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Gosha v. Bank of New York Mellon Corp.

United States District Court, D. Oregon

October 18, 2019

GARY C. GOSHA, an individual; and KIT M. GOSHA, an individual, Plaintiffs,
BANK OF NEW YORK MELLON CORPORATION FKA THE BANK OF NEW YORK, as Trustee CWALT 2005-72, a Delaware Corporation; BAYVIEW LOAN SERVICING LLC, a Florida Corporation; and CLEAR RECON CORP, a California Corporation, Defendants.

          Gary C. Gosha Kit M. Gosha Pro Se Plaintiffs

          Peter J. Salmon ALDRIDGE PITE, LLP Attorney for Defendants

          OPINION & ORDER


         Pro Se Plaintiffs Gary C. Gosha and Kit M. Gosha bring this action against Defendants Bank of New York Mellon (“BONYM”), Bayview Loan Servicing LLC (“Bayview”), and Clear Recon Corp (“Clear Recon”) for breach of contract, unfair trade practices under Or. Rev. Stat. § (“ORS”) 646.608, violations of the Fair Debt Collection Practices Act (“FDCPA”), and violations of the Real Estate Settlement Procedures Act (“RESPA”). Plaintiffs also seek a declaratory judgment regarding: (1) the rights of the parties under the Oregon Trust Deed Act, ORS 86.705; and (2) Defendant BONYM's standing under the Note and Deed of Trust. Defendants now move to dismiss this action under Federal Rule of Civil Procedure 12(b)(6). The Court grants in part and denies in part Defendants' motion.


         Nearly fourteen years ago, Plaintiffs obtained an adjustable rate loan to refinance their home in Tualatin, Oregon. Gosha v. Bank of New York Mellon Corp., No. 3:16-CV-00073-BR, 2016 WL 7238927, at *1-2 (D. Or. Dec. 13, 2016), aff'd, 707 Fed.Appx. 484 (9th Cir. 2017). In September 2011, after their payments began to increase and Plaintiffs sought assistance from their loan servicer, Plaintiffs stopped making payments and defaulted on their loan. Id.; Compl. ¶ 29, ECF 1.

         In the years since, Defendants have attempted three times to nonjudicially foreclose on Plaintiffs' home. Plaintiffs filed their first action to stop the first nonjudicial foreclosure in this Court on January 15, 2016. Compl. ¶ 18; Compl., No. 3:16-CV-00073-BR, ECF 1. Ultimately, Judge Brown dismissed that suit under Fed.R.Civ.P. 12(b)(6). Compl. ¶ 18; Gosha, 2016 WL 7238927. Defendants then voluntarily rescinded the non-judicial foreclosure. Compl. ¶ 18. Defendants asserted that they rescinded the foreclosure due to the expiration of the period to postpone under the Oregon statute. Defs. Mot. Disburse 2-3, No. 3:16-CV-00073-BR, ECF 165.

         On June 14, 2018, Defendant Bayview-the loan servicer-invited Plaintiffs to once again participate in the Oregon Foreclosure Avoidance Program (“OFAP”). Compl. ¶ 25. During the OFAP, Defendant Bayview produced a copy of the Note. Compl. ¶ 31. Plaintiffs allege that the Note is not endorsed to any party or endorsed in blank, and the lender identified is America's Wholesale Lender (“AWL”). Compl. ¶¶ 32-34, Ex. C. In addition, Defendant Bayview provided a Note payment history and payoff quotes that included “additional charges, ” increasing the money demanded from the $320, 000 in the initial loan to $536, 600. Compl. ¶ 35, Ex. A. Plaintiffs, citing RESPA, subsequently sent Defendant Bayview a “Qualified Written Request” for information related to the additional charges and Defendant BONYM's status as the beneficiary of the Deed of Trust. Compl. ¶ 36, Ex. D. Defendant Bayview only responded to Plaintiffs' request for “beneficiary info, ” naming Defendant BONYM as the owner of the loan. Compl. ¶ 37, Ex. D.

