Smith v. America's Wholesale Lender

Filing 14

MEMORANDUM DECISION granting 7 Motion to Dismiss for Failure to State a Claim; deeming as moot 10 Motion for Summary 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)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF IDAHO
KYLE SMITH
Plaintiff,

Case No. 1:12-CV-161-BLW

v.

MEMORANDUM DECISION

AMERICA’S WHOLESALE LENDER, INC.,
Defendant.

INTRODUCTION
The Court has before it defendant’s motion to dismiss and plaintiff’s motion for
summary judgment. The motions are fully briefed and at issue. For the reasons described
below, the Court will grant the motion to dismiss and deem moot the motion for summary
judgment.
ANALYSIS
Plaintiff Kyle Smith sued “America’s Wholesale Lender, Inc.” (AWL) seeking
quiet title to his residential property in Meridian, Idaho. AWL is the business name of
Countrywide Home Loans. In January of 2007, Countrywide loaned $203,000 to Smith
and took back a promissory note secured by a deed of trust on the residence. The exhibits
to Smith’s complaint show that the Federal National Mortgage Association (Fannie Mae)
became the new owner of Smith’s loan on November 30, 2011. There is no dispute that

Memorandum Decision - 1

Countrywide has no interest in Smith’s loan or his residence, and is not attempting to
foreclose, collect on the loan, or assert any interest against Smith.
Nevertheless, Smith has sued them to quiet title to his residence. Smith argues that
Countrywide’s admitted lack of interest in the property entitles him to quiet title as
against them. The Court disagrees. In every Idaho case dealing with quiet title there is a
controversy over ownership rights – the parties are competing over their interest in the
subject property. See, e.g., Machado v. Ryan, 280 P.3d 715 (Id.Sup.Ct. 2012) (suit for
quiet title between parties competing over an easement claim on the property). In the
present case, there are no competing claims; Countrywide sold its entire interest over a
year ago. Allowing Smith to proceed with his quiet title action under these circumstances
would allow a flood of litigation against sellers of loans who have long since divested
themselves of any interest in the subject property.
Smith also makes claims that because his note and deed of trust have been
separated, the deed of trust is no longer valid. But he has sued the wrong defendant –
Countrywide has no deed of trust to defend.
And this reveals the biggest weakness of the case – there is no case or controversy
as required by Article III. See Alcoa, Inc. v. Bonneville Power Admin., 698 F.3d 774 (9th
Cir. 2012). Accordingly, the Court finds that motion to dismiss should be granted due to
a lack of jurisdiction and due to the failure of the complaint to state a claim. This moots
Smith’s motion for summary judgment. The Court will enter Judgment in a separate
document as required by Fed.R.Civ.P. 58(a).
Memorandum Decision - 2

DATED: March 6, 2013

Honorable B. Lynn Winmill
Chief U. S. District Judge

Memorandum Decision - 3