Bank of New York Mellon v. Seyss et al

Filing 35

ORDER by U.S. District Judge John C Coughenour re: none of the Seysses' counterclaims remain after the grant of summary judgment in BNY Mellon's favor. Because all pending claims have been resolved, the Clerk is DIRECTED to close this case. (PM) Modified on 2/13/2017: copy sent to Amy Seyss via USPS (PM).

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THE HONORABLE JOHN C. COUGHENOUR 1 2 3 4 5 6 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT SEATTLE 7 8 9 THE BANK OF NEW YORK MELLON f/k/a THE BANK OF NEW YORK, AS TRUSTEE FOR THE CERTIFICATE HOLDERS OF THE CWALT, INC., ALTERNATIVE LOAN TRUST 2007-OA2, MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2007-OA2, 10 11 12 13 14 CASE NO. C16-0553-JCC ORDER OF DISMISSAL Plaintiff, v. 15 MARCEL E. SEYSS and AMY J. SEYSS, husband and wife, et al., 16 17 Defendants. 18 19 This matter comes before the Court on the parties’ supplemental memoranda on 20 21 22 23 24 25 26 Defendants’ counterclaims (Dkt. Nos. 29, 32). Having thoroughly considered the parties’ briefing and the relevant record, the Court finds oral argument unnecessary and hereby DISMISSES the counterclaims for the reasons explained herein. I. BACKGROUND On November 30, 2015, Plaintiff Bank of New York Mellon (BNY Mellon) filed suit in Snohomish County Superior Court against Defendants Marcel Seyss and Amy Seyss and any ORDER OF DISMISSAL PAGE - 1 1 other Defendants that may claim an interest in the property. (Dkt. No. 1-2 at 2.) BNY Mellon 2 sought a monetary judgment and a judgment foreclosing all interest in the real property. (Id. at 8- 3 9.) The Seysses removed this case and raised several issues that they maintained were 4 counterclaims. (See generally Dkt. No. 1.) 5 BNY Mellon then moved for summary judgment. (Dkt. No. 10.) This Court granted the 6 motion on December 15, 2016, finding that BNY Mellon was entitled to judgment in its favor 7 because it was the holder of the Note and Deed of Trust and was entitled to foreclose on the 8 property after default. (Dkt. No. 22 at 3.) At that time, the Court noted that neither party had 9 addressed the Seysses’ counterclaims raised in their notice of removal. (Id. at 5.) Therefore, this 10 Court instructed the parties to submit supplemental memoranda regarding the Seysses’ 11 counterclaims so that the Court could determine whether the case should be closed. (Id.) 12 II. DISCUSSION 13 A. Local Civil Rule Requirements 14 As a preliminary matter, the Court reminds the Seysses that, pursuant to Local Civil Rule 15 10(e)(1), all filings before the Court must conform to the required format, including designated 16 margins and font. Furthermore, when this Court instructed the parties to submit supplemental 17 information, it expressly stated that “memoranda shall not exceed five pages each.” (Dkt. No. 22 18 at 5.) Pursuant to Local Civil Rule 7(e)(6), the Court may refuse to consider text not included in 19 the page limits. While the Court acknowledges that the Seysses are proceeding without the 20 assistance of counsel, they must still comply with these rules. 21 B. Counterclaims 22 The Seysses alleged five counterclaims in their answer: statute of limitations, publication 23 of a false statement, breach of contract, wrongful foreclosure, and quiet title. (See Dkt. No. 4.) In 24 their supplemental memorandum, the Seysses now assert seven counterclaims: notice of 25 rescission and right to cancel, breach of contract, statute of limitations, statute of frauds, 26 wrongful foreclosure, fraudulent conveyance, and quiet title. (See Dkt. No. 32.) However, the ORDER OF DISMISSAL PAGE - 2 1 Court requested additional information on the previously asserted counterclaims. (Dkt. No. 22 at 2 5.) It did not grant the Seysses permission to raise new counterclaims. See Fed. R. Civ. P. 3 15(a)(2). Therefore, the Court will address only the five initial counterclaims.1 4 Statute of Limitations 5 The Seysses assert that the Note cannot be enforced because the statute of limitations has 6 expired. (Dkt. No. 32 at 2.) However, a statute of limitations claim is an affirmative defense. 