Wurtzberger v. Resmae Mortgage, et al

Filing 24

ORDER signed by Judge Garland E. Burrell, Jr on 10/6/09 ORDERING that Plaintiff's complaint is DISMISSED. However, Plaintiff requests leave to amend his complaint should any claim be dismissed. Plaintiff is granted ten (10) days from the date on which this Order is filed to file an amended complaint. (Becknal, R)

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF CALIFORNIA THOMAS WURTZBERGER, ) ) Plaintiff, ) ) v. ) ) RESMAE MORTGAGE CORPORATION; ) AMERICA'S SERVICING COMPANY; ) MORTGAGE ELECTRONIC REGISTRATION ) SYSTEMS, INC.; HSBC BANK USA, as ) trustee for ACE SECURITIES CORP. ) HOME EQUITY LOAN TRUST, SERIES ) 2007-HE3; NDEx WEST, LLC; AND DOES ) 1-10, ) ) Defendants. ) )

2:09-cv-01718-GEB-DAD ORDER

On June 29, 2009 Defendants Wells Fargo Bank dba America's Servicing Company, ("ASC"), Mortgage Electronic Registration Systems, Inc., ("MERS"), and HSBC Bank, USA ("HSBC"), as trustee for Ace Securities Corp. Home Equity Loan Trust ("ACE") (collectively "Defendants") filed a motion for dismissal of Plaintiff's Complaint under Federal Rule of Civil Procedure 12(b)(6), arguing Plaintiff's Complaint fails to state a claim upon which relief can be granted. Defendants request that judicial notice be taken of documents incorporated by reference into Plaintiff's Complaint and that those documents be considered when the Court decides their motion. Plaintiff opposes the motion, but does not oppose Defendants' judicial notice. Therefore, that request is granted. 1 U.S. v. Ritchie, 342

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F.3d 903, 908 (9th Cir. 2003)("A court may . . . consider . . . documents incorporated by reference in the complaint, or matters of judicial notice-without converting the motion to dismiss into a motion for summary judgment."). BACKGROUND Plaintiff alleges three claims in his Complaint: breach of contract, conversion, and wrongful foreclosure. Each claim concerns

an adjustable rate note ("ARN") Plaintiff signed on October 2, 2006. Plaintiff alleges in his Complaint: "[t]he Note states that Borrower owed Lender . . . $224,000.00, plus interest. Borrower has promised

to pay this debt in regular Periodic Payments and to pay the debt in full not later November 1, 2036." (Compl. ¶ 15.) Plaintiff also

signed a Deed of Trust ("Deed") secured by Plaintiff's residence at 460 Alemar Way, Yuba City, California, 96991. 3.) (Compl. ¶ 15; Ex. 2,

The Deed allows the lender to transfer the ARN to a successor Plaintiff alleges on or about January 2007 Resmae sold the

trustee.

ARN and the Deed to ACE for "over 200% of [the $224,000 loan amount.]" (Compl. ¶ 25.) Plaintiff "became behind on his mortgage payments in September, 2007, [but alleges he] . . . attempted payment of all

arrearage[] in November, 2007 [and] [t]he check was returned and it was explained that Plaintiff had to go through the foreclosure process." (Compl. ¶ 27). Plaintiff "makes a demand of Defendants [in

his Complaint] for a full reconveyance under . . . Paragraph 23 of the Deed . . . ." (Compl. ¶ 26.) Paragraph 23 of the Deed provides

"[u]pon payment of all sums secured by this Security Instrument, Lender shall request Trustee to reconvey the Property and shall surrender this Security Instrument and all notes evidencing debt 2

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secured by this Security Instrument to Trustee.

Trustee shall

reconvey the Property without warranty to the person or persons legally entitled to it." (Compl. ¶ 23; Ex. 2, ¶ 23.) "On December 4, 2007, a Notice of Default was filed against the Property," and "[o]n January 28, 2008, for value received, MERS assigned the Deed . . . [and the ARN] to HSBC (the foreclosure beneficiary at the foreclosure proceeding) . . . ." 32.) (Compl. ¶¶ 31-

Plaintiff alleges in February 2008 he attempted to modify the (Compl. ¶

loan and made three payments between March and June 2008. 28).

