Federal National Mortgage Association v. Ahn et al

Filing 29

ORDER granting 16 Northwest Trustee's Motion to Dismiss for Failure to State a Claim; Ahn's claim against NWT is DISMISSED with prejudice; Tift's claim against NWT is DISMISSED with prejudice; all counterclaims against NWT are DISMISSED with prejudice; Northwest Trustee is terminated as a party to these proceedings. Signed by Judge Ronald B. Leighton.(DN)

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HONORABLE RONALD B. LEIGHTON

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UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF WASHINGTON
AT TACOMA

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FEDERAL NATIONAL MORTGAGE
ASSOCIATION,

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Plaintiff,

CASE NO. C14-5063 RBL
ORDER GRANTING MOTION TO
DISMISS

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v.

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SUNG SOOK AHN,
Defendant

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and
SUNG SOOK AHN, and GREGORY
TIFT,

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[DKT. #16]

Counter Claimants,
v.

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FEDERAL NATIONAL MORTGAGE
ASSOCIATION, et al.,

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Counter
Defendants.

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THIS MATTER is before the Court on Counter-defendant Northwest Trustee Services’
Motion to Dismiss Counterclaims [Dkt. # 16]. Pro-se Defendant and Counterclaimant Sung Sook

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ORDER GRANTING MOTION TO DISMISS - 1

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Ahn defaulted on her mortgage loan in May of 2012, and the lender foreclosed. Northwest, as

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trustee, sold Ahn’s residence to Federal National Mortgage Association (FNMA). FNMA then

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sued to evict Ahn from the residence. Ahn removed the case and asserted counterclaims against
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Northwest, FNMA, Everhome Mortgage (the loan servicer), and Tina McPherson (the point of
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contact for Ahn’s loan). Ahn argues primarily that Everhome illegally foreclosed on her house

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after promising that it wouldn’t. Her claims do not state specifically what Northwest’s

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misconduct was, but generally argue that Northwest wrongfully and improperly sold her house

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after the foreclosure.

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Gregory Tift attempted to assist Ahn with her loan modification. He joined Ahn as a

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counterclaimant, arguing that Ahn’s foreclosure damaged his reputation.
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Northwest seeks dismissal under Fed. R. Civ. P. 12(b)(6). It argues that none of Ahn and
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Tift’s claims assert any facts establishing Northwest’s plausible liability, and points out that

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some do not mention Northwest at all.

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I.

BACKGROUND

Ahn secured a mortgage loan from Bank of America for $235,037. Ahn defaulted on her
loan in May of 2012. In April of 2013 Tift helped her apply for a loan modification. Tift operates

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an alternative dispute housing counseling service.
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On June 28, 2013, Ahn received notice that Bank of America transferred her loan to

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Everhome, which continued to process her modification. Everhome assured Ahn that it would

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not foreclose while it processed her application for a modification.

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Meanwhile, in April of 2013, Bank of America appointed Northwest as the successor
trustee of Ahn’s home under the Deed of Trust. Northwest delivered a Notice of Default to Ahn

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on April 2, 2013. Northwest recorded a Notice of Trustee’s Sale on June 5, 2013 setting the sale
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date as October 11, 2013 and delivered the notice to Ahn on June 6. Ahn made no attempt to

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restrain the sale and FNMA bought the home and recorded the Trustee’s Deed on October 18,

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2013.
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FNMA sued Ahn to remove her from the residence. Ahn and Tift assert counterclaims
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against FNMA, Everhome, McPherson, and Northwest, all arising out of the claim that

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Northwest wrongfully sold her home to FNMA after Everhome and McPherson promised they

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wouldn’t foreclose. Ahn and Tift allege violations of the Deed of Trust Act, breach of a third

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party contract, breach of contract, equitable estoppel, violations of the Washington State

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Consumer Protection Act, promissory estoppel, negligent infliction of emotional distress,
intentional infliction of emotional distress, and false light.1 Many of the claims do not allege any

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conduct by Northwest and all of the claims lack any possible factual basis. Due to these
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deficiencies, Northwest seeks dismissal under Fed. R. Civ. P. 12(b)(6) for failure to state a claim

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upon which relief can be granted.2
II.

