Broyles v. Bank of America, N.A. et al
Filing
30
ORDER GRANTING DEFENDANTS' MOTION TO DISMISS COMPLAINT 18 . Signed by JUDGE LESLIE E. KOBAYASHI on 04/30/2014. -- Defendants' Motion to Dismiss Complaint, filed on January 31, 2014, is HEREBY GRANTED and the Compla int is HEREBY DISMISSED WITH PREJUDICE (eps)CERTIFICATE OF SERVICEParticipants registered to receive electronic notifications received this document electronically at the e-mail address listed on the Notice of Electronic Filing (NEF). Participants not registered to receive electronic notifications were served by first class mail on the date of this docket entry
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAII
MARYANN ROSE BROYLES,
individually and as cotrustee of the MARYANN ROSE
BROYLES REVOCABLE TRUST,
)
)
)
)
)
Plaintiff,
)
)
vs.
)
)
BANK OF AMERICA, N.A.; WELLS )
FARGO BANK, N.A.; SPECIALIZED )
LOAN SERVICES, LLC; JOHN DOES )
)
1-10; JANE DOES 1-10; DOE
)
CORPORATIONS 1-10; DOE
)
PARTNERSHIPS 1-10; DOE
)
ENTITIES 1-10; DOE
)
GOVERNMENTAL UNITS,
)
)
Defendants.
_____________________________ )
CIVIL 13-00540 LEK-KSC
ORDER GRANTING DEFENDANTS’
MOTION TO DISMISS COMPLAINT
Before the Court is Defendants Specialized Loan
Servicing LLC (“SLS”) and Wells Fargo Bank, N.A.’s (“Wells
Fargo,” collectively “Defendants”)1 Motion to Dismiss Complaint
(“Motion”), filed on January 31, 2014.
[Dkt. no. 18.]
Plaintiff
Maryann Rose Broyles, “individually and as co-trustee of the
Maryann Broyles Revocable Trust” (“Plaintiff”), filed her
memorandum in opposition on March 17, 2014, and Defendants filed
their reply on March 24, 2014.
1
[Dkt. nos. 22, 23.]
This matter
Wells Fargo is named in its capacity as Trustee for Banc
of America Alternative Loan Trust 2006-7 Mortgage Pass-Through
Certificates, Series 2006-7.
came on for hearing on April 7, 2014.
At the hearing, the Court
granted Plaintiff leave to file a supplemental memorandum,
addressing a jurisdictional argument raised in Defendants’ reply
and two orders raised by Defendants that were filed after the
Motion.
Plaintiff filed that supplemental memorandum on
April 14, 2014.
[Dkt. no. 27.]
After careful consideration of
the Motion, supporting and opposing memoranda, and the arguments
of counsel, Defendants’ Motion is HEREBY GRANTED and Plaintiff’s
Complaint is HEREBY DISMISSED WITH PREJUDICE for lack of subject
matter jurisdiction.
BACKGROUND
Plaintiff filed her Complaint on October 16, 2013,
alleging a single count of quiet title against Bank of America,
N.A. (“BOA”),2 Wells Fargo, SLS, and various Doe individuals and
entities.
Although styled as a quiet claim action, the instant
lawsuit is, at its essence, a “fear of paying the wrong entity”
claim.
Plaintiff alleges, “[t]his is an action in rem for a
declaratory judgment as to the ownership of a negotiable
instrument. . . .
At present, Ms. Broyles does not know to whom
her mortgage payments are due and does not know whether the
roughly $350,000.00 she has already paid under her mortgage Note
2
BOA filed a motion to dismiss the Complaint on January
27, 2014, [dkt. no. 16,] and on March 17, 2014, Plaintiff filed a
notice of voluntary dismissal without prejudice of BOA [dkt. no.
21].
2
was paid to the correct party.”
[Complaint at ¶ 1.]
The
Complaint centers on a single assignment of the note and mortgage
for her house, located at 48-5536 Waipio Lookout Road, Honokaa,
Hawai`i, 96727 (the “Property”), that Plaintiff alleges was
deceptively recorded by BOA (“the Assignment”).
6.]
[Id. at ¶¶ 1,
Plaintiff invokes the Court’s diversity jurisdiction, as
well as “equitable powers . . . pursuant to the Declaratory
Judgement Act, 28 U.S.C. 2201,” and states that the amount in
controversy is “$825,000.00, which is represents [sic] the
purchase price of the Subject Property.”
[Id. at ¶¶ 2, 3.]
Plaintiff alleges that, on July 26, 2006, she financed
the purchase of the Property by executing a promissary note (“the
Note”), secured by a mortgage agreement with BOA (“the Mortgage”)
and, on June 9, 2009, she conveyed the Property to the Maryann
Broyles Revocable Trust (“the Trust”) with herself as cotrustee.3
[Id. at ¶¶ 10-11.]
