Morach v. Jpmorgan Chase Bank, N.A.
| Decision Date | 26 October 2015 |
| Docket Number | CASE NO. C15-599RAJ |
| Court | U.S. District Court — Western District of Washington |
| Parties | STEPHEN MORACH, Plaintiff, v. JPMORGAN CHASE BANK, N.A., et al. Defendants. |
HONORABLE RICHARD A. JONES
This matter comes before the Court on Defendant JP Morgan Chase Bank, N.A.'s ("Chase") Motion to Dismiss. Dkt. # 6. As set forth below, the Court GRANTS Chase's motion and DISMISSES Chase from this Action with prejudice.
Plaintiff Stephen Morach's ("Plaintiff") complaint is not a paragon of clarity, but this Court will summarize its allegations as best as it can. This case involves real property located at 918 N. Waugh Road, Mount Vernon, Washington 98273 (the "Mount Vernon Property"). See Dkt. # 1-5 (Compl.) at 5.1 Plaintiff borrowed $145,700.00 from Washington Mutual Bank on December 11, 2002 on that property; to secure repayment of the loan, Plaintiff executed a deed of trust, which was recorded in Skagit County onDecember 24, 2002. See id. at 13 & Evidence A2 at 36-53. On August 6, 2007, Plaintiff borrowed $213,894.00 from Chase on the Mount Vernon Property. See id. at 13 & Evidence A at 54-61. Plaintiff's loan was evidenced by a promissory note payable to Chase. See id. at 13; Dkt. # 6-1 Ex. A at 2.3 To secure repayment of the loan, Plaintiff executed a deed of trust providing that upon loan default, Chase could invoke its power of sale and sell the Mount Vernon Property. See Dkt. # 1-5 (Compl.) at 13 & Evidence A at 54, 58-59; Dkt. # 6-2 Ex. B. This deed of trust lists Stewart Title Company of Washington as the trustee and Chase as the lender and beneficiary. See id. Evidence A at 55.
Chase recorded its appointment of Northwest Trustee Services, Inc. ("NWTS") as successor trustee on March 26, 2013. See Dkt. # 6-3 Ex. C. NWTS recorded a Notice of Trustee's Sale on May 23, 2013. See Dkt. # 6-4 Ex. D. That notice of sale lists Plaintiff's arrearages in the amount of $31,675.36. See id. at 4. On November 1, 2013, a trustee's sale was held where Chase was the highest bidder. See Dkt. # 6-5 Ex. E at 3.Accordingly, NWTS issued a trustee's deed to Chase on November 14, 2013. See id. at 1.
This suit was filed on February 23, 2015. See Dkt. # 1-5 (Compl.) at 2. As best as this Court can tell, Plaintiff brings claims for violations of California Business & Professions Code § 17200 (id. at 16), breach of the covenant of good faith and fair dealing (id. at 17), injunctive relief (id. at 17-18), violation of California Civil Code § 1572 (id. at 18-19), fraud and forgery (id. at 19-20), quiet title or declaratory relief (id. at 20), and violation of the Fair Debt Collection Practices Act (id. at 24-28).
Fed. R. Civ. P. 12(b)(6) permits a court to dismiss a complaint for failure to state a claim. The rule requires the court to assume the truth of the complaint's factual allegations and credit all reasonable inferences arising from those allegations. Sanders v. Brown, 504 F.3d 903, 910 (9th Cir. 2007). A court "need not accept as true conclusory allegations that are contradicted by documents referred to in the complaint." Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008). The plaintiff must point to factual allegations that "state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 568 (2007). If the plaintiff succeeds, the complaint avoids dismissal if there is "any set of facts consistent with the allegations in the complaint" that would entitle the plaintiff to relief. Id. at 563; Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009).
The Court typically cannot consider evidence beyond the four corners of the complaint, although it may rely on a document to which the complaint refers if the document is central to the party's claims and its authenticity is not in question. Marder v. Lopez, 450 F.3d 445, 448 (9th Cir. 2006). The Court may also consider evidence subject to judicial notice. United States v. Ritchie, 342 F.3d 903, 908 (9th Cir. 2003).
Where a plaintiff proceeds pro se, the court must construe his "complaints liberally even when evaluating it under the Iqbal standard." Johnson v. Lucent Techs.Inc., 653 F.3d 1000, 1011 (9th Cir. 2011) (citing Hebbe v. Pliler, 627 F.3d 338, 342 (9th Cir. 2010)). "Furthermore, '[l]eave to amend should be granted unless the pleading could not possibly be cured by the allegation of other facts, and should be granted more liberally to pro se plaintiffs.'" Id. (quoting McQuillion v. Schwarzenegger, 369 F.3d 1091, 1099 (9th Cir. 2004)).
