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Linkhart v. US Bank National Association as Trustee for Wachovia Mortgage Loan Trust 2006-ALT1


May 17, 2010


The opinion of the court was delivered by: Honorable Janis L. Sammartino United States District Judge


Presently before the Court is Defendants America's Servicing Company, Mortgage Electronic Registration Systems, Inc., and U.S. Bank National Assocaition's motion to dismiss. (Doc. No. 5.) Also before the Court are Plaintiff's opposition (Doc. No. 7) and Defendants' reply. (Doc. No. 8.) After consideration of the parties' arguments and the relevant law, the Court GRANTS Defendants' motion.


Plaintiff Beverly K. Linkhart "obtained a loan from Defendant Wachovia in the sum of $256,000.00" on September 14, 2006. (Compl. ¶ 12.) This loan "was for Plaintiff's personal use." (Id. ¶ 11.) On the same day "Plaintiff executed a deed of trust purporting to secure the amounts set forth in the Promissory Note" and designating "Defendant MERS . . . as the 'beneficiary.'" (Id. ¶¶ 13--14.) On "November 30, 2009, Defendant NDEX purporting to act as agent for the beneficiary under the Deed of Trust caused to be recorded a Notice of Default and Election to Sell Under Deed of Trust." (Id. ¶ 15.) On March 1, 2010, Defendant NDEX "acting as the alleged duly appointed Trustee under and pursuant to the Deed of Trust caused to be recorded a Notice of Trustee's Sale." (Id. ¶ 16.)

Plaintiff appears to have filed this action on March 22, 2010 in San Diego Superior Court. (Compl. at 8.) She sets forth three causes of action, (1) for declaratory relief, (2) for quiet title, and (3) for an injunction, and seeks damages, costs, attorney's fees anb an injunction against foreclosure. (Id. at 5--8.) Defendants removed the case to this Court on April 1, 2010. (Doc. No. 1.)


Federal Rule of Civil Procedure 12(b)(6) permits a party to raise by motion the defense that the complaint "fail[s] to state a claim upon which relief can be granted," generally referred to as a motion to dismiss. The Court evaluates whether a complaint states a cognizable legal theory and sufficient facts in light of Federal Rule of Civil Procedure 8(a), which requires a "short and plain statement of the claim showing that the pleader is entitled to relief." Although Rule 8 "does not require 'detailed factual allegations,' . . . it [does] demand[] more than an unadorned, the-defendant-unlawfully-harmed-me accusation." Ashcroft v. Iqbal, -- US - , 129 S.Ct. 1937, 1949 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). In other words, "a plaintiff's obligation to provide the 'grounds' of his 'entitle[ment] to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Twombly, 550 U.S. at 555 (citing Papasan v. Allain, 478 U.S. 265, 286 (1986)). "Nor does a complaint suffice if it tenders 'naked assertion[s]' devoid of 'further factual enhancement.'" Iqbal, 129 S.Ct. at 1949 (citing Twombly, 550 U.S. at 557).

"To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Id. (quoting Twombly, 550 U.S. at 570); see also Fed. R. Civ. P. 12(b)(6). A claim is facially plausible when the facts pled "allow[] the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 129 S.Ct. at 1949 (citing Twombly, 550 U.S. at 556). That is not to say that the claim must be probable, but there must be "more than a sheer possibility that a defendant has acted unlawfully." Id. Facts "'merely consistent with' a defendant's liability" fall short of a plausible entitlement to relief. Id. (quoting Twombly, 550 U.S. at 557). Further, the Court need not accept as true "legal conclusions" contained in the complaint. Id. This review requires context-specific analysis involving the Court's "judicial experience and common sense." Id. at 1950 (citation omitted). "[W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged-but it has not 'show[n]'-'that the pleader is entitled to relief.'" Id.



Plaintiff's cause of action for declaratory relief raises two issues: (1) the right of Defendant Mortgage Electronic Registration System, Inc. (MERS) to foreclose, and (2) "whether the loan . . . has been split from the security interest represented by the Deed of Trust, thereby rendering the loan unsecured as a matter of law." (Compl. ¶ 18.) The gravamen of these allegations, as the Court reads them, is that MERS is not permitted to foreclose because it does not possess the note. The Court finds that this claim lacks merit and must be DISMISSED.

