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Brown v. HSBC Bank USA, National Association

United States District Court, Ninth Circuit

October 11, 2013

STEVEN R. BROWN, Plaintiff,
v.
1) HSBC BANK USA, NATIONAL ASSOCIATION as Trustee for the WELLS FARGO ASSET SECURITIES CORPORATION, MORTGAGE PASSTHROUGH CERTIFICATES SERIES 2006-13; 2) WELLS FARGO BANK, N.A.; 3) Does 1-10, inclusive, Defendants.

OPINION AND ORDER

MICHAEL W. MOSMAN, District Judge.

Plaintiff Steven R. Brown filed suit seeking (1) declaratory relief, (2) an injunction preventing defendants from instituting foreclosure proceedings on residential property he owns, and (3) quiet title to the same. Defendants moved to dismiss for lack of subject matter jurisdiction under Federal Rule of Civil Procedure 12(b)(1) and for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6). Having concluded that there is no justiciable controversy between the parties and that Mr. Brown has failed to state a claim to quiet title in his favor, I GRANT Defendants' motion to dismiss [14].

BACKGROUND

Mr. Brown executed a deed of trust ("DOT") securing a mortgage of his residence on July 17, 2006. (Tranetzki Decl. [17] Ex. 1.) The deed of trust designated Wells Fargo Bank, N.A., as lender and beneficiary and designated Fidelity National Title Insurance Co. as trustee. Id. The deed of trust was recorded July 24, 2006. Id.

In 2010, plaintiff filed a voluntary petition for bankruptcy in the District of Oregon. (Tranetzki Decl. [17], Ex. 5.) The suit was originally filed under Chapter 13 but was converted to Chapter 7. ( Id. at 3.) As part of that petition, plaintiff listed Wells Fargo Home Mortgage as a creditor holding a secured claim on the property. (Tranetzki Decl. [17] Ex. 3 at 10.) Plaintiff's personal obligation on the loan was ultimately discharged at the close of the bankruptcy proceedings, with defendants retaining a lien on the property. (Tranetzki Decl. [17] Ex. 4.)

Although it is not contested that nonjudicial foreclosure proceedings on the property were commenced at some point in the past, there are no foreclosure proceedings pending on the property now. (Compl. [1] ¶ 63.)

LEGAL STANDARDS

On a motion to dismiss, the court reviews the sufficiency of the complaint. Scheuer v. Rhodes, 416 U.S. 232, 236 (1974). The court considers allegations in the complaint, any exhibits attached to the complaint, and judicially noticeable materials. Swartz v. KPMG LLP, 476 F.3d 756, 763 (9th Cir. 2007). In cases where there is a jurisdictional defect, dismissal without leave to amend is proper where "the complaint could not be saved by any amendment." Id. at 760 (internal quotation omitted). When reviewing a motion to dismiss, the court must "accept all factual allegations in the complaint as true and construe the pleadings in the light most favorable to the nonmoving party." Knievel v. ESPN, 393 F.3d 1068, 1072 (9th Cir. 2005). The court construes pro se pleadings "liberally, " affording pro se plaintiffs the "benefit of any doubt." Hebbe v. Pliler, 627 F.3d 338, 342 (9th Cir. 2010) (internal quotations omitted). However, this liberal interpretation of a pro se complaint "may not supply essential elements of the claim that were not initially pled." Ivey v. Bd. of Regents of Univ. of Alaska, 673 F.2d 266, 268 (9th Cir. 1982). A court need not accept legal conclusions as true because "[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).

To survive a motion to dismiss for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6), "a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.'" Iqbal, 556 U.S. at 678 (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A pleading that offers only "labels and conclusions" or "naked assertion[s]' devoid of further factual enhancement'" will not suffice. Id. (quoting Twombly, 550 U.S. at 555, 557) (alteration in original). While the plaintiff does not need to make "detailed factual allegations" at the pleading stage, the allegations must be sufficiently specific to give the defendant "fair notice" of the claim and the grounds on which it rests. See Erickson v. Pardus, 551 U.S. 89, 93-94 (2007) (per curiam) (citing Twombly, 550 U.S. at 555).

Litigants may seek dismissal of an action for lack of subject matter jurisdiction under Federal Rule of Civil Procedure 12(b)(1). See Tosco Corp. v. Cmtys. for a Better Env't, 236 F.3d 495, 499 (9th Cir. 2001), abrogated on other grounds by Hertz Corp. v. Friend, 559 U.S. 77 (2010). The plaintiff has the burden of showing the existence of federal jurisdiction over the suit; if no such showing is made, the court must dismiss the case for lack of subject matter jurisdiction unless the defect can be corrected by amendment. Smith v. McCullough, 270 U.S. 456, 459 (1926). Article III jurisdiction requires both standing and the existence of a "case or controversy." See ACLU of Nev. v. Masto, 670 F.3d 1046, 1061-62 (9th Cir. 2012); Cook Inlet Treaty Tribes v. Shalala, 166 F.3d 986, 989 (9th Cir. 1999). If there is "no actual or live controversy" between the parties, the plaintiff lacks standing to bring suit. Foster v. Carson, 347 F.3d 742, 745 (9th Cir. 2003) (internal quotations omitted). Standing requires first that the plaintiff have suffered an injury that is "concrete and particularized" as well as "actual and imminent." Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992). Second, there must also be a causal connection between plaintiff's injury and the defendant's actions. Id. Finally, it must be likely that this injury "will be redressed by a favorable decision." Id. at 560-61 (internal citations omitted). If the plaintiff lacks standing, the court must dismiss the suit for lack of jurisdiction.

While the Declaratory Judgment Act ("DJA"), 28 U.S.C. § 2201, permits federal courts to hear suits for declaratory judgment, there must be an actual controversy between the parties. This requirement is akin to the Article III case or controversy requirement: the dispute must "admi[t] of specific relief through a decree of a conclusive character, as distinguished from an opinion advising what the law would be upon a hypothetical state of facts.'" MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118, 127 (2007) (quoting Aetna Life Ins. Co. v. Haworth, 300 U.S. 227, 240-41 (1937)) (alteration in original). In essence, declaratory judgment is only proper where "the facts alleged, under all the circumstances, show that there is a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality." Id.

DISCUSSION

I. Judicial Notice

A court may take judicial notice of a fact outside the pleadings if the fact "can be accurately and readily determined from sources whose accuracy cannot reasonably be questioned" under Federal Rule of Evidence 201. Defendants have requested that the court take judicial notice of the deed of trust signed by Mr. Brown and recorded in the county land records. Mr. Brown does not dispute that he signed the deed of trust, and it is publically available and thus easily identifiable. Defendants have also requested that the court take judicial notice of Mr. Brown's various bankruptcy ...


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