SAFI v. Bank of America, N.A. et al

Filing 28

ORDER signed by Judge John A. Mendez on 10/10/2013 ORDERING 16 Defendants' Motion to Dismiss is GRANTED. Defendants' Motion to Dismiss Plaintiff's first cause of action is GRANTED WITH LEAVE TO AMEND. Defendants' Motion to Dismi ss Plaintiff's second and third causes of action is GRANTED WITH PREJUDICE. Plaintiff's Amended Complaint must be filed within 20 days from the date of this order. Defendants' responsive pleading is due within 20 days thereafter. If Plaintiff elects not to file an Amended Complaint, she should file a notice of dismissal within the next 20 days. (Reader, L)

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1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 11 12 WAGMA SAFI, Trustee of the Wagma Safi Living Trust dated September 24, 2008, 13 Plaintiff, 14 15 16 17 No. 2:12-CV-02280-JAM-AC ORDER GRANTING DEFENDANTS’ MOTION TO DISMISS v. BANK OF AMERICA, N.A.; QUALIFIED LOAN SERVICE CORPORATION; FEDERAL HOME LOAN MORTGAGE CORPORATION; MORTGAGE ELECTRONIC REGISTRATION SERVICE, INC.; and DOES 1-50, 18 Defendants. 19 This matter is before the Court on Defendants Bank of 20 21 America, N.A. (“BANA”), Quality Loan Service Corporation 22 (“Quality”), Federal Home Loan Mortgage Corporation (“Freddie 23 Mac”), Mortgage Electronic Registration Systems, Inc. (“MERS”), 24 and Does 1-50’s (collectively “Defendants”) Motion to Dismiss 25 (Doc. #16) Wagma Safi’s (“Plaintiff”) Complaint (Doc. #1) for 26 failure to state a claim pursuant to Federal Rule of Civil 27 Procedure 12(b)(6). 28 /// 1 1 Plaintiff opposes the motion (“Opposition”) (Doc. #20). 1 2 Defendants filed a reply to the Opposition (Doc. #24). 3 following reasons, Defendants’ motion is GRANTED. For the 4 5 I. 6 FACTUAL AND PROCEDURAL BACKGROUND This case arises out of a foreclosure action brought against 7 real property commonly known as 9948 Pianella Way, Elk Grove, 8 California (“Subject Property”). 9 was the sole owner of the Subject Property. Prior to June 2008, Plaintiff On or about June 12, 10 2008, Plaintiff and Bob Hugh Hamblen (“Hamblen”) allegedly 11 entered into an oral agreement which included the following 12 terms: 13 14 a. Plaintiff would execute a quitclaim deed to the Subject Property, naming herself and Hamblen as tenants in common. 15 b. Hamblen would obtain a $240,000 loan from Countrywide 16 Bank, secured by a deed of trust against the Subject Property 17 signed by Plaintiff and Hamblen. 18 loan would be solely in Hamblen’s name. 19 20 c. Plaintiff would be responsible for paying all principal, interest, and other charges due on the loan. 21 22 The promissory note for the d. If Hamblen predeceased Plaintiff, his estate would pay the balance due on the loan to Countrywide. 23 e. Plaintiff would remain the true equitable owner of the 24 Subject Property and, upon Plaintiff’s demand, Hamblen would 25 execute a quitclaim deed to Plaintiff. Upon Hamblen’s death, his 26 27 28 1 This motion was determined to be suitable for decision without oral argument. E.D. Cal. L.R. 230(g). The hearing was originally scheduled for September 11, 2013. 2 1 legal half interest in the property would pass to Plaintiff. 2 On June 12, 2008, Plaintiff executed a grant deed conveying 3 a half interest in the Subject Property to Hamblen and retaining 4 the other half interest. 5 Also on June 12, 2008, Plaintiff and Hamblen, as trustors, 6 executed a Deed of Trust against the Subject Property in favor of 7 Countrywide Bank. 8 beneficiary and nominee for Countrywide Bank. 9 was security for a $240,000 loan obtained solely in Hamblen’s 10 11 Under the Deed of Trust, MERS was the nominal The Deed of Trust name from Countrywide Bank. On June 16, 2008, both the grant deed and the Deed of Trust 12 were recorded. 