The opinion of the court was delivered by: B. Lynn Winmill Chief U.S. District Court Judge
MEMORANDUM DECISION AND ORDER ON MOTIONS TO DISMISS (Dkt. Nos. 6, 22, 32)
Currently pending before the Court are three motions to dismiss filed under Fed. R. Civ. P. 12(b)(6) for failure to state a claim for relief. Having reviewed the parties' briefing and the written record, the Court finds that oral argument will not aid in the decisional process and issues the following Memorandum Decision and Order granting the motions to dismiss.
This action is a foreclosure challenge similar, if not identical,*fn1 to many others filed in this Court and around the county in the last few years. The gravamen of these complaints generally is that mortgage lenders, loan servicers and/or trustees have unlawfully foreclosed upon the plaintiffs' residential mortgages due to the securitization of the loans. In most cases, the plaintiffs do not dispute their default, and also attempt to negotiate a loan modification and their inability to do so also forms a basis for the action.
In this particular case, both of these general complaints are alleged. By way of background, Plaintiff purchased land in 1996, and built a home which was completed in 2003. In 2006, he refinanced the home with American Brokers Conduit. Plaintiff executed a promissory note ("the Note"), which was secured by a deed of trust (the "Deed of Trust"). The Note is not in the record. The Deed of Trust lists American Brokers Conduit as the Lender, Pioneer Title as the Trustee, and MERS as "a separate corporation that is acting solely as nominee for Lender and Lender's successors and assigns" and the "beneficiary under this Security Instrument." (Verified Complaint for Declaratory and Injunctive Relief, and Damages ("Complt."), Dkt. 1-3, Attachment A-1 ("Deed of Trust").
After refinancing, Plaintiff listed the house for sale but was unable to sell it. He then fell into financial hardship after becoming temporarily disabled from an accident. In September 2010, he missed a mortgage payment.
After missing his first payment, the loan servicer, Defendant AHMSI "threatened to foreclose." Plaintiff contacted AHMSI and was "offered modification through the HAMP*fn2 , and/or other programs if HAMP would not work." (Cmplt. ¶ 13). Plaintiff alleges that he was informed at that time that he would not qualify for a loan modification unless he missed three mortgage payments.
Plaintiff alleges that he was unable to make his mortgage payment for several more months, and then contacted AHMSI about negotiating a rate adjustment. He alleges he was informed then that he could not qualify for a rate adjustment because of the impact his missed payments had on his credit score. (Cmplt., ¶ 3.16).
Plaintiff then received "the HAMP packet" which he prepared and submitted in early February 2011. (Cmplt., ¶ 3.17.) On February 23, 2011, MERS executed an Assignment of Deed of Trust granting all beneficial interest in the Deed of Trust to AHMSI, "together with the note or notes therein described or referred to, the money due and to become due theron, with interest, and all right acrred or to accrue under said Deed of Trust." On March 1, 2011, AHMSI executed an Appointment of Successor Trustee appointing NWTS as the Trustee succeeding Pioneer Title. (Cmplt., Attch. A-2, Dkt. 1-3, p. 48). On March 7, 2011, NWTS executed a Notice of Default indicating AHMSI's intent to sell the property to satisfy the obligation. (Cmpt., Attch. A-2, Dkt. 1-3, p. 49). The three documents were recorded together on March 9, 2011, in Idaho City, Boise County, Idaho. (Cmplt., Attch. A-2, Dkt. 1-3, p. 47 - 49).
Plaintiff alleges that in March, he received the Notice of Default and Notice of Trustee's Sale, dated March 22, 2011, indicating the sale would take place July 21, 2011. (Cmplt., ¶ 3.19; Attch. A-1, Dkt. 1-3, pp. 39-45.) In April, he inquired about his HAMP application, and claims that he was told that "the correct documents were never received," despite that he had sent them. (Id., ¶ 3.20.) He submitted the HAMP appilcation again on April 16, 2011. (Id., ¶ 3.21.) He also submitted written requests to "the original lender, title company, trustee, and all the new alleged holders of Plaintiff's note and deed (all the defendants herein)," to view the original documents. (Id., ¶ 3.23.)
Plaintiff alleges that the Defendants refused to provide access to the original documents, or to acknowledge "the qualified written requests (QWR)." (Id., ¶ 3.24.) Plaintiff alleges that he then sent several requests to AHMSI and the other defendants for "verification of their interest and/or standing to be the servicer of Plaintiff's Note and Deed of Trust." (Id., ¶ 3.26.) AHMSI refused to answer "all pertinent questions about insterest and standing."(Id., ¶ 3.27.)
Plaintiff was informed on May 5, 2011, that he did not qualify for the HAMP program, or any other loan modification programs. (Id., ¶3.28.) He asked for an explanation of what criteria he did not meet for these programs, to which AHMSI replied on June 17, 2011. (Id., ¶3.29.) Plaintiff requested an Alternative HAMP, and resubmitted a hardship letter and financial analysis, and asked that the trustee sale be postponed. (Id., ¶3.29; Attch. B-1, B-2.)
On July 8, 20122, AHMSI sent Plaintiff another HAMP application, indicating Plaintiff has until August 7, 2011 to respond. (Id., ¶3.30.) Plaintiff re-submitted all of the requested documents before July 19, 2011. (Id., ¶3.30; Attch. C-1.
AHMSI continued to pursue the auction, however, on July 21, 2011. (Id., ¶ 3.32.) Plaintiff alleges that he continued to research the history of his Note and Deed of Trust and learned that the Note had been sold and securitized, and therefore removed from the state of Idaho, and that none of the Defendants possessed the actual "wet ink" Note or Deed of Trust. (Id., ¶3.37.) He also alleges that he was never informed that the Note had been sold or transferred to any defendant in any manner. (Id., ¶3.34.)
