United States District Court, N.D. California
ORDER GRANTING DEFENDANTS' MOTION TO DISMISS
DOCKET NO. 20
M. CHEN United States District Judge.
Lonnie Ratliff has filed against multiple defendants,
asserting claims for, inter alia, wrongful
foreclosure, quiet title, violation of the Fair Debt
Collection Practices Act (“FDCPA”), violation of
the Fair Credit Reporting Act (“FCRA”), and
violation of the California Business & Professions Code
§ 17200. Currently pending before the Court is a motion
to dismiss filed by four of the named defendants -
i.e., JPMorgan Chase Bank, N.A.
(“Chase”); Homesales, Inc.; EMC Mortgage, LLC
(“EMC”); and Mortgage Electronic Registration
Systems, Inc. (“MERS”). Having considered the
parties' briefs and accompanying submissions, as well as
the oral argument of counsel, the Court hereby GRANTS the
motion to dismiss.
FACTUAL & PROCEDURAL BACKGROUND
complaint, Mr. Ratliff alleges as follows.
Ratliff's lawsuit concerns certain real property that he
owned in Oakland, California. The real property has both a
front unit and a back unit. See Compl. ¶ 2.
October 2003, Mr. Ratliff obtained a $630, 000 loan from
Mortgage Store. See Compl. ¶ 39. Chase appears
to have been servicer for the $630, 000 loan. See
Compl., Ex. G (Forensic Rept. at 2).
loan was secured by a deed of trust (“DOT”) on
the Oakland property. See Compl. ¶ 39 & Ex.
B (DOT at 2). The trustee named on the DOT was First
American. See Compl., Ex. B (DOT at 2). In addition,
MERS was identified on the DOT as “a separate
corporation that is acting solely as a nominee for Lender
and Lender's successors and assigns. MERS is the
beneficiary under this Security Instrument.” Compl.,
Ex. B (DOT at 2) (emphasis added).
point, Mortgage Store transferred the loan/DOT to the Impac
Trust but the transfer, according to Plaintiff, was not
properly effected. See, e.g., Compl. ¶ 28
(alleging that “there was no 'True Sale' of
Plaintiff's Tangible Note, a circumstance whereby the
MORTGAGE STORE sold Plaintiff's Tangible Note to the
'buyer/seller' IMPAC Mortgage Holdings, Inc. in an
ordinary course of business”) (emphasis omitted);
Compl. ¶ 29 (alleging that “The MORTGAGE STORE,
INC. never negotiated the Tangible Note by operation of law
for full value in accordance with all applicable law to IMPAC
MORTGAGE HOLDINGS, INC.”). The closing date for
transfer of loans to the Impac Trust was supposed to be in
December 2003. See Compl. ¶ 33.
Mr. Ratliff takes the position, in his complaint, that there
was no proper transfer to the securitized trust, he also
argues, at least in his opposition brief, that, because of
the transfer to the securitized trust, “only the Trust
Pool[, ] or Deutsche Bank as its trustee, had the right to
foreclose as they were the beneficiaries of Plaintiffs'
[sic] mortgage at that point, ” Opp'n at 12, and
not MERS. See Opp'n at 3 (arguing that
“MERS listed itself as the beneficiary despite the fact
that, at this point, the Impac . . . Trust . . . was the true
beneficiary of Plaintiff's mortgage and MERS was a
stranger to Plaintiff's DOT”).
21, 2005 - i.e., several years after the closing
date for transfer of loans to the Impac Trust - MERS signed a
substitution of trustee in which it designated ETS as the new
trustee in place of First American. See Defs.'
RJN, Ex. A (substitution of trustee).
same day, ETS - acting at MERS's behest - issued a notice
of default on the real property at issue. See
Compl., Ex. I (notice of default). This notice of default was
subsequently rescinded in August 2005. See Compl.,
Ex. J (rescission).
February 6, 2006, another notice of default was issued. As
above, the notice indicated that ETS was taking action on
behalf of MERS. See Compl., Ex. K (notice of
months later, in May 2006, ETS had a notice of trustee's
sale recorded against the real property. See Compl.,
Ex. L (notice of trustee's sale). For an unknown reason,
that sale did not take place and another notice of
trustee's sale issued in August 2007. See
Compl., Ex. M (notice of trustee's sale).
the real property was sold in October 2007. The trustee's
deed upon sale reflects that the ETS, as trustee, conveyed
the property to EMC. See Compl., Ex. N
(trustee's deed upon sale).
years later, in October 2013, a grant deed was recorded
transferring the real property from EMC to Homesales.
See Compl., Ex. O (grant deed).
November 2013, Homesales filed an unlawful detainer action
against Mr. Ratliff in state court with respect to the front
unit of the real property. In February 2014, Homesales
initiated a second unlawful detainer action, this time with
respect to the back unit. See Compl. ¶¶
March 2017, a judgment was entered in favor of Homesales on
the front unit. See Compl. ¶ 52. The status of
the back unit has not yet been resolved. See Compl.
January 2017 - prior to the final judgment on the front unit
- Mr. Ratliff filed a Chapter 7 petition in bankruptcy court.
See Compl. ¶ 56. Mr. Ratliff identified Chase
in one of his bankruptcy filings as a creditor (even though,
as indicated above, Chase appears to have been only the
servicer of the loan at issue). See In re Ratliff,
No. 17-40264 (N.D. Cal. Bankr. Ct.) (Docket No. 12, at 15)
(summary of assets and liabilities) (stating that Homesales
had a secured claim on the real property at issue in the
amount of approximately $738, 000 and that Chase had a
secured claim on the same real property in the same amount).
appears to be a response to the bankrupting filing, Chase
sent a letter to Mr. Ratliff in February 2017. The letter
states in relevant part as follows:
Here's how your recent bankruptcy filing affects your
Bankruptcy Case Number: 17-40264
Property Address 2304 9th Ave
Oakland CA 94606
Dear Lonnie Ratliff Jr[.]:
We recently received notification that you've filed for
If you've filed Chapter 7 bankruptcy, please call us at
one of the numbers below to discuss plans for the property.
We'd like to understand if you want to keep the property
and if you're requesting to reaffirm the debt, meaning
the debt will not be discharged and you'll still be
responsible for the balance on your mortgage loan.
Reaffirming a debt is a serious financial decision. You
should determine if it's in your best interest and if you
can afford to make the payments on the debt. . . .
To request a reaffirmation agreement, you should call us at
one of the numbers below. We don't consider your stated
intention within your bankruptcy documents to be a request to
enter into a reaffirmation agreement or a reaffirmation of
We don't report full contractual information to the
credit reporting agencies on bankruptcy accounts. On accounts
included in Chapter 7 bankruptcy and if the debt isn't
reaffirmed, we'll stop reporting on the discharged debt
after the bankruptcy case is closed regardless of whether the
loan is current or is brought current at a later date.
If you're interested in keeping the property and your
loan isn't current, homeowner assistance options may be
available. Please call us at one of the numbers below to
discuss your options. . . .
If you surrender the property, the title won't
automatically transfer and you'll still be responsible
for any post-petition taxes, insurance and Homeowners
Association dues until the title is transferred. . . .
If you don't want to receive monthly statements We'll
continue to send you monthly statements for informational
purposes, but not as an attempt to impose personal liability
for the debt. . . .
Payments on your account are voluntary Any payment we receive
is voluntary and won't be considered an assumption or