Strong v. Countrywide Home Loans, Inc. et al
Filing
29
ORDER: Defendants' Requests for Judicial Notice 8 , 14 and 17 are accepted, Defendants' Motions to Dismiss 7 , 13 and 16 are Granted and this case is dismissed with prejudice. Plaintiff's Motion for Default Judgment 19 and her additional miscellaneous motions 23 , 24 , 25 and 26 are denied as moot. Plaintiff's claims are dismissed as to all defendants in both the lead and member cases save for GMAC Mortgage, LLC and Residential Asset Mortgage Products, Inc. The action as to those two defendants is stayed pending bankruptcy proceedings. Signed on 4/6/2016 by Judge Michael J. McShane. (cp)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON
MARY STRONG
Plaintiff,
Case No. 6:16-cv-00233-MC (Lead Case)
Case No. 6:16-cv-00331-MC (Trailing Case)
OPINION AND ORDER
V.
COUNTRYWIDE HOME
LOANS, INC. ET AL.,
Defendants.
MCSHANE, Judge:
Plaintiff, proceeding prose, initially brought the consolidated actions against various
banks, trustees, and beneficiaries in the Deschutes County Circuit Court and it was subsequently
removed to this Court. ECF No. 1. Plaintiffs claims arise out of a property located at 65510 Old
Bend Redmond Highway in Bend, Oregon, 97701. Plaintiff secured a $364,000 refinance loan
for the property and subsequently defaulted on that loan. ECF No. 9-1. Following default, the
Deed of Trust for the property was assigned and, through a series of related events, Plaintiff lost
access to the property. ECF No. 9-2. For the fourth time, Plaintiff now brings an array of claims
involving the property at issue.
PREVIOUS LITIGATION
Plaintiffs claims are nearly identical actions to those of Civ. Nos. 6:15-cv-1536 and
6:15-cv-1966, which were consolidated by this Court. See Civ. No. 6:15-cv-1536 at ECF Nos.
33, 41. After hearing oral argument and carefully considering Plaintiffs various contentions in
those cases, this Court dismissed Plaintiffs federal claims brought under the Truth in Lending
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Act and the Real Estate Settlement Procedures Act for failure to state a claim and, due to various
defects in Plaintiffs other claims in that case, this Court declined to exercise supplemental
jurisdiction over Plaintiffs remaining state law claims. Id. at ECF No. 41. Plaintiff appealed that
dismissal to the Ninth Circuit Court of Appeals, which dismissed her appeals based on the
posture of those consolidated cases. Id. at ECF No. 47.
In an apparent end-run around this Court's dismissal and the Court of Appeals' dismissal
of her appeal, Plaintiff eliminated her TILA and RESP A claims and refiled these two actions.
This Court then consolidated the cases sua sponte based on common issues of law and fact and
in order to avoid additional unnecessary cost and delay under Federal Rule of Civil Procedure
("FRCP") 42(a). See ECF No. 11.
CURRENT MOTIONS
Defendants in these consolidated cases have filed three motions to dismiss (ECF Nos. 7,
13, 16) as well as three concurrently-filed Requests for Judicial Notice (ECF Nos. 8, 14, 17). In
their initial motion to dismiss for failure to state a claim under FRCP 12(b)(6), Defendants
lodged arguments against each of Plaintiffs claims. Defendants contend, among other things,
that (1) Plaintiffs fraud claims are time-barred and insufficiently pled; (2) Plaintiffs lack of
standing claim is composed of bare legal conclusions which rest on the "split note" theory of
asset transfer, which has been rejected by the Ninth Circuit, see Cervantes v. Countrywide Home
Loans, 656 F.3d 1034, 1044 (9th Cir. 2011); (3) Plaintiff has insufficiently pled her intentional
infliction of emotional distress and slander of titles claims; (4) Plaintiffs slander of title claim is
also time-barred; (5) Plaintiffs quiet title claim fails based on failure to allege tendering of debt;
and (6) Plaintiffs request for declaratory relief fails due to lack of actual controversy. ECF No. 7
at 3. Subsequently, Defendants learned that Plaintiff has no ownership in the property that is the
2 - OPINION AND ORDER
central focus of this case following a non-judicial foreclosure and trustee's sale of the property
on December 17, 2015. ECF No. 13 at 2-3, ECF No. 15-1. This discovery prompted Defendants
to file a Supplemental Motion to Dismiss, ECF No. 13, for lack of standing under Rule 12(b)(l),
arguing that Plaintiff is not the real party in interest under Rule 17(a)(l).
