United States District Court, N.D. California
ORDER GRANTING MOTION TO DISMISS RE: DKT. NO.
WILLIAM H. ORRICK United States District Judge.
Camilla Spangler’s complaint arises primarily out of
her contention that because of alleged defects in the chain
of assignments, defendants American Brokers Conduit, Law
Offices of Les Zieve, Mortgage Electronic Registration
Systems Inc. (“MERS”), Selene Finance LP, and
Wilmington Savings Fund Society FSB wrongfully foreclosed on
her home. She also accuses defendants of a variety of other
misconduct associated with her home loan and foreclosure
process. Defendants MERS, Wilmington, and Selene Finance have
filed a joint motion to dismiss all of the alleged claims.
For the reasons discussed below, the motion to dismiss is
April 10, 2007, Spangler and her husband, now deceased,
executed a promissory note and a security interest in the
form of a Deed of Trust in the amount of $344, 500. FAC
¶¶ 13-14; RJN, Exh. 1. The Deed of Trust lists
Spangler as the borrower, American Brokers Conduit as the
lender, Financial Title Company as the trustee, and MERS as
the nominee for American Brokers Conduit and the beneficiary.
27, 2008, the first Notice of Default was recorded. RJN, Exh.
3. On September 3, 2008, MERS executed a Substitution of
Trustee which substituted Recontrust Company as the new
trustee. FAC ¶ 15; RJN, Exh. 4. The first Notice of Sale
was also recorded on the same date. RJN, Exh. 5. Thereafter,
MERS assigned “all right, title, and interest the
loan” to Countrywide Home Loans Servicing, LP on March
24, 2009, making Countrywide the new beneficiary. FAC ¶
16; RJN, Exh. 6.
assert, and Spangler does not dispute, that due to
requirements imposed by the federal government, Bank of
America acquired Countrywide’s loan portfolio in
2008. As a result, in June 2010, MERS recorded a
Substitution of Trustee and Assignment of Deed of Trust which
substituted Recontrust as the trustee and granted all
beneficial interest to BAC Home Loans Servicing, LP
(previously Countrywide). RJN, Exh. 7. Subsequently, two more
Notices of Sale were recorded, the first in June 2010 and the
second in July 2011. RJN, Exhs. 8, 9.
February 15, 2012, Recontrust recorded the first
“Trustee’s Deed Upon Sale” against
Spangler’s home. RJN, Exh. 10. The Trustee’s Deed
Upon Sale initially transferred the Deed of Trust to Louden,
LLC after Louden purchased the home on February 6, 2012.
Id. But on May 9, 2013, Recontrust recorded a
document titled “Notice of Rescission of Declaration of
Default and Demand for Sale and of Notice of Default and
Election to Sell, ” which rescinded all prior notices
of sale and default. RJN, Exh. 11. As a result of the
rescission, title was placed back into Spangler’s name,
BAC Home Loans Servicing was the beneficiary, and Recontrust
was the trustee.
November 10, 2014, Bank of America, as successor by merger of
BAC Home Loans Servicing, recorded a Substitution of Trustee
which substituted the Law Offices of Les Zieve as trustee.
FAC ¶ 18; RJN, Exh. 12. On the same day, Les Zieve
recorded a Notice of Default demonstrating that Spangler owed
over $174, 000. RJN, Exh. 13.
January 16, 2016, Les Zieve recorded a final Notice of Sale.
RJN, Exh. 16. A foreclosure sale was held on January 28, 2016
and a second Trustee’s Deed Upon Sale was recorded a
few days later on February 4, 2016. RJN, Exh. 17. The
Trustee’s Deed Upon Sale conveyed the property to
Wilmington Savings Fund Society, FSB, dba Christiana Trust,
at that time was also the foreclosing beneficiary.