Plaintiff claims that, on March
19, 2012, BOA “caused to be recorded a false and deceptive
‘Assignment’ claiming that [BOA] had assigned the Note and the
Mortgage to Defendant Wells Fargo as trustee for ‘Banc of America
Alternative Loan Trust 2006-7 Mortgage Pass-Through Certificates,
Series 2006-7’ (‘Trust 2006-7’).”
3
[Id. at ¶ 12.]
Plaintiff does not name the other trustees, but they
appear, from the deed to the Property, to be Markus Broyles and
Gary J. Horwitz. [Id., Exh. C at p. 1.]
3
Plaintiff further alleges that the Assignment was false
and deceptive because: (1) the Assignment was backdated six years
to September 28, 2006, for no apparent commercial reason; (2) the
date on the Assignment is not before the cut-off date of
September 1, 2006 for Trust 2006-7, as represented in a
prospectus filed with the Securities and Exchange Commission; and
(3) the prospectus states that the depositor of Trust 2006-7 is
Banc of America Mortgage Securities, Inc., whereas the Assignment
purports to be from BOA.
[Id. at ¶¶ 13-16.]
Plaintiff alleges
that the Assignment has the same shortcomings as the mortgage
assignments related to Trust 2006-7 in the complaint in United
States ex rel. Szymoniak, C.A. No. 10-cv-014465-JFA (D.S.C.),
which was “ratified and became the basis for the National
Mortgage Settlement of 2012.”
[Id. at ¶ 16.]
Finally, Plaintiff
alleges that, on December 5, 2012, she received a letter from SLS
stating that it had the servicing rights to the Note and
Mortgage, but the letter did not explain how SLS received those
rights and the loan number in the letter did not match the number
in the Note or the Mortgage.
[Id. at ¶ 17.]
Thus, Plaintiff
claims that she “does not know who holds her Note, or to whom she
is supposed to make her regular mortgage payments.”
[Id. at
¶ 18.]
In the single quiet title count, Plaintiff alleges that
Wells Fargo, BOA and SLS each claim “some interest” in the
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Property, but they do not define their interests.
23.]
[Id. at ¶¶ 20-
She claims that there is “no adequate remedy at law for the
confusion and cloud on title,” [id. at ¶ 24,] that she has “the
right to know who owns her Note and Mortgage so that she can
negotiate a loan modification,” [id. at ¶ 25,] and that she is
“in danger of being billed for one debt two or even three times
by the three different Defendants” [id. at ¶ 27].
As remedies,
Plaintiff requests that the Court: declare who owns what interest
in the Property; remove “all clouds on the title”; stay any legal
proceedings relating to the Property; and award attorneys’ fees,
costs, and other appropriate relief.
[Id. at pgs. 11-12.]
DISCUSSION
In their reply, Defendants raised for the first time
the argument that the Court lacks subject matter jurisdiction
since the amount in controversy is below the jurisdictional
threshold of $75,000.
[Reply at 1-6.]
They relied on an order
in Pascua v. Option One Mortgage Corp., Civil No. 13-00406
SOM/KSC, 2014 WL 806226 (D. Hawai`i Feb. 28, 2014), issued by
this district court after the filing of the Motion.
6.]
[Reply at 1-
In that case, a mortgagor, who was facing foreclosure unless
he paid $41,139.92, brought a similar complaint styled as a quiet
title action, alleging that he needed to know whom to pay.
Pascua, 2014 WL 806226, at *1-2.
The district court dismissed
the complaint, in part, because it found that “the value of the
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relief Pascua requests cannot plausibly exceed $75,000.”
Id. at
*4.4
In general, raising a new legal argument in a reply
brief is improper.
See Local Rule LR7.4.
But, where the
argument goes to the Court’s very basis for subject matter
jurisdiction, and the support for the argument was not available
to the party at the time it filed its Motion, the Court may
consider it.
Thus, the Court issued an order requesting that
both parties be prepared to discuss the amount in controversy and
the Pascua order at the hearing on the Motion.
At the hearing, Defendants’ counsel relied on the
reasoning in Pascua, as well as an order that was filed one day
before the hearing, Dicion v. Mann Mortgage, LLC, Civ. No. 1300533 JMS-KSC, 2014 WL 1366151 (D. Hawai`i Apr. 4, 2014), also
dismissing a mortgagor’s quiet title action.
Counsel argued that
Dicion’s complaint is substantively identical to Plaintiff’s, and
even more analogous to the present case than Pascua, because the
mortgagor was bringing suit to determine whom to pay and, as
here, he was not facing foreclosure.
