Wong v. Countrywide Home Loans, Inc. et al

Filing 29

ORDER Granting 8 Motion to Dismiss. IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that pro se plaintiff Suet F. Wong's Motion for Default Judgment 16 be, and the same hereby is, DENIED. The Clerk is instructed to close the case. Signed by Judge James C. Mahan on 2/23/16. (Copies have been distributed pursuant to the NEF - PS)

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UNITED STATES DISTRICT COURT

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DISTRICT OF NEVADA

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***

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SUET F. WONG,

Case No. 2:15-CV-1398 JCM (VCF)

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Plaintiff(s),

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ORDER

v.
COUNTRYWIDE HOME LOANS, INC.,
et al.,
Defendant(s).

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Presently before the court is defendant

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and Mortgage Electronic Reg

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James C. Mahan
U.S. District Judge

motion to dismiss pro se plain
Services, Inc.

)

oc. #8). Defendants BSI Financial

and National Default Servicing Corporation were joined to the motion to

dismiss. (Docs. ##10, 14). Plaintiff also filed a motion for default judgment. (Doc. #16).
I.

Background
On or about October 24, 2003, plaintiff executed a promissory note in favor of Countrywide

Home Loans, Inc. in the amount of $106,000.00. (Docs. ##1 at 5; 2-1 at 33). The note was secured
by a deed of trust on the real property located at 5402 Night Swim Lane, Las Vegas, Nevada,
89113,

-28-712-02. (Doc. #2-1 at 10). The deed of trust

was executed October 24, 2014, and it was assigned from Countrywide, the original lender, to
MERS on May 16, 2011. Id. The trustee is CTC Real Estate Services. Id.
Plaintiff alleges seven claims for relief. Count I appears to claim a procedural deficiency in the
securitization process. (Doc. #1 at 10). Counts II and III attack securitization and allege a
splitting of the note and deed of trust. (Doc. #1 at 12, 13-40). Counts

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corporate assignment of the deed of trust. (Doc. #1 at 40-41). Count

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VI asserts a violation of the Real Estate Settlement Procedures Act ( RESPA ) against BSI. (Doc.

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#1 at 41-42). Lastly, count VII alleges a discrimination claim against the Clark County Recorder,

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Debbie Conway.

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II.

Legal Standards

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a. Motion to dismiss

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The co

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plain statement of the claim showing that the pleader is entitled to re

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Although rule 8 does not require detailed factual allegations, it does require more than labels and

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conclusions. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). Furthermore, a formulaic

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recitation of the elements of a cause of action will not suffice. Ashcroft v. Iqbal, 556 U.S. 662, 677

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(2009) (citation omitted). Rule 8 does not unlock the doors of discovery for a plaintiff armed with

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nothing more than conclusions. Id. at 678-79.

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To survive a motion to dismiss, a compl

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Id. A claim has facial plausibility when the plaintiff

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pleads factual content that allows the court to draw the reasonable inference that the defendant is

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liable for the misconduct alleged. Id. When a complaint pleads facts that are merely consistent

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not meet the requirements to show plausibility of entitlement to relief. Id.

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In Iqbal, the Supreme Court clarified the two-step approach district courts are to apply when

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considering a motion to dismiss. Id. First, the court must accept as true all of the allegations

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contained in a complaint. However, this requirement is inapplicable to legal conclusions. Id.

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Second, only a complaint that states a plausible claim for relief survives a motion to dismiss. Id.

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at 678. Where the complaint does not permit the court to infer more than the mere possibility of

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but not shown

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at 679. When the allegations in a complaint have not crossed the line from conceivable to plausible,

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plaintiff's claim must be dismissed. Twombly, 550 U.S. at 570.

James C. Mahan
U.S. District Judge

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Id.

The Ninth Circuit addressed post-Iqbal pleading standards in Starr v. Baca, 652 F.3d 1202,

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1216 (9th Cir. 2011). The Starr court held,

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First, to be entitled to the presumption of truth, allegations in a complaint or
counterclaim may not simply recite the elements of a cause of action, but must
contain sufficient allegations of underlying facts to give fair notice and to enable
the opposing party to defend itself effectively. Second, the factual allegations that
are taken as true must plausibly suggest an entitlement to relief, such that it is not
unfair to require the opposing party to be subjected to the expense of discovery and
continued litigation.

