Robinson v. Wells Fargo Bank National Association et alMOTION TO DISMISS FOR FAILURE TO STATE A CLAIM W.D. Wash.January 20, 2017 BANK OF AMERICA, N.A.'S MOTION TO DISMISS PLAINTIFF'S COMPLAINT - 1 Case No.: 2:17-cv-00061-JLR S1498993.DOCX 422 W. Riverside Avenue, Suite 1100 Phone: 509.624.5265 Spokane, Washington 99201-0300 Fax: 509.458.2728 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Christopher G. Varallo, WSBA No. 29410 Hon. James L. Robart Steven J. Dixson, WSBA No. 38101 WITHERSPOON ∙ KELLEY 422 West Riverside Avenue, Suite 1100 Spokane, WA 99201-0300 Telephone: (509) 624-5265 Facsimile: (509) 458-2728 cgv@witherspoonkelley.com sjd@witherspoonkelley.com Attorneys for Defendant Bank of America, N.A. UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT SEATTLE BARBARA ROBINSON, Plaintiff, vs. WELLS FARGO BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE CERTIFICATE HOLDERS OF THE MLMI TRUST, MORTGAGE LOAN ASSET- BACKED CERTIFICATES, SERIES 2005 WMC2; MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC.; NATIONSTAR MORTGAGE; BANK OF AMERICA; JAY BRAY; AZTEC FORECLOSURE CORPORATION OF WASHINGTON, Defendants. Case No.: 2:17-cv-00061-JLR DEFENDANT BANK OF AMERICA, N.A.'S MOTION TO DISMISS PLAINTIFF'S COMPLAINT NOTE ON MOTION CALENDAR: February 17, 2017 I. INTRODUCTION Pro se Plaintiff Barbara Robinson (“Plaintiff”) files the instant Complaint against numerous defendants, including Bank of America (“BANA”). The allegations in the Complaint are vague and ambiguous, and to the extent they can be deciphered, it appears that Plaintiff is Case 2:17-cv-00061-JLR Document 7 Filed 01/20/17 Page 1 of 19 BANK OF AMERICA, N.A.'S MOTION TO DISMISS PLAINTIFF'S COMPLAINT - 2 Case No.: 2:17-cv-00061-JLR S1498993.DOCX 422 W. Riverside Avenue, Suite 1100 Phone: 509.624.5265 Spokane, Washington 99201-0300 Fax: 509.458.2728 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 doing little more than asserting that her loan has been securitized, and as a result she believes she need not pay her loan back. Plaintiff does not appear to raise any allegations of actual wrongdoing or come forward with any facts which could possibly entitle her to avoid her loan. Plaintiff’s claims are each legally and factually deficient, and fail as a matter of law. The Complaint should be dismissed in its entirety with prejudice. Plaintiff’s Complaint does not state a single viable claim against Defendant for the following reasons: Plaintiff’s claims which are premised on Plaintiff’s securitization argument each fail, as there is nothing improper about securitizing a loan, and in fact Plaintiff’s loan documents permit its sale; Plaintiff is not entitled to quiet title as there BANA is asserting no competing claim to ownership of the property, and she has failed to tender the debt; Plaintiff’s RICO claim is inadequately pled; There is no cause of action for defamation of credit in Washington;; and Plaintiff has failed to adequately plead the elements of a conspiracy claim. Accordingly, Plaintiff’s Complaint, which relies entirely on legally defective arguments, should be dismissed with prejudice as to BANA. II. FACTUAL AND PROCEDURAL HISTORY A. Factual History Plaintiff borrowed $596,031 from WMC Mortgage Corp. (“WMC”) on or about February 16, 2005 (the “Loan”). The Loan was secured by a Deed of Trust (“DOT”) encumbering the property located at 13540 SE 159th Place, Renton WA 98058. See Declaration of Christopher G. Varallo (“Varallo Decl.”), Ex. A. The DOT lists Plaintiff and her husband Sugar Ray Robinson as Case 2:17-cv-00061-JLR Document 7 Filed 01/20/17 Page 2 of 19 BANK OF AMERICA, N.A.'S MOTION TO DISMISS PLAINTIFF'S COMPLAINT - 3 Case No.: 2:17-cv-00061-JLR S1498993.DOCX 422 W. Riverside Avenue, Suite 1100 Phone: 509.624.5265 Spokane, Washington 99201-0300 Fax: 509.458.2728 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 borrowers, WMC as lender, Bishop & Lynch of King County as trustee and MERS as beneficiary, solely as nominee of the lender and its heirs. On January 5, 2010, a Corporate Assignment of Mortgage/Deed of Trust was recorded, assigning the DOT to Wells Fargo Bank, N.A. (“Wells Fargo”), as trustee for the securitized trust investor. Id., Ex. B. That same day, Wells Fargo recorded an Appointment of Successor Trustee, appointing Northwest Trustee Services, Inc. (“Northwest”) as trustee on the DOT. Id., Ex. C. On January 28, 2010, Northwest recorded Notice of Trustee’s Sale, scheduling a sale for April 30, 2010. Id., Ex. D. This sale was later discontinued by a Notice of Discontinuance filed by Northwest on October 3, 2011. Id., Ex. E. On December 9, 2011, BANA recorded a Loan Modification Agreement, evidencing the fact that BANA had provided Plaintiff with a modification of her Loan. Id., Ex. F. On August 15, 2013, BANA recorded an Assignment of Deed of Trust, assigning the DOT to Nationstar, as the servicing of the Loan had been released from BANA to Nationstar. Id., Ex. G. On May 3, 2016, a Corrective Assignment of Deed of Trust was recorded for purposes of clarifying that the August 15, 2013 Assignment was recorded in error, and the DOT remains with the beneficiary, Wells Fargo, and should not have been erroneously assigned to Nationstar. Id., Ex H. On June 22, 2016, Wells Fargo recorded an Appointment of Successor Trustee, appointing Aztec Foreclosure Corporation of Washington (“Aztec”) as trustee. Id., Ex. I. On August 16, 2015, Aztec recorded a Notice of Trustee’s Sale, scheduling a sale of the Property for December 16, 2016. Id., Ex. J. The county records do not presently indicate whether a sale proceeded on December 16, 2016. Plaintiff filed this suit in King County Superior Court on December 12, 2016. Nationstar removed this matter on January 13, 2017. ECF 1. III. EVIDENCE RELIED UPON This Motion to Dismiss relies upon allegations in the Complaint, the exhibits attached to the Complaint and the undisputed recorded documents of which the Court may take Case 2:17-cv-00061-JLR Document 7 Filed 01/20/17 Page 3 of 19 BANK OF AMERICA, N.A.'S MOTION TO DISMISS PLAINTIFF'S COMPLAINT - 4 Case No.: 2:17-cv-00061-JLR S1498993.DOCX 422 W. Riverside Avenue, Suite 1100 Phone: 509.624.5265 Spokane, Washington 99201-0300 Fax: 509.458.2728 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 judicial notice. 