Big Blue Capital v. ReconTrust Company, N.A. et al

Filing 17

ORDER: Granting 13 Defendant's Motion to Dismiss for Failure to State a Claim; Granting Defendant's Motion to Dismiss Case for Lack of Jurisdiction 13 . Denying as Moot Request for Judicial Notice 11 ; Signed on 6/4/2012 by Chief Judge Ann L. Aiken. (lg)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON

BIG BLUE CAPITAL a/b/n
BIG BLUE CAPITAL PARTNERS,

Case No. 3:l2-cv-00448-AA
oRDER

Plaintiff,

v.
RECONTRUST COMPANY, N.A.;
JPMORGAN CHASE BANK, as
trustee for GS MORTGAGE
SECURITIES CORP GSR MORTGAGE
LOAN TRUST 2004-7; and BANK
AMERICA as successor by
merger to BAC HOME LOAN
SERVICING LP FKA COUNTRYWIDE
HOME LOAN SERVICING;
Defendants.
AIKEN, Chief Judge:
Defendants ReconTrust Company, N.A., JPMorgan Chase Bank, and
Bank

of

America

move

to

dismiss

plaintiff

Big

Blue

Capital

Partners' claims pursuant to Fed. R. Civ. P. 12(b) (1) and Fed. R.
Page 1 - ORDER

Civ.

P.

12 (b) (6) .

For the reasons set forth below,

defendants'

motion is granted and this case is dismissed.
In April 2004, Michael and Raquel Rich' took out a loan from
Countrywide Home Loans,

Inc.

("Countrywide"),

in the amount of

$432, 000,

residential property

(the "Property").

to purchase a

Pursuant to this transaction, the Riches executed a promissory note
(the "Note") in favor of Countrywide.

The Note was secured by a

trust deed (the "Deed of Trust"), which lists Countrywide as the
lender, Mortgage Electronic Registration Systems, Inc.

("MERS") as

the beneficiary, and CTC Real Estate Services as the trustee.

The

Deed of Trust was duly recorded in Clackamas County, Oregon.
Pursuant to the Deed of Trust,

the Riches agreed to make

monthly mortgage payments as required under the Note; the Riches
also

agreed

that

they

would

be

in

default,

and

foreclosure, if they failed to make such payments.
the

Deed of Trust

wri ting,

before

required the

selling or

Riches

to

subject

to

In addition,

obtain approval,

transferring their

interest

in

in the

Property.
In

2008,

repayments,
appointed

the

Riches

stopped

making

thereby materially defaulting.
ReconTrust

Company,

N .A.

the

requisite

loan

In March 2009,

MERS

("ReconTrust")

successor trustee for the Deed of Trust.

to

serve

as

Thereafter, ReconTrust

executed a Notice of Default and Election to Sell the Property.
The Appointment of Successor Trustee and Notice of Default and

1

The Riches are not a party to this litigation.

Page 2 - ORDER

Election

to

Sell were

Clackamas County.

documented

in

the

official

records

of

In January 2010, ReconTrust formally rescinded

the Notice of Default and Election to Sell.
In June 2010, MERS assigned the Deed of Trust to Deutsche
Bank.

Deutsche

Bank again

successor trustee;

ReconTrust

appointed ReconTrust
then issued a

Default and Election to Sell the Property.

to

serve

as

second Notice

of

The Assignment of the

Deed of Trust, Appointment of Successor Trustee,

and Notice of

Default and Election to Sell were recorded in Clackamas County.
March 2011,

In

ReconTrust formally rescinded the second Notice of

Default and Election to Sell.
In April 2011, Deutsche Bank assigned the Deed of Trust to BAC
Home Loan Servicing, LP and ReconTrust issued a third Notice of
Default and Election to Sell the Property.

These documents were

duly recorded in the official records of Clackamas County.
In November 2011, the Riches filed a petition for relief under
Chapter 13 of the Bankruptcy Code.

The petition identified the

value of their interest in the Property as $450,000, subject to two
secured claims by "Bank of America.,,2

The Riches, however, did not

list any purported claims against defendants as assets.
In January 2012, the bankruptcy court confirmed the Riches'
Chapter 13 plan and lifted the automatic stay, which precluded the
Accordingly,

pending non-judicial foreclosure of the Property.
ReconTrust

reinstituted

foreclosure

proceedings

by

issuing

In addition to their initial mortgage, the Riches
executed a second lien against the Property in the amount of
$82,278, which is not at issue in this case.
Page 3 - ORDER

an

Amended Notice of Sale.

