Frances Ryan v. Nationstar Mortgage LLC et al

Filing 15

ORDER signed by Judge Garland E. Burrell, Jr. on 2/4/2015 ORDERING Defendant's 4 motion to dismiss is GRANTED. Plaintiff's complaint is DISMISSED without leave to amend, and judgment shall be entered for Defendant. CASE CLOSED. (Zignago, K.)

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UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF CALIFORNIA

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Frances Ryan, by and through
her Guardian ad Litem,
Geraldine Ryan,

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No. 2:14-cv-02067-GEB-DAD

Plaintiff,

ORDER GRANTING MOTION TO DISMISS

v.
Nationstar Mortgage, LLC; and
Does 1 through 50, inclusive,
Defendants.

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Defendant Nationstar Mortgage, LLC (“Defendant”) seeks

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dismissal

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“Plaintiff‟s entire complaint . . . rests on th[e] failed legal

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contention” that “a non-party to this lawsuit, U.S. Bank acting

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as trustee of a Pooling and Servicing Agreement (“PSA”) of many

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bundled loans, did not receive a valid assignment of Plaintiff‟s

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loan because the assignment purportedly took place after the PSA

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trust‟s

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Dismiss (“Mot.”) 1:3-7, 1:14-17, ECF No. 4.) Defendant argues:

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of

closing

Plaintiff‟s

date.”

Complaint,

(Def.‟s

Mem.

arguing,

P.&A.

in

inter

Supp.

Based on this allegation, Plaintiff contends
that U.S. Bank and [Defendant] lack authority
to foreclose on the loan secured by real
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alia:

Mot.

to

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property . . . . This loan securitization
allegation by Plaintiff has been repeatedly
rejected by the state courts in California
and respective Federal Courts. These courts
have consistently held that persons such as
Plaintiff, borrowers on loans, have no
standing to challenge a violation of a
PSA . . . .

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(Id. at 1:7-16.)
Plaintiff opposes the motion.

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I. Judicial Notice

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Defendant‟s

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motion

includes

a

request

that

judicial

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notice be taken of various documents pertaining to Plaintiff‟s

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mortgage,

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Assignment Deed of Trust. Defendant argues judicial notice is

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proper

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recorded[,] . . . referenced in Plaintiff‟s Complaint, and . . .

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central to the allegations contained in the Complaint.” (Def.‟s

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Req. for Judicial Not. (“RFJN”) 2:8-10, ECF No. 5.)

including

since

Deed

the

Plaintiff

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the

has

of

Trust

and

documents

not

contested

the

Corporation

are

this

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Defendant has shown it should be granted.

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“publicly

requested,

and

granted.
II. Factual Background

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Certain

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Therefore, it is

judicially

noticed

facts

and

allegations

in

Plaintiff‟s Complaint follow.
On

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or

around

November

10,

2005,

Plaintiff

borrowed

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$500,000.00 from Countrywide Home Loans, Inc. for a “residential

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mortgage loan for [her] residence.” (See Compl. ¶¶ 2, 11, ECF No.

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1-3; RFJN Ex. A, ECF No. 5-11.) The loan was secured by a Deed of

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Trust. (See Compl. ¶¶ 2, 12-13; RFJN Ex. A.) The Deed of Trust

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All exhibits to Defendant‟s RFJN were filed collectively as ECF No. 5-1.

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1

lists

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Electronic

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beneficiary.

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interest

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Association as Trustee for the Holders of SARM 2005-23” (“U.S.

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Bank”). (RFJN Ex. B, Compl. ¶ 12.) This assignment was recorded

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on

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N[ationstar] M[ortgage] LLC . . . is the purported servicer of

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[the] Subject Loan.” (Compl. ¶ 3.)

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Recon

August

Trust

Company,

Registration
(RJFN

under

29,

Ex.

the

Plaintiff

as

Systems,

A.)

Deed

2011.

N.A.

(RFJN

alleges

MERS
of

Inc.

then

Trust

Ex.

B,

“[t]he

trustee

“U.S.

Compl.

August

Mortgage

(“MERS”)

assigned
to

and

¶

29,

its

as

the

beneficial

Bank

12.)

2011

National

“Defendant

attempted

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transfer [to U.S. Bank] was made over five (5) years after the

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Closing Date [for the Trust] . . . [and] was [thus] void ab

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initio.” (Id. ¶ 13 (emphasis omitted).) Plaintiff also alleges

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this attempted transfer was void because “the Trust was required

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to possess the Deed of Trust to the Subject Loan within 90 days

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of the Closing Date of the Trust (or April 1, 2006), as set forth

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in the Pooling and Servicing Agreement [(“PSA”)].” (Id. ¶ 20.)

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Plaintiff further alleges:

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Therefore, there has never been any valid
Assignment of the Deed of Trust[,] and . . .
[Defendant] . . . ha[s] [n]ever had any right
to collect any payments from the Plaintiffs.

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. . . .
[Defendant] has no rights to service or
administer the S[ubject] L[oan], as those
rights are derived from a T[rustee] who in
fact does not have any such right.
(Id. ¶¶ 13, 25.)
III. Discussion

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Defendant argues “Plaintiff‟s claim . . . fails because

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she has no standing to challenge the Assignment of Deed of Trust
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or the PSA, since she is not, and never was, a party to, or an

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intended beneficiary of, these agreements.” (Mot. 5:24-26.)

