John v. Quality Loan Service Corp of Washington

Opinion

1 2 FILED IN THE U.S. DISTRICT COURT 3 EASTERN DISTRICT OF WASHINGTON Aug 26, 2020 4 SEAN F. MCAVOY, CLERK 5 6 UNITED STATES DISTRICT COURT 7 EASTERN DISTRICT OF WASHINGTON 8 9 JAY J. JOHN, 10 Plaintiff, NO. 4:20-CV-05008-SAB 11 v. 12 QUALITY LOAN SERVICE CORP. OF ORDER GRANTING MOTION 13 WASHINGTON; DEUTSCHE BANK TO DISMISS FOR FAILURE TO 14 NATIONAL TRUST COMPANY; and STATE A CLAIM 15 NATIONSTAR MORTGAGE LLC, d/b/a 16 MR. COOPER; 17 Defendants. 18 19 Before the Court is Defendants Deutsche Bank National Trust Company and 20 Nationstar Mortgage LLC’s Motion to Dismiss for Failure to State a Claim, ECF 21 No. 15. The motion was considered without oral argument. Defendants Deutsche 22 Bank (in its capacity as trustee of HIS Asset Securitization Corp. Trust 2006-HE2) 23 (hereinafter “Deutsche Bank”) and Nationstar argue that Plaintiff’s Complaint fails 24 to comply with Rules 8 and 9 and fails to allege any facts supporting a cognizable 25 cause of action against Deutsche Bank and Nationstar. Despite being granted an 26 extension, ECF No. 18, Plaintiff did not respond to the motion. Having reviewed 27 28 ORDER GRANTING DEFENDANTS DEUTSCHE BANK AND 1 the briefing and the relevant caselaw, the Court grants the motion and dismisses 2 Defendants Deutsche bank and Nationstar from this matter. 3 Factual Background 4 On June 30, 2006, Plaintiff purchased a property located at 4301 West 35th 5 Court, Kennewick, Washington 99337-2749 and received a Statutory Warranty 6 Deed. ECF No. 1-2 at 3.1-3.2. Plaintiff had two mortgages against the property 7 through Defendants. ECF No. 1-2 at 3.3. Relevant here is a $423,900 promissory 8 note executed by Plaintiff to Golf Savings Bank. ECF No. 15-1. Mortgage 9 Electronic Registration Systems assigned the deed of trust to Deutsche Bank by 10 assignment on September 7, 2011. ECF No. 15-2. The prior servicer, Bank of 11 America, recorded a corrective assignment of deed of trust due to an accidental 12 assignment to Nationstar in 2013. ECF No. 15-3. Deutsche Bank is the beneficiary 13 of record of the deed. 14 Plaintiff’s loan is in default and due for the August 1, 2016 payment. ECF 15 No. 15-4. Foreclosure proceedings began in September 2017. Id. Since that time, 16 Plaintiff has been trying to delay those proceedings. He has filed for bankruptcy 17 twice, both of which were dismissed shortly after filing. This case is this latest 18 attempt to thwart the foreclosure proceedings. 19 Procedural History 20 On August 28, 2019, Plaintiff filed a pro se Complaint to Quiet Title in 21 Benton County Superior Court.1 In his original complaint, Plaintiff alleges that 22 Defendants engaged “in a pattern of fraud…as relates to the failure to negotiate in 23 good faith with elderly borrowers such as Plaintiff.” Id. at ¶ 3.5. In particular, 24 Plaintiff alleged that Defendants used deceptive means to induce Plaintiff to over- 25 1 Plaintiff alleges that he purchased a form complaint from a company called 26 Rockingham, PMA. He later alleged that Rockingham was engaged in the 27 unauthorized practice of law in preparing his deficient complaint. ECF No. 6 at 2- 3, ECF No. 7 at 2-5. 28 ORDER GRANTING DEFENDANTS DEUTSCHE BANK AND 1 leverage his home; use falsely inflated valuations; provided misleading statements 2 regarding the balance of his mortgage, arrears, escrow balances, and reinstatement 3 quotes; used the Mortgage Electronic Registration System to conceal the name of 4 the true owner of the loan in violation of Washington law; forced a default by 5 instructing Plaintiff to become 90 days past due in order to receive relief from his 6 mortgage payment and then denying Plaintiff a loan medication; and failing to 7 engage in the mediation process in a manner consistent with the facts, 8 circumstances and needs of Plaintiff and with consideration of the actual value of 9 the property at issue, and the likelihood of recovering comparable sums after 10 foreclosure. ECF No. 1-2 at ¶¶ 3.5(a)-(f). 