Thrower v. Nationstar Mortgage

Filing 12

MEMORANDUM and ORDER signed by Senior Judge William B. Shubb on 6/28/17 ORDERING that Defendants' MOTION to DISMISS 4 is GRANTED. Plaintiff's claims are DISMISSED WITH PREJUDICE. CASE CLOSED. (Mena-Sanchez, L)

1
2
3
4
5
6
7
8

UNITED STATES DISTRICT COURT

9

EASTERN DISTRICT OF CALIFORNIA

10
----oo0oo----

11
12

ROBERTA THROWER,
Plaintiff,

13
14
15
16
17
18

CIV. NO. 2:17-00766 WBS KJN
MEMORANDUM AND ORDER RE: MOTION
TO DISMISS

v.
NATIONSTAR MORTGAGE LLC; U.S.
BANK NATIONAL ASSOCIATION, AS
TRUSTEE FOR LEHMAN XS TRUST
MORTGAGE PASS-THROUGH
CERTIFICATES, SERIES 2006-4N
and DOES 1-10, inclusive.
Defendants.

19
20

----oo0oo----

21
22
23
24
25
26
27
28

Plaintiff Roberta Thrower brought this action against
Nationstar Mortgage LLC (“Nationstar”) and U.S. Bank National
Association (“U.S. Bank”) for violations of state and federal law
arising out defendants’ alleged misconduct as plaintiff’s
purported mortgage servicer and beneficiary of plaintiff’s debt
obligation.

The matter is now before the court on defendants’

Motion to dismiss for failure to state a claim upon which relief
1

1

can be granted pursuant to Federal Rule of Civil Procedure

2

12(b)(6).

3

I.

(Defs.’ Mot. (Docket No. 4).)

Factual and Procedural Background

4

In 2006, plaintiff allegedly obtained a mortgage loan

5

on property in Rocklin, California, which was secured by a Deed

6

of Trust listing GreenPoint Mortgage Funding, Inc. as the lender.

7

(Compl. 9:13-19 (Docket No. 1).)

8

loan was placed in a mortgage-backed securities trust named

9

Lehman XS Trust, Series 2006-4N (“2006-4N Trust”), which the

The Complaint alleges that the

10

parties agree is governed by New York law.

11

The 2006-4N Trust allegedly had a closing date--the date by which

12

all Notes and Deeds of Trust must be transferred into the trust--

13

of March 31, 2006.

14

that the Deed of Trust was not transferred to the 2006-4N Trust

15

by the closing date and therefore the assignment is invalid.

16

(Compl. 13:18-14:12.)

17

(Compl. 11:19-26.)

(Compl. 9:25-10:1.)

The Complaint alleges

Following a series of recorded assignments, defendant

18

U.S. Bank was the trustee and beneficiary of the Deed of Trust

19

and Nationstar was the mortgage servicer.

20

Notice (“RJN”) Exs. 3-4, 8, 11 (Docket No. 5).)1

21
22
23
24
25
26
27
28

1

(Request for Judicial
Plaintiff

A court may take judicial notice of facts “not subject
to reasonable dispute” that are “accurately and readily
determined from sources whose accuracy cannot reasonably be
questioned.” Fed. R. Evid. 201. “[A] court may take judicial
notice of ‘matters of public record.’” Lee v. City of Los
Angeles, 250 F.3d 668, 689 (9th Cir. 2001) (citing Mack v. S. Bay
Beer Distrib., 798 F.2d 1279, 1282 (9th Cir. 1986)). Defendants
request that the court notice fifteen recorded documents--the
grant deed, trust transfer deed, several assignments of the deed
of trust, several substitutions of trustee, two Notices of
Default and rescission of the first Notice of Default, two
Notices of Trustee’s Sale, the Modification Agreement, and the
docket for plaintiff’s Chapter 13 Bankruptcy petition in the
Central District of California. (See RJN Exs. 1-15.) Plaintiff
does not dispute the accuracy or authenticity of the documents.
2

1

allegedly made payments to defendants and refinanced her mortgage

2

loan with Nationstar in 2012.

3

Default was subsequently recorded in 2016 and a Notice of Trustee

4

Sale was recorded on April 4, 2017.

5

(See RJN Ex. 10.)

A Notice of

(RJN Exs. 13-14.)

