United States District Court, D. Oregon, Portland Division
SUSAN K. SWANGO, Plaintiff,
NATIONSTAR SUB1, LLC; NATIONSTAR MORTGAGE HOLDINGS, INC.; NATIONSTAR MORTGAGE, LLC, doing business as Champion Mortgage Company; METLIFE HOME LOANS, LLC; METLIFE BANK, NATIONAL ASSOCIATION; ZIEVE, BRODNAX AND STEELE, LLP; BENJAMIN D. PETIPRIN; METLIFE, INC.; SYNCHRONY BANK; SYNCHRONY FINANCIAL; and FIDELITY NATIONAL TITLE INSURANCE COMPANY, doing business as Lawyers Title Insurance Corporation, Defendants.
OPINION AND ORDER
MICHAEL W. MOSMAN CHIEF UNITED STATES DISTRICT JUDGE.
matter comes before the Court on the following Motions: the
Motion to Dismiss  Plaintiff's Second Amended
Complaint  pursuant to Federal Rule of Civil Procedure
12(b)(6) filed by Defendants Zieve, Brodnax, and Steele, LLP,
and Benjamin Petiprin (collectively, “the Zieve
Defendants”); the Motion to Dismiss  filed by
Defendants Nationstar Mortgage LLC d/b/a Champion Mortgage
Company, MetLife Home Loans LLC, and MetLife Bank, N.A.
(“Nationstar” or “MetLife, ”
respectively); and the Request for Judicial Notice  filed
by MetLife and Nationstar.
reasons that follow, the Court GRANTS the Zieve
Defendants' Motion to Dismiss ; GRANTS in part and
DENIES in part MetLife and Nationstar's Motion to Dismiss
; and GRANTS MetLife and Nationstar's Request for
Judicial Notice . The Court declines to exercise
supplemental jurisdiction over Plaintiff's state-law
claims and DISMISSES this action, without prejudice for
Plaintiff to pursue her claims in state court.
following facts are taken from Plaintiff's Second Amended
Complaint , the Line of Credit Deed of Trust attached as
Exhibit 1 [57-1] to the Declaration of James P. Laurick ,
the Assignment of Trust Deed [57-2] attached as Exhibit 2
thereto,  and the Fixed Rate Note attached as
Exhibit 3 thereto [57-3], and are taken as true at this stage
of the proceedings:
obtained a line of credit from MetLife secured by a Deed of
Trust on Plaintiff's real property (“the
Property”). 2d Am. Compl.  ¶ 38; see
also Laurick Decl.  Exh. 1 [57-1]. Plaintiff alleges
that MetLife, as part of its advertising for reverse mortgage
products, represented to prospective borrowers that a
borrower could “stay in your home until you die.”
2d Am. Compl.  ¶ 96. The Deed of Trust was recorded
on June 22, 2009, and identified the “maximum principal
amount” as $938, 250.00. Id. ¶¶ 38,
151. Paragraph 2 of the Deed of Trust requires Plaintiff to:
pay all property charges consisting of taxes, ground rents,
flood and hazard insurance premiums, and special assessments
in a timely manner, and shall provide evidence of payment to
Lender, unless Lender pays property charges by withholding
funds from monthly payments due to the Borrower or by
charging such payments to a line of credit as provided for in
the Loan Agreement.
Decl.  Exh. 1 [57-1], at 2. Paragraph 5 of the Deed of
If Borrower fails to make these payments or the property
charges required by Paragraph 2, or fails to perform any
other covenants and agreements contained in this Security
Instrument, or there is a legal proceeding that may
significantly affect Lender's rights in the Property
(such as a proceeding in bankruptcy, for condemnation or to
enforce laws or regulations), then Lender may do and pay
whatever is necessary to protect the value of the Property
and Lender's rights in the Property, including payment of
taxes, hazard insurance and other items mentioned in
Id., at 3. The Deed of Trust provides that the
Lender may accelerate the debt and require immediate payment
in full if “[a]n obligation of the Borrower under this
Security Instrument is not performed.” Id., at
3-4. It also states that, in the event of acceleration, the
“Lender may invoke the power of sale and any other
remedies permitted by applicable law.” Id., at
11, 2012, MetLife assigned to Champion Mortgage Company
“all rights and benefits whatsoever accrued or to
accrue under” the Deed of Trust. Laurick Decl. 
Exh. 2 [57-2], at 1. Champion is an entity related to
Nationstar. 2d Am. Compl.  ¶¶ 10-11. As of July
20, 2017, MetLife and Nationstar had lent to Plaintiff $664,
125.08 in principal with a total amount due of $742, 784.87.
