United States District Court, S.D. California
ORDER ON MOTIONS TO DISMISS AND MOTION TO EXPUNGE
NOTICE OF PENDENCY OF ACTION OR REQUIRE A BOND [DOC. NOS. 3,
CATHY ANN BENCIVENGO UNITED STATES DISTRICT JUDGE.
matter is before the Court on motions to dismiss and to
expunge a notice of pendency of action recorded against the
real property located at 584 Palomar Court, Encinitas,
California 92024 (the “Property”) filed by
Defendants U.S. Bank Trust, N.A., as trustee for LSF9 Master
Participation Trust (“US Bank”) and Summit
Management Company, LLC (“Summit”). Plaintiff has
opposed the motions, and the Court deems them suitable for
submission without oral argument. As discussed below, the
motions are granted.
October 15, 2004, Plaintiff entered into a mortgage loan
agreement with Countrywide Bank as lender consisting of a
promissory note and deed of trust secured by the Property.
[Doc. No. 1-2 at ¶ 8.] The trustee under the deed of
trust was CTC Real Estate Services, and the beneficiary was
Defendant Mortgage Electronic Registration Systems
October 20, 2009, a “Substitution of Trustee and
Assignment of Deed of Trust” dated September 8, 2009
(the “September 2009 Assignment”), was recorded
in the San Diego County Recorder's Office. [Id.
at 58.] The document states that MERS substituted Recontrust
Company, N.A., as trustee, and transferred to BAC Home Loans
Servicing LP all beneficial interest under the deed of trust
to the Property. [Id. at 58, 60.]
21, 2016, an “Assignment of Deed of Trust” dated
May 17, 2016, was recorded in the San Diego County
Recorder's Office. [Id. at 62.] The document
stated that Defendant Bank of America, N.A.
(“BoA”), successor by merger to BAC Home Loans
Servicing LP, assigned its rights under the deed of trust to
the Property to U.S. Bank. [Id.] On July 25, 2016, a
“Substitution of Trustee” dated July 21, 2016,
that substituted Summit as trustee was recorded in the San
Diego County Recorder's Office. [Doc. No. 4 at
October 21, 2016, a notice of trustee sale on the Property
was recorded. [Doc. No. 1-2 at ¶ 18; Doc. No. 4 at 51.]
On July 5, 2017, a foreclosure sale was held with Summit as
trustee, and the Property was conveyed to U.S. Bank. [Doc.
No. 1-2 at ¶ 19; Doc. No. 4 at 54.]
years later, on July 9, 2019, Plaintiff filed a complaint in
San Diego County Superior Court seeking to unwind the
foreclosure sale, cancel the various assignments and
substitutions recorded against the Property, and to quiet
title to the Property. The complaint named U.S. Bank, Summit,
BoA, and MERS as defendants. Summit and U.S. Bank removed the
complaint to this court and on September 6, 2019, filed a
motion to dismiss and a motion to expunge or require a bond
for the notice of pendency of action that Plaintiff recorded
after filing the complaint. These motions have been fully
briefed. Meanwhile, on September 25, 2019, BoA and MERS filed
their own motion to dismiss. The deadline for Plaintiff's
opposition to that motion has yet to pass.
Legal Standard for Motions to Dismiss
familiar standards on a motion to dismiss apply here. To
survive a motion to dismiss under Rule 12(b)(6), “a
complaint must contain sufficient factual matter, accepted as
true, to ‘state a claim to relief that is plausible on
its face.'” Ashcroft v. Iqbal, 556 U.S.
662, 678 (2009) (quoting Bell Atlantic Corp. v.
Twombly, 550 U.S. 544, 570 (2007)). Thus, the Court
“accept[s] factual allegations in the complaint as true
and construe[s] the pleadings in the light most favorable to
the nonmoving party.” Manzarek v. St. Paul Fire
& Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir.
2008). On the other hand, the Court is “not bound to
accept as true a legal conclusion couched as a factual
allegation.” Iqbal, 556 U.S. at 678 (quoting
Twombly, 550 U.S. at 555). Nor is the Court
“required to accept as true allegations that contradict
exhibits attached to the Complaint or matters properly
subject to judicial notice, or allegations that are merely
conclusory, unwarranted deductions of fact, or unreasonable
inferences.” Daniels-Hall v. Nat'l Educ.
Ass'n, 629 F.3d 992, 998 (9th Cir. 2010). “In
sum, for a complaint to survive a motion to dismiss, the
non-conclusory factual content, and reasonable inferences
from that content, must be plausibly suggestive of a claim
entitling the plaintiff to relief.” Moss v. U.S.
Secret Serv., 572 F.3d 962, 969 (9th Cir. 2009)
(quotation marks omitted).
complaint asserts five claims, each of which arise out of
Plaintiff's apparent belief that the recorded assignments
and substitutions of trustee on the Deed of Trust on the
Property were invalid or void rendering the foreclosure sale
wrongful and void. The five claims in the complaint are: (1)
wrongful foreclosure against U.S. Bank and Summit; (2) quiet
title against U.S. Bank; (3) cancelation of instruments
against all defendants; (4) violation of California's
unfair competition law (“UCL”) against all
defendants; and (5) slander of title against all defendants.
Each of Plaintiff's claims are predicated on her position
that MERS lacked authority to assign the Deed of Trust to BAC
Home Loans Servicing, meaning all subsequent assignments and
substitutions were ineffectual and the beneficiary and
trustee unchanged from the original Deed of Trust. Thus,
according to Plaintiff, U.S. Bank and Summit had no interest
in the Deed of Trust or promissory note and no right to
foreclose on the Property. U.S. Bank and Summit each move to
dismiss all claims against them for failure to state a claim.
elements of a wrongful foreclosure cause of action are: (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) the party
attacking the sale (usually but not always the trustor or
mortgagor) was prejudiced or harmed; and (3) in cases where
the trustor or mortgagor challenges the sale, the trustor or
mortgagor tendered the amount of the secured indebtedness or
was excused from tendering.” Sciarratta v. U.S.
Bank Nat'l Assn., 247 Cal.App.4th 552, 561-62