Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_13-cv-02523/USCOURTS-casd-3_13-cv-02523-0/pdf.json

Nature of Suit Code: 290
Nature of Suit: Other Real Property Actions
Cause of Action: 28:1331 Fed. Question

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

JACQUELINE RIEBER, et al., 

Plaintiffs,

Case No. 13-CV-2523-W(JLB)

ORDER GRANTING

DEFENDANTS’ MOTION TO

DISMISS WITH LEAVE TO

AMEND [DOC. 5]

v.

ONEWEST BANK FSB, et al., 

Defendants.

Pending before the Court is a motion to dismiss filed by the following defendants:

OneWest Bank, F.S.B.; Deutsche Bank National Trust Company; OWB REO, LLC;

and Mortgage Electronic Registration Systems, Inc. (collectively, “Defendants”).

Plaintiffs Jacqueline and Richard Rieber oppose.

The Court decides the matter on the papers submitted and without oral

argument. See Civ. L.R. 7.1(d.1). For the following reasons, the Court GRANTS

Defendants’ motion to dismiss the FDCPA claim WITH LEAVE TO AMEND

[Doc. 5].

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I. BACKGROUND

On November 8, 2007, Plaintiffs Jacqueline and Richard Rieber took out a

mortgage loan, secured by a deed of trust, in the amount of $538,000 from IndyMac

Bank, F.S.B. (Compl. [Doc. 1], ¶ 10, Ex. A [Doc. 1-1] at p. 2.) The Deed of Trust

identifies Commonwealth Land Title Insurance Company as the trustee, and Mortgage

Electronic Registration Systems (“MERS”) as the beneficiary. (Compl., Ex. A at p.1.)

According to the Complaint, “[o]n or before December 27, 2007, Plaintiffs’

mortgage loan was sold” to a mortgage-backed securities trust for which Deutsche Bank

National Trust Company serves as trustee. (Compl. ¶ 12.) Plaintiffs contend, however,

that this securitization was “botched” (id. at 2:26-28) because the sale was “made

without the required intervening assignment of Plaintiffs’ Deed of Trust and

endorsement of the Note” (id., ¶ 17). 

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On March 19, 2009,the Federal Deposit Insurance Corporation (“FDIC”) sold

IndyMac Bank F.S.B. to OneWest Bank F.S.B. (Compl., ¶ 19.) Despite Plaintiffs’

contention that the earlier 2007 sale to the trust was botched and thus void (see id., ¶

18), Plaintiffs allege that their loan was not among the IndyMac assets OneWest

acquired as part of the FDIC sale because the loan was sold in December 2007 to the

mortgage-backed securities trust. (Id. ¶ 19.) 

The Complaint next asserts that on March 16, 2012, MERS, as nominee for

IndyMac Bank F.S.B. assigned Plaintiffs’ deed of trust to OneWest. (Compl., ¶ 20.) 

This assignment was recorded on March 22, 2012. (Id.) Also on March 22, 2012,

OneWest executed a substitution of trustee, which substituted Meridian Foreclosure

Service for Commonwealth Land Title Insurance Company as Trustee of Plaintiffs’ deed

of trust. (Id., ¶ 21.) This substitution was recorded on April 4, 2012. (Id.) Plaintiffs

allege that this substitution was “fraudulent and void because [OneWest] was an

 Plaintiffs repeat and clarify this argument in their opposition brief. (Opp’n [Doc. 6], 1

5:18-6:22 (“However, the securitization, in fact, failed.”).) 

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invalid beneficiary withoutthe powerto [s]ubstitute the trustee[,]” presumably because

of the December 2007 sale that Plaintiffs previously alleged was void. (Id. (citing Cal.

Civ. Code § [2934a (a)(1)]).) 

On March 30, 2012, Meridian issued a notice of default and election to sell under

deed of trust. (Compl., ¶ 22.) The notice was recorded on April 4, 2012. (Id.) 

Meridian later sold Plaintiffs’ property to OWB REB LLC. (Id. ¶ 24.) Plaintiffs–now

relying on the validity of the December 2007 sale–allege that because Deutsche Bank

National Trust Company held the beneficial interest in Plaintiffs’ loan, OneWest was

not a valid beneficiary, Meridian was not an authorized agent of a valid beneficiary, and

therefore the Notice of Default was void. (Id.) 

On October 21, 2013, Plaintiffs filed this action in United States District Court,

Southern District of California. They allege a violation of the FDCPA, as well as six

pendent state-law claims. Plaintiffs’ FDCPA claim is the only stated basis for this

Court’s subject-matter jurisdiction. (Compl., ¶ 7.) 

On November 21, 2013, Defendants moved to dismiss for failure to state a claim. 

Plaintiffs oppose.

II. LEGAL STANDARD

The court must dismiss a cause of action for failure to state a claim upon which

relief can be granted. Fed. R. Civ. P. 12(b)(6). A motion to dismiss under Rule

12(b)(6) tests the legal sufficiency of the complaint. Navarro v. Block, 250 F.3d 729,

732 (9th Cir. 2001). The court must accept all allegations of material fact as true and

construe them in light most favorable to the nonmoving party. Cedars-Sanai Med. Ctr.

v. Nat’l League of Postmasters of U.S., 497 F.3d 972, 975 (9th Cir. 2007). Material

allegations, even if doubtful in fact, are assumed to be true. Bell Atl. Corp. v. Twombly,

550 U.S. 544, 555 (2007). However, the court need not “necessarily assume the truth

of legal conclusions merely because they are cast in the form of factual allegations.” 

Warren v. Fox Family Worldwide, Inc., 328 F.3d 1136, 1139 (9th Cir. 2003) (internal

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quotation marks omitted). In fact, the court does not need to accept any legal

conclusions as true. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). 

