Fields v. Nationstar Mortgage et al

Filing 174

ORDER GRANTING IN PART AND DENYING IN PART MERS DEFENDANTS' MOTION TO DISMISS [ECF NO. 83 ] PLAINTIFFS FIRST AMENDED COMPLAINT FOR FRAUD & MISREPRESENTATION, FILED SEPTEMBER 28, 2015 re 157 Motion to Dismiss. Signed by JUDGE LE SLIE E. KOBAYASHI on 07/28/2016. -- The MERS Defendants' Motion is GRANTED insofar as:1) Plaintiff's fraud and misrepresentation claims against the MERS Defendants are DISMISSED; and 2) the portions of Plaint iff's claims based on the MERS Defendants' participation in the securitization of Plaintiff's loan and the MERS Defendants' role in the Nationstar Assignment are DISMISSED WITH PREJUDICE. The Motion is DENIED insofar as all other portions of Plaintiff'sfraud and misrepresentation claims against the MERS Defendants are DISMISSED WITHOUT PREJUDICE.This Court ORDERS Plaintiff to file her motion for leave to file a second amended complaint by August 31, 2016. The motion will be referred to the magistrate judge. (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 served by first class mail on the date on July 29, 2016

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAII
)
)
)
Plaintiff,
)
)
vs.
)
)
NATIONSTAR MORTGAGE LLC;
CHARTER CAPITAL CORPORATION; )
)
AURORA LOAN SERVICING LLC;
)
AURORA BANK; STRUCTURED
ASSETS SECURITIES
)
)
CORPORATION, aka SASCO;
CITIBANK N.A. AS TRUSTEE FOR )
)
THE SASCO MORTGAGE PASSTHROUGH CERTIFICATES 2005-17 )
POOL GROUP 4; LEHMAN BROTHERS )
)
HOLDINGS INC.; MORTGAGE
)
ELECTRONIC REGISTRATION
)
SYSTEMS, aka MERS; MERSCORP
)
HOLDINGS, INC.; and DOE
)
ENTITIES 1-5O,
)
)
Defendants.
_____________________________ )
JANEECE FIELDS,

CIVIL 15-00015 LEK-KJM

ORDER GRANTING IN PART AND DENYING IN PART MERS DEFENDANTS’
MOTION TO DISMISS [ECF NO. 83] PLAINTIFF’S FIRST AMENDED
COMPLAINT FOR FRAUD & MISREPRESENTATION, FILED SEPTEMBER 28, 2015
On April 20, 2016, Defendants Mortgage Electronic
Registration Systems, Inc. (“MERS”) and MERSCORP Holdings, Inc.
(“MERSCORP,” collectively “MERS Defendants”)1 filed their Motion
to Dismiss [ECF No. 83] Plaintiff’s First Amended Complaint for
Fraud & Misrepresentation, Filed September 28, 2015 (“Motion”).

1

The MERS Defendants note that the Amended Complaint
incorrectly names “Mortgage Electronic Registration Systems, aka
MERS” and “MERSCORP HOLDINGS INC.” [Mem. in Supp. of Motion at 1
n.1.]

[Dkt. no. 157.]

Pro se Plaintiff Janeece Fields (“Plaintiff”)

filed her memorandum in opposition on May 16, 2016, and the MERS
Defendants filed their reply on May 23, 2016.
162.]

[Dkt. nos. 161,

On May 27, 2016, Plaintiff filed a surreply, with a

supporting affidavit.

[Dkt. nos. 163-64.]

On June 1, 2016, this

Court issued an entering order finding the Motion suitable for
disposition without a hearing pursuant to Rule LR7.2(d) of the
Local Rules of Practice of the United States District Court for
the District of Hawai`i (“Local Rules”).

[Dkt. no. 167.]

After

careful consideration of the Motion, supporting and opposing
memoranda, and the relevant legal authority, the MERS Defendants’
Motion is HEREBY GRANTED IN PART AND DENIED IN PART for the
reasons set forth below.
BACKGROUND
Plaintiff filed her original Complaint on January 15,
2015.

[Dkt. no. 1.]

The MERS Defendants were among the

defendants named in the Complaint.

[Complaint at ¶¶ IX-X.]

There is no indication in the record that Plaintiff served the
Complaint on the MERS Defendants.
Plaintiff filed her First Amended Complaint for Fraud &
Misrepresentation (“Amended Complaint”) on September 28, 2015.
[Dkt. no. 83.]

The MERS Defendants are among the defendants

2

named in the Amended Complaint.

[Amended Complaint at ¶¶ IX-X.2]

The case arises from Plaintiff’s refinance loan from
Defendant Charter Capital Corporation (“Charter Capital”).3
Plaintiff alleges that Charter Capital verbally offered her
certain loan terms in August 2005, but the actual terms of the
loan “were misrepresented and . . . documents were fabricated and
falsified.”

