Robertson v. DLJ Mortg. Capital, Inc.

• Decision Date: 11 October 2012
• Docket Number: No. CV-12-8033-PCT-LOA,CV-12-8033-PCT-LOA
• Parties: Sherwin Dennis Robertson and Irma Robertson, husband and wife, Plaintiffs, v. DLJ Mortgage Capital, Inc.; Select Portoflio Servicing, Inc.; Fairbanks Capital Corporation Credit Suisse (USA), Inc., Defendants.
• Court: U.S. District Court — District of Arizona

Sherwin Dennis Robertson and Irma Robertson, husband and wife, Plaintiffs,

v. DLJ Mortgage Capital, Inc.; Select Portoflio Servicing, Inc.;Fairbanks Capital Corporation Credit Suisse (USA), Inc., Defendants.

No. CV-12-8033-PCT-LOA

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA

Dated: October 11, 2012

ORDER

This case arises on Defendants' Motion to Dismiss pro se Plaintiffs' Amended Complaint, filed on August 6, 2012. (Doc. 61) Previously, the Court dismissed Plaintiffs' initial Complaint without prejudice for failure to allege subject matter jurisdiction and plausible claims upon which relief may be granted pursuant to Rules 12(b)(1) and (6), Fed.R.Civ.P., respectively. (Doc. 51) Following Ninth Circuit authority, the Court allowed Plaintiffs an opportunity to file an amended complaint to address the Complaint's pleading deficiencies. After considering Plaintiffs' Response, doc. 64,¹ and Defendants' Reply, doc. 65, the Court finds Plaintiffs' timely-filed Amended Complaint fails to state a plausible claim upon which relief may be granted. Defendants' Motion to Dismiss will be granted and this action will be dismissed with prejudice.

I. The Allegations

Claiming to be "sovereign citizens" of the United States, pro se Plaintiffs filed this action on February 22, 2012 and, with leave of Court, amended their complaint on July 16, 2012, identifying this action as one to quiet title to real property located in Yavapai County, Arizona. (Docs. 1, 55) Because a district court is required to give some guidance to pro se plaintiffs regarding the deficiencies in their complaint, Karim-Panahi v. L.A. Police Dep't, 839 F.2d 621, 625 (9th Cir. 1988), the Court's detailed June 25, 2012 Order explained federal pleading requirements and the Complaint's deficiencies. (Doc. 51) All parties have consented to jurisdiction before a magistrate judge pursuant to 28 U.S.C. § 636(c). (Docs. 4, 14)

Plaintiffs allege "they are the holders of the Warranty Deed[,] recorded on June 1, 2005[,] and Plaintiffs possess the title to and are the owners in absolute fee simple of the following .54 acre tract along with all structures situated thereupon of . . . 1575 Commonwealth St[,] Prescott, Arizona[.]" (Doc. 55 at 2-3) Plaintiffs contend their Amended Complaint establishes subject matter jurisdiction "as stated and proven on page 2[]" and alleges "six causes of action [which] stand as a matter of law [and] are supported by state and federal law[.]" (Doc. 64 at 2)

The 27-page Amended Complaint is clearly not "a short and plain statement" of Plaintiffs' claims, showing that Plaintiffs are entitled to relief, as mandated by Fed.R.Civ.P. 8(a). It is short on relevant facts, long on legal conclusions and hyperbole, and reads more like a memorandum of law, challenging the Court to determine the nature of Plaintiffs' claims and arguments. Recognizing pro se pleadings are held "to less stringent standards than formal pleadings drafted by lawyers[,]" Haines v. Kerner, 404 U.S. 519, 520-21 (1972), the Court addresses the merits of Plaintiffs' action without further delay or expense.

Plaintiffs allege "the following causes of action upon which this Court should grant the quiet title relief that the Plaintiffs request . . .

[F]irst, the Defendants do not have and never have had a recorded, valid deed to the real property, but have proceeded all along as though they do. Second the Defendants claim an adverse estate or interest to the land. Third, the Defendants [sic] deed lacks recognition of A.R.S. 12-2261 concerningacknowledgment of a deed. Fourth, the Defendants [sic] deeds are fatally defective, violate Arizona Revised Statues [sic] and are potentially fraudulent. Fifth, the Defendants [sic] deed or conveyance is not deemed to have been duly acknowledged according to A.R.S. 33-401(D). Sixth, the Defendants have collaterally attacked the Letters of Patent of the United States government on the real property.

(Doc. 55 at 3)

Plaintiffs rely upon a "securitization audit and title search," performed by Tila Solutions, LLC, a "professional audit firm," to argue that several foreclosure documents, including the Assignment of Deed of Trust, Substitution of Trustee, Notice of Trustee's Sale, and Trustee's Deed Upon Sale contain numerous "fatal defects." (Doc. 64 at 3-4) Plaintiffs contend "[t]he entire foreclosure proceeding was done based upon defective documents." (Id. at 4) Though Plaintiffs' Response is less than clear, the alleged document deficiencies include: 1) the Assignment of Deed of Trust violates Arizona Revised Statute ("A.R.S.") § 33-411.01 and contains "[f]our fatal defects"; 2) the Substitution of Trustee contains "[t]wo fatal defects"; 3) the Notice of Trustee's Sale has "[f]our fatal defects"; and 4) the Trustee's Deed Upon Sale has "[f]our fatal defects." (Id.)

