Yarpezeshkan et al v. Bank of America, N.A. et al, No. 3:2014cv00237 - Document 13 (S.D. Cal. 2014)
Court Description: ORDER Granting Motions To Dismiss With Leave To Amend: Granting 4 Motion to Dismiss; granting 6 Motion to Dismiss with leave to amend. Plaintiffs must file any amended complaint on or before July 28, 2014. Failure to do so may result in dismissal of this action with prejudice. Signed by Judge Jeffrey T. Miller on 7/2/14. (av1)(jrd)
Download PDF
<![CDATA[
Yarpezeshkan et al v. Bank of America, N.A. et al Doc. 13 1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 12 HASSAN YARPEZESHKAN and MARYAM YARPEZESHKAN, Plaintiffs, 21 v. BANK OF AMERICA, N.A.; MORTGAGE ELECTRONIC SYSTEMS, INC.; REAL TIME RESOLUTIONS, INC.; THE BANK OF NEW YORK MELLON as Trustee for the Certificate Holders of the CWALT formerly known as The Bank of New York; ALTERNATIVE LOAN TRUST 2006-0A19; MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2006-0A19 and Successor Trustee to J.P. Morgan Chase Bank, N.A.. as Trustee on Behalf of the Certificate Holders of the CWHEQ Inc.; and CWHEQ REVOLVING HOME EQUITY LOAN TRUST, SERIES 2006-G, 22 CASE NO. 14-cv-237 JM (BGS) ORDER GRANTING MOTIONS TO DISMISS WITH LEAVE TO AMEND Defendants. 13 14 15 16 17 18 19 20 23 24 25 26 27 28 On February 26, 2014, Defendant Real Time Resolutions, Inc. (“Real Time”) filed a motion to dismiss Plaintiffs’ complaint. (Dkt. No. 4). That same day, Defendants Bank of America, N.A. (“Bank of America”), Mortgage Electronic Systems, Inc. (“MERS”), and The Bank of New York Mellon (“BNYM”) also filed a motion to dismiss Plaintiffs’ complaint. (Dkt. No. 6.) The motions have been -1- 14-cv-237 JM (BGS) Dockets.Justia.com 1 fully briefed by both sides, and the court finds this matter suitable for resolution on 2 the papers without oral argument pursuant to Civil Local Rule 7.1.d.1. For the 3 reasons set forth below, Defendants’ motions to dismiss are GRANTED WITH 4 LEAVE TO AMEND. 5 6 BACKGROUND On June 27, 2006, Plaintiffs obtained two loans. The first loan, a mortgage in 7 the amount of $1,499,999 (the “First Loan”), is secured by a Deed of Trust (“First 8 DOT”) on real property located at 2810 Inverness Drive, La Jolla, California 92037 9 (the “Property”). (Compl. ¶ 10; Defendants’ Request for Judicial Notice (“RJN”) 10 Exh. A).1 The First DOT lists Countrywide Home Loans, Inc. as the lender, 11 ReconTrust Company, N.A. as trustee, and MERS as beneficiary. (Id.) That same 12 day, Plaintiffs obtained a second loan, a home equity line of credit (the “HELOC”, 13 together with the First Loan, the “Loans”), in the amount of $1,180,605, secured by 14 a Deed of Trust and Assignment of Rents on the Property (the “Second DOT”). 15 (Compl. ¶ 17; RJN Exh. B). The Second DOT also lists the lender as Countrywide 16 Bank, N.A., ReconTrust Company, N.A. as trustee, and MERS as beneficiary. (Id.) 17 On August 30, 2006, Plaintiffs’ HELOC was sold to CWHEQ Revolving 18 Home Equity Loan Trust 2006-G, a mortgage-backed securities trust (“MBS Trust”). 19 (Compl. ¶ 19). On November 30, 2006, Plaintiffs’ First Loan was sold to 20 21 22 23 24 25 26 27 28 1 Defendants Bank of America, MERS, and BNYM’s have attached a request for judicial notice to their motion to dismiss. (Dkt. No. 6-2). Defendants ask the court take judicial notice of the following documents: (1) Deed of Trust for the First Loan as recorded in the Official Records of San Diego County, California, on July 7, 2006; (2) Deed of Trust and Assignment of Rents for the HELOC as recorded in the Official Records of San Diego County, California, on July 7, 2006; (3) Assignment of the First Loan’s Deed of Trust as recorded in the Official Records of San Diego County, California, on