Id. ¶ 106. At an unspecified time, Nationstar
accelerated the debt and moved to foreclose on the Property
on the basis that Plaintiff had failed to pay property taxes.
Id. ¶ 110. Plaintiff alleges that, in the event
that she did not pay property taxes, Nationstar was required
to pay them under the terms of the loan. Id.
proceeding pro se, brings nine causes of action. In
Claim One, she brings a breach of contract claim against
MetLife and Nationstar on the basis that they failed to
fulfill their contractual obligation to pay property taxes,
and did not advance Plaintiff the full amount of funds called
for under the line of credit contract. Id.
¶¶ 94-112. In Claim Two, Plaintiff brings a claim
to quiet title in the Property as to MetLife and Nationstar.
Id. ¶¶ 113-41. In Claim Three, Plaintiff
brings a claim for civil conspiracy against all Defendants on
the basis that they conspired to conduct an unlawful
foreclosure of the Property. Id. ¶¶
142-69. In Claim Four, Plaintiff brings two counts against
Nationstar under the Fair Debt Collection Practices Act
(“FDCPA”), 15 U.S.C. §§ 1692-1692p. 2d
Am. Compl.  ¶¶ 170-88. In Claim Five, Plaintiff
brings a claim against Nationstar under the Racketeer
Influenced and Corrupt Organizations Act
(“RICO”), 18 U.S.C. § 1961 et seq.
2d Am. Compl.  ¶¶ 189-214. In Claim Six,
Plaintiff brings five counts under the Oregon Unlawful Trade
Practices Act (“UTPA”), Or. Rev. Stat.
§§ 646.607, 646.638, and 646.639, against MetLife
and Nationstar. 2d Am. Compl.  ¶¶ 215-32. In
Claim Seven, Plaintiff brings two counts under Or. Rev. Stat.
§§ 124.100 and 124.110 against MetLife, Nationstar,
and Fidelity for financial abuse of a protected person. 2d
Am. Compl.  ¶¶ 233-52. In Claim Eight,
Plaintiff brings a claim for fraud against MetLife and
Fidelity on the basis that MetLife made the loan to
Plaintiff, and Fidelity insured the loan, with the intention
of foreclosing on the Property. Id. ¶¶
253-69. Lastly, Plaintiff brings a declaratory judgment claim
against all Defendants regarding whether Plaintiff is
required to allege that she has tendered the amount due on
the loan in order to bring a quiet title claim. Id.
earlier First Amended Complaint  contained largely the
same allegations and claims as the Second Amended Complaint.
Defendants filed Motions to Dismiss [18, 24] the First
Amended Complaint, which the Court addressed in its Opinion
and Order  of February 5, 2018. The Court denied in part,
granted in part with leave to amend, and granted in part
without leave to amend the Motions to Dismiss. The Court
stated: “The Court advises Plaintiff that failure to
address the pleading deficiencies outlined in this Opinion
and Order in her next amended complaint may result in the
Court finding that dismissal of such claims with prejudice is
necessary because further leave to amend would be
futile.” Op. & Order , at 27.
filed her Second Amended Complaint  on March 23, 2018.
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). 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.'” Id.
(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). While a 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 (2007) (per curiam) (citing Twombly,
550 U.S. at 555).
Rule of Civil Procedure 15 provides that a “court
should freely give leave” to amend a complaint
“when justice so requires.” Fed.R.Civ.P.
15(a)(2). As such, when a court dismisses a complaint for
failure to state a claim, “leave to amend should be
granted ‘unless the court determines that the
allegation of other facts consistent with the challenged
pleading could not possibly cure the deficiency.'”
DeSoto v. Yellow Freight Sys., Inc., 957 F.2d 655,
658 (9th Cir. 1992) (quoting Schreiber Distrib. Co. v.
Serv-Well Furniture Co., 806 F.2d 1393, 1401 (9th Cir.
1986)). If amendment would be futile, the court need not
grant leave to amend. Id. “Leave to amend may
also be denied for repeated failure to cure deficiencies by
previous amendment.” Abagninin v. AMVAC Chem.
Corp., 545 F.3d 733, 742 (9th Cir. 2008).
reviewing a motion to dismiss against a pro 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).
and MetLife move to dismiss each of Plaintiff's causes of
action. The Zieve Defendants move to dismiss the civil
conspiracy and declaratory judgment claims.
