for Duxford. And Duxford did

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have the authority to transfer the note. See Fontenot, 198 Cal. App. 4th at 271 (“While it is

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true MERS had no power in its own right to assign the note, since it had no interest in the

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note to assign, MERS did not purport to act for its own interests in assigning the note. Rather,

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the assignment of deed of trust states that MERS was acting as nominee for the lender, which

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did possess an assignable interest.”) (emphasis in original). In short, Plaintiff has failed to

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allege facts which make it plausible that MERS was not acting as the lender’s agent.

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IT IS THEREFORE ORDERED that Plaintiff’s Motion for Reconsideration (Doc.
25) is denied.
DATED this 20th day of January, 2012.

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