Deckys v. BAC Home Loans Servicing LP et al

Filing 28

ORDER ADOPTING REPORT & RECOMMENDATION. IT IS HEREBY ORDERED that the Report and Recommendation entered on 4/17/13 (Dkt. 22) shall be, and is hereby, INCORPORATED by reference and ADOPTED in its entirety. Defendants' Motions to Dismiss (Dkt. 5) is GRANTED WITHOUT LEAVE TO AMEND. Judgment will be entered separately. Defendant's Joinder Motion (Dkt. 8) is GRANTED. 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 (st)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF IDAHO

CATHY M. DECKYS, a married woman
as her sole and separate property,
Plaintiffs,
v.

Case No. 1:12-cv-00529-BLW
ORDER ADOPTING REPORT &
RECOMMENDATION

BAC HOME LOANS SERVICING LP,
a subsidiary of/a.k.a. Bank of America,
N.A., a subsidiary of Bank of America
Corporation, believed to be a foreign
Corporation; COUNTRYWIDE BANK,
FSB; NORTHWEST TRUSTEE
SERVICES, INC. (an Idaho Corp., as
Successor Trustee; and MORTGAGE
ELECTRONIC REGISTRATION
SYSTEMS, INC. (MERS),
Defendants.
On April 17, 2013, United States Magistrate Judge Candy W. Dale issued a Report
and Recommendation, recommending that the Bank of America Defendants’ Motions to
Dismiss (Dkt. 5) be granted, and further recommending that Defendant Northwest
Trustee Services’ Motion for Joinder (Dkt. 8) be granted.
Any party may challenge a magistrate judge’s proposed recommendation by filing
written objections within fourteen days after being served with a copy of the Magistrate
Judge’s Report and Recommendation. See 28 U.S.C. § 636(b)(1)(C). The district court

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must then “make a de novo determination of those portions of the report or specified
proposed findings or recommendations to which objection is made.” Id. The district court
may accept, reject, or modify in whole or in part, the findings and recommendations
made by the Magistrate Judge. Id.; see also Fed. R. Civ. P. 72(b).
Plaintiff Cathy Deckys has filed a limited objection to the Magistrate Judge’s
rulings. She asks this Court to review Judge Dale’s findings related to plaintiff’s
“produce the note” and “prove rights to enforce” arguments. Objection, Dkt. 25, at 2.
After considering these arguments and conducting a de novo review of the record, the
Court finds that Judge Dale correctly decided these issues.
Discussion
Deckys contends that defendants cannot foreclose her property unless they first
produce the promissory note and thus prove their standing to foreclose. This argument is
foreclosed by Trotter v. New York Mellon Bank, 275 P.3d 857 (Idaho 2012). Trotter held
that “a trustee may initiate nonjudicial foreclosure proceedings on a deed of trust without
first proving ownership of the underlying note . . . .” Id. at 862.
Despite the clarity of this holding, Deckys contends that Trotter is inapplicable
because it does not explicitly discuss Article 3 of Idaho’s Uniform Commercial Code.
Yet Trotter concluded that two bankruptcy court decisions from this district – In re
Sheridan, No. 08-20381-TLM, 2009 WL 631355 (Bankr. D. Idaho Mar. 12, 2009) and In
re Wilhelm, 407 B.R. 392 (Bankr. D. Idaho 2009) – were “inapplicable in the context of a
nonjudicial foreclosure.” Trotter, 275 P.3d at 862 n.3. Sheridan and Wilhelm addressed

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Article 3 at some length, reasoning that if a person seeks to foreclose, they would first
need to prove standing under Article 3. See, e.g., Wilhelm, 407 B.R. at 401. Thus,
Trotter implicitly rejected Deckys’ Article 3 arguments.
Next, Deckys’ reliance on Nielson v. Westrom, 270 P.1054 (1928) is misplaced
because that case does not deal with a person’s right to foreclose under Idaho’s Deed of
Trust Act. In Nielson, the borrower paid the original lender on a promissory note. Id. at
1054. That lender sold the note to a third party, yet continued to receive payments from
the borrower. Id. The third party later sought to foreclose the note. Id. The Court held
that the borrower had paid at his own peril because he did not demand production of the
note when he made his payments. Id. at 1055.
Nielson is inapplicable because Deckys is not trying to make payments on her
note. Rather, she is insisting that defendants produce the note before non-judicially
foreclosing. Thus, Trotter directly governs this dispute, not Nielson. Moreover, even if
Deckys were attempting to make payments on the note, in signing the note, she agreed
that it could be sold without prior notice to her, and that she would continue to make
payments to the loan servicing company. See Deed of Trust, Ex. A to Compl., Dkt. 1-2, ¶
20. These facts were not present in Nielson.
ORDER
IT IS ORDERED:
1.

Having conducted a de novo review of the Report and Recommendation,
the Court finds that Magistrate Judge Dale’s Report and Recommendation

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is well founded in law and consistent with the Court’s own view of the
evidence in the record. Therefore, acting on the recommendation of
Magistrate Judge Dale, and this Court being fully advised in the premises,
IT IS HEREBY ORDERED that the Report and Recommendation entered
on April 17, 2013 (Dkt. 22) shall be, and is hereby, INCORPORATED by
reference and ADOPTED in its entirety.
2.

Defendants’ Motions to Dismiss (Dkt. 5) is GRANTED WITHOUT
LEAVE TO AMEND. Judgment will be entered separately.

3.

Defendant’s Joinder Motion (Dkt. 8) is GRANTED.
DATED: June 18, 2013

_________________________
B. Lynn Winmill
Chief Judge
United States District Court

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