13 signed a written agreement identical in its terms to the oral 14 agreement made on or about June 12, 2008 (described above). 15 November 2009, Hamblen died intestate. 16 On September 19, 2008, Plaintiff and Hamblen In From June 2008 to December 2011, Plaintiff allegedly made 17 all payments on the loan to Countrywide, then to BANA, via 18 electronic withdrawals from her bank checking account. In 19 December 2011, Plaintiff ceased making payments on the advice of 20 prior counsel. 21 From December 2011 to present, Plaintiff allegedly “made 22 numerous attempts to tender performance under the Deed of Trust 23 and cure the arrears on the loan.” 24 was unable to do so because BANA refused to disclose any 25 information to her, other than the monetary amount required to 26 pay off the loan. 27 any other information because she was not an obligor on the 28 original promissory note. Compl. ¶ 19. However, she Plaintiff was told that she could not obtain 3 1 On March 13, 2012, an Assignment of Deed of Trust was 2 recorded, transferring the beneficial interest under the Deed of 3 Trust from MERS to BANA. 4 Trustee was recorded, making Quality the trustee under the Deed 5 of Trust. 6 Default against the Subject Property. 7 Quality recorded a Notice of Sale against the Subject Property. 8 On August 28, 2012, Plaintiff filed the original Complaint 9 10 On May 8, 2012, a Substitution of Also on May 8, 2012, Quality recorded a Notice of On August 10, 2012, (Doc. #1) in Sacramento County Superior Court. On August 30, 2012, the Sacramento County Superior Court 11 issued a Temporary Restraining Order staying the planned sale of 12 the Subject Property. 13 outcome of this case. 14 15 16 That order remains in effect pending the On October 26, 2012, Defendants removed the present case from Sacramento County Superior Court to this Court (Doc. #1). This Court has jurisdiction under 18 U.S.C. § 1452(f), which 17 grants original jurisdiction to United States district courts 18 over civil actions to which Freddie Mac is a party. 19 20 II. OPINION 21 A. Legal Standard 22 A party may move to dismiss an action for failure to state a 23 claim upon which relief can be granted pursuant to Federal Rule 24 of Civil Procedure 12(b)(6). 25 plaintiff must plead “enough facts to state a claim to relief 26 that is plausible on its face.” 27 556 U.S. 662, 570 (2007). 28 district court must accept all the allegations in the complaint To survive a motion to dismiss a Bell Atlantic Corp. v. Twombly, In considering a motion to dismiss, a 4 1 as true and draw all reasonable inferences in favor of the 2 plaintiff. 3 overruled on other grounds by Davis v. Scherer, 468 U.S. 183 4 (1984); Cruz v. Beto, 405 U.S. 319, 322 (1972). 5 entitled to the presumption of truth, allegations in a complaint 6 or counterclaim may not simply recite the elements of a cause of 7 action, but must sufficiently allege underlying facts to give 8 fair notice and enable the opposing party to defend itself 9 effectively.” Scheuer v. Rhodes, 416 U.S. 232, 236 (1974), “First, to be Starr v. Baca, 652 F.3d 1202, 1216 (9th Cir. 10 2011), cert. denied, 132 S. Ct. 2101, 182 L. Ed. 2d 882 (U.S. 11 2012). 12 must plausibly suggest an entitlement to relief, such that it is 13 not unfair to require the opposing party to be subjected to the 14 expense of discovery and continued litigation.” 15 that are mere “legal conclusions” are therefore not entitled to 16 the presumption of truth. 17 (2009) (citing Twombly, 550 U.S. at 555). 18 appropriate when a plaintiff fails to state a claim supportable 19 by a cognizable legal theory. 20 Department, 901 F.2d 696, 699 (9th Cir. 1990). 21 “Second, the factual allegations that are taken as true Id. Assertions Ashcroft v. Iqbal, 556 U.S. 662, 678 Dismissal is Balistreri v. Pacifica Police Upon granting a motion to dismiss for failure to state a 22 claim, a court has discretion to allow leave to amend the 23 complaint pursuant to Federal Rule of Civil Procedure 15(a). 