Nielsen v. Aegis Wholesale et al
Filing
21
MEMORANDUM DECISION-granting 10 Motion to Dismiss Case Closed. All claims against MERS are dismissed with prejudice. Plaintiffs claims against defendant Aegis are stayed because of Aegis bankruptcy filing 6 . Accordingly, the clerk is directed to close the case. Signed by Judge David Sam on 3/22/11. (jmr)
THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF UTAH
CENTRAL DIVISION
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
)
Case No.2:10CV606 DS
VICKI NIELSEN,
Plaintiff,
)
vs.
)
MEMORANDUM DECISION
)
AEGIS WHOLESALE CORPORATION,
MORTGAGE ELECTRONIC
REGISTRATION SYSTEMS,
)
)
Defendants.
)
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
This
Mortgage
matter is
Electronic
before
the
Registration
court
on
Systems
motion
(“MERS”)
of
defendant
to
dismiss
plaintiff’s amended complaint pursuant to Fed. R. Civ. P. 12(b)(6).
Defendant argues that plaintiff’s claims are meritless and are
largely based on the “split the note,” “MERS lacks authority,” and
“securitization discharged my note” theories that have already been
dismissed by the United States District Court for the District of
Utah multiple times. Defendant argues that plaintiff’s other claims
for quiet title and fraud lack any legal or factual basis and are
implausible and speculative.
INTRODUCTION
Plaintiff Vicki Nielsen filed her First Amended Complaint on
September
defendants
30,
2010
Aegis
seeking
Wholesale
a
determination
Corporation
of
(“Aegis”)
whether
and
the
Mortgage
Electronic Registration Systems (“MERS”), have the legal right to
foreclose
on
property
she
owns
in
Springville,
Utah
(the
“Property”).1 The following facts are established by the complaint
or by documents attached to the complaint or referenced therein.
On February 13, 2007, Plaintiff Vicki Nielsen signed a note in
favor of Aegis in the principal amount of $290,000.00 (the “First
Note”)to refinance the Property.
On the same date, she signed a
Deed of Trust securing the Note (the “First Trust Deed”)which
identified Aegis as the lender and MERS as the beneficiary under
the
Security
Instrument
successors and assigns.
as
nominee
for
lender
and
lender’s
On this same date, Nielsen signed a Home
Equity Line of Credit Agreement with a maximum principal amount of
$47,500.00 (the “HELOC Agreement”).
Finally, on this same date,
Nielsen signed a Second Deed of Trust securing the HELOC Agreement
(the “Second Trust Deed”) which identified Bartlett Title as
trustee for the benefit of MERS as nominee for Aegis. Plaintiff is
currently
in
default
on
both
the
First
Note,
and
the
HELOC
Agreement.
STANDARD OF REVIEW
Under Federal Rule of Civil Procedure 8(a)(2), a pleading must
contain a “short and plain statement of the claim showing that the
pleader is entitled to relief.” In reviewing the complaint, the
court accepts as true all well pleaded allegations of the complaint
1
Defendant Aegis filed a notice of bankruptcy stay on November
1, 2010 and is therefore not a participant in these proceedings.
2
and views them in the light most favorable to the non-moving party.
Anderson v. Blake, 469 F.3d 910, 913 (10th Cir. 2006).
conclusions,
deductions,
and
opinions
however, not given such a presumption.
couched
as
facts
Legal
are,
Mitchell v. King, 537 F.2d
385 (10th Cir. 1976); Swanson v. Bixler, 750 F.2d 810 (10th Cir.
1984).
The complaint must plead sufficient facts, that when taken
as true, provide “plausible grounds” that “discovery will reveal
evidence” to support plaintiff’s allegations.
V. Twombly, 127 S. Ct. 1955, 1965 (2007).
Bell Atlantic Corp.
The burden is on the
plaintiff to frame a “complaint with enough factual matter (taken
as true) to suggest” that he or she is entitled to relief.
Id.
“Factual allegations must be enough to raise a right to relief
above the speculative level.”
Id.
Furthermore, the allegations
must be enough that, if assumed to be true, the plaintiff plausibly
(not just speculatively) has a claim for relief.
Robbins v.
Oklahoma, 519 F.3d 1242, 1247-48 (10th Cir. 2008). See also,
Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (U.S. 2009)(“a complaint
must contain sufficient factual matter, accepted as true, to ‘state
a claim to relief that is plausible on its face.”)
The
plausibility
standard
requires
“more
than
possibility that a defendant has acted unlawfully.”
a
sheer
As the Court
held in Twombly, where a complaint pleads facts that are “merely
consistent with” a defendant’s liability, it “stops short of the
line
between
possibility
and
plausibility
3
of
‘entitlement
to
relief.’” Twombly 550 U.S. 544, at 555, 127 S.Ct. 1955, 167 L.Ed.2d
929.
According to the Court in Ashcroft, two important principles
underlie this reasoning.