1 IV. ISSUE Should Plaintiff’s Complaint be dismissed in its entirety as to BANA pursuant to FRCP 12(b)(6) for failure to state a claim upon which relief can be granted? V. ARGUMENT A. Legal Standard Federal Rule of Civil Procedure 8(a)(2) requires a plaintiff to provide “‘a short and plain statement of the claim showing that [he] is entitled to relief’ . . . to ‘give the defendant[s] fair notice of what the . . . claim is and the grounds upon which it rests.’” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 545 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)). Claims that fail to meet this standard must be dismissed under Federal Rule of Civil Procedure 12(b)(6). While these Rules do not require heightened fact pleading, they do require that a complaint contain sufficient factual allegations, which, if accepted as true, state a claim for relief “‘that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 129 S. Ct. 1937, 1949 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. at 570 (2007)). Where, however, the Borrower fails to “nudge[] [his] claims across the line from conceivable to plausible, [his] complaint must be dismissed.” Twombly, 550 U.S. at 570. This “plausibility standard is not akin to a ‘probability requirement,’ but it asks for more than a sheer possibility that a defendant 1 The Court may take judicial notice of publicly recorded documents and may consider the documents without turning this motion into a motion for summary judgment. See, e.g., Shaw v. Hahn, 56 F.3d 1128, 1129 n. 1 (9th Cir. 1995); see United States v. Ritchie, 342 F.3d 903, 908 (9th Cir. 2003) (court may consider documents to which the complaint “refers extensively” or “form the basis of the plaintiffs’ claim”); Parrino v. FHP, Inc., 146 F.3d 669, 707 (9th Cir. 1998) (“A court may consider evidence on which the complaint ‘necessarily relies’ if: (1) the complaint refers to the document; (2) the document is central to the plaintiff’s claim; and (3) no party questions the authenticity of the copy attached to the 12(b)(6) motion.”). Case 2:17-cv-00061-JLR Document 7 Filed 01/20/17 Page 4 of 19 BANK OF AMERICA, N.A.'S MOTION TO DISMISS PLAINTIFF'S COMPLAINT - 5 Case No.: 2:17-cv-00061-JLR S1498993.DOCX 422 W. Riverside Avenue, Suite 1100 Phone: 509.624.5265 Spokane, Washington 99201-0300 Fax: 509.458.2728 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 has acted unlawfully. Where a complaint pleads facts that are ‘merely consistent with’ a defendant’s liability, it ‘stops short of the line between possibility and plausibility of ‘entitlement to relief.’” Iqbal, 129 S. Ct. at 1949 (quoting Twombly, 550 U.S. at 557). Indeed, where there is an “obvious alternative explanation” for the conduct alleged, the complaint should be dismissed. Iqbal, 129 S. Ct. at 1951. Therefore, to survive a motion to dismiss under Rule 12(b)(6), the Borrower must provide more than just “labels and conclusions”; rather, he must provide the grounds of his entitlement to relief. Twombly, 550 U.S. at 555 (“formulaic recitation of the elements of a cause of action will not do.”). Moreover, “the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions.” Iqbal, 129 S. Ct. at 1949-50 (“[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements do not suffice[;] only a complaint that states a plausible claim for relief survives a motion to dismiss.”). Indeed, while legal conclusions may establish the complaint’s basic framework, “they must be supported by factual allegations.” Id. at 1950. In addition, where it is clear amendment would be futile, the court may dismiss the Complaint without leave to amend. See Havas v. Thorton, 609 F.2d 372 (9th Cir. 1979). Here, as discussed below, Plaintiff has not “nudged” her claims “across the line from conceivable to plausible.” Iqbal, 129 S. Ct. at 1951 (citing Twombly, 550 U.S. at 570). Accordingly, they should be dismissed as to BANA. B. Each of Plaintiff’s Claims Which Are Based on Her Securitization Argument Are Legally Defective. In reviewing the Complaint, it appears that the only real allegation raised by Plaintiff in support of her various claims (at least as against BANA) is that she challenges the validity of her Loan because it was purportedly securitized. The essence of Plaintiff’s allegations are Case 2:17-cv-00061-JLR Document 7 Filed 01/20/17 Page 5 of 19 BANK OF AMERICA, N.A.'S MOTION TO DISMISS PLAINTIFF'S COMPLAINT - 6 Case No.: 2:17-cv-00061-JLR S1498993.DOCX 422 W. Riverside Avenue, Suite 1100 Phone: 509.624.5265 Spokane, Washington 99201-0300 Fax: 509.458.2728 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 contained in paragraph 16, where Plaintiff states, “the alleged originating ‘mortgage lender’ and others alleged to have ownership of plaintiffs (sic) mortgage and note have unlawfully sold, assigned and/or transferred their ownership and security interests in the Promissory Note and Mortgage