Dwyer v. Trinity Fin. Servs.

Decision Date06 August 2021
Docket NumberC20-1236-JLR-SKV
CourtU.S. District Court — Western District of Washington
PartiesRICHARD DWYER, Plaintiff, v. TRINITY FINANCIAL SERVICES, LLC, Defendant.

REPORT AND RECOMMENDATION

S KATE VAUGHAN, United States Magistrate Judge.

This matter comes before the Court on Defendant Trinity Financial Services, LLC's Motion to Dismiss, Dkt. 24. Having thoroughly considered the parties' briefing and the relevant record, the Court finds oral argument unnecessary and finds that Defendant's Motion, Dkt. 24, should be GRANTED IN PART and DENIED IN PART for the reasons explained herein.

I. BACKGROUND

Plaintiff owns a home located in Kent, Washington. Dkt. 1-1 ¶ 4. On July 11, 2006, Plaintiff took out two loans, each memorialized in a promissory note and secured by a deed of trust, with Mortgage Electronic Registration Systems, Inc. (“MERS”) as nominee and Ownit Mortgage Solutions, Inc. (“Ownit”) as beneficiary under the deeds. Id. ¶ 5; Dkt. 24-1. The second position deed of trust (“Deed”) was recorded on July 17, 2006, under King County Recording Number 20060717000987. Id. Plaintiff has not made any payments on the promissory note (“Note”) secured by the Deed since before December 31, 2006. Id. ¶ 6.

After Plaintiff executed the Deed, Ownit transferred its interest therein to Greystone Solutions, Inc. (“Greystone”), and Greystone subsequently notified Plaintiff that it now owned the Deed. Dkt. 1-1 ¶ 7. No recordings were filed with the King County Recorder's Office in connection with this transfer of ownership and MERS remained the Deed's legal beneficiary in the public records. Id.

On February 28, 2008, Plaintiff filed a Chapter 13 bankruptcy. Dkt. 1-1 ¶ 8. Plaintiff listed Greystone as a secured creditor in the bankruptcy proceeding and Greystone received notice of the bankruptcy. Id. ¶ 9. Greystone did not file a proof of claim or communicate with Plaintiff regarding the bankruptcy. Id. On January 30, 2009, the court dismissed the bankruptcy without plan confirmation. Id. ¶ 8.

On August 1, 2016, MERS assigned the Deed to Defendant. Dkt. 1-1 ¶ 17. Defendant recorded this assignment on August 24, 2016, under King County Recording Number 20160824001578. Id. Plaintiff alleges Defendant did not notify him of the assignment. Id.

Subsequently, the owner of the first position deed of trust initiated foreclosure proceedings against Plaintiff's property. Dkt. 1-1 ¶ 11. As a result, on April 27, 2017, Plaintiff filed a second Chapter 13 bankruptcy. Id. Plaintiff alleges that at the time of this filing, no one had communicated with him about the Deed since before his first bankruptcy filing in 2008. Id. ¶ 12. Plaintiff did not list Greystone or any other entity associated with the Deed as a secured creditor in the 2017 bankruptcy proceeding because he assumed the beneficiary under the Deed had “abandoned all hope of ever collecting anything[.] Id. Plaintiff made payments through the bankruptcy “in reliance upon no claim being asserted by any purported holder of the second position deed of trust.” Id. ¶ 16.

On April 8, 2020, Defendant mailed a letter to Plaintiff (2020 Letter”) stating it had a valid security interest in Plaintiff's property that it could enforce through foreclosure. Dkt. 1-1 ¶ 23. The letter asked Plaintiff to complete a Mortgage Assistance Application that requested personal and financial information from Plaintiff. Dkt. 24-3 at 3-17. It also asked him to contact Defendant to negotiate payment arrangements. Id. at 1.

On August 3, 2020, Plaintiff initiated this lawsuit by serving Defendant with a Summons and Complaint that had not yet been filed in King County Superior Court. Dkt. 12 at 1. On August 18, 2020, Defendant removed Plaintiff's lawsuit to this Court. See Dkt. 1. Plaintiff brings claims against Defendant for violations of Washington's Consumer Protection Act (“CPA”), RCW 19.86 et seq.; Washington's Collection Agency Act (“CAA”), RCW 19.16 et seq.; Washington's Mortgage Loan Serving Act (“MLSA”), RCW 19.148 et seq.; the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692 et seq.; the Truth in Lending Act (“TILA”), 15 U.S.C. § 1601 et seq.; and the Real Estate Settlement Procedures Act (“RESPA”), 12 U.S.C. §§ 2601-2617. Dkt. 1-1 ¶¶ 41-96, 105-23. Plaintiff also seeks to quiet title to his property against the Deed, alleging the statute of limitations for foreclosing the Deed has expired and that any foreclosure action by Defendant is barred by laches and waiver. Id. ¶¶ 97-104. Defendant now moves the Court to dismiss Plaintiff's claims under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief can be granted. Dkt. 24.

