William P Aull v. NBS Default Services, LLC et al

Filing 12

MINUTES OF DEFENDANTS MOTION TO DISMISS THE COMPLAINT (Dkt. 7 , filed March 29, 2016) held before Judge Christina A. Snyder: In accordance with the foregoing, defendants motion to dismiss is hereby GRANTED without prejudice. Plaintiff is granted twenty-one (21) days to file an amended complaint addressing the deficiencies identified herein. Failure to do so may result in dismissal with prejudice. IT IS SO ORDERED. Court Reporter: Laura Elias. (clee)

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
"o"

CIVIL MINUTES - GENERAL
Date

May 2, 2016

Case No.

CV16-01951-CAS (RAOx)

Title

WILLIAM P. AULL v. NBS DEFAULT SERVICES, LLC, ET AL;

Present: The Honorable

CHRISTINA A. SNYDER
Laura Elias
Court Reporter / Recorder

Ingrid Valdes
Deputy Clerk

N/A
Tape No.

Attorneys Present for Plaintiffs:

Attorneys Present for Defendants:

William Aull, Pro Se- Not Present

Adam Summerfield

Proceedings:

I.

DEFENDANTS’ MOTION TO DISMISS THE COMPLAINT
(Dkt. 7, filed March 29, 2016)

INTRODUCTION

On January 12, 2016, pro se plaintiff William P. Aull filed the instant action in the
Los Angeles County Superior Court against defendants NBS Default Services, LLC
(“NBS”) and Nationstar Mortgage, LLC (“Nationstar”) (collectively, “defendants”). Dkt.
1, Ex. A (Compl.). The complaint asserts claims for (1) “fraud and forgery,” (2) violation
of “UCC 8-302 Non Bona Fide Purchaser,” (3) a claim in equity to set aside a wrongful
foreclosure sale, and (4) a claim for violations of the Homeowner Bill of Rights,
California Civil Code section 2924, et seq. Id. at 1. On March 22, 2016, defendants
removed this action to federal court, asserting diversity jurisdiction. Dkt. 1.
On March 29, 2016, defendant Nationstar filed the instant motion to dismiss
plaintiff’s complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). Dkt. 7
(“Motion”). On April 19, 2016, defendants filed a notice of non-receipt of opposition to
the instant motion. Dkt. 10. To date, plaintiff has made no filings or submissions in this
action since the matter was removed to federal court.

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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

CV16-01951-CAS (RAOx)

Title

WILLIAM P. AULL v. NBS DEFAULT SERVICES, LLC, ET AL;

II.

Date

May 2, 2016

BACKGROUND1

In April 2007, plaintiff obtained a $1,436,000.00 mortgage loan from non-party
Bank of America, N.A. See Deft’s Request for Judicial Notice (“RJN”), Ex. A, B.2 This
loan was evidenced by a promissory note and secured by a Deed of Trust over real
property located at 2186 Westridge Road, Los Angeles, California 90049 (the
“Property”).
On September 17, 2010, a Notice of Default was recorded in the Los Angeles
County Recorder’s Office stating that plaintiff had failed to make his March 2010
mortgage payment and all subsequent payments, which collectively amounted to over
$60,000.00. Id., Ex. C. One week later, an assignment of plaintiff’s Deed of Trust was
recorded, evidencing an assignment of the beneficial interest in the Deed of Trust from
Bank of America, N.A. to U.S. Bank, N.A., as Trustee for the Certificate-holders of Banc

1

Plaintiff’s complaint contains no succinct recitation of factual allegations, and
those allegations that are pled in the complaint feature inconsistent dates, as well as vague
and conclusory assertions. Indeed, the complaint appears to contain sections that have
been copied wholesale from other unrelated actions. See Compl. at 17 (referring to an
assignment of a deed of trust that took place in 2005, two years before plaintiff obtained
the loan at issue in this action), 22 (referencing the Solano County Recorder’s Office
rather than the Los Angeles County Recorder’s Office), 28 (referring to plaintiff “Marc
Thomas”). Accordingly, the Court’s recitation of the background facts here refers
extensively to the judicially-noticed documents provided by defendants, some of which
are also incorporated by reference in plaintiff’s complaint.
2