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DISCUSSION

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A.

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Dismissal under Rule 12(b)(6) may be based on either the lack of a cognizable legal

Fed. R. Civ. P. 12(b)(6) Standard

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theory or the 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 Aschcroft v. Iqbal, 129 S. Ct.
1937, 1949 (2009). A claim has “facial plausibility” when the party seeking relief “pleads

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If and to the extent that Tift joins Ahn in any of the claims other than “false light,” his
counterclaims are DISMISSED. He has no standing to assert them.
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Northwest also seeks to strike Ahn’s opposition to the motion because it was filed late
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[Dkt. 21]. Ahn requested an extension of time to respond, but even that came two days after her
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and her late response [Dkt. 24] is accepted by the court because Northwest is not prejudiced.
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factual content that allows the court to draw the reasonable inference that the defendant is liable

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for the misconduct alleged.” Id. Although the Court must accept as true the Complaint’s well-

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pled facts, conclusory allegations of law and unwarranted inferences will not defeat a Rule 12(c)
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motion. Vazquez v. L. A. County, 487 F.3d 1246, 1249 (9th Cir. 2007); Sprewell v. Golden State
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Warriors, 266 F.3f 979, 988 (9th Cir. 2001). “[A] plaintiff’s obligation to provide the ‘grounds’

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of his ‘entitle[ment] to relief’ requires more than labels and conclusions, and a formulaic

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recitation of the elements of a cause of action will not do. Factual allegations must be enough to

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raise a right to relief above the speculative level.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555

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(2007) (citations and footnotes omitted). This requires a plaintiff to plead “more than an

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unadorned, the-defendant-unlawfully-harmed-me accusation.” Iqbal, 129 S. Ct. at 1949 (citing
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Twombly).
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On a 12(b)(6) motion, “a district court should grant leave to amend even if no request to

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amend the pleading was made, unless it determines that the pleading could not possibly be cured

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by the allegation of other facts.” Cook, Perkiss & Liehe v. N. Cal. Collection Serv., 911 F.2d 242,

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247 (9th Cir. 1990). However, where the facts are not in dispute, and the sole issue is whether

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there is liability as a matter of substantive law, the court may deny leave to amend. Albrecht v.

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Lund, 845 F.2d 193, 195–96 (9th Cir. 1988).
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B.

Deed of Trust Act Claim

Ahn claims that Northwest violated the Deed of Trust Act by failing to provide statutory

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notice to her regarding alternatives to the foreclosure proceedings. The Deed of Trust Act

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requires a trustee to issue and transmit to the borrower a Notice of Default and a Notice of

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Trustee’s Sale. RCW 61.24.030(8); RCW 61.23.040(1)(b) (respectfully). Both of those notices

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were delivered by Northwest in accordance with the Deed of Trust Act. Ahn’s claim is not

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plausible. Northwest’s Motion to Dismiss this claim is GRANTED and it is DISMISSED with

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prejudice.

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C.

Breach of Third Party Contract Claim

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Ahn argues that Everhome breached a contract with the United States Treasury when it
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allowed Northwest to complete the foreclosure while Everhome was reviewing Ahn’s loan

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modification application. This claim fails the Iqbal standard because Ahn does not allege a

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contract to which Northwest was a party or any breach by Northwest. Northwest’s Motion to

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Dismiss this claim is GRANTED and it is DISMISSED with prejudice.

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D.

Breach of Contract Claim

Ahn argues that Everhome guaranteed it would not foreclose on her home while it was

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reviewing her loan modification application. This claim fails the Iqbal standard because it does
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not allege a contract to which Northwest was a party or any breach by Northwest. Northwest’s
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Motion to Dismiss this claim is GRANTED and it is DISMISSED with prejudice.

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E.