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Id.

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III.

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Discussion
As an initial matter, the court acknowledges that the complaint was filed pro se and is therefore

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held to less stringent standards. Erickson v. Pardus

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pro se is to be liberally construed, and a pro se complaint, however inartfully pleaded, must be

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pro se litigants in the ordinary civil case should not be treated

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more

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(9th Cir. 1986).

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Jacobsen v. Filler, 790 F.2d 1362, 1364

a. Motion to dismiss
i.

Standing to bring suit (counts I, IV, and V)

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complaint seeks to void transfer/assignment of the promissory note and/or the deed

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of trust that secures the property by attacking the securitization process of the loan. (Doc. #1).

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Plaintiff alleges in count I that certain requirements may not have been met in the pooling and

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servicing agreement

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deeds of trust into the respective trust. (Doc. # 1 at 11); (see also Doc. #8 at 3). Plaintiff in counts

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IV and V also attacks the filing and recording of the corporate assignment of the deed of trust due

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regarding indorsement, assignment, or transfer of the notes and

robo-

-41). Defendants argue that plaintiff lacks

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standing to challenge the securitization process and assignments of her mortgage because she is

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not a party to the trust agreement. (Doc. #8 at 3-4). The court agrees.

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James C. Mahan
U.S. District Judge

ct courts have come to different conclusions when analyzing plaintiff's
right to challenge the securitization process as [p]

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Baldoza v. Bank of America,

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N.A., 2013 WL 978268, at *10 (N.D. Cal. Mar. 12, 2013) [(quoting Johnson v. HSBC Bank USA,

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N.A., 2012 WL 928433, at *2 (S.D. Cal. Mar. 19, 2012)) (citing Schafer v. CitiMortgage, Inc.,

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2011 WL 2437267 (C.D. Cal. June 15, 2011) (denying defendants' motion to dismiss declaratory

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relief claim, which was based on alleged improper transfer due to alleged fraud in signing of

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documents); Vogan v. Wells Fargo Bank, N.A., 2011 WL 5826016, at *7 (E.D. Cal. Nov. 17, 2011);

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Armeni v. America's Wholesale Lender, 2012 WL 603242, at *2 (C.D. Cal. Feb. 24, 2012); Junger

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v. Bank of America, N.A., 2012 WL 603262, at *3 (C.D. Cal. Feb. 24, 2012)].

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The Armeni court, for example, found that the

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process by which his mortgage was (or was not) securitized because he [wa]s not a party to the

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PSA [pooling and service agreement]. Armeni, at *3 (citing In re Correia, 452 B.R. 319, 324 (1st

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Cir. 2011) (holding that debtors as, non-parties to a PSA, lack standing to challenge a mortgage

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assignment based on non-compliance with the agreement.)). Similarly, the court in Bascos held

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that a plaintiff had no standing to challenge the validity of the securitization of the loan as he [wa]s

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not an investor of

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*6 (C.D. Cal. July 22, 2011).

Bascos v. Fed. Home Loan Morg. Corp., 2011 WL 3157063, at

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Baldoza v. Bank of America, N.A. recently analyzed these various cases and concluded that

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s that plaintiffs lack standing to challenge noncompliance with a PSA in

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securitization unless they we

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at *10. The Baldoza court adopted this majority approach; this court follows the same in the present

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case.

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Baldoza

Plaintiff, as homeowner to the transaction, is the borrower/mortgagor in the loan process. Thus,

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as the defendants correctly assert, plaintiff lacks standing to sue here because she

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to the securitization agreement nor an investor [or third party beneficiary] in the s

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(Doc. #8 at 4).

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defendants did not comply with the securitization procedures set forth in the pooling and service

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agreement. (Doc. #8 at 4) (internal citation omitted). The court agrees with this assessment.

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Therefore, plaintiff in the present case lacks standing to challenge the securitization process, and

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the court grants dismissal of counts I, IV, and V with prejudice.