[Id. at ¶ XI.]

According to the Amended Complaint,

Plaintiff discovered in January 2011 that the recorded documents
did not include the terms that she agreed to.

Plaintiff alleges

that a “bait and switch” occurred, and she denies agreeing
to/signing either the mortgage in favor of Charter Capital
(“Mortgage”) or the promissory note the Mortgage secures
(“Note”).4

[Id. at pp. 3-4.]

2

Page 1 through the first half of page 3 of the Amended
Complaint have paragraph numbers, but there are no paragraph
numbers after that. The Court’s citations to the portions of the
Amended Complaint without paragraph numbers will refer to the
relevant page number.
3

On December 10, 2015, the parties who had appeared in the
action by that time stipulated to dismiss with prejudice the
claims in the Amended Complaint against Charter Capital. [Dkt.
no. 133.]
4

The Note was for $999,000.00, and it is secured by the
Mortgage on certain real property located in Kailua (“the
Property”). [Amended Complaint, Exh. 2 (Decl. of A.J. Loll,
dated 7/22/15), Exh. 2A (Note) at 1; Motion, Exh. B (Mortgage) at
3.] The Mortgage was recorded with the Office of the Assistant
Registrar of the Land Court of the State of Hawai`i (“Land
Court”) on August 30, 2005 as Document No. 3319506 on Certificate
of Title 767,528. [Mortgage at 1.] The MERS Defendants ask this
Court to consider the Mortgage pursuant to Fed. R. Evid. 201.
(continued...)

3

In addition to the allegations regarding the
origination of the refinance loan, Plaintiff challenges the
assignment of the Mortgage from Charter Capital to Defendant
Nationstar Mortgage LLC (“Nationstar”).5

She “denies signing or

receiving any Notice of Assignment, Sale or Transfer of Servicing
Rights or any notice of transfer or sale and asserts that these
documents, as well as the Assignment of Mortgage from Charter to
Nationstar [(“Nationstar Assignment”)], are fabricated, falsified
and invalid.”6

[Id. at p.4.]

Plaintiff alleges that, because

the Nationstar Assignment is invalid, the foreclosure proceeding
that Nationstar filed against her in state court (“Foreclosure
Action”) was wrongful.

[Id.]

On March 10, 2016, this Court issued an Order to Show
Cause (“OSC”) directing Plaintiff to show cause why her claims in
the Amended Complaint against Defendants Aurora Loan Servicing
LLC (“Aurora Servicing”); Aurora Bank; Structured Assets
Securities Corporation, also known as SASCO (“SASCO”); Lehman

4

(...continued)
[Mem. in Supp. of Motion at 2 n.2.]
5

On March 9, 2016, Plaintiff and Nationstar stipulated to
dismiss with prejudice the claims in the Amended Complaint
against Nationstar. [Dkt. no. 146.]
6

The Nationstar Assignment was recorded on June 3, 2013 as
Document No. T-8554232 on Certificate of Title No. 973086. MERS,
as Charter Capital’s nominee, assigned Plaintiff’s Mortgage to
Nationstar. [Amended Complaint, Exh. 3 (Nationstar Assignment)
at 1.]

4

Brothers Holdings Inc.; MERS; and MERSCORP (collectively “the
Unserved Defendants”) should not be dismissed for failure to make
timely service.7

[Dkt. no. 148.]

On April 7, 2016, Plaintiff

filed a Proof of Service for MERSCORP and one for MERS.

[Dkt.

no. 153, 154.]
After Plaintiff and the MERS Defendants filed their
responses to the OSC, [dkt. nos. 149, 155,] this Court issued an
order that dismissed Plaintiff’s claims in the Amended Complaint
against Aurora Servicing, Aurora Bank, SASCO, and Lehman Brothers
without prejudice.

[Order Regarding Responses to March 10, 2016

Order to Show Cause, filed 4/18/16 (dkt. no. 156) (“OSC Order”).]
The OSC Order directed the MERS Defendants to either answer the
Amended Complaint or file the appropriate motion because this
Court found that the arguments which the MERS Defendants raised
in their response to the OSC should be addressed through motions
practice.

[OSC Order at 3-4.]

On April 21, 2016, after this

Court issued the OSC Order, Plaintiff filed an affidavit in

7

This Court noted that Plaintiff filed a return of service
regarding Defendant Citibank N.A., as Trustee for the SASCO
Mortgage Pass-Through Certificates 2005-17 Pool Group 4
(“Citibank”), on March 8, 2016. This Court did not make any
finding or conclusion regarding whether the service on Citibank
was effective. [OSC at 2.] Executed summonses as to Citibank
were filed on April 4, 2016 and May 31, 2016. [Dkt. nos. 151,
168.] On July 6, 2016, the Clerk of Court issued an Entry of
Default as to Citibank. [Dkt. no. 172.] As of the date of this
Order, Plaintiff has not filed a motion for default judgment
against Citibank. This Court EMPHASIZES that this Order makes no
findings or conclusions regarding the merits of Plaintiff’s
claims in the Amended Complaint against Citibank.

