Hanson v. American Brokers Conduit et al
Filing
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ORDER granting 19 Defendants US Banks' and MERS' Motions to Dismiss; granting 20 Defendant NW Trustee Services' Motion to Dismiss; denying 24 Plaintiff's Motion to Amend. All of plaintiff's claims are DISMISSED WITH PREJUDICE and this matter is closed. Signed by Judge Ronald B. Leighton.(DN) Modified on 11/22/2011 (DN). (Copy mailed to plaintiff.)
HONORABLE RONALD B. LEIGHTON
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UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF WASHINGTON
AT TACOMA
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EDGAR HANSON,
No. CV11-5287-RBL
Plaintiff,
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v.
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US BANK, NA, et al.,
Defendants.
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ORDER GRANTING DEFENDANTS’
MOTIONS TO DISMISS AND
DENYING PLAINTIFF’S MOTION TO
AMEND
[Dkt. #s 19, 20, and 24]
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This matter is before the Court on the following Motions: Defendants US Banks’ and
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MERS’ Motion to Dismiss [Dkt. #19], Northwest Trustee Services’ Motion to Dismiss [Dkt.
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#20], and Plaintiff Hanson’s Motion to Amend (again) his Complaint [Dkt. #24], which appears
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to be in Response to the Defendants’ Motions.
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The factual context of the case was outlined in the court’s Order Denying Plaintiff’s
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Motions for a TRO and a Preliminary Injunction [Dkt. #32]. The Court denied the Plaintiff’s
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Motions for injunctive relief in part because he did not and could not demonstrate any likelihood
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of success on the merits of his claims. Plaintiff’s claims arise out of the foreclosure of the
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property he pledged as security for a loan he admits taking and not paying. The facts
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surrounding the foreclosure and the Plaintiff’s claims are unremarkable.
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In addition to seeking injunctive relief, Plaintiff’s First Amended Complaint asserts a
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Declaratory Judgment claim, seeking a declaration that he owns the Property and that defendants
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have no interest in it.
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ORDER - 1
The Defendants seek dismissal of Plaintiff’s claims under Rule 12(b)(6). Plaintiff now
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seeks to amend1 his complaint to allege additional claims. [Dkt. # 24] Defendants oppose
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amendments, arguing that the proposed claims are futile. For the reasons below, the Motion to
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Dismiss is GRANTED and the Motion to Amend is DENIED. The case is closed.
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Discussion.
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A. Defendants’ Motions to Dismiss are Granted.
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Dismissal under Rule 12(b)(6) may be based on either the lack of a cognizable legal
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theory or absence of sufficient facts alleged under a cognizable legal theory. Balistreri v.
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Pacifica Police Dep’t, 901 F.2d 696, 699 (9th Cir. 1990). A plaintiff’s complaint must allege
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facts to state a claim for relief that is plausible on its face. See Ashcroft v. Iqbal, 129 S.Ct. 1937,
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1949 (2009). A claim has “facial plausibility” when the party seeking relief “pleads factual
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content that allows the court to draw the reasonable inference that the defendant is liable for the
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misconduct alleged.” Id. Although the Court must accept as true the Complaint’s well-pled facts,
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conclusory allegations of law and unwarranted inferences will not defeat an otherwise proper
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[Rule 12(b)(6)] motion. Vasquez v. L. A. County, 487 F.3d 1246, 1249 (9th Cir. 2007); Sprewell
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v. Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 2001). “[A] plaintiff’s obligation to
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provide the ‘grounds’ of his ‘entitle[ment] to relief’ requires more than labels and conclusions,
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and a formulaic recitation of the elements of a cause of action will not do. Factual allegations
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must be enough to raise a right to relief above the speculative level.” Bell Atl. Corp. v. Twombly,
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550 U.S. 544, 555 (2007) (citations and footnote omitted). This requires a plaintiff to plead
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“more than an unadorned, the-defendant-unlawfully-harmed-me accusation.” Iqbal, 129 S.Ct. at
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1949 (citing Twombly).