A Notice of Trustee's Sale, however, was recorded against the

Property on March 11, 2008 and Ndex West was listed as the trustee. (Compl. ¶¶ 33, 36.) Plaintiff alleges there was never a properly (Compl. ¶ 34.)

recorded substitution of Ndex West as the new trustee.

A trustee's sale occurred on November 4, 2008 on behalf of HSBC, but Plaintiff alleges he never received notice of the trustee's sale . . . ." (Compl. ¶ 36.) Plaintiff's breach of contract claim against Resmae is based on Resmae's failure to reconvey the property to Plaintiff when Resmae allegedly received 200% of the loan obligation, in violation of paragraph 23 of the Deed. (Compl. ¶ 41.) Plaintiff's conversion claim

is based on Defendants' conversion of the "excess monies" from the 200% of the loan obligation received, and Defendants' refusal to return the converted property. (Compl. ¶¶ 50-55.) Plaintiff alleges

in his wrongful foreclosure claim that because "Resmae had already been paid in full on the indebtedness that the Deed . . . secure[d]," MERS's assignment of the Deed to HSBC was "not effective;" therefore, Ndex West did not have "the right to conduct a trustee's sale . . . [or] foreclose on the Property." (Compl. ¶¶ 59, 64.) 3 Plaintiff also

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alleges the foreclosure was wrongful because he "did not receive proper notice of the trustee's sale on November 11, 2008." (Compl. ¶ 63.) STANDARD "Federal Rule of Civil Procedure 8(a)(2) `requires only a short and plain statement of the claim showing that the pleader is entitled to relief,' in order to `give the defendant fair notice of what the . . . claim is and the grounds upon which it rests.'" Bell

Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007)(internal citation omitted). "[W]e must in a review of all Rule 12(b)(6) motions,

accept[] as true all facts alleged in the complaint, and draw[] all reasonable inferences in favor of the plaintiff." al-Kidd v.

Ashcroft, --- F.3d ----, 2009 WL 2836448, at *5 (9th Cir. 2009). "Conclusory allegations of law and unwarranted inferences[, however,] are insufficient to defeat a motion to dismiss for failure to state a claim. In determining whether plaintiff[] can prove facts in support

of [his] claim that would entitle [him] to relief, [the Court] may consider facts contained in documents [incorporated by reference into] the complaint." National Ass'n for Advancement of Psychoanalysis v.

California Bd. of Psychology, 228 F.3d 1043, 1049 (9th Cir. 2000) (internal citations and quotations omitted). DISCUSSION Defendants argue Plaintiff's breach of contract claim fails because Plaintiff has not alleged facts establishing that Defendants have breached the terms of any contract with Plaintiff. Defendants

are correct since the Deed and the ARN do not show Defendants had an obligation to reconvey the property to Plaintiff as Plaintiff alleges. Therefore, this portion of the motion is granted. 4

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 dismissed.

Defendants also seek dismissal of Plaintiff's conversion claim, arguing Plaintiff has failed to allege all of the required elements of this claim. (Defs' Mot. 9:5-20.) An element of a

conversion claim is that plaintiff was the owner of specified property or had the right to possession of the property at the time of the conversion. (1996). Oakdale Village Group v. Fong, 43 Cal.App.4th 539, 543-44

Since Plaintiff has not set forth sufficient facts alleging

this element, this portion of the motion is granted. Lastly, Defendants argue Plaintiff's wrongful foreclosure claim must fail because Plaintiff has not alleged he tendered the full loan amount of $224,000, plus interest. (Defs' Mot. 10:4-8.) "It is

settled that an action to set aside a trustee's sale for irregularities in sale notice or procedure should be accompanied by an offer to pay the full amount of the debt for which the property was security." 578 (1984). Arnolds Management Corp. v. Eischen, 158 Cal.App.3d 575, Therefore, this portion of Defendants' motion is granted. CONCLUSION For the foregoing reasons, Plaintiff's complaint is However, Plaintiff requests leave to amend his complaint Plaintiff is granted ten (10) days

should any claim be dismissed.

from the date on which this Order is filed within which to file a amended complaint curing any deficiency in a claim addressed above. Dated: October 6, 2009

GARLAND E. BURRELL, JR. United States District Judge

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