United States District Court, C.D. California
Stephen H. Johnson et al.
Caliber Home Loans, Inc. et al.
Present: The Honorable PERCY ANDERSON, UNITED STATES DISTRICT
CIVIL MINUTES - GENERAL
IN CHAMBERS - COURT ORDER
the Court are a (1) Motion to Dismiss Case filed by
defendants Caliber Home Loans, Inc. and U.S. Bank Trust,
N.A., as Trustee For LSF9 Master Participation Trust
(“Defendants”) (Docket No. 9); (2) Motion for
Order Declaring Plaintiffs as Vexatious Litigants filed by
Defendants (Docket No. 11); and a (3) Motion to Remand Case
filed by plaintiffs Stephen H. Johnson and Paula A. Johnson
(“Plaintiffs”) (Docket No. 16). Plaintiffs filed
an Opposition to Motion to Dismiss (Docket No. 18), and
Defendants filed a Reply (Docket No. 22). Defendants filed an
Opposition to Motion to Remand (Docket No. 17), and
Plaintiffs filed a Reply (Docket No. 20). Plaintiffs filed an
Opposition to Motion for Order Declaring Plaintiffs as
Vexatious Litigants (Docket No. 19), and Defendants filed a
Reply (Docket No. 23). The parties also filed Requests for
Judicial Notice with their briefing. (Docket Nos. 10, 12, and
21.) Pursuant to Rule 78 of the Federal Rules of Civil
Procedure and Local Rule 7-15, the Court finds this matter
appropriate for decision without oral argument. The hearing
scheduled for September 9, 2019 is vacated, and the matter
taken off calendar.
reasons stated below, the Court denies Plaintiffs' Motion
to Remand, grants Defendants' Motion to Dismiss without
leave to amend, and denies Defendants' Motion for Order
Declaring Plaintiffs as Vexatious Litigants. The Court also
grants Defendants' Request for Judicial Notice in Support
of Motion to Dismiss (Docket No. 10), denies Defendants'
Request for Judicial Notice in Support of Motion for Order
Declaring Plaintiffs as Vexatious Litigants (Docket No. 12),
and denies Plaintiffs' Request for Judicial Notice in
Support of Opposition to Motion to Dismiss and Motion to
Remand (Docket No. 21).
November 21, 2006, Ruth M. Bass-Wallace obtained a $780,
000.00 mortgage loan from Washington Mutual Bank, FA
(“Washington Mutual”), which was secured by a
Deed of Trust on property located at 10578 Deer Canyon Drive,
Rancho Cucamonga, CA 91737 (the “Property”).
(See Docket No. 1 (Notice of Removal), Ex. 1
(“Compl.”) at Ex. A (Adjustable Rate Note);
see also Docket No. 10 (Request for Judicial Notice
in Support of Defendants' Motion to Dismiss, hereinafter
“RJN”), Ex. 1 (Deed of Trust).) The Deed of Trust
specifies Washington Mutual as the “Lender” and
Ms. Wallace as the sole “Borrower.” (RJN, Ex. 1.)
Defendant U.S. Bank Trust, N.A. acquired Washington
Mutual's beneficial interest under the Deed of Trust
through a series of assignments. (Compl. at Exs. D, E.) On
September 4, 2005, Ms. Wallace executed a Grant Deed granting
the Property to herself and Plaintiffs as joint tenants.
(Id. at Ex. B.) Ms. Wallace passed away on December
10, 2007. (Id. at Ex. C.) Plaintiffs made payments
owed under the Deed of Trust, which were accepted by
Defendants or their predecessors-in-interest. (Id.
at 8-9.) However, payments owed pursuant to the Deed of Trust
eventually fell into arrears, and became due on December 1,
2011. (Id. at Ex. G.) Due to contractual delinquency
of the loan, the property was referred to foreclosure on
March 29, 2012. (Id. at Ex. F.) A Notice of Default
was recorded against the Property on June 12, 2012.
See Order Dismissing Case Without Leave to Amend,
Stephen H. Johnson, et al. v. Caliber Home Loans, Inc.,
et al. (“Johnson I”), No.
16-CV-2136 PA (GJSx) (C.D. Cal. May 9, 2017), ECF No. 24 at
2. A Notice of Trustee's Sale was recorded on October 7,
pro se, Plaintiffs filed their first lawsuit against
Defendants regarding the Property in the U.S. District Court
for the Central District of California on October 17, 2016
(“Johnson I”). See Complaint,
No. 16-CV-2136 PA (GJSx), (C.D. Cal. Oct. 17, 2019), ECF No.
