United States District Court, C.D. California
For Nazneen Mouri, an individual, Plaintiff: Nazneen Mouri, LEAD ATTORNEY, Fontana, CA.
For Bank of New York Mellon, a New York Corporation formerly known as The Bank of New York as Trustee for the Certificate Holders of CWALT Inc Alternative Loan Trust 2005-56 Mortgage Pass Through Certificates 2005-56, MERSCORP Holdings Inc, a Delaware Corporation, Select Portfolio Servicing Inc, a Utah Company, Defendant: Conrad V Sison, LEAD ATTORNEY, Locke Lord LLP, Los Angeles, CA; Mark Russell Townsend, Jr, LEAD ATTORNEY, Malcom and Cisneros, Irvine, CA.
For Bank of America, a Delaware Corporation, Defendant: Conrad V Sison, LEAD ATTORNEY, Locke Lord LLP, Los Angeles, CA; Mark Russell Townsend, Jr, LEAD ATTORNEY, Malcom and Cisneros, Irvine, CA; Monique D Jewett-Brewster, LEAD ATTORNEY, Bryan Cave LLP, San Francisco, CA.
For Mortgage Electronic Registration Systems Inc, Interested Party: Conrad V Sison, LEAD ATTORNEY, Locke Lord LLP, Los Angeles, CA; Mark Russell Townsend, Jr, LEAD ATTORNEY, Malcom and Cisneros, Irvine, CA.
CIVIL MINUTES -- GENERAL
PRESENT: HONORABLE VIRGINIA A. PHILLIPS, UNITED STATES DISTRICT JUDGE.
PROCEEDINGS: MINUTE ORDER (1) DENYING PLAINTIFF'S MOTION TO REMAND AND (2) GRANTING DEFENDANTS' MOTIONS TO DISMISS (IN CHAMBERS)
Before the Court in this diversity-based wrongful foreclosure action are Plaintiff Nazneen Mouri's motion to remand the case to state court (Doc. No. 10) and two separate motions to dismiss, one filed by Defendants Bank of New York Mellon (" BNY"); Mortgage Electronic Registration Systems, Inc. (" MERS"); MERSCORP Holdings, Inc.; and Select Portfolios Servicing, Inc. (collectively " BNY Defendants") (Doc. No. 9.), and one filed by Defendant Bank of America, N.A. (" Bank of America"). (Doc. No. 14.) The motions are appropriate for resolution without a hearing. See Fed.R.Civ.P. 78; Local R. 7-15. After considering the papers timely filed in support of and opposition to the motions, and the exhibits attached to them, the Court DENIES Plaintiff's motion to remand; GRANTS Defendants' motions to dismiss; and VACATES the hearing scheduled for December 8, 2014.
Nazneen Mouri (" Plaintiff") purchased the residential property located at 7460 Lawrence Place, Fontana, California (" Residence") on August 19, 2005. (Not. of Removal Ex. A (" Compl.") ¶ ¶ 5, 10, Doc. No. 1.) To buy the Residence, Plaintiff took out a mortgage from Lendingtree Loans (" Lendingtree"), which was secured by a lien on the Residence. (Id. ¶ 10.) Among the loan documents then executed were a promissory note and a deed of trust (" DOT"). (Id.)
Plaintiff asserts MERS assigned the DOT to BNY on June 7, 2011, and an entity called Recontrust,  " on behalf of" BNY, " recorded a Substitution of Trustee naming Recontrust as the trustee" of the DOT on September 12, 2011. (Compl. ¶ ¶ 11, 12.) Recontrust allegedly recorded a Notice of Default (" NOD") on September 12, 2011 and a Notice of Trustee's Sale (" NOTS") on December 19, 2011 against the Residence, and recorded a second NOTS against the Residence on April 8, 2013. (Id. ¶ ¶ 13-15.) Plaintiff alleges the June 7, 2011 transfer of the DOT to the BNY-administered trust (for the purpose of securitization) was unlawful, so the DOT was rendered " null and void." (See Compl. ¶ ¶ 43-44, 48.) All her claims derive from that allegedly improper assignment. (See id. ¶ ¶ 46-48.)
The Complaint sets forth background allegations regarding mortgage-backed securities, explaining securitization is the process by which mortgage loans are bundled together and offered for sale to investors, often in the form of a bond. (Compl. ¶ 17.) Each bundle starts as a trust, but the mortgages first must pass through a real estate mortgage investment conduit (" REMIC") to reach the trust. (Id. ¶ 18-21.) A pooling and servicing agreement (" PSA") creates the trust, and the PSA's terms govern the trust's operation. (Id. ¶ ¶ 22-24.) The provision of the PSA most relevant to this matter is the date on which the trust closes, that is, the date by which all mortgages must be deposited into the trust (" Closing Date"). (Id. ¶ 38.) Plaintiff finally explains: " [i]f a mortgage assignment is dated . . . in a year after the year set forth in the name of the grantee trust on the assignment, it is actually an assignment that was 'specially' and fraudulently made to facilitate initiating foreclosure proceedings." (Id. ¶ 42.)
Plaintiff contends that on June 7, 2011 " Bank of America and/or MERS attempted to transfer and assign Plaintiff's loan to the CWALT, Inc. Alternative Loan securitized trust" for which BNY was trustee. (Compl. ¶ 43.) The Closing Date for the CWALT was September 29, 2005. (Compl. ¶ 45.) Therefore the DOT was improperly transferred to the CWALT, under the terms of the CWALT's PSA. (Compl. ¶ 46.) According to Plaintiff, this defective transfer " results in the Deed of Trust being null and void, " and so the NOD and NOTSs are similarly void as BNY " lacks authority to exercise the power of sale contained in the Deed of Trust." (Compl. ¶ ¶ 48, 49); Cf. Glaski v. Bank of America, N.A. 218 Cal.App.4th 1079, 1082, 160 Cal.Rptr.3d 449 (2013) (" [T]he specific defect alleged is that the attempted transfers were made after the closing date of the securitized trust holding the pooled mortgages and therefore the transfers were ineffective.") (emphasis in original); Jenkins v. JP Morgan Chase Bank, N.A., 216 Cal.App.4th 497, 505, 156 Cal.Rptr.3d 912 (2013) (" The crux of Jenkins's lawsuit is based on her theory her loan was pooled with other home loans in a securitized investment trust . . . without proper compliance with the investment trust's pooling and servicing agreement.").
B. Procedural History
Plaintiff sued Bank of America and BNY Defendants in California Superior Court on June 25, 2014, and BNY Defendants removed the case on August 8, 2014. (Not. of Removal.) Plaintiff asserts five claims: (1) declaratory relief; (2) lack of standing to foreclose due to violation of California Civil Code § 2924(a)(6); (3) fraud; (4) slander of title; and (5) violation of California Business and Professions Code § 17200. (Compl.) The Complaint seeks relief in the form of: compensatory damages; special damages; general damages; punitive damages; restitution; attorney's fees and costs; declaratory relief to the effect that the NOD and NOTS are void; and equitable relief in the form of an injunction to prevent a trustee's sale of the Residence.
BNY Defendants filed a motion to dismiss on August 15, 2014; Plaintiff filed a motion to remand the case on August 18, 2014; and Bank of America filed ...