James C. Mahan
U.S. District Judge

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ii.

Splitting the note and deed of trust (counts II and III)

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Plaintiff alleges that the

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the deed of trust

from the note." (Doc. #1 at 13).

rity

home due to the promissory note being

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Edelstein

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v. Bank of N.Y. Mellon, 286 P.3d 249, 260, 128 Nev. Adv. Op. 48 (Sept. 27, 2012). The Ninth

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Circuit has held that while the note is able to be split, it can be reunified and th

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renders the mortgage unenforceable if MERS or the trustee, as nominal holders of the deeds, are

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Cervantes v. Countrywide Home Loans, Inc., 656 F.3d 1034, 1044 (9th

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Cir. 2011) (citing Landmark Nat’ l Bank, 216 P.3d 158, 167 (2009). Similarly, the Nevada Supreme

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Court in Edelstein analyzed the traditional rule and restatement approach on this issue
and the court rejected the argument that that the use of MERS irreparably splits the

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note and the deed of trust. See id. at 256-259.
Id. at 252.

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Here, any splitting of the note which may have occurred would similarly be curable upon

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reunification. Thus, p

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and III with prejudice.

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iii.

, and the court grants dismissal of counts II

Remaining claims (counts VI and VII)
1. Real Estate

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(count VI)

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Plaintiff alleges that BSI, her loan servicer, did not send a required letter acknowledging receipt

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of her inquiry letter within the five (5) day requirement under RESPA. (Doc #1 at 41-42). Plaintiff

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also alleges

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did not respond within the thirty (30) days as per the time frame mandated
BSI mailed a response to plaintiff forty-three (43) days after
inquiry letter. (Doc. #1 at 41).
ge loan to provide a timely written

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response to inquiries from borrowers regarding the servicing

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Bank, FSB, 704 F.3d 661 (9th Cir. 2012) (citing 12 U.S.C. § 2605(e)) (emphasis added)

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servicer of a federally related mortgage loan receives a qualified written request from the borrower

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. . . for information relating to the servicing of such loan, the servicer shall provider a written

James C. Mahan
U.S. District Judge

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Medrano v. Flagstar

U.S.C. §

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2605(e)(1)(A).
A

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is defined as:
a written correspondence, other than notice on a payment coupon or other payment
medium supplied by the servicer, that-

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i) includes, or otherwise enables the servicer to identify, the name and account of
the borrower; and

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(ii) includes a statement of the reasons for the belief of the borrower, to the extent
applicable, that the account is in error or provides sufficient detail to the servicer
regarding other information sought by the borrower.

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Id. at (e)(1)(B).
The servicer shall respond to a RESPA QWR

Id.

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at (e)(2). After conducting an investigation into the inquiry, the servicer must provide the borrower

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with a

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the servicer believes the account of the borrower is correct as determined by the servicer . . .

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alternat

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borrower or an explanation of why the information requested is unavailable or cannot be obtained

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by the se

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the servicer must also

or,

clarification that includes information requested by the

Id. at (e)(2)(B)(i), (e)(2)(C)(i). Accompanying either of these routes of response,

Id. at (e)(2)(B)(ii), (e)(2)(C)(ii).

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explanation or clarification including either

It is important to note that a

relating to the servicing of

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[the] loan[,] 12 U.S.C. § 2605(e) (emphasis added), and not about the validity of transfer,

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assignment, or indorsement of such loan, as plaintiff appears to be arguing here. In her complaint,

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plaintiff

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receipt of her inquiry. (Doc. #1 at 41-42). The underlying query

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be aimed at challenging the validity of the loan and also the corporate assignment or chain of

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o dispute the validity of my

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lawful ownership, funding, entitlement right, and the current debt you allege that I owe. It is my
-1 at 17).

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James C. Mahan
U.S. District Judge

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s to

demands various clarifications regarding information and documentation

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[sic.

