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Gardner v. American Home Mortgage Servicing

February 10, 2010

KAREN GARDNER, PLAINTIFF,
v.
AMERICAN HOME MORTGAGE SERVICING, INC.; AMERICAN BROKERS CONDUIT; DEUTSCHE BANK NATIONAL TRUST COMPANY AS TRUSTEE FOR AMERICAN HOME MORTGAGE ASSETS TRUST 2007- MORTGAGE-BACKED PASS-THROUGH CERTIFICATES, SERIES 2007-1; T.D. SERVICE COMPANY; AHMSI DEFAULT SERVICES, INC.; MORTGAGE ELECTRONIC) REGISTRATION SYSTEMS, INC.; CYPRESS MORTGAGE GROUP, INC.; THEODORE L. FOWLER, STEVEN JAMES SAMUELSON AND VELMA WILSON, DEFENDANTS.



The opinion of the court was delivered by: Garland E. Burrell, Jr. United States District Judge

ORDER GRANTING AND DENYING IN PART DEFENDANTS' MOTION TO DISMISS*fn1

On October 2, 2009, Defendants American Home Mortgage Servicing, Inc. ("AHMSI") and AHMSI Default Services, Inc. ("AHMSI Default") (collectively, "Defendants") filed a motion under Federal Rule of Civil Procedure 12(b)(6) in which they seek an order dismissing the seven claims alleged against them in Plaintiff's first amended complaint. (Docket No. 42.) For the reasons stated below, Defendants' motion to dismiss is GRANTED and DENIED IN PART.

I. LEGAL STANDARD

A Rule 12(b)(6) motion "challenges a complaint's compliance with . . . pleading requirements." Champlaie v. BAC Home Loans Servicing, LP, No. S-09-1316 LKK/DAD, 2009 WL 3429622, at *1 (E.D. Cal. Oct. 22, 2009). A pleading must contain "a short and plain statement of the claim showing that the pleader is entitled to relief . . . ." Fed. R. Civ. P. 8(a)(2). The complaint must "give the defendant fair notice of what the [plaintiff's] claim is and the grounds upon which relief rests . . . ." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). Further, "[a] pleading that offers labels and conclusions or a formulaic recitation of the elements of a cause of action will not do. Nor does a complaint suffice if it tenders naked assertions devoid of further factual enhancement." Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009).

To avoid dismissal, the plaintiff must allege "only enough facts to state a claim to relief that is plausible on its face." Twombly, 550 U.S. at 547. "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 129 S.Ct. at 1949. Plausibility, however, requires more than "a sheer possibility that a defendant has acted unlawfully." Id. "When a complaint pleads facts that are merely consistent with a defendant's liability, it stops short of the line between possibility and plausibility of entitlement to relief." Id. (quotations and citation omitted).

In evaluating a dismissal motion under Rule 12(b)(6), the court "accept[s] as true all facts alleged in the complaint, and draw[s] all reasonable inferences in favor of the plaintiff." Al-Kidd v. Ashcroft, 580 F.3d 949, 956 (9th Cir. 2009). However, neither conclusory statements nor legal conclusions are entitled to a presumption of truth. See Iqbal, 129 S.Ct. at 1949-50.

Defendants request that judicial notice be taken of three documents related to the foreclosure of Plaintiff's property which are publically recorded with the Sacramento County Recorder: a November 21, 2008 Notice of Default and Election to Sell Under Deed of Trust, a February 23, 2009 Notice of Trustee's Sale, and a March 17, 2009 Trustee's Deed Upon Sale. Plaintiff objects to Defendants' request for judicial notice, arguing that at most, "the documents establish, date and location of filing and the identity of the filer" but "do not establish the Moving Parties' actions." (Opp'n 22:17-28.)

