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Lake v. MTC Financial, Inc.

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

July 24, 2017

WAYNE R. LAKE, et al., Plaintiffs,
v.
MTC FINANCIAL, INC., et al., Defendants.

          ORDER GRANTING MOTION TO DISMISS PLAINTIFFS' FIRST AMENDED COMPLAINT

          JAMES L. ROBART United States District Judge.

         I. INTRODUCTION

         Before the court is Defendant Deutsche Bank Trust Company Americas as Trustee for the Certificate Holders of Dover Mortgage Capital 2005-A Corporation, Grantor Trust Certificate, Series 2005-A's (“Deutsche Bank”) motion to dismiss Plaintiffs Wayne R. Lake and Cynthia A. Lake's (collectively, “the Lakes”) first amended complaint. (MTD (Dkt. # 18); see also FAC (Dkt. # 17).) The court has considered the motion, the Lakes' response (Resp. (Dkt. # 19)), Deutsche Bank's reply (Reply (Dkt. # 20)), the relevant portions of the record, and the applicable law. Considering itself fully advised, [1] the court grants Deutsche Bank's motion and dismisses the Lakes' first amended complaint with prejudice and without leave to amend.

         II. BACKGROUND

         This case arises out of foreclosure proceedings related to the Lakes' residential property, which is located at 18214 25th Avenue Northeast, Lake Forest Park, Washington 98155 (“the Property”). (See, e.g., FAC ¶¶ 3, 13, 32 (“[Deutsche Bank] made false representations that it had rights to foreclose against the [Lakes'] residential property under the provisions of a deed of trust that is recorded against the title of the [Lakes'] property in King County.”), 33.) In October 2002, the Lakes took out a loan for $145, 000.00, which is secured by a deed of trust on the Property. (Id. ¶¶ 3, 7; Compl. (Dkt. # 1) at 9, Ex. A at 15[2]; Resp. at 1.) The deed of trust secured a promissory note that was payable to Bank of America, N.A. (“BANA”). (FAC ¶ 7; Resp. at 1.) The original trustee on the deed of trust was “PRLAP, INC.” (FAC ¶ 7; Resp. at 1.)

         In May 2010, BANA recorded an assignment of the deed of trust to Deutsche Bank (“May 2010 Assignment”). (Gibbons Decl. (Dkt. # 9) ¶ 3, Ex. A.) In their first amended complaint, the Lakes acknowledge the existence of the May 2010 Assignment but question its validity. (FAC ¶ 16 (“An assignment of the deed of trust was purportedly executed on May 4, 2010 . . . which purports to assign the note and deed of trust to [Deutsche Bank].”) see also Compl. at 9; Resp. at 2.) The first amended complaint also acknowledges that the May 2010 Assignment “was recorded on May 6, 2010[, ] in King County.” (FAC ¶ 16; see Resp. at 2.) The first amended complaint alleges that “‘G. Hernandez, ' Assistant Secretary for [BANA], ” signed the May 2010 Assignment on behalf of BANA and that he or she “is a documented ‘robo-signer'. . . [who] did not review or investigate the information in the document he or she signed.” (FAC ¶ 16; see Resp. at 2.)

         On May 6, 2010, Deutsche Bank recorded an Appointment of Successor Trustee, naming ReconTrust Company, N.A. (“ReconTrust”) as the successor trustee. (Gibbons Decl. ¶ 4, Ex. B.) On July 2, 2015, Deutsche Bank recorded another Appointment of Successor Trustee, naming MTC Financial Inc. dba Trustee Corps (“MTC”) as the successor trustee. (Id. ¶ 5, Ex. C.) On October 30, 2015, MTC recorded a Notice of Trustee's Sale scheduling a sale for March 11, 2016, and stating that the Lakes were $133, 890.81 in arrears on their loan payments. (Id. ¶ 6, Ex. D; see also Compl. Ex. A at 37-40.) The March 11, 2016, sale did not take place, and MTC recorded a second Notice of Trustee's sale on May 24, 2016, scheduling a sale date for September 23, 2016, and stating that the Lakes were $142, 622.36 in arrears on their payments. (Gibbons Decl. ¶ 7, Ex. E; see also Compl. Ex. A at 25-28.) On July 6, 2016, MTC recorded a notice that discontinued the September 23, 2016, sale. (Gibbons Decl. ¶ 8, Ex. F.)

         In their first amended complaint, the Lakes allege that (1) Deutsche Bank is falsely representing that it is the holder of the Lakes' note and (2) Deutsche Bank had no right to foreclose on the Lakes' residential property under the deed of trust. (FAC ¶¶ 31-34.) The Lakes further allege that BANA “continue[s] to enforce the same interests that it allegedly had before the purported assignment by acting as the lender and communicating with Plaintiffs as late as June 29, 2016, ” and that “[a]t no time did [BANA] ever identify itself as the servicer of [their] loan.” (Id. ¶¶ 18-19.) This latter allegation, however, is contradicted by documents the Lakes attached to their original complaint. For example, in letters to the Lakes dated November 8, 2012, May 6, 2013, June 20, 2014, and December 5, 2014, BANA informed the Lakes they were in default on their loan, and in each of those letters, BANA specifically identified itself as the servicer of the Lakes' loan. (Compl. Ex. A at 134 (“[BANA] services the mortgage loan on your property . . . .”), 137 (same), 140 (“[BANA] services your mortgage loan.”), 143 (same).

         The Lakes filed their original complaint on September 20, 2016. (See Compl.) In that complaint, the Lakes alleged two claims against Deutsche Bank: (1) breach of a “License Agreement” (see Id. at 17, Ex. B) and (2) violation of the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1962 et seq. (see Compl. at 13). On April 11, 2017, the court granted Deutsche Bank's motion to dismiss the Lakes' complaint. (4/11/17 Order (Dkt. # 16).) The court dismissed the Lakes' breach of contract claim with prejudice and without leave to amend, but granted the Lakes leave to amend their Section 1692f(6) FDCPA claim.[3] (Id. at 15-16.) On May 15, 2017, the Lakes filed an amended complaint alleging an FDCPA claim against Deutsche Bank. (See generally FAC.) The Lakes' first amended complaint does not attach the documents they included in Exhibit A to their original complaint, but they refer to Exhibit A twice in their first amended complaint. (See FAC ¶¶ 15, 20.)

         III. ANALYSIS

         A. Legal Standard

         When considering a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), the court construes the complaint in the light most favorable to the nonmoving party. Livid Holdings Ltd. v. Salomon Smith Barney, Inc., 416 F.3d 940, 946 (9th Cir. 2005). The court must accept all well-pleaded allegations of material fact 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). “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 678.

         The court, however, need not accept as true a legal conclusion presented as a factual allegation. Id. Although 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 under Federal Rule of Civil Procedure 12(b)(6). Id. A complaint does not survive dismissal where “it tenders ‘naked assertion[s]' devoid of ‘further factual enhancement.'” Id. (quoting Twombly, 550 U.S. at 557).

         B. Documents the ...


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