CHRISTOPHER WHALEN; THOMAS AND SHARON TOMLINSON; TIFFANY KLICK; CATHERINE JERREMS; BRIAN AND AMY PFAFF; LANCE ADAMSON; RICHARD AND MELISSA HAWKINS; KRAIG CABLE; HOWARD AND LINDA REED; RAY HUSSA; CAREN ENGLISH; DESSA HANEY; RICHARD MONTEROSSO; TY BOTHWELL; NATHAN AND LAURA SMITH; JACK AND SHARON CASWELL; AUSTIN AND SARAH BISHOP; ROSS LAWRENZ; MELVIN YOUNG; COREY DAHLQUIST; TIMOTHY AND KRISTINE HANK; TODD AND TRACI BIRCH; LEAH KELSEY; STEVEN AND KATRINA ELLIOTT; FELIX AND TINA CUEN, Plaintiffs,
BANK OF AMERICA, N.A. FOR THEMSELVES AND AS SUCCESSOR IN INTEREST OF COUNTRYWIDE FINANCIAL CORPORATION, COUNTRYWIDE HOME LOAN, INC.; BAC HOME LOANS SERVICING; RECONTRUST COMPANY, N.A.; MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC.; and JOHN DOES 1-10, Defendants.
REPORT AND RECOMMENDATION
JOHN A. MENDEZ, District Judge.
This matter is before the Court on Defendants' Motion to Dismiss, which seeks to dismiss the First Amended Complaint alleging various claims against Plaintiffs' mortgage holders. Plaintiffs bring this action to prevent the taking or foreclosure of their homes by Defendants, on the grounds that their loans were improperly assigned, among various other claims. Although the claims are not dissimilar to other complaints of this nature that the Court has considered, the way the complaint is styled is-namely, there are multiple plaintiffs rather than one individual plaintiff bringing suit against Bank of America, Countrywide, ReconTrust, and Mortgage Electronic Systems (MERS). This method of pleading presents particular problems in the context of Plaintiffs' claims.
Defendants move to dismiss, citing Fed.R.Civ.P. 12(b)(1) and 12(b)(6). First, Defendants contend this Court lacks jurisdiction, because Plaintiffs do not have standing. Second, Defendants argue that Plaintiffs' claims fail to meet the pleading standards of Fed.R.Civ.P. 8, because the claims are conclusory. And finally, Defendants attack the claims on their merits based upon precedent from this Court.
The parties have fully briefed the motion and it is now ripe for the Court's consideration. Having reviewed the record herein, the Court finds that the facts and legal arguments are adequately presented in the briefs and record. Accordingly, in the interest of avoiding delay, and because the Court conclusively finds that the decisional process would not be significantly aided by oral argument, the motion will be decided on the record without oral argument. Dist. Idaho L. Rule 7.1(d). After carefully considering the submissions of the parties and the governing law, the Court recommends that the motion to dismiss be granted.
Plaintiffs are borrowers who own homes in Idaho. (First Am. Compl. ¶¶ 7-29.) There are thirty-six Plaintiffs and five Defendants named in this action. Defendants include Bank of America, loan originator Countrywide Home Loans, Mortgage Electronic Registration System ("MERS"), BAC Home Loans Servicing, and ReconTrust. ( Id. at ¶¶ 30-37.) All Plaintiffs allegedly purchased their homes with proceeds from loans that are now serviced by Defendant Bank of America, N.A. ( Id. at ¶¶ 7-29.) Plaintiffs allege that their home loans were securitized, repackaged, and sold to third parties, and that as a result, Bank of America no longer has the right to enforce the payment obligations on the loans or to foreclose on their homes under the various deeds of trust. ( Id. at ¶3, ¶¶ 39-41.) Plaintiffs do not dispute, however, that they each owe money on their mortgage obligations. ( Id. at ¶ 63.)
Plaintiffs filed this action "to prevent the improper taking and/or foreclosure of their property" by Bank of America. ( Id. at ¶ 1.) However, it appears that no foreclosures are currently pending against any of the Plaintiffs, many of whom are current on their loan payments. (Decl. of Ayvazian, ¶ 3 d-e, Dkt. 15.) And Bank of America services only twenty-nine of the Plaintiffs' loans. ( Id. at ¶3c.) Instead, Plaintiffs allege that they are on a "slippery slope" to losing their homes through non-judicial foreclosure (First Am. Compl. ¶ 81), but allege no specific facts showing that foreclosure is imminent or that anyone has threatened them with foreclosure. ( Id. at ¶77-80.)
