Jones v. Nationstar Mortgage LLC

Filing 15

OPINION and ORDER - Defendant's motion to dismiss 5 is granted. Plaintiff's motion for summary judgment 10 is denied as moot, or alternatively, is denied on the merits. Defendant's requests for judicial notice [7 ], 12 are grante d. Although dismissal of the quiet title claim for failure to state a claim might ordinarily result in leave to amend, because the claim is precluded by the Rooker-Feldman doctrine, leave to amend would be futile. Thus, the Complaint is dismissed with prejudice. IT IS SO ORDERED. DATED this 7th day of October, 2016, by United States District Judge Marco A. Hernandez (peg)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON
JENNIFER L. JONES (fka
JENNIFER L. DE GREGORIO),

No. 3:16-cv-01115-HZ

Plaintiff,
v.
NATIONSTAR LLC, an Oregon
corporation CORPORATION
SERVICE COMPANY 1127 Broadway
Street NE Suite 310 Salem OR 97301,
Defendant.
Jennifer L. Jones
134 N.E. 83rd Avenue
Portland, Oregon 97220
Plaintiff Pro Se
Kristine E. Kruger
PERKINS COIE LLP
505 Howard Street, Suite 1000
San Francisco, California 94105-3204
Attorney for Defendant
1 - OPINION & ORDER

OPINION & ORDER

HERNANDEZ, District Judge:
Pro se Plaintiff Jennifer Jones brings this action for quiet title, seeking a judgment
declaring her to be the owner in fee simple of real property and enjoining Defendant from
asserting any claim or interest in the property. Defendant moves to dismiss. Plaintiff moves for
summary judgment. I grant the motion to dismiss and deny the summary judgment motion.
BACKGROUND
Plaintiff filed her Complaint in Multnomah County Circuit Court on or about May 17,
2016. Notice of Removal, Ex. A (Compl. at 3), ECF 1-1. The caption on the Complaint states
that it is a "COMPLAINT (QUIET TITLE)." Id. at 1. She raises a claim of "fee simple title to
real property," described as "Lot 10, Block 12, TERRACE PARK" ("the Property"). Id. She
alleges that her claim for quiet title should be granted because she has been in sole continuous
possession of the Property for more than sixteen years from the original mortgage in 1999, and
has paid more than the equivalent of the principal on the original mortgage. Id. at 1-2. She
asserts that her title interest is superior. Id.
She further alleges that Defendant has no legitimate interest in the Property because (1)
the "House Affordable Refinance Program" or HARP, which she contends gave rise to "the
recent foreclosure on the Property" was wrongly and negligently approved for a "party" who
made a fraudulent claim of ownership in the HARP application; and (2) "the default judgment" in
favor of the State of Oregon as guarantor in the HARP loan program and which gave rise to the
foreclosure, was against the "party" who falsely claimed the ownership in the Property and was
not against Plaintiff. Id. at 2. She further contends that Defendant is not the "real party in
interest in an earlier mortgage on the Property as claimed in the foreclosure proceedings" as
2 - OPINION & ORDER

"Deutsche Bank's claim to ownership was dismissed in a prior quiet title action from 2011." Id.
Defendant1 was served with the summons and Complaint on May 20, 2016. Notice of
Removal at 2, ECF 1. It removed the action here on June 20, 2016. Id. Its asserted basis for
federal jurisdiction is diversity. Id. at 2.
The record shows that Plaintiff and Joseph De Gregorio, as tenants by the entirety, were
borrowers and parties to a 2006 Deed of Trust on real property located at 134 N.E. 83rd Avenue
in Portland and described as Lot 10, Block 12, Terrace Park, and which secured a $169,000 loan.
Notice of Removal, Ex. B, ECF 1-2.2 The Deed of Trust was assigned to Plaintiff in July 2013
with the assignment recorded in Multnomah County on November 1, 2013. Def.'s Req. for Jud.
Not., Ex. 1, ECF 12.3

1

Defendant was sued as "Nationstar LLC, an Oregon corporation." Defendant asserts
that its correct name is "Nationstar Mortgage LLC," and that it is a limited liability corporation
incorporated under the laws of the State of Delaware. Notice of Removal at 1, 2.
2

