Szabo et al v. Bank of New York Mellon et al

Filing 4

Order regarding Complaint 1 . Plaintiffs' Complaint (#1) is DISMISSED. Because I cannot say with certainty that Plaintiffs could not amend their complaint to state a claim, dismissal with without prejudice and with leave to amend. If Plaintif fs wish to file an amended complaint, they must do so within 30 days of the date of this Order. I defer ruling on Plaintiffs' Application to Proceed IFP (#2) pending timely submission of an amended complaint. Signed on 3/11/2015 by Judge Owen M. Panner. (jkm)

THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON
MEDFORD DIVISION
SUSAN SZABO; ZOLTAN SZABO
No. 1:15-cv-0347-PA
Plaintiffs,
ORDER

v.
BANK OF NEW YORK MELLON,
et al.

Defendants.
PANNER, J.

This matter comes before the Court on pro se Plaintiffs'
Complaint (#1) and Application to Proceed in forma pauperis
(IFP)

(#2).

For the reasons set forth below, Plaintiffs'

Complaint is DISMISSED with leave to amend.
Background

Plaintiffs in this action borrowed $230,000 on August 12,
2004, to finance the purchase of property in Josephine County,
Oregon.

The loan was secured by a Note and Deed of Trust.

In

2012, Plaintiffs began to experience financial difficulties and
fell behind on their mortgage payments.

At some point,

Defendants initiated foreclosure proceedings.

1 - ORDER

Legal Standard

Generally, all parties instituting any civil action in
United States District Court must pay a statutory filing fee.
28 U.S.C.
U.S.C.

§

1914(a).

However, the federal IFP statute, 28

1915(a) (1), provides indigent litigants an opportunity

§

for meaningful access to the federal courts despite their
inability to pay the costs and fees associated with that
access.

To authorize a litigant to proceed IFP, a court must

make two determinations.

First, a court must determine whether

the litigant is unable to pay the costs of commencing the
action.

28 U.S.C.

§

1915(a) (1).

Second, it must assess

whether the action is frivolous, malicious, fails to state a
claim upon which relief can be granted, or seeks monetary
relief from a defendant who is immune from such relief.
U.S.C.

28

1915 (e) (2) (B).

§

In regard to the second of these determinations, district
courts have the power under 28 U.S.C.

§

1915(e) (2) (B) to screen

complaints even before the service of the complaint on the
defendants, and must dismiss a complaint if it fails to state a
claim.

Courts apply the same standard under 28 U.S.C.

§

1915 (e) (2) (B) as when addressing a motion to dismiss under Fed.
R. Civ. P. 12 (b) (6).
(9th Cir. 2012).

Watison v. Carter,

668 F.3d 1108, 1112

To survive a motion to dismiss under the

federal pleading standards, the complaint must include a short
and plain statement of the claim and "contain sufficient
factual matter, accepted as true, to 'state a claim for relief
that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S.
662, 678
2 - ORDER

(2009) (quoting Bell Alt. Corp. v. Twombly, 550 U.S.

544, 570 (2007)).

"A claim has facial plausibility when the

plaintiff pleads factual content that allows the court to draw
the

reasonabl~

inference that the defendant is liable for the

misconduct alleged.

The plausibility standard

. asks for

more than a sheer possibility that a defendant has acted
unlawfully."

Id.

The court is not required to accept legal

conclusions, unsupported' by alleged facts, as true.

Id.

Pro se pleadings are held to less stringent standards than
pleadings by attorneys.
(1972).

Haines v. Kerner,

404 U.S. 519, 520-21

That is, the court should construe pleadings by pro se

plaintiffs liberally and afford the plaintiffs the benefits of
any doubt.

Karim-Panahi v. Los Angeles Police Dept., 839 F.2d

621, 623 (9th Cir. 1988).

Additionally, a pro se litigant is

entitled to notice of the deficiencies in the complaint and the
opportunity to amend, unless the complaint's deficiencies
cannot be cured by amendment.

Id.

Discussion

Plaintiffs bring this action alleging breach of contract,
"failure to prove lawful position as a Note Holder," demands
for records, and human rights violations.
I. Standing
"[S]tanding is an essential and unchanging part of the
case-or-controversy requirement of Article III [of the United
States Constitution]." Lujan v. Defenders of Wildlife, 504 U.S.
555, 560 (1992).

"Standing addresses whether the plaintiff is

the proper party to bring the matter to the court for
adjudication."

Chandler v. State Farm Mut. Auto. Ins. Co., 598

F.3d 1115, 1122 (9th Cir. 2010).
3 - ORDER

At an "irreducible minimum,"

Article III "standing requires the party asserting the
existence of federal court jurisdiction to establish three
elements:

( 1) an injury in fact that is (a) concrete and

particularized and (b) actual or imminent;

(2) causation); and

(3) a likelihood that a favorable decision will redress the
injury."