Defendants filed a request for judicial notice of certain documents contained in
the official public records of the County of Los Angeles. Dkt. 8. The Court grants
defendants’ request for judicial notice because these documents are in the public record
and their existence is “capable of accurate and ready determination by resort to sources
whose accuracy cannot reasonably be questioned.” Fed. R. Evid. 201(b). Indeed, courts
routinely take judicial notice of these types of documents. See, e.g., Liebelt v. Quality
Loan Serv. Corp., 2011 WL 741056, at *6 n.2 (N.D. Cal. Feb.24, 2011); Reynolds v.
Applegate, 2011 WL 560757, at *1 n.2 (N.D. Cal. Feb.14, 2011); Giordano v. Wachovia
Mortg., 2010 WL 5148428, at *1 n.2 (N.D. Cal. Dec. 14, 2011).
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

CV16-01951-CAS (RAOx)

Date

May 2, 2016

Title

WILLIAM P. AULL v. NBS DEFAULT SERVICES, LLC, ET AL;

of America Funding Corporation Mortgage Pass-Through Certificates, Series 2007-D.
Id., Ex. D.
In August 2011, plaintiff recorded a grant deed, under which he purportedly
assigned 20% of his interest in the Property to himself and three other persons. Id., Ex.
E. This assignment was dated June 5, 2009, although the notarization was dated April 9,
2011. Id. In November 2011, plaintiff again purportedly assigned 20% of his interest in
the Property to another person. Id., Ex. F. This assignment was dated March 11, 2011.
Id.
In February 2013, the September 2010 Notice of Default was rescinded. Id., Ex.
G. In October 2013, a corrective assignment of the Deed of Trust was recorded,
indicating that the beneficial interest in the Deed of Trust was assigned from Bank of
America, N.A. to “Banc of America Funding Corporation Mortgage Pass-Through
Certificates, Series 2007-D, U.S. Bank National Association, as Trustee c/o Specialized
Loan Servicing, LLC.” Id., Ex. H. This assignment expressly stated that it was being
recorded to correct the named assignee on the 2010 assignment. See id.
In August 2014, another Notice of Default was recorded, stating that plaintiff still
had not made his March 2010 payment, or any subsequent payments. Id., Ex. I; see also
Compl., Ex. C. The August 2014 Notice of Default also indicated that the amount in
arrears totaled over $575,000.00. Id. In December 2014, a Notice of Trustee’s sale was
recorded, stating that the total amount plaintiff owed under his Deed of Trust and
promissory note was estimated to be $2,005,458.31. Id., Ex. J. On January 7, 2016, the
Property was sold to a third party at a trustee’s sale, and a trustee’s deed upon sale was
recorded on January 19, 2016. Id., Ex. K.
III.

LEGAL STANDARD

A motion pursuant to Federal Rule of Civil Procedure 12(b)(6) tests the legal
sufficiency of the claims asserted in a complaint. Under this Rule, a district court
properly dismisses a claim if “there is a ‘lack of a cognizable legal theory or the absence
of sufficient facts alleged under a cognizable legal theory.’ ” Conservation Force v.
Salazar, 646 F.3d 1240, 1242 (9th Cir. 2011) (quoting Balisteri v. Pacifica Police Dep’t,
901 F.2d 696, 699 (9th Cir. 1988)). “While a complaint attacked by a Rule 12(b)(6)
motion to dismiss does not need detailed factual allegations, a plaintiff’s obligation to
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

CV16-01951-CAS (RAOx)

Date

May 2, 2016

Title

WILLIAM P. AULL v. NBS DEFAULT SERVICES, LLC, ET AL;

