Gossen v. JPMorgan Chase Bank, Nat'l Ass'n, Case No. C11–05506 RJB.

• Decision Date: 18 October 2011
• Docket Number: Case No. C11–05506 RJB.
• Citation: 819 F.Supp.2d 1162
• Parties: Yuliya P. GOSSEN, a/k/a Julia Gossen and Aleksey V. Gossen, Plaintiff, v. JPMORGAN CHASE BANK, National Associational/Washington Mutual Bank, FA (FL); Stewart Title Company; Northwest Trustee Services, Inc., Successors by Merger to Northwest Trustee Services PLLC fka Northwest Trustee Services, LLC; Does 1 through 250 Inclusive, Defendants.
• Court: U.S. District Court — Western District of Washington

819 F.Supp.2d 1162

Yuliya P. GOSSEN, a/k/a Julia Gossen and Aleksey V. Gossen, Plaintiff,

v.JPMORGAN CHASE BANK, National Associational/Washington Mutual Bank, FA (FL); Stewart Title Company; Northwest Trustee Services, Inc., Successors by Merger to Northwest Trustee Services PLLC fka Northwest Trustee Services, LLC; Does 1 through 250 Inclusive, Defendants.

Case No. C11–05506 RJB.

United States District Court, W.D. Washington,at Tacoma.

Oct. 18, 2011.

Yuliya P. Gossen, Battle Ground, WA, pro se.

Aleksey V. Gossen, Battle Ground, WA, pro se.

Fred B. Burnside, Rebecca J. Francis, Davis Wright Tremaine, Seattle, WA, Susana Elizabeth Davila, Routh Crabtree Olsen, Bellevue, WA, for Defendants.

ORDER GRANTING MOTIONS TO DISMISS OF DEFENDANTS JP MORGAN CHASE BANK AND NORTHWEST TRUSTEE SERVICES, INC.

ROBERT J. BRYAN, District Judge.

This matter comes before the Court on Defendant JP Morgan Chase Bank's (Chase) Motion to Dismiss under Fed.R.Civ.P. 12(b)(6). Dkt. 11. Defendant Northwest Trustee Services, Inc. (NWTS) joins the motion and also requests dismissal of Plaintiffs' claims. Dkt. 15. The Plaintiffs have failed to respond to the motions to dismiss. Pursuant to Local Rule 7(b)(2), such failure may be considered by the Court as an admission that the motion has merit. The Court has considered the pleadings in support of motions and the record herein.

INTRODUCTION AND BACKGROUND

In July 2007, Plaintiffs Yuliya and Aleksey Gossen, husband and wife, refinanced the loan for their home in City of Battle Ground, Washington. Dkt. 6–1 p. 7. The Gossens executed an “Adjustable Rate Note” (Note) with Washington Mutual Bank (WaMu), dated July 12, 2007, with a principal amount of $304,000. Dkt. 6–1 pp. 7, 51–55; Dkt. 12 pp. 4–9. Yuliya Gossen initialed each page of the Note and signed it. Dkt. 12 pp. 4–9. The Note identified WaMu as the “Lender,” and Yuliya Gossen as the “Borrower.” Id., at pp. 4, 8. The Note stated that the borrower “understands that Lender may transfer this Note” Id., at p. 4.

The Note was secured by a Deed of Trust recorded in Clark County, Washington. Dkt. 6–1 pp. 8, 57–71; Dkt. 12 pp. 10–31. The Deed of Trust identified Yuliya Gossen and Aleksey as the “Borrower” and WaMu as the “Lender.” Dkt. 6–1 p. 57. The Deed of Trust stated that the “Lender is the beneficiary under this Security Instrument,” and Stewart Title Company the “Trustee.” Id., at p. 58. The Deed of Trust further provided that the “Note or a partial interest in the Note (together with this Security Instrument) can be sold one or more times without prior notice to Borrower.” Id., at p. 68. The Deed of Trust empowered the Lender to direct a trustee to initiate foreclosure upon default. Id., at pp. 69–70. Both Yuliya and Aleksey Gossen initialed each page of and signed the Deed of Trust. Id., at pp. 57–71.

On September 25, 2008, the Federal Deposit Insurance Corporation (FDIC) placed WaMu in receivership and sold many of WaMu's assets to Chase, including all loans and loan commitments of WaMu. Dkt. 13 p. 5 through Dkt. 13–1 p. 20; Dkt. 13–2 p. 21.

On April 10, 2009, Northwest Trustee Services, Inc. (NWTS) served a Notice of Default on the Gossens. Dkt. 6–1 pp. 31–33. The Notice of Default was issued by NWTS as the authorized agent of Chase. Id., at p. 33. The Notice referenced the Deed of Trust and Note executed by the Gossens and WaMu. Id.

On April 22, 2009, Chase recorded with Clark County an Appointment of Successor Trustee (Appointment). Dkt. 6–1 p. 36. The Appointment notes that it appears on record that WaMu is the beneficiary and Stewart Title the trustee of the Deed of Trust. The Appointment goes on to state that Chase, as purchaser of the loans and other assets of WaMu, is the present beneficiary and as the present beneficiary, NWTS is appointed as the successor trustee to Stewart Title. Id.

