Mortensen v. Mortg. Elec. Registration Sys., Inc.
| Decision Date | 24 August 2012 |
| Docket Number | Case No. 1:10-cv-00234-EJL-REB |
| Parties | STERLING MORTENSEN, Plaintiff, v. MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., et al., Defendants. |
| Court | U.S. District Court — District of Idaho |
Pending for a Report and Recommendation is a Motion to Dismiss (Dkt. 111) filed by Defendants America's Servicing Company ("ASC"), Northwest Trustee Services ("Northwest"), and Mortgage Electronic Registration Systems, Inc. ("MERS").1 The Court finds that thedecisional process would not be significantly aided by oral argument and, thus, will report to the District Court on this matter having considered the written motions, briefs, and record without oral argument. See D. Idaho L. Civ. R. 7.1(d). Having reviewed the record, and for the reasons discussed herein, the Court hereby enters the following report and recommends that the District Court grant Defendants' Motion.
I. BACKGROUND
On or about August 10, 2006, Plaintiff obtained a home refinance loan2 from Silver State Mortgage ("Silver State"), for 4540 Columbine, Boise, Idaho (the "Property"). Compl.3 ¶¶ 3.0, 3.1. Plaintiff also executed a Deed of Trust, which was recorded in Ada County on August 15, 2006. The Deed of Trust identified Silver State as the Lender, Land America Transnation as the trustee, and MERS as the beneficiary and "nominee for lender, and the lender's successors andassigns." Compl. ¶ 3.2; O'Neill Aff., Ex. A (Dkt. 111-2). Silver State transferred servicing of the loan to GMAC Mortgage Corporation, then the servicing rights were transferred to ASC. Compl. ¶¶ 3.4, 3.6.
In June 2008, Plaintiff alleges that due to financial hardship and a "drop in the value of homes" in the Boise area generally, he called ASC to discuss loan options . Id. ¶¶ 3.7 - 3.11. Plaintiff made his last loan payment in July of 2008. Id. ¶¶ 3.10, 3.11. On November 26, 2008, MERS, as the Deed of Trust beneficiary and the lender's nominee, appointed Northwest as successor trustee. Compl., ¶ 3.27. This Appointment of Successor Trustee was recorded on December 2, 2008. Dkt. 73-34 , Ex. U. Also executed on November 26, 2008 and then recorded on December 2, 2008, was an Assignment of Deed of Trust, in which MERS as beneficiary under the Deed of Trust granted all its beneficial interest, together with the note or notes described in the Deed of Trust, to HSBC Bank USA ("HSBC").5 Compl., ¶ 3.28; Dkt. 73-3, Ex. V. HSBC received this interest as trustee for Nomura. Id. On December 2, 2008, Northwest recorded a Notice of Default for the Property. Compl., ¶ 3.29.
On December 31, 2008, Plaintiff filed for bankruptcy. Id. ¶ 3.33. On March 4, 2009, the bankruptcy court granted HSBC relief from the bankruptcy stay. Id. ¶ 3.35. Following a non-judicial foreclosure sale, a Trustee's Deed conveying the Property to HSBC, as trustee for Nomura, was issued and recorded on November 3, 2009. First O'Neill Aff., ¶ 7 & Ex. F (Dkt.31). On December 11, 2009, HSBC and other entities filed a case in state court for eviction, ejectment, and restitution of property against Plaintiff and other occupants of the Property, Ada County Case No. CVOC2009-23591.6 Compl. ¶ 3.74. Ada County Court District Judge Thomas F. Neville issued several orders upholding the validity of the trustee's sale and rejecting Plaintiff's allegations that the foreclosure was wrongful or that he retained an interest in the Property. See O'Neill Aff., Exs. E, F, and G (Dkt. 111-2). On April 30, 2010, one week before Plaintiff filed this case, Judge Neville, having granted a motion for judgment on the pleadings, entered judgment in favor of HSBC Bank and the other plaintiffs in that case and against Plaintiff and the other occupants of the house "for restitution of" the Property. O'Neill Aff., Ex. E (Dkt. 111-2). Although Plaintiff requested reconsideration and filed a variety of motions in that case, Judge Neville denied all of those motions7 and Plaintiff did not timely appeal the judgment in that case.
