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Moreland v. U.S. Bank, N.A.

United States District Court, E.D. California

April 15, 2015

TERRY MORELAND, Plaintiff,
v.
U.S. BANK, N.A. AS TRUSTEE FOR LB-UBS COMMERCIAL MORTGAGE TRUST 2004-C6 COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES SERIES 2004-C6; LB-UBS 2004-C6. STOCKDALE OFFICE LIMITED PARTNERSHIP; LB-UBS STOCKDALE OFFICE GP; LNR PARTNERS CALIFORNIA MANAGER, LLC; LNR PARTNERS, LLC, and DOES 1 THROUGH 10, inclusive, Defendants. LBUBS 2004-C6 STOCKDALE. OFFICE LIMITED PARTNERSHIP, a Delaware limited partnership, Counter-Claimant,
v.
TERRY L. MORELAND, an individual, and PEGGY J. MORELAND, an individual, Counter-Defendants.

ORDER GRANTING DEFENDANTS' MOTION TO DISMISS, GRANTING DEFENDANTS' MOTION TO EXPUNGE LIS PENDENS, AND DENYING COUNTER-DEFENDANTS' MOTIONS TO DISMISS

JOHN A. MENDEZ, District Judge.

This matter is before the Court on Defendants U.S. Bank, N.A., as trustee for LB-UBS Commercial Mortgage Trust 2004-C6 Commercial Mortgage Pass-through Certificates Series 2006-C6, LB-UBS 2004-C6 Stockdale Office Limited Partnership, LB-UBS Stockdale Office GP, LNR Partners California Manager, LLC, and LNR Partners, LLC's ("Defendants") Motion to Dismiss (Doc. #3) Plaintiff Terry Moreland's ("Plaintiff") Complaint (Doc. #1), and Defendants' Motion to Expunge Lis Pendens (Doc. #5). Plaintiff opposed Defendants' Motion to Dismiss (Doc. #43) and Defendants' Motion to Expunge (Doc. #44). Defendants replied to both oppositions (Doc. #45; Doc. #47). For the following reasons, Defendants' Motion to Dismiss is granted without leave to amend, and Defendants' Motion to Expunge is granted.

Also before the Court are Counter-Defendant Terry Moreland's Motion to Dismiss (Doc. #19) and Counter-Defendant Peggy Moreland's Motion to Dismiss (Doc. #34) Counter-Claimant LBUBS 2004-C6 Stockdale Office Limited Partnership's ("Counter-Claimant") Counterclaim (Doc. #9). Counter-Claimant opposed both motions to dismiss (Doc. #50; Doc. #52). Neither Counter-Defendant filed a reply. For the following reasons, Counter-Defendants' motions to dismiss are denied.[1]

I. FACTUAL ALLEGATIONS AND PROCEDURAL BACKGROUND

On August 2, 2004, UBS Real Estate Investments, Inc. ("Original Lender") made a loan to Stockdale Tower I, LLC ("Borrower") in the amount of $24, 000, 000 ("the Loan"). In connection to the Loan, Borrower executed a Deed of Trust Note and a Deed of Trust (collectively, "Loan Documents"), which encumbered the commercial office building located at 5060 California Avenue, Bakersfield, California ("Stockdale Tower"). DRJN, Ex. 1 and 2.

Soon thereafter, the Loan was transferred from Original Lender to a real estate mortgage investment conduit ("REMIC") trust, LaSalle Bank National Association, in its capacity as trustee for the registered holders of LB-UBS Commercial Mortgage Trust 2004-C6, Commercial Mortgage-Pass Through Certificates, Series 2004-C6 ("the Trust"). Compl. Ex. 1. For ease of reference, this transfer is hereinafter referred to as "the 2004 transfer."

In connection with the 2004 transfer, the Loan was securitized pursuant to a pooling and servicing agreement ("the PSA"). Compl. ΒΆ 1; DRJN, Ex. 3. The parties to the PSA were as follows: (1) LaSalle Bank National Association, in its capacity as trustee; (2) Structured Asset Securities Corporation II, as depositor ("Depositor"); (3) Lennar Partners, Inc., as special servicer; (4) Wachovia Bank, National Association, as master servicer; and (5) ABN Amro Bank, N.V., as fiscal agent.

The PSA purports to create a REMIC trust, consisting, in part, of mortgage loans purchased from Original Lender. Section 2.01(a) of the PSA provides as follows:

"[t]he Depositor, concurrently with the execution and delivery hereof, does hereby assign, sell, transfer, set over and otherwise convey to the Trustee in trust, without recourse, for the benefit of the Certificateholders, all the right, title and interest of the Depositor in, to, and under (i) the Trust Mortgage Loans, (ii) the UBS/Depositor Mortgage Loan Purchase Agreement, (iii) the respective Co-Lender Agreements; and (iv) all other assets included or to be included in the Trust Fund." DRJN, Ex. 3.

Section 2.01(b) of the PSA further provides that:

"[i]n connection with the Depositor's assignment pursuant to Section 2.01(a) above, ... the UBS Mortgage Loan Seller has (pursuant to the UBS/Depositor Mortgage Loan Purchase Agreement) agreed, in the case of each UBS Trust Mortgage Loan, to deliver to and deposit with, on or before the Closing Date: (i) the Trustee or a Custodian appointed thereby, the Mortgage File for such Trust Mortgage Loan." DRJN, Ex. 3.

Section 1.01 of the PSA defines "Mortgage File" as including, among others, the following two documents:

"the original executed Mortgage Note for such Trust Mortgage Loan, endorsed (without recourse, representation, or warranty, express or implied) to the order of LaSalle Bank National Association, as trustee for the registered holders of LB-UBS Commercial Mortgage Trust 2004-C6, Commercial Mortgage Pass-Through Certificates, Series 2004-C6' or in blank... [and] an original executed assignment [of the Deed of Trust] in favor of LaSalle Bank National Association, in its capacity as trustee for the registered holders of LB-UBS Commercial Mortgage Trust 2004-C6, Commercial Mortgage Pass-Through Certificates, Series 2004-C6.'" DJRN, Ex. 3.

In June 2010, the Trust assigned its rights under the Loan to Defendant LBUBS 2004-C6 Stockdale Office Limited Partnership ("Defendant Owner"). Compl., Ex. 2. On August 3, 2010, Defendant Owner caused a Notice of Default and Election to Sell under Deed of Trust ("Notice of Default") to be recorded against Borrower, due to its failure to make timely payments under the Loan. Compl., Ex. 3. In February 2013, Defendant Owner completed a non-judicial foreclosure proceeding against Stockdale Tower. Defendant Owner was the successful bidder at the Trustee's Sale with a credit bid of $20, 000, 000, leaving an unpaid balance owing on the Loan of $11, 306, 472.73. DRJN, Ex. 4.

In January 2013, Plaintiff and Borrower filed a lawsuit against Defendants in state court, alleging that Defendants had interfered with Borrower's ability to pay off the Loan. DRJN, Ex. 5. In February 2013, Defendant Owner filed an action against Plaintiff and his wife to collect the unpaid balance owing on the Loan, pursuant to the personal guaranty that Plaintiff and his wife had executed in connection with the Loan. DRJN, Ex 6. In August 2013, Plaintiff and Defendants executed a written settlement agreement, which contained a mutual general release as to all known and unknown claims between the parties to the agreement. DRJN, Ex. 7.

On October 14, 2014, Plaintiff filed the Complaint in Kern County Superior Court. On November 21, 2014, Defendants removed the matter to this Court. On December 3, 2014, Defendant Owner filed the ...


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