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Ahn argues that Everhome implicitly and explicitly represented to Ahn that it would not

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Equitable Estoppel Claim

foreclose on her property while it was reviewing her loan modification application. Because of
these representations Ahn argues that Everhome should be estopped from foreclosing on her

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home. Ahn’s equitable estoppel claim does not allege any actions by Northwest.
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Furthermore, after foreclosure, a borrower waives the right to bring suit for anything

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other than damages. RCW 61.24.127. Ahn’s claim for equitable estoppel, therefore, states a

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claim upon which relief cannot possibly be granted. Northwest’s Motion to Dismiss this claim is

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GRANTED and it is DISMISSED with prejudice.

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F.

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Ahn argues that Northwest violated multiple sections of the Washington State Consumer

Washington State Consumer Protection Act Claim

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Protection Act. Her claims against Northwest are merely bare-bones recitations of the elements
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at best without accompanying factual allegations of any kind. For example, “Counterclaimants
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allege, have knowledge, and are reasonably informed that all Codefendants have breached the

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Washington State Consumer Protection Act RCW 19.86.090 Civil Action Damages-treble

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damages” [Dkt. 2, 59]. These sorts of allegations fail the Iqbal standard. Northwest’s Motion to

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Dismiss this claim is GRANTED and it is DISMISSED with prejudice.

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G.

Promissory Estoppel Claim

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Ahn argues that she, relying on Everhome’s promise to modify her loan, did not seek
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alternatives to foreclosure. Ahn makes no allegations of any communication from Northwest
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regarding loan modification. Her promissory estoppel claim does not apply to Northwest.
Furthermore, after foreclosure, a borrower waives the right to bring suit for anything

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other than damages. RCW 61.24.127. Ahn’s claim for promissory estoppel, therefore, states a

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claim upon which relief cannot possibly be granted. Northwest’s Motion to Dismiss this claim is

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GRANTED and it is DISMISSED with prejudice.

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H.

Negligent Infliction of Emotional Distress Claim

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Ahn’s claim for negligent infliction of emotional distress is nothing more than a

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statement without any factual support or specific assertions against Northwest:

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“Counterclaimants have been damaged by codefendants negligent infliction of emotional distress

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and are entitled to an award of damages” [Dkt. 2, 63]. These sorts of allegations fail the Iqbal

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standard. Northwest’s Motion to Dismiss this claim is GRANTED and it is DISMISSED with

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prejudice.
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I.

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Ahn’s claim for intentional infliction of emotional distress is merely a bare-bones

Intentional Infliction of Emotion Distress Claim

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recitation of the elements, without accompanying factual allegations of any kind. For example,
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“Codefendants’ conduct was outrageous” [Dkt. 2, 64]. These sorts of allegations fail the Iqbal
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standard. Northwest’s Motion to Dismiss this claim is GRANTED and it is DISMISSED with

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prejudice.

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J.

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Tift argues that Everhome’s negligent handling of documents transmitted by Tift between

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False Light Claim

Everhome and Ahn damaged Tift’s reputation. This claim is contradicted by the rest of the

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complaint: every other claim asserts that Ahn holds Everhome, and not Tift, accountable for the
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alleged harm to her.
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Furthermore, Tift’s claim does not contain any accompanying factual allegations of any

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kind, but merely asserts that Everhome “and all codefendants” were negligent. These sorts of

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allegations fail the Iqbal standard. Northwest’s Motion to Dismiss this claim is GRANTED and

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it is DISMISSED with prejudice.

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K.

Amendment

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Northwest’s Motion to Dismiss Ahn and Tift’s Counterclaims [Dkt. 16] is GRANTED.
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Furthermore, because Northwest followed the proper procedures during the sale of Ahn’s

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residence, there is no possibility that the flaws in Plaintiffs’ complaint could be cured by

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//

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//

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//

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amendment, and leave to amend is denied. All counterclaims against Northwest are DISMISSED

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with PREJUDICE. Northwest is terminated as a party to these proceedings.

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IT IS SO ORDERED.
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Dated this 1st day of August, 2014.
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A

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RONALD B. LEIGHTON
UNITED STATES DISTRICT JUDGE

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