Cuddeback v. Select Portfolio Servicing Inc et al

Filing 12

ORDER granting defendant's 10 Motion to Dismiss for Failure to State a Claim by Judge Ricardo S Martinez.(RS) cc plaintiff

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1 2 3 4 5 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT SEATTLE 6 7 8 9 10 11 12 13 14 ) ) ) Plaintiff, ) ) v. ) SELECT PORTFOLIO SERVICING, INC., ) ) et al., ) Defendants. JON CUDDEBACK, an individual, CASE NO. C16-1214 RSM ORDER GRANTING DEFENDANT NORTHWEST TRUSTEE SERVICES’S MOTION TO DISMISS 15 THIS MATTER comes before the Court on Defendant Northwest Trustee Services, 16 Inc.’s (“NWTS”) Motion to Dismiss under Rule 12(b)(6) for failure to state a claim. Dkt. #10. 17 Plaintiff has failed to respond to the motion. Under this Court’s Local Civil Rules, “[e]xcept 18 19 for motions for summary judgment, if a party fails to file papers in opposition to a motion, such 20 failure may be considered by the court as an admission that the motion has merit.” LCR 21 7(b)(2). The Court considers Plaintiff’s failure to respond to be such an admission in this case. 22 On a motion to dismiss for failure to state a claim under Federal Rule of Civil Procedure 23 12(b)(6), all allegations of material fact must be accepted as true and construed in the light 24 25 most favorable to the nonmoving party. Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336, 337-38 26 (9th Cir. 1996). However, the Court is not required to accept as true a “legal conclusion 27 couched as a factual allegation.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. 28 Corp. v. Twombly, 550 U.S. 544, 555 (2007)). The Complaint “must contain sufficient factual ORDER PAGE - 1 1 matter, accepted as true, to state a claim to relief that is plausible on its face.” Id. at 678. This 2 requirement is met when the plaintiff “pleads factual content that allows the court to draw the 3 reasonable inference that the defendant is liable for the misconduct alleged.” Id. Absent facial 4 plausibility, Plaintiffs’ claims must be dismissed. Twombly, 550 U.S. at 570. 5 Though the Court limits its Rule 12(b)(6) review to allegations of material fact set forth 6 7 in the complaint, the Court may consider documents for which it has taken judicial notice. See 8 F.R.E. 201; Swartz v. KPMG LLP, 476 F.3d 756, 763 (9th Cir. 2007). Here, the Court has 9 previously taken judicial notice of, and continues to consider herein, the documents set forth in 10 support of former Defendants’ (Select Portfolio Servicing and U.S. Bank N.A.) motion to 11 dismiss. See Dkt. #7, Exs. 1-10. The Court also takes judicial notice of the documents filed in 12 13 support of the instant Defendant’s motion to dismiss. Dkt. #10, Exs. A-G. The Court agrees 14 that judicial notice of those documents is appropriate because the documents presented are 15 matters of public record. Lee v. City of Los Angeles, 250 F.3d 668, 688-89 (9th Cir. 2001). 16 A review of the record in this matter reveals the following. On or about November 17, 17 18 2006, Plaintiff executed an Adjustable Rate Note in the amount of $704,000.00, payable to 19 Washington Mutual Bank, FA. In conjunction with the Note, Plaintiff executed a Deed of 20 Trust in favor of Washington Mutual Bank, FA, and providing as collateral for the Note certain 21 real property located at 10011 128th Ave. NE, Kirkland, Washington 98033. See Dkt. #7, Exs. 22 1 and 2. The Trust Deed names Commonwealth Title as the Trustee and grants the Trustee the 23 24 25 26 27 power of sale in the event of default. Id., Ex. 2. The Trust Deed was recorded on December 1, 2006 under King County Auditor’s No. 20061201002540. Id. On