In a separate filing, Defendant asks the Court to take judicial notice of the 2006 Deed of
Trust. ECF 7. Because the document was recorded in Multnomah County, it is a public record.
The document is not reasonably subject to dispute because it is "capable of accurate and ready
determination by resort to sources whose accuracy cannot reasonably be questioned." Fed. R.
Evid. 201(b); Strong v. Countrywide Home Loans, Inc., No. 6:16-CV-00233-MC, 2016 WL
1367622, at *3 (D. Or. Apr. 6, 2016) ("Facts contained in public records are considered
appropriate subjects for judicial notice.") (citing Santa Monica Food not Bombs v. City of Santa
Monica, 450 F.3d 1022, 1025 (9th Cir. 2006)), appeal filed, No. 16-35297 (9th Cir. Apr. 21,
2016). Therefore, I take judicial notice of the 2006 Deed of Trust. Moreover, the Court may
take judicial notice of documents that are matters of public record without converting a motion to
dismiss into a motion for summary judgment. See, e.g., Zucco Partners, LLC v. Digimarc Corp.,
552 F.3d 981, 989 (9th Cir. 2009) (court may consider judicially noticed documents on Rule
12(b)(6) motion); MGIC Indem. Corp. v. Weisman, 803 F.2d 500, 504 (9th Cir. 1986) (district
court, when determining whether complaint fails to state a claim, may take "judicial notice of
matters of public record outside the pleadings[.]").
3

For the reasons explained in Footnote 2, I take judicial notice of the assignment
document.
3 - OPINION & ORDER

In a state court action brought by Nationstar Mortgage, LLC against Joseph DeGregorio,
Plaintiff Jennifer Dehard fka Jennifer DeGregorio, and others, the Multnomah County Circuit
entered a General Judgment and Money Award by Default on March 30, 2015, which , as to "All
Defendants," ordered the foreclosure of the Deed of Trust and required Nationstar to request a
writ of execution for sale of the Property. Pl.'s Mot. for Summ. J., Ex. IV, ECF 10-1.4 Shortly
thereafter, the state court signed a Writ of Execution, directed to the Multnomah County Sheriff,
noting the March 30, 2015 Judgment of foreclosure of the Property which ordered the sale of the
Property to satisfy the unpaid debt owed to Nationstar. Kruger Decl., Ex. 1, ECF 6-1. The sale
by the Sheriff occurred on December 1, 2015. Kruger Decl., Ex. 2, ECF 6-2. Nationstar, the
judgment creditor, was the highest bidder and received a Certificate of Judicial Sale from the
Sheriff after the sale. Id.
STANDARDS
I. Motion to Dismiss
A. Rule 12(b)(1)5
A Rule 12(b)(1) motion may attack the substance of the complaint's jurisdictional
allegations even though the allegations are formally sufficient. See Corrie v. Caterpillar, Inc.,

4

Some of the documents cited are not the subject of a formal request for judicial notice.
However, under Rule 201, the Court may take judicial notice on its own accord, at any stage of
the proceeding. Fed. R. Evid. 201(c)(1), (d). I take judicial notice of all of the Multnomah
County case documents because they are public records and the facts contained therein are not
subject to reasonable dispute.
5

Because part of Defendant's motion relies on the Rooker-Feldman doctrine, it is
properly analyzed under Rule 12(b)(1), not Rule 12(b)(6). Noel v. Hall, 341 F.3d 1148, 1154
(9th Cir. 2003) ("Under Rooker–Feldman, a federal district court does not have subject matter
jurisdiction to hear a direct appeal from the final judgment of a state court.").
4 - OPINION & ORDER

503 F.3d 974, 979-80 (9th Cir. 2007) (court treats motion attacking substance of complaint's
jurisdictional allegations as a Rule 12(b)(1) motion); Dreier v. United States, 106 F.3d 844, 847
(9th Cir. 1996) ("unlike a Rule 12(b)(6) motion, a Rule 12(b)(1) motion can attack the substance
of a complaint's jurisdictional allegations despite their formal sufficiency[.]") (internal quotation
marks omitted). Additionally, the court may consider evidence outside the pleadings. Robinson
v. United States, 586 F.3d 683, 685 (9th Cir. 2009); see also Dreier, 106 F.3d at 847 (a challenge
to the court's subject matter jurisdiction under Rule 12(b)(1) may rely on affidavits or any other
evidence properly before the court).
B. Rule 12(b)(6)
A motion to dismiss for failure to state a claim may be granted only when there is no
cognizable legal theory to support the claim or when the complaint lacks sufficient factual
allegations to state a facially plausible claim for relief. Shroyer v. New Cingular Wireless Servs.,
Inc., 622 F.3d 1035, 1041 (9th Cir. 2010). In evaluating the sufficiency of a complaint's factual
allegations, the court must accept all material facts alleged in the complaint as true and construe
them in the light most favorable to the non-moving party. Wilson v. Hewlett–Packard Co., 668
F.3d 1136, 1140 (9th Cir.2012). However, the court need not accept unsupported conclusory
allegations as truthful. Holden v. Hagopian, 978 F.2d 1115, 1121 (9th Cir. 1992).
II. Motion for Summary Judgment
Summary judgment is appropriate if there is no genuine dispute as to any material fact
and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a). The
moving party bears the initial responsibility of informing the court of the basis of its motion, and
identifying those portions of "'the pleadings, depositions, answers to interrogatories, and
5 - OPINION & ORDER