11 Plaintiff brings claims under the FDCPA, the Washington Consumer 12 Protection Act, the Real Estate Settlement Procedures Act, the RICO Act, the 13 Washington Unfair or Deceptive Trade Practices Act, the Foreclosure Fairness 14 Act, and the Washington Deed of Trust Act. Plaintiff requests that the Court 15 confirm title to the Property in favor of Plaintiff and quiet Defendants’ claims to 16 the Property. ECF No. 1-2 at ¶ 5.1. 17 Soon after filing his complaint, Plaintiff and Defendant QLS filed a 18 Stipulation of Nonparticipation. ECF No. 5-1 at 9-10. In the Stipulation, the 19 Plaintiff and QLS agreed that QLS was a trustee under a Deed of Trust to the 20 Property. ECF No. 5-1 at 9. Plaintiff and QLS also agreed that QLS was named 21 solely in its capacity as trustee, and that Plaintiff would not seek any monetary 22 damages against QLS. Id. Plaintiff also agreed that QLS would not be required to 23 participate in the litigation proceedings in any manner. Id. 24 Defendant Deutsche Bank National Trust Company filed a notice of removal 25 on January 15, 2020 on the basis of federal question and diversity jurisdiction. ECF 26 No. 1 at 2-3. Subsequent to removal, Plaintiff voluntarily dismissed all of his 27 federal law claims. ECF Nos. 4, 11, and 13. Plaintiff also filed a motion to remand, 28 ORDER GRANTING DEFENDANTS DEUTSCHE BANK AND 1 citing a myriad of theories. The Court denied the motion because, although 2 Plaintiff dismissed all of his federal law claims, diversity jurisdiction still existed. 3 ECF No. 14.2 4 Legal Standard 5 On a motion to dismiss, all well-pleaded allegations of material fact are 6 taken as true and construed in a light most favorable to the non-moving party. 7 Wyler Summit P’ship v. Turner Broad. Sys., Inc., 135 F.3d 658, 661 (9th Cir. 8 1998). Under Rule 12(b)(6), a complaint “should not be dismissed unless it appears 9 beyond doubt that [the] plaintiff can prove no set of facts in support of his claim 10 which would entitle him to relief.” Hydranautics v. FilmTec Corp., 70 F.3d 533, 11 535-36 (9th Cir. 1995). 12 Federal Rule of Civil Procedure 8(a)(2) requires that each claim in a 13 pleading be supported by “a short and plain statement of the claim showing that the 14 pleader is entitled to relief.” The purpose of Rule 8 is to “give the defendant fair 15 notice of what the…claim is and the grounds upon which it rests.” Erickson v. 16 Pardus, 551 U.S. 89, 93 (2007). To satisfy this requirement and survive a 12(b)(6) 17 dismissal, a complaint must contain sufficient factual content “to state a claim to 18 relief that is plausible on its face.” Landers v. Quality Commc’ns, Inc., 771 F.3d 19 638, 641 (9th Cir. 2014) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 20 570 (2007)). A claim for relief is plausible on its face “when the plaintiff pleads 21 factual content that allows the court to draw the reasonable inference that the 22 defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 23 678 (2009). 24

25 2 Although it was not mentioned in the briefing on Plaintiff’s Motion to Remand, Defendants’ Motion to Dismiss indicates that Plaintiff filed another Complaint in 26 Benton County Superior Court against these Defendants on October 7, 2019. This 27 case raises claims under the Washington Torrens Act. That case is still pending in state court. 28 ORDER GRANTING DEFENDANTS DEUTSCHE BANK AND 1 Ordinarily, the Court is limited to those facts contained in the Complaint 2 itself when considering a Rule 12 motion. However, the Court may also consider 3 facts that are incorporated by reference in the complaint, in exhibits attached to the 4 complaint, and matters susceptible to judicial notice. Mir v. Little Co. of Mary 5 Hosp., 844 F.2d 646, 649 (9th Cir. 1998). In evaluating whether a complaint states 6 a plausible claim for relief, courts rely on “judicial experience and common sense” 7 to determine whether the factual allegations, which are assumed to be true, 8 “plausibly give rise to an entitlement to relief.” Id. at 679. Thus, the Court can 9 consider the documents contained at ECF No. 16, because they are incorporated by 10 reference in the complaint and are public records susceptible to judicial notice. 