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Mortgage Elec. Registration Sys. v. Robinson

United States District Court, C.D. California

September 16, 2014

Mortgage Electronic Registration Systems et al.
v.
Robinson et al

Attorneys for Plaintiffs: Not Present.

Attorneys for Defendants: Not Present.

Page 1208

CIVIL MINUTES - GENERAL

The Honorable Philip S. Gutierrez, United States District Judge.

Proceedings: (In Chambers) Order DENYING Defendants' Motion for Judgment on the Pleadings

Before the Court is Defendants' motion for judgment on the pleadings pursuant to Rule 12(c) of the Federal Rules of Civil Procedure. See Dkt # 34. The Court finds the matter appropriate for decision without oral argument. Fed.R.Civ.P. 78(b); L.R. 7-15. Having considered the papers filed in support of and in opposition to the motion, the Court DENIES the motion.

I. Background

In February 2005, Defendants Daniel and Darla Robinson (" Defendants" ) obtained a loan to buy real property (" Property" ) in Northridge, California. FAC ¶ ¶ 12-13. The loan was secured against the Property by a deed of trust (" Deed of Trust" ) that was recorded in the Los Angeles County Recorder's Office. FAC ¶ 45.

The Deed of Trust identified United Pacific Mortgage as the " Lender" on the loan and Mortgage Electronic Registration Systems, Inc. (" MERS" ) as " a separate corporation that is acting solely as a nominee for Lender and Lender's successors and assigns." FAC ¶ 47; Exh. 1, p. 2. The Deed of Trust also provided: " MERS is the beneficiary under this Security Instrument." FAC ¶ 48; Exh. 1, p. 1; see also Exh. 1, p. 3 (" The beneficiary of this Security Instrument is MERS (solely as nominee for Lender and Lender's successors and assigns) and the successors and assigns of MERS." ). The Deed of Trust further provided:

Borrower [i.e., Defendants] understands and agrees that MERS holds only legal title to the interests granted by Borrower in this Security Instrument, but, if necessary to comply with law or custom, MERS (as nominee for Lender and Lender's successors and assigns) has the right: to exercise any or all of those interests, including, but not limited to, the right to foreclose and sell the Property; and to take any action required of Lender including, but not limited to, releasing and canceling this Security Instrument.

FAC ¶ 50; Exh. 1, p. 4.

In January 2012, Defendants filed an action in Los Angeles County Superior

Page 1209

Court to quiet title to the Property, and at the same time recorded a Notice of Lis Pendens with the Los Angeles County Recorder's Office. FAC ¶ ¶ 56-57. The quiet title action identified the Deed of Trust as the basis of claims adverse to Defendants' title. FAC ¶ 59. The complaint also expressly pleaded that the note on Defendants' loan was no longer owned by United Pacific Mortgage, but by U.S. Bank National Association, to whom the note had passed by assignment. FAC ¶ ¶ 60, 65. Nevertheless, the complaint named as defendants only United Pacific Mortgage and " persons or entities unknown" claiming any right or interest in the Property adverse to Defendants' claim. FAC ¶ 64. MERS was not served with notice of the action. FAC ¶ 64.

When United Pacific Mortgage failed to appear and defend the quiet title action, Defendants secured a default judgment for quiet title with an order expunging the Deed of Trust. FAC ¶ ¶ 65-70. Defendants recorded the judgment in the Los Angeles County Recorder's Office. FAC ¶ 71.

On September 26, 2013, MERS and its parent company, MERSCORP Holdings, Inc., (collectively, " Plaintiffs" ) filed the action now before this Court, seeking, inter alia, to have Defendants' quiet title judgment set aside. After a motion to dismiss the complaint was granted with leave to amend, Dkt # 17, Plaintiffs filed a First Amended Complaint, Dkt # 19, which asserts four claims for relief. First, Plaintiffs seek to have Defendants' quiet title judgment declared void for having been obtained in violation of California's quiet title statutes, which allegedly entitled MERS to be named as a defendant in the quiet title action. Second, Plaintiffs seek a declaratory judgment that the quiet title action violated their due process rights under the United States and California Constitutions. Third, Plaintiffs bring a claim for cancellation of instruments, specifically, the Notice of Lis Pendens and the quiet title judgment that were recorded in the Los Angeles County Recorder's Office. Finally, Plaintiffs claim slander of title.

On May 9, 2014, the Court denied Defendants' motion to dismiss the First Amended Complaint, on the grounds that Defendants had not complied with the Court's meet-and-confer requirements. See Dkt # 29. Defendants now move for judgment on the pleadings ...


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