Wolfson v. Brammer, 616 F.3d 1045, 1056 (9th Cir.

2010) (citation omitted).
In addition to these constitutional limitations on federal
court jurisdiction, there are also prudential limitations on
its exercise.

Fleck & Assocs., Inc. v. City of Phoenix, 471

F.3d 1100, 1103-04 (9th Cir. 2006).

The doctrine of prudential

standing "restrict[s] the grounds a plaintiff may put forward
in .seeking to vindicate his personal stake."

Id. at 1104.

Courts must consider, among other things, "whether the alleged
injury is more than a mere generalized grievance, whether the
plaintiff is asserting her own rights or the rights of third
parties, ·and whether the claim falls within the zone of
interests to be protected or regulated by the constitutional
guarantee ln question."

Wolfson,

616 F.3d at 1056 (citation

and internal quotation marks omitted).

"[A]s a prudential

matter, even when a plaintiff has Article III standing, we
ordinarily do not allow third parties to litigate on the basis
of the rights of others."

Planned Parenthood of Idaho, Inc.,

Inc. v. Wasden, 376 F.3d 908,

917

(9th Cir. 2004).

In this case,· Plaintiffs appear allege that Defendants
failed to comply with the requirements of its pooling and
servicing agreement

(PS~).

Plaintiffs allege that this failure

somehow constituted a breach of contract with Plaintiffs.
4 - ORDER

Plaintiffs do not allege that they are parties to the PSA or
investors in the REMIC trust.

It is well settled that a

plaintiff lacks standing to enforce the terms of a PSA when he
is neither a party to, nor a third party beneficiary of, that
agreement.

See,

~

Oliver v. Delta Fin. Liquidating Trust

6:12-cv-00869-AA, 2012 WL 3704954, at *4
2012).

(D. Or. Aug. 27,

Plaintiffs therefore lack standing to challenge

Defendants' compliance with the terms of the PSA.
II. Factual Issues

Plaintiffs appear to allege that the involvement of

Mortgage Electronic Registration Systems, Inc.

(MERS) in their

loan potentially constitutes a violation of the Oregon Trust
Deed Act

(OTDA).

The Complaint, however, alleges only that

Defendants have initiated a foreclosure proceeding.

It is

possible for a lender to foreclose on a Note and Deed of Trust
without recourse to non-judicial foreclosure under the OTDA.
See Memmott v. OneWest Bank, Civil No. 10-3042-CL, 2011 WL
1560985 at *11 (D. Or. Feb. 9, 2011) (describing the three
mechanisms for enforcing a security interest under Oregon law).
It is not clear from the Complaint whether the foreclosure
action was brought subject to the OTDA, nor is it clear if that
action is ongoing or completed.
Plaintiffs also allege that they demanded to see the "wet
inku copies of their Note.

Plaintiffs appear to allege that

Defendants' failure to do produce the original Note constitutes
either a breach of contract or a separate cause of action.
Complaint does not allege that Defendants had a contractual
obligation to produce the original Note upon demand.
5 - ORDER

The

Plaintiffs also allege that if Defendants present them with
copies of the Note, such an act would be "considered
counterfeiting."

Plaintiffs provide no support for this

conclusory allegation.
III. The Universal Declaration of Human Rights

Finally, Plaintiffs allege that Defendants and their
attorneys have used their membership in state bar associations
to commit human rights violations in contravention of the
Universal Declaration of Human Rights.
The Universal Declaration of Human Rights is not a treaty
of the United States, but rather a non-binding resolution of
the General Assembly of the United Nations "which creates legal
obligations only insofar as it represents evidence of customary
international law."

Siderman de Blake v. Republic of

Argentina, 965 F.2d 699, 719-20 (9th Cir. 1992).
Declaration does not, of its own force,
matter of international law.
692, 734-35 (2004).

The

impose obligations as a

Sosa v. Alvarez-Machain, 542 U.S.

Nor does the Declaration serve as a source

of justiciable rights.

Serra v. Lappin,

600 F.3d 1191, 1197

n.5 (9th Cir. 2010).
To the extent that Plaintiffs base their claims on the
Universal Declaration of Human Rights, the Complaint fails to
state a claim.
Conclusion

Plaintiffs' Complaint (#1) is DISMISSED.

Because I cannot

say with certainty that Plaintiffs could not amend their
complaint to state a claim, dismissal with without prejudice
and with leave to amend.
6 - ORDER

If Plaintiffs wish to file an amended

complaint, they must do so within 30 days of the date of this
Order.

I defer ruling on Plaintiffs' Application to Proceed

IFP (#2) pending timely submission of an amended complaint.

IT IS SO ORDERED.
DATED this

/(

day of March, 2015.

~~

OWEN M. PANNE
U.S. DISTRICT JUDGE

7 - ORDER