24 “Dismissal with prejudice and without leave to amend is not 25 appropriate unless it is clear . . . that the complaint could not 26 be saved by amendment.” 27 Inc., 316 F.3d 1048, 1052 (9th Cir. 2003). Eminence Capital, L.L.C. v. Aspeon, 28 5 1 B. 2 Defendants request that the Court take judicial notice of Judicial Notice 3 five documents: (1) the Deed of Trust referenced in the 4 Complaint; (2) the Assignment of Deed of Trust from MERS to 5 BANA; (3) the Substitution of Trustee naming Quality as 6 substitute trustee; (4) the Notice of Default referenced in the 7 Complaint; and (5) the Notice of Sale referenced in the 8 Complaint. 9 #17, at 2. 10 Def.’s Request for Judicial Notice (“DRJN”), Doc. Generally, the Court may not consider material beyond the 11 pleadings in ruling on a motion to dismiss for failure to state 12 a claim. 13 material attached to, or relied on by, the complaint so long as 14 authenticity is not disputed, or matters of public record, 15 provided that they are not subject to reasonable dispute. 16 Sherman v. Stryker Corp., 2009 WL 2241664 at *2 (C.D. Cal. 2009) 17 (citing Lee v. City of Los Angeles, 250 F.3d 668, 688 (9th Cir. 18 2001) and Fed. R. Evid. 201). 19 However, the Court may take judicial notice of E.g., Each of the five documents listed above are public records, 20 as they have been recorded in the Sacramento County Recorder’s 21 Office. 22 request, and the documents are not subject to reasonable 23 dispute. 24 for judicial notice. 25 request is granted. 26 Furthermore, Plaintiff has not opposed Defendants’ Therefore, they are the proper subject of a request See Fed. R. Evid. 201. Defendants’ Plaintiff requests that the Court take judicial notice of 27 the Temporary Restraining Order issued by the California 28 Superior Court in this case. Pl.’s Request for Judicial Notice 6 1 (“PRJN”), Doc. #21, at 2. 2 Defendants have not opposed Plaintiff’s request. 3 is the proper subject of a request for judicial notice. 4 e.g., Pistoresi v. Madera Irr. Dist., 2009 WL 256755, at *6 5 (E.D. Cal. Feb. 3, 2009) (taking judicial notice of a Temporary 6 Restraining Order). 7 restraining order is granted. 8 9 This document is a public record and Therefore, it See, Plaintiff’s request as to the temporary Plaintiff also requests judicial notice of the Complaint filed in this action. PRJN, Doc. #21, at 2. Because the 10 Complaint filed in this action is already part of the record, 11 Plaintiff’s request as to the Complaint is denied. 12 C. First Cause of Action 13 In her first cause of action, Plaintiff asks for declaratory 14 relief in the form of a judicial declaration that Plaintiff has 15 the right to reinstate the loan for which the Deed of Trust is 16 collateral, and that Defendants are required to provide her with 17 the information necessary to do so. 18 Plaintiff does not state a claim upon which relief can be granted 19 because she fails to allege that Defendants have withheld any 20 information necessary to Plaintiff’s exercise of the right to 21 reinstate and, in fact, her allegations establish that all 22 necessary information has been provided. 23 reiterating her claim that she has “an unconditional right to 24 cure/reinstate[,]” both as a “Borrower” on the Deed of Trust and 25 as a successor-in-interest to Hamblen in the Subject Property. 26 She also continues to contend that she has been unable to tender 27 performance and reinstate the loan because Defendants “have 28 failed and refused to disclose any information to Plaintiff or 7 Defendants argue that Plaintiff responds by 1 her counsel regarding the loan, other than the payoff amounts 2 stated in Notice of Default and Notice of Sale.” 3 Plaintiff alleges that she “stands ready, willing and able to 4 cure the arrears on the promissory note and tender performance 5 under the Deed of Trust, if only she can ascertain the correct 6 amounts now due on the loan, the correct account number, and the 7 correct address for payment.” Compl. ¶ 20. 