provide the ‘grounds’ of his ‘entitlement to relief’ requires more than labels and
conclusions, and a formulaic recitation of the elements of a cause of action will not do.”
Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). “[F]actual allegations must
be enough to raise a right to relief above the speculative level.” Id.
In considering a motion pursuant to Rule 12(b)(6), a court must accept as true all
material allegations in the complaint, as well as all reasonable inferences to be drawn
from them. Pareto v. FDIC, 139 F.3d 696, 699 (9th Cir. 1998). The complaint must be
read in the light most favorable to the nonmoving party. Sprewell v. Golden State
Warriors, 266 F.3d 979, 988 (9th Cir. 2001). However, “a court considering a motion to
dismiss can choose to begin by identifying pleadings that, because they are no more than
conclusions, are not entitled to the assumption of truth. While legal conclusions can
provide the framework of a complaint, they must be supported by factual allegations.”
Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009); see Moss v. United States Secret Service,
572 F.3d 962, 969 (9th Cir. 2009) (“[F]or a complaint to survive a motion to dismiss, the
non-conclusory ‘factual content,’ and reasonable inferences from that content, must be
plausibly suggestive of a claim entitling the plaintiff to relief.”). Ultimately,
“[d]etermining whether a complaint states a plausible claim for relief will . . . be a
context-specific task that requires the reviewing court to draw on its judicial experience
and common sense.” Iqbal, 556 U.S. at 679.
Unless a court converts a Rule 12(b)(6) motion into a motion for summary
judgment, a court cannot consider material outside of the complaint (e.g., facts presented
in briefs, affidavits, or discovery materials). In re American Cont’l Corp./Lincoln Sav. &
Loan Sec. Litig., 102 F.3d 1524, 1537 (9th Cir. 1996), rev’d on other grounds sub nom
Lexecon, Inc. v. Milberg Weiss Bershad Hynes & Lerach, 523 U.S. 26 (1998). A court
may, however, consider exhibits submitted with or alleged in the complaint and matters
that may be judicially noticed pursuant to Federal Rule of Evidence 201. In re Silicon
Graphics Inc. Sec. Litig., 183 F.3d 970, 986 (9th Cir. 1999); see Lee v. City of Los
Angeles, 250 F.3d 668, 689 (9th Cir. 2001).
As a general rule, leave to amend a complaint which has been dismissed should be
freely granted. Fed. R. Civ. P. 15(a). However, leave to amend may be denied when “the
court determines that the allegation of other facts consistent with the challenged pleading
could not possibly cure the deficiency.” Schreiber Distrib. Co. v. Serv-Well Furniture
Co., 806 F.2d 1393, 1401 (9th Cir. 1986).
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

CV16-01951-CAS (RAOx)

Title

WILLIAM P. AULL v. NBS DEFAULT SERVICES, LLC, ET AL;

II.

Date

May 2, 2016

ANALYSIS
A.

Plaintiff’s Failure to File an Opposition to the Motion to Dismiss

Under Local Rule 7-12, “[t]he failure to file any required document, or the failure
to file it within the deadline, may be deemed consent to the granting or denial of the
motion.” C.D. Cal. L.R. 7–12. See also Ghazali v. Moran, 46 F.3d 52, 53-54 (9th
Cir.1995) (per curiam) (affirming grant of an unopposed motion to dismiss under local
rule by deeming a pro se litigant's failure to oppose as consent to granting the motion);
Holt v. I.R.S., 231 Fed. App’x. 557, at *1 (9th Cir. 2007) (same; and rejecting a pro se
litigant’s contention that the district court should have warned her of the consequences of
failing to file an opposition). Accordingly, plaintiff’s failure to file an opposition to the
instant motion to dismiss provides independent grounds for granting the motion.
B.

The Claims Asserted in the Operative Complaint

The operative complaint in this action asserts four claims for relief. For the
reasons explained in the discussion that follows, the Court dismisses plaintiff’s claims
without prejudice.3

3

Plaintiff also makes various general allegations in his complaint, seemingly
untied to any particular claim, that do not support plaintiff’s claims for relief. For
example, although plaintiff alleges that the assignment of his Deed of Trust is void
because it occurred without a corresponding publicly-recorded assignment of his
promissory note, this argument fails because assignments or transfers of promissory notes
need not be recorded. Herrera v. Fed. Nat. Mortgage Assn., 205 Cal. App. 4th 1495,
1506 (2012) (“[S]ince the assignment of the debt (the promissory note), as opposed to the
security (the DOT), commonly is not recorded, the lender could have assigned the note to
the beneficiary in an unrecorded document not disclosed to plaintiffs.”), abrogated on
other grounds by Yvanova v. New Century Mortgage Corp., 62 Cal. 4th 919 (2016).
Accordingly, it does not follow that any assignment of the Deed of Trust is rendered void
without a corresponding recorded assignment of the promissory note. See id. Similarly,
to the extent plaintiff is alleging that the transfer of his Deed of Trust without his
promissory note rendered any documents or transfers void, see Compl. at 5, this argument
also fails as a matter of law. See, e.g., Lane v. Vitek Real Estate Indus. Group, 713 F.
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

CV16-01951-CAS (RAOx)

Title

WILLIAM P. AULL v. NBS DEFAULT SERVICES, LLC, ET AL;

1.