Id. Prior to the foreclosure sale, on January 22,
2016, BAC Home Loans Servicing had executed an
“Assignment of Deed of Trust” which assigned
Wilmington all of its beneficial interest under the deed of
trust. RJN, Exh. 18. This assignment was recorded on February
5, 2016. Id.
on this record, Spangler asserts eight causes of action: (1)
wrongful foreclosure; (2) violation of California Civil Code
§ 2924(a)(6); (3) violation of California Civil Code
§ 2924.17; (4) violation of 15 U.S.C. § 1641(g);
(5) rescission under the Truth in Lending Act and 15 U.S.C.
§ 1635; (6) violation of 15 U.S.C. § 1692c(b); (7)
violation of Cal. Bus. & Prof. Code § 17200 (the
“UCL”); and (8) a request for declaratory relief.
Federal Rule of Civil Procedure 12(b)(6), a district court
must dismiss a complaint if it fails to state a claim upon
which relief can be granted. To survive a Rule 12(b)(6)
motion to dismiss, the plaintiff must allege “enough
facts to state a claim to relief that is plausible on its
face.” Bell Atl. Corp. v. Twombly, 550 U.S.
544, 556 (2007). A claim is facially plausible when the
plaintiff pleads facts that “allow the court to draw
the reasonable inference that the defendant is liable for the
misconduct alleged.” Ashcroft v. Iqbal, 556
U.S. 662, 678 (2009) (citation omitted). There must be
“more than a sheer possibility that a defendant has
acted unlawfully.” Id. While courts do not
require “heightened fact pleading of specifics, ”
a plaintiff must allege facts sufficient to “raise a
right to relief above the speculative level.”
Twombly, 550 U.S. at 555, 570.
deciding whether the plaintiff has stated a claim upon which
relief can be granted, the court accepts the
plaintiff’s allegations as true and draws all
reasonable inferences in favor of the plaintiff. See
Usher v. City of Los Angeles, 828 F.2d 556, 561 (9th
Cir. 1987). However, the court is not required to accept as
true “allegations that are merely conclusory,
unwarranted deductions of fact, or unreasonable
inferences.” In re Gilead Scis. Sec. Litig.,
536 F.3d 1049, 1055 (9th Cir. 2008). If the court dismisses
the complaint, it “should grant leave to amend even if
no request to amend the pleading was made, unless it
determines that the pleading could not possibly be cured by
the allegation of other facts.” Lopez v.
Smith, 203 F.3d 1122, 1127 (9th Cir. 2000)
move to dismiss all of Spangler’s claims.
FORECLOSURE (CLAIM ONE)
foreclosure is an action in equity where a plaintiff seeks to
set aside a foreclosure sale.” Hard v. Bank of New
York Mellon, No. 14-cv-01948, 2016 WL 2593911, at *12
(E.D. Cal. May 5, 2016). In order to state a claim for
wrongful foreclosure, a plaintiff must allege that:
“(1) the trustee or mortgagee caused an illegal,
fraudulent, or willfully oppressive sale of real property
pursuant to a power of sale in a mortgage or deed of trust;
(2) she was prejudiced or harmed; and (3) she tendered the
amount of the secured indebtedness or was excused from
tendering.” Simmons v. Aurora Bank FSB, No.
13-cv-00482-HRL, 2016 WL 192571, at *7 (N.D. Cal. Jan. 15,
alleges that any assignment purporting to transfer the
beneficial interest in the loan to Wilmington is void because
it occurred after the trust’s closing date and that,
even if it had been timely, it violates the Pooling Services
Agreement which requires an unbroken chain of transfers and
assignments. FAC ¶¶ 44-46. The FAC specifically cites
Yvanova v. New Century Mortgage Corporation, 62
Cal.4th 919 (2016), a recent California Supreme Court case,
as providing the authority under which Spangler is entitled
to challenge the foreclosure. Id. ¶ 53. But
Spangler’s argument fails for at least two reasons: (1)
she does not identify any requirement that the assignment of
the deed of trust ...