Complicating matters, on October 12, 2009, Plaintiff executed a Quitclaim Deed purporting to transfer the Property to Brenda Burton and Steve Fritts. . That same day, Burton and Fritts gave a warranty deed for the property to the Sky Star Moon andUniverse Trust (the "Trust"). See Dkt. 34-1, Ex. B; Compl. At ¶¶ 3.56, 3.104. Steve Fritts recorded that purported "Trustee's Deed" on November 27, 2009, three weeks after the Deed of Trust in favor of HSBC was recorded following the foreclosure sale. First O'Neill Aff., Ex. E (Dkt. 31). In August of 2010, Fritts and Burton, in their capacity as representatives of the Trust, deeded the Property back to Burton and Fritts in their individual capacities, apparently to avoid an issue with appearing pro se in this case on behalf of the Trust. See Mot. & Mem. to Allow Pls.' to Submit Lit. Plan, p. 2 (Dkt. 34).
Plaintiff's most recent Complaint (Dkt. 106) raises the following claims (as identified by Plaintiff) against the remaining Defendants, ASC, Northwest, MERS, and Silver State:8 (1) breach of fiduciary duties by Silver State, ASC, and Northwest; (2) violations of the federal Truth in Lending Act; (3) violations of the Idaho Trust Deeds Act; (4) violations of the Real Estate Settlement Procedures Act; (5) violation of the consumer protection act9 ; (6) intentional infliction of emotional distress; and (7) negligent infliction of emotional distress. Plaintiff seeks declaratory judgment on these issues in his favor and requests that the Defendants be required to return any "unlawfully received" payments and be ordered to void the sale of Plaintiff's Property and return it to him. Comp., p. 58 (Dkt. 106).
ASC, Northwest, and MERS have responded to the Complaint with a Motion to Dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6). (Dkt. 111).
Federal Rule of Civil Procedure 8(a)(2) requires only "a short and plain statement of the claim showing that the pleader is entitled to relief," in order to "give the defendant fair notice of what the . . . claim is and the grounds upon which it rests." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). While a complaint attacked by a Rule 12(b)(6) motion to dismiss "does not need detailed factual allegations," it must set forth "more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Id. at 555. 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." Id. at 570. 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. at 556. The plausibility standard is not akin to a "probability requirement," but it asks for more than a sheer possibility that a defendant has acted unlawfully. Id. Where a complaint pleads facts that are "merely consistent with" a defendant's liability, it "stops short of the line between possibility and plausibility of 'entitlement to relief.'" Id. at 557.
In a more recent case, the Supreme Court identified two "working principles" that underlie the decision in Twombly. See Ashcroft v. Iqbal, 556 U.S. 662, 663 (2009). First, the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions. See id. "Rule 8 marks a notable and generous departure from the hyper-technical, code-pleading regime of a prior era, but it does not unlock the doors of discovery for a plaintiff armed with nothing more than conclusions." Id. at 678-79. Second,only a complaint that states a plausible claim for relief survives a motion to dismiss. Id. at 679. "Determining whether a complaint states a plausible claim for relief will . . . be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Id.
Providing too much in the complaint may also be fatal to a plaintiff. Dismissal may be appropriate when the plaintiff has included sufficient allegations disclosing some absolute defense or bar to recovery. See Weisbuch v. County of L.A., 119 F.3d 778, 783, n.1 (9th Cir. 1997) ().
A dismissal without leave to amend is improper unless it is beyond doubt that the complaint "could not be saved by any amendment." Harris v. Amgen, Inc., 573 F.3d 728, 737 (9th Cir. 2009) (). The Ninth Circuit has held that "in dismissals for failure to state a claim, a district court should grant leave to amend even if no request to amend the pleading was made, unless it determines that the pleading could not possibly be cured by the allegation of other facts." Cook, Perkiss and Liehe, Inc. v. Northern California Collection Serv., Inc., 911 F.2d 242, 247 (9th Cir. 1990). The issue is not whether the plaintiff will prevail but whether he "is entitled to offer evidence to support the claims." Diaz v. Int'l Longshore and Warehouse Union, Local 13, 474 F.3d 1202, 1205 (9th Cir. 2008) (citations omitted).
The Court's review of the motion to dismiss is undertaken with an eye on Ninth Circuit standards regarding pro se litigants. Tucker v. Carlson, 925 F.2d 330 (9th Cir. 1991). However, the Court reminds the Plaintiff that pro se litigants are held to same procedural rules as counseled litigants. King v. Atiyeh, 814 F.2d 565, 567 (9th Cir. 1987). D. Idaho Loc. Civ. R. 83.7.
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