Because the Plaintiff is proceeding pro se, the Court extends some latitude to his
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pleadings. The Court nevertheless finds that the bulk of Plaintiff’s arguments appear to rest on
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the assertion that Defendants are not the original creditors and therefore lack standing to
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foreclose on the mortgage at issue. However, as this Court has concluded previously, courts
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It appears that Plaintiff seeks to assert claims he initially asserted in his original Complaint
[Dkt. #1], but left out of his currently-operative First Amended Complaint [Dkt. #5].
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ORDER - 2
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“have routinely held that [a defendants’] so-called ‘show me the note’ argument lacks merit.”
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Freeston v. Bishop, White & Marshall, P.S., 2010 WL 1186276 (W.D. Wash. 2010) (quoting
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Diessner v. Mortgage Electronic Registration Systems, 618 F. Supp. 2d 1184, 1187 (D. Ariz.
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2009) (collecting cases)).
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Plaintiff has not stated a claim upon which relief may be granted in his current
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Complaint. Plaintiff’s existing claims are familiar ones about MERS’ right to assign his deed of
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trust and the overall impropriety of the timing of the assignment of the deed of trust vis-a-vis the
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transfer of the loan. Both of these claims have been repeatedly and correctly rejected. See, for
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example, Vawter v. Quality Loan Serv. Corp., 707 F. Supp.2d 1115 (W.D. Wa. 2010); Cervantes
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v. Countrywide Home Loans, Inc., 656 F.3d 1034 (9th Cir. 2011).
Plaintiff also asserts unidentified claims based on his allegation that MERS and US Bank
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have entered into Consent Decrees with the Comptroller of Currency. There is no legal or
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logical authority for the proposition that these documents are the basis for a private right of
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action by an in default debtor such as Mr. Hanson, and he has not identified any claim based on
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them. These claims are dismissed.
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Plaintiff Hanson also appears to claim that the fact Defendants were previously denied
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relief from stay during his bankruptcy is res judicata on the issue of the right to enforce the Deed
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of Trust. As Defendants argue, such an order is not a final judgment on the merits and is not
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entitled to res judicata effect.
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Plaintiff’s operative First Amended complaint fails to allege any plausible claims against
any of the defendants. All of the existing claims are dismissed, with prejudice.
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B. Plaintiff’s Motion to Amend is Denied.
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Plaintiff Hanson seeks to amend his complaint a second time, apparently in an effort to
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avoid dismissal. Leave to amend shall be freely given when justice so requires. FED. R. CIV. P.
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15(a). “If the underlying facts or circumstances relied upon by a plaintiff may be a proper subject
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of relief, he ought to be afforded an opportunity to test his claim on the merits.” Foman v. Davis,
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371 U.S. 178, 182 (1962). On a 12(b)(6) motion, “a district court should grant leave to amend
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even if no request to amend the pleading was made, unless it determines that the pleading could
ORDER - 3
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not possibly be cured by the allegation of other facts.” Cook, Perkiss & Liehe v. N. Cal.
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Collection Serv., 911 F.2d 242, 247 (9th Cir. 1990). However, where the facts are not in dispute,
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and the sole issue is whether there is liability as a matter of substantive law, the court may deny
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leave to amend. Albrecht v. Lund, 845 F.2d 193, 195-196 (9th Cir. 1988).
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Defendants oppose amendment, arguing that it would be futile as none of the proposed
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new claims could survive a motion to Dismiss. Rule 15(a) is liberally construed and courts will
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grant leave to amend unless doing so would cause prejudice to the opposing party, is sought in
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bad faith, is futile, or creates undue delay. See Ascon Properties, Inc. v. Mobil Oil Co., 886 F.2d
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1149, 1160 (9th Cir. 1989).