admissions on file, together with the affidavits, if any,' which it believes demonstrate the absence
of a genuine issue of material fact." Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986) (quoting
former Fed. R. Civ. P. 56(c)).
Once the moving party meets its initial burden of demonstrating the absence of a genuine
issue of material fact, the burden then shifts to the nonmoving party to present "specific facts"
showing a "genuine issue for trial." Fed. Trade Comm'n v. Stefanchik, 559 F.3d 924, 927-28
(9th Cir. 2009) (internal quotation marks omitted). The nonmoving party must go beyond the
pleadings and designate facts showing an issue for trial. Bias v. Moynihan, 508 F.3d 1212, 1218
(9th Cir. 2007) (citing Celotex, 477 U.S. at 324).
The substantive law governing a claim determines whether a fact is material. Suever v.
Connell, 579 F.3d 1047, 1056 (9th Cir. 2009). The court draws inferences from the facts in the
light most favorable to the nonmoving party. Earl v. Nielsen Media Research, Inc., 658 F.3d
1108, 1112 (9th Cir. 2011).
If the factual context makes the nonmoving party's claim as to the existence of a material
issue of fact implausible, that party must come forward with more persuasive evidence to support
his claim than would otherwise be necessary. Matsushita Elec. Indus. Co. v. Zenith Radio Corp.,
475 U.S. 574, 587 (1986).
DISCUSSION
I. Motion to Dismiss
Defendant argues that under the Rooker-Feldman doctrine, Plaintiff's quiet title claim is
barred. Additionally, Defendant contends that the facts of the Complaint fail to state a claim for
quiet title because they do not establish that Plaintiff has a superior interest in the Property.
6 - OPINION & ORDER

A. Rooker-Feldman
As stated above, under Rooker–Feldman, "a federal district court does not have subject
matter jurisdiction to hear a direct appeal from the final judgment of a state court." Noel, 341
F.3d at 1154 (citing D.C. Court of Appeals v. Feldman, 460 U.S. 462 (1983), Rooker v. Fidelity
Trust Co., 263 U.S. 413 (1923)). "The clearest case for dismissal based on the Rooker–Feldman
doctrine occurs when 'a federal plaintiff asserts as a legal wrong an allegedly erroneous decision
by a state court, and seeks relief from a state court judgment based on that decision[.]'" Henrichs
v. Valley View Dev., 474 F.3d 609, 613 (9th Cir. 2007) (quoting Noel, 341 F.3d at 1164). The
doctrine bars lower federal courts "from exercising subject matter jurisdiction over a suit that is a
de facto appeal from a state court judgment." Reusser v. Wachovia Bank, N.A., 525 F.3d 855,
859 (9th Cir. 2008) (internal quotation marks omitted).
An action brought in federal court constitutes such an appeal if "claims raised in the
federal court action are 'inextricably intertwined' with [a] state court's decision such that the
adjudication of the federal claims would undercut the state ruling or require the district court to
interpret the application of state laws or procedural rules." Id. (internal quotation marks
omitted). In essence, the Rooker–Feldman doctrine provides that "a party losing in state court is
barred from seeking what in substance would be appellate review of the state judgment in a
United States district court, based on the losing party's claim that the state judgment itself
violates the loser's federal rights." Johnson v. De Grandy, 512 U.S. 997, 1005–1006 (1994).
Plaintiff's quiet title claim is barred by Rooker-Feldman. She first alleges that her title
interest is superior because of her continuous possession of the Property since 1999 and her
payment of more than the principal on the original loan. However, before she filed this action,
7 - OPINION & ORDER

and as a result of the state court Judgment and subsequent foreclosure and auction, she lost any
interest in the Property she may have had. Having no cognizable interest in the Property before
she filed this case, this part of her claim can be understood only as an attack on the validity of the
state court Judgment which already determined that Defendant was entitled to foreclose on the
Property for lack of payment on the loan. Moreover, contrary to her assertion that somehow the
Judgment did not apply to her, the Judgment states that Nationstar's security interest was a first
priority lien and was superior to the interests of "all Defendants" of which Plaintiff was one. Pl.'s
Mot. for Summ. J., Ex. IV, ECF 10-1. The foreclosure portion of the Judgment was expressly
entered against "ALL DEFENDANTS." Id.
Plaintiff's other allegations appear to suggest that the state court Judgment of foreclosure
is invalid because of a fraudulent HARP application. The relationship between the HARP
application and the foreclosure Judgment is a bit unclear from her Complaint and she does not
identify the "party" who committed the alleged fraud. She suggests that this alleged fraud caused
the foreclosure which was ordered by the state court. Her allegations implicate and undermine
the propriety of the state court Judgment by suggesting it was procured by fraud. Given that, the
allegation regarding the fraudulent HARP application is nothing more than a de facto attack on
the state court Judgment and thus, Rooker-Feldman still applies. Finally, her reference to a prior
quiet title action in 2011 is unsupported by any meaningful factual allegations and appears to be
yet another collateral challenge to Nationstar's right to the Property which was adjudicated in the
state court Judgment of foreclosure.
B. Failure to State a Claim
In Oregon, a quiet title action is an equitable action used to determine adverse claims,
8 - OPINION & ORDER

