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Lavine v. Aames Funding Corp.

United States District Court, D. Oregon, Portland Division

March 9, 2017

EMMA J. LAVINE, Plaintiff
AAMES FUNDING CORP., et al., Defendants.


          MICHAEL W. MOSMAN Chief United States District Judge.

         This matter comes before me on Defendants' Motions to Dismiss for Failure to State a Claim [14, 18]. For the reasons set forth below, I GRANT Defendants' Motions and DISMISS the case.


         On February 22, 2006, Plaintiff Emma Lavine executed a promissory note ("the Note") for a loan in the amount of $208, 650, secured by a Deed of Trust encumbering 506 NE Monroe Street, Portland, Oregon 97212 ("the Subject Property"). The Deed of Trust listed Aames Funding Corporation ("Aames") as the lender and beneficiary, and First American Title Insurance Company as the Trustee. The Deed of Trust was recorded in the Office of the Multnomah County Recorder on February 28, 2006, as Instrument No. 2006-036716.

         On June 4, 2008, Aames assigned the Deed of Trust to LaSalle Bank National Association ("LaSalle"). Sometime thereafter, Bank of America merged with LaSalle. On December 10, 2012, Bank of America assigned all rights and interests in the Deed of Trust to U.S. Bank, and on December 24, 2012, the assignment was recorded as Instrument No. 2012-166692.

         Ms. Lavine defaulted on her loan in February 2009. On March 13, 2013, U.S. Bank initiated judicial foreclosure proceedings in the Multnomah County Circuit Court, which eventually resulted in summary judgment in U.S. Bank's favor. A Judgment of Foreclosure was entered against Ms. Lavine on March 25, 2014, and a Writ of Execution in Foreclosure was entered on December 31, 2014. Despite the foreclosure, it appears Ms. Lavine continues to live in the Subject Property.

         On July 22, 2016, Ms. Lavine brought suit against Aames, LaSalle, Goldman Sachs Mortgage Company ("Goldman Sachs"), GS Mortgage Securities ("GS"), Wells Fargo Bank ("Wells Fargo"), Mortgage Electronic Registration Systems ("MERS"), and Does 1 through 100. Although she asserts several causes of action, her central claim is that her loan is unenforceable because it was improperly securitized. She alleges the securitization process involved several transfers that were not properly performed and are therefore void. She also claims that during the securitization process, the Note and underlying mortgage were separated, making them unenforceable. As a result of these deficiencies, Ms. Lavine claims that no Defendant was in a position to enforce the mortgage against her.

         In addition to her claims about improper securitization, Ms. Lavine also alleges several issues dealing with the substance of the Note. Specifically, she alleges that the terms and conditions of the Note were unclear and inconspicuous, and not properly disclosed by Aames. She also claims that Aames wrongfully qualified her for a loan in the first place, knowing that she could not afford the amount.

         On August 18, 2016, Defendants Goldman Sachs and GS filed a Motion to Dismiss [14]. Then, on August 22, 2016, Defendant's U.S. Bank (erroneously sued as LaSalle), Wells Fargo, and MERS filed an Amended Motion to Dismiss [18]. After unsuccessfully seeking a preliminary injunction, Ms. Lavine responded to the Motions on February 8, 2017.


         To survive a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim, "a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting BellAtl. 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). 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).

         In addition to the general pleading requirements, a party alleging fraudulent conduct "must state with particularity the circumstances constituting fraud or mistake." Fed.R.Civ.P. 9(b). Under this heightened standard, a plaintiff must state the "time, place, and specific content of the false representations as well as the identities of the parties to the misrepresentations." Swartz v. KPMGLLP, 476 F.3d 756, 764 (9th Cir. 2007) (citing Edwards v. Marin Park, Inc., 356 F.3d 1058, 1066 (9th Cir. 2004)). This includes identifying the role of the individual defendants in the alleged fraudulent scheme. Moore v. Kayport Package Express, Inc., 885 F.2d 531, 541 (9th Cir. 1989).

         When reviewing a motion to dismiss against apro se plaintiff, the court construes the pro se pleadings "liberally, " affording the plaintiff the "benefit of any doubt." Hebbe v. Pliler, 627 F.3d 338, 342 (9th Cir. 2010) (internal quotations omitted). This liberal interpretation may not, however, "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).


         Ms. Lavine asserts ten causes of action arising from Defendants' alleged conduct: (1) Lack of Standing/Wrongful Foreclosure; (2) Fraud in the Concealment; (3) Fraud in the Inducement; (4) Intentional Infliction of Emotional Distress; (5) Slander of Title; (6) Quiet Title; (7) Declaratory Relief; (8) Violations of TILA and HOEPA; (9) Violation of RESPA; and (10) Rescission. Several problems with Ms. Lavine's Complaint warrant its dismissal. Some of these problems pertain to Ms. Lavine's claims against particular Defendants and others pertain to the claims themselves.[1]

         I. Request for Judicial Notice

         As a preliminary matter, Defendants U.S. Bank, Wells Fargo, and MERS request that I take judicial notice of several documents submitted with their Motion to Dismiss. Generally, a court cannot consider any material outside of the pleadings when ruling on a motion to dismiss. Daniels-Hall v. Nat'lEduc. Ass 'n, 629 F.3d 992, 998 (9th Cir. 2010). But, "under Rule 201 of the Federal Rules of Evidence, [a] court may take judicial notice, on its own or at a party's request, of 'matters of public record.'" Nelmes v. Nationstar Mortg., LLC, No. 3:16-cv-615-AC, 2016 WL 7383335, at *1 (D. Or. Nov. 9, 2016) (citing Lee v. City of Los Angeles, 250 F.3d 668, 689 (9th Cir. 2001)).

         Here, Defendants request that I take judicial notice of the Adjustable Rate Balloon Note, the recorded Deed of Trust, Assignments of the Deed of Trust, and court documents from the state foreclosure proceeding in the Multnomah County Circuit Court. These documents are "not subject to reasonable dispute because [they] . . . can be accurately and readily determined from sources whose accuracy cannot reasonably be questioned." Fed.R.Evid. 201. Thus, I ...

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