Pasinsky v. ABN AMRO Mortgage Group et al

Filing 23

MEMORANDUM DECISION granting 5 Defendant PennyMac's Motion to Dismiss; granting 8 Defendant CitiMortgage Motion to Dismiss. Signed by Judge Ted Stewart on 08/23/2011. (tls)

IN THE UNITED STATES COURT FOR THE DISTRICT OF UTAH
CENTRAL DIVISION

CHRISTY PASINSKY,
Plaintiff,

MEMORANDUM DECISION AND
ORDER GRANTING DEFENDANTS’
MOTIONS TO DISMISS

vs.

ABN AMRO MORTGAGE GROUP, INC.,
USAA FEDERAL SAVINGS BANK,
CITIMORTGAGE INC., PENNYMAC
LOAN SERVICES LLC, JOHN DOES I
AND II, and JOHN DOES 3 through 10,
inclusive,

Case No. 2:11-CV-399 TS

Defendants.

This matter is before the Court on Motions to Dismiss filed by Defendants PennyMac
Loan Services, LLC (“PennyMac”), CitiMortgage, Inc. (“CitiMortgage”), and CitiMortgage as
successor by merger to ABN AMRO Mortgage Group, Inc (“ABN”).1 For the reasons discussed
below, the Court will grant Defendants’ Motions.

1

Plaintiff has failed to respond to the Motion to Dismiss filed by Defendant CitiMortgage
and the time for doing so has expired.
1

I. BACKGROUND
On June 30, 2005, Plaintiff Christy Pasinsky obtained a refinance mortgage loan in the
amount of $800,000 from ABN. Plaintiff also obtained a second loan from USAA Federal
Savings Bank.2 Both Notes were secured by Deeds of Trust recorded against real property
located in Park City, Utah (the “Property”).
Plaintiff began having trouble making loan payments approximately two years ago.
Plaintiff requested a loan modification, which was ultimately denied. When Plaintiff failed to
bring her loan current, foreclosure proceedings were initiated.
II. MOTION TO DISMISS STANDARD
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 Plaintiff as the nonmoving party.3 Plaintiffs must provide “enough facts
to state a claim to relief that is plausible on its face.”4 All well-pleaded factual allegations in the
amended complaint are accepted as true and viewed in the light most favorable to the nonmoving
party.5 But, the court “need not accept . . . conclusory allegations without supporting factual

2

Defendant USAA Federal Savings Bank has been dismissed by stipulation. Docket No.

22.
3

GFF Corp. v. Associated Wholesale Grocers, Inc., 130 F.3d 1381, 1384 (10th Cir.

1997).
4

Bell Atl. Corp. v. Twombly, 550 U.S. 544, 547 (2007).

5

GFF Corp., 130 F.3d at 1384.
2

averments.”6 “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.”7
In considering the adequacy of a plaintiff’s allegations in a complaint subject to a motion
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.”8 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
documents’ authenticity.’”9
III. DISCUSSION
A.

DECLARATORY JUDGMENT
Plaintiff seeks declaratory judgment that Defendants have no right to foreclose on the

Property. In support of this claim, Plaintiff argues that Defendants lost any interest in the note as
a result of the securitization of this note. This Court, however, has repeatedly rejected such
securitization arguments and Plaintiff provides no reason for the Court to reconsider this claim.
6

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).
7

Miller v. Glanz, 948 F.2d 1562, 1565 (10th Cir. 1991).

8

Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 322 (2007) (citing 5B
WRIGHT & MILLER § 1357 (3d ed. 2004 and Supp. 2007)).
9

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)).
3

Additionally, the Utah Court of Appeals has recently reached the same conclusion on the
securitization issue.10 Based on this precedent, the Court rejects Plaintiff’s securitization
arguments.
Seeking to avoid dismissal, Plaintiff ignores the securitization allegations of her
Complaint and advances a new argument. In her Memorandum in Opposition to PennyMac’s
Motion to Dismiss, Plaintiff takes issue with an alleged defect in her loan documents. This
allegation, however, cannot be found in her Complaint. As such, Plaintiff cannot raise this claim
for the first time in her Opposition. Therefore, the Court finds that dismissal of Plaintiff’s claim
for declaratory judgment to be proper.
B.

