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Lake v. Premier Financial Services, Inc.

United States District Court, W.D. Washington, Seattle

June 12, 2017

LEVI A. LAKE, Plaintiff,


          JAMES L. ROBART United States District Judge.


         Before the court is Defendant MTGLQ Investors, L.P.'s (“MTGLQ”) motion to dismiss this action. (Mot. (Dkt. # 8).) Plaintiff Levi A. Lake opposes MTGLQ's motion. (Resp. (Dkt. # 14).) The court has considered MTGLQ's motion, Mr. Lake's response, all submissions filed in support of and opposition to the motion, the relevant portions of the record, the judicially noticed public records as described in this order, and the // applicable law. Being fully advised, [1] the court GRANTS the motion and dismisses Mr. Lake's complaint without prejudice and with leave to amend.


         This case arises from a nonjudicial foreclosure. Mr. Lake seeks to quiet title to the property in question (FAC (Dkt. # 13) ¶¶ 5.1-5.4) and a declaration that Mortgage Electronic Registry Systems, Inc. (“MERS”) is not a legal beneficiary under the deed of trust (id. ¶¶ 4.1-4.2.) On November 7, 2005, Mr. Lake refinanced the existing promissory note on his home with a loan from Defendant Premier Financial Services, Inc. (“Premier”). (Id. ¶ 3.2.) The loan is secured by a deed of trust encumbering Mr. Lake's residence, a condominium in Kirkland, Washington (the “Property”). (Id.) At the time the parties signed the deed of trust, Mr. Lake was the borrower, Premier was the lender, and Fidelity National Title was the trustee. (1st McIntosh Decl. (Dkt. # 9) ¶ 2, Ex. A, (“Deed of Trust”).)[2] In addition, the deed of trust lists MERS as the beneficiary, solely as nominee of the lender and the lender's successors and heirs. (Id.) // Despite occupying the Property, Mr. Lake ceased payments on his loan in 2010. (FAC ¶ 3.11.) On August 5, 2010, AmTrust Bank, as servicer of the loan, notified Mr. Lake that he was in default and that AmTrust would accelerate the remainder of the amount owed if Mr. Lake did not make a payment within 30 days. (Id.) Mr. Lake made no payments, and AmTrust accelerated the entire amount due on September 5, 2010. (Id.)

         On October 25, 2010, a representative of MERS assigned the deed of trust to New York Community Bank (“NYCB”). (Id. ¶ 3.5.) On August 25, 2011, NYCB assigned the deed of trust to Nationstar Mortgage LLC (“Nationstar”). (Id. ¶ 3.6.) The assignment to Nationstar was recorded in King County on October 20, 2011. (Id.) Nationstar appointed Quality Loan Service Corporation of Washington (“Quality”) as successor trustee on December 31, 2015. (FAC ¶ 3.9.) On January 29, 2016, Quality served a notice of default on the Property. (2nd McIntosh Decl. ¶ 2, Ex. A (“Notice of Tr. Sale”) § VI.) On January 17, 2017, Nationstar assigned the deed of trust to MTGLQ. (FAC ¶ 3.10.) On April 18, 2017, MTGLQ recorded a notice of trustee's sale on April 18, which scheduled a sale of the Property for August 25, 2017. (Notice of Tr. Sale § IV.)

         Mr. Lake filed this action in King County Superior Court on March 15, 2017. (See Compl. (Dkt. # 1-1).) MTGLQ removed the action to this court on March 29, 2017. (Not. of Rem. (Dkt. # 1).) On March 30, 2017, MTGLQ filed its motion to dismiss the complaint. (See Mot.) On April 17, 2017, Mr. Lake filed an amended complaint (see FAC)[3] and responded to the motion to dismiss (see Resp.)[4]

         Mr. Lake alleges that any claims to enforce the loan are time-barred. (FAC ¶¶ 5.3-5.4.) MTGLQ contends that the statutory notice of default issued and posted in January 2016 timely initiated the non-judicial foreclosure. (Mot. at 2 (citing Edmundson v. Bank of Am., NA, 378 P.3d 272, 277 (Wash.Ct.App. 2016)).) Mr. Lake responds that the chain of title was imperfect and thus argues that the notice of default did not properly initiate the foreclosure process. (Resp. at 3-4.)

         III. ANALYSIS

         A. Legal Standard

         When considering a motion to dismiss under Rule 12(b)(6), the court construes the complaint in the light most favorable to the non-moving party. Livid Holdings Ltd. v. Salomon Smith Barney, Inc., 416 F.3d 940, 946 (9th Cir. 2005). The court must accept all well-pleaded factual allegations as true and draw all reasonable inferences in favor of the plaintiff. See Wyler Summit P'ship v. Turner Broad. Sys., Inc., 135 F.3d 658, 661 (9th Cir. 1998). In deciding a motion to dismiss, the court may consider the pleadings, documents attached to the pleadings, documents that are judicially noticed, and // documents that the pleadings incorporate by reference. United States v. Ritchie, 342 F.3d 903, 908 (9th Cir. 2003) (citing Van Buskirk v. CNN, 284 F.3d 977, 980 (9th Cir. 2002)).

         “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)); see also Telesaurus VPC, LLC v. Power, 623 F.3d 998, 1003 (9th Cir. 2010). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 663.

         A pleading may fail to state a claim under Rule 12(b)(6) “either by lacking a cognizable legal theory or by lacking sufficient facts alleged under a cognizable legal theory.” Woods v. U.S. Bank N.A., 831 F.3d 1159, 1162 (9th Cir. 2016). The court need not accept as true a legal conclusion presented as a factual allegation. Iqbal, 556 U.S. at 678. Although the pleading standard announced by Federal Rule of Civil Procedure 8 does not require “detailed factual allegations, ” it demands more than “an unadorned, the-defendant-unlawfully-harmed-me accusation.” Id. (citing Twombly, 550 U.S. at 555). A pleading that offers only “labels and conclusions or a formulaic recitation of the elements of a cause of action” will not survive a motion to dismiss. Id. Thus, a complaint must contain sufficient factual allegations to “plausibly suggest entitlement to relief, such that it is not unfair to require the opposing party to be subjected to the expense of discovery and continued litigation.” Starr v. Baca, 652 F.3d 1202, 1216 (9th Cir. 2011).

         B. Application of MTGLQ's Motion to Mr. ...

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