Claim One - Breach of Contract
Claim One, Plaintiff brings a breach of contract claim
against MetLife and Nationstaron the basis that they failed to
pay property taxes and to add those payments to the loan
principal. Plaintiff appears to suggest that such payments
should have been made because the $664, 125.08 in loan
principal remained below the $938, 250.00 maximum principal
and Nationstar previously moved to dismiss this allegation as
to the First Amended Complaint, arguing that Plaintiff's
allegation that they had a duty to pay property taxes was
contradicted by the terms of the Deed of Trust, and,
therefore, should not be credited as true. MetLife and
Nationstar argued that Plaintiff's breach of contract
claim should be dismissed because the Deed of Trust provides
that Plaintiff - and not MetLife or Nationstar - was
responsible for paying the property taxes. In its earlier
Opinion and Order, the Court rejected these arguments, denied
the Motions to Dismiss as to that claim, and held:
It is unclear without reference to the Loan Agreement (which
is not in the record on MetLife and Nationstar's Motion
to Dismiss) whether there is any provision therein that
requires MetLife or Nationstar to pay property taxes or
whether the Trust Deed merely refers to the procedure set out
in the Loan Agreement by which MetLife or Nationstar could
pay the property taxes at their discretion. Because there is
not any unequivocal contradiction of Plaintiffs allegation
that the parties' agreement created a duty in MetLife
and, later, Nationstar to pay property taxes if Plaintiff did
not do so, the Court must view the allegation in the light
most favorable to Plaintiff and accept it as true at this
stage of the proceedings.
So construed, Plaintiff's claim for breach of contract is
straightforward: MetLife and Nationstar breached their duty
to pay property taxes on Plaintiffs behalf and, as a result,
Plaintiff defaulted on her reverse-mortgage loan and incurred
damages therefrom. Plaintiff, therefore, plausibly states a
claim for breach of contract on this record.
Op. & Order , at 7-8.
allegations under Claim One, for breach of contract, in her
Second Amended Complaint are nearly identical to those in the
First Amended Complaint. In their Motion to Dismiss, MetLife
and Nationstar bring largely the same arguments they did in
their earlier Motion, arguing that they had the discretion,
but not the obligation, to pay property taxes on the
Property. The Court has already rejected these arguments.
Defendants have provided no grounds for the Court to depart
from its earlier holding, or to grant a Motion to Dismiss as
to a claim on which the Court already denied such a Motion.
Claim One, Plaintiff also alleges that her contract with
MetLife required it to lend or advance funds up to a maximum
of $938, 250.00, but that MetLife would only advance funds of
$664, 125.08, thus “fail[ing] to lend or advance funds
to Plaintiff as called for by the Contract.” 2d Am.
Compl.  ¶¶ 98-99, 106-08, 112. Defendants argue
that Plaintiff misunderstands the nature of the loan and of
reverse mortgages, and that in such instruments, the loan
principal of $938, 250.00 is not the amount of cash advances
available to the borrower. Instead, they argue, that
principal amount represents 150% of the maximum claim amount
on the loan. This allows for a deed of trust “to
provide sufficient security for the loan over its projected
lifetime.” Nationstar Mot. Dismiss , at
MetLife cites HUD guidelines that allegedly instruct lenders
to set the principal at 150% of the maximum claim amount.
Id., at 7-8 (citing HUD HECM Handbook, Directive
4235.1, Section 6-6). However, by its terms, the HUD
guidelines apply “[w]here state law requires the
mortgage reflect a maximum mortgage amount, ”
id., and MetLife has not established that any such
state law applies here. MetLife does not support its
interpretation of the loan contract and calculation of
finances by citation to the contract or otherwise; at best,
at this stage of the proceedings, it is merely MetLife's
own assertion that the principal and claim maximum should be
interpreted in this way. As with the breach of contract claim
with regard to payment of the property taxes, and as the
Court explained in its prior Opinion and Order, without
contradictory language from the loan documents, the Court
must view these allegations in the light most favorable to
Plaintiff and accept them as true. MetLife's arguments
about the principal amount and cash advances are unavailing
at this stage.
Court denies the Motion to Dismiss Claim One, for breach of
Claim Two - Quiet Title
Claim Two, Plaintiff brings a quiet title claim against
MetLife and Nationstar.
makes assorted allegations against Defendants in her quiet
title claim. She claims that MetLife is not a mortgagee
because the Deed of Trust is “tainted by fraud”
and is an “unlawful contract, ” that Nationstar
has clouded Plaintiff's title by recording an
unauthorized Assignment with a forged signature that falsely
claims a right to enforce a promissory note, and that no
Defendant has a right to enforce any promissory note
encumbering the Property. 2d. Am. Compl.  ¶ 115-16,
128, 137. Plaintiff alleges that all valid loans on the
Property have been discharged and there are no valid ...