related to the property IN A SECRETIVE SECURITIZATION BARGAIN/ARRANGEMENT, and thus no longer have any cognizable legal or equitable ownership interest in plaintiffs’ (sic) names and void any all claims by all named defendants.” Compl., ¶ 16 (emphasis in original). In other words, she presently seeks to quiet title to the property, and also bases various other causes of action against BANA, on the basis that her Loan has been securitized. Plaintiff’s claims, however, are legally defective and must be dismissed, as the securitization of her Loan was not improper, and cannot support any such claims. The securitization of Plaintiff’s Loan does not extinguish her obligation to repay. Indeed, it has no bearing on the validity of the Loan, and Plaintiff does not have standing to challenge the securitization. The Loan documents themselves permit the sale of the Loan. Plaintiff’s arguments demonstrate a fundamental lack of understanding concerning Washington law, and must be rejected. 1. Plaintiff’s Deed of Trust Expressly Permits the Loan to be Sold Without Prior Notice or Approval by Plaintiff. Even assuming that Plaintiff is correct that her Loan had been securitized, her claims still fail. At a threshold level, Plaintiff cannot recover against BANA based on an argument that the Loan was improperly securitized as the Loan documents expressly permit securitization. Plaintiff is unable to state any claim based on her securitization allegations because the very DOT and Promissory Note which she signed provided for the transfer of the Loan. Indeed the DOT unambiguously provides that the Loan could be sold and the servicing rights transferred without notice. In this regard, Uniform Covenant 20 of the DOT states: Case 2:17-cv-00061-JLR Document 7 Filed 01/20/17 Page 6 of 19 BANK OF AMERICA, N.A.'S MOTION TO DISMISS PLAINTIFF'S COMPLAINT - 7 Case No.: 2:17-cv-00061-JLR S1498993.DOCX 422 W. Riverside Avenue, Suite 1100 Phone: 509.624.5265 Spokane, Washington 99201-0300 Fax: 509.458.2728 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 20. Sale of Note; Change of Loan Servicer; Notice of Grievance. The note or a partial interest in the Note (together with this Security Instrument) can be sold one or more times without prior notice to Borrower. A sale might result in a change in the entity (known as the “Loan Servicer”) that collects Periodic Payments due under the Note and this Security Instrument and performs other mortgage loan servicing obligations under the Note, this Security Instrument, and Applicable Law. There also might be one or more change of the Loan Servicer unrelated to a sale of the Note. . . . If the Note is sold and thereafter the Loan is serviced by a Loan Servicer other than the purchaser of the Note, the mortgage loan servicing obligations to the Borrower will remain with the Loan Servicer or be transferred to a successor Loan Servicer and are not assumed by the Note purchaser unless otherwise provided by the Note purchaser. Varallo Decl., Ex. A, ¶ 20 (emphasis added). Accordingly, Plaintiff has no basis to argue that her Loan could not be securitized. 2. Plaintiff Has No Standing to Challenge the Securitization or the Loan, Nor Does Securitization Affect the Validity of Her Obligation to Repay. Plaintiff’s securitization argument appears to be based on allegations that her loan was unlawfully sold and assigned. However, under Washington law borrowers, as non-parties to a trust deed assignment, lack standing to challenge the validity of any assignment of the DOT. See Ukpoma v. U.S. Bank Nat’l Ass’n, No. 12-CV-0184-TOR, 2013 U.S. Dist. LEXIS 66576, at *13 (E.D. Wash. 2013) (“Even assuming for the sake of argument that the assignments in question were fraudulently executed, Plaintiff, as a third party, lacks standing to challenge them.”); Borowski v. BNC Mortgage, Inc., No. C12-5876, 2013 U.S.Dist. LEXIS 122104, at *13 (W.D. Wash. 2013) (“[B]orrowers, as third parties to the assignment of their mortgage (and securitization process), cannot mount a challenge to the chain of assignments unless a borrower has a genuine claim that they are at risk of paying the same debt twice if the assignment stands.”). Accordingly, to the extent that Plaintiff is seeking to challenge the chain of title Case 2:17-cv-00061-JLR Document 7 Filed 01/20/17 Page 7 of 19 BANK OF AMERICA, N.A.'S MOTION TO DISMISS PLAINTIFF'S COMPLAINT - 8 Case No.: 2:17-cv-00061-JLR S1498993.DOCX 422 W. Riverside Avenue, Suite 1100 Phone: 509.624.5265 Spokane, Washington 99201-0300 Fax: 509.458.2728 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 based on allegations that her DOT was improperly assigned, the law in Washington is clear that Plaintiff has no standing to challenge any Assignment of her DOT. Similarly, Plaintiff lacks standing to bring claims based on a purported failure to comply with a Pooling & Servicing Agreement (“PSA”) associated with the purported securitization of her Loan. In Washington it is well settled that a borrower does not have standing to enforce the terms of pooling and servicing agreements to which he or she is not a party. See, e.g., Brodie v. Northwest Trustee Servs., Inc., 2012 WL 4468491, at *4 (E.D. Wash. Sept. 27, 2012) (“Plaintiff does not have standing to pursue a cause of action based upon alleged violations of the PSA.”); Alexander v. Wells Fargo Bank, N.A., No. C15-459RAJ, 2015 WL 5123922, at *3 (W.D. Wash. Sept. 1, 2015); Paatalo v. JPMorgan Chase Bank, N.A., 2012 WL 2505732, at *7 (W.D. Wash., June 28, 2012) (“[A] borrower does not have standing to challenge assignments and agreements to which it is not