5

support of her response the OSC (“Plaintiff OSC Affidavit”).
[Dkt. no. 160.]
In the instant Motion, the MERS Defendants point out
that Plaintiff defaulted on her loan in December 2013, and
Nationstar commenced the Foreclosure Action on February 25, 2014.
[Amended Complaint, Exh. 1 (Verified Complaint for Foreclosure
(“Foreclosure Complaint”)) at ¶ 10.]

In October 2014, Nationstar

moved for summary judgment in the Foreclosure Action and an
interlocutory decree of foreclosure and, on December 19, 2014,
Plaintiff filed objections to that motion, as well as a
counterclaim and cross-complaint against Nationstar, alleging the
same claims that she alleged in the original Complaint in the
instant case.

[Motion, Exh. D (Foreclosure Action docket sheet);

Mem. in Supp. of Motion at 3.]

Plaintiff attempted to remove the

Foreclosure Action to this district court, [CV 15-00020 LEK-BMK,
Notice of Removal of Action, filed 1/21/15 (dkt. no. 2),] but
this Court ultimately granted Nationstar’s motion to remand.
[Id., dkt. nos. 9 (motion to remand), 22 (order granting).]
Plaintiff and her husband, Frank Lamonte Webb, executed
a Warranty Deed, dated March 5, 2015, conveying the property to
Michael Edmund Drzymkowski and Annemarie (NMN) Drzymkowski, and
Hale Ala Kai, LLC.

The Warranty Deed was recorded with the Land

Court on March 12, 2015 as document number T-9201128 on
Certificate of Title number 973086.

6

[Motion, Exh. E (Warranty

Deed) at 1.]

On August 27, 2015, Nationstar moved to dismiss the

Foreclosure Complaint with prejudice, and the state court granted
the motion on December 11, 2015.

[Id., Exh. D at 2-3.]

In the instant Motion, the MERS Defendants argue that
this Court must dismiss the Amended Complaint because:
1) Plaintiff failed to timely serve the Amended Complaint on them
and there is no excusable neglect for the delay; 2) the Amended
Complaint fails to state a claim against them; and 3) any claims
that Plaintiff could have asserted against it were rendered moot
when the Foreclosure Action was dismissed in light of the sale of
the Property.
DISCUSSION
I.

Preliminary Procedural Issues
A.

The MERS Defendants’ Exhibits
The MERS Defendants attached several exhibits to the

Motion.

Only two of the exhibits – the Note and the Nationstar

Assignment – are documents that Plaintiff included as exhibits to
the Amended Complaint.
As a general rule, this Court’s scope of review in
considering a motion to dismiss is limited to the allegations in
the complaint.

See Daniels-Hall v. Nat’l Educ. Ass’n, 629 F.3d

992, 998 (9th Cir. 2010).

“[A] court may consider evidence on

which the complaint necessarily relies if: (1) the complaint
refers to the document; (2) the document is central to the
7

plaintiff’s claim; and (3) no party questions the authenticity of
the copy attached to the 12(b)(6) motion.”
internal quotation marks omitted).

Id. (citations and

Ordinarily, consideration of

other materials requires the district court to convert a motion
to dismiss into a motion for summary judgment.

Yamalov v. Bank

of Am. Corp., CV. No. 10–00590 DAE–BMK, 2011 WL 1875901, at *7
n.7 (D. Hawai`i May 16, 2011) (citing Parrino v. FHP, Inc., 146
F.3d 699, 706 n.4 (9th Cir. 1998)).
This Court has considered the following exhibits to the
Motion that are not attached to the Amended Complaint:
Plaintiff’s Mortgage; the docket sheet for the Foreclosure
Action; and Plaintiff’s Warranty Deed.8

Plaintiff has not

questioned the authenticity of the copies of these documents that
the MERS Defendants submitted with the Motion.

The Amended

Complaint refers to both the Mortgage and the Foreclosure Action,
and they are central to Plaintiff’s claims.

Plaintiff’s Warranty

Deed is central to Plaintiff’s claims insofar as Plaintiff’s
transfer of the Property may be relevant to the question of
whether her claims are moot.

This Court therefore concludes that

it may consider those exhibits to the Motion without converting

8

This Court notes that the MERS Defendants attached their
exhibits to the Motion, without a declaration by counsel or by
another person with personal knowledge of the documents. This
Court does not condone this practice and CAUTIONS the MERS
Defendants that, in the future, if they fail to submit a
declaration or affidavit identifying and authenticating their
exhibits, this Court may disregard and/or strike their exhibits.

