Lake v. MTC Fin., Inc., CASE NO. C16-1482JLR
| Decision Date | 11 April 2017 |
| Docket Number | CASE NO. C16-1482JLR |
| Court | U.S. District Court — Western District of Washington |
| Parties | WAYNE R. LAKE, et al., Plaintiffs, v. MTC FINANCIAL, INC., et al., Defendants. |
Before the court is Defendant Deutsche Bank Trust Company Americas as Trustee for the Certificate Holders of Dover Mortgage Holder Capital 2005-A Corporation Grantor Trust Certificate, Series 2005-A's ("Deutsche Bank") motion to dismiss Plaintiffs Wayne R. and Cynthia A. Lake's (collectively, "the Lakes") complaint. (Mot. (Dkt. # 8).) The Lakes, who are proceeding pro se, did not respond to the motion
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// to dismiss.1 (See generally Dkt.) The court has considered the motion, the relevant portions of the record, and the applicable law. Being fully advised,2 the court GRANTS Deutsche Bank's motion for the reasons set forth below.
This case arises from the sale of the Lakes' home in foreclosure. (Compl. (Dkt. # 1) at 2.) On October 11, 2002, the Lakes signed a deed of trust for $145,000.00, which was recorded against the Lakes' residence in Lake Forest Park, Washington. (Id.) The deed of trust secured a promissory note that was payable to Bank of America, N.A. (See id. at 9.) The complaint alleges that "[a]n assignment of the trust deed and note was purportedly executed on May 4th 2010 . . . in which the document purports to assign the note and trust deed to the defendant," Deutsche Bank. (Id.) The Lakes allege that the original lender, Bank of America, N.A., has nevertheless continued to "express the same interest as it had before the purported assignment." (Id.)
On October 29, 2015, Defendant MTC Financial, Inc. dba Trustee Corps ("MTC") recorded a Notice of Trustee's Sale, which scheduled a sale for March 11, 2016. .) After the March sale did not occur, MTC recorded a second Notice of Trustee's Sale on May 24, 2016, which setSeptember 23, 2016, as the date for the sale. .) After the September sale did not occur, MTC signed a third Notice of Trustee's Sale, which was dated August 8, 2016, and scheduled a sale for December 16, 2016.3 (Compl., Ex. A at 19.) The record does not indicate whether the sale scheduled for December 16, 2016, occurred;
The Lakes also allege that on or about April 1, 2016, Deutsche Bank entered into a "License Agreement" with them and agreed to purge its records and databases of any and all information pertaining to the Lakes. (Compl. at 17.) The Lakes attach a copy of the alleged "License Agreement" as an exhibit to their complaint. (See id., Ex. B.)
On September 20, 2016, the Lakes filed this pro se lawsuit against MTC, Deutsche Bank, and Defendant Regional Trustee Services Corporation ("RTSC"). (See generally Compl.) In their complaint, the Lakes allege that Deutsche Bank violated the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. § 1692 et seq., and breached the alleged "Licensing Agreement." (Id. at 13, 17.) On November 14, 2016, Deutsche Bank filed a motion to dismiss the Lakes' complaint (see generally Mot.) to which the Lakes did not respond4 (see generally Dkt.). The court now addresses Deutsche Bank's motion.
When considering a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), the court construes the complaint in the light most favorable to the nonmoving party. Livid Holdings, Ltd. v. Salomon Smith Barney, Inc., 416 F.3d 940, 946 (9th Cir. 2005). The court must accept all well-pleaded facts as true and draw all reasonable inferences in favor of the plaintiff. Wyler Summit P'ship v. Turner Broad. Sys. Inc., 135 F.3d 658, 661 (9th Cir. 1998). "To 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, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)); see Telesaurus VPC, LLC v. Power, 623 F.3d 998, 1003 (9th Cir. 2010). A court may dismiss a complaint as a matter of law if it lacks a cognizable legal theory or states insufficient facts under a cognizable legal theory. Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1990); Robertson v. Dean Witter Reynolds, Inc., 749 F.2d 530, 534 (9th Cir. 1984).
The court need not accept as true a legal conclusion presented as a factual allegation. Iqbal, 556 U.S. at 678. Although the pleading standard of Federal Rule of Civil Procedure 8 does not require "detailed factual allegations," it demands more than "an unadorned, the-defendant-unlawfully-harmed-me accusation." Id. (citing Twombly, 550 U.S. at 555). A pleading that offers only "labels and conclusions or a formulaic recitation of the elements of a cause of action" will not survive a motion to dismiss under Rule 12(b)(6). Id.
