Christensen et al v. D Land Title et al

Filing 28

MEMORANDUM DECISION AND ORDER-granting 13 Motion to Dismiss and Plaintiffs Complaint is dismissed with prejudice. IT IS SO ORDERED. Signed by Judge David Sam on 6/7/11. (jmr) Modified on 6/8/2011 to fix typo (jmr).

THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF UTAH
CENTRAL DIVISION
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
RICKY R. CHRISTENSEN AND
JULIE ANN CHRISTENSEN,

)

Plaintiffs,

Case No.

2:11CV00205 DS

)

vs.

)
MEMORANDUM DECISION
AND ORDER

D LAND TITLE, et al.,

)
)

Defendants.

)

* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
I.

INTRODUCTION

On December 26, 2007, Plaintiffs executed a Promissory Note in
favor of Far West Bank in the principal amount of $417,000.00 to
acquire and/or refinance property located in Sanpete County, Utah.
That same date Plaintiffs also executed a Deed of Trust securing
the Note.
Land

The Deed of Trust identified Far West Bank as Lender, D

Title

as

Trustee,

and

Mortgage

Electronic

Registration

Systems, Inc. (“MERS”) as Beneficiary and as nominee for Lender and
Lender’s successors and assigns.
Countrywide Home Loans Servicing, L.P.
servicing the loan in March of 2008.

(“Countrywide”) began

BAC Home Loans Servicing L.P.

(“BAC”) formerly know as Countrywide , now services the loan.
Plaintiffs

commenced

the

present

action

in

Utah’s

Sixth

Judicial Court purporting to assert a claim for quite title.

The

Case was removed to this Court.

BAC and Federal National Mortgage

Association (“Fannie Mae”) have intervened in the case and have
been made party defendants.
Asserting that the Complaint fails to state a claim upon which
relief can be granted, Defendants, pursuant to Fed. R. Civ. P.
12(b)(6),

have filed

dismissal

of

the

a

Motion

to

Complaint.1

Dismiss

For

the

(Doc.#

seeking

that

reasons

13)

follow,

Defendants are entitled to the relief they request.
II.

STANDARD OF REVIEW

In reviewing the Complaint the Court accepts as true all well
pleaded allegations of the complaint and views them in the light
most favorable to the non-moving party.
F.3d 910, 913 (10th Cir. 2006).
opinions

couched

presumption.

as

facts

Anderson v. Blake, 469

Legal conclusions, deductions, and
are,

however,

not

given

such

a

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

support plaintiff’s allegations.
127 S. Ct. 1955, 1965 (2007).

will

reveal

evidence”

to

Bell Atlantic Corp. V. Twombly,

The burden is on the plaintiff to

1

The Court concludes that the Note presented by Defendants
for the court’s consideration is not a matter outside the pleadings
such that the motion should be converted to one for summary
judgment. See GFF Corp. v. Associated Wholesale Grocers, 130 F.3d
1381, 1384-85 (10th Cir. 1997)(where documents are central to the
claims in a complaint, authentic copies of those documents may be
submitted to the court for consideration on a motion to dismiss).
2

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.”
assumed

to

be

Id.

true,

The allegations must be enough that, if
the

plaintiff

speculatively) has a claim for relief.

plausibly

(not

just

Robbins v. Oklahoma, 519

F.3d 1242, 1247-48 (10th Cir. 2008).
III.

DISCUSSION

A. Quiet Title
A party seeking to quiet title “must allege title, entitlement
to possession, and that the estate or interest claimed by others is
adverse or hostile to the alleged claims of title or interest.”
Utah State Dept. of Social Services v. Santiago, 590 P.2d 335, 337338(Utah 1979).

The “plaintiff must prevail on the strength of his

own claim to title and not on the weakness of a defendant’s title
or even its total lack of title.”

Church v. Meadow Springs Ranch

Corp., Inc., 659 P.2d 1045, 1048-49 (Utah 1983).

To prevail,

Plaintiffs must allege, and ultimately prove, that their interest
is superior to that granted by the Trust Deed.

The Complaint,

however, contains insufficient allegations to support this claim.
Plaintiffs fail to assert their own claim to title.

Plaintiffs

do

not allege that they hold clear title to the subject property, or
even that they are not in default under the Note.

3

They admit

executing the Deed of Trust and to conveying their interest in the
property for the purpose of securing their loan.

Compl. ¶ 2.

Additionally, Plaintiffs base their quite title claim on the
so called “split the note” theory.2

By statute, “[t]he transfer of

any debt secured by a trust deed shall operate as a transfer of the
security therefor.”

Utah Code Ann. § 57-1-35.

Courts in this

jurisdiction have repeatedly held that the mortgage follows the note
and rejected the “split the note” theory.

See, e.g., Witt v. CIT

Group/Consumer Fin. Inc., No. 2:10cv440-TS, 2010 WL 4609368, at *4
(D. Utah Nov. 5, 2010)(rejecting “split the note” argument as
“squarely at odds with the firmly established presumption that a
transfer of the note carries with it the deed of trust, without any
formal assignment”); King v. American Mortg. Network, Inc., No.
1:09cv00162-DAK,

2010

WL

3516475,

at

*3

(D.

Utah

Sept.

2,

2010)(“Plainiff’s claims that [] the Note and Trust Deed have been
split ... are simply not plausible claims for relief and must be
dismissed”); Rodeback v. Utah Financial, No. 1:09cv00134-TC, 2010
WL 2757243, at *3 (D. Utah July 13, 2010)(“each successor to the

2

Plaintiffs allege the following.
5. Plaintiffs executed the Far West deed of trust for
the purpose of securing the Far West promissory note.
6. The promissory note was assigned to an unknown third
party.
7. Because the relevant note was assigned to entities
other than MERS, which holds the Far West trust deed, a
split of the note and trust deed has occurred and
therefore the latter is a nullity.
Compl. at ¶¶ 5-7
4

note receives the benefit of the security”); Marty v. Mortgage
Electronic

Registration

Systems,

No.

1:10cv00033-CW,

2010

WL

4117196, at *6 (D. Utah Oct. 19, 2010)(“[n]othing in law or logic
supports [plaintiff’s argument] that [a lender’s] delegation [of
nominee authority to MERS] would constitute a separation of the
rights under the trust deed from the ownership of the note”).
The Court, therefore, agrees with Defendants that Plaintiffs’
quiet title claim is legally unsupportable and that they are
entitled to the relief requested.
III.

CONCLUSION

For the reasons stated, Defendants’ Motion to Dismiss (Doc.
#13)

is

granted

and

Plaintiff’s

Complaint

is

dismissed

with

prejudice.
IT IS SO ORDERED.
DATED this 7th day of June, 2011.
BY THE COURT:

DAVID SAM
SENIOR JUDGE
UNITED STATES DISTRICT COURT

5