Rahman v. GreenPoint Mortgage Funding Inc

• Court: District Court, W.D. Washington
• Decided: August 5, 2019
• Docket: 2:19-cv-00530
• Status: Unknown

Opinion

5 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON 6 AT SEATTLE

7 IBRAHIM RAHMAN, NO. 2:19-cv-530

8 Plaintiff, ORDER GRANTING MOTIONS

TO DISMISS FILED BY 9 v. DEFENDANTS (1)GREENPOINT

10 GREENPOINT MORTGAGE FUNDING, INC, MORTGAGE; (2) NATIONSTAR, MERRILL LYNCH & COMPANY, FREDDIE FREDDIE MAC, AND MERS; 11 MAC AS TRUSTEE FOR SECURITIZED AND (3) BANK OF AMERICA TRUST FREDDIE MAC MULTICLASS AND MERRILL LYNCH 12 CERTIFICATES SERIES 3305 TRUST, NATIONSTAR MORTGAGE, LLC, BANK 13 OF AMERICA, NA, MORTGAGE ELECTRONIC REGISTRATION SYSTEM 14 ("MERS"), AND DOES 1 THROUGH 100 INCLUSIVE, et al., 15 Defendants. 16 I. INTRODUCTION 17 This matter comes before the Court on the three separate Motions to Dismiss filed, 18 respectively, by Defendants (1) Greenpoint Mortgage Funding, Inc. (“Greenpoint”) (Dkt No. 10); 19 (2) Nationstar Mortgage LLC (“Nationstar”), Federal Home Loan Mortgage Corporation, as 20 Trustee for Freddie Mac Seasoned Credit Risk Transfer Trust, Series 2017-2 (“Freddie Mac”), and 21 Mortgage Electronic Registration Systems, Inc. (“MERS”) (Dkt. No. 24); and (3) Defendants Bank 22 of America, N.A. (“Bank of America”) and Merrill Lynch, Pierce, Fenner & Smith, Inc. (“Merrill 23 Lynch”) (Dkt. No. 43). For the following reasons, the Court grants all three motions and dismisses 24

ORDER GRANTING DEFENDANTS’ 25 2 II. FACTUAL AND PROCEDURAL BACKGROUND1

3 On March 21, 2007, Plaintiff executed a promissory note (“Note”) for $360,000, in 4 consideration for a loan (the “Loan”) from Greenpoint, for the purchase of real property located at 5 21811 45th Place S., in Kent, Washington (the “Property”). Compl., ¶ 3; see also Ex A to Request 6 for Judicial Notice, Dkt. No. 43-1. Plaintiff also executed at that time a Deed of Trust (“Deed of 7 Trust”) securing the Note and encumbering the Property. Id., ¶ 31; See also Ex. A to Declaration of 8 Hunter Abell (“Abell Decl.”). MERS was named as beneficiary and nominee for Greenpoint, its 9 successors and assigns. Id. 10 In November 2008, MERS assigned its interest in the Deed of Trust to Greenpoint, which 11 in May 2011, assigned its interest in the Deed of Trust to BAC Home Loan Servicing, LP (“BAC”).

12 Exs. B & C to Declaration of Christopher Varallo (“Varallo Decl.”). 13 In November 2012, Plaintiff executed a “Home Affordable Modification Agreement,” 14 representing that he was in default or that default was imminent. Compl. ¶ 41; Varallo Decl., Ex. 15 D. That agreement, with Nationstar as Lender, modified the terms of the original Loan, setting forth 16 a new principal balance of $453,069. Id. 17 In December 2018, Bank of America, successor to BAC, assigned its interest in the Deed 18 of Trust to Freddie Mac. Id., Ex. E. On January 8, 2019, Freddie Mac authorized a Notice of Default, 19 indicating that Plaintiff had ceased making payments on the Loan in July 2018. Id., Ex. G. The 20 Notice of Trustee’s Sale indicated that as of February 2019 Plaintiff was $17,068.12 in arrears on 21

22 1The Court relies on factual allegations in the Complaint, taken as true for purposes of this motion. The Court may also consider documents whose “authenticity ... is not contested” if “the plaintiff's complaint necessarily relies” on 23 them, and may take judicial notice of matters of public record. Fed. R. Evid. 201; see Lee v. City of Los Angeles, 250 F.3d 668, 688–89 (9th Cir. 2001), citations omitted. 24

ORDER GRANTING DEFENDANTS’ 25 2 On or about February 13, 2019, Plaintiff, proceeding pro se, filed the instant lawsuit in King

