Robinson v. Wheeler et al

Filing 20

ORDER that Defendants' MERS, Ocwen Loan Servicing, LLC, the Bank of New York Mellon, and Saxon Mortgage Services motion to dismiss (Doc. 15 ) is granted. Signed by Judge David G Campbell on 8/20/2012.(KMG)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE DISTRICT OF ARIZONA

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Ramona Robinson

No. CV-12-00142-PHX-DGC
Plaintiff,

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v.

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ORDER

Yvonne J. Miller and John Doe Wheeler,
her husband; et al.,

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Defendants.

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Defendants Mortgage Electronic Registration Systems, Inc. (“MERS”), Ocwen

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Loan Servicing, LLC, the Bank of New York Mellon, and Saxon Mortgage Services have

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filed a motion to dismiss Plaintiff’s complaint, and Plaintiff has filed a response.

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Docs. 15, 19. No party has requested oral argument. For the reasons set forth below, the

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Court will grant the motion.

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I.

Procedural History.

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On February 24, 2011, Plaintiff filed an action in state court against a number of

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defendants, alleging, inter alia, breach of contract and wrongful foreclosure stemming

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from the January 7, 2011 foreclosure sale of her home.

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Doc. 1-2. Defendants removed the action to federal court based on federal subject matter

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and supplemental jurisdiction because Plaintiff’s allegations that Defendants violated the

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federal Home Affordable Modification Program (“HAMP”) permeated the complaint.

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Id., Doc. 1. The action was assigned to Judge Susan R. Bolton.

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CV-11-00559-PHX-SRB,

On March 31, 2011, Defendants MERS, Ocwen Loan Servicing, LLC, and the

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Bank of New York Mellon filed a motion to dismiss, and Plaintiff failed to respond. Id.,

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Doc. 9; see id., Doc. 20. After advising Plaintiff that the court would deem the motion

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unopposed and subject to being granted under Local Rule of Civil Procedure 7.2(i) and

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Federal Rule of Civil Procedure 41(b) if Plaintiff did not respond by April 18, 2011,

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Judge Bolton dismissed the complaint as to the moving Defendants on May 4, 2011. Id.,

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Docs. 10, 20.1 Judge Bolton subsequently dismissed the complaint as to Saxon Mortgage

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Services due to Plaintiff’s failure to serve, and a final judgment was entered in favor of

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all Defendants on July 6, 2011. Id., Doc. 25.

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On October 27, 2011, Plaintiff filed a second complaint in state court, alleging

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three claims: (1) breach of contract (note and deed of trust), (2) breach of covenant of

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good faith and fair dealing, and (3) wrongful foreclosure, each stemming from the same

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foreclosure sale. Doc. 1-1. The complaint largely follows Plaintiff’s previous complaint

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word-for-word. Defendants removed the new complaint to federal court on the basis of

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diversity jurisdiction on January 20, 2012. Doc. 1. Defendant J. P. Morgan Chase Bank

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filed a motion to dismiss, which the Court granted on April 25, 2012. Doc. 4; see Doc.

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10. Defendants MERS, Ocwen Loan Servicing, LLC, the Bank of New York Mellon,

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and Saxon Mortgage Services filed the instant motion to dismiss on April 26, 2002.

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Defendants argue that Plaintiff’s claims are precluded by res judicata in light of

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the final judgment entered in the prior lawsuit. Doc. 15 at 3, 5-7. Defendants also argue

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that the claims are barred by A.R.S. § 33-811(C), are based on invalid legal conclusions,

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and fail to set forth sufficient elements to state a claim. Id. at 3, 7-12.

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II.

Legal Standard.

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When analyzing a complaint for failure to state a claim under Rule 12(b)(6), the

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well-pled factual allegations are taken as true and construed in the light most favorable to

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the nonmoving party. Cousins v. Lockyer, 568 F.3d 1063, 1067 (9th Cir. 2009) (citation

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omitted).

Legal conclusions couched as factual allegations are not entitled to the

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Two other defendants filed motions to which Plaintiff did not respond and were
likewise dismissed. See Docs. 21, 22.
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assumption of truth, Ashcroft v. Iqbal, 556 U.S. 662, 680 (2009), and therefore are

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insufficient to defeat a motion to dismiss for failure to state a claim, In re Cutera Sec.

