Niborg et al v. CitiMortgage, Inc. et al

Filing 22

ORDER granting 8 Motion to Dismiss for Failure to State a Claim; granting 9 Motion to Dismiss for Failure to State a Claim; denying 17 Motion to Remand and granting leave to amend. Plaintiffs' must file an amended complaint no later than June 2, 2017. Signed by Judge Benjamin H. Settle. cc: Pltfs via mail (MGC)

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UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF WASHINGTON
AT TACOMA

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ERIC NIBORG and TAMMI NIBORG,
Plaintiff,
v.
CITIMORTGAGE, INC., et al.,
Defendants.

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CASE NO. C17-5155 BHS
ORDER DENYING PLAINTIFFS’
MOTION TO REMAND,
GRANTING DEFENDANTS’
MOTIONS TO DISMISS, AND
GRANTING PLAINTIFFS LEAVE
TO AMEND

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This matter comes before the Court on Defendants Fannie Mae and CitiMortgage

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(“Citi”), Inc.’s (collectively “Defendants”) motions to dismiss (Dkts. 8, 9) and Plaintiff

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Eric and Tammi Niborg’s (“Niborgs”) motion to remand (Dkt. 17). The Court has

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considered the pleadings filed in support of and in opposition to the motions and the

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remainder of the file and hereby grants Defendants’ motions and denies the Niborgs’

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motion for the reasons stated herein.

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I.

PROCEDURAL HISTORY

On February 10, 2017, the Niborgs filed a complaint against Defendants in Clark
County Superior Court for the State of Washington. Dkt. 1-2 (“Comp.”). The Niborgs

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assert claims for quiet title, wrongful foreclosure, conversion, fraud, misrepresentation,

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and civil conspiracy. Id.

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On March 1, 2017, Defendants removed the matter to this Court. Dkt. 1.

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On March 9, 2017, Defendants filed motions to dismiss. Dkts. 8, 9. On April 11,

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2017, the Niborgs responded and filed a motion to remand. Dkts. 16, 17. On May 1,

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2017, Defendants responded to the motion to remand. Dkts. 18, 19. On May 4, 2017, the

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Niborgs replied. Dkt. 21.

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II.

FACTUAL BACKGROUND

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The Niborgs allege that they own the real property located at 1518 NE 91st

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Avenue, Vancouver, WA 98664 (“Property”). In April 2006, the Niborgs obtained a loan

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secured by the Property. In 2012, two assignments of the Deed of Trust were recorded,

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giving notice that Citi was the new beneficiary. On May 13, 2013, Citi appointed Clear

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Recon Corp. (“CRC”) as successor trustee.

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On October 23, 2013, CRC recorded a notice of trustee’s sale noting a non-judicial

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foreclosure of the Property to occur on February 28, 2014. The notice claimed that the

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Niborgs had missed 21 months of payments resulting in a past due balance of $37,486.70.

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Dkt. 10, Exh. F. CRC formally discontinued the foreclosure sale on August 7, 2014. The

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Niborgs do not allege any foreclosure activity subsequent to this date.

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On October 13, 2014, Citi recorded notice that Fannie Mae was the new

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beneficiary of the Deed of Trust. The servicing of the loan transferred to non-party

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Seterus, Inc. In Spring 2015, the Niborgs entered into a loan modification with Seterus.

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III.
A.

DISCUSSION

Remand

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The Niborgs move for remand because (1) the Court lacks subject matter

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jurisdiction, (2) they did not receive timely notice of the removal, and (3) all defendants

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did not consent to the removal. Dkt. 17. All of these arguments are without merit. First,

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the Court has subject matter jurisdiction because the parties are diverse and the amount in

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controversy exceeds the jurisdictional minimum of $75,000. 28 U.S.C. § 1332. The

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Niborgs, however, argue that Defendants consented to state court jurisdiction when they

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initiated the foreclosure action in the state. There is no authority for such a proposition.

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Thus, the Court denies the Niborgs’ motion on this issue.
Second, Fannie Mae removed the matter after receiving Citi’s consent. Dkt. 1 at

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3. Thus, the Court denies the Niborgs’ motion on this issue.
Finally, the Niborgs have failed to show that they didn’t receive timely notice of

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the removal. Even if the Niborgs did not receive the notice of removal in the normal

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course of mail delivery, they have failed to cite any authority for the proposition of a

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deadline for delivery of the notice of removal to the plaintiff. Therefore, the Court denies

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the Niborgs’ motion to remand.