Date

May 2, 2016

Claim for “Forgery and Fraud”

Plaintiff’s first claim is for “forgery and fraud.” Compl. at 17. While plaintiff
alleges that the assignment of the Deed of Trust “contained false statements,” plaintiff
fails to identify any particular statements as actually being false. “Although ‘a
well-pleaded complaint may proceed even if it strikes a savvy judge that actual proof is
improbable,” plaintiff must include sufficient ‘factual enhancement’ to cross ‘the line
between possibility and plausibility.’ ” Eclectic Properties E., LLC v. Marcus &
Millichap Co., 751 F.3d 990, 995 (9th Cir. 2014) (quoting Twombly, 550 U.S. at
556-57). Plaintiff’s complaint contains little such factual enhancement regarding
defendants’ alleged fraud, relying instead upon generalized assertions, “legal
conclusions,” and “threadbare recitals of a cause of action.” Iqbal, 556 U.S. at 678
(citation omitted); see also Twombly, 550 U.S. at 555 (noting Federal Rule of Civil
Procedure 8(a)(2) requires “more than labels and conclusions” and that “[f]actual
allegations must be enough to raise a right to relief above a speculative level”).4
Plaintiff’s claim for fraud is accordingly dismissed without prejudice.
2.

Claim for “Violation of UCC 8-302”

Plaintiff’s second claim is for violation of Article 8 of the Uniform Commercial
Code. In this portion of plaintiff’s complaint, plaintiff appears to allege that the trustee’s
Supp. 2d 1092, 1098-99 (E.D. Cal. 2010) (party enforcing secured obligation is not
required to have a beneficial interest in, or physical possession of, the promissory note);
Debrunner v. Deutsche Bank Nat’l Trust Co., 204 Cal. App. 21 4th 433, 440-42 (2012)
(foreclosing party need not possess promissory note).
4

In attempting to assert a claim for fraud, plaintiff also cites to provisions of the
Uniform Commercial Code (UCC) detailing the requirements for enforceability of
security interests. Id. at 18. However, the UCC “does not apply to nonjudicial
foreclosures under deeds of trust,” because the “comprehensive statutory framework
established [by the California Civil Code] is intended to be exhaustive.” Aguirre v. CalWestern Reconveyance Corp., No. 11-6911 2012 WL 273753 (C.D. Cal. Jan 30, 2012).
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

CV16-01951-CAS (RAOx)

Date

May 2, 2016

Title

WILLIAM P. AULL v. NBS DEFAULT SERVICES, LLC, ET AL;

sale is void because the foreclosing entity lacked possession of the note and thereby ran
afoul of section 2932.5 of the California Civil Code. Compl., at 22-23. Plaintiff further
alleges that these purported errors rendered the transfer of his loan and/or Deed of Trust
invalid under Article 8 of the UCC. Id. at 23-24. Both of these contentions fail.
First, “California law does not require possession of the note as a precondition to a
non judicial foreclosure under a deed of trust.” Pagtalunan v. Reunion Mortg., Inc., No
09-162 2009 WL 961995 (N.D. Cal. April 8, 2009). Second, Section 2932.5 of the
California Civil Code dictates that only assignments of mortgages––not deeds of
trust––must be recorded. See Cal. Civ. Code§ 2932.5; Haynes v. EMC Mortgage Corp.,
205 Cal. App. 4th 329, 335-36 (2012) (noting that section 2932.5 “by its plain terms,
does not apply to deeds of trust”). Finally, and most importantly here, plaintiff’s claim
for “violation of UCC 8-302” must fail because Article 8 of the Uniform Commercial
Code covers investment securities—not loans or deeds of trust. See UCC § 8-102;
Aguirre v. Cal-Western Reconveyance Corp., No. 11-6911 2012 WL 273753 (C.D. Cal.
Jan 30, 2012).
Accordingly, plaintiff’s claim for “violation of UCC 8-302” is dismissed without
prejudice.
3.

Claim to Set Aside the Foreclosure Sale

Plaintiff’s third claim is a claim in equity to set aside the foreclosure sale. See
Compl. at 24-25. “After a nonjudicial foreclosure sale has been completed, the
traditional method by which the sale is challenged is a suit in equity to set aside the
trustee’s sale.” Lona v. Citibank, N.A., 202 Cal.App.4th 89, 103 (2011). Elements of
this equitable claim are: “(1) the trustee or mortgagee caused an illegal, fraudulent, or
willfully oppressive sale of real property pursuant to a power of sale in a mortgage deed
or trust; (2) the party attacking the sale (usually but not always the trustor or mortgagor)
was prejudiced or harmed; and (3) in cases where the trustor or mortgagor challenges the
sale, the trustor or mortgagor tendered the amount of the secured indebtedness or was
excused from tendering.” Id. at 104. “Justifications for setting aside a trustee’s sale
[under the first element] . . . include the trustee’s or the beneficiary’s failure to comply
with the statutory procedural requirements for the notice or conduct of the sale.” Id.

