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Attilio Armeni v. America's Wholesale Lender

January 25, 2012


The opinion of the court was delivered by: David O. Carter United States District Judge


Before the Court is Defendants' Motion to Dismiss Plaintiffs' First Amended Complaint ("FAC") (Dkt. 11). After considering the moving, opposing, and replying papers thereon, and for the reasons stated below, the Court hereby GRANTS IN PART and DENIES IN PART the Motion. The Court also GRANTS Defendants' request for judicial notice.


Plaintiff Attilio Armeni, in his capacity as Trustee of the Armeni Family Trust dated July 23, 1993, filed this suit against America's Wholesale Lender ("AWL") in its capacity as the originating lender, Deutsche Bank National Trust Company ("Deutsche Bank") in its capacity as purported assignee of Plaintiff's deed of trust, and Bank of America, N.A., as successor by merger to BAC Home Loan Servicing, LP ("BAC"), in its capacity as purported mortgage servicer. On April 23, 2006, Plaintiff executed a $630,000 promissory note, secured by a deed of trust, to finance real property located in Westlake Village, California. Shortly after the origination of his loan, AWL sold the loan. (FAC ¶ 21.) Plaintiff alleges that his loan was never properly assigned and transferred into the HarborView Mortgage Loan Trust 2006-5 ("Harborview Trust"). (Id. ¶ 21.) As a result, Plaintiff concludes that the loan was never properly transferred to Deutsche Bank as Trustee of the Harborview Trust, as required by the Trust Agreement (aka the Pooling and Services Agreemen), thereby preventing Defendants from collecting on the note and enforcing the loan. (Id. ¶¶ 22-25.) Plaintiff believes that because the copy of the note and deed of trust provided by Defendants does not reflect an endorsement to Deutsche Bank, it was not properly transferred to Deutsche Bank and Deutsche Bank therefore has no right to collect on the loan. (Id. ¶ 34.)

Plaintiff alleges that Defendants attempted to cover up their failure to properly assign or transfer the mortgage by executing and filing a fraudulent Assignment of Deed of Trust. (Id. ¶ 27.) Plaintiff believes the Assignment was fraudulent because it was robo signed by a person who did not have the corporate authority to sign on behalf of MERS. (Id. ¶ 28.) Plaintiff does not dispute that he owes money on the loan, rather, he disputes the amount owed and asks the Court to determine the true creditor of his note and deed of trust. (Id. ¶ 32.)

Alternatively, if the Court finds an enforceable security interest in the note or deed of trust on behalf of any Defendant, Plaintiffs allege that Defendants have breached Section 2 of the deed of trust, as well as the implied covenant of good faith and fair dealing, by charging improper fees, miscalculating and misapplying payments to offset principal and interest, and that Defendants have committed various statutory violations, including the Fair Debt Collections Practices Act ("FDCPA") and the Real Estate Settlement Procedures Act ("RESPA"). (Id. ¶ 2.)


Under Rule 12(b)(6), a defendant may move to dismiss for failure to state a claim upon which relief can be granted. A plaintiff must state "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). A claim has "facial plausibility" if the plaintiff pleads facts that "allow[] the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, --- U.S. ----, 129 S. Ct. 1937, 1949 (2009).

In resolving a Rule 12(b)(6) motion under Twombly, the Court must follow a two-pronged approach. First, the Court must accept all well-pleaded factual allegations as true, but "[t]hread-bare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Id. Nor must the Court "accept as true a legal conclusion couched as a factual allegation." Id. at 1949-50 (quoting Twombly, 550 U.S. at 555). Second, assuming the veracity of well-pleaded factual allegations, the Court must "determine whether they plausibly give rise to an entitlement to relief." Id. at 1950. This determination is context-specific, requiring the Court to draw on its experience and common sense, but there is no plausibility "where the well pleaded facts do not permit the court to infer more than the mere possibility of misconduct." Id.


A. Authority to Collect on Loan

Plaintiff's theory, that Deutsche Bank has no authority to collect on his loan because the transfer of the loan into the Harborview Trust was not done in compliance with the terms of the Trust Agreement, does not give rise to legally cognizable claims. Plaintiff admits that he is not an investor of the Harborview Trust, or a third party beneficiary of the Trust Agreement, either of which might give him standing to challenge the breach of that agreement (Opp'n at 11). See Bascos v. Federal Home Loan Mortg. Corp., No. CV 11--3968--JFW (JCx), 2011 WL 3157063, at *6 (C.D. Cal. July 22, 2011) ("To the extent Plaintiff challenges the securitization of his loan because Freddie Mac failed to comply with the terms of its securitization agreement, Plaintiff has no standing to challenge the validity of the securitization of the loan as he is not an investor of the loan trust."); In re Correia, 452 B.R. 319, 324 (1st Cir. BAP 2011) (where debtors asked court to declare mortgage assignment invalid based upon breach of Pooling Services Agreement, a contract to which debtors were not a party nor third-party beneficiaries, the court found that debtors lacked standing to object to any breaches of the terms of the PSA).

Because Plaintiff lacks standing to raise alleged breach of the Trust Agreement, to the extent his claims are based on breach of this agreement, the claims fail and Defendants' ...

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