Generally, a district court may not consider material beyond the complaint in ruling on a Rule 12(b)(6) motion to dismiss. Lee v. City of L.A., 250 F.3d 668, 688 (9th Cir. 2001). The Ninth Circuit, however, has carved out limited exceptions to this rule. First, a court may consider material properly submitted as a part of the complaint. Id. Second, a court may consider documents not physically attached to the pleading if the contents are alleged in the complaint and no party questions the authenticity. Id. Third, under Federal Rule of Evidence 201, a court may take judicial notice matters of public record. Id. at 688-89. Rule 201 provides, in pertinent part, "[a] judicially noticed fact must be one not subject to reasonable dispute in that it is . . . capable of accurate and ready determination by resort to sources whose accuracy cannot reasonably be questioned." Fed. R. Evid. 201(b)(2). "A trial court may presume that public records are authentic and trustworthy," Gilbrook v. City of Westminster, 177 F.3d 839, 858 (9th Cir. 1999), and thus, fall within the purview of Rule 201, see also Allshouse v. Caliber Home Loans, Inc., No. CV1401287DMGJCX, 2014 WL 12594210, at *3 (C.D. Cal. Oct. 29, 2014) ().
Based on the foregoing authority, the court may consider the documents the Lakes attach to their complaint. Lee, 250 F.3d at 688. Thus, the court considers the Notices of Trustee's Sales (Compl., Ex. A at 19, 25, 37), the original deed of trust (id. at 15), and the communications sent from Bank of America, N.A. to the Lakes (id. at 134, 137, 140, 143). The court also considers the "License Agreement." (Compl., Ex. B.)
In addition, Deutsche Bank asks the court to take judicial notice of the assignment of the deed of trust from Bank of America, N.A. to Deutsche Bank and the appointment of ReconTrust Company N. A., as the successor trustee, both of which have been recorded with the King County Recorder's Office. (Mot. at 6; see also Gibbons Decl. ¶¶ 3-4, Exs. A-B.) Deutsche Bank further requests notice of the appointment of successor trustee to MTC on July 2, 2015, which was also recorded with the King County Recorder's Office. (Mot. at 6; see also Gibbons Decl. ¶ 5, Ex. C.)
The Lakes did not respond to Deutsche Bank's request for judicial notice. (See generally Dkt.) Although the Lakes allege in their complaint that the "defendant delivered to the plaintiff written communications that were made to look like or falsely represent documents authorized, issued, or approved by a court, official, or agency of the United States" (Compl. at 12),5 this allegation does not overcome the presumption that public records are authentic and trustworthy, Gilbrook, 177 F.3d at 858. Indeed, the court does not need to accept as true the Lakes' allegation that the documents were false or fraudulent because the allegation is a legal conclusion, and the Lakes did not allege sufficient facts from which the court could reasonably infer that the documents were false or fraudulent. Iqbal, 556 U.S. at 678. Thus, the court grants Deutsche Bank's request for judicial notice.
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The Lakes allege claims based on violations of the FDCPA and breach of contract. (See generally Compl.) Deutsche Bank moves for the dismissal of all of the Lakes' claims.6 (See Mot.)
Deutsche Bank argues that the Lakes' FDCPA claim should be dismissed on a number of grounds, including that (1) the Lakes lack of standing to challenge the assignment of the deed of trust (Mot. at 9), (2) the FDCPA does not apply to the foreclosure process (id. at 10), and (3) Deutsche Bank is not a "debt collector" as defined by the FDCPA (id. at 11). The court addresses each argument in turn.7
Deutsche Bank moves to dismiss the Lakes' FDCPA claim because the Lakes lack standing to challenge the assignment of the deed of trust. (Mot. at 9.) "It is well established that 'a borrower generally lacks standing to challenge the assignment of its loan documents unless the borrower shows that it is at a genuine risk of paying the samedebt twice.'" Hummel v. Nw. Tr. Servs., Inc., 180 F. Supp. 3d 798, 806 (W.D. Wash. 2016) (quoting Andrews v. Countrywide Bank, NA, 95 F. Supp. 3d 1298, 1301-02 (W.D. Wash. 2015), reconsideration denied, No. C15-0428JLR, 2015 WL 12085856 (W.D. Wash. Apr. 7, 2015)). Borrowers, as third parties to an assignment, cannot challenge the chain of assignments. Borowski v. BNC Mortg., Inc., No. C12-5867RJB, 2013 WL 4522253, at *5 (W.D. Wash. Aug. 27, 2013).
In this case, the Lakes have not alleged that they are at risk of paying the same debt twice. (See generally Compl.) Although the Lakes allege that Bank of America, N.A. "has continued to express the same interests as it had before" (Compl. at 9), an exhibit to their complaint contradicts that allegation, (Compl., Ex. A at 134, 137, 140, 143 (...
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