11 In assessing whether a case should be dismissed with prejudice and without 12 leave to amend, five factors should be considered: “(1) bad faith; (2) undue delay; 13 (3) prejudice to the opposing party; (4) futility of amendment; and (5) whether the 14 plaintiff has previously amended his complaint.” Nunes v. Ashcroft, 375 F.3d 805, 15 808 (9th Cir. 2004). “Futility alone can justify the denial of a motion for leave to 16 amend.” Id. 17 Discussion 18 Defendants Deutsche Bank and Nationstar argue that Plaintiff’s allegations 19 do not comply with Rules 8, 9, or 12(b)(6) and that his Complaint should be 20 dismissed with prejudice. Plaintiff has not responded to the Motion despite the fact 21 that he was given a four-week extension to respond. 22 1. Plaintiff’s Failure to Respond to Motion to Dismiss 23 As a preliminary matter, per Local Civil Rule 7(e), Plaintiff’s failure to 24 respond may be deemed consent to entry of a dismissal order. See e.g., Knemeyer 25 v. Podruzny, No. 2:19-CV-00108-SMJ, 2020 WL 1932337 at *2 n.1 (E.D. Wash. 26 April 21, 2020); Eileen Frances Living Trust v. Bank of America, No. 2:15-CV- 27 227-RMP; 2017 WL 2945732 at *2 (E.D. Wash. July 10, 2017) (denying motion to 28 ORDER GRANTING DEFENDANTS DEUTSCHE BANK AND 1 reconsider where case was dismissed on a Rule 12 motion after plaintiff failed to 2 timely respond); Gonzales v. SunTrust Morg., Inc., No. 2:11-CV-0460-EFS, 2012 3 WL 502258 at *2 (E.D. Wash. Feb. 14, 2012). Thus, the Court grants Defendants’ 4 motion to dismiss and dismisses Defendants Deutsche Bank and Nationstar based 5 solely on Plaintiff’s failure to comply with Local Rule 7. 6 2. Rule 8 Analysis 7 Even if Plaintiff had responded to the Motion to Dismiss, the Court grants 8 Defendants’ Motion to Dismiss for failure to comply with Rule 8. First, Plaintiff’s 9 Complaint does not include a “short and plain statement of the claim” as required 10 by Rule 8(a). Plaintiff’s Complaint is basically a list of legal conclusions and the 11 elements of claims he wants to assert. ECF No. 1-2 at ¶¶ 3.5, 3.6. Indeed, the 12 Complaint contains no facts that would put Defendants on notice of what Plaintiff 13 is really seeking or that would lead to the reasonable inference that Defendants 14 were liable to Plaintiff for the alleged misconduct. See Iqbal, 556 U.S. at 678 15 (plaintiff must plead more than an “unadorned, the-defendant-unlawfully-harmed- 16 me accusation to satisfy Rule 8 and survive a Rule 12(b) motion to dismiss). 17 Furthermore, Plaintiff’s Complaint does not make any single allegation against 18 Deutsche Bank or Nationstar in particular and instead lumps all of the Defendants 19 together as one group who seem to all be responsible for each other’s actions. This 20 blanket treatment of Defendants in the Complaint makes it impossible for Deutsche 21 Bank and Nationstar to determine what specific conduct is alleged to have been 22 done by them, and therefore prevents them from determining what the claims 23 against them specifically are. Accordingly, Plaintiff’s Complaint fails to satisfy the 24 requirements of Rule 8 and is dismissed. 