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Lake v. MTGLQ Investors, L.P.

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

September 1, 2017

LEVI A. LAKE, Plaintiff,
v.
MTGLQ INVESTORS, L.P., et al., Defendants.

          ORDER ON CROSS MOTIONS FOR SUMMARY JUDGMENT

          JAMES L. ROBART, United States District Judge

         I. INTRODUCTION

         Before the court are Defendant MTGLQ Investors, L.P.'s (“MTGLQ”) motion for summary judgment (Def. Mot. (Dkt. # 33)), and Plaintiff Levi A. Lake's cross-motion for summary judgment (Pltf. Mot. (Dkt. # 37)). Defendant New York Community Bank as Servicer for the Federal Deposit Insurance Corporation (“FDIC”) as Receiver for Ohio Savings Bank AKA Amtrust Bank (“NYCB”) joins MTGLQ's motion for summary judgment. (Joinder (Dkt. # 36).)

         The court has considered the parties' submissions, 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 MTGLQ and NYCB's (collectively, “Defendants”) motion for summary judgment and DENIES Mr. Lake's cross-motion for summary judgment.

         II. BACKGROUND

         This case arises from a nonjudicial foreclosure. Mr. Lake seeks to quiet title to the property in question. (SAC (Dkt. # 28) ¶ 37.) On November 7, 2005, Mr. Lake refinanced the existing promissory note on his home with a loan from Premier Financial Services, Inc. (“Premier”). (Id. ¶ 6.) The loan is secured by a deed of trust encumbering Mr. Lake's residence (the “Property”). (1st McIntosh Decl. (Dkt. # 9), Ex. A (attaching the deed of trust).) The deed of trust lists Mr. Lake as the borrower, Premier as the lender, and Fidelity National Title as the trustee. (Id. at 2.)[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.)

         The promissory note was subsequently transferred. (See Sahyers Decl. (Dkt. # 20), Ex. A (attaching Mr. Lake's promissory note).) The note bears two indorsements: (1) from Premier to Ohio Savings Bank, without recourse, dated November 7, 2005, and (2) a blank indorsement, without recourse, executed by Robert Diamond, an Ohio Savings Bank authorized agent. (Id.) The deed of trust was also subsequently assigned. The deed of trust was assigned from MERS to New York Community Bank on October 25, 2010. (SAC ¶ 8; Lake Decl., Ex. C.)) NYCB assigned the deed of trust to Nationstar Mortgage LLC (“Nationstar”) on August 25, 2011. (SAC ¶ 9; Lake Decl., Ex. D.) Nationstar assigned the deed of trust to MTGLQ on January 17, 2017. (SAC ¶ 11; Lake Decl., Ex. E.)

         Despite occupying the Property, Mr. Lake ceased payments on his loan in 2010. (SAC ¶ 7.) 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. ¶ 14.) Mr. Lake made no payments. (Id.)

         In May 2015, Nationstar, which was now the servicer of the loan for Fannie Mae, hired Quality Loan Service Corporation of Washington (“Quality”) to advance a non-judicial foreclosure of the Property. (See Herbert-West Decl. (Dkt. # 34) ¶ 4; SAC, Ex. E (“Not. of Default”) at 1.) In December 2015, Nationstar appointed Quality as successor trustee and provided Quality with a declaration stating that Nationstar was now the holder of Mr. Lake's promissory note. (See Herbert-West Decl., Ex. A (“Successor Appointment”), Ex. B (“Nationstar Beneficiary Decl.”).) On January 29, 2016, Quality served a notice of default on the Property. (Not. of Default). The notice identifies Fannie Mae as the owner and Nationstar as the loan servicer. (Id.) In April 2017, Quality obtained a declaration stating that MTGLQ was now the holder of Mr. Lake's note, and issued a notice of trustee's sale identifying MTGLQ as the beneficiary. (See Herbert-West Decl., Ex. C (“MTGQL Beneficiary Decl.”); 2nd McIntosh Decl. ¶ 2, Ex. A (“Notice of Tr. Sale”).)

         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 and filed a motion to dismiss the complaint. (Not. of Rem. (Dkt. # 1); MTD (Dkt. # 8).) Before the court ruled on that motion, Mr. Lake filed an amended complaint. (See FAC (Dkt. # 13).)[3] The court granted MTGLQ's motion to dismiss and dismissed Mr. Lake's first amended complaint with leave to amend. (See 6/12/2017 Order (Dkt. # 25).)

         On June 30, 2017, Mr. Lake timely filed a second amended complaint, naming MTGLQ and NYCB as defendants.[4] (See SAC ¶¶ 2-3.)[5] Mr. Lake seeks to quiet title on the theory that Quality lacked authority to issue the notice of default, and any foreclosure action is now time-barred. (See id.) On July 20, 2017, MTGQL filed a motion for summary judgement. (See Def. Mot.) On July 28, 2017, NYCB filed a joinder to MTGLQ's motion for summary judgment. (See Joinder.) On August 4, 2017, Mr. Lake filed a cross-motion for summary judgment. (See Pltf. Mot.) The cross-motions for summary judgment and the motion to join are now before the court.[6]

         III. ANALYSIS

         A. Legal Standards

         1. Summary ...


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