3 County Superior Court, which Defendants removed to this Court based on diversity of the parties. 4 Dkt. No. 1. On June 10, 2019, Plaintiff filed a motion for a Temporary Restraining Order (“TRO”), 5 seeking an injunction of the foreclosure sale of the Property, scheduled to take place in June 2019. 6 The Court granted that motion pending resolution of the instant motions. 7 On April 18, 2019, Greenpoint filed a motion to dismiss. On May 17, 2019, Nationstar, 8 Freddie Mac and MERS filed a motion to dismiss. And on July 3, 2019, Bank of America and 9 Merrill Lynch filed a motion to dismiss. Taken together, these three motions seek dismissal of all 10 claims against all named Defendants, with prejudice and without leave to amend. 11 Plaintiff failed to file a response to either of the first two motions to dismiss by the respective

12 deadlines. Instead, on June 21, 2019—approximately six weeks after his first response was due, 13 and two weeks after the second was due—Plaintiff filed a motion to extend, requesting until July 14 1, 2019 to respond to the motions. Dkt No. 39. Plaintiff’s motion to extend the deadlines was 15 untimely and set forth no justification for having missed the deadlines to respond to the motions to 16 dismiss.2 17 On July 11, 2019, Plaintiff filed a “Response to Defendant’s Motion to Dismiss” 18 (“Response”). Dkt. No. 44. It is not clear from the response which of the three motions to dismiss 19 Plaintiff is responding to, though the Court presumes it is a response to all three. In his Response, 20 Plaintiff essentially concedes that his Complaint fails to state a claim on which relief can be granted; 21 seeks leave to amend his Complaint by August 2, 2019; and raises an argument concerning a

22 23 2 In acknowledgment of Plaintiff’s pro se status, the Court GRANTS Plaintiff’s Motion for Extension of Time, Dkt. 24 No. 21. In the future, no untimely extensions of time will be granted.

ORDER GRANTING DEFENDANTS’ 25 2 replies. Dkt. Nos. 45, 46, 47.

3 Having reviewed the Complaint, the three Motions to Dismiss, Plaintiff’s Response, and the 4 Defendants’ Replies to that Response, and all exhibits filed therewith, the Court finds and rules as 5 follows. 6 III. DISCUSSION 7 A. Standard on Motion to Dismiss 8 On a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), the Court must 9 determine whether the plaintiff has alleged sufficient facts to state a claim for relief which is 10 “plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662 (2009), quoting Bell Atlantic Corp. v. 11 Twombly, 550 U.S. 544, 570 (2007). The court construes the complaint in the light most favorable

12 to the non-moving party, accepting all well-pleaded allegations of material fact as true and drawing 13 all reasonable inferences in favor of the plaintiff. See Livid Holdings Ltd. v. Salomon Smith Barney, 14 Inc., 416 F.3d 940, 946 (9th Cir. 2005); Wyler Summit P’ship v. Turner Broad. Sys., Inc., 135 F.3d 15 658, 661 (9th Cir. 1998). The court, however, need not accept as true a legal conclusion presented 16 as a factual allegation. Iqbal, 556 U.S. at 678. Furthermore, the Court is “not required to accept as 17 true conclusory allegations which are contradicted by documents referred to in the complaint.” 18 Steckman v. Hart Brewing, Inc., 143 F.3d 1293, 1295–96 (9th Cir. 1998). 19 If a claim is based on a proper legal theory but fails to allege sufficient facts, the plaintiff 20 should be afforded the opportunity to amend the complaint before dismissal. Keniston v. Roberts, 21 717 F.2d 1295, 1300 (9th Cir.1983). If the claim is not based on a proper legal theory, the claim