or about November 24, 2010, JPMorgan Chase Bank, which had acquired loans and other assets from Washington Mutual, and as receiver for the Federal Deposit Insurance 28 ORDER PAGE - 2 1 Corporation, executed an Assignment of Deed of Trust memorializing the assignment of the 2 Trust Deed to the Trust. The Assignment was recorded on December 6, 2010, as King County 3 Auditor’s No. 20101206001250. Dkts. #7, Ex. 3 and #10, Ex. A. 4 In 2010, Plaintiff defaulted on the Loan, and the Trust initiated a non-judicial 5 foreclosure sale. Dkt. #7, Ex. 4. The 2010 Notice of Trustee’s Sale references the parties to, 6 7 8 and recording information of, the Deed of Trust and Assignment, and set a sale date of March 25, 2011. Id. 9 10 Plaintiff has been attempting to avoid foreclosure of his property ever since, primarily through a series of nefarious tactics known as “hijacking” bankruptcy cases in California and 11 South Carolina.1 Indeed, on March 24, 2011, the day before the scheduled trustee’s sale, 12 13 Plaintiff recorded a Quitclaim Deed to “Jon Cuddeback as trustor and Tracy Michael Wilkinson 14 as co-trustee of the Jon Cuddeback Family Trust”. See, Dkt. #10, Ex. B. Because Mr. 15 Wilkinson had filed a bankruptcy in the Central District of California on March 22, 2011, the 16 trustee’s sale was postponed. On September 6, 2011, Mr. Wilkinson filed a Declaration in his 17 18 bankruptcy matter stating that he did not know Mr. Cuddeback, he had no interest in the 19 Property, he did not consent to the transfer, and he never accepted the delivery of the Quitclaim 20 Deed. Dkt. #10, Ex. C. As a result, the Trust obtained relief from the bankruptcy stay on 21 September 20, 2011 22 A trustee’s sale was again scheduled. However, on November 30, 2011, Mr. 23 24 Cuddeback recorded a second Quitclaim Deed granting the Property to “Jon Cuddeback as 25 Trustee and Ganine Maria Arnold as co-trustee of the Jon Cuddeback Family Trust”. Dkt. #10, 26 1 27 28 See, In re 4th Street East Investors, Inc., 474 B.R. 709 (C.D. CA Bk., 2012) (explaining that “hijacked” or “dumping” cases are cases in which a transferor of property, acting without the debtor’s participation or acquiescence, seeks to implicate the automatic stay for the transferor’s own benefit by purporting to transfer property into a random bankruptcy estate, or by backdating or falsifying a grant deed to make it appear that such a transfer has occurred). ORDER PAGE - 3 1 2 Ex. D. Because Ms. Arnold had an open bankruptcy case pending in the Central District of California, the trustee’s sale was again postponed. After Ms. Arnold’s case was dismissed, Mr. Cuddeback filed a third Quit Claim Deed 3 4 on March 24, 2011, to “Jon Cuddeback Trustee and Clayton Macaulay as co-trustee of the Jon 5 Cuddeback Family Trust”. Dkt. #10, Ex. E. Clayton Macaulay had an open bankruptcy case in 6 7 the District of South Carolina Bankruptcy Court. 8 On May 21, 2012, Plaintiff filed a petition for protection under Chapter 13 of the 9 bankruptcy code. Dkt. #7, Ex. 5 and Dkt. #1 at ¶ 19. That case was dismissed on October 5, 10 2012 as a result of Plaintiff’s failure to file required documentation. Dkt. #7, Ex. 6. 11 On October 30, 2015, the Trust recorded an Appointment of Successor Trustee naming 12 13 NWTS as Successor Trustee, and vesting NWTS with the powers of the original trustee. Dkts. 14 #7, Ex. 7, #10, Ex. F and RCW 61.24.010(2). The Appointment of Successor Trustee was 15 recorded under King County Auditor’s No. 20151030001968. Dkt. #7, Ex. 7. 