Boersma v. M&I Marshall & Ilsley Bank

Filing 20

ORDER granting 17 Defendant's Motion to Strike 16 Response in Opposition to Motion and granting 7 Defendant's Motion to Dismiss with prejudice. Signed by Judge James A Teilborg on 1/31/12.(LSP)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE DISTRICT OF ARIZONA

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Jay Boersma,
Plaintiff,

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vs.

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M&I Marshall & Ilsley Bank,
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Defendant.
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No. CV11-768-PHX-JAT
ORDER

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Defendant M&I Marshall & Ilsley Bank (“M&I”) has filed a Motion to Dismiss with

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Prejudice (Doc. 7) and a Motion to Strike Plaintiff’s Opposition to Dismiss (Doc. 17). The

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Court now rules on the Motions.
BACKGROUND

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Plaintiff Jay Boersma has filed two previous law suits concerning M&I’s right to

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foreclose on his residential property – Boersma v. M&I Marshall & Ilsley Bank CV10-2221-

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PHX-NVW and Boersma v. M&I Marshall & Ilsley Bank CV11-148-PHX-ROS.1 Both of

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those prior suits were dismissed without prejudice. In this third lawsuit, Plaintiff again

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alleges that Defendant does not have the right to foreclose on the residential property located

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at 15324 E. Sundown Dr., Fountain Hills, Arizona, despite Plaintiff admittedly failing to

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The Court may consider matters of public record, like judicial filings, on a motion
to dismiss without converting the motion into a motion for summary judgment. Coto
Settlement v. Eisenberg, 593 F.3d 1031, 1038 (9th Cir. 2010).

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make loan payments (Doc. 7-1 ¶3) on the $1,207,500 Promissory Note signed on June 22,

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2005 (Doc. 5-2 in CV10-2221-PHX-NVW).

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MOTION TO STRIKE

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Plaintiff filed three separate responses to Defendant’s Motion to Dismiss. He filed

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an Opposition to Motion to Dismiss on May 16, 2011 (Doc. 10), a Memorandum in Support

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of Opposition to Motion to Dismiss on May 31, 2011 (Doc. 13), and an Opposition to Motion

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to Dismiss on September 22, 2011 (Doc. 16). Defendant moves to strike the second

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Opposition (Doc. 16) filed on September 22, 2011.

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Local Rules of Civil Procedure allow a party to file one responsive memorandum in

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opposition to a motion to dismiss. L.R.Civ.P. 7.2(c). If a party wants to file more than one

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response, then the party needs to obtain the permission of the Court.

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Plaintiff filed his original Opposition on May 16, 2011, and also filed a Memorandum

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in Support on May 31, 2011.2 Because Plaintiff had already filed his one allowed response

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to the Motion to Dismiss, he needed to seek leave to file the second Opposition he filed in

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September of 2011. Because Plaintiff did not receive permission from the Court to file the

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second Opposition, the Court will grant Defendant’s Motion to Strike the second Opposition

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(Doc. 16). Even if the Court had allowed the second Opposition, the Court would not have

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reached a different result on the Motion to Dismiss.
MOTION TO DISMISS

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I.

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The Court may dismiss a complaint for failure to state a claim under 12(b)(6) for two

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reasons: 1) lack of a cognizable legal theory and 2) insufficient facts alleged under a

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cognizable legal theory. Balistreri v. Pacifica Police Dep’t, 901 F.2d 696, 699 (9th Cir.

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1990).

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Legal Standard

To survive a 12(b)(6) motion for failure to state a claim, a complaint must meet the

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Defendant has not moved to strike the Memorandum that Plaintiff filed on May 31,
2011, which Plaintiff also filed without leave.
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requirements of Federal Rule of Civil Procedure 8(a)(2). Rule 8(a)(2) requires a “short and

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plain statement of the claim showing that the pleader is entitled to relief,” so that the

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defendant has “fair notice of what the . . . claim is and the grounds upon which it rests.” Bell

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Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007)(quoting Conley v. Gibson, 355 U.S. 41,

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47 (1957)).

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Although a complaint attacked for failure to state a claim does not need detailed

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factual allegations, the pleader’s obligation to provide the grounds for relief requires “more

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than labels and conclusions, and a formulaic recitation of the elements of a cause of action

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will not do.” Twombly, 550 U.S. at 555 (internal citations omitted). The factual allegations

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of the complaint must be sufficient to raise a right to relief above a speculative level. Id.

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Rule 8(a)(2) “requires a ‘showing,’ rather than a blanket assertion, of entitlement to relief.