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Plaintiff

rejoins

that

she

“may

challenge

the

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„securities trust‟s chain of ownership by alleging the attempts

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to transfer the deed of trust to the securities trust occurred

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after the trust‟s closing date.‟” (Pl.‟s Opp‟n 2:10-12, ECF No. 7

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(quoting Glaski v. Bank of Am., Nat‟l Ass‟n, 218 Cal. App. 4th

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1079, 1096 (2013)).) In Glaski, a California Court of Appeal

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“reject[ed] the view that a borrower‟s challenge to an assignment

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must fail once it is determined that the borrower was not a party

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to,

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Glaski, 218 Cal. App. 4th at 1096. The California Court of Appeal

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held, in Glaski, that “a borrower can challenge an assignment of

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his or her note and deed of trust if the defect asserted would

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void

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omitted).

or

third

the

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party

beneficiary

assignment.”

Defendant

Id.

replies

at

that

of,

1095

the

assignment

(citation

Glaski

is

a

and

agreement.

emphasis

“misguided

and

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minority decision[,]” and under “the majority view in Jenkins v.

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JP Morgan Chase Bank, N.A., 216 Cal. App. 4th 497 (2013)[,] . . .

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a borrower is not a party to the securitization of a loan and,

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therefore, lacks standing to challenge said transfer.” (Def.‟s

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Reply 2:3-8, 2:19-22, ECF No. 9.) In Jenkins, a California Court

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of Appeal held that a borrower, “[a]s an unrelated third party to

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the alleged securitization, and any other subsequent transfers of

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the beneficial interest under the promissory note, . . . lacks

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standing

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trust‟s

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transactions.” Jenkins, 216 Cal. App. 4th at 515. The Court of

to

enforce

pooling

and

any

agreements,

servicing

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including

agreement,

the

relating

investment
to

such

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Appeal also stated in Jenkins:

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the relevant parties to such a transaction
[ar]e the holders (transferors) of the
promissory note and the third party acquirers
(transferees) of the note. . . .

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Furthermore, even if any subsequent
transfers
of
the
promissory
note
were
invalid, [plaintiff borrower] is not the
victim of such invalid transfers because her
obligations
under
the
note
remained
unchanged.

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Id.

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“Glaski

conflicts

with

several

other

California

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Court[] of Appeal cases that have held that a mortgage borrower,

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as

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irregularities in the chain of transfer.” Moran v. GMAC Mortg.,

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LLC, No. 5:13-CV-04981-LHK, 2014 WL 3853833, at *5 (N.D. Cal.

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Aug. 5, 2014); see, e.g., Yvanova v. New Century Mortg. Corp.,

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172

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reasoning

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granted, 176 Cal. Rptr. 3d 266 (2014); Mendoza v. JPMorgan Chase

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Bank, N.A., 228 Cal. App. 4th 1020, 1033-34 (2014) (“We can find

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no state or federal cases to support the Glaski analysis and will

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follow the federal lead in rejecting this minority holding.”),

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rev. granted, 180 Cal. Rptr. 3d 1 (2014).

a

third

Cal.

party,

Rptr.
in

does

3d

104,

Jenkins,

not

have

109-110

and

a

cause

(2014)

decline

to

of

(“We

follow

action

agree

due

with

Glaski.”),

to

the
rev.

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Further, “the majority of federal district courts that

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have addressed . . . whether a borrower has standing to challenge

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securitization

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allegedly defective manner[] are in accord with Jenkins.” Boza v.

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U.S. Bank Nat‟l Ass‟n, No. LA CV12-06993 JAK (FMOx), 2013 WL

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5943160, at *6 (C.D. Cal. Oct. 28, 2013); accord Rivac v. Ndex

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West LLC, No. C 13-1416 PJH, 2013 WL 6662762, at *4 (N.D. Cal.

of

a

note

by

its

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transfer

to

a

trust

in

an

1

Dec.

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position‟ of courts within this district, which is that Glaski is

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unpersuasive,

and

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noncompliance

with

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parties to the PSA or third party beneficiaries of the PSA.”

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(internal quotation marks and citation omitted)); Newman v. Bank

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of N.Y. Mellon, No. 1:12-CV-1629 AWI GSA, 2013 WL 5603316, at *3

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n.2 (E.D. Cal. Oct. 11, 2013) (declining to follow Glaski).

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2013)

(“This

that
a

court

is

plaintiffs
PSA

in

persuaded

lack

by

the

standing

securitization

to

unless

„majority

challenge
they

are

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The California Supreme Court has not addressed this

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issue. “[W]here the state‟s highest court has not decided an

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issue, the task of the federal courts is to predict how the state

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high court would resolve it.” Westlands Water Dist. v. Amoco

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Chem. Co., 953 F.2d 1109, 1111 (9th Cir. 1991) (quoting Air–Sea

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Forwarders, Inc. v. Air Asia Co., Ltd., 880 F.2d 176, 186 (9th

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Cir. 1989)) (internal quotation marks omitted). “An intermediate

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state appellate court decision is a datum for ascertaining state

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law which is not to be disregarded by a federal court unless it

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is convinced by other persuasive data that the highest court of

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the state would decide otherwise.” Hayes v. Cnty. of San Diego,

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658 F.3d 867, 872-73 (9th Cir. 2011) (internal quotation marks

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and citation omitted).

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Jenkins is persuasive and is followed. Plaintiff does

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not allege in her Complaint facts plausibly showing that she was

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either a party to the assignment about which she complains or an

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intended

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“Plaintiff[]

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proceeds of [her] loan transactions; and [it is evident that her]

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role thereafter was simply to make payments of the principal and

third-party
.

.

.

beneficiary
contend

that

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of

the

[she]

assignment.
did

not

Nor

receive

does
the

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interest due.”

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F.3d 79, 90 (2d Cir. 2014). Therefore, Plaintiff has not shown

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that

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Plaintiff‟s Complaint is dismissed without leave to amend, and

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judgment shall be entered for Defendant.

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Dated:

she

can

Rajamin v. Deutsche Bank Nat‟l Trust Co., 757

provide

a

basis

February 4, 2015

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for

her

claims.

Accordingly,