Plaintiffs claim also that Bank of America has defrauded them through a series of deceptions that caused overpayments, miscalculated interest, damaged credit scores, and unmarketable titles to their properties. ( Id. at ¶ 72, ¶¶ 111-124.) Ultimately, Plaintiffs ask the Court to determine their obligations under each of their loans and to identify their rightful creditors given that many of their loans have been repackaged, securitized, and sold to investors. ( Id. at ¶¶ 125-161.)
This is Plaintiffs' third attempt at a complaint. Plaintiffs first filed in November of 2011, and voluntarily dismissed the case on February 23, 2012. Whalen v. Bank of Am., No. 1:11-cv-00549-EJL. Three months later, Plaintiffs filed a substantially similar complaint, which Defendants moved to dismiss on September 26, 2012. (Dkt. 13.) In response, Plaintiffs filed their First Amended Complaint, and Defendants stipulated to a briefing schedule. Other than adding some background information and changing the prior "accounting" claim to a claim under Idaho's Consumer Protection Act, the First Amended Complaint contains the same factual background and claims as the prior iterations.
The First Amended Complaint asserts four causes of action: (1) one for declaratory relief; (2) one for fraud against all Defendants; (3) one for violation of Idaho's Consumer Protection Act; and (4) lastly, one for violation of the Fair Debt Collection Practices Act. None of the theories of relief as currently pleaded are viable. The Court therefore recommends that Defendants' motion to dismiss be granted with respect to each of the claims listed above.
1. Bisson, et. al. v. Bank of America, N.A., et. al.
Of note is the case of Bisson, et. al. v. Bank of America, N.A., et. al., No. c12-0995JLR, 2013 WL 325262 (W.D. Wash. Jan. 15, 2013), which Defendants brought to the Court's attention on February 11, 2013, by way of a notice of supplemental authority. (Dkt. 25.) The complaint in Bisson appears strikingly similar in both style and substance to the Amended Complaint in this matter. The Bisson complaint contains the same four claims as in this case, although the fraud and consumer protection act claims were brought under Washington state law. The same law firm appearing in this case filed the complaint on behalf of the plaintiffs in Bisson.
The district Court for the Western District of Washington dismissed the complaint, on the grounds that the plaintiffs lacked standing to bring consumer protection act and Fair Debt Collection Practice Act claims because they alleged no injury. With respect to the plaintiffs' fraud claim, the court dismissed it for lack of an allegation the plaintiffs suffered any injury, and for the plaintiffs' failure to adequately allege all elements of fraud under Washington law. As for the plaintiffs' declaratory judgment claim, the court dismissed it as well for failure to allege that any foreclosures had been initiated or threatened, resulting in a lack of standing to pursue such a claim. The district Court then held that the plaintiffs did not adequately plead a claim for declaratory relief with respect to who owns each of their home loans and has the right to collect on them, but did permit the plaintiffs time to amend their complaint regarding this claim.
Although they have had sufficient time to do so considering their counsel's firm prosecuted that action, Plaintiffs in this action have not addressed the effect of Bisson on the Plaintiffs' claims here. But the Court finds the reasoning sound, and sees no reason not to consider the Washington District Court's opinion as part of its analysis.
2. Motion to Dismiss Standards
A. Rule 12(b)(1)
A defendant may move to dismiss a complaint for lack of subject matter jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(1) in one of two ways. See Thornhill Publ'g Co., Inc. v. General Tel. & Elec. Corp., 594 F.2d 730, 733 (9th Cir.1979). The attack may be a "facial" one where the defendant attacks the sufficiency of the allegations supporting subject matter jurisdiction. Id. On the other hand, the defendant may launch a "factual" attack, "attacking the existence of subject matter jurisdiction in fact." Id. When considering a "facial" attack made pursuant to Rule 12(b)(1), a court must consider the allegations of the complaint to be true and construe them in the light most favorable to the plaintiff. Love v. United States, 915 F.2d 1242, 1245 (9th Cir.1988). A "factual" attack made pursuant to Rule 12(b)(1) may be accompanied by extrinsic evidence. St. Clair v. City of Chico, 880 F.2d 199, 201 (9th Cir.1989); Trentacosta v. Frontier P. Aircraft Indus., 813 F.2d 1553, 1558 (9th Cir.1987). When considering a factual attack on subject matter jurisdiction, "the district court is ordinarily free to hear evidence regarding jurisdiction and to rule on that issue prior to trial, resolving factual disputes where necessary." Augustine v. United States, 704 F.2d 1074, 1077 (9th Cir.1983) (citing Thornhill, 594 F.2d at ...