Dick v. American Home Mortgage Servicing Inc., et al

Filing 40

MEMORANDUM and ORDER granting 33 Motion to Dismiss signed by Senior Judge William B. Shubb on 9/18/13: Plaintiffs have twenty days from the date of this Order to file an amended complaint, if they can do so consistent with this Order. (Kaminski, H)

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UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF CALIFORNIA

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----oo0oo---11
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GABRIEL DICK and JILL DICK,
Plaintiffs,

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CIV. NO. 2:13-00201 WBS CKD
BK. NO. 2:11-45476
ADV. PRO. NO. 12-2007

v.
AMERICAN HOME MORTGAGE
SERVICING, INC., AMERIQUEST
MORTGAGE CO., AMERIQUEST
MORTGAGE SECURITIES, INC.,
DEUTSCHE BANK NATIONAL TRUST,
TOWN AND COUNTRY TITLE
SERVICES, CITI RESIDENTIAL
LEDNING, and POWER DEFAULT
SERVICES, INC.,

MEMORANDUM AND ORDER RE: MOTION
TO DISMISS

Defendants.

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----oo0oo---Plaintiffs Gabriel Dick and Jill Dick brought this

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action against defendants Homeward Residential, Inc., formerly

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known as American Home Mortgage Servicing, Inc.; Ameriquest

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Mortgage Co.; Ameriquest Mortgage Securities, Inc.; Deutsche Bank

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National Trust; Town and Country Title Services; Citi Residential

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Lending; and Power Default Services, Inc., arising from the
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foreclosure of their home.

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Services, Ameriquest Mortgage Company, and Ameriquest Mortgage

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Securities, Inc. (collectively, “moving defendants”) now move to

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dismiss plaintiffs’ First Amended Complaint (“FAC”) pursuant to

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Federal Rule of Civil Procedure 12(b)(6) for failure to state a

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claim upon which relief can be granted.1

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I.

Factual and Procedural Background

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Defendants Town and Country Title

In January 2003, plaintiffs obtained a loan in the
amount of $270,000 from Ameriquest Mortgage Company.2

(Req. for

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Judicial Notice (“RJN”) Ex. 1 (“FAC”) Ex. A (Docket No. 35).)

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security, plaintiffs executed a Note and Deed of Trust on the

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property located at 11603 Northern Lights Drive in Grass Valley,

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California (“Northern Lights property” or “property”).

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As

(Id.)

Plaintiffs allege that the note was to be transferred
into a securitized trust, with a closing date of July 1, 2003.

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Because oral argument will not be of material
assistance, the court orders this matter submitted on the briefs.
E.D. Cal. L.R. 230(g).
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A court may take judicial notice of facts “not subject
to reasonable dispute” because they are either “(1) generally
known within the territorial jurisdiction of the trial court or
(2) capable of accurate and ready determination by resort to
sources whose accuracy cannot reasonably be questioned.”
Turnacliff v. Westly, 456 F.3d 1113, 1120 n.5 (9th Cir. 2008)
(quoting Fed. R. Evid. 201) (internal quotations omitted).
Plaintiffs filed their First Amended Complaint in the
bankruptcy adversary proceeding in the Bankruptcy Court for the
Eastern District of California, (No. 12-02007). Defendants
request that the court judicially notice the complaint as well as
various recorded documents pertaining to the property located at
11603 Northern Lights Drive in Grass Valley, California. (See
Req. for Judicial Notice Exs. 1-5 (Docket No. 35).) The court
will take judicial notice of these documents, since they are
matters of public record whose accuracy cannot be questioned.
See Lee v. City of Los Angeles, 250 F.3d 668, 689 (9th Cir.
2001).
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(FAC at 6, ¶ 5.)

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assignment would be void under the terms of the trust instrument.

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(Id. at 6, ¶ 7.)

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Plaintiffs claim any subsequent transfer or

In January 2009, Ameriquest Mortgage Company assigned

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all beneficial interest in the Note and Deed of Trust to Deutsche

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Bank National Trust (“Deutsche Bank”), as Trustee.

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4; 8, ¶ 8.)

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(Id. at 7, ¶

A Notice of Default and Election to Sell Under Deed of
Trust was recorded on October 12, 2010, listing the default as

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$15,379.31.

