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Pidasheff v. Quality Loan Service Corp. Washington

United States District Court, D. Oregon

January 22, 2019

ELENA PIDASHEFF and VICTOR PIDASHEFF, Plaintiffs,
v.
QUALITY LOAN SERVICE CORPORATION WASHINGTON; U.S. BANK NATIONAL ASSOCIATION AS TRUSTEE FOR THE LEHMAN XS TRUST MOTRGATGE PASS-THROUGH CERTIFICATES SERIES 2006-10N; OCWEN LOAN SERVICES, LLC; DOES I THROUGH V, SUNTRUST MORTGAGE, INC., Defendants.

          Elena Pidasheff and Victor Pidasheff, pro se.

          Ann T. Marshall and Barbara L. Bollero, Anglin Flewelling Rasmussen Campell & Trytten LLP, Of Attorneys for Defendant SunTrust Bank as Successor in Interest to SunTrust Mortgage, Inc. Emilie K. Edling and Amber Labrecque, Houser & Allison, APC, Of Attorneys for Defendants U.S. Bank, National Association and Ocwen Loan Servicing, LLC.

          OPINION AND ORDER

          Michael H. Simon United States District Judge.

         Plaintiffs Elena and Victor Pidasheff bring this action seeking damages for wrongful foreclosure of their home. Defendants Suntrust Bank (“Suntrust”), U.S. Bank National Association as trustee for the Lehman XS Trust Mortgage Passthrough Certificates Series 2006-10N (“U.S. Bank”), and Ocwen Loan Servicing, LLC (“Ocwen”) move to dismiss the complaint under Federal Rule of Civil Procedure 12(b)(6)for failure to state a claim upon which relief can be granted. Defendants U.S. Bank and Ocwen also seek dismissal of the action for insufficient service of process. For the reasons that follow these motions are GRANTED.

         STANDARDS

         A motion to dismiss for failure to state a claim may be granted only when there is no cognizable legal theory to support the claim or when the complaint lacks sufficient factual allegations to state a facially plausible claim for relief. Shroyer v. New Cingular Wireless Servs., Inc., 622 F.3d 1035, 1041 (9th Cir. 2010). In evaluating the sufficiency of a complaint's factual allegations, the court must accept as true all well-pleaded material facts alleged in the complaint and construe them in the light most favorable to the non-moving party. Wilson v. Hewlett-Packard Co., 668 F.3d 1136, 1140 (9th Cir. 2012); Daniels-Hall v. Nat'l Educ. Ass'n, 629 F.3d 992, 998 (9th Cir. 2010). To be entitled to a presumption of truth, allegations in a complaint “may not simply recite the elements of a cause of action, but must contain sufficient allegations of underlying facts to give fair notice and to enable the opposing party to defend itself effectively.” Starr v. Baca, 652 F.3d 1202, 1216 (9th Cir. 2011). All reasonable inferences from the factual allegations must be drawn in favor of the plaintiff. Newcal Indus. v. Ikon Office Solution, 513 F.3d 1038, 1043 n.2 (9th Cir. 2008). The court need not, however, credit the plaintiff's legal conclusions that are couched as factual allegations. Ashcroft v. Iqbal, 556 U.S. 662, 678-79 (2009).

         A complaint must contain sufficient factual allegations to “plausibly suggest an entitlement to relief, such that it is not unfair to require the opposing party to be subjected to the expense of discovery and continued litigation.” Starr, 652 F.3d at 1216. “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678 (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556 (2007)). “The plausibility standard is not akin to a probability requirement, but it asks for more than a sheer possibility that a defendant has acted unlawfully.” Mashiri v. Epstein Grinnell & Howell, 845 F.3d 984, 988 (9th Cir. 2017) (quotation marks omitted).

         A court must liberally construe the filings of a pro se plaintiff and afford the plaintiff the benefit of any reasonable doubt. Hebbe v. Pliler, 627 F.3d 338, 342 (9th Cir. 2010). “‘Unless it is absolutely clear that no amendment can cure the defect, . . . a pro se litigant is entitled to notice of the complaint's deficiencies and an opportunity to amend prior to dismissal of the action.'” Garity v. APWU Nat'l Labor Org., 828 F.3d 848, 854 (9th Cir. 2016) (alteration in original) (quoting Lucas v. Dep't of Corrections, 66 F.3d 245, 248 (9th Cir. 1995) (per curiam)). Under Federal Rule of Civil Procedure 8(a)(2), however, every complaint must contain “a short and plain statement of the claim showing that the pleader is entitled to relief.” This standard “does not require ‘detailed factual allegations, '” but does demand “more than an unadorned, the defendant-unlawfully-harmed-me accusation.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). “A pleading that offers ‘labels and conclusions' or ‘a formulaic recitation of the elements of a cause of action will not do.'” Id. (quoting Twombly, 550 U.S. at 555).