8

the Motion into a motion for summary judgment.
B.

Plaintiff’s Surreply
As previously noted, Plaintiff filed a surreply, with a

supporting affidavit, on May 27, 2016.

Local Rule 7.4 states

that, other than the memorandum in opposition to a motion and the
reply, “[n]o further or supplemental briefing shall be submitted
without leave of court.”

Plaintiff argues that the surreply was

necessary because the MERS Defendants’ reply “contain[ed]
incorrect representations” and because new facts came to light.9
[Surreply at 1, 3.]

Although Plaintiff failed to obtain leave to

file the surreply and supporting affidavit, this Court has
considered them in ruling on the Motion.
However, this Court CAUTIONS Plaintiff that, in future
motions practice, she must obtain leave of court before filing
documents other than a memorandum in opposition or a reply.

If

she fails to do so, the additional document may be disregarded
and/or stricken from the record.
This Court now turns to the merits of the Motion.
II.

Failure to Serve
The MERS Defendants first argue that this Court should

dismiss the Amended Complaint against them because Plaintiff

9

The surreply states “new facts first came to light in this
case on 7/24/2016.” [Surreply at 3.] Insofar as Plaintiff filed
the surreply on May 27, 2016, this Court assumes that Plaintiff
meant May 24, 2016.

9

failed to effect timely service.

When Plaintiff filed the

Amended Complaint on September 28, 2015, the Federal Rules of
Civil Procedure stated:
If a defendant is not served within 120 days after
the complaint is filed, the court – on motion or
on its own after notice to the plaintiff – must
dismiss the action without prejudice against that
defendant or order that service be made within a
specified time. But if the plaintiff shows good
cause for the failure, the court must extend the
time for service for an appropriate period. . . .
Fed. R. Civ. P. 4(m) (2015).10

Plaintiff did not serve the MERS

Defendants until March 30, 2016, well beyond the 120-day period.
See dkt. nos. 153, 154.
This district court has recognized that, pursuant to
Rule 4(m), courts have broad discretion to dismiss a plaintiff’s
claims against a defendant without prejudice if the plaintiff
fails to establish good cause for her failure to effect timely
service.

See, e.g., Uy v. Wells Fargo Bank, N.A., Civ. No. 10-

00204 ACK-RLP, 2011 WL 1539832, at *1 (D. Hawai`i Apr. 20, 2011)
(citing In re Sheehan, 253 F.3d 507, 512–13 (9th Cir. 2001)).

In

Sheehan, the Ninth Circuit stated:
When considering a motion to dismiss a
complaint for untimely service, courts must
determine whether good cause for the delay has
been shown on a case by case basis. We have
recognized that “[a]t a minimum, ‘good cause’
means excusable neglect.” Boudette v. Barnette,

10

Effective December 1, 2015, the period for service is now
ninety days. Fed. R. Civ. P. 4(m).

10

923 F.2d 754, 756 (9th Cir. 1991). In Boudette,
we stated that a plaintiff may be required to show
the following factors in order to bring the excuse
to the level of good cause: “(a) the party to be
served received actual notice of the lawsuit;
(b) the defendant would suffer no prejudice; and
(c) plaintiff would be severely prejudiced if his
complaint were dismissed.” Id.
253 F.3d at 512 (alteration in Sheehan) (some citations omitted).
Plaintiff argues that there is good cause for her late
service of the Amended Complaint on the MERS Defendants.

She

states that, beginning around February 2015, she attempted to
find out how to serve the MERS Defendants in Hawai`i, but
discovered that neither of them had an agent for service of
process in Hawai`i.
those efforts.

She does not state how long she continued

[Pltf. OSC Aff. at ¶¶ 1-2.]

At an unspecified

point, Plaintiff performed “numerous google searches” and called
the secretary of state in various states.

[Id. at ¶ 3.]

She

eventually learned from the “California Secretary of State that
[she] should call the Comptroller of the Currency and the FDIC to
get the information.”

[Id.]

She called those offices around

March 2016 and obtained the address for the MERS Defendants’
headquarters in Reston, Virginia.

[Id. at ¶ 4.]

Plaintiff has not presented any reasons why she could
not have learned about the Virginia address during the period
allotted for service, particularly because Plaintiff knew at the
time she filed her Amended Complaint that the MERS Defendants had
their headquarters in Virginia.

See Amended Complaint at ¶¶ IX11

X.

None the of the circumstances that Plaintiff describes in

either her filings addressing the OSC or her filings addressing
the instant Motion constitute excusable neglect.

