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Yarpezeshkan v. Bank of America, N.A.

United States District Court, S.D. California

July 2, 2014

BANK OF AMERICA, N.A.; MORTGAGE ELECTRONIC SYSTEMS, INC.; REAL TIME RESOLUTIONS, INC.; THE BANK OF NEW YORK MELLON as Trustee for the Certificate Holders of the CWALT formerly known as The Bank of New York; ALTERNATIVE LOAN TRUST 2006-0A19; MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2006-0A19 and Successor Trustee to J.P. Morgan Chase Bank, N.A. as Trustee on Behalf of the Certificate Holders of the CWHEQ Inc.; and CWHEQ REVOLVING HOME EQUITY LOAN TRUST, SERIES Defendants.


JEFFREY T. MILLER, District Judge.

On February 26, 2014, Defendant Real Time Resolutions, Inc. ("Real Time") filed a motion to dismiss Plaintiffs' complaint. (Dkt. No. 4). That same day, Defendants Bank of America, N.A. ("Bank of America"), Mortgage Electronic Systems, Inc. ("MERS"), and The Bank of New York Mellon ("BNYM") also filed a motion to dismiss Plaintiffs' complaint. (Dkt. No. 6.) The motions have been fully briefed by both sides, and the court finds this matter suitable for resolution on the papers without oral argument pursuant to Civil Local Rule 7.1.d.1. For the reasons set forth below, Defendants' motions to dismiss are GRANTED WITH LEAVE TO AMEND.


On June 27, 2006, Plaintiffs obtained two loans. The first loan, a mortgage in the amount of $1, 499, 999 (the "First Loan"), is secured by a Deed of Trust ("First DOT") on real property located at 2810 Inverness Drive, La Jolla, California 92037 (the "Property"). (Compl. ¶ 10; Defendants' Request for Judicial Notice ("RJN") Exh. A).[1] The First DOT lists Countrywide Home Loans, Inc. as the lender, ReconTrust Company, N.A. as trustee, and MERS as beneficiary. (Id.) That same day, Plaintiffs obtained a second loan, a home equity line of credit (the "HELOC", together with the First Loan, the "Loans"), in the amount of $1, 180, 605, secured by a Deed of Trust and Assignment of Rents on the Property (the "Second DOT"). (Compl. ¶ 17; RJN Exh. B). The Second DOT also lists the lender as Countrywide Bank, N.A., ReconTrust Company, N.A. as trustee, and MERS as beneficiary. (Id.)

On August 30, 2006, Plaintiffs' HELOC was sold to CWHEQ Revolving Home Equity Loan Trust 2006-G, a mortgage-backed securities trust ("MBS Trust"). (Compl. ¶ 19). On November 30, 2006, Plaintiffs' First Loan was sold to Alternative Loan Trust 2006-OA19, a different MBS Trust. (Id. at ¶ 19). BNYM serves as trustee for both of the MBS Trusts. (Id.) Plaintiffs allege the sale of the Loans to the MBS Trusts were "made without the required intervening assignment of Plaintiffs' Deed of Trust and endorsement of the Note" before the closing dates of the MBS Trusts as required by the governing MBS Trust documents. (Id. at ¶¶ 25, 27). Plaintiffs contend this failure "resulted in an irreversible break in the chain of title and ownership of the subject mortgage loans" and, thus, "the current beneficiary, mortgagee or secured lender are unknown." (Id. at ¶ 30).

