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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1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA 8 9 Ramona Robinson No. CV-12-00142-PHX-DGC Plaintiff, 10 11 v. 12 ORDER Yvonne J. Miller and John Doe Wheeler, her husband; et al., 13 Defendants. 14 15 Defendants Mortgage Electronic Registration Systems, Inc. (“MERS”), Ocwen 16 Loan Servicing, LLC, the Bank of New York Mellon, and Saxon Mortgage Services have 17 filed a motion to dismiss Plaintiff’s complaint, and Plaintiff has filed a response. 18 Docs. 15, 19. No party has requested oral argument. For the reasons set forth below, the 19 Court will grant the motion. 20 I. Procedural History. 21 On February 24, 2011, Plaintiff filed an action in state court against a number of 22 defendants, alleging, inter alia, breach of contract and wrongful foreclosure stemming 23 from the January 7, 2011 foreclosure sale of her home. 24 Doc. 1-2. Defendants removed the action to federal court based on federal subject matter 25 and supplemental jurisdiction because Plaintiff’s allegations that Defendants violated the 26 federal Home Affordable Modification Program (“HAMP”) permeated the complaint. 27 Id., Doc. 1. The action was assigned to Judge Susan R. Bolton. 28 CV-11-00559-PHX-SRB, On March 31, 2011, Defendants MERS, Ocwen Loan Servicing, LLC, and the 1 Bank of New York Mellon filed a motion to dismiss, and Plaintiff failed to respond. Id., 2 Doc. 9; see id., Doc. 20. After advising Plaintiff that the court would deem the motion 3 unopposed and subject to being granted under Local Rule of Civil Procedure 7.2(i) and 4 Federal Rule of Civil Procedure 41(b) if Plaintiff did not respond by April 18, 2011, 5 Judge Bolton dismissed the complaint as to the moving Defendants on May 4, 2011. Id., 6 Docs. 10, 20.1 Judge Bolton subsequently dismissed the complaint as to Saxon Mortgage 7 Services due to Plaintiff’s failure to serve, and a final judgment was entered in favor of 8 all Defendants on July 6, 2011. Id., Doc. 25. 9 On October 27, 2011, Plaintiff filed a second complaint in state court, alleging 10 three claims: (1) breach of contract (note and deed of trust), (2) breach of covenant of 11 good faith and fair dealing, and (3) wrongful foreclosure, each stemming from the same 12 foreclosure sale. Doc. 1-1. The complaint largely follows Plaintiff’s previous complaint 13 word-for-word. Defendants removed the new complaint to federal court on the basis of 14 diversity jurisdiction on January 20, 2012. Doc. 1. Defendant J. P. Morgan Chase Bank 15 filed a motion to dismiss, which the Court granted on April 25, 2012. Doc. 4; see Doc. 16 10. Defendants MERS, Ocwen Loan Servicing, LLC, the Bank of New York Mellon, 17 and Saxon Mortgage Services filed the instant motion to dismiss on April 26, 2002. 18 Defendants argue that Plaintiff’s claims are precluded by res judicata in light of 19 the final judgment entered in the prior lawsuit. Doc. 15 at 3, 5-7. Defendants also argue 20 that the claims are barred by A.R.S. § 33-811(C), are based on invalid legal conclusions, 21 and fail to set forth sufficient elements to state a claim. Id. at 3, 7-12. 22 II. Legal Standard. 23 When analyzing a complaint for failure to state a claim under Rule 12(b)(6), the 24 well-pled factual allegations are taken as true and construed in the light most favorable to 25 the nonmoving party. Cousins v. Lockyer, 568 F.3d 1063, 1067 (9th Cir. 2009) (citation 26 omitted). Legal conclusions couched as factual allegations are not entitled to the 27 1 28 Two other defendants filed motions to which Plaintiff did not respond and were likewise dismissed. See Docs. 21, 22. -2- 1 assumption of truth, Ashcroft v. Iqbal, 556 U.S. 662, 680 (2009), and therefore are 2 insufficient to defeat a motion to dismiss for failure to state a claim, In re Cutera Sec. 3 Litig., 610 F.3d 1103, 1108 (9th Cir. 2010). To avoid a Rule 12(b)(6) dismissal, the 4 complaint must plead enough facts to state a claim to relief that is plausible on its face. 5 Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). This plausibility standard “is not 6 akin to a ‘probability requirement,’ but it asks for more than a sheer possibility that a 7 defendant has acted unlawfully.” Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 8 556). “[W]here the well-pleaded facts do not permit the court to infer more than the mere 9 possibility of misconduct, the complaint has alleged – but it has not ‘show[n]’ – ‘that the 10 pleader is entitled to relief.’” Id. at 679 (quoting Fed. R. Civ. P. 8(a)(2)). 11 III. Discussion. 12 Where federal court jurisdiction is based on diversity of citizenship, the res 13 judicata law of Arizona applies. See Priest v. American Smelting & Refining Co., 409 14 F.2d 1229, 1231 (9th Cir. 1969); Gramm v. Lincoln, 257 F.2d 250, 255 n.6 (9th Cir. 15 1958). In Arizona, res judicata will preclude a claim when a former judgment on the 16 merits was rendered by a court of competent jurisdiction and the matter now in issue 17 between the same parties was, or might have been, determined in the former action. Hall 18 v. Lalli, 977 P.2d 776, 779 (Ariz. 1999); accord Blonder-Tongue Labs. v. Univ. of Ill. 19 Found., 402 U.S. 313, 323-24 (1971). Dismissals for failure to prosecute or to comply 20 with the rules or order of any court, other than a dismissal for lack of jurisdiction, 21 improper venue, or failure to join a party, constitute a judgment on the merits. Ariz. R. 22 Civ. P. 41(b); see Hoff v. City of Mesa, 344 P.2d 1013, 1015 (Ariz. 1959). 23 Defendants argue that the current claims against them were either brought or could 24 have been brought in the prior action. The prior action named the same Defendants and 25 involved the same foreclosure. Plaintiff previously asserted claims for breach of the note, 26 deed of trust, and loan modification agreement; breach of the covenant of good faith and 27 fair dealing; and wrongful foreclosure – the same claims asserted against Defendants in 28 this case. Compare CV-11-00559-PHX-SRB, Doc. 1-2, ¶¶ 69, 71, 74; 77-78 with Doc. 1-3- 1 1, ¶¶ 68, 73, 74, 79-80. 2 Plaintiff contends that her claims are not the same because the thrust of her first 3 complaint was Defendants’ failure to comply with HAMP, and it has since become clear 4 that a mortgage borrower has no private right of action under that program. Doc. 19 at 6. 5 But merely eliminating the references to HAMP in the complaint does not change the fact 6 that Plaintiff asserts breaches of the same note and deed of trust that were the subject of 7 the earlier case, and that she asserts wrongful foreclosure with respect to the same sale. 8 Plaintiff has not alleged any claims she did not or could not have alleged in the earlier 9 complaint.2 10 Plaintiff argues that the complaint makes new allegations such as “robosigning” 11 and fraud that she was unable to discover earlier because Defendants failed to comply 12 with her discovery requests. Doc. 19 at 7. The complaint alleges these deficiencies in 13 the transfers of Plaintiff’s mortgage documents and the fraudulent signing of the notice of 14 trustee sale. See, e.g., Doc. 1-1, ¶¶ 23, 24, 32, 38, 44, 49, 51. As Defendants argue, 15 however, Plaintiff has not shown that these alleged deficiencies caused her damages. 16 Doc. 15 at 10. Moreover, borrowers who are not party to the assignment of their 17 mortgage – and whose rights are not affected by it – lack standing to bring a claim. Id.; 18 see In Re Mortgage Electronic Registration Sys. (MERS) Litigation, MDL No. 09-2119- 19 JAT, 2011 WL 4550189 at *5 (D. Ariz. Oct. 3, 2011). Thus, the new allegations are 20 insufficient to support a claim under any of the legal theories asserted. 21 22 23 24 25 26 2 27 28 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. -4- 1 IT IS ORDERED that Defendants’ MERS, Ocwen Loan Servicing, LLC, the 2 Bank of New York Mellon, and Saxon Mortgage Services motion to dismiss (Doc. 15) is 3 granted. 4 Dated this 20th day of August, 2012. 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -5-

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