Fischer v. Ocwen Loan Servicing, LLC
| Decision Date | 25 November 2014 |
| Docket Number | CV-14-94-BLG-SPW-CSO |
| Court | U.S. District Court — District of Montana |
| Parties | JOHN DAVID FISCHER, JERALD DUANE FISCHER, and ANGIE LEE FISCHER, Plaintiffs, v. OCWEN LOAN SERVICING, LLC, FEDERAL HOME LOAN MORTGAGE CORPORATION, RECONTRUST COMPANY, NA, and all persons unknown claiming any right, title, estate, lien or interest in or to the real property described herein, or any part thereof, adverse to the Plaintiffs' title, Defendants. |
This action arises out of a trustee's sale of real property. In their Amended Complaint, Plaintiffs John David Fischer, Jerald Duane Fischer, and Angie Lee Fischer (the "Fischers"), assert the following claims against Ocwen Loan Servicing, LLC ("Ocwen"), Federal Home Loan Mortgage Corporation ("FHLMC"), and ReconTrust Company, NA. :
See ECF 19.1 These claims are all based on state law. The Amended Complaint is not entirely clear as to which claims are asserted against which Defendants.
Now pending are Ocwen and FHLMC's (referred to herein as "Defendants") Motion for Judicial Notice (ECF 4) and Motion to Dismiss (ECF 2).
According to documents submitted by Defendants,2 Plaintiff Jerald Fischer borrowed $220,000 from AEGIS and, in connection with that loan, executed a Deed of Trust on property on Rosebud Drive in Billings, Montana. ECF 10-1. John Fischer and Angie Fischer lateracquired interest in the property by way of quitclaim deeds. ECF 10-2, 10-3. Defendants contend that the Jerald Fischer defaulted on the loan in January 2012, and that foreclosure proceedings were commenced.
The following facts are alleged in Plaintiffs' Amended Complaint and, for purposes of considering the pending motion to dismiss, are assumed to be true.
In December 2011 or January 2012, Plaintiffs "began the application process for a mortgage payment modification through the Federal Government's Home Affordable Modification Program (hereinafter 'HAMP') through Bank of America." ECF 19 at ¶ 5. As part of that process, Bank of America informed Plaintiffs that foreclosure processes may be initiated, but that Plaintiffs' home "would not be foreclosed on." Id. at ¶ 6. In April 2012, Plaintiffs were notified of a pending trustee's sale scheduled for August 22, 2012, but Bank of America again assured Plaintiffs "that this notification was part of the HAMP modification process and . . . that their home would not be foreclosed on." Id. at ¶¶ 7-8.
In June 2012, Bank of America sold Plaintiffs' Deed of Trust to Ocwen and, as a result, Plaintiffs were asked to re-complete the HAMP modification packet through Ocwen. Id. at ¶¶ 9, 10. Plaintiffs completed the modification packet as requested by Ocwen. Id. at ¶ 11.
Unbeknownst to Plaintiffs, Ocwen proceeded with the trustee's sale on August 22, 2012. Thereafter, by letter dated September 4, 2012, Ocwen thanked Plaintiffs for submitting their application for assistance and stated that they were "processing [Plaintiffs'] request as quickly as possible." ECF 19-1 at 1. In the letter, Ocwen also stated: "While we consider your request, we will not initiate a new foreclosure action and we will not move ahead with the foreclosure sale on an active foreclosure as long as we have received all required documents and you have met the eligibility requirements." Id. at 2. The letter also stated: "[N]o foreclosure sale will be conducted and you will not lose your home during the HAMP evaluation." Id. (emphasis in original).
Ocwen recorded the Trustee's Deed transferring the subject property to FHLMC on January 8, 2013. Id. at ¶¶ 15-16.
FHLMC argues there are no facts alleged as to FHLMC under Counts II-X, and it should be dismissed from each Count. ECF 3 at 16-17, 21, 24, 26, 28, and 29.
Ocwen presents nine arguments for dismissal of the Amended Complaint for failure to state a claim under Rule 12(b)(6). First, Defendants argue that the Fischers cannot bring a quiet title action because they are not the legal owners and the Fischers' "interest in the property was conveyed to FHLMC by the Trustee's Deed." Id. at 14. They further argue that quiet title would be inappropriate because the Fischers "do not allege that the debt has been satisfied, that they have offered to pay the debt or that the debt is unenforceable." Id. at 15.
Second, Ocwen argues that the Fischers fail to state a claim under the Montana Consumer Protection Act ("MCPA") because the MCPA does "not include enforcing a security interest against a debtor, especially when the debtor received statutorily required notices and does not contest his default." Id. at 18.