Chase filed the instant Motion on July 23, 2015. See Dkt. # 6. Plaintiff has never filed any opposition, as Chase points out in its reply. See Dkt. # 7. Under this Court's Local Rules, Plaintiff's failure to oppose Chase's motion "may be considered by the court as an admission that the motion has merit." See Local Rules W.D. Wash. LCR 7(b)(2). For this reason alone, this Court is inclined to grant Chase's motion. Nevertheless, because Plaintiff is proceeding pro se, this Court will more thoroughly consider the merits of Chase's motion.
Chase first argues that Plaintiff has waived all of his claims other than fraud by failing to obtain a pre-sale injunction. See Dkt. # 6 at 8.
The Washington Deed of Trust Act ("DoTA") sets out the "only means by which a grantor may preclude a sale once foreclosure has begun with receipt of the notice of sale and foreclosure." Gossen v. JPMorgan Chase Bank, 819 F. Supp. 2d 1162, 1169 (W.D. Wash. 2011) (citing Brown v. Household Realty Corp., 189 P.3d 233, 235-36 (Wash. Ct. App. 2008)); see also Merry v. Nw. Trustee Servs., Inc., 352 P.3d 830, 834 (Wash. Ct. App. 2015). Under this principle, "waiver of a postsale contest occurs when 'a party (1) received notice of the right to enjoin the sale, (2) had actual or constructive knowledge of a defense to foreclosure prior to the sale, and (3) failed to bring an action to obtain a court order enjoining the sale.'" Frizzell v. Murray, 313 P.3d 1171, 1174 (Wash. 2013) (quoting Plein v. Lackey, 67 P.3d 1061, 1067 (Wash. 2003)).
It appears that all three elements for waiver are present here. First, Plaintiff does not allege that he did not receive notice of his right to enjoin the trustee sale. Rather, Plaintiff in fact alleges that he received notices of defaults and notices of trustee sales, but levies conclusory allegations that they have been fraudulently filed.4 See Dkt. # 1-5 (Compl.) at 15. Second, Plaintiff does not dispute that these documents notified him of his right to seek to enjoin the sale, nor could he, given the clear language of those documents. See e.g., id. Evidence A at 58-59; Dkt. # 6-4 Ex. D at 5. Finally, there is no question that Plaintiff did not bring an action to enjoin the trustee's sale prior to the sale's occurrence on November 1, 2013. See id.; Dkt. # 6-5 Ex. E at 3. Waiver applies and, therefore, Plaintiff's claims for quiet title, declaratory relief, and injunctive relief are deemed waived and are DISMISSED. See Gossen, 819 F. Supp. 2d at 1169.
Certain claims for money damages after a foreclosure sale has occurred are exempted from the waiver doctrine, including claims for common law fraud or misrepresentation, violations of Title 19 of the Revised Code of Washington, failures of the trustee to comply with the DoTA, and violations of RCW 61.24.026. See RCW 61.24.127(1). Plaintiff alleges at least a claim for fraud, so this Court will proceed to analyze certain other claims that have not necessarily been waived.
Plaintiff alleges numerous California-law based claims, likely because his Complaint is likely copied from a complaint filed in California. See Dkt. # 1-5 (Compl.) at 9 (). In any event, the law of California does not apply to the note or loan at issue here. See id. Evidence A at 58 (). AndPlaintiff has not shown how the presumption against extraterritorial application of California law is overcome in this case. See O'Connor v. Uber Techs., Inc., 58 F. Supp. 3d 989, 1004 (N.D. Cal. 2014) (citing Sullivan v. Oracle Corp., 51 Cal.4th 1191, 1207 (2011)). Plaintiff's claims for violations of California's unfair competition statutes are therefore DISMISSED.
Plaintiff appears to allege that Chase breached the duty of good faith and fair dealing by breaching provisions contained in the promissory note and deed of trust. See Dkt. # 1-5 (Compl.) at 17. But he does not identify any specific contract provision that the duty is tied to. Such is necessary under Washington law. See Gossen, 891 F. Supp. 2d at 1170 (); Badgett v. Sec. State Bank, 807 P.2d 356, 360 (Wash. 1991) (). Plaintiff does mention any terms of any deed of trust in his Complaint. Accordingly, the Court DISMISSES this claim.
Plaintiff brings several claims for fraud, including pursuant to California Civil Code § 1572, which has no application to this case. See Dkt. # 1-5 (Compl.) at 18-20. The basis for the alleged fraud claims is unclear, but apparently stems from an unknown employee's signature of an assignment of a deed of trust and void, forged, or fraudulent filings of notices of default and notices of trustee sale. See id. at 19.
Under Washington law, a claim for fraud has nine elements: "(1) representation of an existing fact; (2) materiality; (3) falsity; (4)...
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