Plaintiff’s counsel did not
address either Pascua or Dicion directly at the hearing, or even
4
The other ground for lack of subject matter jurisdiction
was that there was not complete diversity, Pascua, 2014 WL
806226, at *3, which is not at issue in the present case.
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mention them in the supplemental memorandum.5
The Court finds the orders in Pascua and Dicion wellreasoned, and will follow them here.
I.
Article III Standing
The Ninth Circuit has clearly articulated the test for
Article III standing:
To satisfy Article III’s standing requirements, a
plaintiff must show (1) she has suffered an
‘injury in fact’ that is (a) concrete and
particularized and (b) actual or imminent, not
conjectural or hypothetical; (2) the injury is
fairly traceable to the challenged action of the
defendant; and (3) it is likely, as opposed to
merely speculative, that the injury will be
redressed by a favorable decision. A plaintiff
has the burden of showing that she has standing.
Ibrahim v. Dep’t of Homeland Sec., 669 F.3d 983, 992 (9th Cir.
2012) (citations and quotation marks omitted).
“‘[T]hreatened
injury must be certainly impending to constitute injury in fact,’
and [ ] ‘[a]llegations of possible future injury’ are not
sufficient.”
Clapper v. Amnesty Int’l USA, 133 S. Ct. 1138, 1147
(2013) (emphases and some alterations in Clapper) (citation
omitted).
“For purposes of ruling on a motion to dismiss for want
of standing, both the trial and reviewing courts must accept as
true all material allegations of the complaint, and must construe
the complaint in favor of the complaining party.”
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Bernhardt v.
Both of those lawsuits were filed by Plaintiff’s counsel.
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Cnty. of Los Angeles, 279 F.3d 862, 867 (9th Cir. 2002).
“However, a plaintiff may not rely on a ‘bare legal conclusion to
assert injury-in-fact, or engage in an ingenious academic
exercise in the conceivable to explain how defendants’ actions
caused his injury.’”
Dicion, 2014 WL 1366151, at *3 (quoting
Maya v. Centex Corp., 658 F.3d 1060, 1068 (9th Cir. 2011))
(internal quotation marks omitted).
This case is substantively indistinguishable from
Dicion.
Like Dicion, Plaintiff seeks a declaration of “the
interest (if any) of the Defendants and [Plaintiff] in the
Subject Property and in the Mortgage therein;” the removal of
“all clouds on the title of the Subject Property resulting from
Defendants’ actions;” and a “Stay of any and all legal
proceedings in rem against the Subject Property until this Court
can determine the status of each Defendants’ interest (if
any)[.]”
Compare Complaint at pgs. 11-12, with Dicion, 2014 WL
1366151, at *4 (nearly identical prayer for relief).
Also, similar to Dicion, Plaintiff here does not allege
that: she is in default; more than one entity has demanded
payment from her; any Defendant has initiated foreclosure against
her; or she desires to pay off the loan.
1366151, at *4.
See
Dicion, 2014 WL
Thus, like Dicion, since Plaintiff does not face
foreclosure or multiple liability, any possible future injury is
too conjectural or hypothetical, and her uncertainty of whom to
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pay is not sufficiently concrete or particularized, to constitute
an injury-in-fact.
See id.; see also Ibrahim, 669 F.3d at 992.
For these reasons, which Plaintiff failed to address at the
hearing and in her supplemental memorandum, the Court GRANTS the
Motion because Plaintiff lacks standing to bring this action.
Further, the Court FINDS that amendment would be
futile, and thus dismissal of the Complaint is WITH PREJUDICE.
See Cal. ex rel. Cal. Dep’t of Toxic Substances Control v.
Neville Chem. Co., 358 F.3d 661, 673 (9th Cir. 2004) (“denial of
leave to amend is appropriate if the amendment would be futile”
(internal quotations and citations omitted))6.
II.
Diversity Jurisdiction
For the sake of completeness, the Court now addresses
Defendants’ argument that the Complaint also fails for lack of
diversity jurisdiction.
A district court “shall have original
jurisdiction of all civil actions where the matter in controversy
exceeds the sum or value of $75,000, exclusive of interest and
costs,” 28 U.S.C. § 1332, and there is complete diversity, Wong
v. Crosman Corp., Civ. No. 13-00333 JMS-BMK, 2013 WL 4957335, at
*2 (D. Hawai`i Sept. 12, 2013) (citing Matheson v. Progressive
Speciality Ins. Co., 319 F.3d 1089, 1090 (9th Cir. 2003)).
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“To
The Court notes that, although directed at the hearing to
address Pascua and Dicion in her supplemental memorandum,
Plaintiff failed to discuss either. This provides further
support for the conclusion that amendment would be futile.
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justify dismissal, it must appear to a legal certainty that the
claim is really for less than the jurisdictional amount.”
