Gilbert et al v. Bank of America N.A. et al

Filing 9

MEMORANDUM DECISION AND ORDER granting 5 Motion to Dismiss. Plaintiffs are granted leave to amend and shall have 14 days from the date of this Order to file an Amended Complaint. If no Amended Complaint is filed by the deadline, the Court will dismiss matter with prejudice, by separate order and judgment. Signed by Judge B. Lynn Winmill. (caused to be mailed to non Registered Participants at the addresses listed on the Notice of Electronic Filing (NEF) by cjm)

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF IDAHO

JALENE GILBERT and TOM GILBERT,
Plaintiffs,

Case No. 1:11-cv-00272-BLW

v.
BANK OF AMERICA, N.A., as successor to
COUNTRYWIDE HOME LOANS, INC., a
Delaware corp.; MORTGAGE
ELECTRONIC REGISTRATION
SYSTEM, INC. (MERS), a Delaware corp.;
RECONTRUST COMPANY, N.A., a
corporation of unknown origin and a whollyowned subsidiary of Bank of America, N.A.;
FEDERAL NATIONAL MORTGAGE
ASSOC., a federally chartered corp.; and
DOES 1-10, as individuals or entities with an
interest in the property commonly known as:
11772 Purple Sage Road, Middleton, Idaho
83644,

MEMORANDUM DECISION AND
ORDER

Defendants.

Before the Court is Defendants’ Motion to Dismiss (Dkt. 5), and Defendant’s
unopposed Motion to Take Judicial Notice (Dkt. 6). The Court has determined that oral
argument would not significantly assist the decisional process, therefore the matters will
be considered on the record and pleadings, without a hearing. Having thoroughly

MEMORANDUM DECISION AND ORDER - 1

reviewed the record and parties’ pleadings, the Court will grant the Motions (Dkts. 5, 6)
and dismiss Plaintiff’s Complaint (Dkt. 1) with leave to amend, as more fully expressed
below.
BACKGROUND
According to the Complaint (Dkt. 1), Plaintiffs Jalene and Tom Gilbert financed
the purchase of real property at 11772 Purple Sage Road in Middleton, Idaho, 83644, on
September 21, 2007, with a loan from Capital One Home Loans. Compl., at ¶¶ 1, 9-11.
The loan was memorialized in a promissory note (Ex. A to Dina Aff., Dkt. 6-1), and
secured by a Deed of Trust (Ex. B to Dina Aff., Dkt. 6-2). The Deed names Capital One
as lender, Lawyers Title Realty Service as trustee, and MERS as the nominee of the
beneficiary. Id. According to Plaintiffs, Capital One was acquired by Countrywide
Home Loans, which was in turn acquired by Bank of America. Compl. at 9.
Plaintiffs acknowledge they defaulted on their mortgage payments, triggering the
issuance of a Notice of Default on December 24, 2010, which indicated that as of
December 28, 2010, they were $14,497.56 in arrears. Ex. A to Compl., Dkt. 1-1. Upon
Plaintiffs’ default, the beneficial interests in the Note and Deed were assigned to BAC
Home Loan Servicing, and ReconTrust was appointed successor trustee. Exs. B & C to
Compl., Dkts. 1-2, 1-3.
On June 10, 2011, Plaintiffs brought this action to quiet title to the property, to
require Defendants to produce the Note, to determine Defendants’ interest in the
property, and for attorney fees and costs. Defendants now move to dismiss.

MEMORANDUM DECISION AND ORDER - 2

LEGAL STANDARD
Federal Rule of Civil Procedure 8(a)(2) requires only “a short and plain statement
of the claim showing that the pleader is entitled to relief,” in order to “give the defendant
fair notice of what the . . . claim is and the grounds upon which it rests.” Bell Atlantic
Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 1964 (2007). While a complaint
attacked by a Rule 12(b)(6) motion to dismiss “does not need detailed factual
allegations,” it must set forth “more than labels and conclusions, and a formulaic
recitation of the elements of a cause of action will not do.” Id. at 555. 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.” Id. at 570. A claim has facial
plausibility when the plaintiff pleads factual content that allows the court to draw the
reasonable inference that the defendant is liable for the misconduct alleged. Id. at 556.
The plausibility standard is not akin to a “probability requirement,” but it asks for more
than a sheer possibility that a defendant has acted unlawfully. Id. Where a complaint
pleads facts that are “merely consistent with” a defendant's liability, it “stops short of the
line between possibility and plausibility of ‘entitlement to relief.’ ” Id. at 557.
In a more recent case, the Supreme Court identified two “working principles” that
underlie Twombly. See Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009). First, the tenet
that a court must accept as true all of the allegations contained in a complaint is
inapplicable to legal conclusions. Id. “Rule 8 marks a notable and generous departure

