Claudette Marie Leslie v. New Century Mortgage Corporation

CourtDistrict Court, C.D. California
DecidedMarch 15, 2023
Docket2:22-cv-06007
StatusUnknown

This text of Claudette Marie Leslie v. New Century Mortgage Corporation (Claudette Marie Leslie v. New Century Mortgage Corporation) is published on Counsel Stack Legal Research, covering District Court, C.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Claudette Marie Leslie v. New Century Mortgage Corporation, (C.D. Cal. 2023).

Opinion

Case 2:22-cv-06007-ODW-JEM Document 73 Filed 03/15/23 Page 1 of 12 Page ID #:4377

O 1 JS-6 2

7 United States District Court 8 9 Central District of California 10

11 CLAUDETTE MARIE LESLIE et al., Case № 2:22-cv-06007-ODW (JEMx)

12 Plaintiffs, ORDER GRANTING DEFENDANT 13 v. FREDDIE MAC’S MOTION TO DISMISS FIFTH AMENDED 14 NEW CENTURY MORTGAGE COMPLAINT [50] AND 15 CORPORATION et al., REMANDING CASE 16 Defendants. 17 18 19 I. INTRODUCTION 20 Plaintiffs Claudette Marie Leslie, Rodwell N. Leslie, and Lillette E. Leslie 21 initiated this wrongful foreclosure action in the Superior Court of California, County of 22 Los Angeles against Defendants New Century Mortgage Corporation; CitiMortgage, 23 Inc.; Quality Loan Service Corporation; and others. They later added Federal Home 24 Loan Mortgage Company (“Freddie Mac”) as a Defendant, and Freddie Mac removed 25 the case pursuant to 12 U.S.C. § 1452(f) and 28 U.S.C. § 1442(a). Freddie Mac now 26 moves pursuant to Federal Rule of Civil Procedure (“Rule”) 12(b)(6) to dismiss the 27 claims the Leslies assert against it in their Fifth Amended Complaint. (Mot. Dismiss 28 (“Motion” or “Mot.”), ECF No. 50.) After carefully considering the papers filed in Case 2:22-cv-06007-ODW-JEM Document 73 Filed 03/15/23 Page 2 of 12 Page ID #:4378

1 connection with the Motion, the Court deemed the matter appropriate for decision 2 without oral argument. Fed. R. Civ. P. 78; C.D. Cal. L.R. 7-15. For the following 3 reasons, the Court GRANTS Freddie Mac’s Motion. 4 II. FACTUAL BACKGROUND 5 For purposes of this Rule 12(b)(6) motion, the Court accepts the Leslies’ 6 well-pleaded allegations as true. Lee v. City of Los Angeles, 250 F.3d 668, 688 (9th Cir. 7 2001). 8 A. Purchase, Refinancing, and Securitization 9 In 2003, Rodwell Leslie and Lillette Leslie purchased the subject property, a 10 single family residence on 47th Street in Los Angeles, California. (Fifth Am. Compl. 11 ¶ 2, ECF No. 46.) In 2006, they refinanced their home loan with Defendant New 12 Century Mortgage Corporation, signing a promissory note in in the amount of $357,000 13 (the “Note”) secured by a deed of trust (“Deed of Trust”) (together, the “Loan”). (Id. 14 ¶ 11.) New Century was the beneficiary of the Loan, and nonparty Financial Title was 15 the trustee. (Id.) 16 Shortly after funding the Loan, New Century caused nonparty Citigroup Global 17 Markets Realty Corp., PLC to pool the Loan with other similar mortgages. (Id. ¶ 12.) 18 Citigroup Global Markets Realty then sold the pooled loans to Citigroup Mortgage Loan 19 Trust, Inc., as part of the Citigroup Mortgage Loan Trust 2006-NC, Asset-Backed 20 Pass-Through Certificates, Series 2006-NC (the “Loan Trust”). (Id.) Nonparty U.S. 21 Bank National Association was the trustee of the Loan Trust, and the Leslies allege that, 22 following this securitization transaction, U.S. Bank was the owner of the Leslies’ Note 23 and the beneficiary of their Deed of Trust. (Id.) However, the Leslies also allege that 24 the securitization failed because New Century failed to provide an endorsed Note or an 25 assignment of the Deed of Trust to the Loan Trust by the deadline set forth in the 26 securitization agreement, leaving the Loan “‘in limbo’ with no clear owner or 27 beneficiary.” (Id. ¶ 13.) 28