The Amended Notice scheduled the sale of

the Property for March 15, 2012.

A foreclosure sale has not yet

occurred.
On March 7,
deed,

2012,

the Riches executed a

conveying their interest in the

bargain and sale

property to plaintiff,

limited liability company created under the laws of Ohio.
to that contract,

a

Pursuant

plaintiff agreed to pay the Riches $3,000 in

exchange for the Property.

Plaintiff, however, did not assume any

obligation to repay the Note pursuant this transaction.

Further,

the Riches did not obtain written consent from their lender prior
to transferring their interest in the Property, as required by the
Deed of Trust.
On March 13, 2012, plaintiff filed a complaint in this Court;
plaintiff asserts two claims against defendants, both arising out
of defendants'
foreclosure

alleged failure to comply with the non-judicial

procedures

("OTDA") .

outlined

Subsequently,

in

the

Oregon

Trust

Deed Act

defendants moved to dismiss this case,

asserting, in part, that plaintiff does not have standing.
Where the court lacks subject-matter jurisdiction, the action
must be dismissed.
standing

is

Fed.

R.

appropriately

Civ.

P.

raised

12 (b) (1) .

pursuant

to

12 (b) (1) .

Chandler v. State Farm Mut. Auto.

1115,

(9th Cir.

1122

subject-matter

2010).

jurisdiction

Fed.

R.

Ins, Co.,

Ci v.

P.

598 F. 3d

The party who seeks to invoke the
of

the

court

establishing that such jurisdiction exists.
Wildlife, 504 U.S. 555, 561 (1992).
Page 4 - ORDER

A challenge to

has

the

burden

of

Lujan v. Defenders of

In such instances, the court

may hear evidence regarding subj ect-matter jurisdiction and resolve
factual

disputes

where

necessary;

however,

"no

presumptive

truthfulness attaches to plaintiff's allegations, and the existence
of disputed material
evaluating

for

facts

itself

will not preclude the

the

merits

of

[court]

jurisdictional

from

claims."

Kingman Reef Atoll Invs., LLC v. united States, 541 F.3d 1189, 1195
(9th Cir. 2008).
Plaintiff has filed a number of actions in this District that
arise out of virtually identical facts and involve essentially the
same

parties

and

attorneys;

in

each

instance,

the

case

was

dismissed pursuant to Fed. R. Civ. P. 12(b) (1) because plaintiff
did not have standing.
ReconTrust Co., N.A.
May 4,
N.A.

See Big Blue Capital Partners,

("Big Blue I"), 2012 WL 1605784, *4-7

2012); Big Blue Capital Partners,

LLC v.

LLC v.
(D.Or.

Recontrust Co.,

("Big Blue II"), 2012 WL 1870752, *2-5 (D.Or. May 21, 2012).3
Specifically,

as

this

Court

recently explained,

plaintiff

lacked standing under Article III of the Consitution because it
"knowingly purchased the Property after the [borrower] materially
defaulted

on

the

Note

foreclosure proceedings."
AS

such,

plaintiff

did

and

defendants

initiated

non-judicial

See Big Blue I, 2012 WL 1605784 at *5.
not

suffer

an

injury

traceable to defendants' challenged actions.

that

was

fairly

Id.

Moreover, prudential standing was absent because plaintiff's
claims were premised on a third-party's rights; namely, plaintiff's

3 Plaintiff also has a case pending before Judge Mosman.
See Big Blue Capital Partners, LLC v. Recontrust Co., N.A., Case
No. 3:12-cv-00292-MO.

Page 5 - ORDER

claims arose out of harm suffered by the non-party borrowers as a
result of defendants' alleged failure to follow the non-judicial
foreclosure

procedures

articulated

in

the

OTDA.

Id.

at

*7.

Plaintiff also did not have prudential standing because the OTDA
"was [not] intended to protect corporate entities [that] purchase
properties already in default and seek to profit by extracting a
settlement from the lender."

Id.

Therefore, for the reasons set

forth in Big Blue I and Big Blue II, this Court lacks subjectmatter jurisdiction.
CONCLUSION

Defendants'
parties'

Motion to Dismiss

(doc.

13)

is GRANTED.

The

requests for oral argument are DENIED as unnecessary.

Finally, this case is DISMISSED and all pending motions are DENIED
as moot.
IT IS SO ORDERED.
Dated

this~~

of June 2012.

Ann Aiken
United States District Judge

Page 6 - ORDER