a party.”); Burke & Thomas, Inc. v Int’l Org. of Masters, Mates & Pilots, 92 Wn.2d 762, 767 (1979) (third parties may not sue on a contract absent the contracting parties’ intent to assume an obligation to the third party). If the Loan was securitized through a PSA, the circumstances under which the Loan was transferred into the trust would have no bearing on Plaintiff’s obligation to repay the Loan. See, e.g., Frazer v. Deutsche Bank Nat’l Trust Co., No. 11-cv-5454-RBL, 2012 WL 1821386, at *2 (W.D. Wash. May 18, 2012) (“Plaintiffs are not parties to the pooling and servicing agreement and present no authority suggesting standing to challenge it.”); Bank of New York Mellon v. Sakala, CV 11-00618 DAE-BMK, 2012 WL 1424665 (D. Haw. Apr. 24, 2012) (dismissing borrower’s FDCPA claims based upon violations of a PSA where borrowers were neither parties to nor intended beneficiaries of the PSA); In re Almeida, 417 B.R. 140, 149 n. 4 (Bankr. D. Mass. 2009) (holding that borrower had no standing to assert violation of terms of PSA); Case 2:17-cv-00061-JLR Document 7 Filed 01/20/17 Page 8 of 19 BANK OF AMERICA, N.A.'S MOTION TO DISMISS PLAINTIFF'S COMPLAINT - 9 Case No.: 2:17-cv-00061-JLR S1498993.DOCX 422 W. Riverside Avenue, Suite 1100 Phone: 509.624.5265 Spokane, Washington 99201-0300 Fax: 509.458.2728 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Correia v. Deutsche Bank Nat’l Tr. Co., 452 B.R. 319, 324-25 (B.A.P. 1st Cir. 2011) (rejecting argument by debtors that mortgage assignment was invalid based upon non-compliance with PSA as debtors were neither parties, nor third party beneficiaries, of PSA). Plaintiff’s obligation to repay the Loan was not extinguished merely because the Note was allegedly transferred to a securitized trust. Arguments that the Note is somehow deprived of its status as a negotiable instrument or its effectiveness otherwise vitiated because of any securitization have been widely rejected. As such, securitization does not impact the validity of the underlying note, which borrowers must still perform under. See, e.g., Citibank, N.A. v. Wilbern, 12 C 755, 2013 WL 1283802 (N.D. Ill. Mar. 26, 2013) (citing with approval the proposition that “compliance or noncompliance with the trust agreement is not relevant to the validity of a loan's assignment” and rejecting claims based on alleged failure to properly transfer note to trust); Bank of New York Mellon v. Fleming, 2013 WL 241153 (N.D. Ill. Jan. 18, 2013) (“Even if the assignments violated the PSA, that had no effect on [borrowers’] obligations under the note and mortgage, as the PSA was a contract entirely separate from the note and mortgage.”); Lowry v. EMC Mortg. Corp., 2013 WL 841326 (D. Ariz. March 6, 2013); Banks v. Freddie Mac, 2013 WL 1182685 (D. Nev. March 20, 2013); Joson v. Bank of Am., NA, 2013 WL 1249714 (D. Nev. March 22, 2013); Hagos v. MTC Financial, Inc., 2013 WL 1292703 (D. Nev. March 29, 2013); Albritton v. Tiffany & Bosco, P.A., 2013 WL 3153848, at *8 (D. Ariz. June 19, 2013); Reyes v. GMAC Mortg. LLC, 2011 WL 1322775, at *2, *3 (D. Nev. April 5, 2011); see also Henkels v. J.P. Morgan Chase, 2011 WL 2357874, at *7 (D. Ariz. June 14, 2011) (claim for unauthorized securitization of his loan denied as borrower “cited no authority for the assertion that securitization has had any impact on [its] obligations under the loan); Johnson v. Homecomings Fin., 2011 WL 4373975, at *7 (S.D. Cal. Sept. 20, 2011) (declining Case 2:17-cv-00061-JLR Document 7 Filed 01/20/17 Page 9 of 19 BANK OF AMERICA, N.A.'S MOTION TO DISMISS PLAINTIFF'S COMPLAINT - 10 Case No.: 2:17-cv-00061-JLR S1498993.DOCX 422 W. Riverside Avenue, Suite 1100 Phone: 509.624.5265 Spokane, Washington 99201-0300 Fax: 509.458.2728 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 to adopt the “discredited theory” that a deed of trust “‘split’ from the note through securitization, render[s] the note unenforceable”). Plaintiff has no standing to challenge how a DOT is assigned, nor does the question of who holds the Note in any way affect Plaintiff’s obligation to repay her Loan. Plaintiff’s attempt to create a controversy where none exists must fail, as should her attempt to avoid her obligation to repay the Loan which she voluntarily took out and then defaulted under. Plaintiff’s attempt to attack the propriety of the Assignment fails. 3. Plaintiff’s Split the Note Argument Has Been Rejected By Washington Courts. Although Plaintiff’s allegations are far from clear, it appears that Plaintiff may be challenging the enforceability of his Loan based on a perceived defect stemming from the fact that the Note and Deed of Trust were not transferred together into the investor trust. See Compl. This theory- which has been roundly rejected- has become known as the “split the note theory.” See In re MERS, 2011 WL 251453 (D. Ariz. January 25, 2011) (identifying the “split the note theory” and rejecting it as a basis for quiet title, slander of title, and unjust enrichment). Notably, this theory ignores the fact that when a note secured by a deed of trust is assigned, the deed of trust follows the note (in the legal if not physical sense). Restatement (Third) of Property (Mortgages) § 5.4 (a)(1997) (“A transfer of an obligation secured by a mortgage also transfers the mortgage unless the parties to the transfer agree otherwise.”). The Washington Supreme Court, in Bain v. Metro Mortg. Grp., Inc., 75 Wn.2d at 106, held that lenders and their assigns are entitled to name an agent to act on the lender’s behalf. Accordingly, the court in Bain considered, and rejected the claim that splitting