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recorded on February 24, 2011.

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Trustee’s Deed Upon Sale was recorded, declaring that the

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Northern Lights property had been sold to Deutsche Bank.

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Ex. 5.)

(RJN Ex. 2.)

A Notice of Trustee’s Sale was
(Id. Ex. 4.)

On May 6, 2011, a

(Id.

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In October 2011, plaintiffs filed a Chapter 7

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bankruptcy petition in the United States Bankruptcy Court for the

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Eastern District of California, (No. 11-45476).

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2012, plaintiffs filed a complaint to commence a bankruptcy

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adversary proceeding, (No. 12-02007).

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amended complaint in that proceeding on February 9, 2012.

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On January 5,

Plaintiffs filed the
(FAC.)

Plaintiffs obtained a discharge in bankruptcy on

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February 13, 2012.

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withdraw the reference of the adversary complaint to bankruptcy

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court on July 16, 2013.

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moving defendants filed the instant motion to dismiss.

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No. 33.)

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II.

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This court granted plaintiffs’ motion to

(Docket No. 32.)

On August 26, 2013,
(Docket

Legal Standard
On a motion to dismiss, the court must accept the
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allegations in the complaint as true and draw all reasonable

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inferences in favor of the plaintiff.

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U.S. 232, 236 (1974), overruled on other grounds by Davis v.

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Scherer, 468 U.S. 183 (1984); Cruz v. Beto, 405 U.S. 319, 322

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(1972).

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plead “only enough facts to state a claim to relief that is

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plausible on its face.”

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544, 570 (2007).

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for more than a sheer possibility that a defendant has acted

Scheuer v. Rhodes, 416

To survive a motion to dismiss, a plaintiff needs to

Bell Atl. Corp. v. Twombly, 550 U.S.

This “plausibility standard,” however, “asks

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unlawfully,” and where a complaint pleads facts that are “merely

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consistent with” a defendant’s liability, it “stops short of the

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line between possibility and plausibility.”

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556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 556–57).

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III. Analysis

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Ashcroft v. Iqbal,

Plaintiffs’ FAC, filed pro se, lists inconsistently the

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claims it asserts throughout various parts of the FAC.

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construing the pleadings, and in light of the briefs filed after

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plaintiffs obtained counsel, the court reads the FAC to assert

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the following claims: wrongful foreclosure, declaratory relief,

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cancellation of instrument, fraud, quiet title, and injunctive

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relief.

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(9th Cir. 2003) (“Courts have a duty to construe pro se pleadings

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liberally . . . .”).

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A.

Liberally

See Bernhardt v. Los Angeles County, 339 F.3d 920, 925

Statute of Limitations

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The moving defendants first contend that all of

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plaintiffs’ claims are barred by the relevant statutes of

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limitations.

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33).)

(Defs.’ Mem. of P. & A. at 5:25-6:14 (Docket No.

According to the moving defendants, plaintiffs concede
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that the moving defendants’ interest in the property was assigned

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in July 2003, and, as such, plaintiffs cannot proceed in light of

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California statutes of limitations proscribing the plaintiffs’

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claims after four years.

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based on a misreading of the FAC.

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(Id.)

This, however, appears to be

The FAC refers to a “Corporate Assignment of Deed of

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Trust with Citi Residential Lending Inc. as Attorney in Fact for

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Ameriquest Mortgage Company to Deutsche Bank National Trust as

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Trustee for Ameriquest Mortgage Securities Inc. Asset Backed Pass

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Through Certificates Series 2003-7 under PSA agreement on July

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13, 2003.”

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13, 2003” date referenced above refers to the pooling and

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servicing agreement for the creation of the “Ameriquest Mortgage

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Securities Inc. Asset Backed Pass Through Certificates Series

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2003-7” security, not the date of an assignment.

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(FAC at 8, ¶ 8.)

It appears, though, that the “July

Accordingly, in light of this ambiguity, and drawing

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all reasonable inferences in favor of the plaintiffs, the court

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cannot find that plaintiffs’ claims are barred by the applicable

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statutes of limitationsr.

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B.