Plaintiff has also moved in the Deschutes County Circuit Court for default judgment
against some defendants, apparently arising out of confusion related to the removal of one of the
consolidated cases. See ECF No. 20. In addition, as in the prior actions, Plaintiff has filed a
number of miscellaneous motions. ECF Nos. 23-26.
I address all of these motions below.
STANDARD
I.
Motion to Dismiss Under 12(b)(6)
To survive a motion to dismiss under Rule 12(b)(6), a complaint must contain sufficient
facts that "state claim to relief that is plausible on its face." Bell Atlantic Corp. v. Twombly, 550
U.S. 544, 570 (2007). A claim is plausible on its face when the supporting factual allegations
allow the court to infer the defendant's liability based on the alleged conduct. Ashcroft v. Iqbal,
556 U.S. 662, 663 (2009).
The factual allegations in a complaint must present more than "the mere possibility of
misconduct." Id. at 678. In the case of prose litigants a court reviews the pleadings with a less
stringent standard than those drafted by lawyers; the court views the complaint liberally but will
not supplant vague and conclusory allegations. See Erickson v. Pardus, 551 U.S. 89, 94 (2007);
Litman v. Harris, 768 F.3d 1237, 1241 (9th Cir. 2014).
II.
Motion to Dismiss Under 12(b)(l)
Rule 17 requires that: "An action must be prosecuted in the name of the real party in
3 - OPINION AND ORDER
interest." Fed.R.Civ.P. 17(a)(l). A plaintiff lacks "prudential standing" ifhe is not asserting his
"own legal interests as the real party in interest ... ."Dunmore v. United States,358 F.3d 1107,
1112 (9th Cir. 2004) (citation omitted). The identity of the real party in interest, however,
depends on the legal relationships of the parties under applicable substantive law."). Thus, the
court should focus on "that portion of state law from which the specific right being sued upon
sterns." Allstate Ins. Co. v. Hughes, 358 F.3d 1089, 1094 (9th Cir. 2004) (citation omitted)
(emphasis omitted).
III.
Motion for Default Judgment
The decision to grant or deny a motion for default judgment is within the discretion of the
court. Alan Neuman Prods., Inc. v. Albright, 862 F.2d 1388, 1392 (9th Cir. 1988); Eitel v.
McCool, 782 F .2d 14 70, 14 71-72 (9th Cir. 1986). There are a number of factors which may be
considered when exercising that discretion. Eitel, 782 F.2d at 1471-72. Default judgments are
ordinarily disfavored. Id. at 14 72.
DISCUSSION
I.
Duplicative Matters and Judicial Notice
Defendants Countrywide Horne Loans, Inc., ("Countrywide"), Bank of America, N.A.,
and Mortgage Electronic Registration Systems, Inc. ("MERS") collectively request that this
court take judicial notice of the following documents: (1) a Deed of Trust securing to the
property located at 65510 Old Bend Redmond Highway in Bend, Oregon, 97701 a $364,000 loan
by Plaintiff Mary Strong who is Trustee of the Mary Strong Family Trust, recorded on March 23,
2007, in the Deschutes County Records Office as 2007-17104; (2) an Assignment of Deed of
Trust, recorded on July 20, 2010, in the Deschutes County Records Office as 2010-28180; (3) an
Appointment of Successor Trustee recorded on July 20, 2010, in the Deschutes County Records
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Office as 2010-28181; (4) a Notice of Default and Election to Sell, recorded on April 20, 2011,
in the Deschutes County Records Office as 2011-14688; (5) a second Notice of Default and
Election to Sell, recorded on March 20, 2012, in the Deschutes County Records Office as 2012009789; (6) a Notice of Sale Proof of Compliance, recorded on July 6, 2012, in the Deschutes
County Records Office as 2012-026286; and (7) a Rescission Notice of Default recorded on July
6, 2012, in the Deschutes County Records Office as 2012-027835. Req. for Jud. Notice, ECF No.
