Gardner v. American Brokers Conduit et al

Filing 9

ORDER GRANTING 4 Motion to Dismiss with leave to amend, signed by Chief Judge Anthony W. Ishii on 7/16/2012. ( Amended Complaint due by 8/20/2012) (Figueroa, O)

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IN THE UNITED STATES DISTRICT COURT FOR THE

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EASTERN DISTRICT OF CALIFORNIA

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KIM GARDNER,

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1: 12 - CV - 00555 AWI DLB
Plaintiff,
[Document # 4]

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v.
AMERICAN BROKERS CONDUIT;
FREDDIE MAC; FINANCIAL TITLE
COMPANY; MORTGAGE ELECTRONIC
REGISTRATION SYSTEMS, INC.; CALWESTERN RECONVEYANCE CORP.;
ALL PERSONS UNKNOWN, CLAIMING
ANY LEGAL OR EQUITABLE RIGHT,
TITLE, ESTATE, LIEN OR INTEREST IN
THE PROPERTY,
Defendants.
____________________________________/

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BACKGROUND
Plaintiff Kim Gardner (“Plaintiff”) filed a complaint February 17, 2012, in Fresno County

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Superior Court seeking declaratory relief and to quiet title to real property in the city of Fresno.

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Doc. 1 at 7. Plaintiff also sought a temporary restraining order; the motion was denied without

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prejudice by the Superior Court. Id. at 49. Defendant Federal Home Loan Mortgage Corporation

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(“Freddie Mac”, “Defendant”), erroneously sued as Freddie Mac, filed a notice of removal of the

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action on April 6, 2012. On June 8, 2012, Freddie Mac filed the instant motion to dismiss

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Plaintiff’s complaint. The motion was unopposed.

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LEGAL STANDARD

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A claim may be dismissed under Fed. R. Civ. P. 12(b)(6) if the claim states no cognizable

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legal theory or alleges insufficient facts to support a valid allegation. Balistreri v. Pacifica Police

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Dep’t, 901 F.2d 696, 699 (9th Cir. 1990).

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For purposes of the 12(b)(6) motion, all well-pleaded allegations are accepted as true and

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are construed in the light most favorable to the non-moving party. Manzarek v. St. Paul Fire &

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Marine Ins. Co., 519 F.3d 1025, 1031-32 (9th Cir. 2008). A well-pleaded allegation contains

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sufficient facts to state a claim that is plausible on its face. Bell Atl. Corp. v. Twombly, 550 U.S.

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544, 570 (U.S. 2007). To be plausible, alleged facts must be more than “merely consistent with a

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defendant’s liability;” the “sheer possibility” of unlawful behavior is insufficient. Ashcroft v.

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Iqbal, 556 U.S. 662, 678 (2009). Allegations that are merely conclusory, unwarranted deductions

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of fact, or unreasonable inferences do not meet the plausibility standard and need not be accepted

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as true. Daniels-Hall v. Nat’l Educ. Ass’n, 629 F.3d 992, 998 (9th Cir. 2010).

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Where, as here, the plaintiff is a pro se litigant, the plaintiff's complaint is “to be liberally

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construed” and, “however inartfully pleaded, must be held to less stringent standards than formal

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pleadings drafted by lawyers.” Erickson v. Pardus, 551 U.S. 89, 94 (2007) (internal quotation

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marks and citations omitted).

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A. Judicial Notice – Generally, the court considers only the complaint and attached documents in

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deciding a motion to dismiss, but the court may also take judicial notice of matters of public

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record without converting the motion into a motion for summary judgment. Lee v. City of Los

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Angeles, 250 F.3d 668, 689 (9th Cir. 2001). Defendant has requested judicial notice of several

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documents, including Plaintiff’s Deed of Trust (“Deed”), executed May 8, 2006; a corporate

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assignment of the Deed, recorded September 27, 2011; a Notice of Default, recorded June 28,

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2011; a Notice of Default and Election to Sell; a document substituting Cal-Western

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Reconveyance Corp. (“Cal-Western”) as trustee, recorded November 16, 2011; a Notice of

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Trustee’s Sale, recorded November 28, 2011; and a Trustee’s Deed of Sale, recorded January 19,

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2012. Such documents are properly the subject of judicial notice, Fed. R. Evid. 201(b); Permito

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v. Wells Fargo Bank, 2012 U.S. Dist. LEXIS 55977 at *7-8 (N.D. Cal. Apr. 20, 2012), and the

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court will take notice of the undisputed facts contained in these documents. Lee, supra, at 690.