The Complaint offers almost no factual allegations on this cause of action. Its most relevant factual assertions are that "Defendant MERS is designated as the 'beneficiary' under the Deed of Trust and Defendant Wachovia is designated as the 'Lender.'" (Compl. ¶ 14.) This does not satisfy Plaintiff's obligation to allege sufficient facts such that their claim is plausible on its face. Iqbal, 129 S.Ct. at 1949. Such a defect is enough to merit dismissal of this claim. However, Plaintiff's legal argument is without merit and will therefore also be addressed.

California "Civil Code sections 2924 through 2924k provide a comprehensive framework for the regulation of a non-judicial foreclosure sale pursuant to a power of sale contained in a deed of trust." Moeller v. Lien, 25 Cal. App. 4th 822, 830 (1994). Under section 2924(a)(1), allows a "trustee, mortgagee, or beneficiary, or any of their authorized agents" to begin the non-judicial foreclosure process. Cal. Civ. Code § 2924(a)(1); see also Huestis v. Indymac Fed. Bank, 2010 WL 1416714, at *6 (E.D. Cal. 2010).

The complained of action here is a non-judicial foreclosure. (See Compl. ¶¶ 15--16; Opp. at 2.) The Complaint, Plaintiff's opposition to this motion, and the copy of the Deed of Trust submitted by Plaintiff all state that MERS was designated as the beneficiary under the Deed of Trust. (Compl. ¶ 14; Opp. at 6; Doc. No. 1, Ex. A at 25.) Moreover, "[c]courts have consistently found that MERS does in fact have standing to foreclose as the nominee of the lender." Morgera v. Countrywide Home Loans, Inc., 2010 WL 160348, at *8 (E.D. Cal. 2010) (citing Trent v. Mortgage Elec. Registration Sys., Inc., 288 Fed. Appx. 571 (11th Cir. 2008); Mortgage Elec. Registration Sys., Inc. v. Azize, 965 So. 2d 151 (Fla. App. 2 Dist. 2007); Mortgage Elec. Registration Sys., Inc. v. Revoredo, 955 So. 2d 33 (Fla. App. 3 Dist. 2007); In re Huggins, 357 B.R. 180 (Bankr. D. Mass. 2006); In re Sina, No. A06-200, 2006 WL 2729544 (Minn. Ct. App. 2006); Mortgage Elec. Registration Sys., Inc. v. Ventura, 2006 WL 1230265 (Conn. Super. Ct. April 20, 2006); Mortgage Elec. Registration Sys., Inc. v. Leslie, 2005 WL 1433922 (Conn. Super. Ct. 2005)); see also Adams v. SCME Mortgage Bankers, Inc., 2009 WL 1451715, at *7 (E.D. Cal. 2009); Swanson v. EMC Mortgage Corp., 2009 WL 3627925, at *10 (E.D. Cal. 2009). This would seem to put the matter at an end, conclusively demonstrating that MERS is entitled to foreclose on Plaintiff's property.

However, Plaintiff attempts to argue otherwise. According to her, "a 'person holding only a note lacks the power to foreclose because it lacks the security, and a person holding only a deed of trust suffers no default because only the holder of the note is entitled to payment on it.'"*fn1 (Opp. at 7 (citing In re Hawkins, 2009 WL 901766, at *4 (Bankr. D. Nev. 2009)).) Further, Plaintiff argues that the Court must look beyond section 2924 because in order to foreclose "the party must also demonstrate that it is a 'person entitled to enforce' the Deed of Trust under Cal. Comm. Code § 3301" because that section "governs negotiable instruments such as promissory notes." (Id. (emphasis in original).) Section 3301, according to Plaintiff, allows "only the holder of a negotiable instrument . . . [to] enforce that negotiable instrument." (Id.) And therefore Defendant MERS must show that it is the holder of the note and entitled to enforce that note. (Id. at 7--8.)