interests, or estates in real property. Or. Rev. Stat. § (O.R.S.) 105.605. A judgment quieting title
requires the plaintiff to "prove that they have a substantial interest in, or claim to, the disputed
property and that their title is superior to that of defendants." Coussens v. Stevens, 200 Or. App.
165, 171, 113 P.3d 952, 955 (2005). Plaintiff's allegations that she has an interest in the property
because of her possession, and that her interest is superior, are legal conclusions which are not
taken as true for purposes of a motion to dismiss for failure to state a claim. She fails to set forth
any facts establishing that she has any interest in the Property, much less an interest superior to
that of Defendant. At this point, and before she filed this action, the Property had been sold at
auction and a Certificate of Judicial Sale delivered to Defendant. The facts fail to show that
Plaintiff has any interest in the Property. To the extent she contends that the Property should not
have been sold, that is a de facto attack on the state court Judgment and as explained above, is
barred from being litigated in this Court.
II. Motion for Summary Judgment
Given my conclusions regarding the motion to dismiss, I deny the motion for summary
judgment as moot. Alternatively, I deny the motion for summary judgment because Plaintiff fails
to establish that she is entitled to judgment as a matter of law.
In the motion, Plaintiff spends a fair amount of time arguing that Defendant's removal of
this case from state court to federal court was improper. Under 28 U.S.C. § 1447(c), a motion to
remand the case back to state court is to be made within thirty days of removal, unless the motion
attacks the federal court's subject matter jurisdiction. Here, Plaintiff suggests that this Court
lacks such jurisdiction and thus, I address the argument.
Defendant based its removal on diversity jurisdiction. 28 U.S.C. § 1332. Plaintiff admits
9 - OPINION & ORDER

that she is a citizen of Oregon. Pl.'s Mot. for Summ. J. 4. Although Defendant's initial assertions
of citizenship in its Notice of Removal failed to properly address its status as a limited liability
company, it later provided the required information to the Court. ECF 9. That filing shows that
Defendant's owners/members are not citizens of Oregon, but are citizens of other states. Thus,
the citizenship prong of the diversity requirement is met.
As to the amount in controversy, I agree with Defendant that the value of the Property is
the appropriate "amount" to analyze for the purposes of establishing diversity jurisdiction. See
Kirstein v. Deutsche Bank Nat'l Trust Co., No. 1:15-CV-02329-CL, 2016 WL 3003208, at *2 (D.
Or. Mar. 17, 2016) (noting that "'[i]n actions seeking declaratory or injunctive relief, it is well
established that the amount in controversy is measured by the value of the object of the
litigation'" (quoting Hunt v. Wash. State Apple Adver. Comm'n, 432 U.S. 333, 347 (1977)); and
further explaining that "courts in the Ninth Circuit have consistently interpreted the 'object of the
litigation' to be the at-issue property and, therefore, incorporated the property's value into the
amount in controversy" (citing cases)), adopted by J. McShane, 2016 WL 2994862 (D. Or. May
24, 2016). The Deed of Trust secured a $169,000 loan. In December 2015, the Property sold at
auction for $301,682.87. Kruger Decl., Ex. A, ECF 1-4. Thus, the amount in controversy is
more than $75,000. Removal was proper.
Any other arguments raised by Plaintiff are unavailing.
CONCLUSION
Defendant's motion to dismiss [5] is granted. Plaintiff's motion for summary judgment
[10] is denied as moot, or alternatively, is denied on the merits. Defendant's requests for judicial
notice [7, 12] are granted. Although dismissal of the quiet title claim for failure to state a claim
10 - OPINION & ORDER

might ordinarily result in leave to amend, because the claim is precluded by the Rooker-Feldman
doctrine, leave to amend would be futile. Thus, the Complaint is dismissed with prejudice.
IT IS SO ORDERED.

Dated this

day of

Marco A. Hernandez
United States District Judge

11 - OPINION & ORDER

, 2016