Based on these factual allegations, Plaintiff brings this action against Mortgage Electronic Registration Systems, Inc. (MERS), Pioneer Title of Ada County, American Brokers Conduit, Federal National Mortgage Association ("Fannie Mae"), American Home Mortgage Servicing, Inc. (AHMS) and Northwest Trustee Services, Inc. (NWTS) alleging ten (10) different causes of action.
MERS and AHMSI removed this action from state court on August 15, 2011. (Dkt. 1). Defendants Fannie Mae, AHMSI and MERS filed answers to the Complaint. (See Dkts. 17 &31). Defendant American Brokers Conduit has neither been served nor appeared. Defendants Pioneer Title of Ada County, the original trustee, and NWTS, the successor trustee (together "trustee defendants") moved to dismiss the complaint as against them for failure to state a claim for relief. Fed. R. Civ. P. 12(b)(6). (Dkts. 6, 22 & 32).*fn3
STANDARD OF REVIEW FOR MOTION TO DISMISS
A Rule 12(b)(6) motion to dismiss tests the sufficiency of a party's claim for relief. When considering such a motion, the Court's inquiry is whether the allegations in a pleading are sufficient under applicable pleading standards. Rule 8(a) of the Federal Rules of Civil Procedure sets forth the minimum pleading requirement, which is that the plaintiff provide only a "short and plain statement of the claim showing that the pleader is entitled to relief," and "giv[ing] the defendant fair notice of what the . . . claim is and the grounds upon which it rests." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955 (2007).
When reviewing a motion to dismiss, a district court must accept as true all non-conclusory, factual (not legal) allegations made in the complaint. Ashcroft v. Iqbal, 129 S.Ct. 1937, 1950 (2009); Erickson v. Pardus, 551 U.S. 89 (2007). Based upon these allegations, the court examining a complaint for sufficiency of information must draw all reasonable inferences in favor of the plaintiff. See Mohamed v. Jeppesen Dataplan, Inc., 579 F.3d 943, 949 (9th Cir. 2009). However, "[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Iqbal, 129 S.Ct. at 1949.
After any conclusory statements have been removed, the court must then analyze the remaining factual allegations in the complaint "to determine if they plausibly suggest an entitlement to relief." Delta Mech., Inc., 345 Fed. Appx. at 234. "While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the grounds of his entitlement to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Iqbal, 129 S. Ct. at 1949 (citing Twombly, 550 U.S. at 555). In addition, "[f]actual allegations must be enough to raise a right to relief above the speculative level, on the assumption that all the allegations in the complaint are true (even if doubtful in fact)." Twombly, 550 U.S. at 555. In sum, a party must allege "enough facts to state a claim to relief that is plausible on its face." Id. at 570; Iqbal, 129 S. Ct. at 1949.
In discussing this standard, a recent Tenth Circuit Court of Appeals opinion stated that "the mere metaphysical possibility that some plaintiff could prove some set of facts in support of the pleaded claims is insufficient; the complaint must give the court reason to believe that this plaintiff has a reasonable likelihood of mustering factual support for these claims." Robbins v. Oklahoma, 519 F.3d 1242, 1247 (10th Cir. 2008). In this way, while "[s]pecific facts are not necessary," a plaintiff must allege enough facts to "give the defendant fair notice of what the . . . claim is and the grounds upon which it rests." Erickson v. Pardus, 551 U.S. 89 (2007) (per curiam (internal citation omitted).
Generally, with respect to Rule 12(b)(6) motions, the Court may not consider any evidence contained outside the pleadings without converting the motion to one for summary judgment under Fed. R. Civ. P. 56, and allowing the non-moving party an opportunity to respond. See Fed. R. Civ. P. 12(b); United States v. Ritchie, 342 F.3d 903, 907-908 (9th Cir. 2003). "A court may, however, consider certain materials-- documents attached to the complaint, documents incorporated by reference in the complaint, or matters of judicial notice-- without converting the motion to dismiss into a motion for summary judgment." Id. at 908 (citing Van Buskirk v. CNN, 284 F.3d 977, 980 (9th Cir. 2002); Barron v. Reich, 13 F.3d 1370, 1377 (9th Cir. 1994); 2 James Wm. Moore et al., Moore's Federal Practice § 12.34 (3d ed.1999)); Mullis v. United States Bank, 828 F.2d 1385, 1388 (9th Cir. 1987)).
The Court may take judicial notice "of the records of state agencies and other undisputed matters of public record" without transforming the motions to dismiss into motions for summary judgment. Disabled Rights Action Comm. v. Las Vegas Events, Inc., 375 F.3d 861, 866 (9th Cir. 2004).
A. Breach of Fiduciary Duty Claims
Plaintiffs' First and Second causes of action allege claims for breach of fiduciary duty against all defendants. "In order to establish a claim for breach of fiduciary duty, a plaintiff must establish that defendants owed plaintiff a fiduciary duty and that the fiduciary duty was breached." Bushi v. Sage Health Care, PLLC, 203 P.3d 694, 699 (2009) (citation and marks omitted); see also Giles v. Gen. Motors Acceptance Corp., 494 F.3d 865, 880--881 (9th Cir. 2007) (applying Nevada law).
The trustee defendants move to dismiss Plaintiff's claims for breach of fiduciary duty on the basis that no fiduciary relationship exists between Plaintiff and either moving Defendant. The Court agrees.
Fiduciary relationships are rarely recognized in Idaho. Davis v. Keybank Nat'l Assoc., 2005 WL 2847239, *2 (D. Idaho October 26, 2005). "The facts and circumstances must indicate that the one reposing the trust has foundation for his belief that the one giving advice or presenting arguments is acting not in his own behalf, but in the interests of the other party." Id. (Citing Idaho ...