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Fontaine v. Bank of America, N.A.

United States District Court, S.D. California

January 7, 2015

JULIE ELICE FONTAINE, Plaintiff,
v.
BANK OF AMERICA, N.A., a/k/a FIRST MAGNUS FINANCIAL CORPORATION, A DIVISION OF BANK OF AMERICA, N.A. and f/k/a FIRST MAGNUS FINANCIAL CORPORATION; THE BANK OF NEW YORK MELLON f/k/a THE BANK OF NEW YORK AS TRUSTEE FOR THE CERTIFICATEHOLDER OF CWMBS, INC. CHL MORTGAGE PASS THROUGH TRUST 2006-3, MOTGAGE PASS THROUGH CERTIFICATE SERIES 2006; MERSCORP HOLDINGS, INC; MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC. (MERS); RECONTRUST COMPANY, N.A.; CLEAR RECON CORP; and DOES 1 through 10 inclusive, Defendants.

ORDER

WILLIAM Q. HAYES, District Judge.

The matter before to Court is Defendants' Motion to Dismiss Plaintiff's Petition. (ECF No. 13).

I. BACKGROUND

On August 20, 2014, Plaintiff initiated this action by filing a Complaint against Defendants Bank of America, N.A., The Bank of New York Mellon, Merscorp Holdings, INC., Mortgage Electronic Registrations Systems, Inc ("MERS"), ReconTrust Company, N.A., Clear Recon Corp., and Does 1 through 10. (ECF No 1).

On October 20, 2014, Defendants Bank of America, N.A., The Bank of New York Mellon, MERS, and ReconTrust Company filed the Motion to Dismiss Plaintiff's Complaint Petition. (ECF No. 13). On November 12, 2014, Plaintiff filed an opposition. (ECF No. 16). On November 21, 2014, Defendants' filed a reply. (ECF No. 17).

On November 24, 2014, Defendant Clear Recon Corp. filed a Notice of Joinder to Defendants' Motion to Dismiss Plaintiff's Petition adopting and incorporation the contents of the Defendants' Motion to Dismiss. (ECF No. 18).

II. ALLEGATIONS OF COMPLAINT

"The Plaintiff signed [the] Security Instrument (Deed of Trust) in favor of FIRST MAGNUS FINANCIAL CORPORATION ("First Magnus") on or about November 17, 2005." (ECF No. 1 ¶ 20). "Since that time a number of parties have come forward indicating that loan payments should now be sent to an entity other than the original lender, First Magnus." Id. ¶ 21. "[S]ubsequent to the financial meltdown in October 2008, ... Plaintiff began to query her alleged lender as to identify [] the lawful owners of [her] loan and determine whether the Plaintiff would ever receive clear and marketable title to her home once it was paid off." Id. ¶ 22. "The subsequent responses from the alleged lender(s) were vague and ambiguous and did not answer the bona fide and lawful question of the Plaintiff." Id. ¶ 23. "Subsequently, the Plaintiff used the only mechanism available to [her] which was to withhold payments until which time the lawful owner and creditor of the loan could be identified without a reasonable doubt." Id. ¶ 24.

"In April 2011, [BofA] signed the OCC Consent Order, # AA-EC-11-12, with the Comptroller of the Currency of the United States of America ("Comptroller") after an examination by the OCC in which the OCC identified numerous deficiencies and unsafe and unsound practices in residential mortgage servicing and in [] CITIGROUP's initiation and handling of foreclosure proceedings." Id. ¶ 32. "Subsequently, the... Order was amended... which in part provided for cash payments for homeowners that had been violated by the bank's unsafe and unsound business practices..." Id. ¶ 33. "Plaintiff is a homeowner who is a beneficiary to the OCC Consent Order, whose rights have been violated pursuant to state and federal law..." Id. ¶ 39.

"In April 2012[, ] BANK OF AMERICA CORPORATION ("BofA") entered into an agreement (NMS Consent Order)... and agreed to fundamentally change their egregious and unlawful business practices that were severely harming the homeowners of this country." Id. ¶ 26. "Plaintiff... is a beneficiary to the covenants of the Court order... to refrain from foreclosing on homeowners property when they do not have a documented property interest in the note and mortgage or deed of trust." Id. ¶ 31.

"The Defendants and their agents have violated the terms of the OCC Consent Order and the NMS Consent Order ("Consent Orders") by continuing to obfuscate the true legal holder of the Note and Deed of Trust and creating a scenario in which the Plaintiff cannot benefit from clear and marketable title without resorting to extraordinary measures." Id. at 40.

