Robinson et al v. Bank of America NA et al
Filing
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ORDER granting 10 Defendants' Motion to Dismiss and denying as moot 12 Plaintiff's Motion for a Rule 16 Conference. Signed by Judge James A Teilborg on 5/1/12.(LSP)
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IN THE UNITED STATES DISTRICT COURT
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FOR THE DISTRICT OF ARIZONA
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Plaintiffs,
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vs.
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BAC Home Loans Servicing, LP; et al., )
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Defendants.
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Van M. Robinson; Polly R. Robinson,
No. CV11-1920-PHX-JAT
ORDER
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Currently pending before the Court are Defendants’ Motion to Dismiss (Doc. 10) and
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Plaintiffs’ Motion for a Rule 16 Conference (Doc. 12). The Court now rules on the motions.
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I.
BACKGROUND
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Plaintiffs Van and Polly Robinson refinanced their home loan in March of 2007. In
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connection with the refinance, they executed a Deed of Trust and a Promissory Note. The
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Promissory Note evidences a loan of $1,100,00 from On Q Financial Inc. (Doc. 1-1), which
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is secured by the property at 19684 North 96th Place, Scottsdale, Arizona 85255, as
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evidenced by the Deed of Trust (Id.).
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Plaintiffs claim that they are now “underwater” on their home loan and owe more than
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the property is worth. Plaintiffs further allege that because of the economy they have not
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been able to make their mortgage payments. Despite acknowledging their failure to pay,
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Plaintiffs seek to prevent Defendants from foreclosing on their home.
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Plaintiffs filed their current case in Arizona state court on September 2, 2011.
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Plaintiffs’ Complaint denominates three separate causes of action for declaratory relief,
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injunctive relief, and “false recordations.” Plaintiffs also make many of the arguments
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typically seen in mortgage foreclosure litigation.
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Defendants removed to this Court on September 29, 2011. (Doc. 1.) They filed their
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Motion to Dismiss on October 24, 2011. (Doc. 10.) They argue pursuant to Federal Rule
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of Civil Procedure 12(b)(6) that Plaintiffs have failed to state a claim.
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II.
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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).
LEGAL STANDARD
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To survive a 12(b)(6) motion for failure to state a claim, a complaint must meet the
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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-2-
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unlawfully-harmed-me accusation.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (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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556 U.S. at 678. Facial plausibility exists if the pleader pleads factual content that allows the
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court to draw the reasonable inference that the defendant is liable for the misconduct alleged.
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Id. Plausibility does not equal “probability,” but plausibility requires more than a sheer
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possibility that a defendant has acted unlawfully. Id. “Where a complaint pleads facts that
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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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III.
ANALYSIS AND CONCLUSION
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A.
First Cause of Action for Declaratory Relief
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Plaintiffs first cause of action for declaratory relief lists different provisions of the
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Arizona Uniform Declaratory Judgments Act. This claim seems to indicate that Plaintiffs
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would like the Court to make declarations regarding the validity and rights accorded by the
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contracts to which Plaintiffs are a party.
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The only contracts to which Plaintiffs are a party are the Deed of Trust and the
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Promissory Note. But Plaintiffs do not argue that either of these contracts is void. Nor do
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Plaintiffs deny that they are in default of those contracts.
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In reviewing the items that Plaintiffs seek the Court to declare, the Court finds that the
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requested declarations rely on unsupportable legal arguments. Plaintiffs make holder in due
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course arguments and standing arguments that this Court previously has rejected. The Court
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cannot make declarations based on invalid and rejected legal theories. In re MERS Litig.,
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744 F.Supp.2d 1018, 1032 (D. Ariz. 2010)(When all other claims are dismissed, declaratory
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or injunctive relief that is premised on those claims likewise must fail); see also Reader v.
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BAC Home Loan Servicing LP, 2012 WL 125977 *4 (D. Ariz. January 17, 2012)(“Finally,
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plaintiff seeks declaratory relief under A.R.S. §12-1831, but her requested declarations hinge
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on meritless theories.”). The Court therefore finds that Plaintiffs fail to state a claim in their
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first cause of action.
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B.
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A request for injunctive relief is not a separate cause of action, but is a request for
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equitable relief. See City of Tucson v. Clear Channel Outdoor, Inc., 181 P.3d 219, 234 (Ariz.
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Ct. App. 2008). Plaintiffs did not file a separate motion seeking a preliminary injunction, so
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the Court does not need to address the factors weighed in ruling on a motion for preliminary
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injunction. Because their second cause of action is not really a cause of action at all, but a
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request for relief, the Court finds that Plaintiffs have failed to state a claim in their second
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cause of action.
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C.
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In their third cause of action, Plaintiffs attempt to state a claim under ARS §33-420
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regarding the Assignment, Substitution of Trustee, and Notice of Sale. But none of those
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documents is a document purporting to create an interest in real property, as is required to
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state a claim under §33-420. Schayes v. Orion Fin. Group, Inc., 2011 WL 3156303 *6 (D.
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Ariz. July 27, 2011). Also, to the extent this cause of action attempts to argue that MERS
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cannot act as a beneficiary under a Deed of Trust or is somehow a fraudulent straw man, this
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Court has rejected those arguments. See e.g., Blau v. America’s Servicing Co., 2009 WL
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3174823 *7-8 (D. Ariz. September 29, 2009); Cervantes v. Countrywide Home Loans, Inc.,
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2009 WL 3157160 *10-11 (D. Ariz. September 24, 2009). The Court therefore finds that the
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Plaintiffs have failed to state a claim in their third cause of action.
Second Cause of Action for Injunctive Relief
Third Cause of Action for False Recordations
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D.
