United States District Court, D. Idaho
SHANE H. SCHAEFFER and BARBARA J. SCHAEFFER, Plaintiffs,
JP MORGAN CHASE BANK, N.A.; MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., Defendants.
REPORT AND RECOMMENDATION RE: ECF No. 10 ORDER RE:
ECF No. 12
HONORABLE CANDY W. DALE UNITED STATES MAGISTRATE JUDGE.
the Court are Defendants' motion to dismiss and their
accompanying motion to take judicial notice. This matter
concerns Plaintiffs' allegations of constructive fraud,
breach of the implied covenant of good faith and fair
dealing, slander of title, and violation of Idaho Code §
45-1506, the statute that governs foreclosure proceedings in
Idaho. Defendants ask the Court to take judicial notice of
several documents that reflect Plaintiffs' mortgage loan
origination, default, and foreclosure proceedings, and based
upon those documents, asks the Court to dismiss
Plaintiffs' complaint with prejudice for failure to state
motion to dismiss is now ripe. Having fully reviewed the
record, the Court finds 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 the decisional process would not be
significantly aided by oral argument, this matter will be
decided on the record without oral argument. The Court issues
the following order granting Defendants' motion for
judicial notice, and a report recommending Defendants'
motion to dismiss be granted.
obtained a loan in 2011 to purchase their home, located at
423 Snake River Circle, Rigby, Idaho, in Jefferson County
(the Property). On or about March 14, 2011, Plaintiffs
executed a promissory note and deed of trust secured by the
Property. (Dkt. 12-1 at 2.) The Deed of Trust, Instrument No.
390550, was recorded on March 16, 2011, in Jefferson County.
It identified the lender as Guild Mortgage Company, and the
trustee as First American Title Insurance Company of Idaho.
Mortgage Electronic Registration Systems, Inc. (MERS) was
identified as a separate corporation acting “solely as
a nominee for Lender and Lender's successors and assigns.
MERS is the beneficiary under this Security
section titled “Transfer of Rights in the Property,
” the Deed of Trust states as follows:
The beneficiary of this Security Instrument is MERS (solely
as nominee for Lender and Lender's successors and
assigns) and the successors and assigns of MERS. This
Security Instrument secures to Lender: (i) the repayment of
the Loan, and all renewals, extensions and modifications of
the Note; and (ii) the performance of Borrower's
covenants and agreements under this Security Instrument and
the Note. For this purpose, Borrower irrevocably grants and
conveys to Trustee, in trust, with the power of sale, the
following described property….
property identified in this section is Plaintiff's
property located in Rigby, Idaho.
Deed of Trust set forth Borrowers' duty to pay Lender,
and the consequences of nonpayment. These consequences
include demand for immediate payment of all sums due under
the Security Instrument, as well as invocation of the power
Deed of Trust informed Plaintiffs that 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
Lender invoked the power of sale, the Lender was obligated to
execute or cause Trustee to execute written notice of the
event of default, and cause notice of the sale to be given.
The Lender possessed also the authority to remove Trustee and
appoint a successor trustee, and such successor trustee
“shall succeed to all the title, power and duties
conferred upon Trustee” under the terms of the Deed of
March 24, 2011, Plaintiffs received a Notice of Assignment,
Sale, or Transfer of Servicing Rights from Guild Mortgage
Company. (Dkt. 3 at 5.) The notice indicated Chase Home
Finance would be the servicer of the mortgage loan and begin
collecting payments on May 1, 2011.
December 20, 2012, Vernita Lansey, acting in her capacity as
Assistant Secretary of Mortgage Electronic Registration
Systems, Inc. (MERS) as Nominee for Guild Mortgage Company,
executed a corporate assignment of the deed of trust. (Dkt.
12-1 at 17.) The assignment assigned and transferred the deed
of trust to JP Morgan Chase Bank, NA. It was recorded as
Instrument No. 402054 in Jefferson County, Idaho.
appointment of successor trustee was recorded on November 24,
2015, as Instrument No. 420367. (Dkt. 3 at 60.) JP Morgan
appointed Sydney K. Leavitt, Esq., as successor trustee under
the Deed of Trust.
December 2, 2015, Sydney Leavitt, of the law firm Aldridge
Pite, LLP, executed a Notice of Default. (Dkt. 12-1 at 19.)
The notice identified Leavitt as the successor trustee under
the Deed of Trust executed by the Schaeffers; indicated they
had failed to pay the monthly payment due on April 1, 2015;
and noted the amount due as of December 2, 2015, was $11,
857.21. Plaintiffs admit in the Complaint they stopped making
payments in 2015. Compl. ¶ 20-21.
the assignment of the deed of trust to JP Morgan had occurred
in 2012, the Notice of Default identified First American
Title Insurance Company of Idaho as Trustee, and MERS as
Nominee for Guild Mortgage Company. But, the Notice included
reference as well to MERS's “successors and assigns
as beneficiary” of the deed of trust. The notice was
recorded as Instrument No. 420472 in Jefferson County, Idaho.
December 11, 2015, Leavitt executed a Notice of Trustee's
sale, setting forth that the sale would occur on April 20,
2016, at the Jefferson County courthouse, and that Leavitt,
as successor Trustee, would sell the Property at public
auction. (Dkt. 3 at 75.) The notice indicated the sum owing
on the debt secured by the deed of trust as of December 11,
2015, was $202, 556.72.
Motion to Dismiss Standard
Rule of Civil Procedure 8(a)(2) requires only “a short
and plain statement of the claim showing that the pleader is
entitled to relief” to “give 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 (2007). While a complaint attacked by a Rule
12(b)(6) motion to dismiss “does not need detailed
factual allegations, ” it must set forth “more
than labels and conclusions, and a formulaic recitation of
the elements of a cause of action will not do.”
Id. at 555. To survive a motion to dismiss, a
complaint must contain sufficient factual matter, accepted as
true, to “state a claim to relief that is plausible on
its face.” Id. at 570. 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. Id.
at 556. The plausibility standard is not akin to a
“probability requirement, ” but it asks for more
than a sheer possibility that a defendant has acted
unlawfully. Id. 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.'” Id. at 557.
United States Supreme Court identified two “working
principles” that underlie Twombly in
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). First,
the Court need not accept as true legal conclusions that are
couched as factual allegations. Id. Rule 8 does not
“unlock the doors of discovery for a plaintiff armed
with nothing more than conclusions.” Id. at
678-79. Second, to survive a motion to dismiss, a complaint
must state a plausible claim for relief. Id. at 679.
“Determining whether a complaint states a plausible
claim for relief will ... be a context-specific task that
requires the reviewing court to draw on its judicial
experience and common sense.” Id.
Rule 12(b)(6), the Court may consider matters that are
subject to judicial notice. 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, n.1 (9th Cir. 2004).
The Court may also examine documents referred to in the
complaint, although not attached ...