Third, Ocwen argues that the fraud claims do not meet theheightened pleading standard required by Rule 9(b). It further argues that the Complaint fails to meet "the basic element of a misrepresentation[,]" id. at 23, because Ocwen did not conceal any material facts and the Fischers "do not state what was concealed and how the alleged fact that was concealed was material." Id. at 24.
Fourth, Ocwen argues the Fischers' claim for constructive fraud fails because Ocwen did not have a duty to the Fischers, nor did it breach a duty "with an intent to create an advantage against Plaintiffs." Id. at 25. Ocwen further argues that the letter sent on September 4, 2012, was automatically generated and was not sent to "fraudulently induce Plaintiffs to act or to create an advantage over Plaintiffs." Id.
Fifth, Ocwen argues the deceit claim should be dismissed because the Fischers do not allege they had ever been approved for a loan modification or that the trustee's sale had been canceled. Id. at 26. Ocwen also argues that there are no facts suggesting the Fischers changed their position based on the September 4, 2012 letter. Id.
Sixth, Ocwen argues there is no "duty to modify or negotiate adefaulted loan." Id. at 27. It argues that absent some duty, the Fischers fail to state a claim for negligence. Ocwen further argues that nothing alleged in the Complaint suggests Ocwen "went beyond the ordinary role of the lender." Id.
Seventh, Ocwen argues the Fischers did not properly allege negligent misrepresentation because the Fischers were aware of the trustee's sale on August 22, 2012, and knew that it "would proceed if all of the documents were not received and if they did not qualify for the loan modification." Id. at 28.
Eighth, Ocwen argues the Fischers fail to allege a contract on which to support a claim for breach of the covenant of good faith and fair dealing. Id. at 29.
Ninth, Defendants argue that punitive damages are a component of recovery, not a cause of action. Id. at 30. They further argue that because an award for punitive damages was included as a separate claim rather than in the prayer for relief, it should be dismissed. Id.
The Fischers contend that because Ocwen already brought a Rule 12(b)(6) motion that had been ruled on in state court, it may not bringit a second time. ECF 20 at 3-6. Furthermore, they argue that the motion for judicial notice is an improper attempt to litigate a summary judgment motion and that Ocwen "cherry-picked only a few of the relevant documents involved and did not present to the Court the full array of documentary evidence involved in this case." Id. at 8.
Finally, the Fischers argue that they have adequately pled each claim and that the Court should take judicial notice of a Complaint and Consent Judgment ("Consent Judgment") involving Ocwen, executed in February 2014. Id. at 10-11. Because this request for judicial notice was not properly filed as a motion, it will not be considered. See Fed. R. Civ. P. 7(b)(1) ().
As a general rule, a district court may not consider any material beyond the pleadings in ruling on a Rule 12(b)(6) motion without converting the motion into one for summary judgment. Lee v. City of Los Angeles, 250 F.3d 668, 688 (9th Cir. 2001) (citation omitted). Thereis an exception to this rule, however, where a court takes judicial notice of matters of public record. Id. at 688-89. Taking judicial notice does not convert a motion to dismiss into one for summary judgment. See United States v. 14.02 Acres of Land More or Less in Fresno Cnty., 547 F.3d 943, 955 (9th Cir. 2008). For example, in Snyder v. HSBC Bank, USA, N.A., 913 F.Supp.2d 755 (D. Ariz. 2012), the district court took judicial notice of a publicly-filed Trustee's Deed Upon Sale in ruling on a 12(b)(6) motion to dismiss.
Here, Defendants present with their motion the Declaration of Jenny M. Jourdonnais, who declares under penalty of perjury that nine documents, which are attached to her Declaration, have all been filed in the official records of the Yellowstone County Clerk and Recorder. ECF 10 and 10-1 through 10-9. Plaintiffs do not dispute the authenticity of these documents and do not dispute that they have been filed in the official records of Yellowstone County. Indeed, Plaintiffs acknowledge that these are "a few of the relevant documents involved...." ECF 20 at 8.3 Each of the documents pertains to the course of transactionsdescribed in the Amended Complaint.
Accordingly, for the purpose of considering the pending motion to dismiss, the Court will grant the motion for judicial notice of the documents attached by Defendants to their motion for judicial notice. ECF 10.
When a case is removed from state court, it is taken "up where the state court left it off." Granny Goose Foods, Inc. v. Bhd. of Teamsters and Auto Truck...
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