United States District Court, D. Idaho
MEMORANDUM DECISION AND ORDER
C. NYE, U.S. DISTRICT COURT JUDGE
before the Court is a Motion to Dismiss under Federal Rule of
Civil Procedure 12(b)(6) that Defendants Ocwen Loan Servicing
LLC (“Ocwen”) and Perkins Coie LLP
(“Perkins Coie”) filed jointly on April 25, 2018.
Dkt. 3. Having reviewed the record and briefs, the Court
finds that the parties have adequately presented the facts
and legal arguments. Accordingly, in the interest of avoiding
further delay, and because the Court finds that the
decisional process would not be significantly aided by oral
argument, the Court will decide the motion without a hearing.
Dist. Idaho Loc. Civ. R. 7.1(d)(2)(ii). For the reasons
outlined below, the Court GRANTS the Motion to Dismiss, but
gives Plaintiffs Terry Kerr and Dennis Kerr (“the
Kerrs”) leave to file an Amended Complaint.
their Motion to Dismiss, Ocwen and Perkins Coie give the
following background information:
In June 2006, the Kerrs obtained a cash-out refinance loan
for $210, 900. In August 2008, the Kerrs defaulted on their
loan obligation. American Home Mortgage Servicing, Inc.,
which later became known as Homeward Residential, Inc.
(“Homeward”), owned the loan and began
non-judicial foreclosure proceedings in October 2009. Before
the foreclosure was finalized, the Kerrs entered into a Loan
Modification Agreement, effective as of June 1, 2010. Under
that agreement, the Kerrs' first payment was due July 1,
2010. The Kerrs failed to make the first payment and have
made no subsequent payments. Accordingly, foreclosure
proceedings were initiated once again.
In response to the foreclosure proceeding, Mr. Kerr filed a
complaint against Homeward in Idaho state court, which
Homeward then removed to the U.S. District Court for the
District of Idaho. In his Complaint, Mr. Kerr alleged that
Homeward (then American Home Mortgage Servicing, Inc.) (1)
altered the Loan Modification Agreement without the
Kerrs' consent; (2) criminally conspired with
unidentified parties in a manner that “amounted to
civil racketeering” and violated the Service Members
Civil Relief Act; (3) acted in bad faith and violated the
implied covenant of good faith and fair dealing; (4) acted
with racial animus; and (5) intentionally inflicted emotional
distress. On September 26, 2012, the Kerrs' Complaint was
dismissed with prejudice.
During the course of that proceeding, Mr. Kerr filed a Notice
of Bad Faith and Misconduct and a Motion for Restraining
Order against Perkins Coie attorney Cynthia Yee-Wallace. The
court granted defendants' Motion to Strike and Motion for
Sanctions, concluding that “Plaintiff's Notice and
Motion for Restraining Order are patently frivolous and are
without a legal or factual basis.”
In an opinion dated February 23, 2018, the Ninth Circuit
affirmed the district court's order dismissing the First
Action, with prejudice. Less than two months later, the Kerrs
filed the instant action in which they raise the same
allegations against Ocwen, which acquired Homeward and which
is the current servicer of the subject note, as well as
Perkins Coie LLP, the attorneys of record for Homeward in the
Dkt. 3-1, at 2-4 (internal citations and footnotes omitted).
“First Action” is No. 4:11-cv-00134-EJL-LMB in
this District. The Court takes judicial notice of the filings
in the First Action, as those documents are matters of public
record or otherwise “not subject to reasonable
dispute.” Fed. R. Evid 201(b); Reyn's Pasta
Bella, LLC v. Visa USA, Inc., 442 F.3d 741, 746 n.6 (9th
Cir. 2006) (taking judicial notice of briefs and other
filings in related case and the appeal of that case).
their Complaint in this case, Dkt. 1, the Kerrs do not recite
the background as laid out by Ocwen and Perkins Coie.
However, in their Response to the Motion to Dismiss, Dkt. 14,
the Kerrs do not deny these background facts either. The
Kerrs do deny receiving notice from the Ninth Circuit that it
had affirmed this Court's dismissal of the First Action.
after the Kerrs filed their Complaint, Ocwen and Perkins Coie
filed the pending Motion to Dismiss. Dkt. 3. That Motion is
now fully briefed and ripe for decision.