Hale et al v. First American Title Insurance et al
MEMORANDUM DECISION granting 7 Motion to Dismiss; granting 8 Motion to Release Lis Pendens. Signed by Judge Ted Stewart on 09/08/2011. (tls)
IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF UTAH
TIMOTHY J. HALE and DEBORAH HALE,
MEMORANDUM DECISION AND
ORDER GRANTING DEFENDANTS’
MOTION TO DISMISS AND
MOTION TO RELEASE LIS
Case No. 2:11-cv-398-TS
Judge: Ted Stewart
FIRST AMERICAN TITLE INSURANCE,
AS TRUSTEE, et al.,
This matter is before the Court on Defendants’ Motions to Dismiss and Release Lis
Pendens. For the reasons discussed below, the Court will grant both of these Motions.
On June 21, 2007, Plaintiffs executed a promissory note (“Note”) in favor of Defendant
Solstice Capital Group Inc. in the principal amount of $155,500.00. The Note was secured by a
Deed of Trust that named Defendant First American Title Insurance Company as trustee and
Defendant Mortgage Electronic Registrations Systems, Inc. as beneficiary.
Plaintiffs filed this lawsuit on April 1, 2011, bringing a claim for quiet title based on the
theory that because the Trust Deed had been split from the Note, “the former is a nullity and
should be stricken from the chain of title.”1
In considering a motion to dismiss under Rule 12(b)(6), all well-pleaded factual
allegations, as distinguished from conclusory allegations, are accepted as true and viewed in the
light most favorable to Plaintiffs as the nonmoving party.2 Plaintiffs must provide “enough facts
to state a claim to relief that is plausible on its face.”3 All well-pleaded factual allegations in the
complaint are accepted as true and viewed in the light most favorable to the nonmoving party.4
But, the court “need not accept . . . conclusory allegations without supporting factual
averments.”5 “The court’s function on a Rule 12(b)(6) motion is not to weigh potential evidence
that the parties might present at trial, but to assess whether the plaintiff’s complaint alone is
legally sufficient to state a claim for which relief may be granted.”6
In considering the adequacy of a plaintiff’s allegations in a complaint subject to a motion
Docket No. 1, ¶ 11.
GFF Corp. v. Associated Wholesale Grocers, Inc., 130 F.3d 1381, 1384 (10th Cir.
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 547 (2007).
GFF Corp., 130 F.3d at 1384.
S. Disposal, Inc., v. Tex. Waste, 161 F.3d 1259, 1262 (10th Cir. 1998); Hall v. Bellmon,
935 F.2d 1106, 1110 (10th Cir. 1991).
Miller v. Glanz, 948 F.2d 1562, 1565 (10th Cir. 1991).
to dismiss, a district court not only considers the complaint, but also “documents incorporated
into the complaint by reference, and matters of which a court may take judicial notice.”7 Thus,
“notwithstanding the usual rule that a court should consider no evidence beyond the pleadings on
a Rule 12(b)(6) motion to dismiss, ‘[a] district court may consider documents referred to in the
complaint if the documents are central to the plaintiff’s claim and the parties do not dispute the
As a preliminary matter, the Court notes that Plaintiffs, in their Memorandum in
Opposition to Defendants’ Motion to Dismiss, present two new arguments that were not included
in their Complaint. First, they argue that this case should be remanded because diversity
jurisdiction is lacking, and second, they request the Court to make a determination regarding who
actually holds the original promissory note and trust deed. With regards to the former, not only is
this request for remand procedurally improper and untimely,9 but Defendants have adequately
proven complete diversity, and therefore Plaintiffs’ argument for remand fails. With regards to
the latter, Plaintiffs do not state in their Complaint that they “seek to determine the [Trust
Deed’s] true party in interest,” and hence it is procedurally improper for Plaintiffs to raise this
request for the first time in their Memorandum in Opposition to Defendants’ Motions. Therefore,
Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 322 (2007) (citing 5B
WRIGHT & MILLER § 1357 (3d ed. 2004 and Supp. 2007)).
Alvarado v. KOBTV, LLC, 493 F.3d 1210, 1215 (10th Cir. 2007) (quoting Jacobsen v.
Deseret Book Co., 287 F.3d 936, 941 (10th Cir. 2002)).
28 U.S.C. § 1447(c) requires a motion to remand to be filed within 30 days of the filling
of the notice of removal.
the Court will not address this request, but will note that even if the Court were to address it, it
would be without merit because this request is a derivative of Plaintiffs’ “split note” claim,
which, as explained below, also fails.
As stated above, Plaintiffs’ Complaint brings a single, quiet title claim that rests squarely
on a “split note” theory. This theory has been repeatedly rejected by both this Court and now by
the Utah Court of Appeals.10 Because Plaintiffs provide no reason for this Court to depart from
this precedent, Plaintiffs’ claim must fail. The Court will therefore dismiss Plaintiffs’ Complaint
It is therefore
ORDERED that Defendants’ Motions to Dismiss and Release Lis Pendens (Docket Nos.
7 and 8) are GRANTED. It is further
ORDERED that Plaintiffs Timothy J. Hale and Deborah Hale shall release the lis pendens
filed in relation to this matter by September 13, 2011.
Commonwealth Prop. Advocates, LLC v. Mortg. Elec. Registration Sys., Inc., — P.3d
—, 2011 WL 2714429, at *4-5 (July 14, 2011).
Plaintiffs’ Complaint is dismissed with prejudice. The Clerk of the Court is directed to
close this case forthwith.
DATED September 8, 2011.
BY THE COURT:
United States District Judge
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