Rubio v. U.S. Bank N.A., C 13-05752 LB

Decision Date31 March 2014
Docket NumberNo. C 13-05752 LB,C 13-05752 LB
CourtU.S. District Court — Northern District of California
PartiesEDGARDO C. RUBIO, Plaintiff, v. U.S. BANK N.A., AS TRUSTEE FOR THE NOTEHOLDERS OF AEGIS ASSET BACKED SECURITIES TRUST 2005-3; OCWEN LOAN SERVICING LLC; WESTERN PROGRESSIVE, LLC; MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC.; and DOES 1 - 100, Inclusive. Defendants.
ORDER GRANTING MOTION TO
DISMISS FIRST AMENDED
COMPLAINT

[ECF No. 20]

INTRODUCTION

Plaintiff Edgardo Rubio sued Defendants U.S. Bank, Ocwen Loan Servicing, Western Progressive, and Mortgage Electronic Registration Systems in connection with foreclosure proceedings commenced against his San Francisco property. See First Amended Complaint ("FAC"), ECF No. 16.1 Defendants move to dismiss. Upon consideration of the papers submittedand applicable legal authorities, the court GRANTS the motion to dismiss.2

STATEMENT
I. BACKGROUND FACTS3

Plaintiff Edgardo Rubio took out a $610,000 mortgage loan from Aegis Funding Corp. on a property located at 760 Bacon Street, San Francisco, California (the "Property"). See First Amended Complaint ("FAC") ¶¶ 3, 9, ECF No. 16. He secured the loan with a Deed of Trust ("DOT"). On April 21, 2005, Mr. Rubio recorded the DOT in the Official Records of the San Francisco County Recorder's Office, as document number H941528.4 Id. ¶¶ 3, 9, Ex. A (the Deed of Trust). The DOT names Amy Mandart as the Trustee. See id. Ex. A at 1. It also names Mortgage Electronic Registration Systems, Inc. ("MERS") as "nominee for Lender and Lender's successors and assigns." Id. Plaintiff alleges that MERS is a corporation that has been suspended from doing business in California since March 25, 2009, is not licensed to do business in California, and at all relevant times was illegally conducting business in Alameda County, California. Id. ¶ 6.

The DOT includes provisions for acceleration and remedies, as follows:

22. Acceleration; Remedies. Following Borrower's breach of any covenant or agreement in this Security Instrument, Lender at its option may require immediate payment in full of all sums secured by this Security Instrument without further demand and may invoke the power of sale and any other remedies permitted by Applicable Law. Lender shall be entitled to collect all expenses incurred in pursuing the remedies provided in this Section 22, including, but not limited to, reasonable attorneys' fees and costs of title evidence.
If Lender invokes the power of sale, Lender shall execute or cause Trustee to execute a written notice of the occurrence of an event of default and of Lender's election to cause the Property to be sold. Trustee shall cause this notice to be recorded in each county in which any part of the Property is located. Lender or Trustee shall mail copies of the notice as prescribed by Applicable Law to Borrower and to the other persons prescribed by Applicable Law. Trustee shall give public notice of sale to the persons and in the manner prescribed by Applicable Law. After the time required by Applicable Law, Trustee, without demand on Borrower, shall sell the Property at public auction to the highest bidder at the time and place and under the terms designated in the notice of sale in one or more parcels and in any orderTrustee determines. Trustee may postpone sale of all or any parcel of the Property by public announcement at the time and place of any previously scheduled sale. Lender or its designee may purchase the Property at any sale.

Id. Ex. A at 15; see id. ¶¶ 24-26 (discussing this provision). The DOT contains other provisions that relate to the lender's right to substitute trustees.

24. Substitute Trustee: Lender, at its option, may from time to time appoint a successor trustee to any Trustee appointed hereunder by an instrument executed and acknowledged by Lender and recorded in the office of the Recorder of the county in which the Property is located. The instrument shall contain the name of the original Lender, Trustee and Borrower, the book and page where this Security Instrument is recorded and the name and address of the successor trustee. Without conveyance of the Property, the successor trustee shall succeed to all the title, powers and duties conferred upon the Trustee herein and by Applicable Law. This procedure for substitution of trustee shall govern to the exclusion of all other provisions for substitution.

Id. Ex. A at 15; see id. ¶ 27 (discussing this provision).

On or before June 28, 2005, Aegis securitized and sold the beneficial interest in Plaintiff's Deed of Trust to the Aegis Asset Backed Securities Trust 2005-3, Mortgage-Backed Notes (the "Trust"). Id. ¶ 10. The Trust was created by a Pooling and Servicing Agreement ("PSA") that named Wilmington Trust Company as Trustee. Id. ¶ 10, Ex. B at 6, 21. Wilmington Trust Company's assets, including the Trust, were first purchased by Wachovia Bank, N.A., and then by U.S. Bank, N.A. Id. ¶ 11. U.S. Bank currently holds itself out as trustee of the Trust and as the beneficial interest holder of Mr. Rubio's DOT. Id. According to a "Property Securitization Report" regarding Mr. Rubio's property, the Trust is governed by the laws of New York. Id., see id. Ex. B at 21.