While Plaintiffs claim they "[a]re not challenging the title and deed of the Defendants[,]." doc. 64 at 7, and Defendants recognize the pleading is labeled "Amended Complaint To Quiet Title," Defendants contend that, in reality, it is "a complaint to challenge the validity of the Trustee's Sale." (Doc. 61 at 2) Other than seeking an order quieting title to the subject residential property, Defendants argue the Amended Complaint's "causes of action" do, in fact, challenge the documents recorded as part of the foreclosure process. According to Defendants, Plaintiffs' Amended Complaint is barred in its entirety by A.R.S. § 33-811(C) because Plaintiffs' "[o]bjections or challenges to Defendants' title to the property were waived once the trustee's sale was completed." (Doc. 65 at 2) (emphasis in original). Defendants also claim Plaintiffs' quiet-title action fails for three other reasons: "(1) Plaintiffs are not in possession of title to the property; (2) Defendants do not claim an interest in the property; and (3) Plaintiffs have not alleged tender." (Id. at 4)

Defendants describe Plaintiffs' purported deficiencies as follows:

1. The name of the servicer or creditor is stamped on the document in block letters[;]

2. The document appears to be a standard form with "fillin-the-blanks" [sic] for the names of the signors and entities[;]

3. The return address on the Assignment is to a third party provider . . .[;]

4. The document is dated and signed years before the document is actually [recorded][;]

5. The party who signed the document executed it as "an attorney in fact"for the servicer or the creditor[;]

6. The document includes a reference to an "instrument number."[;]

7. The document was notarized in San Diego, California[;]

8. The document was executed the same day it was filed with the court[; and]

9. The signor is an "Assistant" anything.

(Id. at 2-3)

II. Background

Plaintiffs and their filings provide many of the relevant facts material to Defendants' Motion. In determining whether plaintiffs can prove facts in support of their claim that would entitle them to relief, a district court may consider facts contained in documents attached to the complaint. See Nat'l Ass'n for the Advancement of Psychoanalysis v. Cal. Bd. of Psychology, 228 F.3d 1043, 1049 (9th Cir. 2000) (citations omitted). In addition, Defendants have requested the Court take judicial notice of publicly-filed documents without objection by Plaintiffs.² See Coto Settlement v. Eisenberg, 593 F.3d 1031, 1038 (9th Cir. 2010) (district court may properly consider materials incorporated into the complaint or matters of public record withoutconverting motion to dismiss to a motion for summary judgment.).

On February 15, 2007, Plaintiffs executed a promissory note in the amount of $680,000.00, which was secured by a deed of trust on residential property located at 1575 Commonwealth Street, Prescott, Arizona (the subject "property"). (Doc. 56, Exhibit ("Exh.") 3³ at 6-20, filed by Plaintiffs at the same time as Amended Complaint.). A Warranty Deed was issued to Plaintiffs on March 5, 2005, and recorded in Yavapai County, Arizona on June 5, 2005. (Id., Exh. 2 at 2-3) A Deed of Trust, signed by Plaintiffs, was recorded on February 26, 2007 in Yavapai County. (Id., Exh. 3 at 6-20) An Assignment of Deed of Trust was executed on December 18, 2009, by M & I Marshall & Isley Bank, a Wisconsin corporation, assigning the property to Defendant DLJ Mortgage Capital, Inc. ("DLJ Mortgage"), which was recorded in Yavapai County on October 19, 2010. (Id., Exh. 4 at 21) After Plaintiffs stopped making payments on the note, a Substitution of Trustee and Notice of Trustee's Sale were recorded in Yavapai County on November 16, 2010. (Id., Exhs. 5-6, at 22-25) After Plaintiffs failed to cure their default on the note, the property was sold at a trustee's sale on February 15, 2011, conveying the property to Defendant DLJ Mortgage, as reflected in the Trustee's Deed Upon Sale. (Id., Exh. 8 at 28-30) On February 22, 2011, the Trustee's Deed Upon Sale was recorded in Yavapai County, Arizona. (Id. at 28) On March 23, 2012, a Special Warranty Deed was recorded, conveying the property to Robert G. Berry and Pamela S. Berry, husband and wife, non-parties to this litigation. (Id., Exh. 16 at 70) Plaintiffs recorded a lis pendens against the property on February 11, 2011 with Yavapai County, four days before the trustee's sale. (Id., Exh. 7 at 26-27)

III. Jurisdiction

In the Court's June 25, 2012 Order dismissing the Complaint, the Court explained the federal courts' limited jurisdiction and pointed out the failure to the Complaint to comply with Rule 8(a)(1)'s pleading requirement that a complaint must contain "a short and plain statement of the grounds for the court's jurisdiction. . . ." (Doc. 51 at 3-5) (citing, among other authorities,Rule 8(a)(1), Fed.R.Civ.P.) Plaintiffs' Amended Complaint alleges the domicile of each individual party, the place of incorporation and principal place of business of each corporate Defendant, and the amount in controversy exceeds $75,000, exclusive of interest and costs. (Doc. 55 at 2) Plaintiffs clearly predicate subject...