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Arlene Hensley v. the Bank of New York Mellon

May 27, 2011




On November 8, 2005, Plaintiff Arlene Hensley obtained a $270,000.00 loan from First Bank Mortgage ("First Bank") in order to finance the property located at 2404 Buckley Way, Modesto, CA 95358. The loan terms were set forth in a promissory note, which was secured by a deed of trust that was recorded on November 23, 2005 in Stanislaus County. The deed of trust identifies First Bank as the lender, Defendant Mortgage Electronic Registration Systems, Inc. ("MERS") as the beneficiary and First Land Trustee Corporation ("First Land") as the trustee.

On March 29, 2010, Defendant ReconTrust Company, N.A. ("ReconTrust"), acting as an agent for MERS, recorded a notice of default against Plaintiff in Stanislaus County. On April 7, 2010, a substitution of trustee and assignment of deed of trust was recorded in Stanislaus County in which MERS substituted ReconTrust as trustee in place of First Land and assigned the deed of trust to Defendant Bank of New York Mellon ("BNY Mellon"). Subsequently, ReconTrust filed a notice of trustee's sale that was recorded on July 7, 2010 in Stanislaus County.

Plaintiff, proceeding pro se, filed a Complaint on July 22, 2010. The Magistrate Judge dismissed the complaint for failure to state a claim with leave to amend on August 3, 2010. On August 30, 2010, Plaintiff filed a First Amended Complaint ("FAC") against BNY Mellon, MERS and ReconTrust. The Court dismissed the FAC with leave to amend on December 23, 2010.

On January 14, 2011, Plaintiff filed a Second Amended Complaint ("SAC") against BNY Mellon, MERS, ReconTrust and BAC Home Loans Servicing, LP ("BACHLS").*fn2 On February 4, 2011, Defendants filed a motion to dismiss the SAC pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. Plaintiff failed to file a timely opposition to Defendants' motion to dismiss. Instead, Plaintiff filed a motion for extension of time on March 11, 2011. The Court granted Plaintiff's motion, giving Plaintiff forty-five days to obtain legal representation to help file an opposition to Defendants' motion to dismiss. Plaintiff did not file an opposition within the forty-five day time period. For the reasons that follow, Defendants' motion to dismiss is granted.


Under Federal Rule of Civil Procedure 12(b)(6),a claim may be dismissed because of the plaintiff's "failure to state a claim upon which relief can be granted." Fed. R. Civ. P. 12(b)(6). A dismissal under Rule 12(b)(6) may be based on the lack of a cognizable legal theory or on the absence of sufficient facts alleged under a cognizable legal theory. Johnson v. Riverside Healthcare Sys., 534 F.3d 1116, 1121 (9th Cir. 2008); Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). In reviewing a complaint under Rule 12(b)(6), all allegations of material fact are taken as true and construed in the light most favorable to the non-moving party. Marceau v. Blackfeet Hous. Auth., 540 F.3d 916, 919 (9th Cir. 2008); Vignolo v. Miller, 120 F.3d 1075, 1077 (9th Cir. 1999). The Court is not required "to accept as true allegations that are merely conclusory, unwarranted deductions of fact, or unreasonable inferences." In re Gilead Scis. Sec. Litig., 536 F.3d 1049, 1056-57 (9th Cir. 2008); Sprewell v. Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 2001). As the Supreme Court has explained:

While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the 'grounds' of his 'entitlement to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do. Factual allegations must be enough to raise a right to relief above the speculative level, on the assumption that all the allegations in the complaint are true (even if doubtful in fact).

Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007).

To avoid a Rule 12(b)(6) dismissal, "a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face[.]" Telesaurus VPC, LLC v. Power, 623 F.3d 998, 1003 (9th Cir. 2010) (citations omitted). "In sum, for a complaint to survive a motion to dismiss, the non-conclusory 'factual content,' and reasonable inferences from that content, must be plausibly suggestive of a claim entitling the plaintiff to relief." Moss v. United States Secret Serv., 572 F.3d 962, 969 (9th Cir. 2009).

If a Rule 12(b)(6) motion to dismiss is granted, "[the] district court should grant leave to amend even if no request to amend the pleading was made, unless it determines that the pleading could not possibly be cured by the allegation of other facts." Doe v. United States, 58 F.3d 494, 497 (9th Cir. 1995). In other words, leave to amend need not be granted when amendment would be futile. Gompper v. VISX, Inc., 298 F.3d 893, 898 (9th Cir. 2002).


1. Wrongful Foreclosure

Plaintiff alleges that foreclosure was improper because MERS "could not be named or act in the capacity of a beneficiary" when it had no financial interest in the deed of trust. SAC at 4. Therefore, Plaintiff alleges that MERS' substitution of ReconTrust as trustee and MERS' assignment ...

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