         Plaintiffs suggest that Defendant Bayview engaged in “nefarious behavior” during the OFAP conference. Plaintiffs note that Defendant Bayview and the OFAP facilitator would not reset the conference so that Plaintiffs could be represented by counsel, “deliberately thwart[ing]” their ability to discuss foreclosure avoidance. Compl. ¶ 43. The OFAP conference “ended with an adverse result for” Plaintiffs because Defendant Bayview was provided with a certificate of compliance, which is required for them to pursue the non-judicial foreclosure under Oregon law. Id.

         On October 10, 2018, Defendant Clear Recon filed its second Notice of Default in Washington County, Oregon. Compl. ¶ 47, Ex. J. On October 29, 2018, Plaintiffs sent a dispute letter to Defendant Clear Recon demanding that the foreclosure be rescinded. Compl. ¶ 47. The next day, Defendant Clear Recon rescinded the second notice of default and acceleration of the debt. Compl. ¶ 48, Ex. K.

         On December 22, 2018, Plaintiffs were served with another Trustee's Notice of Sale. Compl. ¶ 49 Ex. A. The Notice indicates that the current beneficiary of the deed of trust is Defendant BONYM and the trustee is Defendant Clear Recon. Compl. Ex. A at 4-5. The Notice also reflects delinquent payments by Plaintiffs beginning in September of 2011, with a total required to reinstate of $247, 892.26. Id.

         In conjunction with their Complaint, Plaintiffs filed a Motion for a Temporary Restraining Order (“TRO”) to restrain Defendants from conducting a foreclosure sale of Plaintiffs' home, which was scheduled for April 23, 2019. Pls. Mot. TRO 2, ECF 2. The Court granted the Motion for a TRO on April 15, 2019, Order, ECF 18, and, after a hearing on the Motion for a Preliminary Injunction, the Court entered a preliminary injunction staying the foreclosure on June 5, 2019, Op. & Order, ECF 35. Defendants have since rescinded the third foreclosure. Pls. Req. Judicial Notice, ECF 41.


         A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) tests the sufficiency of the claims. Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). “All allegations of material fact are taken as true and construed in the light most favorable to the nonmoving party.” Am. Family Ass'n, Inc. v. City & Cnty. of S.F., 277 F.3d 1114, 1120 (9th Cir. 2002). To survive a motion to dismiss, a complaint “must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face[, ]” meaning “the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal quotation marks omitted). In other words, a complaint must contain “well-pleaded facts” that “permit the court to infer more than the mere possibility of misconduct[.]” Id. at 679.

         However, the court need not accept conclusory allegations as truthful. See Warren v. Fox Family Worldwide, Inc., 328 F.3d 1136, 1139 (9th Cir. 2003) (“[W]e are not required to accept as true conclusory allegations which are contradicted by documents referred to in the complaint, and we do not necessarily assume the truth of legal conclusions merely because they are cast in the form of factual allegations.”) (internal quotation marks, citation, and alterations omitted). A motion to dismiss under Rule 12(b)(6) will be granted if a plaintiff alleges the “grounds” of his “entitlement to relief” with nothing “more than labels and conclusions, and a formulaic recitation of the elements of a cause of action[.]” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). “Factual allegations must be enough to raise a right to relief above the speculative level on the assumption that all the allegations in the complaint are true (even if doubtful in fact)[.]” Id. (citations and footnote omitted).

         Courts must liberally construe pro se pleadings. Wolfe v. Strankman, 392 F.3d 358, 362 (9th Cir. 2004). Additionally, a court cannot dismiss a pro se complaint without first explaining to the plaintiff the deficiencies of the complaint and providing an opportunity to amend. Ferdik v. Bonzelet, 963 F.2d 1258, 1261 (9th Cir. 1992). Dismissal of a pro se complaint without leave to amend is proper only if it is clear that the deficiencies of the complaint could not be cured by amendment. Lucas v. Department of Corrections, 66 F.3d 245, 248 (9th Cir. 1995).


         Defendants move to dismiss Plaintiffs' claims under Rule 12(b)(6).[1] The Court addresses each claim and the parties' respective arguments below.

         I. Claims for ...

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