While, "as a general rule, a district court may not consider materials not originally included in the pleadings in deciding a Rule 12 motion . . . it may take judicial notice of matters of public record and may consider them without converting a Rule 12 motion into one for summary judgment." United States v. 14.02 Acres of Land, 547 F.3d 943, 955 (9th Cir. 2008) (quotations and citations omitted). However, to take judicial notice of a fact, it must be either "generally known within the territorial jurisdiction of the trial court" or "capable of accurate and ready determination by resort to sources whose accuracy cannot reasonably be questioned." Fed. R. Evid. 201(b). The documents submitted by Defendants are publically recorded documents of which judicial notice may properly be taken, and accordingly, those documents may be considered in deciding Defendants' dismissal motion. See Champlaie, 2009 WL 3429622, at *4 (finding judicial notice of recorded Notice of Default, Notice of Trustee's Sale, and Trustee's Deed Upon Sale proper). Plaintiff's argument in opposition to Defendants' request is insufficient to preclude the court from taking judicial notice of these documents.

II. BACKGROUND

On or about November 16, 2006, Plaintiff obtained a loan from American Brokers to refinance her residence located at 6610 Chesterbrock Drive in Elk Grove, California. (First Amended Compl. ("FAC") ¶ 38.) The "terms of the loan were [memorialized] in a promissory note which in turn was secured by a Deed of Trust on the property." (Id.) The Deed of Trust identified American Brokers as the lender and MERS as the beneficiary and nominee for the lender and the lender's assigns and successors. (Id. ¶¶ 38, 41.)

Plaintiff alleges that in 2006, defendant Velma Wilson told her she was a loan officer for defendant Cypress and "solicited [Plaintiff] to refinance her residence." (Id. ¶ 23.) Plaintiff's claims largely stem from her allegations that Wilson induced her into purchasing an unaffordable loan through misrepresentations, non-disclosure and fraudulent conduct. Specifically, Plaintiff alleges Wilson told Plaintiff that she could get her "the 'best deal' and the 'best interest rates' available on the market" and if the "loan ever became unaffordable" Plaintiff would be able to refinance. (Id. ¶¶ 25, 36.)

At some point, Plaintiff stopped making payments on her mortgage loan. On or about November 21, 2008, T.D. Service Company filed a Notice of Default on the loan and deed of trust with the Sacramento County Recorder. (Id. ¶ 52, Request for Judicial Notice ("RJN") Ex. A.) The Notice of Default provided that Deutsche Bank National Trust Company as Trustee for American Home Mortgage Assets Trust 2007-1 Mortgage-Backed Pass-Through Certificates, Series 2007-1, was the beneficiary and AHSMI Default the trustee under the Deed of Trust. (Id.) Plaintiff alleges that "this 'appointment' was fraudulent and void [and] [a]ccordingly, the Notice of Default was defective and void." (FAC ¶ 52.)

A Notice of Trustee's Sale was recorded on February 23, 2009 with the Sacramento County Recorder, stating that AHSMI Default, as the trustee, would sell Plaintiff's property at a public auction occurring on March 17, 2009. (RJN Ex. B.) The Notice of Trustee's Sale provided that the amount of the unpaid balance on Plaintiff's loan totaled $458.598.95. (Id.)

A Trustee's Deed Upon Sale was recorded on March 23, 2009. The Trustee's Deed Upon Sale states that AHMSI Default, as the trustee, sold Plaintiff's residence to Deutsche Bank National Trust Company for $365,925.93 on March 17, 2009. (RJN Ex. C.) At the time of sale, the amount of Plaintiff's unpaid debt with costs totaled $463,149.54. (Id.)

Plaintiff alleges that:

Defendants, and each of them, are not the real parties in interest, are not the legal trustee, mortgagee or beneficiary, nor are they authorized agents of the trustee, mortgagee or beneficiary, nor are they in possession of the Note, or holders of the Note, or non-holders of the Note entitled to payment, as required by the California Commercial Code §§ 3301 and 3309, and California Civil Code § 2924 et seq. ...


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