8 (documents available at ECF No. 9, Exs. 1-7). Those same Defendants additionally request
that this court take judicial notice of a Trustee's Deed evidencing that the subject property was
sold in a trustee's sale to Stratagem Asset-Backed Credit Trust VI, under John P. Jones, Trustee,
on December 17, 2015, recorded on January 25, 2016, in the Deschutes County Clerk's Office as
2016-002518. Supp. Req. for Jud. Notice, ECF No. 14 (document available at ECF No. 15, Ex.
1). Finally, Defendant Bank ofNew York ("B.N.Y.") Mellon Trust Company, N.A., requests that
this court take judicial notice of a 20-year title search for the subject property through the First
American Title Company of Oregon, attached to ECF No. 18, showing that B.N.Y. Mellon never
had an interest in the property.
In general, material outside of the pleadings may not be considered in ruling on a motion
to dismiss unless the motion is treated as one for summary judgment and the parties are "given
reasonable opportunity to present all materials made pertinent to such motion by Rule
56." Jacobson v. AEG Capital Corp., 50 F.3d 1493, 1496 (9th Cir. 1995). One exception to this
general rule allows the court to take judicial notice of"matters of public record," under Rule 201
of the Federal Rules of Evidence. Lee v. County of Los Angeles, 240 F.3d 754, 774 (9th Cir.
2001). Facts contained in public records are considered appropriate subjects for judicial
notice. Santa Monica Food not Bombs v. City ofSanta Monica, 450 F.3d 1022, 1025 (9th Cir.
5 - OPINION AND ORDER
2006).
Upon analysis of the nine public documents in Defendants' various requests for judicial
notice, this Court takes judicial notice of each under FRE 201, as they are matters of public
record and not reasonably subject to debate.
Following this Court's judicial notice of the sale of the property, I find that Plaintiff is not
the real party in interest for at least her claim to quiet title, her declaratory relief claim, and her
rescission claim. On consideration of grounds for each of the current motions to dismiss, and in
light ofthis Court's rulings in the previous duplicative actions, Plaintiffs claims are dismissed.
II.
Motion for Default Judgment
Plaintiffs Motion for Default Judgment appears to be based on contentions that a
Defendant not herein named has failed to appear. See ECF No. 20-1. Upon review and in
exercise of its sound discretion, this Court denies Plaintiffs motion.
III.
Bankruptcy Stay
On November 6, 2015, GMAC Mortgage, LLC, also named by Plaintiff in the Member
Case caption as Residential Asset Mortgage Products, Inc., filed a Notice of Bankruptcy Status
with this court. See 6:15-cv-1966-MC, ECF No. 15. Due to pending bankruptcy proceedings in
the United States Bankruptcy Court for the Southern District of New York, any action as to those
parties must be placed under an automatic stay. 11 U.S.C. § 362(a)(l). Accordingly, the above
dismissal as to all other named defendants does not extend to GMAC Mortgage, LLC or
Residential Asset Mortgage Products, Inc., and Plaintiffs action against those parties is stayed
pending update in bankruptcy status.
Those parties are again ordered to notify this court within thirty days of the conclusion of
their bankruptcy proceedings or, alternatively, if the Bankruptcy Court grants them limited relief
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from the automatic stay requirements of 11 U.S.C. § 362.
CONCLUSION
For the reasons stated above, Defendants' Requests for Judicial Notice, ECF Nos. 8, 14,
17, are ACCEPTED, Defendants' Motions to Dismiss, ECF Nos. 7, 13, 16, are GRANTED, and
this case is DISMISSED with prejudice. Plaintiffs Motion for Default Judgment, ECF No.19,
and her additional miscellaneous motions, ECF Nos. 23-26, are DENIED as moot. Plaintiffs
claims are dismissed as to all defendants in both the Lead and Member Cases save for GMAC
Mortgage, LLC and Residential Asset Mortgage Products, Inc. The action as to those two
defendants is stayed pending bankruptcy proceedings.
IT IS SO ORDERED.
Dated this _L_ day of April, 2016.
\_ LMichael McShane
United States District Judge
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