         BACKGROUND

         On January 25, 2006, Plaintiff Elena Pidasheff signed a note and deed of trust with Suntrust Mortgage, Inc., to purchase a home in Clackamas County, Oregon.[1] She then conveyed the property to Victor Pidasheff, her husband, and herself as tenants by the entirety. ECF 22 at 48. First American Title Insurance Company was the original trustee and Mortgage Electronic Registration Systems, Inc. was identified as the beneficiary. ECF 22 at 33-35. Elena Pidasheff agreed to make monthly instalments on the loan. Compl ¶ 27. Upon Plaintiffs' “information and belief, ” they determined that no rightful party could legally collect payments from Plaintiffs, and Plaintiffs “subsequently ceased making payments” on the loan. Compl. ¶ 32. In 2009, Plaintiff failed to make her monthly loan payments due fron November 2008 through February 2009 and defaulted on her loan. ECF 22 at 53. A foreclosure sale was schedule for July 2009, but the sale never happened. ECF 22 at 54, 58. Plaintiff failed to make twelve payments on her loan between March of 2009 and February of 2010. ECF 22 at 66. Another foreclosure sale was scheduled for June 15, 2010. ECF 22 at 67. This sale, too, never took place.[2]

         Plaintiffs defaulted on the loan again in April of 2011, and Ocwen, who had assumed servicing of Plaintiffs' loan in February of 2013, filed a judicial foreclosure proceeding against Elena Pidasheff in Clackamas County Court on June 12, 2013. Elena Pidasheff, represented by counsel, filed counterclaims alleging that Ocwen had not demonstrated any legal interest in the note or deed of trust and therefore could not initiate a judicial foreclosure proceeding. Elena Pidasheff disputed whether Ocwen was the true loan servicer, and also alleged that Ocwen had failed to follow the required legal procedures before initiating the foreclosure. She sought a declaratory judgment regarding the legal rights and obligations of all parties, and also brought counterclaims under the Unlawful Trade Practices Act, breach of contract and duty of good faith and fair dealing claims, and claims under the Real Estate Settlement Practices Act, 12 U.S.C. § 2605. On August 27, 2013, U.S. Bank filed an amended complaint in the Clackamas County Court action, substituting itself for Ocwen as the named plaintiff. ECF 22 at 157. On November 17, 2014, the parties entered into a stipulated order and general judgment of dismissal, in which U.S. Bank's claims were dismissed without prejudice and Elena Pidasheff's claims were dismissed with prejudice.

         On June 7, 2018, Mortgage Electronic Registration Systems, Inc., as designated nominee for Suntrust Mortgage, Inc., assigned its interest in the mortgage to U.S. Bank. ECF 22 at 69. The instrument recording U.S. Bank's interest in the mortgage was recorded in Clackamas County. ECF 22 at 71. U.S. Bank then appointed Quality Loan Service Corporation as successor trustee, replacing First American Title Insurance Company. ECF 72. On November 16, 2018, Quality Loan Service Corporation notified Plaintiffs that they were again in default and that a foreclosure sale was scheduled for April 1, 2019. The foreclosure sale has not yet taken place. Plaintiffs filed the pending action against U.S. Bank, Ocwen, Suntrust, and Quality Loan Service Corporation, seeking damages for wrongful foreclosure.

         DISCUSSION

         U.S. Bank and Ocwen argue that Plaintiffs' service of process on them was insufficient and failed to meet the requirements of Rule 4 of the Federal Rules of Civil Procedure. The certificates of service for both parties are signed by Plaintiff Elena Pidasheff herself. Rule 4(c) requires that service may be made by “any person who is not a party.” See Mongeon v. City of Portland, 2015 WL 5129561 at *4 (D. Or. July 2, 2015) (finding ineffective service of process where plaintiff signed the proof of service); see also Constein v. United States, 628 F.3d 1207, 1213-14 (10th Cir. 2010 (“Even when service is effected by use of the mail, only a nonparty can place the summons and complaint in the mail.”). It appears as though Plaintiffs attempted to cure the defect in service by submitting a declaration stating that “I, ...


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