Tadehara et al v. Ace Securities Corp Home Equity Loan Trust Series 2007-HE4 et al
Filing
14
MEMORANDUM DECISION AND ORDER-granting 6 Motion to Dismiss for Failure to State a Claim. Case Closed. Signed by Judge David Sam on 8/31/11. (jmr)
THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF UTAH
CENTRAL DIVISION
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
LARI KEI TADEHARA, AND
JULIA KAY TADEHARA,
)
Plaintiffs,
vs.
Case No. 2:11CV00436 DS
)
)
MEMORANDUM DECISION
AND ORDER
)
ACE SECURITIES CORP. HOME
EQUITY LOAN TRUST SERIES
2007-HE4, ET AL.,
)
Defendants.
)
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
I.
INTRODUCTION
Plaintiffs defaulted under the terms of a Trust Deed and Note
securing the repayment of a loan obtained to purchase a home
located in Murray Utah.
Non-Judicial foreclosure proceedings
ensued.
Plaintiffs filed this action purporting to assert claims for
Quiet
Title/Declaratory
Judgment
(Claim
1),
Fraud
(Claim
2),
Wrongful Foreclosure (Claim 3), and Violation of the Truth-inLending Act (Claim 4).
Defendants Ocwen Loan Servicing, LLC, HSBC Bank USA, NA, as
Trustee on Behalf of ACE Securities Corp., Home Equity Loan Trust,
Series 2007-HE4, Asset Backed Pass-Through Certificates (“HSBC Bank
as Trustee”)(erroneously sued as “HSBC Bank USA, N.A.” and “ACE
Securities Corp.” and “Ace Securities Home Equity Loan Trust,
Series 2007-HE4"), and Mortgage Electronic Registration Systems,
Inc. (collectively “Defendants”), move to dismiss the Complaint
(Doc. #6).
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
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.
F.3d 1242, 1247-48 (10th Cir. 2008).
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plausibly
(not
just
Robbins v. Oklahoma, 519
III.
A.
DISCUSSION
Quite Title/Declaratory Relief (Count I)
The Court agrees with Defendants that the Complaint fails to
state a claim for quiet title.
A “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).
Plaintiffs fail to assert their own claim to title. They do
not allege that they hold clear title to the subject property, or
even that they are not in default under the Note.
They admit
executing the Deed of Trust and to conveying their interest in the
property for the purpose of securing the loan.
Additionally, the Court agrees with Defendants that Plaintiffs’
quiet title claim is based on the oft-rejected argument that MERS
lacked
standing
foreclosure.
In
to
authorize
the
assignment
and
resulting
See Mem. Supp. at note 2.
their
claim
for
declaratory
judgment,
Plaintiffs
essentially allege that Defendants lack authority to foreclose on
the subject property. As set forth in Defendants’ pleadings,
Plaintiffs’ position has been rejected by courts of this district.
Plaintiff agreed in the Trust Deed that MERS was the beneficiary
and that MERS and its successors and assigns had the authority to
foreclose on the subject property in the event of default by
3
Plaintiff.
Courts of this district have consistently so
held.
See Mem. Supp. at 7–9 (and cases cited therein).
B.
Fraud (Count 2)
Under Rule 9 of both the Federal and Utah Rules of Civil
Procedure,
fraud must be plead with particularity.
“‘Rule 9((b)
requires that a plaintiff set forth the ‘who, what, when, where and
how’ of the alleged fraud.’” U.S. ex rel. Sikkenga v Regence
Bluecross
Blueshield
of
Utah,
472
F.3d
702,
727
(10th
Cir.
2006)(quoting Thompson v. Columbia/HCA Healthcare Corp., 125 F.3d
899, 903 (5th Cir. 1997).
Plaintiff has failed to set forth her
allegations of fraud with the required
C. Wrongful
particularity.
Foreclosure (Count III)
Plaintiffs’ wrongful foreclosure claim fails because it is
based on their fraud claim which has been rejected, and because
Utah
does
not
recognize
a
claim
for
relief
for
wrongful
foreclosure.
D.
Truth in Lending Violations/Failure to Honor Recision
Count IV.
Plaintiffs allege that under the Truth in Lending Act, 15
U.S.C. §1601 et seq. (the “TILA”), Defendants were obligated, but
failed, to make certain disclosures relating to extending them
credit.
The
Plaintiffs seek rescission of their mortgage loan.
right
to
rescind
a
loan
transaction
and
ancillary
disclosure obligations do not apply to a residential mortgage
4
transaction.
12 C.F.R. § 226.23(f); 15 U.S.C. § 1635(e). From the
record it appears that the loan at issue was a residential mortgage
transaction.
Moreover, as Defendants note, if the lender fails to provide
the required disclosures, the right to rescind extends for three
years following consummation of the transaction or until the sale
of the property, whichever occurs first.
15 U.S.C. § 1635(f).
Here the sale of the property occurred on May 24, 2011.
Although
Plaintiffs claim that they sought to rescind the loan with an
August 31, 2009 letter, nine months after they were already in
default
on
the
loan,
Plaintiffs
have
not
alleged
that
they
tendered, or that they have the ability to tender, amounts owed
under the Note.
This Court, and others, have held that failure or
inability to tender a return of the money due under a note is
grounds for dismissal of a rescission claim on equitable grounds.
See Jackson v. IndyMac/One West Bank FSB, No. 2:10cv00493 DS, 2010
WL 3452339 (D. Utah Sept. 1, 2010); Sanders v. Ethington, No.
2:10cv00183 DAK, 2010 WL 5252843 (D. Utah Dec. 16, 2010).
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.
IV CONCLUSION
For the foregoing reasons, as well as generally for the
reasons set for by Defendants in their pleadings, their Motion to
Dismiss (Doc. #6) is granted with prejudice.
DATED this 31st of August, 2011.
BY THE COURT:
DAVID SAM
SENIOR JUDGE
UNITED STATES DISTRICT COURT
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