25 3. Rule 9(b) Analysis 26 Plaintiff’s Complaint raises claims that sound in fraud, so they must also 27 comply with the specificity requirements of Rule 9(b). In order to satisfy the 28 ORDER GRANTING DEFENDANTS DEUTSCHE BANK AND 1 requirements of Rule 9(b) and survive a motion to dismiss, the plaintiff must allege 2 “the who, what, when, where, and how of the misconduct charged.” Ebeid ex rel. 3 United States v. Lungwitz, 616 F.3d 993, 998 (9th Cir. 2010). When there are 4 multiple defendants, Rule 9(b) does not allow “a complaint to merely lump 5 defendants together but requires plaintiffs…to inform each defendant separately of 6 the allegations surrounding his alleged participation in the fraud.” Swartz v. KPMG 7 LLP, 476 F.3d 756, 764-65 (9th Cir. 2007). As with the Rule 8 analysis, Plaintiff’s 8 Complaint fails to meet the standards of Rule 9(b) because he does not state facts 9 that would amount to a plain and clear statement of his claims, let alone state them 10 with the particularity required by Rule 9. As above, Plaintiff’s Complaint lumps 11 together all of the defendants into one group without specifying how each 12 particular Defendant engaged in fraud. Thus, Plaintiff’s claims that sound in fraud 13 should be dismissed for failure to state a claim and failure to comply with Rule 9. 14 4. Rule 12(b)(6) Analysis 15 Finally, Defendants argue that Plaintiff’s Complaint fails to state facts to 16 support his Consumer Protection Act claims, Unfair or Deceptive Trade Practices 17 Act claims, his quiet title claims, and Deed of Trust Act claims. This Order 18 considers each claim in turn. 19 a. Consumer Protection Act 20 Plaintiff alleges that Defendants violated the Consumer Protection Act by 21 claiming “amounts due in the notice of sale which exceeded those permitted under 22 the applicable statute of limitations.” See ECF No. 1-2 at ¶ 4.0. In particular, 23 Plaintiff alleges that Defendants claimed the entire indebtedness due in the Notice 24 of Sale although default occurred in June 2017. Id. at ¶ 3.6. However, the Deed of 25 Trust provides that, should Plaintiff default on the loan and the default is not cured 26 on or before the date specified in the Notice, “Lender, at its option, may require 27 immediate payment in full of all sums secured by this Security Instrument without 28 ORDER GRANTING DEFENDANTS DEUTSCHE BANK AND 1 further demand and may invoke the power of sale and/or any other remedies 2 permitted by Applicable Law.” ECF No. 16-1 at 14-15. Per the Notice of Trustee’s 3 Sale, Plaintiff received notice that he was in default on the loan as of August 2, 4 2017. ECF No. 16-4 at 29. The Notice of Trustee’s Sale also noted that Plaintiff 5 could cure the default by paying the amount owed on the loan. Id. at 28.3 6 The Washington Consumer Protection Act provides that unfair methods of 7 competition and unfair or deceptive acts or practices in the conduct of any trade or 8 commerce are unlawful. Wash. Rev. Code 19.86.020. Plaintiff does not identify 9 with particularity what provision of the Act he alleges has been violated or how the 10 conduct alleged here violates the Act. 11 Plaintiff does not allege that he cured the default by paying off the amount 12 owed on the loan, nor does he allege any facts that would amount to a violation of 13 the Consumer Protection Act. Accordingly, the Court grants Defendants’ motion 14 and dismisses Plaintiff’s CPA claim for failure to state a claim upon which relief 15 may be granted. 16 b. Unfair or Deceptive Trade Practices Act 17 These claims also seem to sound under the CPA, as there is no Act by this 18 name in Washington. Plaintiff alleges that Defendants violated the “Unfair or 19 Deceptive Trade Practices Act” “for practices associated with the origination 20 and/or servicing of the subject loan.” Plaintiff alleges no further facts in support of 21 this claim. Accordingly, the Court dismisses Plaintiff’s Unfair or Deceptive Trade 22 Practices Act claims. 23 // 24