This Court

therefore FINDS that Plaintiff has failed to establish good cause
for her failure to serve the MERS Defendants within 120 days
after the filing of the Amended Complaint.
In light of this Court’s finding, it can dismiss
Plaintiff’s claims against MERS without prejudice or it can order
that Plaintiff effect service with a specified period of time.
This Court, in the exercise of its discretion, finds that either
remedy would be futile because Plaintiff served both of the MERS
Defendants on March 30, 2016, through an attorney authorized to
accept service of process on behalf of each of the MERS
Defendants, and the MERS Defendants have appeared in this case.
This Court emphasizes that it does not condone Plaintiff’s
failure to serve the MERS Defendants in a timely manner.
However, this Court concludes that – because Plaintiff has
effected service – this Court should test the plausibility of
Plaintiff’s claims instead of dismissing Plaintiff’s claims
pursuant to Rule 4(m).
The MERS Defendants’ Motion is therefore DENIED as to
their request to dismiss Plaintiff’s claims against them pursuant
to Rule 4(m).

12

III. Whether Plaintiff’s Claims Are Sufficiently Pled
The MERS Defendants also ask this Court to dismiss
Plaintiff’s claims against them pursuant to Fed. R. Civ. P.
12(b)(6).11

The Amended Complaint contains no factual

allegations identifying actions or omissions by either MERS or
MERSCORP.

This Court therefore CONCLUDES that the Amended

Complaint fails to state any plausible claims against the MERS
Defendants.

See Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (“To

survive a motion to dismiss, a complaint must contain sufficient
factual matter, accepted as true, to ‘state a claim to relief
that is plausible on its face.’” (quoting Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 570, 127 S. Ct. 1955, 167 L. Ed. 2d 929
(2007))).

Plaintiff’s claims against the MERS Defendants must be

dismissed pursuant to Rule 12(b)(6).
Moreover, the two claims that Plaintiff alleges are
fraud and misrepresentation.

The specific allegations in the

Amended Complaint show that Plaintiff is alleging intentional
misrepresentation, see Amended Complaint at pp. 10-11, and
intentional misrepresentation is a claim that sounds in fraud.
See, e.g., Barber v. Ohana Military Communities, LLC, Civil No.
14-00217 HG-KSC, 2014 WL 3529766, at *11 (D. Hawai`i July 15,
2014) (noting that, under Hawai`i law, a fraud claim and an

11

Rule 12(b)(6) states that “a party may assert the
following defenses by motion: . . . failure to state a claim upon
which relief can be granted.”

13

intentional misrepresentation claim are the same).

Thus, both of

Plaintiff’s claims must comply with the following heightened
pleading standard:
[Fed. R. Civ. P.] 9(b) requires that, “[i]n
alleging fraud or mistake, a party must state with
particularity the circumstances constituting fraud
or mistake.” Pursuant to Rule 9(b), a party is
required to make particularized allegations of the
circumstances constituting fraud. See Sanford v.
MemberWorks, Inc., 625 F.3d 550, 557–58 (9th Cir.
2010).
In their pleadings, Plaintiffs “must allege
the time, place, and content of the fraudulent
representation; conclusory allegations do not
suffice.” See Shroyer v. New Cingular Wireless
Servs., Inc., 622 F.3d 1035, 1042 (9th Cir. 2010)
(citation omitted). “Malice, intent, knowledge,
and other conditions of a person’s mind may be
alleged generally.” Fed. R. Civ. P. 9(b); see
also Odom v. Microsoft Corp., 486 F.3d 541, 554
(9th Cir. 2007) (en banc) (“[T]he state of mind —
or scienter — of the defendants may be alleged
generally.” (citation omitted)); Walling v.
Beverly Enters., 476 F.2d 393, 397 (9th Cir. 1973)
(stating that Rule 9(b) “only requires the
identification of the circumstances constituting
fraud so that the defendant can prepare an
adequate answer from the allegations” (citations
omitted)).
When there are multiple defendants,
Rule 9(b) does not allow a complaint to
merely lump multiple defendants together but
require[s] plaintiffs to differentiate their
allegations when suing more than one
defendant . . . and inform each defendant
separately of the allegations surrounding his
alleged participation in the fraud. In the
context of a fraud suit involving multiple
defendants, a plaintiff must, at a minimum,
identif[y] the role of [each] defendant[] in
the alleged fraudulent scheme.

14

Swartz v. KPMG LLP, 476 F.3d 756, 764–65 (9th Cir.
2007) (alterations in Swartz) (internal quotation
marks and citations omitted); see also Meridian
Project Sys., Inc. v. Hardin Constr. Co., 404 F.
Supp. 2d 1214, 1226 (E.D. Cal. 2005) (“When fraud
claims involve multiple defendants, the complaint
must satisfy Rule 9(b) particularity requirements
for each defendant.” (citations omitted)).
Barker v. Gottlieb, 23 F. Supp. 3d 1152, 1164-65 (D. Hawai`i
2014) (alterations in Barker) (some citations omitted).

The

allegations against the MERS Defendants in Plaintiff’s Amended
Complaint do not meet the heightened pleading standard.