September 13, 2011; and (4) Assignment of the HELOC’s Deed of Trust as recorded in the Official Records of San Diego County, California, on July 16, 2011. Plaintiffs object to the truth of the contents of these documents, but do not oppose the court taking judicial notice of these documents for the limited purpose of establishing that the documents were recorded in the land records of San Diego County on the dates stamped by the Recorder’s Office. (Dkt. No. 7-1). Accordingly, the court grants Defendants’ request and takes judicial notice of these documents and their contents for the limited purpose of demonstrating that the documents were duly recorded, filed, or published on the relevant dates in the Official Records of San Diego County, California. -2- 14-cv-237 JM (BGS) 1 Alternative Loan Trust 2006-OA19, a different MBS Trust. (Id. at ¶ 19). BNYM 2 serves as trustee for both of the MBS Trusts. (Id.) Plaintiffs allege the sale of the 3 Loans to the MBS Trusts were “made without the required intervening assignment 4 of Plaintiffs’ Deed of Trust and endorsement of the Note” before the closing dates of 5 the MBS Trusts as required by the governing MBS Trust documents. (Id. at ¶¶ 25, 6 27). Plaintiffs contend this failure “resulted in an irreversible break in the chain of 7 title and ownership of the subject mortgage loans” and, thus, “the current 8 beneficiary, mortgagee or secured lender are unknown.” (Id. at ¶ 30). 9 On July 6, 2012, Defendant MERS purported to assign the DOT for Plaintiffs’ 10 HELOC to BNYM as trustee on behalf of the certificate holders of the CWHEQ 11 revolving Home Equity Loan Trust 2006-G. (Id. ¶ 34). On August 22, 2011, 12 MERS attempted to assign the DOT for Plaintiffs’ First Loan to The Bank of New 13 York Mellon f/k/a The Bank of New York, as Trustee for the Certificateholders of 14 the CWALT, Inc., Alternative Loan Trust 2006-OA19, Mortgage Pass-Through 15 Certificates, Series 2006-OA19. (Id. ¶ 33). However, Plaintiffs allege the 16 beneficial interest in Plaintiffs’ Loans formerly held by Countrywide, the original 17 lender for which Defendant MERS served as nominee, was extinguished in 2006 18 when the Loans were sold to the MBS Trusts. (Id. at ¶¶ 19, 21). As MERS had no 19 interest in Plaintiffs’ Loans when it purported to assign the beneficial interests under 20 the DOTs to BNYM as trustee, Plaintiffs contend the 2011 Assignments are null and 21 void. 22 Plaintiffs further allege the 2011 Assignment of the First Loan is fraudulent 23 and void because MERS was never the securities trust depositor. (Id. at ¶ 33). The 24 governing trust documents provide that only the depositor in the securitization 25 transaction may transfer Plaintiffs’ mortgage to BNYM as trustee for the Alternative 26 Loan Trust 2006-OA19. (Id.) Therefore, Plaintiffs’ contend the Assignment is 27 invalid, ineffective and void. (Id.) 28 -3- 14-cv-237 JM (BGS) 1 Bank of America placed Plaintiffs’ HELOC in collection with Defendant Real 2 Time, effective April 1, 2013. (Id. at ¶ 35). Bank of America purports to be the 3 current loan servicer by merger with BAC Home Loans Servicing, LP f/k/a 4 Countrywide Home Loans Servicing, LP, the original loan servicer for both Loans. 5 (Id. at ¶ 18). 