Munson, et al. v. The Bank of New York, et al.

Filing 10

ORDER Granting 5 Motion to Dismiss With Prejudice and Without Leave to Amend. The Clerk of Court is instructed to close the file. Signed by Judge Jeffrey T. Miller on 10/15/2012. (All non-registered users served via U.S. Mail Service)(srm)

1
2
3
4
5
6
7
8

UNITED STATES DISTRICT COURT

9

SOUTHERN DISTRICT OF CALIFORNIA

10
11

DARRYL MUNSON; LA NEDRA
MUNSON,

CASE NO. 12cv1546 JM(NLS)

12

ORDER GRANTING MOTION TO
DISMISS

Plaintiff,
13

vs.

17

THE BANK OF NEW YORK MELLON
FKA THE BANK OF NEW YORK;
MORTGAGE ELECTRONIC
REGISTRATION SYSTEMS, INC.; and
BAC HOME LOANS SERVICING, LP FKA
COUNTRYWIDE HOME LOANS
SERVICING, LP,

18

Defendants.

14
15
16

19

Defendants The Bank of New York Mellon (fka The Bank of New York), Mortgage Electronic

20

Registration Systems, Inc., and Bank of America, N.A. (Successor by merger to BAC Home Loans

21

Servicing, LP, fka Countrywide Home Loans Servicing L.P.) move to dismiss the complaint pursuant

22

to Fed.R.Civ.P. 12(b)(6), or in the alternative, for a more definite statement pursuant to Fed.R.Civ.P.

23

12(e). Plaintiffs Darryl and La Nedra Munson did not file an opposition nor a statement of non-

24

opposition as required by Local Rule 7.1(e)(2). Pursuant to Local Rule 7.1(d)(1), the matters presented

25

are appropriate for decision without oral argument. For the reasons set forth below, the court grants

26

the motion to dismiss all claims. The Clerk of Court is instructed to close the file.

27
28

BACKGROUND
On June 22, 2012, Plaintiffs commenced this federal question action by alleging three federal
-1-

12cv1546

1

claims for declaratory relief pursuant to 28 U.S.C. §2201, 2202, violation of the Helping Families Save

2

Their Homes Act (“HFSTHA”), 15 U.S.C. §1641(g), and violation of the Fair Debt Collection

3

Practices Act (“FDCPA”), 15 U.S.C. §1692, et seq. Plaintiff also asserts supplemental jurisdiction

4

over eleven state law claims for negligence, quasi contract, violation of Cal. Bus. and Prof. Code

5

§§17200 and 17500, accounting, constructing trust, wrongful foreclosure, to void trustee’s deed upon

6

sale, quiet title, breach of contract, and civil conspiracy.1

7

Plaintiffs’ claims arise from a loan obtained from Countrywide Bank N.A. at the peak of the

8

housing bubble on January 6, 2006. (Compl. ¶25). The loan, in the amount of $937,500, was secured

9

by a deed of trust recorded against real property located in Valley Center, California. (RJN Exh. 1).

10

The loan was subsequently assigned to The Bank of New York Mellon fka The Bank of New York as

11

Successor to JP Morgan Chase Bank, N.A. as Trustee of SAMI II 2006-AR3 (“BONY”). (RJN Exh.

12

2).

13

Plaintiffs defaulted on the loan and, on June 20, 2008, a Notice of default and Election to Sell

14

Under Deed of Trust was recorded against the property. (RJN Exh. 3). Plaintiffs failed to cure the

15

default; and on June 11, 2012, the property was sold at a trustee’s sale. (RJN Exh. 5).

16

In broad brush, Plaintiffs allege that the securitization of their loan was ineffective because,

17

among other things, the note at issue did not include “a complete chain of endorsements” and that the

18

failure to deposit the Note and Deed of Trust into the trust violated New York trust laws. (Compl.

19

¶44). As every subsequent assignment was allegedly invalid, Defendants “unlawfully collect[ed]

20

Plaintiffs’ mortgage payments.” (Compl. ¶51). Plaintiffs also allege that once they fell two months

21

behind in mortgage payments, “Defendants failed to put Plaintiffs into a modification agreement that

22

would have cured any alleged default and would have been an absolute defense to foreclosure.”

23

(Compl. ¶65).

24
25
26

DISCUSSION
Legal Standards
Federal Rule of Civil Procedure 12(b)(6) dismissal is proper only in "extraordinary" cases.