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1 B. Assignment to CitiMortgage; Notice of Default 2 Several years later, on September 23, 2014, New Century, through Defendant 3 CitiMortgage, Inc. acting as New Century’s attorney-in-fact, assigned the Deed of Trust 4 to CitiMortgage. (Id. ¶ 22.) The Leslies allege that this assignment did not transfer any 5 right, title, or interest in the property to CitiMortgage because (1) the Loan had already 6 been sold and assigned to the Loan Trust in June 2006 and (2) CitiMortgage later 7 claimed Freddie Mac, not New Century, owned the Note at the time. (Id.) 8 In late 2014, the Leslies first sought a loan modification, and in April 2015, 9 CitiMortgage caused its trustee, Quality Loan, to record a Notice of Default and 10 Election to Sell the property. (Id. ¶¶ 23, 29.) As with the prior transactions, the Leslies 11 allege that CitiMortgage—and, by extension, Quality Loan—had no authority to issue 12 or record these documents. (Id. ¶ 31.) 13 C. Loan Modification Applications; Trustee Sale 14 From 2016 to 2018, the Leslies submitted applications for a loan modification. 15 (Id. ¶ 25.) CitiMortgage repeatedly asked the Leslies to submit documents they had 16 already submitted, and the Loan was not modified. (Id.) The Leslies allege that this 17 was due to bad faith on the part of CitiMortgage. (Id.) 18 On September 26, 2018, CitiMortgage—again, allegedly without any authority 19 to do so—caused Quality Loan to record a Notice of Trustee Sale with a scheduled sale 20 date of November 8, 2018. (Id. ¶ 31.) In October 2018, the Leslies submitted a new 21 loan modification application, (id. ¶ 32), and on November 2, 2018, CitiMortgage sent 22 the Leslies written correspondence acknowledging that it had received the Leslies’ loan 23 modification documents, (id. ¶ 33). On November 5, 2018, CitiMortgage sent the 24 Leslies additional correspondence indicating that “[y]ou may be eligible for a 25 modification of your loan. We will contact you shortly to discuss the details of 26 modifying your loan.” (Id. ¶ 35.) 27 On November 7, 2018, two CitiMortgage representatives each advised Rodwell 28 Leslie that the trustee sale set for November 8, 2018, had been taken off calendar. (Id.

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1 ¶ 36.) Nevertheless, on November 8, 2018, the trustee sale went forward, and the 2 property was sold to a third party. (Id. ¶ 37.) That third party proceeded to initiate 3 unlawful detainer proceedings against the Leslies, and eventually, the Leslies were 4 evicted from the property. (Id. ¶ 39.) On January 13, 2021, Lillette Leslie passed away, 5 and pursuant to court order, Rodwell now maintains Lillette’s claims as her successor 6 in interest. (Id. ¶¶ 2, 40.) 7 D. Freddie Mac 8 Later, in connection with this lawsuit, CitiMortgage and Freddie Mac asserted 9 that CitiMortgage sold the Loan to Freddie Mac, then reacquired the Loan, then again 10 sold the Loan to Freddie Mac, leaving Freddie Mac as the owner of the Loan from 11 March 2010 until November 2018, when the Property was sold in foreclosure. (Id. 12 ¶¶ 15–16.) Accordingly, the Leslies include allegations about Freddie Mac, which are 13 of three types. The first type of allegations concern what CitiMortgage claims about 14 Freddie Mac. For example, the Leslies allege that CitiMortgage claimed that, on 15 March 29, 2010, it sold the Loan to Freddie Mac. (Id. ¶ 15e; see also id. ¶ 22 16 (“Citi[M]ortgage claimed Freddie Mac was the purported owner of the Note at that 17 time.”).) The second type of allegation concerns what Freddie Mac claims about itself. 18 For example, the Leslies allege that “[i]n March 2010, Freddie Mac claimed it 19 purchased the Loan from Citi[M]ortgage.” (Id. ¶ 44.) The third type of allegation 20 concerns what Plaintiffs claim about Freddie Mac. The main allegation of the third type 21 is that “Freddie Mac had no interest in the [L]oan.” (Id. ¶ 26.) 22 III. PROCEDURAL BACKGROUND 23 On September 6, 2019, the Leslies filed their initial Complaint in state court.

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Claudette Marie Leslie v. New Century Mortgage Corporation, Counsel Stack Legal Research, https://law.counselstack.com/opinion/claudette-marie-leslie-v-new-century-mortgage-corporation-cacd-2023.