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Without some factual allegation in the complaint, it is hard to see how a claimant could

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satisfy the requirement of providing not only ‘fair notice’ of the nature of the claim, but also

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‘grounds’ on which the claim rests.” Id. (citing 5 C. Wright & A. Miller, Federal Practice

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and Procedure §1202, pp. 94, 95(3d ed. 2004)).

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Rule 8’s pleading standard demands more than “an unadorned, the-defendant-

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unlawfully-harmed-me accusation.” Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009)(citing

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Twombly, 550 U.S. at 555). A complaint that offers nothing more than naked assertions will

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not suffice. To survive a motion to dismiss, a complaint must contain sufficient factual

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matter, which, if accepted as true, states a claim to relief that is “plausible on its face.” Iqbal,

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129 S.Ct. at 1949. Facial plausibility exists if the pleader pleads factual content that allows

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the court to draw the reasonable inference that the defendant is liable for the misconduct

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alleged. Id. Plausibility does not equal “probability,” but plausibility requires more than a

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sheer possibility that a defendant has acted unlawfully. Id. “Where a complaint pleads facts

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that are ‘merely consistent’ with a defendant’s liability, it ‘stops short of the line between

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possibility and plausibility of entitlement to relief.’” Id. (citing Twombly, 550 U.S. at 557).

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In deciding a motion to dismiss under Rule 12(b)(6), the Court must construe the facts

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alleged in the complaint in the light most favorable to the drafter of the complaint and the
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Court must accept all well-pleaded factual allegations as true. See Shwarz v. United States,

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234 F.3d 428, 435 (9th Cir. 2000). Nonetheless, the Court does not have to accept as true

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a legal conclusion couched as a factual allegation. Papasan v. Allain, 478 U.S. 265, 286

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(1986).

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II.

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Plaintiff’s Complaint contains a lot of general allegations regarding securitization of

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loans in the banking industry. Plaintiff does not assert that Defendant definitely sold his loan

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into the secondary market, but that many loans are re-packaged and sold. The Complaint

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also quotes from some federal statutes and rules. The only legal theory that Plaintiff

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specifically alleges against Defendant is the so-called “show me the note” theory. Plaintiff

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asserts that unless Defendant can produce his original Promissory Note, Defendant cannot

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foreclose on his property.

Analysis and Conclusion

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In Arizona, and “[u]nlike their judicial foreclosure cousins that involve the court, deed

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of trust sales are conducted on a contract theory under the power of sale authority of the

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trustee.” In re Krohn, 52 P.3d 774, 777 (Ariz. 2002). See also A.R.S. § 33-807(A)

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(providing power of sale authority to trustee after default). Plaintiff does not cite, nor is the

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Court aware of, any controlling Arizona authority requiring the production of the original

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note before the commencement of a foreclosure sale. To the contrary, courts within the

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District of Arizona “have routinely held that [the] ‘show me the note’ argument lacks merit.”

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Diessner v. Mortgage Elec. Registration Sys., 618 F.Supp.2d 1184, 1187-88 (D. Ariz. 2009)

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(quoting Mansour v. Cal-W. Reconveyance Corp., 618 F.Supp.2d 1178, 1181 (D. Ariz.

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2009)). And the Arizona Court of Appeals, citing precedent from this Court, recently

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confirmed that “Arizona’s non-judicial foreclosure statute does not require presentation of

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the original note before commencing foreclosure proceedings.” Hogan v. Wash. Mut. Bank,

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N.A., 261 P.3d 445, 448 (Ariz. Ct. App. 2011).

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Plaintiff acknowledges that a trustee does not have to produce the original promissory

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note before it initiates a trustee sale. But he argues that Defendant must produce the

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Promissory Note here because he has challenged Defendant’s “standing” to foreclose. The
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fact that Plaintiff has filed a lawsuit does not change the rules regarding production of the

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note. Because Plaintiff’s only claim, the “show me the note” claim, fails as a matter of law,

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the Court will grant the Motion to Dismiss.

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Moreover, even if Defendant were required to produce Plaintiff’s Promissory Note,

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Defendant has done so. Defendant attached both the Recorded Deed of Trust and Plaintiff’s

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Promissory Note as exhibits to its motion to dismiss in Plaintiff’s first case. (Docs. 5-1 &

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5-2 CV10-2221-PHX-NVW).

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The Court will grant the Motion to Dismiss with prejudice because Plaintiff could not

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allege any more facts that would save his “show me the note” claim and amendment is

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therefore futile.

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Accordingly,

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IT IS ORDERED Granting Defendant’s Motion to Strike (Doc. 17).

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IT IS FURTHER ORDERED Granting Defendant’s Motion to Dismiss with

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prejudice (Doc. 7).
DATED this 31st day of January, 2012.

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