“While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need

detailed factual allegations, a plaintiff’s obligation to provide the ‘grounds’ of his

‘entitlement to relief’ requires more than labels and conclusions, and a formulaic

recitation of the elements of a cause of action will not do.” Twombly, 550 U.S. at 555

(internal citations omitted). Instead, the allegations in the complaint “must be enough

to raise a right to relief above the speculative level.” Id. Thus, “[t]o survive a motion

to dismiss, a complaint must contain sufficientfactual matter, accepted as true, to ‘state

a claim to relief that is plausible on its face.’” Iqbal, 556 U.S. at 678 (citing Twombly,

550 U.S. at 570). “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.” Id. “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.” Id. A complaint may be dismissed as a matter of law either for

lack of a cognizable legal theory or for insufficient facts under a cognizable theory. 

Robertson v. Dean Witter Reynolds, Inc., 749 F.2d 530, 534 (9th Cir. 1984).

III. DISCUSSION

Plaintiffs allege that OneWest and Meridian violated the FDCPA by collecting

mortgage payments to which they were not entitled. Plaintiffs’ theory appears to be

premised on the 2007 sale of their mortgage to the securities trust. (Compl., ¶ 12.) As

a result of that sale, Plaintiffs contend that Deutsche Bank National Trust Company,

as trustee of the trust, owns the beneficial interest on their loan, and therefore

OneWest and Meridian did not have the authority to collect payments or foreclose on

Plaintiffs’ property. (Id. ¶¶ 21–25.) 

However, the Complaint also alleges that the securitization of their loan was

“botched.” (Compl., 2:28.) Plaintiffs contend that the 2007 transaction was “made

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without the required intervening assignment of Plaintiffs’ Deed of Trust and

endorsement of the Note” and, therefore, was not a “‘true sale[]’ within the meaning

of the Tax Code and Pooling and Servicing Agreement.” (Id. ¶¶ 16-17.) The

Complaint then quotes a section of the law they allege governs the mortgage-backed

securities trust in question that provides, “[i]f the trust is expressed in an instrument

creating the estate of the trustee, every sale, conveyance or other act of the trustee in

contravention of the trust... is void.” (Id. ¶ 18 (quoting N.Y. Est. Powers & Trusts Law

§ 7-2.4.).) 

Plaintiffs’ opposition confirms their contention that the 2007 transaction was

void. There, Plaintiffs state that “the securitization, in fact, failed.” (Opp’n [Doc. 6]

5:18; 6:2 (“the 2007 securitization failed.”).) The next paragraph of their opposition

then again makes clear that Plaintiffs allege the securitization was void. (Id. 6:3-5

(“only one California court has considered the standing of the trustee of an MBS Trust

to enforce the terms of mortgage executed in California where violations of New York

trust law render[] the securitization of a particular loan void.”).) 

Accepting as true Plaintiffs’ allegation that the 2007 securitization of their loan

failed and was void, the only reasonable inference is that Deutsche Bank NationalTrust

Company, as trustee of the mortgage-backed securities trust, did not acquire the

beneficial interest in Plaintiffs’ loan. Instead, IndyMack Bank F.S.B. retained that

interest, which was therefore among the assets the FDIC sold to OneWest on March

19, 2009. (Compl., ¶ 19.) Accordingly, OneWest and Meridian did not lack authority

to collect mortgage payments, to issue the notice of default orforeclose on the Property.

Although true that Plaintiffs are entitled to plead mutually exclusive alternative

theories of their case, PAE Gov’t Servs., Inc. v. MPRI, Inc., 514 F.3d 856, 859 (9th Cir.

2007), they have not done so here. Instead, Plaintiffs’ Complaint pleads contradictory

facts that fail to provide fair notice to Defendants regarding the basis of the FDCPA

claim. The inconsistency of Plaintiffs’ allegations thatthe securitization is void and that

the same securitization is valid and divests OneWest and Meridian of authority to

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collect mortgage payments, keeps Plaintiffs’ FDCPA claim from meeting Rule 8's

requirement of “a short and plain statement of the claim showing that the pleader is

entitled to relief” rising above a speculative level. Fed. R. Civ. P. 8(a)(2); Twombly,

550 U.S. at 555. Accordingly, the Court finds Plaintiffs have failed to state an FDCPA

claim.2

IV. CONCLUSION & ORDER

In light of the foregoing, the Court GRANTS Defendants’ motion to dismiss and

DISMISSES WITH LEAVE TO AMEND Plaintiffs’ Complaint. Any amended

complaint must be filed on or before May 20, 2014. 

IT IS SO ORDERED.

DATED: May 6, 2014

Hon. Thomas J. Whelan

United States District Judge

Because there is no other basis for subject-matter jurisdiction, the Court declines to

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decide the remaining state-law claims. To the extent Plaintiffs plead a valid FDCPA claim in

an amended complaint, Defendants may reassert their challenge the state-based claims.

However, Defendants should refrain from using what appears to be a boilerplate motion

to respond to the amended complaint. In general, Defendants’ motion to dismiss the

Complaint did little more than set forth the applicable law, while providing little or no analysis

regarding how the law relates to the allegations in the Complaint. For example, Defendants’

three-sentence FDCPA argument failed to explain how, based on the Complaint’s factual

allegations, One West was not a “debt collector.” Defendants’ fraud argument set forth general

legalstandards related to pleading a fraud claim, and then simply concludes with the statement

that Plaintiffs “have not identified who was authorized to speak on behalf of each defendant

or to whom the information was communicated.” (P&A [Doc. 5-1], 5:7–9.) Plaintiffs’ fraud

claim, however, does not even appear to be based on verbal communications. (See Compl., ¶¶

45–48.) In short, Defendants’ motion must do more than simply raise legal issues.

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