On May 19, 2009, more than thirty days after transmitting the Notice of Default and not having received a response, NWTS recorded a Notice of Trustee's Sale that set the sale date for August 21, 2009. Dkt. 6–1 pp. 38–41. A sale did not occur and on March 25, 2010, NWTS executed a Notice of Discontinuance of Trustee's Sale and a new Notice of Trustee's Sale, setting the new sale for July 2, 2010. Dkt. 6–1 pp. 43–47; Dkt. 13–2 p. 13.

NWTS eventually sold the property on September 24, 2010, to Federal National Mortgage Association (Fannie Mae) for $362,378.00 and recorded the Trustee's Deed on October 10, 2010. Dkt. 13–2 pp. 16–18. The Gossens neither sought nor obtained a temporary restraining order or preliminary injunction to restrain the sale.

On May 4, 2011, the Gossens filed the instant lawsuit against three entities: JP Morgan Chase Bank, National Associational/Washington Mutual Bank, FA (Chase); Stewart Title Company; and Northwest Trustee Services (NWTS). Dkt. 6–1 pp. 2–5. The Complaint asserts fourteen causes of action, as well as Truth In Lending Act (TILA) and Real Estate Settlement Procedures Act (RESPA) violations. Dkt. 6–1. The causes of action are: (1) wrongful foreclosure, (2) “set aside default,” (3) fraud, (4) declaratory relief, (5) quiet title, (6) breach of fiduciary duty, (7) breach of the covenant of good faith and fair dealing, (8) injunctive relief—note, (9) injunctive relief—foreclosure, (10) “separation of note and deed of trust,” (11) “no holder in due course,” (12) “right of rescission,” (13) conspiracy, and (14) accounting. Id.

The Gossens premise these causes of action primarily on three factual allegations. First, the Gossens assert that the lender WaMu failed to disclose pertinent loan information to the Gossens (Dkt. 6–1 pp. 10–12); second, they assert that because WaMu did not record an assignment of its interest in the Note and Deed of Trust to Chase, Chase did not have a beneficial interest in the Note or Deed of Trust, and thus could not foreclose (Dkt. 6–1 pp. 7–10); and third, NWTS lacked authority to issue the Notice of Default starting the foreclosure process because it did so before Chase executed the appointment of NWTS as successor trustee to Stewart Title in the Deed Of Trust (Dkt. 6–1 pp. 12–13).

Defendants Chase and NWTS move for dismissal with prejudice of all claims of the Plaintiffs pursuant to Fed.R.Civ.P. 12(b)(6). Stewart Title Company has not filed an appearance in the action, nor does the record reflect that Stewart Title Company has been served with a copy of the summons and complaint.

STANDARDS GOVERNING RULE 12(b)(6) MOTIONS TO DISMISS

Federal Rule of Civil Procedure 8(a)(2) provides that a pleading must contain a “short and plain statement of the claim showing that the pleader is entitled to relief.” Under Fed.R.Civ.P. 12(b)(6), a complaint may be dismissed for “failure to state a claim upon which relief can be granted.” Dismissal of a complaint may be based on either the lack of a cognizable legal theory or the absence of sufficient facts alleged under a cognizable legal theory. Balistreri v. Pacifica Police Department, 901 F.2d 696, 699 (9th Cir.1990). While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the grounds of his entitlement to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do. Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007).

Accordingly, “[t]o survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ ” Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 ( citing Twombly, at 570, 127 S.Ct. 1955). A claim has “facial plausibility” when the party seeking relief “pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. First, “a court considering a motion to dismiss can choose to begin by identifying pleadings that, because they are no more than conclusions, are not entitled to the assumption of truth.” Id., at 1950. Secondly, “[w]hen there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief.” Id. In sum, for a complaint to survive a motion to dismiss the non-conclusory factual content, and reasonable inferences from that content must be plausibly suggestive of a claim entitling the pleader to relief.

A court may consider material which is properly submitted as part of the complaint on a motion to dismiss without converting into a motion for summary judgment. Lee v. City of Los Angeles, 250 F.3d 668, 688 (9th Cir.2001). Where the documents are not physically attached to the complaint, they may be considered if the documents' “authenticity ... is not contested” and “the plaintiff's complaint necessarily relies on them.” Parrino v. FHP, Inc., 146 F.3d 699, 705–06 (9th Cir.1998). Further, pursuant to Fed.R.Evid. 201, a court may take judicial notice of “matters of public record” without converting a motion to dismiss into a motion for summary judgment. Mack v. South Bay Beer Distrib., Inc., 798 F.2d 1279, 1282 (9th Cir.1986).

Plaintiffs have attached much of this documentation to Plaintiffs' Verified Complaint. It is also in large part a matter of public record. Further, its authenticity has not been contested. Finally, the Verified Complaint necessarily relies on these documents. Accordingly, the Court has considered these documents in ruling on this motion to dismiss.

CLAIMS ARISING FROM CONDUCT OF WASHINGTON MUTUAL

The Gossens assert TILA and RESPA violations based on WaMu's alleged failure to identify loan charges, fees, and terms at the origination of the loan agreement. Dkt. 6–1 p. 10—The Second Cause of Action (To Set Aside Default) is based on WaMu's alleged failure to provide the Gossens the “opportunity to negotiate” the Deed of Trust. Dkt. 6–1 p....