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Melville v. Bank of New York Mellon Corp.

United States District Court, E.D. Washington

September 21, 2017

DANIEL P. MELVILLE and MARY R. MELVILLE, Plaintiff,
v.
THE BANK OF NEW YORK MELLON CORPORATION a/k/a THE BANK OF NEW YORK AS TRUSTEE FOR CITICORP MARTGAGE SECURITIES TRUST SERIES 2007-6; CHASE HOME FINANCE; JP MORGAN CHASE BANK NATIONAL ASSOCIATION; NORTHWEST TRUSTEE SERVICES INC; and QUALITY LOAN SERVICE CORP OF WASHINGTON, Defendants.

          ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS' MOTIONS TO DISMISS

          ROANNA MALOUF PETERSON UNITED STATES DISTRICT JUDGE

         BEFORE THE COURT are two motions to dismiss Plaintiffs' complaint pursuant to Fed.R.Civ.P. 12(b)(6). ECF Nos. 5, 21. The first was filed by Northwest Trustee Services, Inc. (“NWTS”), ECF No. 5, and the second was filed by The Bank of New York Mellon Corporation (“Bank of New York”), Chase Home Finance, and JP Morgan Chase Bank National Association (“JP Morgan Chase Bank”), ECF No. 21. Quality Loan Service Corporation of Washington (“QLS”) filed a joinder to the motion to dismiss filed by Bank of New York, Chase Home Finance, and JP Morgan Chase Bank. ECF No. 24. Both motions to dismiss address Plaintiffs' January 23, 2017, complaint alleging that Defendants violated the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. § 1692 et al., and converted Plaintiffs' property. ECF No. 1. The Court has reviewed all the pleadings relevant to the Fed.R.Civ.P. 12(b)(6) issue currently before the Court and is fully informed.

         BACKGROUND

         Plaintiffs, a married couple, bring this mortgage-related case after their home was sent into foreclosure proceedings. They make the following allegations in their complaint. On December 19, 2007, Plaintiffs executed a promissory note, secured by a Deed of Trust, to Cherry Creek Mortgage Co., Inc. with Stewart Title serving as trustee. ECF No. 1-1 at 11-21. Plaintiffs allege that no parties outside the originally appointed beneficiary, Cherry Creek Mortgage Co., and trustee, Stewart Title, were identified as having any interest in the Deed of Trust, and the Deed of Trust was never transferred or assigned to any party and “there is no evidence anywhere of any transfers or assignments of this instrument.”[1] ECF No. 1. Plaintiffs also allege that Defendants acquired personal and banking information belonging to Plaintiffs and a forged copy of Plaintiffs' promissory note.

         Plaintiffs allege that in the twelve months prior to filing the complaint, Defendants began sending written communications stating that they had legal rights to the property under the Deed of Trust. Plaintiffs asked Defendants to provide some verification that they had these rights and requested that Defendants identify the source of their knowledge of Plaintiffs' financial information. Plaintiffs allege that Defendants failed to respond to any of these requests besides providing copies of records from the county recorder's office. ECF No. 1.

         The relative positions of the Defendants are as follows. According to the unrecorded Notice of Trustee's Sale, Cherry Creek Mortgage Co. transferred its beneficiary interest in the Deed of Trust to JPMorgan Chase Bank. ECF No. 1-1. According to a securitization audit submitted by Plaintiffs, the Deed of Trust may have been securitized with Chase Home Finance acting as the sponsor and seller, Chase Mortgage Finance acting as Depositor, Chase Mortgage Finance Trust Series 2007-S6 acting as the issuing entity, the Bank of New York acting as trustee, and JPMorgan Chase Bank as servicer. ECF No. 1-1 at 81-102.

         According to NWTS, it acted as a successor trustee on the Deed of Trust. ECF No. 5 at 2. Likewise, NWTS alleges that QLS was appointed successor trustee under the Deed of Trust. ECF No. 5 at 3. QLS sent correspondence to Plaintiffs as the successor trustee. ECF Nos. 1-1 at 25-27.