First, although a court must accept as
true all well-plead factual allegations in a complaint, this does
not apply to “legal conclusion couched as a factual allegation.”
Ashcroft,
at
1950.
erroneous
legal
Vicki
conclusions
Nielsen’s
couched
complaint
as
factual
is
rife
with
allegations.
Second, a complaint survives a motion to dismiss only if it states
a plausible claim for relief.
“[W]here the well-pleaded facts do
not permit the court to infer more than the mere possibility of
misconduct, the complaint has alleged-but it has not ‘show[n]’‘that the pleader is entitled to relief.’”Id., at 1950 (citing Fed.
Rule Civ Proc. 8(a)(2)).
DISCUSSION
Without elaboration, the court adopts defendant’s argument that
plaintiff has latched onto a failed theory–that a note and trust
deed can be “split” and rendered null and void.
As they noted in
their memorandum in support, “[t]his Court has already rejected the
“split the note” theory, including in the “securitization” context.
See Marty v. Mortgage Electronic Registration Systems, Inc., Case
No. 1:10-cv-33 (Oct. 19, 2010); King v. American Mortgage Network,
Case No. 1:09-cv-162 (Sept. 1, 2010); Rodeback v. Utah Financial,
Case No. 1:09-cv-134 (July 13, 2010).”
4
Defendants’ Memorandum in
Support at 4. And defendants go on to correctly cite Utah Code Ann.
§ 57-1-35 which states, “The transfer of any debt secured by a trust
deed
shall
Plaintiff
operate
also
as
cites
a
this
transfer
of
statute
application to the facts of her case.
the
but
security
then
therefor.”
misconstrues
its
Plaintiff’s Memorandum in
Opp. at 4-5. By law, each successor to the Note also receives the
benefit of the security, and by contract, MERS is appointed as the
nominee beneficiary under the First Deed of Trust.
Contrary to
plaintiff’s argument, MERS has established its rights with respect
to foreclosure on the security and MERS has at all relevant times
been entitled to act as beneficiary under the First Deed of Trust.
Plaintiff Nielsen has not cited any case law to the contrary nor any
statute that says the exception she argues exists.
Furthermore, the court confirms the already-established holding
that identification of the note holder is not necessary in nonjudicial foreclosures in Utah. Possession of the note is not
necessary for MERS to carry out its duty as the beneficiary and
there is no duty to produce the actual note or name the holder in
order to authorize the trustee to foreclose on the Property. The
identity of the beneficiary has no affect on whether the borrower
has made its required monthly payments, which is default under the
plain terms of the note.
Ms. Nielsen does not contend that she has
made the payments, and default on the First Note is admitted.
Nor
does the identity of the beneficiary have any affect on the notice
5
and sale requirements for a non-judicial foreclosure. The execution
of the trust deed transfers all of the trustor’s interest in the
property
“to
the
trustee
as
security
for
the
obligation
or
obligations for which the trust property is conveyed. . .” Utah Code
Annotated § 57-1-20 (emphasis added). Regardless of who holds the
note, in a non-judicial foreclosure the trustee is acting as that
party’s fiduciary and the borrower, in this case Ms. Nielsen, is
obligated to deal with the trustee. Plaintiff’s claim that her case
is different because the First Note was securitized and thus MERS
cannot possibly identify the note holder is contrary to established
law and without merit.
Finally, the court finds plaintiff’s declaratory action and
quiet title claims fail as a matter of law.
Because plaintiff’s
preceding claims involving MERS’ authority to act as beneficiary as
well as her argument that MERS must identify the note holder to
initiate a non-judicial foreclosure both fail as a matter of law,
plaintiff has no basis for her declaratory action claim and it is
dismissed.
In addition, plaintiff’s quiet title claim, seeking to
extinguish competing interests in the Property in favor of the
interest of plaintiff, fails.
This court has repeatedly and firmly
rejected plaintiff’s legal arguments regarding her quiet title
claim, and plaintiff has made no allegation that the First Trust
Deed has been reconveyed or satisfied.
Hence, since the facts have
established that she executed the First Trust Deed, that it was
6
notarized and recorded, and that it has not been reconveyed or
satisfied, there is no basis for Nielsen to claim that the First
Trust Deed is not a valid encumbrance against her title and she
therefore cannot make out a claim for quiet title. See Commonwealth
Property Advocates v. Citimortgage, Inc., 2011 WL 98491, *4 (D.Utah,
2011).
CONCLUSION
For the foregoing reasons, IT IS HEREBY ORDERED that defendant
MERS’s Motion to Dismiss (Doc. #10) is GRANTED.
MERS are dismissed with prejudice.
All claims against
Plaintiff’s claims against
defendant Aegis are stayed because of Aegis’ bankruptcy filing (Doc.
#6).
Accordingly, the clerk is directed to close the case.
SO ORDERED.
DATED this 22nd day of March,2011.
BY THE COURT:
DAVID SAM
SENIOR JUDGE
UNITED STATES DISTRICT COURT
7
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