United States District Court, N.D. California, San Jose Division
ORDER RE MOTIONS TO DISMISS AND DENYING MOTIONS FOR
DEFAULT JUDGMENT [RE: ECF 95, 99, 117, 135, 137,
LAB SON FREEMAN United States District Judge
brings this action to rid herself of a purported mortgage
refinancing loan. The Court previously dismissed her
complaint for seeking to bring claims that she had failed to
properly schedule in her Chapter 7 bankruptcy, but granted
leave to amend. See ECF 91. Plaintiff has now filed
a prolix 91 page, 218 paragraph amended complaint. In four
separate motions pled by Old Republic Default Management
Services, Old Republic National Title Insurance Company,
Shellpoint and Bank of New York, and MERS,
Defendants argue that she again exclusively asserts
claims that she failed to schedule in her bankruptcy.
Defendants therefore ask the Court to dismiss the complaint
with prejudice. For the reasons stated below, the Court
GRANTS Defendants’ motions to dismiss, docketed at ECF
99, 117, and 135, without leave to amend.
detailed Plaintiff’s allegations in its first Order
Granting Motions to Dismiss (“First Dismissal
Order”), see ECF 91, the Court briefly
summarizes Plaintiff’s amended allegations below.
Plaintiff alleges that she acquired the property located at
131 Sutphen Street in Santa Cruz, CA (“Property”)
and recorded the deed on September 1, 1998. Second Amended
Compl. (“SAC”) ¶ 11, ECF 93. Though
Plaintiff is now a citizen of Nevada, she alleges that, at
all relevant times, the Property was her principal residence.
Id. ¶ 41.
December 14, 2004, Plaintiff secured a $544, 000 refinancing
loan with a deed of trust (“DOT”) on the
Property. Id. ¶¶ 12-13, 18. The DOT was
recorded on December 21, 2004 and named non-party
America’s Wholesale Lender as the lender. Id.
¶¶ 12-13. Plaintiff alleges that, though $544, 000
was credited primarily to refinance a previous loan, neither
AWL nor any of the Defendants provided that funding.
Id. ¶ 18. Rather, Plaintiff alleges, AWL did
not exist as named (i.e., as a New York corporation) and the
actual lender was never disclosed. Id. ¶¶
for the purposes of her Truth in Lending Act
(“TILA”) claim, Plaintiff alleges that AWL was
the creditor and that AWL violated TILA by failing to provide
her with the required disclosures. Id. ¶¶
2, 20. Plaintiff alleges that she therefore properly
rescinded the refinancing loan by mailing a notice of
rescission to AWL on July 13, 2007. Id. ¶ 16.
AWL then “failed to comply with its duties under 15
U.S.C. § 1635(b)” or to challenge the rescission
within 20 days of receiving the rescission. Id.
December 7, 2009, non-party Reconstruct Company requested
that a Substitution of Trustee and Assignment of Deed of
Trust (“SOT and Assignment”) be recorded.
Id. ¶ 31. Plaintiff alleges that the SOT and
Assignment was invalid and void because the Defendants and
AWL were not what they purported to be (i.e., the lender,
assignee, trustee, or beneficiary of the loan) and because
Plaintiff had previously rescinded the DOT. Id.
¶ 32. In March 2010, Reconstruct Company recorded a
Notice of Trustee’s Sale of the Property. Id.
November 12, 2010, Plaintiff filed for Chapter 7 bankruptcy.
Id. ¶ 22; see also Case No.
5:10-bk-61716. Plaintiff scheduled the Property and the loan
at issue as unsecured, nonpriority, contingent, unliquidated,
and disputed. SAC ¶ 22.
also filed an adversary proceeding in bankruptcy court
against MERS and other entities who are not parties to this
action to determine whether or not the purported refinancing
debt was secured. Id. ¶ 22; see also
Case No. 5:11-ap-05106. Plaintiff did not mention the alleged
rescission. SAC ¶¶ 22-23. The bankruptcy court
dismissed the adversary proceeding for lack of subject matter
jurisdiction because only the Chapter 7 trustee had standing
to pursue Plaintiffs claims at that time. Id. ¶
January 2012, Plaintiffs bankruptcy case was closed.
Plaintiff alleges that, at that point, the Property was
abandoned back to Plaintiff and the purported refinancing
debt was deemed unsecured and void by operation of law.
Id. ¶ 25.
2012, Plaintiff filed a lawsuit in Santa Cruz Superior Court,
Case No. CV 174201. Id. ¶ 29. Plaintiff alleges
that, with trial looming, Reconstruct Company recorded a
Notice of Rescission and Declaration of Default and Demand
for Sale and of Notice of Default and Election to Sell on
January 23, 2014. Id. ¶ 29. Plaintiff alleges
that, because this effectively ended the attempts to
foreclose on the Property, Plaintiff dismissed her state case
without prejudice and her appeal of the bankruptcy adversary
ruling. Id. ¶ 29.
Plaintiff alleges that Defendants’ wrongful activities
did not end there. Instead, Plaintiff alleges that Defendants
collectively recorded or “caused to be recorded”
the following: a Notice of Default and Election to Sell Under
Deed of Trust (“NOD 1”) and second Substitution
of Trustee (“SOT 2”) on October 28, 2014,
id. ¶¶ 33-34; a second Notice of Default
(“NOD 2”) and third Substitution of Trustee
(“SOT 3”) on December 19, 2014, id.
¶¶ 35-36, and a second Notice of Trustee’s
Sale on April 30, 2015, id. ¶ 37. Plaintiff alleges
that the documents wrongfully identified Shellpoint and MERS
as the beneficiary, MERS as the nominee, ORNTIC as the
trustee, and BONYMCorp as the assignee of the DOT.
Id. ¶¶ 32, 84. Plaintiff alleges that each
of these documents was invalid and void because Plaintiff had
rescinded the DOT on which they were based. Id.
on the above allegations, Plaintiff asserts: (1) cancellation
of invalid instruments; (2) slander and disparagement of the
title to Plaintiff’s property against all Defendants;
(3) fraud against ORNTIC and Shellpoint; (4) violation of the
Federal Fair Debt Collection Practices Act
(“FDCPA”), 15 U.S.C. § 1692 et seq,
and the Rosenthal Debt Collection Practices Act
(“RFDCPA” or “Rosenthal Act”), Cal.
Civil Code § 1788 et seq, against ORNTIC and
Shellpoint; (5) violation of California’s Unfair
Practices Act (“UPA”), Cal. Bus. & Prof. Code
§ 17000 et seq., against ORNTIC, Shellpoint,
and MERS; and (6) a new 42 U.S.C. § 1983 claim against