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Gelinas v. Bank of America, N.A.

United States District Court, W.D. Washington

March 27, 2017

DAVID R. GELINAS, et al., Plaintiffs,
v.
BANK OF AMERICA, N.A., et al., Defendants.

          ORDER

          The Honorable Richard A. Jones United States District Judge

         I. INTRODUCTION

         This matter comes before the Court on Defendants Bank of America, N.A. (“BANA”), HSBC Bank, USA, National Association (“HSBC”), Mortgage Electronic Registration Systems, Inc.'s (“MERS”) Motion to Dismiss Plaintiffs' Complaint (collectively “Defendants”) (Dkt. # 10) and Defendant Quality Loan Services Corporation of Washington's (“QLS”) Motion to Dismiss (Dkt. # 9). For the reasons that follow, the Court GRANTS the motions.

         II. BACKGROUND[1]

         On December 9, 2006, Plaintiffs took out a mortgage loan for $460, 000.00 from Express Capital Lending. Dkt. # 1 ¶ 17. Plaintiffs' loan is secured by a Deed of Trust (“DOT”) on real property, which is located at 6829 Skipley Road, Snohomish, WA 98290 (“Property”). Id.; Dkt. # 11, Ex. A. The DOT names Plaintiffs as the borrowers, Express Capital Lending as the lender, First American Title as the trustee, and MERS as the beneficiary. Dkt. # 11, Ex. A. On September 28, 2011, MERS recorded an Assignment of Deed of Trust and assigned the DOT to BANA. Id., Ex. B; Dkt. # 1 ¶ 19. Then, on January 10, 2013, BANA recorded an Assignment of Deed of Trust and assigned the DOT to HSBC. Dkt. # 11, Ex. C. On February 21, 2014, HSBC recorded an Appointment of Successor Trustee, appointing QLS as the successor of title. Id., Ex. D.

         On November 26, 2014, QLS recorded a Notice of Trustee's Sale scheduling a sale for March 27, 2015, because Plaintiffs were in default of their loan. Id., Ex. E. The Notice of Trustee's Sale documented that Plaintiffs owed $131, 936.56 on their loan payments. Id. However, the March 2015 sale did not take place, and QLS recorded a second Notice of Trustee's Sale on February 8, 2016. Id., Ex. F; Dkt. # 1 ¶ 23. By then, Plaintiffs' were $173, 599.90 in arrears. Id.

         Plaintiffs assert that they submitted a loan modification application to BANA on June 3, 2016. Dkt. # 1 ¶ 25. Plaintiffs claim they are in weekly communications with Ms. Angie Fortunity of BANA's loss mitigation department and that their file is “open and active.” Id. However, they admit that they “have not provided all required information requested on [their loan modification application].” Id. ¶ 26. Plaintiffs filed this lawsuit on August 26, 2016. Dkt. # 1.

         III. LEGAL STANDARD

         Rule 12(b)(6) permits a court to dismiss a complaint for failure to state a claim. The rule requires the court to assume the truth of the complaint's factual allegations and credit all reasonable inferences arising from those allegations. Sanders v. Brown, 504 F.3d 903, 910 (9th Cir. 2007). A court “need not accept as true conclusory allegations that are contradicted by documents referred to in the complaint.” Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008). The plaintiff must point to factual allegations that “state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 568 (2007). If the plaintiff succeeds, the complaint avoids dismissal if there is “any set of facts consistent with the allegations in the complaint” that would entitle the plaintiff to relief. Id. at 563; Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009). Where a plaintiff proceeds pro se, the court must construe his “complaints liberally even when evaluating it under the Iqbal standard.” Johnson v. Lucent Techs. Inc., 653 F.3d 1000, 1011 (9th Cir. 2011) (citing Hebbe v. Pliler, 627 F.3d 338, 342 (9th Cir. 2010)).

         IV. DISCUSSION

         Plaintiffs allege six causes of action in their Complaint: (1) quiet title, (2) violations of the Real Estate Settlement Procedures Act (“RESPA”), 12 C.F.R. 1024.41(g), (3) violation of the Washington Consumer Protection Act (“CPA”), RCW ch. 19.86, (4) declaratory judgment, (5) slander of title, and (6) violation of the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692e(5). Dkt. # 1.

