United States District Court, W.D. Washington, Seattle
L. ROBART United States District Judge
the court is Defendants Nationstar Mortgage, LLC
("Nationstar"), Mortgage Electronic Registration
Systems, Inc. ("MERS"), and Federal National
Mortgage Association's ("Fannie Mae")
(collectively "Moving Defendants") second motion to
dismiss (2d MTD (Dkt. # 20)) Plaintiffs Lynn Hover and Mila
Hover's (collectively, the "Hovers") amended
complaint (Am. Compl. (Dkt. # 17)). The Hovers oppose the
motion. (2d MTD Resp. (Dkt. #25).) The court has considered
the motion, the submissions filed in support thereof and
opposition thereto, the relevant portions of the record, and
the applicable law. Being fully advised,  the court STRIKES
the Hovers' libel claim, GRANTS Moving Defendants'
motion to dismiss, and DISMISSES with prejudice the
Hovers' claims against Moving Defendants for private
nuisance, unjust enrichment, and fraud. Further, the court
ORDERS the Hovers to show cause why the court should not
dismiss for failure to serve their claims against Defendants
GMAC Mortgage LLC ("GMAC"), "Residential
Mortgage Lender, " Northwest Trustee Services, Inc.
("NWTS"), and John or Jane Does 1-1000
(collectively "Non-Moving Defendants").
case arises out of a planned non-judicial foreclosure of the
Hovers' house. (See Am. Compl. ¶¶
33-35.) On July 17, 2002, the Hovers signed a deed of trust
for $196, 000.00 that was recorded against the Hovers'
residence in Issaquah, Washington. (Id. ¶¶
1-4, 10; see also Deed of Tr. at 18.) On June 17,
2016, NWTS recorded a notice of trustee's sale against
the Hovers' residence. (Not. of Tr. Sale; Am. Compl.
¶ 33.) The notice stated that the Hovers owed $35,
636.50 in order to keep the residence from foreclosure and
that the mortgage had a remaining principal balance of $155,
980.04. (Not. of Tr. Sale at 3; Am. Compl. ¶ 34.)
response to the notice of trustee's sale, on July 6,
2016, the Hovers filed a complaint in King County Superior
Court. (Compl. (Dkt. #1-1).) In that complaint, the Hovers
alleged claims of private nuisance, unjust enrichment, and
fraud. (Compl. ¶¶ 20, 30-34, 37-39, 49, 80-86.) The
complaint also requested injunctive relief. (Id.
¶¶ 130-60.) On August 8, 2016, Nationstar timely
removed this action on the basis of diversity jurisdiction.
(See Not. of Rem. (Dkt. #1).) In the notice of
removal, Nationstar contended that NWTS, a non-diverse party,
was a nominal defendant to this suit and thus did not destroy
complete diversity. (Id. ¶ 13.)
August 17, 2016, the court ordered Moving Defendants and
Non-Moving Defendants to show cause why the case should not
be remanded for lack of subject matter jurisdiction. (OSC
(Dkt. # 10) at 1-2.) The order detailed the argument in the
notice of removal that NWTS did not destroy complete
diversity because it was a nominal defendant, but the court
noted that the Hovers' complaint-although not a model of
clarity-could be construed to assert claims against NWTS.
(Id. at 3-4.) The order required Moving Defendants
and Non-Moving Defendants to show cause and allowed, but did
not require, the Hovers to submit a responsive memorandum.
(Id. at 5.)
August 29, 2016, Moving Defendants responded to the show
cause order. (OSC Resp. (Dkt. #12).) Moving Defendants argued
that because the original complaint only named NWTS in its
capacity as trustee, case law supported treating NWTS as a
nominal party. (Id. at 9.) Moving Defendants
contended that only when the trustee is alleged to have
committed misconduct under the Deed of Trust Act, RCW ch.
61.24, such as making a false statement on the notice of
trustee's sale, does the trustee qualify as a real party
in interest in a foreclosure case. (Id. at 6 (citing
Beiermann v. JP Morgan Chase Bank Nat'l Ass'n
No. C11-5952RSL, 2012 WL 1377094, at *3 (W.D. Wash. Apr.
19, 2012); Leem v. Bank of Am. Home Loans, No.
C13-1517RSL, 2014 WL 897378, at *3 (W.D. Wash. Mar. 6,
2014)).) The Hovers did not respond to the order to show
cause. (See generally Dkt.) Based on Moving
Defendants' brief, the legal authority cited therein, and
the Hovers' nonresponse, the court concluded that it had
subject matter jurisdiction because NWTS was a nominal
defendant and therefore did not destroy complete diversity.
August 11, 2016, Moving Defendants moved to dismiss the
original complaint for failure to state a claim. (1st MTD
(Dkt. # 7).) Moving Defendants contended that the
securitization of the deed of trust did not give rise to a
cause of action. (Id. at 8-9.) Additionally, Moving
Defendants argued that the Hovers fail to state a claim
because all three claims were time barred by the applicable
statutes of limitations. (Id. at 5-7.) Finally,
Moving Defendants argued that the Hovers failed to allege
sufficient facts to support each claim. (Id. at
11-13 (arguing private nuisance), 13-15 (arguing unjust
enrichment), 15-18 (arguing fraud).) The Hovers did not
respond to the motion to dismiss. (See generally
Dkt.) On September 2, 2016, Moving Defendants filed a reply
memorandum in which they argued that the court should treat
the Hovers' failure to respond as an admission that
Moving Defendants' motion has merit. (1st MTD Reply (Dkt.
# 13) at 3 (citing Local Rules W.D. Wash. LCR 7(b)(2)).)
September 8, 2016, the court dismissed the Hovers' claims
against Moving Defendants. (9/8/16 Order (Dkt. #14).) In the
order, the court explained that "each of [Moving]
Defendants' arguments has a firm legal basis."
(Id. at 3.) Furthermore, the court treated the
Hovers' failure to respond as an admission that Moving
Defendants' motion had merit. (Id. at 2-3.)
However, the court granted the Hovers leave to amend their
complaint to "remedy the deficiencies identified in
Moving Defendants' motion to dismiss." (Id.
at 3.) The court cautioned the Hovers that "failure to
timely amend the complaint" would result in the court
dismissing their claims against Moving Defendants with
prejudice. (Id. at 3-4.)
October 18, 2016, the Hovers filed an amended complaint.
(See Am. Compl.) The amended complaint asserts a new
cause of action, libel, stemming from the notice of
trustee's sale. (Id. ¶¶ 31-49.) The
amended complaint also contains a lengthy discussion of a
party's right to a jury trial. (Id. ¶¶
19-30, 52.) Besides the libel claim and the right to a jury
trial discussion, the Hovers' new complaint contains few
allegations that were not in the original complaint. (See
Id. ¶¶ 51 (asserting a private nuisance claim
that is partially premised on the libel claim), 62
(attempting to correct the elements for an unjust enrichment
claim), 64-65 (asserting legal conclusions), 82-83 (asserting
legal conclusions), 91-93 (discussing attached "industry
publications"), 110 (asserting legal conclusions and
statements that all parties are aware or should be aware that
"no real loan exists").)
October 31, 2016, Moving Defendants filed a second motion to
dismiss. (2d MTD.) Moving Defendants argue that "very
little distinguishes" the Hovers' amended complaint
from their original complaint. (Id. at 2.) Moving
Defendants address the Hovers' new libel claim
(id. at 12-14) and reiterate their arguments from
the first motion as to the Hovers' other claims
(id. at 5-12, 14-24). Moving Defendants' motion
to dismiss is now before the court.
court first addresses the Hovers' libel claim and then
turns to the remainder of the ...