United States District Court, W.D. Washington, Seattle
DAVID M. WILSON, et al., Plaintiffs,
BANK OF AMERICA, N.A., et al., Defendants.
ORDER GRANTING DEFENDANTS' MOTION TO DISMISS
ROBERT S. LASNIK, District Judge.
This matter comes before the Court on "Defendants' Motion to Dismiss, " dkt. # 5. Defendants Bank of America, N.A. ("BANA"),  Specialized Loan Servicing, LLC ("SLS"), and Deutsche Bank National Trust Company, as trustee for holders of the GSR Mortgage Loan Trust 2007-OA1 ("Deutsche Bank") (collectively "Defendants"), seek dismissal of all of Plaintiffs' claims under Fed.R.Civ.P. 12(b)(5) and Fed.R.Civ.P. 12(b)(6). Having reviewed all papers filed in support of and in opposition to Defendants' motion, the Court finds the following:
In February 2007, Plaintiffs executed a promissory note for $216, 000.00, payable to the order of Countrywide Bank, N.A. ("Countrywide"). Dkt. # 1 at 22; Dkt. # 6-2 at 24-28. The promissory note was secured by a Deed of Trust on real property located at 11327 30th Avenue SE, Everett, Washington. Dkt. # 6-2 at 31-41. The Deed of Trust lists Countrywide as "lender, " Commonwealth Land Title as "trustee, " and Mortgage Electronic Registration Systems, Inc. ("MERS") as both "beneficiary" and "nominee." Id . at 31-32.
Plaintiffs defaulted on the loan in October 2011. Dkt. # 1 at 26. On May 11, 2012, MERS assigned its beneficial interest under the Deed of Trust to Deutsche Bank. Id . at 22. Plaintiffs contend that this assignment was "blatant fraud" designed to coerce them into resuming payments and to allow Defendants to foreclose on the property if Plaintiffs did not begin making payments on the loan. Id . at 9. On May 9, 2013, SLS, the loan servicer at the time, mailed Plaintiffs a Notice of Default and Notice of Intent to Foreclose. Id . at 26-27.
In their complaint, Plaintiffs allege that their loan has been transferred a number of times, their loan servicer has changed several times, and they have not received notice of these changes. Id . at 4-11. Plaintiffs contend that Countrywide Home Loans Servicing LP ("CWHLS") was the loan servicer from April 2007 through April 2009; BANA was the servicer from May 2009 through October 2012; and SLS became the servicer in November 2012 and remains the current servicer. Id . at 6-7, 9-10. Plaintiffs allege that these servicers, at various times, misrepresented that Wells Fargo was the holder of the promissory note and incorrectly told them they could not refinance without paying a "Pre-Payment Penalty." Id.
This is the third lawsuit filed by Plaintiffs related to this loan. On November 30, 2011, Plaintiffs filed a complaint against "Bank of America N.A. Trust GSR2007-OA1" in Snohomish County Superior Court seeking to quiet title and alleging breach of the duty of good faith and fair dealing. Wilson v. Bank of America N.A. Trust GSR2007-OA1, C11-2146MJP (Dkt. # 6-1). After the defendant removed the case to federal district court, Plaintiffs' claims were dismissed without prejudice for failure to state a claim. Dkt. # 6-3. Six months later, Plaintiffs filed a complaint against Bank of America N.A., Wells Fargo Bank, N.A., Deutsche Bank National Trust Company, and Trust GSR2007-OA1, alleging fraud. Wilson v. Bank of America, N.A., C12-1532JLR (Dkt. # 6-2). On January 12, 2013, Plaintiffs' second complaint was dismissed without prejudice, this time for lack of standing. Dkt. # 6-4.
Plaintiffs filed the complaint in the above-captioned matter on August 30, 2013. Dkt. # 1. They assert claims of fraud, misrepresentation, and breach of the duty of good faith and fair dealing. Defendants seek dismissal of the complaint on the grounds that Plaintiffs' claims are barred by res judicata, Defendants have not been properly served pursuant to Rule 4 of the Federal Rules of Civil Procedure ("Rule 4"), and the complaint fails to state a claim upon which relief may be granted.
A. Res Judicata
As a preliminary matter, Defendants contend that Plaintiffs' claims are barred by the doctrine of res judicata. Dkt. # 5 at 6-7. Since federal jurisdiction in this case is based upon diversity of citizenship, this Court must apply the substantive law of the forum state, which includes the law of res judicata. Jacobs v. CBS Broadcasting, Inc. , 291 F.3d 1173, 1177 (9th Cir. 2002). "The doctrine of res judicata rests upon the ground that a matter which has been litigated, or in which there has been an opportunity to litigate, in a former action in a court of competent jurisdiction, should not be permitted to be litigated again." Ensley v. Pitcher , 152 Wn.App. 891, 899 (2009). Res judicata requires "identity between a prior judgment and a subsequent action as to (1) persons and parties, (2) causes of action, (3) subject matter, and (4) the quality of persons for or against whom the claim is made." Karlberg v. Otten , 167 Wn.App. 522, 536 (2012). Res judicata requires a final judgment on the merits. Id.
Under Washington law, a dismissal without prejudice is not a final judgment on the merits for the purposes of res judicata. Rose ex rel. Estate of Rose v. Fritz , 104 Wn.App. 116, 121 (2001). Because Plaintiffs' prior two complaints were dismissed without prejudice and there have been no final decisions on the merits, the present action is not barred by res judicata.
B. Rule 12(b)(5)
"When a defendant moves to dismiss based upon insufficient service of process, the plaintiff has the initial burden [of] making a prima facie showing of proper service." Witt v. Port of Olympia , 126 Wn.App. 752, 757 (2005) (internal quotation marks and citation omitted). "A plaintiff may make this showing by producing an affidavit of service that on its face shows that service was properly carried out." Id . If the plaintiff makes this showing, ...