27
1

28

The court notes that the complaint identifies the Central District of California as the location
where the complaint was filed even though the complaint was filed in the Southern District of
California.
-2-

12cv1546

1

United States v. Redwood City, 640 F.2d 963, 966 (9th Cir. 1981). Courts should grant 12(b)(6) relief

2

only where a plaintiff's complaint lacks a "cognizable legal theory" or sufficient facts to support a

3

cognizable legal theory. Balistreri v. Pacifica Police Dept., 901 F.2d 696, 699 (9th Cir. 1990). Courts

4

should dismiss a complaint for failure to state a claim when the factual allegations are insufficient “to

5

raise a right to relief above the speculative level.” Bell Atlantic Corp v. Twombly, 550 U.S. 544, 555

6

(2007) (the complaint’s allegations must “plausibly suggest[]” that the pleader is entitled to relief);

7

Ashcroft v. Iqbal, 129 S.Ct. 1937 (2009) (under Rule 8(a), well-pleaded facts must do more than

8

permit the court to infer the mere possibility of misconduct). “The plausibility standard is not akin to

9

a ‘probability requirement,’ but it asks for more than a sheer possibility that a defendant has acted

10

unlawfully.” Id. at 1949. Thus, “threadbare recitals of the elements of a cause of action, supported

11

by mere conclusory statements, do not suffice.” Id. The defect must appear on the face of the

12

complaint itself. Thus, courts may not consider extraneous material in testing its legal adequacy.

13

Levine v. Diamanthuset, Inc., 950 F.2d 1478, 1482 (9th Cir. 1991). The courts may, however,

14

consider material properly submitted as part of the complaint. Hal Roach Studios, Inc. v. Richard

15

Feiner and Co., 896 F.2d 1542, 1555 n.19 (9th Cir. 1989).

16

Finally, courts must construe the complaint in the light most favorable to the plaintiff. Concha

17

v. London, 62 F.3d 1493, 1500 (9th Cir. 1995), cert. dismissed, 116 S. Ct. 1710 (1996). Accordingly,

18

courts must accept as true all material allegations in the complaint, as well as reasonable inferences

19

to be drawn from them. Holden v. Hagopian, 978 F.2d 1115, 1118 (9th Cir. 1992). However,

20

conclusory allegations of law and unwarranted inferences are insufficient to defeat a Rule 12(b)(6)

21

motion. In Re Syntex Corp. Sec. Litig., 95 F.3d 922, 926 (9th Cir. 1996).

22

The Federal Claims

23

The Fourth Cause of Action

24

Plaintiffs allege that Defendants violated the HFSTHA by failing to comply with the Truth in

25

Lending Act. Defendants come forward to show that HFSTHA does not require loan servicers to

26

engage in loan modifications. Jones v. Premier One Funding, Inc., 2010 WL 841277, *3 (N.D. Cal.

27

2010). Furthermore, HFSTHA does not “give rise to a private right of action.” Cook v. One West

28

Bank FSC, 2009 WL 5218054, *2 (E.D. Cal. 2009). Accordingly, the court grants the motion to
-3-

12cv1546

1
2
3

dismiss this claim.
In light of these authorities, the court construes Plaintiffs’ failure to respond as non-opposition
to dismissal of this federal cause of action with prejudice and without leave to amend.

4

The Fifth Cause of Action

5

This cause of action alleges that Defendants violated the FDCPA by seeking to collect the loan.

6

Here, the FDCPA does not apply to Defendants because BONY, as assignee of the loan, is seeking to

7

collect its own debt and BAC, the loan servicer, is not a debt collector for purposes of the FDCPA.

8

Diessner v. Mortg. Elec. Registration Sys., 618 F.Supp.3d 1184, 188 (D. Ariz. 2009).

9

In light of these authorities, the court construes Plaintiffs’ failure to respond as non-opposition

10

to dismissal of this federal cause of action with prejudice and without leave to amend.

11

The State Law Claims

12

The court finds the eleven state law causes of action fail to state a claim for the reasons set

13

forth by Defendants and as acknowledged by Plaintiffs’ failure to respond to Defendants’ motion. The

14

court dismisses all state law claims for negligence, quasi contract, violation of Cal. Bus. and Prof.

15

Code §§17200 and 17500, accounting, constructing trust, wrongful foreclosure, to void trustee’s deed

16

upon sale, quiet title, breach of contract, and civil conspiracy.

17
18
19
20

In sum, the court dismisses all claims alleged by Plaintiffs. The Clerk of Court is instructed
to close the file.
IT IS SO ORDERED.
DATED: October 15, 2012

21
22

Hon. Jeffrey T. Miller
United States District Judge

23
24
25
26
27
28
-4-

12cv1546