On July 6, 2012, Defendant MERS purported to assign the DOT for Plaintiffs' HELOC to BNYM as trustee on behalf of the certificate holders of the CWHEQ revolving Home Equity Loan Trust 2006-G. (Id. ¶ 34). On August 22, 2011, MERS attempted to assign the DOT for Plaintiffs' First Loan to The Bank of New York Mellon f/k/a The Bank of New York, as Trustee for the Certificateholders of the CWALT, Inc., Alternative Loan Trust 2006-OA19, Mortgage Pass-Through Certificates, Series 2006-OA19. (Id. ¶ 33). However, Plaintiffs allege the beneficial interest in Plaintiffs' Loans formerly held by Countrywide, the original lender for which Defendant MERS served as nominee, was extinguished in 2006 when the Loans were sold to the MBS Trusts. (Id. at ¶¶ 19, 21). As MERS had no interest in Plaintiffs' Loans when it purported to assign the beneficial interests under the DOTs to BNYM as trustee, Plaintiffs contend the 2011 Assignments are null and void.

Plaintiffs further allege the 2011 Assignment of the First Loan is fraudulent and void because MERS was never the securities trust depositor. (Id. at ¶ 33). The governing trust documents provide that only the depositor in the securitization transaction may transfer Plaintiffs' mortgage to BNYM as trustee for the Alternative Loan Trust 2006-OA19. (Id.) Therefore, Plaintiffs' contend the Assignment is invalid, ineffective and void. (Id.)

Bank of America placed Plaintiffs' HELOC in collection with Defendant Real Time, effective April 1, 2013. (Id. at ¶ 35). Bank of America purports to be the current loan servicer by merger with BAC Home Loans Servicing, LP f/k/a Countrywide Home Loans Servicing, LP, the original loan servicer for both Loans. (Id. at ¶ 18).

Based on these factual allegations, Plaintiffs allege seven causes of action in the complaint: (1) Declaratory Relief; (2) Quiet Title; (3) Fraud; (4) Violation of Bus. & Profs. Code § 17200, et seq. ; (5) Unjust Enrichment; (6) Accounting; and (7) Violation of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692, et seq.


For a plaintiff to overcome a Rule 12(b)(6) motion to dismiss for failure to state a claim, the complaint must contain "enough facts to state a claim to relief that is plausible on its face." Bell Atl. v. Twombly , 550 U.S. 544, 570 (2007). "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." Ashcroft v. Iqbal , 556 U.S. 662, 678 (2009). Factual pleadings merely consistent with a defendant's liability are insufficient to survive a motion to dismiss because they only establish that the allegations are possible rather than plausible. See id. at 678-79. The court should grant 12(b)(6) relief only if the complaint lacks either a "cognizable legal theory" or facts sufficient to support a cognizable legal theory. See Balistreri v. Pacifica Police Dep't , 901 F.2d 696, 699 (9th Cir. 1990).

In addition, when resolving a motion to dismiss for failure to state a claim, courts may not generally consider materials outside the pleadings. Schneider v. Cal. Dep't of Corrs. , 151 F.3d 1194, 1197 n. 1 (9th Cir. 1998); Jacobellis v. State Farm Fire & Cas. Co. , 120 F.3d 171, 172 (9th Cir. 1997); Allarcom Pay Television Ltd. v. Gen. Instrument Corp. , 69 F.3d 381, 385 (9th Cir. 1995). "The focus of any Rule 12(b)(6) dismissal... is the complaint." Schneider , 151 F.3d at 1197 n. 1. This precludes consideration of "new" allegations that may be raised in a plaintiff's opposition to a motion to dismiss brought pursuant to Rule 12(b)(6). Id . (citing Harrell v. United States , 13 F.3d 232, 236 (7th Cir. 1993); 2 Moore's Fed. Prac. § 12.34[2] (Matthew Bender 3d ed.)).

However, "[w]hen a plaintiff has attached various exhibits to the complaint, those exhibits may be considered in determining whether dismissal [i]s proper...." Parks Sch. of Bus., Inc. v. Symington , 51 F.3d 1480, 1484 (citing Cooper v. Bell , 628 F.2d 1208, 1210 n. 2 (9th Cir. 1980)). The court may also consider "documents whose contents are alleged in a complaint and whose authenticity no party questions, but which are not physically attached to the pleading...." Knievel v. ESPN , 393 F.3d 1068, 1076 (9th Cir. 2005) (citing Branch v. ...

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