Lehrman v. Wells Fargo Bank N.A. et al

Filing 13

ORDER granting defendant's 6 Motion to Dismiss for Failure to State a Claim; all of plaintiff's claims are dismissed with prejudice by Judge Ricardo S Martinez.(RS) cc plaintiff

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UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF WASHINGTON
AT SEATTLE

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FREDRIC LEHRMAN, an individual,

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Plaintiff,

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Case No. C17-205RSM
ORDER GRANTING MOTION TO
DISMISS

v.

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WELLS FARGO BANK, N.A., SELENE
FINANCE; SELENE FINANCE, LP; U.S
BANK, N.A. as trustee for Stanwich Mortgage
Loan Trust, Series 2012-3; NORTH
CASCADE TRUSTEE SERVICES INC.;
CARRINGTON MORTGAGE SERVICES,
LLC; and DOES 1-10,

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Defendants.

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I.

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INTRODUCTION

This matter comes before the Court on the Motion to Dismiss filed by Defendant

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Carrington Mortgage Services, LLC, Dkt. #6.

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GRANTS Defendants’ Motion and dismisses Plaintiff’s claims with prejudice.

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For the reasons stated below, the Court

II. BACKGROUND

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A. Factual Background 1

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On or about November 28, 2006, Plaintiff Frederic Lehrman sought and obtained a loan

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for $530,400 related to his real property located at 13609 SE 58th Place, Bellevue, Washington.

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The following background facts are taken from Plaintiff’s Complaint, Dkt. #4, and accepted as true for purposes
of ruling on Defendants’ Rule 12(b)(6) Motion to Dismiss.

ORDER GRANTING MOTION TO DISMISS - 1

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He states he was never informed of the true identity of the actual lender that funded that loan,

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but that Wells Fargo was a conduit for delivery of funds. On April 24, 2013, a Notice of

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Default issued as to this loan. Plaintiff asserts that there is no legitimate deed of trust or note

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that evidence a debt owed by the Plaintiff, and that there is no competent chain of title to

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establish standing for any defendant to assert claims against the plaintiff or his real property.
B. Procedural Background
Plaintiff filed this action on February 13, 2017. Dkt. #1. Plaintiff brings this action for
quiet title and violation of the Fair Debt Collection Practices Act. Dkt #4.
This is Plaintiff’s second action related to the same 2006 loan for the same real

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property. Plaintiff’s first action was originally filed on March 27, 2014, in state court. Case

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No. 2:14-cv-00607-RSM, Dkt. #1-1. In that action, Plaintiff named as defendants U.S. Bank in

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its capacity as trustee of the Stanwich Mortgage Loan Trust, Series 2012-3, the securitized trust

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which owns Plaintiff’s loan; Elizabeth A. Osterman; and Carrington Mortgage Services, the

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former servicer of the loan.

Id.

Plaintiff brought six claims: (1) wrongful initiation of

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nonjudicial foreclosure under Washington’s Deed Trust Act, RCW 61.24 et seq.; (2) fraud; (3)

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slander of title; (4) declaratory judgment; (5) negligence; and (6) violation of Washington

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State’s Consumer Protection Act.

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Plaintiff later requested to amend his complaint in that case to include Wells Fargo and Selene

Id.

Defendants in that action removed to this Court.

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Finance. See Dkt. #40. The Court denied Plaintiff’s request to add those parties, noting that

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“any claims against Wells Fargo or Selene Finance based on a 2006 loan would almost

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certainly be barred by the statute of limitations.” Dkt. #42 at 5. The Court dismissed all of

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Plaintiff’s claims in that action with prejudice. Dkt. #42.

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ORDER GRANTING MOTION TO DISMISS - 2

III. DISCUSSION

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A. Legal Standard
In making a 12(b)(6) assessment, the court accepts all facts alleged in the complaint as
true, and makes all inferences in the light most favorable to the non-moving party. Baker v.

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Riverside County Office of Educ., 584 F.3d 821, 824 (9th Cir. 2009) (internal citations omitted).

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However, the court is not required to accept as true a “legal conclusion couched as a factual

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allegation.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly,

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550 U.S. 544, 555 (2007)). The complaint “must contain sufficient factual matter, accepted as

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true, to state a claim to relief that is plausible on its face.” Id. at 678. This requirement is met

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when the plaintiff “pleads factual content that allows the court to draw the reasonable inference

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that the defendant is liable for the misconduct alleged.” Id. The complaint need not include

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detailed allegations, but it must have “more than labels and conclusions, and a formulaic

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recitation of the elements of a cause of action will not do.” Twombly, 550 U.S. at 555. Absent

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facial plausibility, Plaintiff’s claims must be dismissed. Id. at 570.