6 Based on these factual allegations, Plaintiffs allege seven causes of action in 7 the complaint: (1) Declaratory Relief; (2) Quiet Title; (3) Fraud; (4) Violation of 8 Bus. & Profs. Code § 17200, et seq.; (5) Unjust Enrichment; (6) Accounting; and (7) 9 Violation of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692, et seq. 10 11 LEGAL STANDARD For a plaintiff to overcome a Rule 12(b)(6) motion to dismiss for failure to 12 state a claim, the complaint must contain “enough facts to state a claim to relief that 13 is plausible on its face.” Bell Atl. v. Twombly, 550 U.S. 544, 570 (2007). “A claim 14 has facial plausibility when the plaintiff pleads factual content that allows the court 15 to draw the reasonable inference that the defendant is liable for the misconduct 16 alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). Factual pleadings merely 17 consistent with a defendant’s liability are insufficient to survive a motion to dismiss 18 because they only establish that the allegations are possible rather than plausible. 19 See id. at 678-79. The court should grant 12(b)(6) relief only if the complaint lacks 20 either a “cognizable legal theory” or facts sufficient to support a cognizable legal 21 theory. See Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1990). 22 In addition, when resolving a motion to dismiss for failure to state a claim, 23 courts may not generally consider materials outside the pleadings. Schneider v. Cal. 24 Dep’t of Corrs., 151 F.3d 1194, 1197 n. 1 (9th Cir. 1998); Jacobellis v. State Farm 25 Fire & Cas. Co., 120 F.3d 171, 172 (9th Cir. 1997); Allarcom Pay Television Ltd. v. 26 Gen. Instrument Corp., 69 F.3d 381, 385 (9th Cir. 1995). “The focus of any Rule 27 12(b)(6) dismissal . . . is the complaint.” Schneider, 151 F.3d at 1197 n. 1. This 28 precludes consideration of “new” allegations that may be raised in a plaintiff's -4- 14-cv-237 JM (BGS) 1 opposition to a motion to dismiss brought pursuant to Rule 12(b)(6). Id. (citing 2 Harrell v. United States, 13 F.3d 232, 236 (7th Cir. 1993); 2 Moore’s Fed. Prac. 3 § 12.34[2] (Matthew Bender 3d ed.)). 4 However, “[w]hen a plaintiff has attached various exhibits to the complaint, 5 those exhibits may be considered in determining whether dismissal [i]s proper . . . .” 6 Parks Sch. of Bus., Inc. v. Symington, 51 F.3d 1480, 1484 (citing Cooper v. Bell, 7 628 F.2d 1208, 1210 n. 2 (9th Cir. 1980)). The court may also consider “documents 8 whose contents are alleged in a complaint and whose authenticity no party questions, 9 but which are not physically attached to the pleading. . . .” Knievel v. ESPN, 393 10 F.3d 1068, 1076 (9th Cir. 2005) (citing Branch v. Tunnell, 14 F.3d 449, 454 (9th 11 Cir. 1994) overruled on other grounds by Galbraith v. County of Santa Clara, 307 12 F.3d 1119 (9th Cir. 2002)). 13 14 DISCUSSION The “thrust of Plaintiffs’ Complaint is that none of the named party 15 defendants has standing to institute and pursue foreclosure activity against them or 16 to collect monthly mortgage payments from them.” (Compl. ¶ 1). While basing all 17 of their claims on this general premise, Plaintiffs assert two conflicting theories. 18 In the first of Plaintiffs’ theories, they allege the initial sales of Plaintiffs’ 19 Loans to the MBS Trusts extinguished all beneficial interest in Plaintiffs’ Loans held 20 by Countrywide Home Loans, Inc., the original lender, and its nominee, MERS. (Id. 21 at ¶¶ 2, 3). As a result of the securitization of the Loans, Plaintiffs allege MERS had 22 no interest in Plaintiffs’ Loans to assign to BNYM as Trustee for the certificate 23 holders of the Alternative Loan Trust 2006-OA19 in 2011. (Id.) Accordingly, 24 Plaintiffs argue the 2011 assignments were “fraudulent, null and void.” (Id.) 25 Alternatively, Plaintiffs contend “it is an indisputable fact that the attempted 26 securitization of Plaintiffs’ Loans failed.” (Id. at ¶ 5). Plaintiffs argue the sales to 27 the MBS Trusts were made without the required intervening assignment of 28 Plaintiffs’ DOTs and endorsement of the Notes. (Id. at ¶ 29). Defendants’ failure to -5- 14-cv-237 JM (BGS) 1 make the required assignments among the participants in the securitization 2 transactions before the closing dates of the mortgage-backed securities trusts 3 “resulted in an irreversible break in the chain of title and ownership of the subject 4 mortgage loans.” (Id. at ¶ 30). Thus, Plaintiffs allege the 2011 assignments of 5 Plaintiffs’ mortgage loans to BNYM were part of a scheme devised by the 6 Defendants to obscure the fact that Plaintiffs’ mortgage loans were never validly 7 transferred to the MBS Trusts in 2006. (Id. at ¶ 5). 