Broerman et al v. California Reconveyance Company et al

Filing 22

ORDER granting Defendants' 19 Motion to Dismiss; denying Plaintiffs' 20 Motion to Amend; we will allow plaintiffs another opportunity to file a motion to amend their complaint in order to assert a claim upon which relief can be granted; Plaintiffs' motion to amend the complaint must be filed no later than 14 days after the filing of this order, or this action will be dismissed with prejudice. Signed by Judge Frederick J Martone on 3/8/12.(REW)

Download PDF
1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA 8 9 10 11 12 13 14 ) ) ) Plaintiffs, ) ) vs. ) ) California Reconveyance Company, et al,) ) ) Defendants. ) ) Kevin Karl Broerman, et al., No. CV-11-1819-PHX-FJM ORDER 15 16 17 18 Before the court is defendants’ motion to dismiss the amended complaint (doc. 19), plaintiffs’ response and motion to amend (doc. 20), and defendants’ reply (doc. 21). 19 We first reject plaintiffs’ suggestion that this motion to dismiss should be converted 20 to a motion for summary judgment under Rule 12(d), Fed. R. Civ. P., because defendants 21 referred to public records in their motion to dismiss. In considering a motion to dismiss, we 22 may take judicial notice of matters of public record outside the pleadings, MGIC Indem. 23 Corp. v. Weisman, 803 F.2d 500, 504 (9th Cir. 1986), as well as those documents referred 24 to in the complaint, whose authenticity no party questions. United States v. Corinthian 25 Colleges, 655 F.3d 984, 999 (9th Cir. 2011). 26 We also note that plaintiffs’ response to the motion to dismiss was filed 7 days late 27 without explanation or request for an extension of time. Plaintiffs are admonished that they 28 must comply with the federal and local rules of civil procedure, notwithstanding their pro se 1 status. 2 On November 23, 2005, plaintiffs borrowed $491,603 from Pulte Mortgage LLC to 3 purchase real estate located in Anthem, Arizona. A deed of trust secures payment of the 4 loan. Motion, ex. A. The deed of trust names MERS as beneficiary and as nominee for Pulte. 5 After the closing, the loan was transferred to the Real Estate Mortgage Investment Conduit 6 Washington Mutual Mortgage Pass-Through Certificates, and Washington Mutual Bank 7 (“WaMu”) became the loan servicer. Motion, ex. B. Subsequently, JPMorgan Chase Bank 8 acquired certain assets and assumed certain liabilities of WaMu from the Federal Deposit 9 Insurance Corporation acting as receiver, at which time Chase became the loan servicer as 10 successor in interest to WaMu. 11 At an undisclosed time, Chase initiated foreclosure proceedings. On June 14, 2011, 12 MERS assigned its beneficial interest in the deed of trust to U.S. Bank, and U.S. Bank filed 13 a Notice of Substitution of Trustee, appointing CRC as the successor trustee (“Notice of 14 Substitution”). Motion, ex. D. On the same day, defendant California Reconveyance 15 Company (“CRC”) recorded a Notice of Trustee’s Sale. Thereafter, on August 12, 2011, 16 CRC recorded a Cancellation of Notice of Sale, which cancelled the sale notice. It appears 17 that, to date, CRC has not recorded a new Notice of Trustee’s Sale. 18 Plaintiffs assert one count in their amended complaint–a claim to quiet title. They 19 allege that CRC improperly initiated non-judicial foreclosure proceedings because it has not 20 established that it has “the requisite legal standing to institute foreclosure,” has “failed to 21 provide evidence or even take the position that it is the holder of all rights under the Note,” 22 has “failed to demonstrate that it . . . is the party with the true ownership interest in the 23 Mortgage,” and has not “demonstrated that it has suffered actual or threatened injury as a 24 consequence of any default.” Amended Complaint ¶¶ 7-10. 25 Plaintiffs’ theory that CRC, or the other defendants, must demonstrate that they hold 26 rights under the Note before initiating foreclosure proceedings has been consistently rejected 27 by Arizona courts. See, e.g., Hogan v. Washington Mut. Bank, 227 Ariz. 561, ___, 261 P.3d 28 445, 448 (Ct. App. 2011) (rejecting the “show me the note” theory and holding that -2- 1 Arizona’s non-judicial foreclosure statute does not require presentation of the original note 2 before commencing foreclosure proceedings). 3 Moreover, to quiet title, a plaintiff must allege that he possesses title to the subject 4 property, that the defendant claims an interest adverse to his, and that it would be inequitable 5 to let defendant’s interest stand. It is well established that quiet title is not a remedy available 6 to a plaintiff until the underlying debt is paid or tendered. Farrell v. West, 57 Ariz. 490, 491, 7 114 P.2d 910, 911 (1941). Plaintiffs do not allege that they have tendered, or are able to 8 tender, the outstanding balance on the Loan. Therefore, the remedy of quiet title is not 9 available, and plaintiffs’ amended complaint fails to state a claim upon which relief can be 10 granted. 11 Plaintiffs request that in the event we find pleading deficiencies that they be allowed 12 to file an amended complaint. But plaintiffs wholly fail to comply with LRCiv 15.1, which 13 requires, among other things, that a party seeking to amend a pleading attach a copy of the 14 proposed amended pleading as an exhibit to the motion. Therefore, the motion to amend is 15 denied (doc. 20). 16 IT IS ORDERED GRANTING defendants’ motion to dismiss (doc. 19). 17 IT IS FURTHER ORDERED DENYING plaintiffs’ motion to amend (doc. 20). 18 Plaintiffs have already filed an amended complaint, which continues to be deficient. 19 Nevertheless, we will allow plaintiffs another opportunity to file a motion to amend their 20 complaint in order to assert a claim upon which relief can be granted. We caution plaintiffs 21 that any filings with this court must comply with Rule 11(b), Fed. R. Civ. P., or risk being 22 subject to sanctions. Plaintiffs’ motion to amend the complaint must be filed no later than 23 14 days after the filing of this order, or this action will be dismissed with prejudice. 24 DATED this 8th day of March, 2012. 25 26 27 28 -3-

Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.

Why Is My Information Online?