16 On May 18, 2016, NWTS set a trustee’s sale for September 16, 2016. Dkts. #7, Ex. 8 17 18 and #10, Ex. G. Plaintiff then initiated this action on August 3, 2016. Dkt. #1. On or about 19 September 16, 2016, Plaintiff again filed a petition for protection under Chapter 13 of the 20 bankruptcy code.2 Dkt. #7, Ex. 9. That case was dismissed on October 26, 2016, for failure to 21 file required documentation. Id., Ex. 10. 22 Here, taking the facts described above as true, and having reviewed the arguments 23 24 asserted by Defendant NWTS, the Court finds no support for the claims alleged by Plaintiff. 25 Plaintiff alleges, inter alia, that NWTS is in violation of the Real Estate Settlement Procedures 26 Act’s (“RESPA”) loss mitigation rules apparently for an alleged “mishandling of his loan 27 28 modification application and dual tracking regarding same.” Dkt. #1 at ¶ ¶ 11-14. Plaintiff 2 Plaintiff failed to inform the Court that he filed for bankruptcy while this matter was pending. ORDER PAGE - 4 1 complains that he has never been notified of the various transfers of his loans between 2 companies, that he was never provided notice of a new Trustee, and that his loan modification 3 paperwork has been “grossly mishandled.” Id. at ¶ ¶ 16-17, 22-24 and 25-27. He also alleges 4 that the successor Trustee was not appointed by the “present beneficiary” which results in 5 violations of the Fair Debt Collection Practices Act (“FDCPA”) and the Washington Consumer 6 7 Protection Act (“CPA”), and therefore title should be quieted in his favor. Id. at ¶ ¶ 33-50. 8 For the reasons argued by NWTS in its motion, the Court agrees that Plaintiff’s claims 9 must fail as a matter of law because (1) NWTS is a non-servicer and therefore cannot be held 10 liable for violations of 12 C.F.R. § 1024.42; (2) Plaintiff has failed to allege any facts showing 11 that he has satisfied his obligations under the Deed of Trust, NWTS does not claim a current 12 13 right to the Property, and Plaintiff has quitclaimed his interest in the Property to entities not 14 named in this action; therefore, he has no valid quiet title claim; (3) NWTS is not a debt 15 collector as defined by FDCPA and therefore Plaintiff has no valid FDCPA claim against 16 NWTS; and (4) Plaintiff fails to allege any facts to support a claim for Declaratory relief 17 18 against NWTS. See Dkt. #10 at 4-6. 19 Ordinarily, leave to amend a complaint should be freely given following an order of 20 dismissal, “unless it is absolutely clear that the deficiencies of the complaint could not be cured 21 by amendment.” Noll v. Carlson, 809 F.2d 1446, 1448 (9th Cir. 1987); see also DeSoto v. 22 Yellow Freight Sys., Inc., 957 F.2d 655, 658 (9th Cir. 1992) (“A district court does not err in 23 24 denying leave to amend where the amendment would be futile.” (citing Reddy v. Litton Indus., 25 Inc., 912 F.2d 291, 296 (9th Cir. 1990)). Here, the Court concludes that granting leave to 26 amend would be futile. The Court can conceive of no possible cure for the deficiencies in 27 Plaintiff’s Complaint, particularly given the documentary evidence provided by the current and 28 ORDER PAGE - 5 1 2 3 4 former Defendants in this action and the invalidity of Plaintiff’s primary legal arguments as noted above. Having reviewed the relevant pleadings, the declarations and exhibits attached thereto, and the remainder of the record, the Court hereby ORDERS: 5 1) Defendant’s Motion to Dismiss (Dkt. #10) is GRANTED and all claims against 6 Defendant NWTS are DISMISSED with prejudice. 7 8 2) This matter is now CLOSED. 9 DATED this 20th day of January 2017. 10 11 A 12 RICARDO S. MARTINEZ CHIEF UNITED STATES DISTRICT JUDGE 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ORDER PAGE - 6

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