"Plaintiff's mortgage loan has been securitized." Id. ¶ 61. "No language within [] Plaintiff's Deed of Trust or Note indicated that the mortgage loan would be securitized..." Id. ¶ 63. "The rights to the Plaintiff's Intangible Obligation have [] allegedly been conveyed as a Transferable Record to multiple classes of the CWHL Trust." Id. ¶ 87. "Multiple classes of the CWHL Trust are allegedly making claims of [] rights to [] Plaintiff's Intangible Obligation. However, to exercise those claims of [] rights to the Plaintiff's Intangible Obligation, assignments of the Plaintiff's Deed of Trust should have been accomplished, which were not effectuated." Id. ¶ 93. "The assignment of the Plaintiff's Deed of Trust is a conveyance of an instrument concerning real property which must be recorded to be acted upon." Id. ¶ 94.

"There are no recorded assignments of the Plaintiff's Deed of Trust from First Magnus to multiple classes of the CWHL Trust within 30 days of the January 31, 2006 closing date..., either [there] have been a violation of Federal Law or multiple classes of the CWHL Trust, who are allegedly the owners of the Plaintiff's obligation are not the owners of [] either the Plaintiff's Note or Deed of Trust..." Id. ¶ 98.

"Multiple classes of the CWHL Trust are allegedly the owners of the Plaintiff's Intangible Obligation, however, according to California State Law, multiple classes of the CWHL Trust can only be entitled to enforce the Plaintiff's Deed of Trust if multiple classes of the CWHL Trust were transferred the rights to the Plaintiff's Deed of Trust by way of assignments pursuant to California Government Code Section 27288.1 and California Civil Code Section 1213. Id. ¶ 103.

"In contradiction to law, Plaintiff's Deed of Trust must have been duly assigned to multiple classes of the CWHL 2006-3 Trust for multiple classes of the CWHL 2006-3 Trust to be entitled to enforce the Plaintiff's Deed of Trust." Id. ¶ 104.

"For all three parts of the Plaintiff's Loan as a whole to have been transferred into the CWHL Trust there is a chain of entities through which the Plaintiff's Deed of Trust must be assigned and the Plaintiff's Note indorsed." Id. ¶ 111. "This chain of transfer as required in the CWHL Trust Pooling and Servicing Agreement ("PSA") is to have begun with a recorded assignment of the Plaintiff's Deed of Trust and an indorsement of the Plaintiff's Note from the Lender, First Magnus... to the Seller Countrywide Home Loan, Inc. Once the Seller (Countrywide Home Loans, Inc.) had taken complete ownership, then a recorded assignment of the Plaintiff's Deed of Trust and indorsement of the Plaintiff's Note form the Seller (Countrywide Home Loans, Inc.) to the Depositor (CWMBS, Inc.) was to have occurred. After the Depostior (CWMBS, Inc.) had taken complete ownership, a recorded assignment of the Plaintiff's Deed of Trust and an indorsement of the Plaintiff's Note from the Depositor (CWMBS, Inc.) to the Trustee (The Bank of New York) was to have occurred next. Finally, once the Trustee (The Bank of New York) had taken complete ownership, a recorded assignment of the Plaintiff's Deed of Trust and an indorsement of the Plaintiff's Note from the Trustee to the [CWHL Trust] was to have occurred." Id. ¶ 112.

"Moreover, these assignments were to all be recorded in the official records of San Diego County, California Registry as per the [PSA] for the CWHL Trust, these required assignments were not effectuated." Id. ¶ 113. "[A]ny electronic transfers of the Plaintiff's Deed of Trust that may have been executed without recording within the Official records of the San Diego County Registry are void pursuant to the Uniform Electronic Transactions Act (UETA) USC §15-96-1-7003." Id. ¶ 115.

The Complaint alleges the following six claims: (1) intentional non-disclosure; (2) missing public recording assignments & violation of California law; (3) breach of contract; (4) violations of the NMS and OCC consent orders; (5) vilations of 15 U.S.C. 41 § 1641; and (6) violations of the Uniform Electronic Transactions Act (UETA) 15 U.S.C. 96 § 7003.

III. DISCUSSION

A. Legal Standard

Federal Rule of Civil Procedure 12(b)(6) permits dismissal for "failure to state a claim upon which relief can be granted." Fed.R.Civ.P. 12(b)(6). "A pleading that states a claim for relief must contain... a short and plain statement of the claim showing that the pleader is entitled to relief." Fed.R.Civ.P. 8(a)(2). Dismissal under Rule 12(b)(6) is appropriate where the complaint lacks a cognizable legal theory or sufficient facts to support a cognizable legal theory. See Balistreri v. P. Police Depot, 901 F.2d 696, 699 (9th Cir. 1990).

"[A] plaintiff's obligation to provide the grounds' of his entitle[ment]' to relief" requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quoting Fed.R.Civ.P. 8(a)(2)). When considering a motion to dismiss, a court must accept as true all "well-pleaded factual allegations." Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009). "Courts have a duty to construe pro se pleadings liberally, including pro se motions as well as complaints." Bernhardt v. Los Angeles County, 339 F.3d 920, 925 (9th Cir.2003). However, a court is not "required to accept as true allegations that are merely conclusory, unwarranted deductions of fact, or unreasonable inferences." Sprewell v. Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 2001). "In sum, for a complaint to survive a motion to dismiss, the ...


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