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Wrongful Foreclosure
Plaintiffs allege the foreclosure of their property was

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improper.

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“the theory that the [assignment] was void, and as such, none of

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the Defendants in this case had the right or authority to

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foreclose” upon the property.

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(Docket No. 38).)

According to plaintiffs, “the crux” of their claims is

(Pls.’ Mem. of P. & A. at 4:5-7

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A majority of district courts in California have held

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that borrowers do not have standing to challenge the assignment
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of a loan because borrowers are not party to the assignment

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agreement.

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SKO, 2013 WL 2318890, at *3 (E.D. Cal. May 28, 2013) (listing

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cases).

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Court of Appeal that allowed a borrower to challenge an

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assignment as void.

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Cal. App. 4th 1079, 1095 (5th Dist. 2013) (“We reject the view

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that a borrower’s challenge to an assignment must fail once it is

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determined that the borrower was not a party to, or third party

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See Gilbert v. Chase Home Fin., LLC, 1:13-CV-265 AWI

Plaintiffs rely on a recent decision of a California

See Glaski v. Bank of Am., Nat’l Ass’n, 218

beneficiary of, the assignment agreement.”).
The court need not reach the issue, as plaintiffs’

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wrongful foreclosure claim fails because plaintiffs cannot allege

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that the foreclosure was prejudicial.

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Fargo Bank, N.A., 198 Cal. App. 4th 256, 272 (1st Dist. 2011)

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(“[A] plaintiff in a suit for wrongful foreclosure has generally

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been required to demonstrate the alleged imperfection in the

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foreclosure process was prejudicial to the plaintiff’s

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interests.”)

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borrower is in default and cannot show that the allegedly

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improper assignment interfered with the borrower’s ability to pay

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or that the original lender would not have foreclosed under the

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circumstances.

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Inc., No. B240531, 2013 WL 4522474, at *5 (Cal. Ct. App. 2d Dist.

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Aug. 27, 2013) (“The assignment of the deed of trust and the note

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did not change [plaintiffs’] obligations under the note, and

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there is no reason to believe that . . . the original lender

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would have refrained from foreclosure in these circumstances.”);

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Herrera v. Fed. Nat’l Mortg. Ass’n, 205 Cal. App. 4th 1495, 1508

See Fontenot v. Wells

California courts find a lack of prejudice when a

See Silga v. Mortg. Elec. Registration Sys.,

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(4th Dist. 2012) (finding no prejudice from assignment of loan

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where borrowers defaulted on the loan and failed to tender and

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cure default); Fontenot, 198 Cal. App. 4th at 272 (finding no

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prejudice where borrower was in default and did not allege that

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transfer of note interfered with borrower’s ability to pay).

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Plaintiffs acknowledge they were in default of their

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loan.

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allegedly improper transfer interfered with their ability to pay

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their note, or that the original lender would have refrained from

(FAC at 9, ¶¶ 10-11.)

They do not allege that the

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foreclosure under the circumstances.

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“assignment merely substituted one creditor for another, without

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changing [plaintiffs’] obligations under the note.”

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198 Cal. App 4th at 272.

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have met these obligations, and thus any defects in the

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foreclosure were not prejudicial to plaintiffs.

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court will grant the moving defendants’ motion to dismiss

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plaintiffs’ claim for wrongful foreclosure.3

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C.

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The allegedly improper

Fontenot,

Plaintiffs do not allege they could

Accordingly, the

Declaratory Relief
Plaintiffs seek a declaration that “the entire loan

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which includes the Deed of Trust and the associated Promissory

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Note be deemed null and void,” as well as a “determination that

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the Plaintiffs are the sole and rightful owner of Title in the

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subject property, and that the Defendants be stripped of any and

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To the extent that plaintiffs allege that the
foreclosure was improper because the mortgage was securitized,
the claim nonetheless fails. See Lane v. Vitek Real Estate
Indus. Grp., 713 F. Supp. 2d 1092, 1099 (E.D. Cal. 2010) (Shubb,
J.) (“The argument that parties lose their interest in a loan
when it is assigned to a trust pool has also been rejected by
many district courts.”).
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all rights, title, liens or interests in the subject property.”

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(FAC at 15, ¶¶ 1-2.)