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FACTS (alleged or undisputed)
Plaintiff executed the Deed on his Fresno property on May 8, 2006. The Deed names

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American Brokers Conduit as the lender, Financial Title Company as trustee, and Mortgage

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Electronic Registration Systems (“MERS”) as nominee for the lender and as beneficiary under

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the Deed. Doc. 4-1 at 4-5. Plaintiff alleges that the Deed was transferred to “Freddie Mac Fixed

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Non-Cumulative Perferred [sic] Stock” and that assignments of the Deed to the sponsors or

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depositor were not recorded, in contravention of the Pooling and Servicing Agreement (“PSA”).

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Doc. 1 at 9:11-16.1 Plaintiff also alleges that an audit showed that MERS “had no chain of note

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possession ship [sic].” Id. at 12:19-21.

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Plaintiff seeks to quiet title on the basis that the defendants “obtained the Subject

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Property through Fraud and wrongful conduct, and failed to adhere to the strict statutory

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requirements to effectuate the foreclosure sale ... .” Id. at 14:10-14. Plaintiff seeks a declaration

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of the parties’ rights and interests in the Property, “[d]ue to the dispute as to the rights and

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interests of the parties to the Subject property ... .” Id. at 15:16-25.

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DISCUSSION
A. Plaintiff’s quiet title claim against Defendant – Under California law, a complaint

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seeking to quiet title must contain “(a) A description of the property that is the subject of the

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action. ... (b) The title of the plaintiff as to which a determination under this chapter is sought and

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the basis of the title. ... (c) The adverse claims to the title of the plaintiff against which a

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Plaintiff states that the PSA is attached to his complaint, but no such documents are
contained in this court’s filings.
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determination is sought. (d) The date as of which the determination is sought [; and] (e) A prayer

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for the determination of the title of the plaintiff against the adverse claims.” Cal. Civ. Code

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§ 761.020.

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In order to properly plead element (b), the basis of title, Plaintiff must allege he is the

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rightful owner of the property, which includes satisfaction of the obligations under the Deed.

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Adegbenga Adesokan v. U.S. Bank, 2012 U.S. Dist. LEXIS 15192, 9-10 (E.D. Cal. Feb. 6, 2012);

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Kelley v. Mortgage Elec. Resgistration Sys., 642 F. Supp. 2d 1048, 1057 (N.D. Cal. 2009).

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Plaintiff’s Deed states that “[b]orrower shall pay when due the principal of, and interest on, the

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debt evidenced by the Note ... .” Doc. 4-1 at 7. The Notice of Default and Election to Sell, dated

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June 27, 2011, and of which the court has taken notice, states that Plaintiff failed to make all

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payments due on and after Nov. 1, 2010. Plaintiff has therefore failed to sufficiently allege that

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he is the rightful owner of the Property. California courts have also held that a party seeking

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equitable relief after a foreclosure sale must offer a valid and viable tender of payment of any

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indebtedness. Roque v. Suntrust Mortgage, Inc., 2010 U.S. Dist. LEXIS 11546 at *17-18 (N.D.

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Cal. Feb. 9, 2010). Plaintiff, however, fails to allege in his complaint that he has offered a full

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tender of his debt. Defendant’s motions to dismiss will be granted, without prejudice, as to the

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claim to quiet title.

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B. Declaratory Relief: Declaratory relief is an equitable remedy; to weigh a request for such a

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remedy, the court must look to the underlying claims. Perez v. Am. Home Mortgage Servicing,

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2012 U.S. Dist. LEXIS 56744 (N.D. Cal. Apr. 23, 2012). Because Plaintiff has not stated a

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legally cognizable claim upon which to support a request for declaratory relief, Plaintiff’s claim

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will be dismissed. See Silva v. Saxon Mortgage Servs., 2012 U.S. Dist. LEXIS 88459 at *22

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(E.D. Cal. June 26, 2012) (dismissing declaratory relief claim where all relevant claims had been

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dismissed).

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C. Leave to amend – “If a complaint is dismissed for failure to state a claim, leave to amend

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should be granted unless the court determines that the allegation of other facts consistent with the

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challenged pleading could not possibly cure the deficiency.” Schreiber Distributing Co. v.

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Serv-Well Furniture Co., Inc., 806 F.2d 1393, 1401 (9th Cir. 1986). Plaintiff will therefore be

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given the opportunity to provide the facts and allegations needed for a well-pleaded complaint, as

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described above.

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CONCLUSION AND ORDER
THEREFORE, Defendant Freddie Mac’s motion to dismiss the complaint as against it is

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GRANTED. Plaintiff is given leave to amend his complaint within 30 days of entry of this Order.

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IT IS SO ORDERED.

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Dated:
0m8i78

July 16, 2012
CHIEF UNITED STATES DISTRICT JUDGE

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