This argument is specious. As courts have unanimously found, section 3301 is inapplicable in the context of foreclosure actions. "[S]section 3301 reflects California's adoption of the Uniform Commercial Code, and does not govern non-judicial foreclosures, which is governed by California Civil Code section 2924." Webb v. Indymac Bank Home Loan Servicing, 2010 WL 121084, at *5 (E.D. Cal. 2010) (citing Gaitan v. Mortgage Elec. Registration Sys., 2009 WL 3244729, at *10 (C.D. Cal. 2009)). Section 2924 is a "comprehensive" framework and, in the arena of non-judicial foreclosure, is exhaustive. Moeller, 25 Cal. App.4th at 834; see also Morgera, 2010 WL 160348, at *8; Adams, 2009 WL 1451715, at *7; Champlaie v. BAC Home Loans Servicing, LP, 2009 WL 3429622, at *12--*14 (E.D. Cal. 2009). Because of the exhaustive nature of these non-judicial foreclosure statutes, the Court cannot simply import additional requirements from other, unrelated statutes. Therefore, since section 2924does not require Defendant MERS to demonstrate that it is in possession of the note in order to foreclose, this claim is DISMISSED WITH PREJUDICE.


Plaintiff's second claim is for quiet title. (Compl. ¶¶ 21--25.) She alleges that she "is . . . the owner of a fee simple interest in and to" her real property. (Id. ¶ 22.) She also states that the relevant "adverse claim to the title . . . is the claim to a security interest . . . by the Defendants." (Id. ¶ 24.)

Quiet title claims may establish title against adverse claims to real property or any interest therein. Cal. Civ. Proc. Code § 760.020. A complaint alleging such a claim must be verified and include (1) a description of the property; (2) the basis for plaintiff's title; (3) the adverse claim or claims to title; (4) the date as of which the determination is sought; and (5) a prayer for determination of plaintiff's title against the adverse claims. Id. § 761.020.

Defendants argue that this claim should be dismissed because "Plaintiff has not alleged (and cannot allege) . . . tender" of the amount of her indebtedness. (Memo. ISO Motion at 6.) Plaintiff's opposition does not address the quiet title issue.

In light of both the law and Plaintiff's failure to oppose, dismissal is proper. First, the Complaint does not state a claim for quiet title. Plaintiff does not address facts going to all five elements of a quiet title claim. Second, the Complaint is not verified as required under section 760.020. And finally, Plaintiff has not alleged her ability to tender her indebtedness. California law holds that Plaintiff cannot quiet title in his property "without discharging his mortgage debt. The cloud upon his title persists until the debt is paid." Aguilar v. Bocci, 114 Cal. Rptr. 91, 92 (Cal. Ct. App. 1974) (citing Burns v. Hiatt, 87 P. 196, 197 (Cal. 1906)); see also Distor v. US Bank NA, 2009 WL 3429700, at *6 (N.D. Cal. 2009) ("[P]laintifff has no basis to quiet title without first discharging her debt."). Given these flaws, the Court DISMISSES WITHOUT PREJUDICE Plaintiff's second cause of action.


The third cause of action seeks an injunction against the Defendants. (Compl. ¶¶ 26--29.) Plaintiff alleges that Defendants' alleged conduct caused damage to Plaintiff and "will continue to cause great and irreparable harm to Plaintiff if not restrained and enjoined by an Order of this Court." (Id. ¶¶ 27--28.) The specific harm cited is that her "Real Property will be sold at Trustee's Sale." (Id. at 28.)

"[A]n injunction is a remedy, not a cause of action." Roberts v. L.A. County Bar Ass'n, 105 Cal. App. 4th 604, 618 (2003) (citing McDowell v. Watson, 59 Cal. App. 4th 1155, 1159 (1997)). As such, a plaintiff's ability to obtain an injunction depends on the existence of a cause of action allowing such relief. Lopez v. Wash. Mutual Bank, F.A., 2010 WL 1558938, at *9 (E.D. Cal. 2010). Since this complaint contains no viable causes of action, this claim must be DISMISSED WITH PREJUDICE.*fn2


For the reasons stated, Defendants' motion is GRANTED. Plaintiff's first and third causes of action are DISMISSED WITH PREJUDICE and her second cause of action is DISMISSED WITHOUT PREJUDICE. If Plaintiff wishes to amend her complaint, she MAY FILE her first amended complaint within twenty-one days of the date this Order is electronically docketed.


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