KENNETH A. BATES; HEATHER M. BATES, Plaintiff,
SUNTRUST MORTGAGE, INC., a Virginia corporation; SETERUS, INC., a Delaware corporation; MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., a Delaware corporation, ALL PERSON UNKNOWN, CLAIMING ANY LEGAL OR RQUITABLE RIGHT, TITLE, ESTATE, LIEN OR INTEREST IN THE PROPERTY DESCRIBED IN THE COMPLAINT ADVERSE TO PLAINTIFFS' TITLE OR ANY CLOUD ON PLAINTIFFS' TITLE THERETO, DOES 1 through 50, inclusive, Defendants.
TROY L. NUNLEY, District Judge.
This matter is before the Court pursuant to two separate motions to dismiss. Defendants Seterus, Inc. ("Seterus") and Mortgage Electronic Registration Systems, Inc. ("MERS") collectively filed a Motion to Dismiss Plaintiffs' Complaint on July 22, 2013. (ECF No. 7.) The following day, Defendant SunTrust Mortgage, Inc. ("SunTrust") also filed a Motion to Dismiss Plaintiffs' Complaint. (ECF Nos. 8.) Plaintiffs Kenneth A. Bates and Heather M. Bates (hereinafter collectively referred to as "Plaintiffs") have filed an opposition to both motions. (ECF Nos. 10, 11.) The Court has carefully considered the arguments presented by both parties. For the reasons set forth below, Defendants' motions to dismiss (ECF Nos. 7, 8) are both GRANTED.
I. Factual Background
On December 14, 2006, Plaintiffs obtained a primary loan in the amount of $344, 000.00 and a secondary loan in the amount of $64, 500.00 from the San Francisco Police Credit Union ("SFPCU"), in order to purchase the real property located at 770 Teton Lane, Tracy, California 95376 (the "subject property"). (Compl., ECF No. 1 at ¶¶ 2, 8, 9.) Each loan was secured by a Note and a Deed of Trust on the property, in which SFPCU was the trustee. (ECF No. 1 at ¶ 8, 9.)
On December 28, 2006, SFPCU assigned all of its rights under both notes and deeds of trust to SunTrust, as recorded by SFPCU in the official records of the San Joaquin County Recorder's Office. (ECF No. 1 at ¶¶ 11-12.) On January 17, 2007, both notes and both deeds of trust were marked as "Paid." (ECF No. 1 at ¶ 13). On January 24, 2007, SFPCU executed a full reconveyance, as trustee, under the deed of trust and the secondary deed of trust. (ECF No. 1, Ex. C, Ex. D.) The full reconveyances contain the following relevant language: "SF Police [Credit] Union, as duly appointed Trustee under Deed of Trust... does hereby RECONVEY, without warranty, to the person or persons legally entitled thereto, the estate now held by it hereunder." (ECF No. 1, Ex. C, Ex. D.) Thereafter, SFPCU forwarded the original copies of the first note and both deeds of trust to Plaintiffs by mail. (ECF No. 1 at ¶ 16.) Each of those documents bore a stamp and handwriting stating, "PAID Date 1-17-07." Id.
On December 12, 2012, a corporate assignment of the deed of trust was recorded in which SunTrust assigned all beneficial interest under the first deed of trust to MERS. (ECF No. 8 at 3:5-6.) On March 15, 2013, a corporate assignment of the deed of trust was recorded in which SunTrust assigned all beneficial interest under the secondary deed of trust to MERS. (ECF No. 8 at 3:7-9.) Plaintiffs filed their complaint in the instant action on March 15, 2013, requesting quiet title and declaratory relief. (ECF No. 1.) SunTrust, Seterus, and MERS move this Court to dismiss Plaintiffs' claims. (ECF Nos. 7, 8.)
II. Standards of Applicable Law
A. Motion to Dismiss
Pursuant to Federal Rule of Civil Procedure 12(b)(6), a claim may be dismissed for failure to state a claim upon which relief may be granted. "Dismissal can be based on the lack of a cognizable legal theory or the absence of sufficient facts alleged under a cognizable legal theory." Balistreri v. Pacifica Police Dept. , 901 F.2d 696, 699 (9th Cir. 1990). In determining the adequacy of the pleading, the Court must determine whether a plaintiff would be entitled to some form of relief if the facts alleged in the complaint were true. See Ashcroft v. Iqbal , 556 U.S. 662, 678 (2009); De La Cruz v. Tormey , 582 F.2d 45, 48 (9th Cir. 1978). However, the court is "not bound to accept as true a legal conclusion couched as a factual allegation." Ashcroft , 556 U.S. at 678 (internal quotations omitted). Moreover, the factual matter must state a claim to relief that is plausible on its face. Id . "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. The plausibility standard is not akin to a probability requirement, but it asks for more than a sheer possibility that a defendant has acted unlawfully." Id . (internal quotations omitted).
A complaint will not be dismissed under 12(b)(6) "unless it appears beyond doubt that plaintiff can prove no set of facts in support of her claim that would entitle her to relief." Yamaguchi v. Dep't of the Air Force , 109 F.3d 1475, 1480 (9th Cir. 1997) (quoting Lewis v. Telephone Emps. Credit Union , 87 F.3d 1537, 1545 (9th Cir. 1996)). "All allegations of material fact are taken as true and construed in the light most favorable to the nonmoving party." Cahill v. Liberty Mut. Ins. Co. , 80 F.3d 336, 337-38 (9th Cir. 1996).
B. Quiet Title
An action to quiet title is a claim brought "to establish title against adverse claims to real or personal property or any interest therein." Cal. Civ. Proc. Code § 760.020. In a quiet title action, two conditions must be met. First, a complaint must be verified and include "(1) a legal description of the property and its street address or common designation, (2) the title of the plaintiff and the basis of the title, (3) the adverse claims to the title of the plaintiff, (4) the date as of which the determination is sought, and (5) a prayer for the determination of the title of the plaintiff against the adverse claims." Permpoon v. Wells Fargo Bank Nat'l Ass'n, No. 09-CV-01140-H (BLM) , 2009 U.S. Dist. LEXIS 89723, at *5 (S.D. Cal. Sept. 29, 2009) (citing Cal. Civ. Proc. Code § 761.020). Second, a plaintiff must pay or offer to pay any outstanding debts on the subject property before the action to quiet title is commenced. Hamilton v. Bank of Blue Valley , 746 F.Supp.2d 1160, 1177-78 (E.D. Cal. 2010); Phillips v. Wells Fargo Bank, N.A., No. 09CV1486-H (BLM), 2009 WL 3756698, at *5 (S.D. Cal. Nov. 6, 2009).
C. Declaratory Relief
"Claims for declaratory relief... are ultimately prayers for relief, and not causes of action." Javaheri v. JP Morgan Chase Bank, N.A., No. 2:10-cv-08185-ODW (FFMx) , 2012 WL 3426278 at *8-9 (C.D. Cal. Aug. 13, 2012) (citing Lane v. Vitek Real Estate Indus. Grp. , 713 F.Supp.2d 1092, 1104 (E.D. Cal. 2010)). 28 U.S.C. § 2201 provides, "any court of the United States, upon the filing of an appropriate pleading, may declare the rights and other legal relations of any interested party seeking such declaration, whether or not further relief is or could be sought." Declaratory relief should be denied if it will "neither serve a useful purpose in clarifying and settling the legal relations in issues nor terminate the proceedings and afford relief from the uncertainty and controversy faced by the parties." United States v. Washington , 759 ...