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B.

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Dismiss
1.

Standard

Motions to dismiss brought under Rule 12(b)(6) of the Federal Rules of Civil

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Procedure may be based on either the lack of a cognizable legal theory or the absence of

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sufficient facts alleged under such a theory. Balistreri v. Pacifica Police Department,

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901 F.2d 696, 699 (9th Cir. 1990). Material allegations are taken as admitted and the

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complaint is construed in the plaintiff’s favor. Keniston v. Roberts, 717 F.2d 1295, 1301

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(9th Cir. 1983). To survive a motion to dismiss, the complaint does not require detailed

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factual allegations but must provide the grounds for entitlement to relief and not merely a

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“formulaic recitation” of the elements of a cause of action. Bell Atlantic Corp. v.

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Twombly, 127 S. Ct. 1955, 1965 (2007). Plaintiffs must allege “enough facts to state a

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claim to relief that is plausible on its face.” Id. at 1974.

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2.

Claims

Defendants move to dismiss all of the Niborgs’ claims for failure to state a claim.

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First, the Niborgs assert a claim against Citi to quiet title. An action to quiet title is an

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equitable proceeding “designed to resolve competing claims of ownership.” Walker v.

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Quality Loan Serv. Corp., 176 Wn. App. 294, 322 (2013), as modified (Aug. 26, 2013).

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The Niborgs have failed to allege that Citi has asserted a competing claim of ownership.

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The claim also fails because the Niborgs have failed to allege that they have paid off their

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outstanding debt and are the rightful owners of the property. Young v. Quality Loan Serv.

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Corp., C14-1713RSL, 2015 WL 12559901, at *1 (W.D. Wash. July 7, 2015). Therefore,

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the Court grants Defendants motions on the Niborgs’ quiet title claim.

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Second, the Niborgs’ wrongful foreclosure claim fails because there was no

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foreclosure sale. Frias v. Asset Foreclosure Servs., Inc., 181 Wn. 2d 412, 429 (2014)

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(“We hold there is no actionable, independent cause of action for monetary damages

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under the DTA based on DTA violations absent a completed foreclosure sale.”).

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Therefore, the Court grants Defendants’ motions on the Niborgs’ wrongful foreclosure

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claim.
Third, the Niborgs’ conversion claim fails because real property does not meet the

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definition of chattel under Washington law. Wa. State Bank v. Medalia Healthcare, 96

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Wn. App. 547 (1999). Therefore, the Court grants Defendants’ motions on the Niborgs’

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conversion claim.

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Fourth, the Niborgs’ claims for fraud and misrepresentation are based on

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statements allegedly made in 2012 and 2013. Comp., ¶¶ 81–103. Defendants move to

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dismiss because the claims are barred by the statute of limitations, which is three years in

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Washington. RCW 4.16.080. The Court agrees because the Niborgs filed the complaint

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in 2017 and fail to contest the argument that the claims are barred. Therefore, the Court

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grants Defendants’ motions to dismiss the Niborgs’ fraud and misrepresentation claims.
Finally, the Niborgs base their civil conspiracy claim on the wrongful acts alleged

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in the other five claims. The Niborgs, however, have failed to allege any wrongful act.

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Therefore, the Court grants Defendants’ motions to dismiss the Niborgs’ civil conspiracy

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claim.

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3.

Remedy

Defendants request that the Court dismiss the Niborgs’ claims with prejudice, and

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the Niborgs’ request leave to amend to correct any deficiencies. While it is highly

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unlikely that the Niborgs will be able to correct the identified deficiencies with additional

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factual allegations, dismissal is proper only if it is absolutely clear that the deficiencies of

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the complaint could not be cured by amendment. Broughton v. Cutter Labs., 622 F.2d

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458, 460 (9th Cir. 1980). The Court finds that, at this time, it is not absolutely clear that

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complaint may not be saved by any amendment. Therefore, the Court grants the Niborgs

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leave to amend.

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IV.

ORDER

Therefore, it is hereby ORDERED that Defendants’ motions to dismiss (Dkts. 8,

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9) are GRANTED, the Niborgs’ motion to remand (Dkt. 17) is DENIED, and the

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Niborgs are GRANTED leave to amend. The Niborgs must file an amended complaint

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no later than June 2, 2017. Failure to file an amended complaint or otherwise respond

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will result in DISMISSAL without further order of the Court.

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Dated this 16th day of May, 2017.

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A

BENJAMIN H. SETTLE
United States District Judge

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