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St. Clair v. JPMorgan Chase Bank, N.A.

United States District Court, E.D. California

September 18, 2014

RICHARD ST. CLAIR, Plaintiff,
v.
JPMORGAN CHASE BANK, N.A., MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC. AND U.S. BANK, N.A., AS TRUSTEE FOR WASHINGTON MUTUAL MORTGAGE PASS-THROUGH CERTIFICATES, WMALT SERIES 2007-OA3 Defendants.

ORDER GRANTING DEFENDANTS' MOTION TO DISMISS WITH LEAVE TO AMEND

BARBARA A. McAULIFFE, Magistrate Judge.

I. INTRODUCTION

Plaintiff Richard St. Clair filed this wrongful foreclosure action on August 19, 2013. (Doc. 2.) Plaintiff alleges Defendants JP Morgan Chase Bank, N.A. ("JP Morgan"), U.S. Bank, N.A., As Trustee For Washington Mutual Mortgage Pass-through Certificates, WMalt Series 2007-OA3 ("U.S. Bank"), and Mortgage Electronic Systems, Inc. ("MERS") (JP Morgan, U.S. Bank, and MERS are collectively referred to as "Defendants") violated numerous California laws in foreclosing on Plaintiff's property.

On October 3, 2013, MERS and U.S. Bank filed a Motion to Dismiss for failure to state a claim pursuant to Federal Rule of Civil Procedure 12(b)(6). (Doc. 13.) On November 4, 2013, JP Morgan filed a motion to dismiss for failure to state a claim pursuant to Federal Rule of Civil Procedure 12(b)(6). (Doc. 18.) Plaintiff opposed the motions, and Defendants filed reply briefs. (Doc. 26-31.) On January 23, 2014, Senior District Judge Anthony W. Ishii vacated the hearing set for both motions, and took the motions under submission pursuant to Local Rule 230(g). (Doc. 34.) The parties subsequently consented to the jurisdiction of the United States Magistrate Judge, and this case was reassigned to the Honorable Barbara A. McAuliffe on August 18, 2014. (Doc. 44.)

Having thoroughly considered the parties' briefs and related filings, Defendants' Motions to Dismiss are GRANTED.[1] Plaintiff's Complaint is DISSMISSED WITH LEAVE TO AMEND.

II. FACTUAL HISTORY AND PROCEDURAL BACKGROUND

On November 21, 2006, non-party Michele M. Contreras refinanced a previous loan by securing a million dollar loan ("Contreras Loan"), encumbering the real property located at 1328 East Rosemont Lane, Fresno, California 93730 (the "Subject Property").

The Deed of Trust for the Contreras Loan identifies Loan Center of California, Inc., as the original lender and Financial Title Co. as the trustee. The beneficiary of the Deed of Trust is identified as "MERS (solely as nominee for Lender and Lender's successors and assigns) and the successors and assigns of MERS." (ECF Doc. 14, Attachment #3 at p. 1).

In 2007, the Contreras Loan was allegedly sold to WMALT Series 2007-OA3, a mortgage-backed securities trust ("WMALT Trust"). Plaintiff claims this sale constitutes a "securitization, " and that the "securitization" of the Loan extinguished the interests of the previous beneficiaries to the Deed of Trust.

On January 12, 2008, an Assignment of Deed of Trust was executed by MERS as nominee for Loan Center of California, Inc. in favor of Washington Mutual Bank ("WAMU"). In January of 2008, Quality Loan Services ("Quality"), as agent for WAMU, executed a Notice of Default and Election to Sell Under Deed of Trust ("Notice of Default") because Ms. Contreras defaulted on her obligations under the Deed of Trust. The Notice of Default stated that Ms. Contreras should contact WAMU, c/o Quality, to arrange for payments to stop the foreclosure.

On February 13, 2008, an Assignment of Deed of Trust was recorded, transferring MERS' beneficial interest in the Deed of Trust to WAMU. In April of 2008, a Substitution of Trustee in favor of Quality was recorded.

In September of 2008, Chase acquired WAMU's assets and liabilities pursuant to a Purchase and Assumption Agreement. The parties disagree as to whether the Contreras Loan was among WAMU's assets; specifically, whether they comported with the chain of title protocol mandated by the Pooling and Servicing Agreement, Plaintiff argues securitization of the loan failed because the Contreras Loan was not assigned to the WMALT Trust until 2009, two years after the closing date of the trust. Plaintiff also argues the various assignments of the Contreras Loan did not comport with the chain of title protocol mandated by the Pooling and Servicing Agreement. Therefore, Plaintiff argues, any beneficial interest in the Contreras Loan did not pass to Chase.

On August 28, 2012, a Grant Deed was recorded purporting to transfer Contreras' interest in the Subject Property to Plaintiff, Richard St. Clair. The Grant Deed was apparently executed and notarized nearly a year before recordation, on August 30, 2011.

Between April of 2008 and October of 2012, Quality executed and recorded four Notices of Trustee's Sale in its capacity as trustee of the Deed of Trust.[2] On October 4, 2012 and October 8, 2012, respectively, Quality executed and recorded a fifth Notice of Trustee's Sale. On June 10, 2013, Quality conveyed the Subject Property to ...


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