22 should be dismissed. Id. 23 24

ORDER GRANTING DEFENDANTS’ 25 Granted 2 In the Complaint, Plaintiff asserts six “Causes of Action:” Lack of Standing/Wrongful 3 Foreclosure, Breach of Contract, Quiet Title, Slander of Title, Temporary Restraining Order, and 4 Declaratory Relief. Both the “General Allegations” and the outlined Causes of Action in the 5 Complaint are verbose, opaque, and vague where specificity is required, as in the allegations of 6 fraud. See Fed. R. Civ. P. 9(b); see, e.g., Compl. ¶ 46 (“Defendants’ actions in the processing, 7 handling and attempted foreclosure of this §1031-Exchange involved numerous fraudulent, false, 8 deceptive and misleading practices, including, but not limited to, violations of State laws designed 9 to protect borrowers.”). It is nearly impossible to ascertain what claims are being made against 10 which Defendants, and on what grounds. For this reason alone, dismissal of the Complaint would 11 be appropriate. See Fed. R. Civ. P. 8(a)(2) (requiring “a short and plain statement of the claim 12 showing that the pleader is entitled to relief”); Twombly, 550 U.S. at 546 (“While a complaint 13 attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's 14 obligation to provide the “grounds” of his “entitle[ment] to relief” requires more than labels and 15 conclusions, and a formulaic recitation of a cause of action's elements will not do.”) (citation 16 omitted). 17 For this reason also, the Court will evaluate the sufficiency of all the claims together. At the 18 outset, it should be noted that Plaintiff does not dispute that he obtained the Loan, or that he signed 19 any of the attendant documents. He does not claim that he has paid off the Loan, or even that he is 20 up to date on his payments. Instead, the gravamen of the Complaint, and the argument underlying 21 all claims, appears to be that the securitization process—including assignments of the Note and/or 22 Deed of Trust, and/or alleged fraud or deficiencies in these transactions—somehow relieved 23 Plaintiff of his obligation to continue to make payments on the Loan. 24

ORDER GRANTING DEFENDANTS’ 25 2 claim on which relief may be granted and must dismiss the Complaint. Plaintiff’s theory that

3 securitization of his mortgage somehow nullified the underlying debt obligation has been routinely 4 rejected in this district (and beyond). See, e..g, Young v. Quality Loan Serv. Corp., No. C14- 5 1713RSL, 2015 WL 12559901, at *1 (W.D. Wash. July 7, 2015), citing Andrews v. Countrywide 6 Bank, NA, 95 F. Supp. 3d 1298, 1301 (W.D. Wash. 2015); Cuddeback v. Bear Stearns Residential 7 Mortg. Corp., C12-1300RSM, 2013 WL 5692846, at *3 (W.D. Wash. Sept. 10, 2013); McCarty v. 8 U.S. Bank, N.A., C11-5078RBL, 2012 WL 1751791, at *2 (W.D. Wash. May 16, 2012); Robinson 9 v. Wells Fargo Bank Nat’l Ass’n, 2017 WL 2311662, at *4 (W.D. Wash. May 25, 2017) 10 (“securitization and any related assignments do not ordinarily constitute a defense to foreclosure 11 under Washington law unless the borrower shows a genuine risk of paying the same debt twice.”).

12 To the extent that Plaintiff claims that his loan was “paid in full” when Greenpoint assigned the 13 mortgage to Merrill Lynch, such argument is “illogical and unsupported,” and must be dismissed. 14 Andrews, 95 F. Supp. 3d at 1300; see Compl. ¶¶ 58-62. 15 Nor do Plaintiff’s other averments support a claim upon which relief can be granted. To the 16 extent that Plaintiff is arguing that Defendants somehow committed fraud or failed to perfect a 17 security interest in his Property, thus relieving him of his repayment obligation, this claim also fails. 18 See, e.g., Compl. ¶ 45 (Defendants “do not have an equitable right to foreclose on the Property 19 because Defendants, and each of them, have failed to perfect any security interest” in the Property.). 20 First, Plaintiff lacks standing to assert such a claim, even if it were valid. See, e.g., Ukpoma v. U.S. 21 Bank Nat. Ass’n, 2013 WL 1934172, *3 (E.D. Wash. May 9, 2013) (“Even assuming for the sake

22 of argument that the assignments [of a deed of trust] were fraudulently executed, Plaintiff, as a third 23 party, lacks standing to challenge them.”); Borowski v. BNC Mortg., Inc., 2013 WL 4522253 (W.D. 24

ORDER GRANTING DEFENDANTS’ 25 2 the allegations in his Complaint fall woefully short of the required specificity of Fed. R. Civ. P.

3 9(b). It is impossible for the Court—or Defendants—to ascertain what actions, committed by which 4 party, constituted fraud. For this reason as well, his claims fail. Finally, the only factual allegations 5 that the Court can discern concerning the failure to “perfect a security interest” in the Property are 6 that Defendants failed to file a “UCC-1 financing statement.” See Pl.’s Resp., Dkt. No. 44. This 7 position presupposes that the filing of a UCC-1 financing statement is required under these 8 circumstances to give notice of an interest in real property, which it is not. See, e.g, Carbon v. 9 Spokane Closing and Escrow, Inc., 147 P.3d 605 (2006); United States v. Neal, 776 F.3d 645, 649 10 n.1 (9th Cir. 2015) (“A UCC-1 financing statement is a standardized legal form filed by a creditor 11 giving notice of an interest in the personal property of a debtor.”) (emphasis added).