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Plaintiff’s proposed Second Amended Complaint [Dkt. #24] asserts the same general
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facts as his operative complaint, and lists a host of ‘claims” he seeks to assert. Each claim
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apparently seeks the same relief as does Plaintiff’s current complaint: Hanson asks the court to
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permanently enjoin the foreclosure, award him damages, and determine that MERS was not a
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proper beneficiary.
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The claims asserted are described as follows: disparity; breach of contract – unanswered
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QWR; equitable estoppel – invalid debt; erroneous credit reporting; foreclosure on incorrect
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note; forfeiture on foreclosure; recoupment and setoff; False claim – failed endorsement;
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erroneous alleged default; material violations - Washington Deed of Trust Act; Slander of Title –
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notice of trustee’s sale; and Declaratory relief regarding MERS’s status as a beneficiary.
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Defendants oppose the Amendment. They point out that Hanson admits he took out a
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loan, and signed the Deed of Trust. He denies being in default, but has not and apparently
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cannot allege that he has made the required payments on the Note. Defendants argue that none
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of Hanson’s proposed claims are viable.
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Hanson’s “disparity” claim is a variation on the “show me the note” argument that has
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been consistently rejected, and has already been rejected in this case. This claim is not viable as
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a matter of law, and permitting amendment to assert it would be futile.
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Hanson’s RESPA/breach of contract claim is not viable because neither MERS nor US
Bank was the loan servicer, and Plaintiff has not even alleged that he sent anyone a Qualified
ORDER - 4
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Written Request, or that any entity failed to respond to it. This claim is not viable as a matter of
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law, and permitting amendment to assert it would be futile.
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Defendants correctly conclude that Hanson’s equitable estoppel – invalid debt claim is
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really a FCRA claim for falsely reporting that he was in default on his loan. There is no
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authority for the proposition that Hanson’s dubious denial of the debt and the validity of the note
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and deed of trust required any defendant to not report his default. This claim is not viable as a
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matter of law, and permitting amendment to assert it would be futile.
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Defendants oppose Plaintiff’s proposed claims regarding the negotiability of the Note as
futile. Plaintiff’s claims are based on his position that the Note was “private” and
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“unregistered.” This position is entirely without merit. Plaintiff’s proposed foreclosure on
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incorrect note, recoupment and setoff, failed endorsement and erroneous alleged default claims
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are not viable as a matter of law, and permitting amendment to assert them would be futile.
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Hanson’s “forfeiture on foreclosure” claim is based on his allegation that foreclosure
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would have adverse tax consequences for some defendants. Even if this were true (and it is not)
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it would not affect Hanson’s debt or the Deed of Trust. This claim is not viable as a matter of
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law, and permitting amendment to assert it would be futile.
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Hanson’s proposed material violations - Washington Deed of Trust Act claim is based on
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the timing of the appointment of Northwest Trustee Services, a claim previously rejected. This
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claim is not viable as a matter of law, and permitting amendment to assert it would be futile.
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Hanson’s slander of title claim is based on his contention that the Notice of Trustee’s sale
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was unlawful and apparently that it adversely impacted his title. This claim requires, among
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other things, interference with a pending sale of the property. Hanson has made no such
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allegation. This claim is not viable as a matter of law, and permitting amendment to assert it
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would be futile.
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Finally, Hanson’s claim for declaratory relief is not viable, as MERS’s role in the sale is
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not something that Plaintiff Hanson can assert claims about in this Court. See Vawter, supra.
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This claim is not viable as a matter of law, and permitting amendment to assert it would be futile.
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ORDER - 5
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Defendants’ Motions to Dismiss are GRANTED, and Plaintiff’s motion to amend is
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DENIED. All of plaintiff’s claims are DISMISSED WITH PREJUDICE, and any other pending
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Motions are DENIED as moot.
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IT IS SO ORDERED.
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Dated this 22nd day of November, 2011.
A
RONALD B. LEIGHTON
UNITED STATES DISTRICT JUDGE
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