8 Essentially, Plaintiffs’ complaint alleges Defendants do not have a beneficial 9 interest in their mortgages because (1) securitization extinguished any interest in the 10 loans held by Countrywide Home Loans, Inc. as the initial lender and servicer, and 11 (2) the securitization of the mortgages failed. Notably, Plaintiffs do not state these 12 arguments in the alternative; rather, they allege both simultaneously. While 13 Plaintiffs are entitled to plead mutually exclusive alternative theories of their case, 14 Plaintiffs’ complaint alleges contradictory facts that fail to provide fair notice to 15 Defendants regarding the bases for Plaintiffs’ claims. See Rieber v. Onewest Bank 16 FSB, 2014 WL 1796706, at *3 (S.D. Cal. May 6, 2014) (citing PAE Gov’t Servs., 17 Inc. v. MPRI, Inc., 514 F.3d 856, 859 (9th Cir. 2007)); Greetis v. PNC Financial 18 Servs. Group, Inc., 2014 WL 714894, at *2 (S.D. Cal. Feb. 21, 2014). Where 19 Plaintiffs’ theory regarding the securitization of their loan and who holds the interest 20 in their loan is too unclear for the court to consider arguments regarding the alleged 21 securitization and sale, it is appropriate to dismiss the complaint and allow Plaintiffs 22 leave to amend the complaint in order to clarify its factual allegations and legal 23 theories. Greetis, 2014 WL 714894, at *2 (S.D. Cal. Feb. 21, 2014)(citing Lester v. 24 JP Morgan Chase Bank, 926 F. Supp. 2d 1081, 1091 (N.D. Cal. 2013) (dismissing 25 claims where plaintiff simultaneously claimed that the mortgage loan was sold to a 26 trust and could not be assigned, and also that the loan was improperly securitized)). 27 28 Moreover, Plaintiffs’ contradictory allegations appear to support legally -6- 14-cv-237 JM (BGS) 1 impermissible claims. Assuming the securitization was successful, Plaintiffs’ 2 argument that securitization extinguished any interest in the loans held by 3 Countrywide Home Loans, Inc. fails because parties do not lose their interest in a 4 loan when it is assigned to a trust pool. Lane v. Vitek Real Estate Industries Group, 5 713 F. Supp. 2d 1092, 1099 (E.D. Cal. 2010)(citing Benham v. Aurora Loan Servs., 6 2009 WL 2880232, at *3 (N.D. Cal. Sep. 1, 2009)(“Other courts ... have summarily 7 rejected the argument that companies like MERS lose their power of sale pursuant to 8 the deed of trust when the original promissory note is assigned to a trust pool.”); 9 Hafiz v. Greenpoint Mortg. Funding, Inc., 652 F. Supp. 2d 1039, 1042-43 (N.D. Cal. 10 2009). 11 Similarly, if securitization of the mortgages failed, Plaintiffs lack standing to 12 challenge the securitization process because they were not parties to the agreement 13 that securitized the note. See Burke Burke v. JPMorgan Chase Bank, N.A., 2014 14 WL 129050, at *2 (N.D. Cal. Jan. 14, 2014); Pugh v. JPMorgan Chase Bank, N.A., 15 2013 WL 5739147, at *2 (E.D. Cal. Oct. 22, 2013); Junger v. Bank of Am., N.A., 16 2012 WL 603262, at *3 (C.D. Cal. Feb. 24, 2012). Plaintiffs rely on Glaski v. Bank 17 of America for the proposition that a borrower has standing to challenge the 18 assignment of a loan to a securitized trust, even if he was not a party to or a 19 beneficiary of the assignment agreement. 218 Cal. App. 4th 1079, 1097 (2013). 