the mortgage from the Note caused the loan to become unenforceable. Thus, it is not a violation of Washington law to “split” the note from the deed of trust. Zamzow v. Homeward Residential, Inc., No. C12-5755BHS, 2012 WL Case 2:17-cv-00061-JLR Document 7 Filed 01/20/17 Page 10 of 19 BANK OF AMERICA, N.A.'S MOTION TO DISMISS PLAINTIFF'S COMPLAINT - 11 Case No.: 2:17-cv-00061-JLR S1498993.DOCX 422 W. Riverside Avenue, Suite 1100 Phone: 509.624.5265 Spokane, Washington 99201-0300 Fax: 509.458.2728 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 6615931, at *1 (W.D. Wash. Dec. 19, 2012) (citing Bain); see Bavand v. OneWest Bank FSB, No. C12-0254JLR, 2013 WL 1208997, at *2 (W.D. Wash. Mar. 25, 2013) (-[T]he ‘split the note‘ theory-the argument that if ownership of a deed of trust is split from ownership of the underlying promissory note, one or both of those documents becomes unenforceable . . . [-]has no sound basis in law or logic and [has been] rejected [by the Ninth Circuit] . . . [and] by the Washington Supreme Court . . . .”); Abram v. Wachovia Mortgage/Wells Fargo Bank FSB, No. C12-1679JLR, 2013 WL 1855746, at *2 (W.D. Wash. Apr. 30, 2013) (citing Cervantes v. Countrywide Home Loans, Inc., 656 F.3d 1034, 1044-45 (9th Cir. 2011)). To the extent that Plaintiff’s claims rely on the split-the-note theory, they fail as a matter of law. C. Plaintiff Is Not Entitled to Quiet Title. Plaintiff also alleges that BANA and the other defendants have no interest in the Property based on a defective securitization theory. Based on this debunked theory, Plaintiff seeks to quiet title of the Property in her name. In addition to the grounds raised above, Plaintiff’s claim also fail as a matter of law as she does not allege tender and BANA asserts no interest in the Property. Quiet title actions are “designed to resolve competing claims of ownership…[or] the right to possession of real property.” Kobza v. Tripp, 105 Wn. App. 90, 95, 18 P.3d 621 (2001) (emphasis added). But BANA here does not assert title in the Property. Rather, it previously asserted only a security interest, as the servicer of the Loan, before it service released the Loan to Nationstar. At present, BANA asserts no interest in the Property of any kind. The Washington statute governing quiet title actions recognizes that deeds of trust and mortgages create only secured liens on real property, and do not convey any ownership interest or right to Case 2:17-cv-00061-JLR Document 7 Filed 01/20/17 Page 11 of 19 BANK OF AMERICA, N.A.'S MOTION TO DISMISS PLAINTIFF'S COMPLAINT - 12 Case No.: 2:17-cv-00061-JLR S1498993.DOCX 422 W. Riverside Avenue, Suite 1100 Phone: 509.624.5265 Spokane, Washington 99201-0300 Fax: 509.458.2728 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 possession of the subject property. See RCW 7.28.230(1) (“A mortgage of any interest in real property shall not be deemed a conveyance so as to enable the owner of the mortgage to recover possession of the real property, without a foreclosure and sale according to law”); State v. Superior Court for King County, 170 Wash. 463, 467, 16 P.2d 831 (1932). Since BANA does not assert a claim to ownership of the Property, it cannot be proper defendant to a quiet title action and should be dismissed from such a suit. See, e.g., Eason v. IndyMac Bank, FSB, 2010 U.S. Dist. LEXIS 33806 (D. Ariz. 2010) (dismissing defendant MERS from a foreclosure related quiet title action because the plaintiff did not allege it claimed title interest in the property); Walters v. Fid. Mortg. Co. of Cal., 2010 U.S. Dist. LEXIS 36839 (E.D. Cal. 2010). To the extent that Plaintiff also asks the Court to judicially release her from the Deed of Trust-i.e., thereby giving her a free house- Plaintiff’s request cannot be sustained. To maintain a quiet title action against a mortgagee, a plaintiff must first pay the outstanding debt on which the subject mortgage is based. See Evans v. BAC Home Loans Servicing LP, No. c10-0656- RSM, 2010 WL 5138394, at *3 (W.D. Wash. 2010) (“Plaintiffs cannot assert an action to quiet title against a purported lender without demonstrating they have satisfied their obligations under the Deed of Trust.”). In Evans, Judge Martinez explains why a Plaintiff may not use a quiet title action to void a lien: The logic of such a rule is overwhelming. Under a deed of trust, a borrower’s lender is entitled to invoke a power of sale if the borrower defaults on its loan obligations. As a result, the borrower’s right to the subject property is contingent upon the borrower’s satisfaction of loan obligations. . . it would be unreasonable to allow a borrower to bring an action to quiet title against its lender without alleging satisfaction of those loan obligations. Case 2:17-cv-00061-JLR Document 7 Filed 01/20/17 Page 12 of 19 BANK OF AMERICA, N.A.'S MOTION TO DISMISS PLAINTIFF'S COMPLAINT - 13 Case No.: 2:17-cv-00061-JLR S1498993.DOCX 422 W. Riverside Avenue, Suite 1100 Phone: 509.624.5265 Spokane, Washington 99201-0300 Fax: 509.458.2728 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Id., at *4. This is exactly what Plaintiff appears to be attempting here. However, the law is clear that to maintain a quiet title action regarding a mortgagee, a plaintiff must first pay the outstanding debt on which the mortgage is based. Id. Because Plaintiff does not allege that she has paid the amounts owed under her Loan, or that she has the ability to pay, there is absolutely no legal basis for his assertion that tender is not required here, and Plaintiff’s Quiet Title claim therefore fails. D. Plaintiff’s RICO Claim Fail