Thus,

the Amended Complaint did not give the MERS Defendants notice of
the basis of Plaintiff’s claims, and they would be forced to
respond with a general denial of wrongdoing.

See In re Lui, No.

14-60025, 2016 WL 1212113, at *1 (9th Cir. Mar. 29, 2016)
(“Rule 9(b) demands that allegations of fraud be specific enough
to give defendants notice of the particular misconduct . . . so
that they can defend against the charge and not just deny that
they have done anything wrong.” (citation and internal quotation
marks omitted)).

Plaintiff’s claims against the MERS Defendants

must also be dismissed pursuant to Rule 9(b).
This Court next turns to the issue of whether the
dismissal is with prejudice or without prejudice – in other
words, whether Plaintiff should be allowed to file a second
amended complaint to try to cure the defects in her claims
against the MERS Defendants.

Because Plaintiff is proceeding pro

se, this Court can only dismiss her claims with prejudice if it
15

is absolutely clear that no amendment can cure the defects in her
claims.

See Lucas v. Dep’t of Corr., 66 F.3d 245, 248 (9th Cir.

1995) (“Unless it is absolutely clear that no amendment can cure
the defect, . . . a pro se litigant is entitled to notice of the
complaint’s deficiencies and an opportunity to amend prior to
dismissal of the action.”).
Although it is not readily apparent from the Amended
Complaint, Plaintiff’s claims against the MERS Defendants appear
to arise from: 1) their participation in the securitization of
Plaintiff’s loan; and 2) their role in the Nationstar Assignment.
See, e.g., Amended Complaint at p. 4 (“Plaintiff has been harmed
by this deceit and concealment in that she unknowingly became
involved in a mortgage securitization scheme that sold mortgage
backed certificates to investors that made false claims to
investors and caused damage to investors.”); id. at p. 10 (“The
Assignment of Mortgage from Charter’s ‘successors or assign’ was
a misrepresentation, a falsified fabricated document that allowed
Nationstar and their attorneys to begin foreclosure proceedings
on Plaintiffs property.”).
First, to the extent that Plaintiff challenges the MERS
Defendants’ role in the securitization of her loan, this district
court has recognized that:
As the majority of courts have held, grievances
regarding the securitzation [sic] process cannot
be the basis for a cause of action. In re
16

Nordeen, 495 B.R. 468, 479 (9th Cir. BAP 2013)
(rejecting “the idea that securitization
inherently changes the [] existing legal
relationship between the parties to the extent
that the original parties cease to occupy the
roles they did at the closing,” because “the
securitization of a loan does not in fact alter or
affect the legal beneficiary’s standing to enforce
the deed of trust.”) (citing Joyner v. Bank of Am.
Home Loans, 2010 WL 2953969, at *1, *5, *9 (D.
Nev. July 26, 2010) (footnote omitted));
Rodenhurst v. Bank of Am., 773 F. Supp. 2d 886,
898 (D. Haw. 2011) (“The Court also rejects
Plaintiffs’ contention that securitization in
general somehow gives rise to a cause of action —
Plaintiffs point to no law or provision in the
mortgage preventing this practice, and cite to no
law indicating that securitization can be the
basis of a cause of action. Indeed, courts have
uniformly rejected the argument that
securitization of a mortgage loan provides the
mortgagor a cause of action.”)
Uy v. HSBC Bank USA, Nat’l Ass’n, Civ. No. 14-00261 HG-KSC, 2015
WL 1966689, at *5 (D. Hawai`i Apr. 30, 2015) (alteration in Uy v.
HSBC).
This Court agrees with the legal principles summarized
in Uy v. HSBC, and also notes that, in the Mortgage, Plaintiff
expressly agreed to grant MERS the authority to act on behalf of
Charter Capital and its successors and assigns.

See Mortgage at

3 (stating that “Borrower does hereby mortgage, grant and convey
to MERS (solely as nominee for Lender and Lender’s successors and
assigns) and to the successors and assigns of MERS, with power of
sale,” of the Property).

Further, Plaintiff specifically

acknowledged that

17

MERS holds only legal title to the interests
granted by Borrower in this Security Instrument,
but, if necessary to comply with law or custom,
MERS (as nominee for Lender and Lender’s
successors and assigns) has the right: to exercise
any or all of those interests, including, but not
limited to, the right to foreclose and sell the
Property; and to take any action required of
Lender including, but not limited to, releasing
and canceling this Security Instrument.
[Id.]

Consistent with the Mortgage, MERS executed the Nationstar

Assignment “solely as nominee for Charter Capital.”

[Nationstar

Assignment at 1.]
Hawai`i courts have held that language similar to the
language in Plaintiff’s Mortgage “empower[s] MERS to take action,
including assigning the loan.”

See, e.g., Bank of Am., N.A. v.

