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Morkal v. Federal Home Loan Mortgage Corporation

United States District Court, D. Oregon

May 8, 2014

LINDA MORKAL, Plaintiff,
FEDERAL HOME LOAN MORTGAGE CORPORATION, aka Freddie Mac, a government sponsored enterprise; RECONTRUST COMPANY, N.A.; and BANK OF AMERICA, N. A., Defendants.

Anthony V. Albertazzi, Joseph M. Harder The Albertazzi Law Firm Bend, Oregon Attorneys for plaintiff

James P. Laurick Kilmer Voorhees & Laurick, PC Portland, Oregon Attorney for defendants


ANN AIKEN, District Judge.

Defendants Federal Home Loan Mortgage Corporation ("Freddie Mac"), ReconTrust Company, N.A. ("ReconTrust"), and Bank of America, N. A. ("BANA") move to dismiss plaintiff Linda Morkal's complaint pursuant to Fed.R.Civ.P. 12 (b) (6). Defendants also move for judicial notice of certain publicly-filed documents. For the reasons set forth below, defendants' motions are granted.


In 2005, plaintiff and her now deceased husband took out a loan in the amount of $110, 000 to purchase a residential property in La Pine, Oregon ("Property"). Pursuant to this transaction, plaintiff executed a Promissory Note ("Note"), which was secured by a Deed of Trust ("DOT"). The DOT identified plaintiff as the borrower, Quicken Loans, Inc. as the lender, Orange Coast Title Company as the trustee, and Mortgage Electronic Registration Systems, Inc. ("MERS") as the beneficiary. Under the DOT, plaintiff agreed to make monthly mortgage payments as required under the Note. Plaintiff also agreed that she would be in default, and subject to foreclosure, if she failed to make such payments.

After her husband's death on April 10, 2010, plaintiff stopped making loan repayments as required by the Note and DOT. On April 11, 2011, MERS assigned its interest in the DOT to BAC Home Loans Servicing, LP, FKA Countrywide Home Loans Servicing LP, a subsidiary of BANA; BAC Home Loans Servicing subsequently transferred the servicing rights of plaintiff's loan to BANA.

On July 18, 2011, BANA appointed ReconTrust as successor trustee under the DOT. That same day, ReconTrust recorded a Notice of Default and Election to Sell the Property. At some unspecified time thereafter, plaintiff contacted BANA to request the amount needed to cure her default. On December 29, 2011, BANA responded with two reinstatement calculations, each articulating a different amount. By December 30, 2011, plaintiff had secured funds necessary to fulfill the higher reinstatement calculation and communicated an intent to cure her default, but nonetheless did not furnish payment to BANA. The trustee's sale was held on January 3, 2012, after which ReconTrust conveyed the Property to Freddie Mac. The Trustee's Deed was recorded on January 20, 2012, in Deschutes County, Oregon.

On June 6, 2012, plaintiff filed a complaint in the Deschutes County Circuit Court alleging violations of the Oregon Trust Deed Act ("OTDA")[1] based on: (1) MERS' role as beneficiary and assignment of the DOT; and (2) BANA's prevention of or interference with her attempts to reinstate her loan. On July 26, 2012, plaintiff recorded a lis pendens in the Deschutes County Circuit Court. On August 3, 2012, defendants removed plaintiff's case to this Court. On February 20, 2013, defendants filed a motion to dismiss plaintiff's complaint and expunge the Deschutes County lis pendens.


Where the plaintiff "fails to state a claim upon which relief can be granted, " the court must dismiss the action. Fed.R.Civ.P. 12 (b) (6). To survive a motion to dismiss, the complaint must allege "enough facts to state a claim to relief that is plausible on its face." Bell Atlantic Corp. v. Twombly , 550 U.S. 544, 570 (2007). For purposes of a motion to dismiss, the complaint is liberally construed in favor of the plaintiff and its allegations are taken as true. Rosen v. Walters , 719 F.2d 1422, 1424 (9th Cir. 1983). Bare assertions, however, that amount to nothing more than a "formulaic recitation of the elements" of a claim "are conclusory and not entitled to be assumed true." Ashcroft v. Iqbal , 556 U.S. 662, 681 (2009). Rather, to state a plausible claim for relief, the complaint "must contain sufficient allegations of underlying facts" to support its legal conclusions. Starr v. Baca , 652 F.3d 1202, 1216 (9th Cir. 2011), cert. denied, 132 S.Ct. 2101 (2012).


Defendants argue that plaintiff's complaint should be dismissed because she is statutorily barred from challenging a completed non-judicial foreclosure. In addition, defendants contend that plaintiff's claim concerning MERS should be dismissed because MERS' status as beneficiary did not invalidate the foreclosure. In response, "plaintiff voluntarily dismisses her claim pertaining to MERS' involvement in the foreclosure process." Pl.'s Resp. to Mot. Dismiss 12. Plaintiff asserts, however, that the ...

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