12 Plaintiff also claims that the Note and Deed of Trust have been “split,” thereby relieving 13 him of his obligations. See, e.g., Compl. ¶ 54. This unsupported legal theory has also been roundly 14 and uniformly rejected. See, e.g., Bavand v. OneWest Bank FSB, No. C12–0254JLR, 2013 WL 15 1208997, at *2 (W.D. Wash. Mar. 25, 2013) (“[T]he “split the note” theory - the argument that if 16 ownership of a deed of trust is split from ownership of the underlying promissory note, one or both 17 of those documents becomes unenforceable - has been rejected by the Washington Supreme Court, 18 as well as the Ninth Circuit, which concluded that such a theory “has no sound basis in law or 19 logic”) citing Cervantes v. Countrywide Home Loans, Inc., 656 F.3d 1034 (2011); Bain v. 20 Metropolitan Mortg. Grp., Inc., 175 Wn. 2d 83 (2012). 21 What is plain and undisputed is that Plaintiff stopped making payments on the Loan over a

22 year ago; that a balance of over $350,000 remains owing on the Loan, as modified; and that Plaintiff 23 is well over $17,000 behind in his payments. Varallo Decl., Exs. G & I. These facts are fatal to all 24

ORDER GRANTING DEFENDANTS’ 25 2 favor of a pro se plaintiff, it is not required (or allowed) to permit a party to proceed to the discovery

3 stage based on a complaint wholly lacking in legal merit. Failure to state a claim is not a 4 “technicality” as Plaintiff claims; it the very basis for a Fed. R. Civ. P. 12(b)(6) motion to dismiss. 5 Defendants’ Motions to Dismiss are granted. 6 C. Plaintiff is Denied Leave to Amend 7 In his Response to the Motions, Plaintiff requests an opportunity to amend his complaint, 8 which “shall be freely given when justice so requires.” Fed.R.Civ.P. 15(a). On a 12(b)(6) motion, 9 “a district court should grant leave to amend, . . . unless it determines that the pleading could not 10 possibly be cured by the allegation of other facts.” Cook, Perkiss & Liehe v. N. Cal. Collection 11 Serv., 911 F.2d 242, 247 (9th Cir.1990).

12 The Court should not dismiss a pro se complaint without leave to amend unless “it is 13 absolutely clear that the deficiencies of the complaint could not be cured by amendment.” Akhtar 14 v. Mesa, 698 F.3d 1202, 1212 (9th Cir. 2012), quoting Schucker v. Rockwood, 846 F.2d 1202, 1203 15 (9th Cir. 1988). Nevertheless, where the facts are not in dispute, and the sole issue is whether there 16 is liability as a matter of substantive law, the court may deny leave to amend. Albrecht v. Lund, 845 17 F.2d 193, 195–96 (9th Cir.1988). Here, the facts are not in dispute; it is the legal insufficiency of 18 Plaintiff’s arguments that dooms his claims. Furthermore, in requesting leave to amend, Plaintiff 19 does not identify any additional facts or legal theories that could save his existing claims or give 20 rise to a viable cause of action. He promises only that an amended complaint would “include fraud” 21 and seek additional remedies for “backpayments, interest and damages.” Pl. Resp. at 2, Dkt. No.

22 44. Plaintiff has also failed to provide a copy of the proposed amended pleading for the Court’s 23 review, as required by LCR 15. For these reasons, the Court finds that an amendment would be 24

ORDER GRANTING DEFENDANTS’ 25 2 IV. CONCLUSION

3 For the foregoing reasons, the Court hereby GRANTS all three pending Motions to Dismiss. 4 The Temporary Restraining Order entered June 20, 2019 (Dkt. No. 37) is hereby lifted, and the 5 Clerk is authorized and directed to draw a check on the funds deposited in the registry of this court 6 in the principal amount of $500 plus all accrued interest, minus any statutory users fees, payable to 7 Ibrahim Rahman and mail or deliver the check to Ibrahim Rahman. 8 9 DATED this 5th day of August, 2019. 10 A 11 12 B arbara Jacobs Rothstein U.S. District Court Judge 13 14 15 16 17 18 19 20 21 22 23 24

ORDER GRANTING DEFENDANTS’ 25