         Plaintiffs specifically bring ten claims for relief: counts (1)-(5) allege that each Defendant violated provisions of the FDCPA, including 15 U.S.C. §§ 1692e and 1692g; and counts (6)-(10) each allege that each Defendant converted Plaintiffs' property.

         JURISDICTION

         This Court has subject matter jurisdiction over the FDCPA claims under 28 U.S.C. § 1331 and over the conversion claims under 28 U.S.C. § 1367.

         STANDARD

         The Federal Rules of Civil Procedure allow for the dismissal of a complaint where a plaintiff fails to state a claim upon which relief can be granted. Fed.R.Civ.P. 12(b)(6). A motion to dismiss brought pursuant to this rule “tests the legal sufficiency of a claim.” Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). In reviewing the sufficiency of a complaint, a court accepts all well-pleaded allegations as true and construes those allegations in the light most favorable to the non-moving party. Daniels-Hall, 629 F.3d at 998 (citing Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031-32 (9th Cir. 2008)).

         To withstand dismissal, a complaint must contain “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). “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.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). While specific legal theories need not be pleaded, the pleadings must put the opposing party on notice of the claim. Fontana v. Haskin, 262 F.3d 871, 877 (9th Cir. 2001) (citing Conley v. Gibson, 355 U.S. 41, 47 (1957)). Plaintiffs are not required to establish a probability of success on the merits, but they must demonstrate “more than a sheer possibility that a defendant has acted unlawfully.” Iqbal, 556 U.S. at 678 (citing Twombly, 550 U.S. at 556). “[A] [p]laintiff's obligation to provide the ‘grounds' of his ‘entitle[ment] to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Twombly, 550 U.S. at 555.

         Documents the Court Considers

         Generally, a district court may not consider material beyond the complaint in ruling on a Rule 12(b)(6) motion to dismiss. Lee v. City of L.A., 250 F.3d 668, 688 (9th Cir. 2001). However, the Ninth Circuit has carved out limited exceptions to this rule. First, a court may consider material properly submitted as part of the complaint. Id. Second, a court may consider documents that are not physically attached to the pleading if their contents are alleged in the complaint and no party questions their authenticity. Id. Third, under Federal Rule of Evidence 201, a court may take judicial notice of matters of public record. Id. at 688-89; see also United States v. Ritchie, 342 F.3d 903, 908-09 (9th Cir. 2003) (citing Van Buskirk v. CNN, 284 F.3d 977, 980 (9th Cir. 2002)).

         Rule 201 provides that “[t]he court may judicially notice a fact that is not subject to reasonable dispute because it . . . can be accurately and readily determined from sources whose accuracy cannot reasonably be questioned.” Fed.R.Evid. 201(b)(2). “A trial court may presume that public records are authentic and trustworthy, ” Gilbrook v. City of Westminster, 177 F.3d 839, 858 (9th Cir. 1999), and thus, falls under Rule 201. See also Allshouse v. Caliber Home Loans, Inc., No. CV1401287DMGJCX, 2014 WL 12594210, at *3 (C.D. Cal. Oct. 29, 2014) (“Courts routinely take judicial notice of assignments of deed of trust and similar recorded documents” in motions to dismiss.).

         Based on the above authority, this Court considers the documents Plaintiffs attached to their original complaint. Defendants also ask the Court to consider filings from Plaintiff Mary Melville's Chapter 13 Bankruptcy, Case No. 14-02203-FPC. ECF Nos. 5, 21, 24. This Plan is attached to Defendants' motions, ECF Nos. 5-1, 22, and can be considered by the Court. Additionally, Defendant NWTS asks the Court to take judicial notice of Instrument Nos. 6244607, 6255008, and 6535025 recorded with the Spokane County Auditor. ECF No. 5. However, these ...


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