As a Matter of Law. Plaintiff purports to state a claim for violation of RICO. See Compl. ¶¶ 29-31, 43-50. In this regard, she alleges that defendants “have joined together in a criminal enterprise to unlawfully slander title to the property in this action and use aggressively deceptive brigandry to cause anguish and homeless to be visited upon plaintiff without lawful justification or bona fide claim of ownership interests.” Id., ¶ 30. It is clear that this claim is based on the same defective securitization claim that she is basing all her other claims on. This is made evident later in the Complaint where she alleges that “[t]his actions (sic) concerns violation of law pertaining to the improper and illegal drafting, execution and public recording of assignment, conveyances, transfer, sales, and foreclosure documents used to unlawfully and illegally divest Owners/plaintiffs’ of their lawful property.” Id., ¶ 47. Finally, she alleges that “[b]y sending fraudulent pleadings to the clerks of court, judges, attorneys, and defendants in foreclosure cases, defendants in this action and their agents…. Intentionally participated in a scheme to default plaintiffs and other similarly situation across America,” Id., ¶49. Plaintiff’s allegations cannot support any valid claim under RICO, as she has failed to allege any actual improper actions undertaken by BANA against her. Case 2:17-cv-00061-JLR Document 7 Filed 01/20/17 Page 13 of 19 BANK OF AMERICA, N.A.'S MOTION TO DISMISS PLAINTIFF'S COMPLAINT - 14 Case No.: 2:17-cv-00061-JLR S1498993.DOCX 422 W. Riverside Avenue, Suite 1100 Phone: 509.624.5265 Spokane, Washington 99201-0300 Fax: 509.458.2728 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 To state a claim under Racketeer Influenced and Corrupt Organizations Act (“RICO”), a plaintiff must allege four elements: (1) conduct (2) of an enterprise (3) through a pattern (4) of racketeering activity. Kenda Corp. v. Pot O’Gold Money Leagues, Inc., 329 F.3d 216, 233 (1st Cir. 2003). A plaintiff must allege with “particularity the time, place, and manner of each act of fraud, plus the role of each defendant in each scheme.” Lancaster Community Hospital v. Antelope Valley Hospital Dist., 940 F.2d 397, 405 (9th Cir. 1991). In addition, a civil RICO plaintiff must allege injury in his business or property “by reason of” a violation of RICO’s substantive provisions. 18 USC § 1964(c). However, it is not enough for plaintiff to rely on mere labels and conclusions to establish a RICO claim, rather a plaintiff must give each defendant notice of the particular predicate act it participated in, and must allege each predicate act with the requisite specificity. See, e.g., Rosales v. Downey Savings & Loan Ass’n, F.A., No. 09-cv39, 2009 WL 514229, at *6 (S.D. Cal March 2, 2009) (“[t]he Ninth Circuit has held that allegations of predicate acts must comply with Rule 9(b)’s specificity requirements” and holding that “[t]he Complaint does not allege sufficient facts to support the conclusory allegations that Defendants committed mail fraud, wire fraud, and obstruction of justice” and “does not allege the role of each Defendant in the allegedly unlawful acts that give rise to plaintiffs' RICO claim”). Here, Plaintiff’s Complaint falls woefully short of meeting this standard, as it fails to satisfy any of the required elements with the requisite specificity. In particular, as noted herein, Plaintiff fails to come forward with facts demonstrating that BANA has engaged in any improper conduct of any kind with relation to her Loan. She seems to believe that simply by arguing that her Loan was securitized that she can allege that the defendants engaged in a RICO enterprise. This is simply not the case. Plaintiff admits that she took out a Loan to purchase the Case 2:17-cv-00061-JLR Document 7 Filed 01/20/17 Page 14 of 19 BANK OF AMERICA, N.A.'S MOTION TO DISMISS PLAINTIFF'S COMPLAINT - 15 Case No.: 2:17-cv-00061-JLR S1498993.DOCX 422 W. Riverside Avenue, Suite 1100 Phone: 509.624.5265 Spokane, Washington 99201-0300 Fax: 509.458.2728 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Property, and the very terms of the Loan permit it to be sold. Compl., ¶¶ 1-3; Varallo Decl, Ex. A, ¶ 20. As explained above, the fact that her Loan was sold to a securitized trust does not establish any wrongdoing, nor does it provide her with any basis to challenge the validity of the Loan itself, nor to seek to quiet title to the Loan in her name. Plaintiff comes forward with no allegations supporting her legal conclusion that BANA sent any fraudulent pleadings to any court in a foreclosure case against her, or that it has any involvement in any pending foreclosure against Plaintiff. To the contrary, the recorded documents reveal that BANA has no present relationship to the Loan, and has no involvement with the pending non-judicial foreclosure. In light of this, Plaintiff cannot possibly demonstrate that BANA had engaged in any racketeering activity which can possibly support a RICO claim. Plaintiff is required to come forward with facts demonstrating the required “enterprise”, and predicate acts in support of same by BANA, each of which has to be supported by allegations setting forth the time, place and manner of each act of fraud, plus the role of each defendant in the alleged scheme. Absent such facts, which are clearly lacking here, Plaintiff’s claim must fail. E. Plaintiff’s Defamation of Credit Claim Fails. Plaintiff self-styled second cause of action is for defamation of credit. Compl. ¶¶ 3-34. 