7 Morrison v. Mahoney, 399 F.3d 1042, 1046 (9th Cir. 2005). “If a party mistakenly designates a 8 defense as a counterclaim . . . the court must, if justice requires, treat the pleading as though it 9 were correctly designated.” Fed. R. Civ. P. 8(c)(2). The Seysses failed to raise the issue in their 10 response to the motion for summary judgment (Dkt. No. 17). Therefore, they waived this claim. 11 Additionally, the statute of limitations claim fails on the merits. The Seysses are correct 12 that the statute of limitations for enforcement of real estate contracts is six years in Washington. 13 Wash. Rev. Code § 4.16.040. However, they are incorrect that the statute of limitations has 14 expired in this case. The Note and Deed of Trust has been in default since December 1, 2009. 15 (Dkt. No. 14 at 4.) BNY Mellon brought suit on November 30, 2015, within the statute of 16 limitations. (Dkt. No. 1-2 at 2.) 17 Publication of a False Statement 18 The Seysses asserted that BNY Mellon made a publication of a false statement because 19 the Note was improperly separated from the Deed of Trust, which destroyed the Note and made 20 the Deed of Trust invalid. (Dkt. No. 1 at 10-11.) This Court has already established that the Note 21 and Deed of Trust were transferred appropriately to BNY Mellon and it is the current holder of 22 the Note. (Dkt. No. 22 at 2.) The Court thus resolved this counterclaim when it entered judgment 23 in favor of BNY Mellon. 24 As the Seysses have chosen not to provide additional information on one of their initial counterclaims, publication of a false statement, the Court will cite to their initial complaint (Dkt. No. 1) when referencing it. The Court will cite to their supplemental memorandum (Dkt. No. 32) for their remaining counterclaims. 1 25 26 ORDER OF DISMISSAL PAGE - 3 1 Breach of Contract 2 The Seysses likewise allege breach of contract based on their argument that the Note and 3 Deed of Trust were not transferred appropriately. (Dkt. No. 32 at 1.) Therefore, they insist that 4 BNY Mellon lacks the authority to enforce either one. (Id.) BNY Mellon is correct to point out 5 that this amounts to a lack of standing claim. (Dkt. No. 29 at 3.) Lack of standing is an 6 affirmative defense that the Seysses failed to raise in their response to the motion for summary 7 judgment. Therefore, this claim was waived. 8 9 Additionally, this claim fails on the merits. In Washington, a holder of a note is one who is “in possession of a negotiable instrument that is payable either to bearer or to an identified 10 person that is the person in possession.” Wash. Rev. Code § 62A.1-201(a)(21). As this Court has 11 previously noted, BNY Mellon is the holder of the Note and has the authority to foreclose on the 12 property after default. (See Dkt. No. 22 at 3-4.) 13 Wrongful Foreclosure 14 Again, the Seysses assert that BNY Mellon lacks the authority to enforce the Note and 15 therefore foreclosure was wrongful. (Dkt. No. 32 at 2-3.) While they are correct that the 16 foreclosure process is often complicated and confusing, that is not enough to establish a 17 wrongful foreclosure. Furthermore, the Court has already acknowledged that BNY Mellon “is 18 the current holder of the Note and the beneficiary under the Deed of Trust.” (Dkt. No. 22 at 2.) 19 As such, it is “entitled to enforce the note and the deed of trust securing that note.” (Id. at 4) 20 (citing Bain v. Metro. Mortg. Grp., Inc., 285 P.3d 34, 44 (Wash. 2012)). 21 Quiet Title 22 Finally, the Seysses claim quiet title to the property. (Id.) However, as BNY Mellon 23 correctly points out, this claim “is based entirely on the validity of the other [c]ounterclaims . . . . 24 Accordingly, the quiet title claim also fail[s] to survive.” (Dkt. No. 29 at 5.) 25 III. 26 CONCLUSION For the foregoing reasons, none of the Seysses’ counterclaims remain after the grant of ORDER OF DISMISSAL PAGE - 4 1 summary judgment in BNY Mellon’s favor. Because all pending claims have been resolved, the 2 Clerk is DIRECTED to close this case. 3 DATED this 13th day of February, 2017. 6 A 7 John C. Coughenour UNITED STATES DISTRICT JUDGE 4 5 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 ORDER OF DISMISSAL PAGE - 5

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