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Where a complaint is dismissed for failure to state a claim, “leave to amend should be

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granted unless the court determines that the allegation of other facts consistent with the

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challenged pleading could not possibly cure the deficiency.” Schreiber Distrib. Co. v. Serv-

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Well Furniture Co., 806 F.2d 1393, 1401 (9th Cir. 1986).

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B. Defendant’s Motion

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As an initial matter, the Court has reviewed the record and finds that Plaintiff was

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properly served a copy of this Motion. See Dkt. #6 at 17. Plaintiff presents no compelling

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evidence to the contrary.

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ORDER GRANTING MOTION TO DISMISS - 3

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“Filing two separate lawsuits based on the same event—claim splitting—is precluded in

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Washington.” Ensley v. Pitcher, 152 Wash. App. 891, 222 P.3d 99, 102 (2009) (quoting Landry

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v. Luscher, 95 Wn. App. 779, 780, 976 P.2d 1274 (1999)). Defendant Carrington Mortgage

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Services argues that because Plaintiff’s 2014 action has been dismissed, this current action must

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also be dismissed. Dkt. #12 at 3 (citing Federated Dep’t Stores v. Moitie, 452 U.S. 394, 398,

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101 S. Ct. 2424, 2428, 69 L.Ed.2d 103, 108 (1981) (“A final judgment on the merits of an

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action precludes the parties or their privies from relitigating issues that were or could have been

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raised in that action.”); Ensley v. Pitcher, 152 Wash. App. 891, 222 P.3d 99, 102 (2009).

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Defendant argues that all of Plaintiff’s current claims arose out of the origination of the 2006

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loan and the subsequent servicer’s attempts to foreclose on the 2006 loan, issues addressed in

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the 2014 action and dismissed with prejudice on April 12, 2017. Dkt. #12 at 3.

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Defendant also argues that Plaintiff’s claims are barred by the statute of limitations to

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the extent they are premised on fraudulent loan origination. Dkt. #6 at 8-9. There is a three-

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year limit on such claims, measured from discovery of the facts giving rise to the claim. See

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RCW 4.16.080(4). Plaintiff does not respond to Defendant’s argument with any evidence that

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he discovered his claims less than three years before filing this action. Defendant argues that

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Plaintiff has the burden of asserting facts in the complaint to show that the fraud was not

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discovered outside of the statute of limitation. Dkt. #12 at 2 (citing Reeves v. John Davis &

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Co., 164 Wash. 287, 290, 2 P.2d 732, 733 (1931)).

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The Court agrees with Defendant that Plaintiff’s claims are barred under res judicata

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claim splitting and would otherwise be barred by the statute of limitations. Plaintiff presents no

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legitimate argument to the contrary, instead arguing that he has “never heard” of claim splitting

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and that res judicata does not apply because the previous case has been dismissed. Dkt. #11 at

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4-5. Res judicata properly bars Plaintiff from relitigating the issues in this case, which clearly

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overlap with claims that were or should have been brought in Plaintiff’s prior action, dismissed

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with prejudice. Even if Plaintiff’s current action were not barred on procedural grounds, it

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would be dismissed under the applicable statute of limitations given the number of years

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between when Plaintiff knew or should have known of the facts giving rise to the instant claims

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and the date of filing this action. Given all of this, the Court need not address Defendant’s other

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arguments on the merits of Plaintiff’s claims.

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C. Leave to Amend
Where a complaint is dismissed for failure to state a claim, “leave to amend should be

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granted unless the court determines that the allegation of other facts consistent with the

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challenged pleading could not possibly cure the deficiency.” Schreiber, supra. The Court finds

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that Plaintiff cannot allege different facts, consistent with the challenged pleading, which could

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survive dismissal and that therefore leave to amend should not be granted in this matter.

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IV. CONCLUSION

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Having reviewed the relevant pleadings, the declarations and exhibits attached thereto,
and the remainder of the record, the Court hereby finds and ORDERS:
1) Defendant’s Motion to Dismiss (Dkt. #6) is GRANTED. All of Plaintiff’s claims
are DISMISSED with prejudice.

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2) This case is CLOSED.
DATED this 24th day of April, 2017.

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A

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RICARDO S. MARTINEZ
UNITED STATES DISTRICT JUDGE

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ORDER GRANTING MOTION TO DISMISS - 5