Geographic Expeditions, Inc. v. Estate of Lhotka ex rel. Lhotka,
599 F.3d 1102, 1106 (9th Cir. 2010) (internal quotation omitted).
The party asserting jurisdiction bears the burden of proving
diversity.
Kanter v. Warner-Lambert Co., 265 F.3d 853, 857-58
(9th Cir. 2001).
This district court recently found, in Pascua,
“In actions seeking declaratory or injunctive
relief, it is well established that the amount in
controversy is measured by the value of the object
of the litigation.” Hunt v. Washington State
Apple Adver. Comm’n, 432 U.S. 333, 347 (1977).
Pascua’s full debt, like his property, is an
object in this litigation, but it is not the
object of the litigation. The object of the
litigation is “the particular and limited thing
sought to be accomplished by the action.” Ridder
Bros., Inc. v. Blethen, 142 F.2d 395, 399 (9th
Cir. 1944). See also Jackson v. Am. Bar Ass’n,
538 F.2d 829, 831 (9th Cir. 1976) (“Where the
complaint seeks injunctive or declaratory relief
. . . the amount in controversy is . . . the value
of the right to be protected or the extent of the
injury to be prevented.”); Freeland v. Liberty
Mut. Fire Ins. Co., 632 F.3d 250, 253 (6th Cir.
2011) (“Where a party seeks a declaratory
judgment, the amount in controversy is . . . the
value of the consequences which may result from
the litigation.”) (internal quotation omitted).
2014 WL 806226, at *4 (alterations in Pascua.
In that case,
the court reasoned,
Here, the matter Pascua says he wants to
accomplish does not implicate the entire debt or
the value of the property. Although he styles his
claim as one to “quiet title,” Pascua does not
allege that he holds title to the property free
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and clear of any debt obligation. See, e.g.,
Woodside v. Ciceroni, 93 F. 1, 4 (9th Cir. 1899).
Nor does Pascua seek to enjoin a foreclosure.
See, e.g ., Garfinkle v. Wells Fargo Bank, 483
F.2d 1074, 1076 (9th Cir. 1973). In either such
situation, the full debt or the property itself
would be the object of the litigation, because the
claimant would be trying to prevent paying the
debt or losing the property. Pascua, by contrast,
asks for a declaration to prevent him from feeling
uncertainty as to whom to pay. He is not actually
being asked to pay his acknowledged debt more than
once. The amount in controversy is therefore the
subjective value to Pascua of freeing him from
that risk. Courts are often disinclined to
speculate as to the monetary value of something so
vague and amorphous as a feeling of uncertainty.
Jackson, 538 F.2d at 831 (noting the difficulty of
adjudicating rights that “appear to be intangible,
speculative, and lack the capability of being
translated into monetary value”).
Id. at *5 (emphasis in original).
The court concluded that,
it is implausible to suggest that the subjective
value to Pascua of such a declaration is greater
than $75,000. Pascua’s primary fear appears to be
that he will accidentally pay the wrong party
$41,139.92, which is the amount Wells Fargo is
currently requesting he pay to avert foreclosure.
The harm to Pascua of his fear that he might lose
a second payment of $41,139.92 cannot plausibly be
worth in excess of $75,000.
Id.; see also Dicion, 2014 WL 1366151, at *6 (dismissing
complaint, in the alternative, because “the amount in controversy
is not sufficient to invoke diversity jurisdiction”).
This case is even more clear than Pascua (and is the
same as Dicion), since none of the Defendants (or any other
entity) are threatening foreclosure or demanding more than the
monthly mortgage payment.
Thus, the alleged injury is solely the
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uncertainty of not knowing whom to pay, and not the loss of a
specific payment.
Consistent with Pascua and Dicion, and their
reasoning, this Court FINDS that Plaintiff has failed to allege a
sufficient basis for diversity jurisdiction.
Thus,
alternatively, the Court GRANTS the Motion on that basis, and
DISMISSES the Complaint WITH PREJUDICE.
See Neville Chem. Co.,
358 F.3d at 673.
CONCLUSION
On the basis of the foregoing, Defendants’ Motion to
Dismiss Complaint, filed on January 31, 2014, is HEREBY GRANTED
and the Complaint is HEREBY DISMISSED WITH PREJUDICE.
IT IS SO ORDERED.
DATED AT HONOLULU, HAWAII, April 30, 2014.
/s/ Leslie E. Kobayashi
Leslie E. Kobayashi
United States District Judge
MARYANN ROSE BROYLES, ETC. VS. BANK OF AMERICA, ET AL; CIVIL 1300540 LEK-KSC; ORDER GRANTING DEFENDANTS’ MOTION TO DISMISS
COMPLAINT
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