25 3 The Court notes that Defendants may have neglected to update some of the dates and totals owed on the loan in their Motion, because the documents filed in support 26 of the motion have different dates and amounts owed. This Order refers to the 27 dates and totals owed in the documents filed in support of Defendants’ motion, as they appear to be specific and correct as to Plaintiff’s situation. 28 ORDER GRANTING DEFENDANTS DEUTSCHE BANK AND 1 c. Quiet Title 2 Plaintiff also brings claims to quiet title to the property in question and 3 requests that the Court confirm and quiet title in his favor. ECF No. 1-2 at ¶ 4.4. A 4 quiet title claim against a mortgagee requires an allegation that the mortgagor is the 5 rightful owner of the property and that the mortgagor has paid an outstanding debt 6 secured by the mortgage. Tonseth v. WaMu Equity Plus, No. C11-1359-JLR, 2012 7 WL 37406, at *6 (W.D. Wash. Jan. 9, 2012). Defendants argue that Plaintiff 8 cannot allege facts supporting satisfaction of his deed of trust obligations such that 9 title should be quieted in his favor. Reviewing the complaint, Plaintiff does not 10 dispute that he is in default or that he tried to make payments on the debt. He 11 cannot meet the requirements of a quiet title action, and accordingly his claim is 12 dismissed. 13 d. Deed of Trust Act 14 Finally, Plaintiff alleges that Defendants violated the Deed of Trust Act by 15 using MERS as a beneficiary “to purposely conceal the name of the true owner of 16 the loan. ECF No. 1-2 at ¶¶ 3.5(d), 4.6. The deed of trust here identifies Golf 17 Savings Banks as the original lender, ECF No. 16-1 at ¶ C, and MERS as a 18 “separate corporation that is acting solely as a nominee for Lender and Lender’s 19 successors and assigns.” Id. at ¶ E. Defendants Nationstar and Deutsche Bank were 20 later identified as assignees of the loan. ECF Nos. 16-3, 16-4. 21 It is not clear what provision of the Deed of Trust Act Plaintiff alleges 22 Defendants violated. However, it is clear that these allegations also fail to state a 23 claim upon which relief can be granted. Plaintiff alleges no facts from which 24 Defendants’ liability could be inferred. Accordingly, the Court dismisses this 25 claim. 26 // 27 // 28 ORDER GRANTING DEFENDANTS DEUTSCHE BANK AND 1 5. Whether to Dismiss with Leave to Amend 2 Finally, the Court considers whether Plaintiff should be given leave to 3 amend his complaint to cure the deficiencies discussed above. Defendants request 4 that this matter be dismissed without leave to amend and with prejudice. Plaintiff 5 did not respond to the motion to dismiss, so it is difficult to assess whether there 6 are facts that could be alleged to support his claims. The Court finds that 7 amendment here would likely be futile. In addition, this is at least the third case 8 brought by Plaintiff against these Defendants to enjoin the foreclosure of the 9 property. Any time given to amend the Complaint would likely cause undue delay 10 and prejudice to the opposing parties. Therefore, the claims against Defendants 11 Deutsche Bank and Nationstar are dismissed with prejudice and without leave to 12 amend. 13 Accordingly, IT IS HEREBY ORDERED: 14 1. Defendants Deutsche Bank and Nationstar’s Motion to Dismiss for 15 Failure to State a Claim, ECF No. 15, is GRANTED. 16 2. The claims against Defendants Nationstar Mortgage LLC, d/b/a Mr. 17 Cooper, and Deutsche Bank National Trust Company are dismissed in their 18 entirety with prejudice and without leave to amend. 19 // 20 // 21 // 22 // 23 // 24 // 25 // 26 // 27 // 28 ORDER GRANTING DEFENDANTS DEUTSCHE BANK AND 1 3. Defendant Quality Loan Services of Washington is dismissed pursuant to 2|| the Stipulation of Non-Participation, ECF No. 5-1 at 9. 3 IT IS SO ORDERED. The District Court Clerk is hereby directed to enter this Order, to provide copies to counsel, and close the file. 5 DATED this 26th day of August 2020.

@.... Shockey ec toar 10 Stanley A. Bastian Chief United States District Judge 12 13 14 15 16 17 18 19 20 21 22) 23 24 25 26 27 28 ORDER GRANTING DEFENDANTS DEUTSCHE BANK AND NATIONSTAR’S MOTION TO DISMISS FOR FAILURE TO STATE A