8 9 Opp. at 6. The rights and obligations of a trustor in a deed of trust are governed by California Civil Code section 2924 et seq. Under 10 section 2924c, the trustor has a statutory right of 11 reinstatement. 12 trustor . . . may pay to the beneficiary . . . the entire amount 13 due . . . and thereby cure the default . . . and the obligation 14 and deed of trust or mortgage shall be reinstated[.]” 15 Code § 2924. 16 Specifically, section 2924c provides that “the Cal. Civ. Accordingly, Plaintiff is entitled to the right to reinstate 17 the loan through full payment of the debt. 18 fails to allege that she has exercised this right through a 19 proper tender of payment. 20 that she “made numerous attempts to tender performance under the 21 Deed of Trust and cure the arrears on the loan” but was unable to 22 do so because Defendants refused to provide the necessary 23 information. 24 to constitute a specific allegation that Plaintiff has tendered 25 performance or that Defendants have improperly refused a tender 26 of performance. 27 Cal.App.3d 1154, 1165 (1988) (“The tenderer must do and offer 28 everything that is necessary on his part to complete the Compl. ¶ 19. However, Plaintiff In the Complaint, Plaintiff alleges This naked assertion is insufficient See Gaffney v. Downey Sav. & Loan Assn., 200 8 1 transaction[.] 2 unambiguous tender of the entire amount due or else suffer the 3 result that the tender is of no effect.”). 4 [I]t is a debtor’s responsibility to make an Here, despite Plaintiff’s assertion that she “made numerous 5 attempts to tender performance,” she fails to state any factual 6 basis for this claim. 7 allege that she actually sent any payment to Defendants, despite 8 the fact that she knew the total amount due (appearing on the 9 Notice of Default and the Notice of Sale) and the proper mailing Compl. ¶ 19. Notably, Plaintiff fails to 10 address of the beneficiary (appearing on the second page of the 11 Notice of Default). 12 Exs. D-E, attached to DRJN, Doc. #17. Nevertheless, Plaintiff contends that such a tender was 13 rendered impossible by Defendants’ refusal “to disclose any 14 information to Plaintiff or her counsel regarding the loan, other 15 than the payoff amounts stated in Notice of Default and Notice of 16 Sale.” 17 Opp. at 6. Under section 2924c(b)(1), the beneficiary or mortgagee is 18 required to provide the trustor with certain information that is 19 necessary to exercise the right to reinstate the loan. 20 Specifically, section 2924c(b)(1) mandates that a “Notice of 21 Default” be sent to the trustor, containing the following 22 language: “To find out the amount you must pay, or to arrange for 23 payment to stop the foreclosure . . . contact:” followed by the 24 name of the beneficiary or mortgagee, its mailing address, and 25 its telephone number. 26 California courts have determined that “compliance [with 27 section 2924c(b)(1)] necessarily requires that the beneficiary 28 provide accurate information in response to an inquiry from the 9 1 trustor.” 2 Cal.App.3d 202, 216 (1989). 3 provide the trustor with information is quite limited. 4 Ausulio v. Summit Homeowner’s Assn., Inc., 2003 WL 22229550, at 5 *10 (Cal. Ct. App. Sept. 29, 2003) (holding that, as long as 6 there is no “uncertainty regarding the appropriate amount of the 7 debt,” the standard Notice of Default is sufficient to satisfy 8 the beneficiary’s obligation under section 2924c(b)(1)). 9 Anderson v. Heart Fed. Sav. & Loan Assn., 208 However, the beneficiary’s duty to See Here, Plaintiff acknowledges that she received a Notice of 10 Default, which included a payoff amount. 