2 In support of this claim, Plaintiff alleges that “As a direct result of Defendants intending and then filing unfounded foreclosure lawsuits against the NAMES OF PLAINTIFF, they have defamed, ruined and irreparably damaged plaintiff’s credit as the lawsuit is a matter of public record.” Compl., ¶ 33 (emphasis in original). This purported claim fails on a number of levels. 2 In fact, it appears that Plaintiff’s cause of action are misnumbered, as this is the third actual claim being asserted after her quiet title and RICO claims. Case 2:17-cv-00061-JLR Document 7 Filed 01/20/17 Page 15 of 19 BANK OF AMERICA, N.A.'S MOTION TO DISMISS PLAINTIFF'S COMPLAINT - 16 Case No.: 2:17-cv-00061-JLR S1498993.DOCX 422 W. Riverside Avenue, Suite 1100 Phone: 509.624.5265 Spokane, Washington 99201-0300 Fax: 509.458.2728 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 First, it is clear that Plaintiff has no real claim to assert here, rather she has taken this and cut and paste it from a template she apparently found on the internet. This is evident from the fact that Plaintiff could not even be bothered to remove the “NAMES OF PLAINTIFF” language from the template she copied. Second, the Complaint references a foreclosure lawsuit, although she does not allege that any such lawsuit has been filed against her by any of the defendants. To the contrary, the recorded documents reveal that no judicial foreclosure has been filed against her, and instead, the other defendants -not BANA- have initiated a non- judicial foreclosure against her. See Section II.A. Further, Plaintiff does not come forward with any factual allegations to support her claim that anyone improperly reported her credit to any credit bureau. See Compl., ¶ 34. Finally, it bears noting that there appears to be no actual cause of action in Washington for defamation of credit, and Westlaw searches reveal no reported case law addressing defamation of credit in Washington. For all these reasons, this claim fails as a matter of law and must be dismissed. F. Plaintiff’s Conspiracy to Defraud Claims Is Inadequately Plead. Plaintiff’s final cause of action is styled as being for “Conspiracy to Defraud.” See Compl. ¶ 35-38. In support of this claim, she alleges: Defendants….agreed, between and among themselves and in combination with each other and various agents, as to each overt act in furtherance of the conspiracy and scheme, to engage in unlawful actions for a common purpose, to wit: to perpetrate a fraud upon Plaintiffs (sic) as the lawful Owners of the property in this instant action. Id., ¶ 36. Nowhere in this claim, however, does Plaintiff actually make any allegation concerning what the alleged conspiracy was, or what acts the defendants undertook in support of same. For these reasons, such claim fails. Case 2:17-cv-00061-JLR Document 7 Filed 01/20/17 Page 16 of 19 BANK OF AMERICA, N.A.'S MOTION TO DISMISS PLAINTIFF'S COMPLAINT - 17 Case No.: 2:17-cv-00061-JLR S1498993.DOCX 422 W. Riverside Avenue, Suite 1100 Phone: 509.624.5265 Spokane, Washington 99201-0300 Fax: 509.458.2728 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 To state a cause of action for civil conspiracy, a plaintiff “must prove by clear, cogent, and convincing evidence that (1) two or more people combined to accomplish an unlawful purpose, or combined to accomplish a lawful purpose by unlawful means; and (2) the conspirators entered into an agreement to accomplish the conspiracy.” All Star Gas, Inc. of Washington v. Bechard, 100 Wn. App. 732, 740, 998 P.2d 367 (2000) (citing Wilson v. State, 84 Wn. App. 332, 350-51, 929 P.2d 448 (1996)). “Mere suspicion or commonality of interests is insufficient to prove a conspiracy.” Id. To sustain a claim of civil conspiracy, a plaintiff must prove that the defendant committed an underlying tort. See Webster v. Bronson, 2009 WL 3185922, at *6 (W.D. Wash. Oct. 2, 2009) (“Plaintiff's conspiracy claim fails because allegations of civil conspiracy do not give rise to a cause of action unless an independent civil wrong has been committed.”). Plaintiff’s claim fails at a threshold level because there was no underlying tort upon which she can base a claim for civil conspiracy. As noted above, Plaintiff does not allege what the conspiracy among the parties was created to accomplish, nor does she allege what acts were undertaken by BANA in furtherance of such conspiracy. To the extent that Plaintiff is seeking to base this claim on her underlying allegation that her Loan was improperly securitized, such attempt fails. As noted above, securitization is not improper and was in fact authorized by the very terms of her Loan. Plaintiff cannot demonstrate that there was some actionable conspiracy to do something which was permitted by the Loan’s very terms. Absent an underlying wrong, there can be no claim for conspiracy. This claim fails as a matter of law. VI. CONCLUSION Plaintiff has not come forward with any allegations which can possibly support any claim against BANA. Plaintiff’s Complaint instead reveals a vague, yet transparent attempt to Case 2:17-cv-00061-JLR Document 7 Filed 01/20/17 Page 17 of 19 BANK OF AMERICA, N.A.'S MOTION TO DISMISS PLAINTIFF'S COMPLAINT - 18 Case No.: 2:17-cv-00061-JLR S1498993.DOCX 422 W. Riverside Avenue, Suite 1100 Phone: 509.624.5265 Spokane, Washington 99201-0300 Fax: 509.458.2728 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 create a controversy where none exists. Such an attempt runs contrary to Washington law and must be rejected. Permitting Plaintiff leave to amend would be futile. BANA respectfully requests that Plaintiff’s Complaint be dismissed in its entirety, with prejudice and