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Wurtzberger v. Resmae Mortgage Corp.

April 29, 2010

THOMAS WURTZBERGER, PLAINTIFF,
v.
RESMAE MORTGAGE CORPORATION; AMERICA'S SERVICING COMPANY; MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC.; HSBC BANK USA, AS TRUSTEE FOR ACE SECURITIES CORP. HOME EQUITY LOAN TRUST, SERIES 2007-HE3; NDEX WEST, LLC, DEFENDANTS.



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

ORDER GRANTING DEFENDANTS' MOTIONS TO DISMISS

On November 2, 2009, Defendants Wells Fargo Bank, N.A. dba America's Servicing Company ("Wells Fargo"), Mortgage Electronic Registration Systems, Inc. ("MERS"), and HSBC Bank, USA, as trustee for Ace Securities Corp. Home Equity Loan Trust, Series 2007-HE3, ("HSBC") filed a motion under Federal Rule of Civil Procedure ("Rule") 12(b)(6) in which they seek dismissal of Plaintiff's First Amended Complaint ("FAC") without leave to amend. Plaintiff did not oppose the motion.

On November 5, 2009, Defendant NDEx West, LLC ("NDEx") filed a motion under Rule 12(b)(6), in which it seeks dismissal of Plaintiff's claims with prejudice. NDEx moves in the alternative for summary judgment under Rule 56, based on a conclusory argument which is not reached because of the below ruling on the dismissal motion. Plaintiff opposed NDEx's motion and requested leave to amend his claims against NDEx. (Opp'n 13:15-17.)

Further, on November 24, 2009, Defendant Resmae filed a verified "Suggestion of Bankruptcy," informing the Court that on February 12, 2007, Defendant Resmae Mortgage Corporation ("Resmae") filed for bankruptcy, and that on June 5, 2007, the United States Bankruptcy Court for the District of Delaware confirmed a "Second Amended Plan of Reorganization of [Resmae]," ("Plan") which "discharged... [Resmae] from any Claim that arose before [that date], to the fullest extent provided by... the Bankruptcy Code." (Sugg. of Bankruptcy 2:22-25.) The Plan contains a "permanent injunction against any person commencing or continuing any action... to collect, offset, or recover any claim...." against Resmae. (Id. 2:22-3:6.) Resmae argues: "Given the permanent injunction... Resmae respectfully requests that it be dismissed from this action." (Id. 3:5-6.) Plaintiff did not respond to this filing.

This permanent injunction enjoins Plaintiff's claims against Resmae. Therefore, Resmae's unopposed request to be dismissed from this action is granted.

I. BACKGROUND

Plaintiff alleges four claims in his FAC against all Defendants: (1) wrongful foreclosure for failing to properly assign the [ARN] and Deed of Trust; (2) wrongful foreclosure for failing to validly substitute a trustee; (3) rescission of foreclosure for failing to property assign the Deed of Trust; and (4) rescission of foreclosure for failing to validly substitute a trustee. (FAC ¶¶ 29-43.) Each claim concerns an ARN Plaintiff signed on October 2, 2006, in which Plaintiff agreed to pay Resmae $224,000.00, and which was secured by Plaintiff's residence ("Property") through a Deed of Trust. (Id. ¶¶ 9-10.) Plaintiff attached to the FAC the ARN, the Deed of Trust, and the Notice of Default and Election to Sell the Property, the Assignment of the Deed of Trust, the Notice of Trustee's Sale for the Property, and the Trustee's Deed Upon Sale of the Property. Plaintiff seeks damages, interest and reconveyance of the Property.

Plaintiff alleges in his FAC he "became behind on his mortgage payments in September[] 2007... [and]... attempted payment of all arrearage[] in November[] 2007 [, but] [t]he check was returned and it was explained that Plaintiff had to go through the foreclosure process." (Id. ¶ 16.) "On December 4, 2007, a Notice of Default was filed against the Property" naming NDEx as the foreclosure trustee and "[o]n January 28, 2008, for value received, MERS assigned the Deed of Trust, and purported to assign the [ARN], to HSBC (the foreclosing beneficiary)...." (Id. ¶¶ 20-21.)

"On March 11, 2008, a Notice of Trustee's Sale was recorded against the Property" listing NDex as the trustee and "indicat[ing] that the sale would occur on March 26, 2008." (Id. ¶ 22.) Plaintiff alleges there was never a properly recorded substitution of NDex as the new trustee. (Id. ¶ 23.)

Plaintiff further alleges: "On November 4, 2008, NDEx conducted a trustee's sale of Plaintiff's [P]roperty on behalf of HSBC" and the "Trustee's Deed Upon Sale" indicates HSBC was the beneficiary and purchaser at the sale, but Plaintiff never received notice for the November 4, 2008, trustee's sale. (Id. ¶¶ 24-26.) The only notice of trustee's sale Plaintiff alleges he received was for the trustee's sale scheduled for March 25, 2008. (Id. ¶ 25.) Although Plaintiff alleges the trustee's sale was scheduled for March 25, 2008, the Notice of Trustee's Sale attached as Exhibit 5 to the FAC shows that the trustee's sale was actually scheduled for March 26, 2008.

II. LEGAL STANDARDS

When deciding a Rule 12(b)(6) dismissal motion, the Court "must... accept[] as true all facts alleged in the complaint, and draw[] all reasonable inferences in favor of the plaintiff." al-Kidd v. Ashcroft, 580 F.3d 949, 956 (9th Cir. 2009). "Conclusory allegations of law and unwarranted inferences[, however,] are insufficient to defeat a motion to dismiss for failure to state a claim." National Ass'n for Advancement of Psychoanalysis v. California Bd. of Psychology, 228 F.3d 1043, 1049 (9th Cir. 2000) (internal citations and quotations omitted).

Wells Fargo, MERS, HSBC, and NDEx (collectively "Defendants") request that judicial notice be taken of Plaintiff's FAC and/or certain documents attached to the FAC. These documents are the ARN, the Deed of Trust, the Notice of Default and Election to Sell, the Assignment of Deed of Trust, the Notice of Trustee's Sale, and the Trustee's Deed Upon Sale. Since "a plaintiff may attach a copy of a document to the complaint and incorporate it by reference; such a document become[s] a part of the pleading for all purposes." Reyes v. Department of Treasury, No. 1:09-cv-00319-LJO-SMS, 2009 WL 981604, at *2, n.1 (E.D. Cal. April 10, 2009)(referencing Fed.R.Civ.P. 10(c). Therefore, the referenced documents constitute part of the pleadings under the incorporation by reference doctrine.

Defendants also request that the Court take judicial notice of the publically recorded Substitution of Trustee. (Wells Fargo's Request for Judicial Notice ("RFJN") Ex. 2);(NDEx's RFJN Ex. 6). Defendant NDEx also requests that the Court take judicial notice of the publically recorded Grant Deed granting the Property to Plaintiff and his spouse as joint tenants ("Grant Deed"), as well as the publically recorded Inter-spousal Transfer Deed in which Plaintiff's ...


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