MEMORANDUM DECISION AND ORDER - 3

from the hyper-technical, code-pleading regime of a prior era, but it does not unlock the
doors of discovery for a plaintiff armed with nothing more than conclusions.” Id. at
1950. Second, only a complaint that states a plausible claim for relief survives a motion
to dismiss. Id. “Determining whether a complaint states a plausible claim for relief will .
. . be a context-specific task that requires the reviewing court to draw on its judicial
experience and common sense.” Id.
A dismissal without leave to amend is improper unless it is beyond doubt that the
complaint “could not be saved by any amendment.” Harris v. Amgen, Inc., 573 F.3d 728,
737 (9th Cir. 2009) (issued 2 months after Iqbal).1 The Ninth Circuit has held that “in
dismissals for failure to state a claim, a district court should grant leave to amend even if
no request to amend the pleading was made, unless it determines that the pleading could
not possibly be cured by the allegation of other facts.” Cook, Perkiss and Liehe, Inc. v.
Northern California Collection Service, Inc., 911 F.2d 242, 247 (9th Cir. 1990). The
issue is not whether plaintiff will prevail but whether he “is entitled to offer evidence to
support the claims.” Diaz v. Int’l Longshore and Warehouse Union, Local 13, 474 F.3d
1202, 1205 (9th Cir. 2007)(citations omitted).

1
 The Court has some concern about the continued vitality of the liberal amendment policy adopted in
Harris v. Amgen, based as it is on language in Conley v. Gibson, 355 U.S. 41, 45-46 (1957), suggesting
that “a complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that
the plaintiff can prove no set of facts in support of his claim . . ..” Given Twombly and Iqbal’s rejection
of the liberal pleading standards adopted by Conley, it is uncertain whether the language in Harris v.
Amgen has much of a life expectancy.      

MEMORANDUM DECISION AND ORDER - 4

ANALYSIS
1.

Motion To Take Judicial Notice
Under Rule 12(b)(6), the Court may consider matters that are subject to judicial

notice. Mullis v. United States Bank, 828 F.2d 1385, 1388 (9th Cir. 1987). The Court
may take judicial notice “of the records of state agencies and other undisputed matters of
public record” without transforming the motions to dismiss into motions for summary
judgment. Disabled Rights Action Comm. v. Las Vegas Events, Inc., 375 F.3d 861, 866
(9th Cir. 2004). Defendants move the Court to take judicial notice of certain documents
recorded in public records of Canyon County, and relied upon by Plaintiffs in their
Complaint. Motion, Dkt. 6. Plaintiffs filed no opposition. There being no objection, and
the Court finding Defendants’ Motion (Dkt. 6) otherwise supported, the Court will grant
the motion.
2.

Motion to Dismiss
Plaintiffs’ sole claim against Defendants is an action to quiet title. Compl. at 3. In

Idaho, “[a] mortgagor cannot without paying his debt quiet title as against the
mortgagee.” Trusty v. Ray, 249 P.2d 814, 817 (Idaho 1952). This is true even where the
mortgagee has failed to pursue a foreclosure action within the applicable statute of
limitations. Id.; see also In re Mullen, 402 B.R. 353, 358 (Bankr.D.Idaho 2008). Here,
Plaintiffs have included no assertion in their Complaint that they tendered payment of
their debt obligation. Without evidence or even an assertion that Plaintiffs can or are

MEMORANDUM DECISION AND ORDER - 5

willing to tender payment on their loan, they cannot succeed on their quiet title action, as
a matter of law.
As noted above, leave to amend should be granted unless it is beyond doubt that
the complaint “could not be saved by any amendment.” Harris, 573 F.3d at 737. Here,
Defendants have moved for dismissal based on the absence of facts necessary to support
Plaintiffs’ quiet title claim – namely that Plaintiffs are able to or did tender the balance of
their loan. Pl. Mot., Dkt. 5-1 at 7. In their response, Plaintiffs do not challenge
Defendants’ assertion, nor otherwise indicate that they could or did tender payment on
the loan. Indeed, Plaintiffs acknowledge receiving a Notice of Default and attach the
notice as an exhibit to the Complaint. Ex. A to Compl. Instead of challenging the
Notice’s validity based on tender of payment, Plaintiffs argue – among other points – that
ReconTrust lacked legal authority to execute the Notice because it was not properly
appointed by Bank of America. Compl. at 4-5. However, even if the Court agreed with
Plaintiffs’ arguments, none can supplant the absence of tender – an element necessary to
their claim.
Thus, for Plaintiffs to proceed they must allege that they did or can tender
payment. Plaintiffs not having alleged tender, the Court will grant Defendants’ motion,
but with leave for Plaintiffs to amend, if Plaintiffs are able to do so in good faith. If
Plaintiffs amend their complaint to include good faith allegations that they tendered
payment, the Court will address Defendants’ remaining arguments to dismiss, and issue a
separate decision.

MEMORANDUM DECISION AND ORDER - 6

ORDER
IT IS ORDERED:
1.

Defendants’ Motion to Dismiss (Dkt. 5) is GRANTED.

2.

Plaintiffs are granted LEAVE TO AMEND, and shall have 14 days from
the date of this Order to file an Amended Complaint that addresses tender
of payment on Plaintiffs’ loan, as discussed in this decision above.

3.

If no Amended Complaint is filed by the deadline set forth above, the Court
the Court will DISMISS matter with prejudice, by separate order and
judgment.

4.

Upon Plaintiffs’ filing of an Amended Complaint, the Court will address
Defendants’ remaining arguments in their Motion (Dkt. 5), by separate
order.

DATED: September 15, 2011 

_________________________  
B. Lynn Winmill 
Chief Judge 
United States District Court 

MEMORANDUM DECISION AND ORDER - 7