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Litig., 610 F.3d 1103, 1108 (9th Cir. 2010). To avoid a Rule 12(b)(6) dismissal, the

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complaint must plead enough facts to state a claim to relief that is plausible on its face.

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Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). This plausibility standard “is not

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akin to a ‘probability requirement,’ but it asks for more than a sheer possibility that a

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defendant has acted unlawfully.” Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at

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556). “[W]here the well-pleaded facts do not permit the court to infer more than the mere

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possibility of misconduct, the complaint has alleged – but it has not ‘show[n]’ – ‘that the

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pleader is entitled to relief.’” Id. at 679 (quoting Fed. R. Civ. P. 8(a)(2)).

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III.

Discussion.

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Where federal court jurisdiction is based on diversity of citizenship, the res

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judicata law of Arizona applies. See Priest v. American Smelting & Refining Co., 409

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F.2d 1229, 1231 (9th Cir. 1969); Gramm v. Lincoln, 257 F.2d 250, 255 n.6 (9th Cir.

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1958). In Arizona, res judicata will preclude a claim when a former judgment on the

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merits was rendered by a court of competent jurisdiction and the matter now in issue

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between the same parties was, or might have been, determined in the former action. Hall

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v. Lalli, 977 P.2d 776, 779 (Ariz. 1999); accord Blonder-Tongue Labs. v. Univ. of Ill.

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Found., 402 U.S. 313, 323-24 (1971). Dismissals for failure to prosecute or to comply

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with the rules or order of any court, other than a dismissal for lack of jurisdiction,

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improper venue, or failure to join a party, constitute a judgment on the merits. Ariz. R.

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Civ. P. 41(b); see Hoff v. City of Mesa, 344 P.2d 1013, 1015 (Ariz. 1959).

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Defendants argue that the current claims against them were either brought or could

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have been brought in the prior action. The prior action named the same Defendants and

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involved the same foreclosure. Plaintiff previously asserted claims for breach of the note,

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deed of trust, and loan modification agreement; breach of the covenant of good faith and

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fair dealing; and wrongful foreclosure – the same claims asserted against Defendants in

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this case. Compare CV-11-00559-PHX-SRB, Doc. 1-2, ¶¶ 69, 71, 74; 77-78 with Doc. 1-3-

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1, ¶¶ 68, 73, 74, 79-80.

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Plaintiff contends that her claims are not the same because the thrust of her first

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complaint was Defendants’ failure to comply with HAMP, and it has since become clear

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that a mortgage borrower has no private right of action under that program. Doc. 19 at 6.

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But merely eliminating the references to HAMP in the complaint does not change the fact

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that Plaintiff asserts breaches of the same note and deed of trust that were the subject of

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the earlier case, and that she asserts wrongful foreclosure with respect to the same sale.

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Plaintiff has not alleged any claims she did not or could not have alleged in the earlier

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complaint.2

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Plaintiff argues that the complaint makes new allegations such as “robosigning”

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and fraud that she was unable to discover earlier because Defendants failed to comply

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with her discovery requests. Doc. 19 at 7. The complaint alleges these deficiencies in

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the transfers of Plaintiff’s mortgage documents and the fraudulent signing of the notice of

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trustee sale. See, e.g., Doc. 1-1, ¶¶ 23, 24, 32, 38, 44, 49, 51. As Defendants argue,

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however, Plaintiff has not shown that these alleged deficiencies caused her damages.

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Doc. 15 at 10. Moreover, borrowers who are not party to the assignment of their

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mortgage – and whose rights are not affected by it – lack standing to bring a claim. Id.;

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see In Re Mortgage Electronic Registration Sys. (MERS) Litigation, MDL No. 09-2119-

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JAT, 2011 WL 4550189 at *5 (D. Ariz. Oct. 3, 2011). Thus, the new allegations are

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insufficient to support a claim under any of the legal theories asserted.

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As the Court previously discussed in its order granting J. P. Morgan Chase
Bank’s motion to dismiss, Plaintiff’s wrongful foreclosure claim also fails substantively
because Arizona courts do not recognize such a claim, and Plaintiff does not dispute that
she defaulted on her loan payments before her property was sold. See Doc. 10 at 4-5.
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IT IS ORDERED that Defendants’ MERS, Ocwen Loan Servicing, LLC, the

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Bank of New York Mellon, and Saxon Mortgage Services motion to dismiss (Doc. 15) is

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granted.

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Dated this 20th day of August, 2012.

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