QUIET TITLE
Plaintiff requests the Court quiet title to the Property in her favor. Plaintiff’s quiet title

claim is based on the allegation that the “Trust Deeds and Notes were intentionally separated by
assignment of the respective trust deeds without assignment of the Notes during the
securitization process” and “[s]ubsequent to securitization of the Plaintiff’s Notes, ABN, USAA,
and Citi have no interest in the Subject Property.”11 This is simply a restatement of the
securitization claim contained in Plaintiff’s claim for declaratory judgment. For the same reason
set forth above, this claim fails.

10

Commonwealth Property Advocates, LLC v. Mortgage Electronic Registration System,
Inc., — P.3d —, 2011 WL 2714429, at *4-5 (July 14, 2011).
11

Docket No. 1, Ex. 1, ¶¶ 114-15.
4

C.

NEGLIGENT MISREPRESENTATION
“Under Utah law, to prove negligent misrepresentation several elements must be shown:

(1) the plaintiffs reasonably relied on the defendant's representation, (2) the representation
constitutes a “careless or negligent misrepresentation of a material fact,” (3) the defendant “had a
pecuniary interest in the transaction,” (4) the defendant “was in a superior position to know the
material facts,” and (5) the defendant “should have reasonably foreseen that the injured party was
likely to rely upon the misrepresentation.”12
Because negligent misrepresentation constitutes a form of fraud,13 the requirements of
Fed.R.Civ.P. 9(b) apply even though the claim is not technically a claim for fraud.14 Rule 9(b)
requires a party to “state with particularity the circumstances constituting fraud”15 and this
particularity requirement is not met by a mere recitation of the elements of fraud or by conclusory
allegations that are not supported by relevant facts.16
The allegations in Plaintiff’s Complaint fail to meet the particularity requirement.
Plaintiff simply alleges that Citi “repeatedly supplied false information to the Plaintiff with

12

Mitchell v. Smith, 2010 WL 5172906, at *8 (D. Utah Dec. 14, 2010) (quoting PriceOrem Inc. Co. v. Rollins, Brown & Gunnel, Inc., 713 P.2d 55, 59 (Utah 1986)).
13

See Atkinson v. IHC Hosps. Inc., 798 P.2d 733, 737 (Utah 1990).

14

See Coroles v. Sabey, 79 P.3d 974 (Utah Ct. App. 2003).

15

Fed.R.Civ.P. 9(b).

16

See Hoverman v. CitiMortgage, 2011 WL 3421406, at *5 (D. Utah Aug. 4, 2011).
5

respect to her ability to qualify or obtain a loan modification.”17 This allegation is insufficient
under Rule 9.
D.

BREACH OF THE COVENANT OF GOOD FAITH AND FAIR DEALING
Plaintiff’s fourth cause of action alleges that Defendant CitiMortgage breached the duty

of good faith and fair dealing. Specifically, Plaintiff alleges that Defendants breached the duty
by: (1) making representations and material misrepresentations concerning the status of the Note
and her ability to modify the terms of the Note; (2) failing to present evidence, upon Plaintiff’s
request, regarding the unidentified and/or misrepresented current foreclosor’s authority; and (3)
failing to provide proof that it was (or is) the true holder of the Note or that it was the authorized
agent for purposes of foreclosing the note.18 The Court finds that this claim fails as a matter of
law.
The covenant of good faith and fair dealing, which inheres in every contractual
relationship, “cannot be construed to establish new, independent rights or duties not agreed upon
by the parties.”19 Plaintiffs’ fourth cause of action seeks to impose new duties upon Defendant
and grant Plaintiff new rights relating to the modification of the loan’s original terms. The
covenant of good faith and fair dealing cannot be relied on to create a contract different than the
one agreed to by the parties. Plaintiff’s fourth cause of action, therefore, fails as a matter of law
and must be dismissed.

17

Docket No. 1, Ex. 1, ¶ 106.

18

Id., ¶ 125.

19

PDQ Lube Center, Inc. v. Huber, 949 P.2d 792, 798 (Utah Ct. App. 1997).
6

IV. CONCLUSION
It is therefore
ORDERED that the Motion to Dismiss filed by PennyMac (Docket No. 5) is GRANTED.
It is further
ORDERED that the Motion to Dismiss filed by CitiMortgage and CitiMortgage as
successor by merger to ABN (Docket No. 8) is GRANTED.
Plaintiff’s Complaint is dismissed with prejudice. The Clerk of the Court is directed to
close this case forthwith.
DATED August 23, 2011.
BY THE COURT:

_____________________________________
TED STEWART
United States District Judge

7