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Under 28 U.S.C. § 2201(a), “any court of the United

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States, upon the filing of an appropriate pleading, may declare

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the rights and other legal relations of any interested party

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seeking such declaration, whether or not further relief is or

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could be sought.”

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“neither serve a useful purpose in clarifying and settling the

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legal relations in issue nor terminate the proceedings and afford

Declaratory relief should be denied if it will

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relief from the uncertainty and controversy faced by the

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parties.”

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(9th Cir. 1985).

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United States v. Washington, 759 F.2d 1353, 1356–57

Here, a nonjudicial foreclosure sale has already taken

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place, and moving defendants disclaim any interest in the

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property.

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validity of that sale.

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declaratory relief would only address past wrongs and would add

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nothing to the proceeding in terms of either issues addressed or

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relief sought, it is inappropriate.”

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Fin., LLC, No. CIV. 2:12-1771 WBS CKD, 2012 WL 3778970, at *4

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(E.D. Cal. Aug. 31, 2012).

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moving defendants’ motion to dismiss this claim.

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D.

The remainder of plaintiffs’ claims challenge the
“Because plaintiffs’ claim for

Burachek v. Chase Home

Accordingly, the court will grant the

Cancellation of Instrument
“A written instrument, in respect to which there is a

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reasonable apprehension that if left outstanding it may cause

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serious injury to a person against whom it is void or voidable,

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may, upon his application, be so adjudged, and ordered to be

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delivered up or canceled.”

Cal. Civ. Code § 3412.
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“To plead a

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cause of action for cancellation of instrument, plaintiff must

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show that he will be injured or prejudiced if the instrument is

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not cancelled, and that such instrument is void or voidable.”

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Zendejas v. GMAC Wholesale Mortg. Corp., No. 1:10–CV–00184 OWW

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GSA, 2010 WL 2629899, at *7 (E.D. Cal. June 29, 2010).

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As with their wrongful foreclosure claim, plaintiffs do

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not allege that allowing the Deed of Trust to stand will cause

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them any injury.

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12-1413 KJM AC, 2013 WL 1310589, at *8 (E.D. Cal. Mar. 28, 2013)

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(“A party is not prejudiced by an irregularity if he is unable to

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pay his reasonable indebtedness.”).

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they defaulted on their loan, and their property has already been

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sold in a nonjudicial foreclosure sale.

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11.)

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below, plaintiffs do not state how the allegedly improper

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assignment caused their inability to make payments on their loan.

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See Cornell v. That Certain Instrument Entitled Deed of Trust,

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No. CIV. 2:12-330 WBS CKD, 2012 WL 1869689, at *5 (E.D. Cal. May

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22, 2012) (requiring causal relationship between alleged

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deficiency and circumstances leading to foreclosure).

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Accordingly, the court will grant the moving defendants’ motion

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to dismiss plaintiffs’ cancellation claim.

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See Wilson v. Household Fin. Corp., No. CIV S-

Plaintiffs acknowledge that

(See FAC at 9, ¶¶ 10-

Moreover, aside from vague allegations of fraud, analyzed

E.

Fraud
In California, the essential elements of a claim for

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fraud are “(a) a misrepresentation (false representation,

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concealment, or nondisclosure); (b) knowledge of falsity (or

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‘scienter’); (c) intent to defraud, i.e., to induce reliance; (d)

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justifiable reliance; and (e) resulting damage.”
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In re Estate of

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Young, 160 Cal. App. 4th 62, 79 (4th Dist. 2008).

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heightened pleading requirements for claims of fraud under

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Federal Rule of Civil Procedure 9(b), “a party must state with

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particularity the circumstances constituting the fraud.”

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Civ. P. 9(b).

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where, and how” of the fraud.

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F.3d 1097, 1106 (9th Cir. 2003) (citation omitted).

Under the

Fed. R.

A plaintiff must include the “who, what, when,
Vess v. Ciba–Geigy Corp. USA, 317

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Here, plaintiffs make only vague and general

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allegations of fraudulent conduct regarding the moving

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defendants.

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with fraud”); 14-15 (“the mortgage, into which the Defendants had

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coerced the Plaintiffs, was blighted with deception on every

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level and executed with calculated intentions to defraud the

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Plaintiffs”).)