         A. Judicial Notice

         Defendants request that the Court take judicial notice of certain documents. Among these documents are (1) the deed of trust (Dkt. # 11, Ex. A; Snohomish County Auditor Instrument # 200701080572); (2) two recordings of the assignment of the deed of trust (id., Exs. B, C; ## 201109280477, 201301100083); (3) a recorded appointment of successor trustee (id., Ex. D; # 201402210257); and (4) two recorded notices of trustee sale (id., Exs. E, F; ## 201411260230, 201602080244).[2] Each of these documents is available at http://snohomishcountywa.gov/176/Auditor.

         When resolving a motion to dismiss, a court typically cannot consider evidence beyond the four corners of the complaint. It may, however, consider certain materials, including those subject to judicial notice, without converting the motion into a motion for summary judgment. United States v. Ritchie, 342 F.3d 903, 908 (9th Cir. 2003). Under Rule 201, a court may take judicial notice of “a fact that is not subject to reasonable dispute because it: (1) is generally known within the trial court's territorial jurisdiction; or (2) can be accurately and readily determined from sources whose accuracy cannot reasonably be questioned.” Fed.R.Evid. 201. Certain public records qualify under the second category, including the “records and reports of administrative bodies.” Ritchie, 342 F.3d at 909 (quoting Interstate Nat. Gas Co. v. S. Cal. Gas Co., 209 F.2d 380, 385 (9th Cir. 1953)).

         Here, the Court takes judicial notice of the foregoing publically recorded Snohomish County documents. The contents of these documents are not subject to reasonable dispute, as they “are authentic documents recorded with a governmental agency.” Gelinas v. U.S. Bank, NA, No. 16-1468-JLR, 2017 WL 553277, at *3 (W.D. Wash. Feb. 10, 2017).[3]

         B. Quiet Title Claim

         Plaintiffs assert a claim for quiet title. Dkt. # 1 ¶ 23. They allege that Defendants have no interest in the Property because the assignment recorded on September 28, 2011 is invalid. Id. Plaintiffs argue that if the assignment is invalid, then the subsequently recorded documents are also invalid. Id. They thus allege that Defendants should be prevented from foreclosing on Plaintiffs' Property. Id. Defendants argue that Plaintiffs' claim fails because Plaintiffs have not paid their debt. Dkt. # 10 at 8.

         The purpose of a quiet title action is to resolve competing claims of ownership of real property. Kobza v. Tripp, 105 Wash.App. 90, 95 (2001). In order for Plaintiffs to succeed on a quiet title claim, Plaintiffs must first allege that they “are the rightful owners of the property, i.e., that they have satisfied their obligations under the Deed of Trust.” Santos v. Countrywide Home Loans, No. CIV.20902642WBS DAD, 2009 WL 3756337, at *4 (E.D. Cal. Nov. 6, 2009) (quoting Kelley v. Mortgage Elec. Reg. Sys., Inc., 642 F.2d 1048, 1057 (N.D. Cal. 2009)); see also Borowski v. BNC Mortgage, Inc., No. C12-5867 RJB, 2013 WL 4522253, at *4 (W.D. Wash. Aug. 27, 2013) (stating that because plaintiff owed an outstanding balance on his mortgage loan, he had not met the required prerequisite for a quiet title action). In other words, to bring a quiet title claim, Plaintiffs must first allege facts demonstrating they have paid their outstanding debt.

         Plaintiffs have not alleged facts asserting they have paid their outstanding debt. In their Complaint, Plaintiffs state that “the disputed mortgage at issue” totals $493, 546.00. Dkt. # 1 at ¶ 10. The Notice of Trustee's Sale shows that Plaintiffs owe $173, 599.90 as of February 8, 2016. (Dkt. # 11, Ex. F). In their reply brief, Plaintiffs allege no facts asserting they have paid their outstanding debt. Dkt. # 13.

         As an additional basis for dismissal, Defendants argue that Plaintiffs' claim fails because they lack standing to challenge the validity of an assignment of their deed of trust. Dkt. # 10 at 6. The Court agrees. In Washington, Plaintiffs, as third parties, lack standing to challenge the chain of their Assignment unless they can ...


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