11 the copy of the Notice of Default provided in Plaintiff’s Exhibit 12 A contains only the first page of the Notice, the full notice 13 appears in Defendants’ Exhibit D, and shows that the second page 14 of the Notice includes the statutorily required language and 15 contact information. 16 D, attached to DJRN, Doc. #17. 17 the recipient to contact “BANK OF AMERICA, N.A.” and provides a 18 mailing address and a phone number. 19 Doc. #17. 20 Furthermore, although Ex. A, attached to Complaint, Doc. #1. Ex. Specifically, the Notice directs Ex. D, attached to DJRN, Accordingly, Plaintiff fails to allege that Defendants did 21 not comply with the statutory mandate that the Notice of Default 22 include sufficient contact information. 23 Nevertheless, Plaintiff contends that Defendants’ refusal to 24 disclose any loan information, other than the amount due, 25 prevented Plaintiff from exercising her right to reinstate the 26 loan. 27 information was needed, or how this information was necessary to 28 her exercising her right to reinstate the loan. However, Plaintiff fails to identify what additional 10 By her own 1 allegations, the “payoff amount” was included in the Notice of 2 Default which Plaintiff received. 3 full Notice of Default, Plaintiff was provided with Defendant 4 Bank of America’s mailing address and telephone number. 5 Defendants refused to disclose any other information, Plaintiff 6 had access to sufficient information to make a full payment and 7 reinstate the loan. 8 9 Furthermore, as seen in the Even if Accordingly, Plaintiff’s first cause of action for declaratory relief is dismissed. Despite Defendants’ alleged 10 refusal to provide Plaintiff with information regarding the loan, 11 their compliance with the notice requirements of section 12 2924c(b)(1) provided Plaintiff with sufficient information to 13 exercise her right to reinstate the loan. 14 exists between Plaintiff and Defendants because Plaintiff’s 15 request for information has already been satisfied. 16 No actual controversy However, it is possible that the complaint can be saved by 17 amendment. 18 sufficiently describe either (1) an actual tender of payment to 19 Defendants or (2) exactly what additional information regarding 20 the loan was withheld by Defendants, and how this made payment 21 impossible. 22 Namely, Plaintiff must allege specific facts that As the argument considered above is dispositive, the Court 23 declines to address Defendants’ remaining arguments regarding the 24 first cause of action. 25 26 Plaintiff’s first claim for declaratory relief is DISMISSED WITH LEAVE TO AMEND. 27 28 11 1 D. 2 In her second cause of action, Plaintiff asks for Second Cause of Action 3 declaratory relief, contending that “Bank of America is the sole 4 beneficiary under the Deed of Trust and that MERS has no 5 authority to transfer or assign any rights under the Deed[.]” 6 Compl. ¶ 29. 7 Trust “solely as nominee” and therefore lacks the authority to 8 assign its interest to a third party. 9 argue that Plaintiff lacks standing because the foreclosure and Plaintiff alleges that MERS signed the Deed of Compl. ¶ 12. Defendants 10 sale of her property does not constitute an injury in fact. 11 Plaintiff responds that this argument “misses the gravamen” of 12 the Complaint and that the foreclosure would “constitute a 13 violation of substantive California law.” 14 Defendants’ argument that Plaintiff lacks standing appears 15 to confuse “prejudicial procedural irregularity” in the context 16 of wrongful foreclosures with “injury” for the purpose of 17 standing. 