Plaintiff filed a verified complaint, bringing claims

6

against defendants for: (1) declaratory relief; (2) negligence;

7

(3) quasi contract; (4) violation of the Fair Debt Collection

8

Practices Act (“FDCPA”); (5) accounting; (6) quiet title; (7)

9

violation of the California Unfair Competition Law (“UCL”); and

10

(8) violation of 26 U.S.C. § 860G(d)(1).

11

defendants’ Motion to dismiss.

12

II.

13

Now before the court is

Discussion
On a motion to dismiss under Rule 12(b)(6), the court

14

must accept the allegations in the complaint as true and draw all

15

reasonable inferences in favor of the plaintiff.

16

Rhodes, 416 U.S. 232, 236 (1974), overruled on other grounds by

17

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

18

319, 322 (1972).

19

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

20

plausible on its face.”

21

544, 570 (2007).

22

‘probability requirement,’ but it asks for more than a sheer

23

possibility that a defendant has acted unlawfully.”

24

Iqbal, 556 U.S. 662, 678 (2009).

Scheuer v.

To survive a motion to dismiss, a plaintiff

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

“The plausibility standard is not akin to a

Ashcroft v.

“A claim has facial

25
26
27
28

Therefore, “[t]he court will take judicial notice of these
documents because they are matters of public record whose
accuracy cannot be questioned.” See Willis v. JPMorgan Chase
Bank, N.A., Civ. No. 2:17-366 WBS AC, 2017 WL 1349744, at *1
(E.D. Cal. Apr. 5, 2017) (taking judicial notice of recorded
deeds of trust).
3

1

plausibility when the plaintiff pleads factual content that

2

allows the court to draw the reasonable inference that the

3

defendant is liable for the misconduct alleged.”

4

Id.

The Complaint alleges that defendants cannot foreclose

5

on the property or demand mortgage payments from plaintiff

6

because the Deed of Trust and Note were not transferred into the

7

2006-4N Trust by its closing date, thereby violating the Pooling

8

Service Agreement (“PSA”).

9

not allege that she was a party to any of the assignments of her

(Compl. 11:19-26.)

Plaintiff does

10

loan, Deed of Trust, or Note.

11

lacks standing to challenge any allegedly untimely assignment to

12

the 2006-4N Trust and therefore plaintiff’s entire Complaint must

13

be dismissed.

14

Defendants argue that plaintiff

A borrower has standing to challenge an assignment of

15

her note and deed of trust on the basis of defects that render

16

the assignment void, but does not have standing to challenge a

17

voidable assignment.

18

Cal. 4th 919, 942-43 (2016).

19

voidable, the power to ratify or avoid the transaction lies

20

solely with the parties to the assignment.”

21

a voidable transaction, a void one cannot be ratified or

22

validated by the parties to it even if they so desire.”

23

Turner, --- F.3d ----, 2017 WL 2587981, at *3 (9th Cir. 2017).

24

Yvanova v. New Century Mortg. Corp., 62
“When an assignment is merely

Id. at 936.

“Unlike

In re

Under New York law, an act in violation of a trust

25

agreement renders the assignment not void, but voidable.

26

Rajamin v. Deutsche Bank Nat’l Trust Co., 757 F.3d 79, 87-90 (2d

27

Cir. 2014) (holding that “any failure to comply with the terms of

28

the PSAs” did not render the “acquisition of plaintiffs’ loan and
4

See

1

mortgages void” because “[u]nder New York law, unauthorized acts

2

by trustees are generally subject to ratification by the trust

3

beneficiaries”); see also Morgan v. Aurora Loan Servs., LLC, 646

4

Fed. App’x 546, 550 (9th Cir. 2016) (citing Rajamin).

5

a borrower does not have standing to challenge a purported

6

untimely assignment of a deed of trust.

7

WL 2587981, at *3-5 (holding a borrower did not have standing to

8

challenge the assignment of her deed of trust into a securitized

9

trust); Morgan, 646 Fed. App’x at 550 (“[B]ecause an action in

Therefore,

See In re Turner, 2017

10

violation of a trust agreement is voidable--not void--under New

11

York law, which governs the [trust agreement] at issue,

12

[plaintiff] lacks standing here.”).

13

The alleged assignment in violation of the PSA

14

“rendered the transfer voidable, not void.”

See In re Turner,

15

2017 WL 2587981, at *3.

16

the assignment voidable and plaintiff was not a party to the

17

assignment, plaintiff does not have standing to challenge the

18

assignment of her Note and Deed of Trust into the 2006-4N Trust.

19

See id.