II. DISCUSSION
A. Legal Standard

In considering a Rule 12(b)(6) motion, [1] the Court must determine whether the complaint alleges factual allegations stating a claim for relief that is ‘plausible on its face.' Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. (citing Twombly, 550 U.S. at 556). While detailed factual allegations are not necessary, a complaint must offer “more than labels and conclusions” and contain more than a “formulaic recitation of the elements of a cause of action[.] Twombly, 550 U.S. at 555. Dismissal is appropriate if the complaint fails to state a cognizable legal theory or fails to provide sufficient facts to support a claim. Shroyer v. New Cingular Wireless Servs., Inc., 622 F.3d 1035, 1041 (9th Cir. 2010). In considering a motion to dismiss, [a]ll well-pleaded allegations of material fact in the complaint are accepted as true and are construed in the light most favorable to the non-moving party.” Faulkner v. ADT Sec. Servs., Inc., 706 F.3d 1017, 1019 (9th Cir. 2013) (cited source omitted).

When granting a motion to dismiss, the Court may dismiss claims with or without prejudice, and with or without leave to amend. To the extent the Court dismisses Plaintiff's claims for failure to allege sufficient facts, Plaintiff has requested leave to amend his Complaint so that he may allege additional specific facts supporting his claims. Dkt. 26 at 1. [A] district court should grant leave to amend . . . unless it determines that the pleading could not possibly be cured by the allegation of other facts.” Cook, Perkiss & Liehe v. N. Cal. Collection Serv., 911 F.2d 242, 247 (9th Cir. 1990). Where the facts are not in dispute and the sole issue is whether there is liability as a matter of substantive law, the Court may deny leave to amend. Albrecht v. Lund, 845 F.2d 193, 195-96 (9th Cir. 1988).

B. Materials Considered

As a general matter, the Court may not consider materials beyond the complaint in ruling on a Rule 12(b)(6) motion. Lee v. City of L.A., 250 F.3d 668, 688 (9th Cir. 2001).[2] Exceptions to this rule include material properly submitted as a part of the complaint and documents not physically attached to the complaint if the contents are alleged in the complaint and no party questions the documents' authenticity. Id. In addition, under Federal Rule of Evidence 201, a court may take judicial notice of ‘matters of public record.' Id. at 688-89 (quoting Mack v. South Bay Beer Distrib., 798 F.2d 1279, 1282 (9th Cir. 1986), abrogated on other grounds by Astoria Fed. Sav. & Loan Ass'n v. Solimino, 501 U.S. 104 (1991)). Specifically, a court may take judicial notice of a fact “not subject to reasonable dispute” because the fact “can be accurately and readily determined from sources whose accuracy cannot reasonably be questioned.” Fed.R.Evid. 201(b)(2).

Defendant asks the Court to consider two letters from Defendant to Plaintiff when ruling on its Motion-the 2020 Letter and a letter dated August 13, 2015, (2015 Letter”). Dkt. 24 at 6. Defendant also asks the Court to consider the Deed and the dockets and pleadings from Plaintiff's bankruptcy cases. Id. Plaintiff does not object to consideration of the 2020 Letter or the Deed. These documents are referred to extensively in Plaintiff's Complaint and/or form the basis of his claims. That is, Plaintiff specifically alleges Defendant's mailing of the 2020 Letter violated the CAA, CPA, and FDCPA. Dkt. 1-1 ¶¶ 41-96. Further, Plaintiff references the Deed throughout his Complaint and his claims against Defendant are predicated on Defendant having a beneficial interest in the Deed. Given this, the Court agrees both the 2020 Letter and the Deed are properly considered here. See United States v. Ritchie, 342 F.3d 903, 907-09 (9th Cir. 2003).

Plaintiff also does not object to the Court's consideration of the dockets and pleadings from his bankruptcy cases. Matters of public record properly subject to judicial notice include “documents on file in federal or state courts.” Harris v. Cnty. of Orange, 682 F.3d 1126, 1132 (9th Cir. 2012) (citing Bennett v. Medtronic, Inc., 285 F.3d 801, 803 n.2 (9th Cir. 2002)). Courts may therefore consider pleadings, orders, and other court filings or records of administrative bodies when ruling on a Rule 12(b)(6) motion. Del Puerto Water Dist. v. United States Bureau of Reclamation, 271 F.Supp.2d 1224, 1233 (C.D. Cal. 2003) (citing Mack, 798 at 1282). But as reflected in the discussion below, the dockets and pleadings from Plaintiff's bankruptcy cases are not ultimately relevant to the Court's ruling and the Court declines to take judicial notice of them.

Plaintiff does object, however, to the Court's consideration of the 2015 Letter from Defendant to Plaintiff, which appears to have notified Plaintiff that servicing of the loan secured by the Deed was being transferred to Defendant. See Dkt....

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