On July 15, 2009, Western Progressive, LLC as Trustee to the DOT recorded a Notice of Default and Election to Sell Under Deed of Trust (the "First NOD"). Id. ¶ 12. At all relevant times, Western was a limited liability company organized under the laws of Delaware and registered with the California Secretary of State as business entity no. 200835710284. Id. ¶ 5.

On October 28, 2009, Aztec Foreclosure Corporation, recorded a substitution of trustee in which MERS "solely as nominee for U.S. Bank National Association, as Indenture Trustee on behalf of the Noteholders of Aegis Asset Backed Securities Trust 2005-3, Mortgage-Backed Notes as serviced by Ocwen Loan Servicing, LLC" substituted Aztec as the trustee of Mr. Rubio's DOT. See RJN Ex. 2. Also on October 28, 2009, Aztec Foreclosure Service recorded a Notice of Trustee's Sale ("NOTS"). See FAC ¶ 13.

On June 23, 2011, "LSI Title Company, as Agent for Western as Trustee to the DOT" recorded a second NOD. Id. ¶ 14; see RJN Ex. 3.

On July 25, 2011, another Assignment of Deed of Trust was recorded. FAC ¶ 15; see RJN Ex. 4. In this Assignment, Defendant MERS, "acting solely as nominee for Aegis Funding Corporation, purported to assign the beneficial interest in Rubio's DOT "including all rights title and interest in the mortgage to U.S. BANK, N.A., AS TRUSTEE FOR THE NOTEHOLDERS OF AEGIS ASSET BACKED SECURITIES TRUST 2005-3." Id. ¶ 15. The document was signed on July 1, 2011, but states that the assignment was "entered into as of the 24th day of August, 2007." See RJN Ex. 4.

On September7, 2011, Western recorded a Notice of Rescission of Notice of Default rescinding the June 23, 2011 Notice of Default. See RJN Ex. 5.

On March 9, 2012, Western, as Trustee to the DOT, recorded a Third NOD. FAC ¶ 16; see RJN Ex. 6.

Mr. Rubio alleges that on July 2, 2012, Aegis Funding Company recorded a Substitution of Trustee ("SOT") that purported "to substitute Western in as Trustee to the DOT." FAC ¶ 17. Although it had not previously been named as trustee, Western had been recording documents since the July 15, 2009 NOD. Id. Also on July 2, 2012, LSI Title Agency recorded an SOT naming Western as the Trustee. See RJN Ex. 7.5 This SOT was signed by "U.S. Bank National Association, as Trustee on behalf of the Noteholders of Aegis Asset Backed Securities Trust 2005-3 Mortgage-Backed Notes, By Ocwen Loan Servicing, LLC, its attorney in fact." Id. Ocwen Loan Servicing, LLC is a Limited Liability Company organized under the laws of Delaware and registered in California as business entity no. 200213810063. Id. ¶ 4.

Western recorded a second, third, and fourth Notice of Trustee's Sale in the San Francisco County Recorder's Office on July 2, 2012, August 30, 2013, and September 4, 2013, respectively. Id. ¶¶ 18-20; RJN Ex. 8 (September 4, 2013 Notice of Trustee's Sale). Thereafter, Trustee's Sale No. 2011-16973 was scheduled for January 27, 2014, to be conducted by Western on behalf of U.S.Bank, as Trustee. Id. ¶ 21.

II. PROCEDURAL HISTORY

Plaintiff filed his original complaint in San Francisco County Superior Court on November 6, 2013, against U.S. Bank, Ocwen Loan Servicing, and Western. See Complaint, ECF No. 1-1 at 4. Defendants removed this action from state court on December 12, 2013. See Notice of Removal, ECF No. 1. On December 19, 2013, Defendants filed a motion to dismiss Plaintiff's claims. See Motion to Dismiss, ECF No. 7. On January 9, 2014, Plaintiff filed the FAC. See ECF No. 16. The court denied the motion to dismiss as moot. See ECF No. 17.

In the FAC, Plaintiff asserts claims for (1) breaches of express agreements, (2) breaches of implied agreements, (3) slander of title, (4) wrongful foreclosure, (5) violation of California Civil Code section 2923.5, (6) violation of the Truth in Lending Act ("TILA"), 15 U.S.C. § 1601, et seq., (7) violation of the Real Estate Settlement Procedures Act6 ("RESPA"), 12 U.S.C. § 2604, (8) violation of the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692, et seq., (9) violation of the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. § 1962, and (10) violations of California's Unfair Competition Law ("UCL"), Cal. Bus. & Prof. Code § 17200.

Defendants thereafter moved to dismiss. See ECF No. 20.

ANALYSIS
I. MOTION TO DISMISS

Rule 8(a) requires that a complaint contain a "short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). A complaint must therefore provide a defendant with "fair notice" of the claims against it and the grounds for relief. See Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quotation and citation omitted).

A court may dismiss a complaint under Federal Rule of Civil Procedure 12(b)(6) when it does not...

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