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Marshall v. General Motors/ Corporation Service Co.

United States District Court, S.D. California

June 26, 2019

Gentleman Marshall as AGENT obo His Granted Federal Franchise MARSHALL PFEIFFER Known as #222703407-g38455581, Plaintiff,
v.
GENERAL MOTORS/ CORPORATION SERVICE COMPANY; ALLY FINANCIAL INC/ CORPORATION SERVICE COMPANY; FEDERAL HOME LOAN MORTGAGE CORPORATION/AGENT; THE BANK OF NEW YORK MELLON CORPORATION/AGENT; NEWREZ LLC F/K/A NEW PENN FINANCIAL, LLC, D/B/A/SHELLPOINT MORTGAGE SERVICING LLC; QUALITY LOAN SERVICE CORPORATION, Defendants.

          ORDER GRANTING MOTIONS TO DISMISS [ECF Nos. 73, 74, 75, 87].

          Hon. Gonzalo P. Curiel United States District Judge.

         This litigation arises out of a loan obtained by pro se Plaintiff Marshall Pfeiffer (“Plaintiff”), secured by a Deed of Trust on his property, located in El Cajon, California. At issue is Plaintiff's Second Amended Complaint (“SAC”), which alleges that entities associated with servicing, owning, and selling his mortgage loan have improperly and fraudulently moved to foreclose against him. (ECF No. 71.)

         Various defendants in this case (“Defendants”) have filed four motions to dismiss in response. On May 15, 2019, Magnum Property Investments, LLC, (“Magnum”) filed a motion to dismiss. (ECF No. 73.) On May 17, 2019, Federal Home Loan Mortgage Corporation, NewRez LLC, New Residential Investment Corp., the Bank of New York Mellon Corporation filed a motion to dismiss. (ECF No. 74.) On May 20, 2019, Quality Loan Service Corporation (“Quality Loan”) filed its motion to dismiss. (ECF No. 75.) On June 10, 2019, Ally Bank (erroneously sued as GMAC Bank/Ally Bank) filed a motion to dismiss. (ECF No. 87.) Plaintiff filed a combined response to these motions (ECF No. 81), and additionally filed a separate response to Ally Bank's motion (ECF No. 93).

         Pursuant to Civil Local Rule 7.1(d)(1), the Court finds the foregoing motions suitable for adjudication without oral argument. For the reasons explained below, Defendants' motions to dismiss will be granted without leave to amend.

         I. Background

         A. Factual History

         On January 8, 2008, Plaintiff obtained a $475, 000.00 Promissory Note (the “Note”) from Homecomings Financial, LLC, secured by a Deed of Trust in Plaintiff's property at 4382-4384 Mississippi Street, El Cajon, California 92104. (ECF No. 87-3, at 5.)[1] The Deed of Trust was recorded on January 11, 2008 and listed Chicago Title as Trustee and identified Mortgage Electronic Registration Systems, Inc. (“MERS”) as the nominee beneficiary for the lender and lender's successors and assigns. (Id.)

         After origination, the Deed of Trust was assigned five times, and the following assignments are reflected in the official records of the San Diego County Recorder's Office: (1) on March 8, 2011, MERS assigned the DOT to GMAC Mortgage, LLC (ECF No. 87-4); (2) on July 17, 2013, GMAC Mortgage, LLC assigned the DOT to Ocwen Loan Servicing (ECF No. 87-5); (3) on September 14, 2015, Ocwen assigned the DOT to Residential Credit Solutions Inc. (ECF No. 87-6); (4) on October 10, 2016, Residential Credit Solutions Inc. assigned the DOT to Ditech Financial LLC (ECF No. 87-7); (5) on November 13, 2017, Ditech Financial LLC assigned the DOT to NewRez (ECF No. 87-8). During this period, the identity of the Trustee also changed several times. On April 26, 2011, GMAC Mortgage, LLC substituted CAL-Western Reconveyance Corporation as Trustee. (ECF No. 74-5, at 2.) On February 2, 2016, the Law Offices of Les Zieve was substituted in as Trustee. (ECF No. 75-3, at 29.) Thereafter, on June 28, 2018, NewRez substituted in Quality Loan. (ECF No. 75-3, at 35.)

         At some point in 2012, Plaintiff stopped paying his monthly payments under the Loan. (ECF No. 71-1, at 39 (referring to default in April 2012); ECF No. 71-2, at 18 (referring to default in August 2012).) Plaintiff's default persisted for approximately six years, until June 28, 2018, when Quality Loan, acting as Trustee for NewRez, recorded a Notice of Default and Election to Sell Under Deed of Trust. (ECF No. 75-3, at 38.) Thereafter, on October 8, 2018, Quality Loan recorded a Notice of Trustee's Sale indicating that Plaintiff had been in arrears in the amount of $257, 460.73. (ECF No. 75-3, 43.) The foreclosure sale took place on November 9, 2018, when Plaintiff's property was sold at auction to Magnum.