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only names individuals engaged in alleged “Robosigning fraud,”

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who plaintiffs admit are not employees of the moving defendants.

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(Id. at 8-9.)

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explanation of the “who, what, when, where, and how” of the

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alleged fraud, and fall well short of Rule 9(b)’s requirement of

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particularity.

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Mortg. Servs., Inc., 687 F. Supp. 2d 1191, 1200 (E.D. Cal. 2009)

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(Shubb, J.) (dismissing fraud allegations without “any specific

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representation made by any defendant at any time”).

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the court will dismiss the fraud claim against the moving

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defendants.

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F.

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(See, e.g., FAC at 10, ¶ 4 (“the mortgage is plagued

To the extent the FAC offers any specifics, it

Such conclusory allegations do not approach an

See Vess, 317 F.3d at 1106; Castaneda v. Saxon

Accordingly,

Quiet Title
A claim to quiet title requires: (1) a verified

complaint, (2) a description of the property, (3) the title to
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which a determination is sought, (4) the adverse claims to the

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title against which a determination is sought, (5) the date as of

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which the determination is sought, and (6) a prayer for the

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determination of the title.

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(citing Cal. Code Civ. Proc. § 761.020).

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Buracheck, 2012 WL 3778970, at *7

Plaintiffs fail to allege that moving defendants make

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any “adverse claims to the title against which a determination is

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sought.”

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of adverse possession actions by entities that may claim to be of

Id.

The FAC only makes general allegations of a “risk

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interest.”

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been sold, and Deutsche Bank, rather than any of the moving

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defendants, has taken title.

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Plaintiffs acknowledge that moving defendants had already

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assigned any interest in the property prior to the foreclosure.

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(See FAC at 8, ¶ 8.)

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title that plaintiffs seek to defeat.

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Bank, N.A., 214 Cal. App. 4th 780, 802-03 (4th Dist. 2013)

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(holding mortgage borrower could not quiet title to home against

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creditor after trustee’s sale, where creditor no longer held

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title to the property).

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defendants’ motion to dismiss the quiet title claim.

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G.

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(FAC at 6, ¶ 6.)

Plaintiffs’ property has already

(See RJN Ex. 5 (Trustee’s Deed).)

Moving defendants make no adverse claims to
See West v. JPMorgan Chase

Accordingly, the court will grant moving

Injunctive relief
Under California law, requests for injunctive relief

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have been consistently classified as remedies and not valid

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causes of action in their own rights.

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v. Richter, 52 Cal. App. 2d 164, 168 (4th Dist. 1942)

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(“Injunctive relief is a remedy and not, in itself, a cause of

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action.”).

See, e.g., Shell Oil Co.

Accordingly, the court will grant the moving
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de
efendants motion to dism
s’
n
miss plai
intiffs’ separate claim for

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in
njunctive relief.
e
.

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H.

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Leave to Amend
o
Although leave to amend must be freely given, the court
h
t

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is not req
s
quired to allow futile am
o
f
mendments
s.

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Fr
reight Sy
ys., Inc. 957 F.
.,
.2d 655, 658 (9th Cir. 1992).
h

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cl
lear that further amendme
t
r
ent will not help plaintiffs adequately
p

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pl
lead at least som causes of acti
l
me
s
ion.

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de
eclarator relief and inj
ry
f
junctive relief a
are remedies and not
d

See DeSoto v Yellow
v.
w
It is

As discussed above,

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ca
auses of action in their own righ
i
ht.

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of action, plainti
f
,
iffs are admonish
hed that failure to cure the

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de
efects id
dentified in this Order w
d
s
will be g
grounds for dism
missal

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wi
ithout fu
urther le
eave to amend.
a

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As t the remaining causes
to
g

IT IS TH
HEREFORE ORDERED that def
fendants’ motion to
di
ismiss be and th same hereby is GRANTE
e,
he
h
s,
ED.

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Plaintif
ffs have twenty d
days from the date of th
m
his Order

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to file an amended complai
o
n
d
int, if t
they can do so consistent with

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th
his Order
r.

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Da
ated:

Se
eptember 18, 2013
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