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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

CV16-01951-CAS (RAOx)

Date

May 2, 2016

Title

WILLIAM P. AULL v. NBS DEFAULT SERVICES, LLC, ET AL;

However, “under California law, ‘[a] valid and viable tender of payment of the
indebtedness owing is essential to an action to cancel a voidable sale under a deed of
trust.’” Agbabiaka v. HSBC Bank USA Nat. Association, 2010 WL 1609974, *6 (N.D.
Cal. Apr. 20, 2010) (quoting Karlsen v. American Savings and Loan Assoc., 15
Cal.App.3d 112, 117-18 (1971)); see also Lester v. J.P. Morgan Chase Bank, 926
F.Supp.2d 1081, 1092 (N.D. Cal.2013) (“Generally, the ‘tender rule’ applies to claims to
set aside a trustee’s sale for procedural irregularities or alleged deficiencies in the sale
notice”). “The rationale behind the rule is that if [the borrower] could not have redeemed
the property had the sale procedures been proper, any irregularities in the sale did not
result in damages to the [borrower].” Lona, 202 Cal. App. 4th at 112. Accordingly, the
tender rule prevents “a court from uselessly setting aside a foreclosure sale on a technical
ground when the party making the challenge has not established his ability to purchase
the property.” Williams v. Countrywide Home Loans, 1999 WL 740375, *2 (N.D. Cal.
Sept.15, 1999).
Here, plaintiff has failed sufficiently to plead that he has tendered the amount of
his indebtedness, as required for him to maintain a claim. Stebley v. Litton Loan
Servicing, LLP, 202 Cal. App. 4th 522, 526 (2011) (“A full tender must be made to set
aside a foreclosure sale, based on equitable principles.”); see also Hernandez v. Select
Portfolio, Inc., 2015 WL 3914741, at *11 (C.D. Cal. June 25, 2015) (“Allegations
concerning tender must go beyond mere conclusory assertions that plaintiff has offered to
tender the amount of his or her indebtedness.”).
Accordingly, plaintiff’s claim in equity to set aside the non-judicial foreclosure
sale of the Property is dismissed without prejudice.
4.

Claim for Violation of California Civil Code Section 2924

Plaintiff’s final claim asserts violations of the California Homeowner Bill of
Rights, California Civil Code section 2924, et seq. Compl. at 25. In this section of the
complaint, plaintiff alleges that between October 2015 and December 2015, he sent a
“Completed Loan modification packet” to defendants, and that defendant Nationstar
allegedly responded on November 1, 2015 to inform plaintiff that his loan modification
was under review. Id. On December 15, 2015, plaintiff purportedly requested a

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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

CV16-01951-CAS (RAOx)

Date

May 2, 2016

Title

WILLIAM P. AULL v. NBS DEFAULT SERVICES, LLC, ET AL;

postponement of the foreclosure sale, which Nationstar allegedly said it would consider.
Id. Nonetheless, the foreclosure sale proceeded to take place on January 7, 2016. Id.
Ultimately, however, plaintiff fails to state a claim under California Civil Code
section 2924 because the complaint “fail[s] to allege the specific provision of § 2924 that
Defendants violated.” Campos v. Bank of Am., Inc., No. C 11-0431SBA, 2012 WL
2862603, at *4 (N.D. Cal. July 11, 2012); see Kelley v. Mortgage Electronic Registration
Sys., Inc., 642 F.Supp.2d 1048, 1057 (N.D.Cal.2009) (dismissing § 2924 claim because
plaintiff failed to identify provision of nonjudicial foreclosure statute that defendant
violated); Nissim v. Wells Fargo Bank, N.A., No. C 12-1201 CW, 2013 WL 192903, at
*10 (N.D. Cal. Jan. 17, 2013) (dismissing complaint and granting plaintiff leave to amend
“to identify the particular subsection of section 2924 that he alleges Defendants have
violated”).
Accordingly, plaintiff’s fourth claim is dismissed without prejudice.
III.

CONCLUSION

In accordance with the foregoing, defendants’ motion to dismiss is hereby
GRANTED without prejudice.
Plaintiff is granted twenty-one (21) days to file an amended complaint addressing
the deficiencies identified herein. Failure to do so may result in dismissal with prejudice.
IT IS SO ORDERED.
:
Initials of Preparer

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IV

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