18 Cal.App.4th 256, 272 (2011) (noting that “a plaintiff in a suit 19 for wrongful foreclosure has generally been required to 20 demonstrate that the alleged imperfection in the foreclosure 21 process was prejudicial to the plaintiff’s interest” in order to 22 overcome the common law presumption that a nonjudicial 23 foreclosure sale was conducted regularly and fairly); see Herrera 24 v. Fed. Nat. Mortgage Assn., 205 Cal.App.4th 1495, 1507 (2012) 25 (noting that “[e]ven if MERS lacked the authority to transfer the 26 note, it is difficult to conceive how plaintiff was prejudiced by 27 MERS’ purported assignment” and therefore declining to void a 28 foreclosure sale). See Fontenot v. Wells Fargo Bank, N.A., 198 The wrongful foreclosure and sale of 12 1 Plaintiff’s home would almost certainly constitute a concrete 2 injury for purposes of establishing standing. 3 Lujan v. Defenders, 504 U.S. 555 (1992). See generally 4 Nevertheless, Plaintiff fails to cite any cases to support 5 her substantive argument that the nominee beneficiary on a Deed 6 of Trust lacks the authority to assign its interest to a third 7 party. 8 universally held that MERS, as nominee beneficiary, has the power 9 to assign its interest under a deed of trust.” Herrera, 205 This is unsurprising, as “[t]he courts in California have 10 Cal.App.4th 1495, 1498 (2012). For example, in Fontenot, the 11 court held that “the allegation that MERS was merely a nominee is 12 insufficient to demonstrate that MERS lacked authority to make a 13 valid assignment of the note on behalf of the original lender.” 14 Fontenot, 198 Cal.Appl.4th 256, 271 (2011). 15 Here, the Deed of Trust states that “[t]he beneficiary of 16 this Security Instrument is MERS (solely as nominee for Lender 17 and Lender’s successors and assigns) and the successors and 18 assigns of MERS.” 19 Accordingly, the Deed not only identifies MERS as the nominee 20 beneficiary, but also implicitly contemplates the potential 21 future assignment of MERS’ interest to a third party. 22 Furthermore, California Civil Code section 2932.5 expressly 23 provides that the “power of sale” may be assigned to and 24 exercised by a third party. 25 Ex. A, attached to DJRN, Doc. #17. As Plaintiff makes no other allegations that would call into 26 question the validity of MERS’ assignment, she has failed to 27 state a claim and the second cause of action is dismissed. 28 Furthermore, as it is clear that the complaint can not be saved 13 1 2 3 by amendment, it must be dismissed with prejudice. Plaintiff’s second claim for declaratory relief is DISMISSED WITHOUT LEAVE TO AMEND. 4 E. Third Cause of Action 5 Plaintiff also asserts a separate claim for injunctive 6 relief. 7 that injunctive relief is a remedy, not a separate claim. 8 Plaintiff fails to oppose this argument. 9 Defendants move to dismiss this claim on the grounds Defendants are correct that injunctive relief is a remedy, 10 not a separate cause of action. 11 cause of action for injunctive relief is inappropriate.” 12 v. Quality Loan Serv. Corp., 702 F. Supp. 2d 1183, 1201 (E.D. 13 Cal. 2010). Accordingly, Plaintiff’s claim for injunctive relief 14 is DISMISSED WITHOUT LEAVE TO AMEND. A “separately pled claim or Jensen 15 16 17 III. ORDER For the foregoing reasons, Defendants’ Motion to Dismiss is 18 GRANTED. Defendants’ Motion to Dismiss Plaintiff’s first cause 19 of action is GRANTED WITH LEAVE TO AMEND. 20 Dismiss Plaintiff’s second and third causes of action is GRANTED 21 WITH PREJUDICE. 22 within twenty (20) days from the date of this order. Defendants’ 23 responsive pleading is due within twenty (20) days thereafter. 24 If Plaintiff elects not to file an Amended Complaint, she should 25 file a notice of dismissal within the next twenty (20) days. Defendants’ Motion to Plaintiff’s Amended Complaint must be filed 26 IT IS SO ORDERED. 27 Dated: October 9, 2013 28 ____________________________ JOHN A. MENDEZ, UNITED STATES DISTRICT JUDGE 14

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