1. In their First Amended Complaint, Plaintiffs alleged that
“Defendants are third-party strangers to their mortgage
loan and have no ownership interest entitling them to collect
payment or declare a default or attempt to foreclose.”
(RJN, Ex. 2 at 2.) They claimed that “Defendants have
resorted to misrepresenting to Plaintiffs and to the Court
that they have authority to collect Plaintiffs'
obligation and that they have the right to take
Plaintiffs' Property away.” Id. Plaintiffs
asserted claims for: (1) declaratory relief under 28 U.S.C.
§§ 2201, 2202; (2) quiet title relating to
violation of the Federal Truth in Lending Act
(“TILA”); (3) violation of the Fair Debt
Collection Practices Act (“FDCPA”), 15 U.S.C.
§§ 1692, et seq.; (4) violation of TILA, 15 U.S.C.
§ 1641(g); (5) violation of the Real Estate Settlement
Procedures Act (“RESPA”), 12 U.S.C. § 2605;
(6) violation of the California Homeowner Bill of Rights
(“HBOR”), Cal. Civ. Code §§ 2924.17,
2924(a)(6); (7) breach of contract; (8) breach of the implied
covenant of good faith & fair dealing; (9) wrongful
foreclosure; and (10) violation of the Unfair Competition Law
(“UCL”), Cal. Bus. & Prof. Code §§
17200, et seq. Id. at 1. Their requested relief
included a “judicial declaration . . . that the title
to subject ‘Property' is vested in Plaintiff alone
and that Defendants and each of them be declared to have no
interest either Legal or Equitable, right, estate, or lien in
subject ‘Property', and that the Defendants, their
Agents or Assigns, be forever enjoined from asserting estate,
right, title or interest to subject
‘Property.'” Id. at 41.
Court dismissed the case without leave to amend. (RJN, Ex.
3.) The Court determined that Plaintiffs were not approved,
in writing, by the Lender or Lender's successors in
interest, and Plaintiffs therefore never acquired a valid
interest under the Deed of Trust. (Id., Ex. 3 at 5.)
The Grant Deed failed to evidence Defendants' or any
other Lender's written approval of Plaintiffs as
Wallace's successors in interest, and so Plaintiffs
lacked standing to assert any causes of action that arose
from the Deed of Trust. (Id. at 6.) In addition, the
Court concluded that Plaintiffs failed to plausibly allege a
claim for quiet title because Wallace's Grant Deed was
subject to the conditions imposed by the Deed of Trust, and
Plaintiffs never acquired a valid interest under the Deed of
Trust. (Id. at 7.) The Court also concluded that
Plaintiffs' wrongful foreclosure claim was premature
because neither the operative First Amended Complaint nor
Plaintiffs' Opposition asserted that a foreclosure sale
had occurred. (Id. at 7-8.) The Court also concluded
Plaintiffs' claim for declaratory relief was derivative
of their other claims, so it was dismissed without leave to
amend. (Id. at 8 (internal quotations omitted).) The
Court issued a Judgment of Dismissal. (RJN, Ex. 4.)
Plaintiffs were not granted leave to amend.
filed a second lawsuit against Defendants in the San
Bernardino County Superior Court on June 26, 2019. (Compl. at
1.) This action involves the same Property at 10578 Deer
Canyon Drive, Rancho Cucamonga, CA 91737. (Id. at
4.) Here again Plaintiffs allege that “Defendants are
attempting to collect a debt that is not due or owed to
them.” (Id. at 3; see also id. at
11.) Plaintiffs assert claims for: (1) violations of the
California Rosenthal Fair Debt Collection Practices Act, Cal.
Civ. Code §§ 1788, et seq.; (2) violation of Cal.
Civ. Code § 2936; (3) violation of Cal. Civ. Code §
366.2; and (4) cancellation of instruments. (Id. at
13-18.) Like in Johnson I, Plaintiffs seek “a
declaratory judgment finding that Defendants do not have any
legally cognizable rights as to Plaintiff[s], the Property,
Plaintiff[s'] alleged debt, tendered to and executed by
Plaintiff.” (Id. at 18.) Defendants filed a
Notice of Removal based on diversity jurisdiction, 28 U.S.C.
§ 1332, on July 26, 2019. (Docket No. 1.) Defendants
then filed a Motion to Dismiss pursuant to Federal Rule of
Civil Procedure 12(b)(6) on the grounds that Plaintiffs fail
to state a claim upon which relief can be granted. (Docket
No. 9 at 2.) Defendants also filed a Motion for Order
Declaring Plaintiffs as Vexatious Litigants. (Docket No. 11.)
Plaintiffs filed a Motion to Remand the case to California
state court. (Docket No. 16.)