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Glenn Michael Kuder, et al v. Jp Morgan Chase

February 28, 2013


The opinion of the court was delivered by: Craig M. Kellison United States Magistrate Judge


Plaintiffs, who are proceeding pro se, bring this civil action.*fn1 Pending before the court are: (1) motion to dismiss by defendants JP Morgan Chase and Deutsche Bank ("bank defendants") (Doc. 7); and (2) motions to dismiss and to strike by defendants Ruzicka and Wallace, LLP, and Richard Sontag, Esq. ("attorney defendants") (Docs. 10 and 12). The bank defendants argue, among other things, that this action is barred as against them under the doctrine of claim preclusion. The attorney defendants argue, among other things, that plaintiff fails to state a claim upon which relief can be granted.


A. Plaintiffs' Allegations

Plaintiffs allege that defendants failed to produce the note and that defendant banks cannot foreclose on the note because they are not legitimate creditors. Plaintiffs also claim that the attorney defendants are liable for representing their clients -- the bank defendants -- in litigation to perpetrate the alleged violations. Plaintiffs assert two claims of action as follows:

Claim 1 Quiet Title and Violation of the Fair Debt Collection Practices Act. Claim 2 Wrongful Foreclosure For remedies, plaintiffs seek compensatory damages, punitive damages, declaratory relief, abatement, and a "cease and desist" order.

B. Procedural History

A grant deed concerning the subject property at 642 Main Street, Etna, California, was recorded in the Siskiyou County Recorder's Office showing Philip Justin Riley as the grantor and Glenn Michael Kuder as the grantee. A deed of trust securing a loan on the subject property was recorded on June 30, 2004. The deed of trust identifies Long Beach Mortgage Company as the lender and Philip J. Riley as the borrower. After the loan was defaulted, a notice of default was issued on July 23, 2008. On October 29, 2008, a substitution of trustee was recorded in connection with the deed of trust. The California Reconveyance Company was substituted as trustee. The substitution was executed by Washington Mutual Bank as successor in interest to Long Beach Mortgage Company. The Office of Thrift Supervision ultimately closed Washington Mutual Bank and appointed the FDIC as receiver. Defendant JP Morgan Chase then acquired certain assets and liabilities of Washington Mutual Bank from the FDIC, including Washington Mutual Bank's interest in the loan on the subject property.

On November 13, 2008, plaintiffs filed a quiet title action against Washington Mutual Bank and the California Reconveyance Company in the Siskiyou County Superior Court (Kuder I) raising essentially the same claims as raised in the current action. Kuder I was removed to this court on December 19, 2008, and assigned case number 2:08-CV-3087-LKKDAD. On September 2, 2009, the Magistrate Judge recommended that Kuder I be dismissed. The findings and recommendations were adopted in full on September 30, 2009, and Kuder I was dismissed with prejudice. The Ninth Circuit Court of Appeals affirmed the judgment in Kuder I on April 13, 2010.

On September 8, 2009 -- while Kuder I was still pending in this court and possibly in response to the September 2, 2009, findings and recommendations -- plaintiffs filed a second action, this time in the United States District Court for the District of Columbia (Kuder II). Kuder II was then transferred to this court on concerns over proper venue and assigned case number 2:10-CV-0404-MCE-KJN. The defendants in Kuder II moved to dismiss on the grounds of claim preclusion. On December 2, 2010, the Magistrate Judge issued findings and recommendations that Kuder II also be dismissed. The Magistrate Judge concluded, among other things, that the claims in Kuder II were barred as against defendants JP Morgan Chase and the California Reconveyance Company under the doctrine of claim preclusion. The District Judge adopted the findings and recommendations in full on February 1, 2011.

Finally, sometime after Kuder II was decided, JP Morgan Chase assigned its interests in the subject property/loan to Deutsche Bank.


A. Claim Preclusion

Two related doctrines of preclusion are grouped under the term "res judicata." See Taylor v. Sturgell, 553 U.S. 880, 128 S. Ct. 2161, 2171 (2008). One of these doctrines -- claim preclusion -- forecloses "successive litigation of the very same claim, whether or not relitigation of the claim raises the same issues as the earlier suit." Id. Stated another way, "[c]laim preclusion. . . bars any subsequent suit on claims that were raised or could have been raised in a prior action." Cell Therapeutics, Inc. v. Lash Group, Inc., 586 F.3d 1204, 1212 (9th Cir. 2009). "Newly articulated claims based on the same nucleus of facts are also subject to a res judicata finding if the claims could have been brought in the earlier action." Stewart v. U.S. Bancorp, 297 F.3d 953, 956 (9th Cir. 2002). Thus, claim preclusion ...

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