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Strong v. Lehman Brothers Bank, FSB

United States District Court, D. Oregon

February 2, 2018

MARY P. STRONG Plaintiff,
v.
LEHMAN BROTHERS BANK, FSB, BAC HOME LOANS SERVICING LP, AND NATIONSTAR MORTGAGE LC; FEDERAL HOME LOAN MORTGAGE CORPORATION AS TRUSTEE FOR SECURITIZED TRUST FREDDIE MAC MULTICLASS CERTIFICATES, SERIES 2998; FEDDIE MAC; AURORA COMMERICAL CORP.; ELECTRONIC REGISTRATION SYSTEM, AKA “MERS” AND DOES 1 THROUGH 100, INCLUSIVE, Defendants.

          OPINION AND ORDER

          Michael McShane, United States District Judge

         Before this court are Defendants Lehman's Brothers Bank, FSB; Nationstar Mortgage LLC; Aurora Commercial Corp.; and Mortgage Electronic Registration Systems, Inc.'s (“Defendants”) Motion to Dismiss Plaintiff's Complaint (Dkt. 60); Defendants' two Requests for Judicial Notice In Support of their motion to dismiss (Dkts. 59 & 61; “RJN”); and Plaintiff Mary Strong's Motion for Rescission, Quiet Title and Declaratory Relief (Dkt. 65).

         For the reasons stated below, Defendants' Requests for Judicial Notice (Dkts. 59 & 61) are GRANTED. Because a holder of a note has standing to seek judicial foreclose upon the occurrence of default, Plaintiff fails to allege facts sufficient to state a claim of relief. Defendants' Motion to Dismiss (Dkt.60) is GRANTED. This case is DISMISSED with prejudice. All other outstanding motions (Dkts. 52, 65, 69) are DENIED as moot.

         BACKGROUND

         Plaintiff is the borrower under a Note dated June 29, 2005, which was secured by a Deed of Trust, for the property located at 2559 N.W. Monterrey Pines Drive, Bend, Oregon 97701 (the “Property”). Complaint, p.6 (Dkt. 1, p. 9, Notice of Removal); RJN, Ex. A. The Deed of Trust, which was recorded in the Deschutes County Official Records as Document No. 2005-42362, identified Plaintiff as the “Borrower”; Lehman as the “Lender”; and MERS as beneficiary “acting solely as a nominee for Lender and Lender's successors and assigns.” Dkt. 1, pp. 50-64; RJN, Ex. B.

         On January 24, 2011, MERS (acting as nominee) assigned the Deed of Trust to Aurora Loan Services, LLC. This assignment was recorded in the Deschutes County Official Records as Document No. 2011-05453. RJN, Ex. C. Thereafter, the Deed of Trust was assigned from Aurora Loan Services LLC to Nationstar, and this assignment was recorded in the Deschutes County Official Records on April 20, 2015, as Document No. 2015-013910. RJN, Ex. D.

         Plaintiff filed her initial lawsuit in Deschutes County Circuit Court, which was then removed to this Court as Case Number 16-cv-001498. Plaintiff then filed a separate lawsuit in the U.S. District of Oregon as case number 16-cv-01499. This Court consolidated the cases on its own motion. Dkt. 8. Plaintiff asserted eight claims for relief: (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; and (8) Rescission under TILA.

         Defendants filed motions to dismiss (Dkts. 22 & 33) and a Request for Judicial Notice (Dkt. 35). Court granted the two motions and request for judicial notice, and dismissed Plaintiff's suit on October 17, 2016. Dkt. 37. This court found that because securitization does not destroy a right to foreclose, the plaintiff's claims for wrongful foreclosure, slander of title, and quiet title relied on an insufficient legal theory. Id. Plaintiff appealed.

         The Ninth Circuit Court of Appeals affirmed dismissal of Plaintiff's claims for rescission under TILA, Intentional Infliction of Emotional Distress, Fraud in the Concealment, and Fraud in the Inducement. The Ninth Circuit Court of Appeals reversed the Court's dismissal of Plaintiff's claims for “Lack of Standing to Foreclose, ” Quiet Title, Slander of Title, and related Declaratory Relief, and remanded for further consideration of the Oregon Supreme Court's opinion in Brandrup v. ReconTrust Co., N.A., 353 Or. 688, 303 P.3d 301, 304, 309-12 (Or. 2013). The remand noted specifically that the district court “did not expressly consider plaintiff's allegation that Mortgage Electronic registration Systems, Inc. (MERS”) could not act on its own authority as the beneficiary under the deed of trust.” (internal citations omitted). Dkt. 46-1. On October 25, 2017, the Court ordered briefing to respond to the query presented by the Ninth Circuit Court of Appeals in its remand

         STANDARD OF REVIEW

         To survive a motion to dismiss under Fed.R.Civ.P. 12(b)(6), a complaint must contain sufficient factual matter that “state[s] a claim to relief that is plausible on its face.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007). A claim is plausible on its face when the factual allegations allow the court to infer the defendant's liability based on the alleged conduct. Ashcroft v. Iqbal, 556 U.S. 662, 663 (2009). The factual allegations must present more than “the mere possibility of misconduct.” Id. at 678.

         When considering a motion to dismiss, the court must accept all allegations of material fact as true and construe those facts in the light most favorable to the non-movant, Burget v. Lokelani Bernice Pauahi Bishop Trust, 200 F.3d 661, 663 (9th Cir. 2000), but the court is “not bound to accept as true a legal conclusion couched as a factual allegation, ” Twombly, 550 U.S. at 555. If the complaint is dismissed, leave to amend should be granted unless the court “determines that the pleading could not possibly be cured by the allegation of other facts.” Doe v. United States, 58 F.3d 494, 497 (9th Cir. 1995).

         DISCUSSION

         A. Request for ...


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