         B. Procedural Background

         On November 7, 2018 Plaintiff filed his original complaint (ECF No. 1), and on December 5, 2018, Plaintiff filed a motion to amend the complaint to add additional defendants. (ECF No. 28.) On December 6, 2018, the Court denied the motion to amend as moot because Plaintiff could amend as of right under Federal Rule of Civil Procedure 15(a)(1)(A). (ECF No. 29.) In that motion, the Court specifically advised Plaintiff of his responsibility under Rule 8 to submit pleadings which were “simple, concise, and direct.” (Id. at 4.) It further reminded Plaintiff that failure to comply with the Federal Rules, or any order of the Court may result in a dismissal of the action with prejudice. (Id. at 5.)

         On December 17, 2018, Plaintiff filed a First Amended Complaint (“FAC”). (ECF No. 29.) The FAC alleged, inter alia, that Defendants were engaged in a wrongful foreclosure on his property because there was a fraudulent chain of assignments of the DOT which demonstrated that NewRez was not the true beneficiary. Plaintiff also alleged that the Note had become separated from the Deed of Trust, and objected that any entity which sought to foreclose must show that it had physical possession of the note. Plaintiff further argued that Defendants improperly responded to his inquiries to ascertain the true noteholder.

         On March 11, 2019, after considering the Defendants' motions to dismiss, the Court entered an order dismissing the FAC on three independent grounds. (ECF No. 65.) First, the Court agreed with Defendants that the FAC was so scattershot, inscrutable, and prolix that it ran afoul of Rule 8 with respect to many of the defendants. Second, the Court held that Plaintiff lacked standing to challenge the foreclosure sale because none of Plaintiff's assertions of impropriety-i.e., the separation of the Note from the Deed of Trust, the fact that some notes were endorsed in blank, and that some defendants did not satisfactorily respond to his inquiries-would render the assignments void, rather than voidable. Finally, because the Court found that Plaintiff lacked standing to challenge the foreclosure sale, the Court found that Plaintiff's failure to tender the full amount of his outstanding debt precluded him from claiming wrongful foreclosure. In dismissing the FAC, the Court granted Plaintiff leave to file a second amended complaint, but cautioned Plaintiff that any such filing must address the deficiencies outlined in the dismissal order or risk dismissal. (Id. at 16.)

         Plaintiff timely filed his SAC on May 30, 2019[2] (ECF No. 71); an apparently accompanying set of exhibits to the SAC-submitted under the title of “Amended Brief Appendix”-was uploaded to the docket on April 12, 2019 (ECF No. 67). The allegations in the SAC mirror the ones previously dismissed under the FAC, with two notable differences. First, in an ostensible effort to comply with Rule 8, Plaintiff included a section, titled “specific claims against each defendant, ” in which he groups his pleadings according to defendants. (ECF No. 71, at 10-28.) Second, Plaintiff clarified that his challenge to the foreclosure sale rested, in part, on a claim that NewRez had no beneficial interest in the Note because NewRez's beneficial interest stemmed, if at all, from a void assignment of the DOT from Homecomings Financial, LLC, the original lender, to GMAC Mortgage, LLC, back in 2011.

         Defendants submitted motions to dismiss, arguing once more that Plaintiff's pleadings violate Rule 8, and that the SAC fails to overcome any of the deficiencies identified previously identified by the Court with respect to his failure to state a claim under Rule 12(b)(6).

         II. Applicable Legal Standards

         A. Rule 8

         As the Court previously detailed in its December 6, 2018 Order, which granted Plaintiff leave to file a first amended complaint, (ECF No. 29), Plaintiff is beholden to the dictates of Rule 8. Rule 8(a)(2) requires that pleadings that state 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). Furthermore, “[e]ach allegation must be simple, concise, and direct.” Fed.R.Civ.P. 8(d)(1).

         Complaints that are too confusing and prolix to “perform the essential functions of a complaint” are subject to dismissal under Rule 8. See, e.g., McHenry v. Renne, 84 F.3d 1172, 1177-80 (9th Cir. 1996) (upholding a Rule 8(a) dismissal of a complaint that was “argumentative, prolix, replete with redundancy, and largely irrelevant”); Hatch v. Reliance Ins. Co., 758 F.2d 409, 415 (9th Cir. 1985) (upholding a Rule 8(a) dismissal of a complaint that was confusing and conclusory). Although the pleadings of pro se plaintiffs are liberally construed, the basic pleading requirements of Rule 8 apply to self-represented and counseled plaintiffs alike. Ghazali v. Moran, 46 F.3d 52, 54 (9th Cir. 1995); Wynder v. McMahon, 360 F.3d 73, 79 n. 11 (2d Cir. 2004).

         B. ...


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