Reyes-Toledo, No. CAAP-15-0000005, 2016 WL 1092305, at *2
(Hawai`i Ct. App. Mar. 16, 2016), cert. granted, 2016 WL 3488573
(Hawai`i June 22, 2016).12

12

In fact, this Court considered

In Reyes-Toledo, the Intermediate Court of Appeals stated:
The Mortgage specifies, “[Reyes–Toledo] does
hereby mortgage, grant and convey to MERS (solely
as nominee for [Countrywide] and [Countrywide’s]
successors and assigns) and to the successors and
assigns of MERS, with power of sale, the
[Property].” Additionally, the Mortgage states:
[Reyes–Toledo] understands and agrees that
MERS holds only legal title to the interests
granted by [Reyes–Toledo] in this Security
Instrument, but if necessary to comply with
law or custom, MERS (as nominee for
[Countrywide] and [Countrywide’s] successors
and assigns) has the right: to exercise any
or all of those interests, including, but not
(continued...)

18

identical language in Whittington v. Bank of New York Mellon.
CIVIL 16-00014 LEK-KJM, 2016 WL 3102002, at *5 (D. Hawai`i
June 2, 2016) (noting that Whittington’s mortgage stated:
“‘Borrower does hereby mortgage, grant and convey to MERS (solely
as nominee for Lender and Lender’s successors and assigns) and to
the successors and assigns of MERS, with power of sale,’ of the
Property”).

In Whittington, this Court concluded that “the

portion of [Whittington]’s claims challenging the securitization
process in general and MERS’s role as mortgagee fail[ed] to state
a plausible claim for relief,” and dismissed those portions of
her claims with prejudice.

Id. at *6.

For the reasons articulated in Uy v. HSBC and
Whittington, and based upon the existing record in this case,
this Court CONCLUDES that it is absolutely clear that no
amendment can cure the defects in the portions of Plaintiff’s
claims based on the MERS Defendants’ participation in the
securitization of Plaintiff’s loan and their role in the
Nationstar Assignment.

Those portions of Plaintiff’s fraud and

misrepresentation claims are therefore DISMISSED WITH PREJUDICE.

12

(...continued)
limited to, releasing and canceling this
Security Instrument.

2016 WL 1092305, at *1–2 (alterations in Reyes-Toledo).

19

However, this Court recognizes that Plaintiff may have
intended to allege other theories supporting her fraud and
misrepresentation claims against the MERS Defendants.

Even

liberally construing Plaintiff’s Complaint,13 this Court cannot
determine what those other theories of liability are.

It is

arguably possible for Plaintiff to amend her fraud and/or
misrepresentation claim against the MERS Defendants to state
plausible claims based on theories of liability other than the
securitization theory and the invalid assignment theory.

This

Court therefore DISMISSES the remainder of Plaintiff’s fraud and
misrepresentation claims WITHOUT PREJUDICE.
IV.

Mootness
The MERS Defendants also argue that Plaintiff’s claims

against them are moot because she no longer owns the Property.
This Court is not required to address this argument because it
has already dismissed Plaintiff’s claims, but it will address the
argument in order to provide guidance to Plaintiff, if she
chooses to amend her claims.

13

This Court must liberally construe Plaintiff’s pleadings
because she is proceeding pro se. See, e.g., Eldridge v. Block,
832 F.2d 1132, 1137 (9th Cir. 1987) (“The Supreme Court has
instructed the federal courts to liberally construe the ‘inartful
pleading’ of pro se litigants.” (citing Boag v. MacDougall, 454
U.S. 364, 365, 102 S. Ct. 700, 701, 70 L. Ed. 2d 551 (1982) (per
curiam))).

20

The United States Supreme Court has stated that a case
becomes moot
when the issues presented are no longer “live” or
the parties lack a legally cognizable interest in
the outcome. But a case “becomes moot only when
it is impossible for a court to grant any
effectual relief whatever to the prevailing
party.” Knox v. Service Employees, 567 U.S. –, –,
132 S. Ct. 2277, 2287, 183 L. Ed. 2d 281 (2012)
(internal quotation marks omitted); see also
Church of Scientology of Cal. v. United States,
506 U.S. 9, 12, 113 S. Ct. 447, 121 L. Ed. 2d 313
(1992) (“if an event occurs while a case is
pending on appeal that makes it impossible for the
court to grant ‘any effectual relief whatever’ to
a prevailing party, the appeal must be dismissed”
(quoting Mills v. Green, 159 U.S. 651, 653, 16 S.
Ct. 132, 40 L. Ed. 293 (1895))). As long as the
parties have a concrete interest, however small,
in the outcome of the litigation, the case is not
moot.
Chafin v. Chafin, 133 S. Ct. 1017, 1023 (2013) (some citations
and internal quotation marks omitted).