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Plaintiffs make several arguments in the body of their Complaint that they do not
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allege as separate causes of action. As noted above, Plaintiffs argue that MERS cannot act
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as a valid beneficiary of the Deed of Trust and therefore cannot assign any interests. This
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Court repeatedly has rejected arguments regarding the validity of MERS and its ability to act
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as beneficiary and nominee. See, e.g., Warren v. Sierra Pac. Mortg. Servs. Inc., 2011 WL
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1526957 *5 (D. Ariz. April 22, 2011).
Miscellaneous Arguments
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Plaintiffs also argue that none of the Defendants is a holder in due course entitled to
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enforce the promissory note. But Plaintiffs are not attempting to enjoin enforcement of the
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note, they are attempting to enjoin a trustee sale of their home. A trustee sale is conducted
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pursuant to the authority granted by a borrower in the deed of trust. And a deed of trust is
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not a negotiable instrument covered by Arizona’s Uniform Commercial Code. Hogan v.
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Washington Mut. Bank, N.A., 261 P.3d 445, 449; see also Bridgeman v. CitiMortgage Inc.,
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2011 WL 3880829 *2 (D. Ariz. September 2, 2011)(distinguishing In re Veal, 450 B.R. 897
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(9th Cir. BAP 2011), which applied Illinois law and concerned issues of standing to assert
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proofs of claim in a bankruptcy proceeding)). A non-judicial foreclosure of a deed of trust
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in Arizona therefore does not need to comply with the UCC. Hogan, 261 P.3d at 448-49; see
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also Kuc v. Bank of Am., 2012 WL 1268126 *2 (D. Ariz. April 16, 2012)(“But in Arizona,
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neither the presentation of the original Note nor proof that a party is entitled to enforce an
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instrument is needed to conduct a non-judicial foreclosure.”)(citing Deissner v. Mortg. Elec.
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Registration Sys., 618 F.Supp.2d 1184, 1187-88 (D. Ariz. 2009)).
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Plaintiffs also make standing and “real party in interest” arguments. They claim that
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Defendants do not have standing to conduct a foreclosure sale and are not the real parties in
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interest. But standing and real party in interest requirements do not apply to non-judicial
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proceedings like a trustee sale. Pitre v. BANA CWB CIG HFI 1st Liens, 2011 WL 6153651
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*5 (D. Ariz. December 12, 2011); AOM Group v. Wachovia Mortg., 2010 WL 3190677 *3
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(D. Ariz. August 12, 2010)(“Plaintiff also asserts that defendants lack standing and are not
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the real parties in interest. But, as defendants point out, these requirements apply to a
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plaintiff who invokes the judicial process and not to a defendant.”).
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Plaintiffs further argue that the Promissory Note and Deed of Trust were
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impermissibly separated when the Note was transferred through MERS and securitized. This
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Court repeatedly has rejected all variations of the splitting of the note and deed argument.
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See, e.g., Graham-Miller v. Nationstar Mortg. LLC, 2012 WL 404613 *3 (D. Ariz. February
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8, 2012); Gullion v. Tiffany & Bosco P.A., 2012 WL 260040 *3 (D. Ariz. January 30,
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2012)(rejecting Plaintiff’s argument that the defendant could not foreclose because the note
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was separated from the deed of trust when it was securitized)(citing Cervantes v.
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Countrywide Home Loans Inc., 656 F.3d 1034, 1044 (9th Cir. 2011)(“Even if we were to
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accept the plaintiffs’ premises that . . . the note is split from the deed, we would reject the
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plaintiffs’ conclusion that, as a necessary consequence, no party has the power to
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foreclose.”)).
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Finally, Plaintiffs’ allegations regarding the Pooling and Servicing Agreement must
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fail. Plaintiffs are not parties to the Pooling and Servicing Agreement, nor are they third
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party beneficiaries of that Agreement. They therefore cannot bring a claim based on the
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Pooling and Servicing Agreement. Kentera v. Fremont Inv. and Loan, 2012 WL 1132760
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*4 (D. Ariz. April 4, 2012)(rejecting a claim based on a Pooling and Servicing Agreement
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because the plaintiffs were not a party to that agreement); Schultz v. BAC Home Loans
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Servicing, LP, 2011 WL 3684481 *2 (D. Ariz. August 23, 2011)(same).
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Plaintiffs have failed to articulate a single, legally supported claim for relief. Because
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all of their attempted legal theories fail as a matter of law, the Court cannot give them
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declaratory or injunctive relief. The Court therefore will grant Defendants’ Motion to
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Dismiss.
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Plaintiffs have not sought leave to amend their Complaint. Nonetheless, the Court
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normally should not grant a motion to dismiss for failure to state a claim without giving leave
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to amend, even if leave to amend is not requested. Lopez v. Smith, 203 F.3d 1122, 1127 (9th
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Cir. 2000). But the Court need not grant leave to amend if amendment would be futile.
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Cervantes, 656 F.3d at 1043. Plaintiffs’ Complaint contains numerous mortgage foreclosure
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arguments that have been rejected time and time again for failure to state a claim. The
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allegation of additional facts in support of these theories could not possibly save the theories.
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Because amendment would be futile, the Court will grant the motion to dismiss with
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prejudice and without leave to amend. Lopez, 203 F.3d at 1127 (stating that courts do not
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have to grant leave to amend if the complaint could not possibly be cured by the allegation
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of other facts).
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Accordingly,
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IT IS ORDERED Granting Defendants’ Motion to Dismiss (Doc. 10).
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IT IS FURTHER ORDERED Denying as moot Plaintiffs’ Motion for a Rule 16
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Conference (Doc. 12).
DATED this 1st day of May, 2012.
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