Because such a violation only renders

20

Plaintiff relies on Glaski v. Bank of America, N.A.,

21

218 Cal. App. 4th 1079, 1097 (5th Dist. 2013), where the court

22

held that an assignment of a deed of trust into a securitized

23

trust after the closing date rendered the assignment void.

24

However, Glaski is “an outlier and not widely accepted law.”

25

Gutierrez v. Bank of Am., N.A., Civ. No. 2:14-1246 TLN AC, 2015

26

WL 925703, at *5 (E.D. Cal. Mar. 3, 2015) (citing cases); see

27

Wells Fargo Bank, N.A. v. Erobobo, 127 A.D.3d 1176, 1177-78 (N.Y.

28

App. Div. 2015) (reversing the trial court decision relied upon
5

1

in Glaski).

2

case that follows Glaski’s reasoning.2

3

courts that have addressed this issue post-Glaski--including the

4

Ninth Circuit, many district courts within the Ninth Circuit, and

5

other California Courts of Appeal--have held that borrowers do

6

not have standing to challenge a late assignment of their deed of

7

trust because an untimely assignment is voidable, not void.

8

e.g., Morgan, 646 Fed, App’x at 550; Saterbak v. JPMorgan Chase

9

Bank N.A., 245 Cal. App. 4th 808, 815 (4th Dist. 2016).

Plaintiff fails to point to a single post-Glaski
To the contrary, the

See,

The

10

court finds no reason to depart from the overwhelming majority of

11

recent decisions, including binding Ninth Circuit decisions.

12

Because plaintiff does not have standing to challenge

13

the alleged assignment, she also does not have standing to bring

14

claims relying on the allegedly untimely assignment.

15

v. MTC Fin., Inc., Civ. No. 1:17-43 DAD SKO, 2017 WL 2311680, at

16

*6 (E.D. Cal. May 26, 2017) (dismissing FDCPA, wrongful

17

foreclosure, and quiet title claims because plaintiffs did not

18

have standing to challenge the assignment of their deed of

19

trust); Walker v. Deutsche Bank Nat’l Trust Co., CV 15-03887-BRO

20

(MRWx), 2015 WL 12746201, at *7 (C.D. Cal. Oct. 5, 2015)

See Palmer

21
22
23
24
25
26
27
28

2

Plaintiff also cites a pre-Glaski case, Vogan v. Wells
Fargo Bank, N.A., Civ. No. 2:11-2098 JAM KJN, 2011 WL 5826016
(E.D. Cal. Nov. 17, 2011), where the court denied a motion to
dismiss a UCL claim when plaintiffs alleged, in part, that a
recorded assignment was executed after the closing date of the
securitized trust because it gave rise to a plausible inference
that some of the assignment was fraudulent. That case, however,
pre-dates the Second Circuit decision in Rajamin and the Ninth
Circuit decisions in In re Turner and Morgan, which held that
borrowers lack standing to challenge a late assignment of their
note or deed of trust because such an act “is voidable--not void-under New York law.” See, e.g., Morgan, 646 Fed. App’x at 550.
6

1

(dismissing quasi contract, wrongful foreclosure, and quiet title

2

claims because plaintiff lacked standing to challenge the

3

assignment of her loan).

4

conceded that all claims of plaintiff’s complaint rely on this

5

alleged assignment.

6

plaintiff’s claims.

7

At oral argument, plaintiff’s counsel

Accordingly, the court will dismiss all of

Although Fed. R. Civ. P. 15(a)(2) requires the court to

8

“freely give leave [to amend] when justice so requires,”

9

a

district court “need not grant leave to amend where the

10

amendment: (1) prejudices the opposing party; (2) is sought in

11

bad faith; (3) produces an undue delay in litigation; or (4) is

12

futile.”

13

946, 951 (9th Cir. 2006).

14

claims when she lacks standing to challenge the assignment of her

15

Deed of Trust would be futile because plaintiff cannot allege any

16

set of facts that would render the assignment void, instead of

17

voidable.

18

12746201, at *7.

19

leave to amend.

20

AmerisourceBergen Corp. v. Dialysist W., Inc., 465 F.3d
Granting plaintiff leave to amend her

See Palmer, 2017 WL 2311680, at *6; Walker, 2015 WL
Therefore, the court will not grant plaintiff

IT IS THEREFORE ORDERED that defendants’ Motion to

21

dismiss (Docket No. 4) be, and the same hereby is, GRANTED.

22

Plaintiff’s claims are DISMISSED WITH PREJUDICE.

23

Dated:

June 28, 2017

24
25
26
27
28
7