without leave to amend, as to BANA. Respectfully submitted this 20 th day of January, 2017. WITHERSPOON ∙ KELLEY s/ Christopher G. Varallo Christopher G. Varallo, WSBA No. 29410 Steven J. Dixson, WSBA No. 38101 cgv@witherspoonkelley.com sjd@witherspoonkelley.com 422 W. Riverside Ave., Suite 1100 Spokane, WA 99201-0300 Phone: (509) 624-5265 Fax: (509) 458-2717 Attorneys for Defendant Bank of America, N.A. Case 2:17-cv-00061-JLR Document 7 Filed 01/20/17 Page 18 of 19 BANK OF AMERICA, N.A.'S MOTION TO DISMISS PLAINTIFF'S COMPLAINT - 19 Case No.: 2:17-cv-00061-JLR S1498993.DOCX 422 W. Riverside Avenue, Suite 1100 Phone: 509.624.5265 Spokane, Washington 99201-0300 Fax: 509.458.2728 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 CERTIFICATE OF SERVICE I hereby certify that on the 20 th day of January, 2017, 1. I caused to be electronically filed the foregoing DEFENDANT BANK OF AMERICA, N.A.'S MOTION TO DISMISS PLAINTIFF'S COMPLAINT with the Clerk of the Court using the CM/ECF System which will send notification of such filing to the following: David John Elkanich serve.dje@hklaw.com; jennifer.kilbourn@hklaw.com pamela.sullivan@hklaw.com 2. I hereby certify that I have caused to be mailed by United States Postal Service the foregoing DEFENDANT BANK OF AMERICA, N.A.'S MOTION TO DISMISS PLAINTIFF'S COMPLAINT to the following non-CM/ECF participants at the address listed below: Barbara Robinson 13540 SE 159 th Pl. Renton, WA 98058 3. I hereby certify that I have mailed by United States Postal Service the foregoing document to the following CM/ECF participants at the address listed below: None. 4. I hereby certify that I have hand-delivered the foregoing document to the following participants at the addresses listed below: None. s/ Christopher G. Varallo Christopher G. Varallo, WSBA No. 29410 Case 2:17-cv-00061-JLR Document 7 Filed 01/20/17 Page 19 of 19 [PROPOSED] ORDER GRANTING BANK OF AMERICA, N.A.'S MOTION TO DISMISS - 1 Case No.: 2:17-cv-00061-JLR S1499032.DOCX 422 W. Riverside Avenue, Suite 1100 Phone: 509.624.5265 Spokane, Washington 99201-0300 Fax: 509.458.2728 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Christopher G. Varallo, WSBA No. 29410 Hon. James L. Robart Steven J. Dixson, WSBA No. 38101 WITHERSPOON ∙ KELLEY 422 West Riverside Avenue, Suite 1100 Spokane, WA 99201-0300 Telephone: (509) 624-5265 Facsimile: (509) 458-2728 cgv@witherspoonkelley.com sjd@witherspoonkelley.com Attorneys for Defendant Bank of America, N.A. UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT SEATTLE BARBARA ROBINSON, Plaintiff, vs. WELLS FARGO BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE CERTIFICATE HOLDERS OF THE MLMI TRUST, MORTGAGE LOAN ASSET- BACKED CERTIFICATES, SERIES 2005 WMC2; MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC.; NATIONSTAR MORTGAGE; BANK OF AMERICA; JAY BRAY; AZTEC FORECLOSURE CORPORATION OF WASHINGTON, Defendants. Case No.: 2:17-cv-00061-JLR [PROPOSED] ORDER GRANTING BANK OF AMERICA, N.A.'S MOTION TO DISMISS THIS MATTER, having come before the Court upon the filing of Defendant Bank of America’s (“BANA”) Motion to Dismiss (“the Motion”); all parties having been given notice and an opportunity to respond; the Court having reviewed all pleadings filed by all parties relating to the Motion; and the Court having reviewed the records and files herein, it is hereby: Case 2:17-cv-00061-JLR Document 7-1 Filed 01/20/17 Page 1 of 3 [PROPOSED] ORDER GRANTING BANK OF AMERICA, N.A.'S MOTION TO DISMISS - 2 Case No.: 2:17-cv-00061-JLR S1499032.DOCX 422 W. Riverside Avenue, Suite 1100 Phone: 509.624.5265 Spokane, Washington 99201-0300 Fax: 509.458.2728 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ORDERED that BANA’s Motion to Dismiss is GRANTED; and it is FURTHER ORDERED that the claims of Plaintiff Barbara Robinson are dismissed in their entirety, with prejudice, and without leave to amend as to BANA. IT IS SO ORDERED. _________________________________ HON. JAMES L. ROBART Submitted by: WITHERSPOON ∙ KELLEY s/ Christopher G. Varallo Christopher G. Varallo, WSBA No. 29410 Steven J. Dixson, WSBA No. 38101 Attorneys for Defendant Bank of America, N.A. Case 2:17-cv-00061-JLR Document 7-1 Filed 01/20/17 Page 2 of 3 [PROPOSED] ORDER GRANTING BANK OF AMERICA, N.A.'S MOTION TO DISMISS - 3 Case No.: 2:17-cv-00061-JLR S1499032.DOCX 422 W. Riverside Avenue, Suite 1100 Phone: 509.624.5265 Spokane, Washington 99201-0300 Fax: 509.458.2728 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 CERTIFICATE OF SERVICE I hereby certify that on the 20 th day of January, 2017, 1. I caused to be electronically filed the foregoing [PROPOSED] ORDER GRANTING BANK OF AMERICA, N.A.'S MOTION TO DISMISS with the Clerk of the Court using the CM/ECF System which will send notification of such filing to the following: David John Elkanich serve.dje@hklaw.com; jennifer.kilbourn@hklaw.com pamela.sullivan@hklaw.com 2. I hereby certify that I have caused to be mailed by United States Postal Service the foregoing [PROPOSED] ORDER GRANTING BANK OF AMERICA, N.A.'S MOTION TO DISMISS to the following non-CM/ECF participants at the address listed below: Barbara Robinson 13540 SE 159 th Pl. Renton, WA 98058 3. I hereby certify that I have mailed by United States Postal Service the foregoing document to the following CM/ECF participants at the address listed below: None. 4. I hereby certify that I have hand-delivered the foregoing document to the following participants at the addresses listed below: None. s/ Christopher G. Varallo Christopher G. Varallo, WSBA No. 29410 Case 2:17-cv-00061-JLR Document 7-1 Filed 01/20/17 Page 3 of 3