When a claim involves a

request for injunctive relief, and the court cannot grant relief
sought, the claim is moot.

See, e.g., Ctr. for Biological

Diversity v. Lohn, 511 F.3d 960, 963-64 (9th Cir. 2007) (citing
Friends of the Earth, Inc. v. Bergland, 576 F.2d 1377, 1379 (9th
Cir. 1978) (“Where the activities sought to be enjoined have
already occurred, and the appellate courts cannot undo what has
already been done, the action is moot.”)).
Because Plaintiff no longer owns the Property, any
claims for injunctive relief related to her ownership of the
Property or the attempted foreclosure would be moot.
21

However, by

the time Plaintiff filed the Amended Complaint, she had already
sold the Property.

[Amended Complaint at p. 13 (“The wrongful

foreclosure created a situation of urgency and duress for
Plaintiff and under duress Plaintiff sold her property before
Nationstar could foreclose and evict her.”).]

She apparently

alleges that: 1) the Foreclosure Action was instituted based upon
the tortious conduct alleged in the Amended Complaint; 2) if the
Foreclosure Action had not been pending, she would not have sold
the Property; and 3) the wrongfully instituted Foreclosure Action
and the forced sale caused her to suffer damages.

[Id.

(“Plaintiff is injured in the amount of $1,296,411, plus the
amount that the home has increased in value since the sale, plus
costs, legal fees and damages.”).]

If that is her theory of

damages, and if she is able to marshal sufficient facts to amend
her fraud and misrepresentation claims against the MERS
Defendants to allege plausible claims, this Court would be
inclined to conclude that these claims would not be moot.
V.

Summary and Leave to Amend
The MERS Defendants’ Motion is GRANTED insofar as:

1) Plaintiff’s fraud and misrepresentation claims against the
MERS Defendants are DISMISSED; and 2) the portions of Plaintiff’s
claims based on the MERS Defendants’ participation in the
securitization of Plaintiff’s loan and the MERS Defendants’ role
in the Nationstar Assignment are DISMISSED WITH PREJUDICE.
22

The

Motion is DENIED insofar as all other portions of Plaintiff’s
fraud and misrepresentation claims against the MERS Defendants
are DISMISSED WITHOUT PREJUDICE.
This Court will allow Plaintiff to file a motion for
leave to file a second amended complaint that cures the defects
in her claims against the MERS Defendants which this Court
described in this Order.

Plaintiff may also reassert her claims

against Citibank – which are not affected by this Order.
Plaintiff must attach a copy of her proposed second amended
complaint to the motion for leave to file.

See Local Rule LR10.3

(“Any party filing or moving to file an amended complaint . . .
shall reproduce the entire pleading as amended and may not
incorporate any part of a prior pleading by reference, except
with leave of court.”).

This Court ORDERS Plaintiff to file her

motion for leave to file a second amended complaint by August 31,
2016.

The motion will be referred to the magistrate judge.
This Court CAUTIONS Plaintiff that, if she fails to

file her motion for leave to file a second amended complaint by
August 31, 2016, the claims that this Court dismissed without
prejudice in this Order will be dismissed with prejudice, and
this Court will direct the Clerk’s Office to terminate the MERS
Defendants as parties in this case.

In other words, Plaintiff

would have no remaining claims against the MERS Defendants, and
only her claims in the Amended Complaint against Citibank would
23

remain.

This Court also CAUTIONS Plaintiff that, even if the

magistrate judge allows Plaintiff to file her proposed second
amended complaint, as to any claim that this Order dismissed
without prejudice, the corresponding second amended claim may be
dismissed with prejudice if the second amended claim fails to
cure the defects identified in this Order.
CONCLUSION
On the basis of the foregoing, the MERS Defendants’
Motion to Dismiss [ECF No. 83] Plaintiff’s First Amended
Compliant for Fraud & Misrepresentation, Filed September 28,
2015, which the MERS Defendants filed on April 20, 2016, is
HEREBY GRANTED IN PART AND DENIED IN PART, as set forth supra
Discussion Section V.

Plaintiff must file her motion for leave

to file a second amended complaint by August 31, 2016, and the
motion must comply with the rulings in this Order.
IT IS SO ORDERED.

24

DATED AT HONOLULU, HAWAII, July 28, 2016.

/s/ Leslie E. Kobayashi
Leslie E. Kobayashi
United States District Judge

JANEECE FIELDS VS. NATIONSTAR
00015 LEK-KJM; ORDER GRANTING
DEFENDANTS’ MOTION TO DISMISS
AMENDED COMPLAINT FOR FRAUD &
28, 2015

MORTGAGE, LLC, ET AL; CIVIL 15IN PART AND DENYING IN PART MERS
[ECF NO. 83] PLAINTIFF’S FIRST
MISREPRESENTATION, FILED SEPTEMBER

25