United States District Court, W.D. Washington, Seattle
ROBIN D. HARTLEY, et al., Plaintiffs,
BANK OF AMERICA, N.A., et al., Defendants.
ORDER GRANTING IN PART NWTS' MOTION TO
S. Lasnik United States District Judge
matter comes before the Court on the “Fed. R. Civ. P.
12(b)(6) Motion of Defendant Northwest Trustee Services,
Inc.” Dkt. # 16. Plaintiffs filed this lawsuit against
a number of lenders, loan servicers, trustees, and other
banking institutions alleging technical errors and illegal
acts that delayed plaintiffs' ability to modify their
home loan and caused damage. Northwest Trustee Services
(“NWTS”) seeks dismissal of five of the claims
asserted, arguing that they are not plausible based on the
facts alleged. Having reviewed the complaint, the attached
exhibits, and the memoranda submitted by the parties
(including plaintiffs' sur-reply), the Court finds as
March 2006, plaintiff Robin Hartley executed a promissory
note for $500, 800.00, payable to the order of First Magnus
Financial Corp. Decl. of Douglas A. Johns (Dkt. # 9), Ex.
The note was secured by a deed of trust on real property
located at 17134 111th Ave. NE, Bothell, Washington.
Id., Ex. 3. The deed of trust lists First Magnus as
the lender, Stewart Title as the trustee, and Mortgage
Electronic Registration Systems, Inc. (“MERS”) as
both the beneficiary of the trust and the
“nominee” for the lender. Id.
began having trouble making their mortgage payments in 2008.
At the time, Countrywide Home Loans Servicing LP was
servicing plaintiffs' mortgage and communicated with them
regarding amounts past due and its intent to accelerate the
loan. Id., Exs. 4, 5, and 30. On or about April 29,
2009, Robin Hartley and BAC Home Loans Servicing, LP
(identifying itself as the lender) agreed to modify the loan,
amending and supplementing the original note and deed of
trust to increase the principal balance to $525, 243.52 and
to reduce the annual interest rate. Robin Hartley signed the
Loan Modification Agreement on May 19, 2009. Id.,
Ex. 6. The modification was not countersigned until three
years later, by which time BAC Home Loans Servicing, LP had
merged into Bank of America, N.A. Bank of America executed
the agreement on September 10, 2012. Id., Ex. 7.
made their last payment on the loan in July 2009.
April 2012, MERS purportedly assigned its interests as
beneficiary of the deed of trust to Bank of New York Mellon,
as trustee for certain certificate holders (hereinafter,
“BNYM”). In January 2013, a law firm acting on
behalf of an unidentified “Deed of Trust
Beneficiary” notified plaintiffs that they were in
default. The notice identified BNYM as the owner of the note
and Bank of America as the servicer. Plaintiffs requested
mediation, and the matter was referred by the Washington
Department of Commerce. Months passed while Bank of America
decided whether or not it wanted to pursue the notice of
default, pursue mediation, and/or offer a loan modification.
Id., Ex. 30. Whatever efforts Bank of America was
prepared to make were cut off when the servicing of the loan
was transferred to RCS in or before September 2013.
Id., Exs. 12, 13, and 30. RCS promptly notified
plaintiffs that they were in default and that RCS intended to
accelerate the loan. Id., Ex. 30. The first
mediation session was held on March 31, 2014.
2014, BNYM appointed Northwest Trustee Services, Inc.,
(“NWTS”) as the successor trustee. NWTS issued
another Notice of Default, which caused plaintiffs'
counsel to file another request for mediation. Despite the
first and second mediation requests, NWTS took the next step
toward foreclosure by issuing a Notice of Trustee's Sale
on September 4, 2014. Id., Ex. 17. A week later, the
mediator notified the parties that the second referral from
the Department of Commerce was in error because the mediation
process was still underway: the second request for mediation
was withdrawn (Id., Ex. 30), and NWTS discontinued
the trustee's sale (Id., Ex. 18).
seeks dismissal of plaintiffs' claims of quiet title,
breach of the covenant of good faith and fair dealing,
negligence, intentional infliction of emotional distress, and
violations of the Washington Lending and Homeownership Act.
The question for the Court in this context is whether the
facts alleged in the complaint or shown by the attached
exhibits present a “plausible” ground for relief.
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570
A claim is facially plausible when the plaintiff pleads
factual content that allows the court to draw the reasonable
inference that the defendant is liable for the misconduct
alleged. Plausibility requires pleading facts, as opposed to
conclusory allegations or the formulaic recitation of
elements of a cause of action, and must rise above the mere
conceivability or possibility of unlawful conduct that
entitles the pleader to relief. Factual allegations must be
enough to raise a right to relief above the speculative
level. Where a complaint pleads facts that are merely
consistent with a defendant's liability, it stops short
of the line between possibility and plausibility of
entitlement to relief. Nor is it enough that the complaint is
factually neutral; rather, it must be factually suggestive.
Somers v. Apple, Inc., 729 F.3d 953, 959-60 (9th
Cir. 2013) (internal quotation marks and citations omitted).
All well-pleaded factual allegations are presumed to be true,
with all reasonable inferences drawn in favor of the
non-moving party. In re Fitness Holdings Int'l,
Inc., 714 F.3d 1141, 1144-45 (9th Cir. 2013). If the
complaint fails to state a cognizable legal theory or fails
to provide sufficient facts to support a claim, dismissal is
appropriate. Shroyer v. New Cingular Wireless Servs.,
Inc., 622 F.3d 1035, 1041 (9th Cir. 2010).
allege that any action to foreclose their deed of trust is
barred by the applicable statute of limitations and that they
are therefore entitled to quiet title under RCW 7.28.300.
Dkt. # 1 at ¶ 111. NWTS has no ownership or possessory
interest in the property, however, nor does it claim such an
interest. It is therefore not a proper defendant to a quiet
title action. See Kobza v. Tripp, 105 Wn.App. 90, 95
(2001). Plaintiffs acknowledge that their quiet title claim
against NWTS fails as a matter of law, but argue that NWTS
should remain a defendant on this claim - even though there
can be no liability - so that it can provide information
regarding the amount of the debt that is no longer
enforceable. Complete relief on the claim can be had without
NWTS' involvement, however. Nor is the potential need for
discovery a justification for asserting a meritless claim
against a particular defendant. Even if all claims against
NWTS are dismissed, plaintiffs may seek information from NWTS
under Rule 45.
Washington Mortgage Lending and Homeownership Act, ...