20 However, as Defendants point out, the decision in Glaski has been largely rejected 21 by courts as the minority view. Covarrubias v. Federal Home Loan Mortg. Corp., 22 2014 WL 311060, at *4 (S.D. Cal. Jan. 28, 2014)(declining to follow Glaski and 23 holding that the plaintiff lacked standing to challenge an agreement to which she 24 was not a party); Rivac v. Ndex W. LLC, 2013 WL 6662762, at *4 (N.D. Cal. 25 Dec.17, 2013) (“This court is persuaded by the majority position of courts within 26 this district, which is that Glaski is unpersuasive, and that plaintiffs lack standing to 27 challenge noncompliance with a PSA in securitization unless they are parties to the 28 PSA or third party beneficiaries of the PSA.”) (quotation and citations omitted); -7- 14-cv-237 JM (BGS) 1 Boza v. U.S. Bank Nat’l Ass’n, 2013 WL 5943160, at *6 (C.D. Cal. Oct.28, 2013) 2 (“The majority of federal district courts that have addressed the issue whether a 3 borrower has standing to challenge securitization of a note by its transfer to a trust in 4 an allegedly defective manner, are in accord with Jenkins. And, several state and 5 district courts that have analyzed the effect of New York law on post-closing date 6 acquisitions, like the one at issue in Glaski, have concluded that such transfers are 7 voidable rather than void.”) (citations omitted); Newman v. Bank of New York 8 Mellon, 2013 WL 5603316, at *3 n. 2 (E.D. Cal. Oct.11, 2013) (“[N]o courts have 9 yet followed Glaski and Glaski is in a clear minority on the issue. Until either the 10 California Supreme Court, the Ninth Circuit, or other appellate courts follow Glaski, 11 this Court will continue to follow the majority rule.”).2 Opting to apply the majority 12 rule, the court declines to follow Glaski and finds that Plaintiffs lack standing to 13 challenge the securitization of their Loans as they were not parties to the relevant 14 agreements. 15 In Plaintiffs’ complaint, each of the asserted causes of action relies upon 16 either Plaintiffs’ theory that securitization failed or Plaintiffs’ theory that the valid 17 securitization of the Loans in 2006 divested MERS of its ability to assign the Loans 18 to BNYM in 2011. Thus, as currently pled, neither Defendants nor the court have 19 sufficiently clear information to address Plaintiffs’ claims. Plaintiffs’ inconsistent 20 allegations simply do not provide a cognizable legal theory or facts sufficient to 21 support a cognizable legal theory. 22 23 CONCLUSION For the reasons set forth above, Defendants’ motions to dismiss are 24 GRANTED WITH LEAVE TO AMEND. However, the court notes an amended 25 complaint must set forth specific and plausible allegations explaining why 26 2 See also In re Davies, --- Fed.Appx. ----, 2014 WL 1152800, at *2 (9th Cir. 27 Mar. 24, 2014)(noting its belief that the California Supreme Court would ultimately agree with the weight of authority in California holding that debtors who are not parties 28 to the pooling and servicing agreements cannot challenge them, despite the court’s holding in Glaski). -8- 14-cv-237 JM (BGS) 1 Defendants lack sufficient interest to foreclose on Plaintiffs’ mortgages. Plaintiffs 2 must file any amended complaint on or before July 28, 2014. Failure to do so may 3 result in dismissal of this action with prejudice. 4 IT IS SO ORDERED. 5 DATED: July 2, 2014 6 7 Hon. Jeffrey T. Miller United States District Judge 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -9- 14-cv-237 JM (BGS)
]]>
Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You
should read the full case before relying on it for legal research purposes.
This site is protected by reCAPTCHA and the Google
Privacy Policy and
Terms of Service apply.