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like questions

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rebuttal evidence to validate Exhibit A, which, based on the pro se

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of trust itself. (See Doc. #2-1 at 32-48).

is the deed

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Medrano, 704 F.3d

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661, 667 (9th Cir. 2012). The plaintiff in the present case alleges that BSI failed to comply with

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requirements of the 5-day acknowledgement of receipt of the QWR and the 30-day response to her

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inquiry letter under RESPA, 12 U.S.C. § 2605(e). When interpreting the statute, the Ninth Circuit

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clearly states that the inquiry must pertain to the servicing of a loan and not the validity of the loan

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itself. See id. at 667-

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receiving any scheduled period any scheduled periodic payments from a borrower pursuant to the

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terms of any loan, including amounts for escrow accounts . . . and making the payments of principal

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This court finds that the initial inquiry letter sent by borrower does not constitute a qualified

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written request under 12 U.S.C. § 2605(e)

there

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was no obligation under RESPA to respond

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themselves to partially respond. See Medrano, 702 F.3d at 667 (holding that a letter challenging

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validity of a loan or its terms did not constitute a QWR because

fully or partially despite BSI taking it upon

. . . distinguishes

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relationship with the lender, on the other [hand]. That

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distinction makes sense because only servicers of loans are subject to §2605(e)

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and they [the

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also Doc. #2-1 at 14-

) (see
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Even if the letter constituted a QWR, the request is unduly broad and burdensome on the

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servicer. Thus, there was no obligation to comply with the inquiry letter. Other federal district

James C. Mahan
U.S. District Judge

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courts have found that servicers need not respond to unreasonable requests for information unless

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See,

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e.g., Derusseau v. Bank of Am., N.A., 2011 WL 5975821, *4 (S.D. Cal. Nov. 29, 2011) (discussing

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Armeni v. America's Wholesale Lender,

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2012 WL 603242, at *2 (C.D. Cal. Feb. 24, 2012)

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not respond to an unreasonable request for information unless plaintiff justifies his or her belief

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Bhatti v. Guild Mortg. Co., 2011 WL 6300229, *7 (W.D. Wash.

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Dec. 16, 2011) (similarly holding that

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loan, from its inception, . . . do[es] not assist . . . [the servicer] in identifying and investigating any

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purported discrepancies with the servicing of their loan. Such broad requests for information and

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[RESPA].

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In the present case, plaintiff has not provided a specific enough query to allow the servicer to

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compile requested information regarding deficiencies or other error, and, therefore, the servicer

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was not obligated to respond to this inquiry letter. Other jurisdictions have similarly held that if a

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QWR requests a complete life of loan transactional history

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relates to their loan, from its inception[,]

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servicer and, thus, does not require response. Derusseau at *5; Bhatti at *7

overly broad and burdensome on the

The query by plaintiff in the present case requested broad information and/or documentation

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the court finds that the RESPA claim under count VI should be dismissed with prejudice.
2. Discrimination claim against Clark County Recorder (Count VII)

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This claim is moot. The Clark County Recorder, Debbie Conway, was dismissed from this case

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without prejudice after the pro se plaintiff failed to provide service of process for this party. (Doc.

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# 28). Thus, count VII is dismissed without prejudice.

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...

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...

James C. Mahan
U.S. District Judge

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b. Default judgment

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efault judgment is not appropriate in this case. Under Rule 55, entering

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a default is appropriate

when a party against whom a judgment for affirmative relief is sought

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has failed to plead or otherwise defend

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motion to dismiss was an appropriate response to defend against an unfavorable judgment. (Doc.

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#8). T

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respond to the complaint

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Ill. 2006) (emphasis added).

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IV.

Fed. R. C. P. 55(a) (emphasis added)

or otherwise
UMG Recordings, Inc. v. Stewart, 461 F. Supp. 2d 837, 840 (S.D.

Conclusion

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Accordingly,

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IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that defend

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dismiss (doc. #8) be, and the same hereby is, GRANTED.

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consistent with the foregoing.

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IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that pro se plaintiff Suet F.
on for default judgment (doc. #16) be, and the same hereby is, DENIED.

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The clerk is instructed to close the case.

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DATED February 23, 2016.

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__________________________________________
UNITED STATES DISTRICT JUDGE

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James C. Mahan
U.S. District Judge

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