Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_11-cv-00455/USCOURTS-casd-3_11-cv-00455-1/pdf.json

Nature of Suit Code: 220
Nature of Suit: Foreclosure
Cause of Action: 28:1441 Petition for Removal

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

ANGELA MCLEAN,

Plaintiff,

CASE NO. 11cv0455-LAB (NLS)

ORDER DENYING MOTION FOR

REMAND; AND

ORDER GRANTING IN PART

MOTION TO DISMISS

vs.

AURORA LOAN SERVICING, et al.,

Defendants.

This action was removed from state court on March 4, 2011, on the basis of diversity

jurisdiction. At the time of removal, Plaintiff Angela Mclean was proceeding pro se, but since

that time she has obtained counsel and is now represented by them. The action concerns

a dispute with a loan servicer.

Motion to Remand

Immediately after removal, Ms. Mclean, then proceeding pro se, moved for remand.

Her theory is based on an understanding that federal question jurisdiction is lacking over

some of the claims. But this motion fails because Defendants removed on the basis of

diversity jurisdiction. The notice of removal alleges complete diversity among the parties, and

the requisite amount in controversy. The motion for remand (Docket no. 6) is therefore

DENIED.

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Motion to Dismiss

Defendants have moved to dismiss based on failure to state a claim, and failure to join

a necessary party. Ms. Mclean’s opposition, which was filed by her counsel, concedes that

her quiet title claim has not been adequately pleaded. It agrees she has not joined her coborrower (her husband, Mikel Mclean) as a party and says she could do so if needed, but

also argues the co-borrower is not a necessary party. Defendants argue Mr. Mclean is a

necessary party because his absence could subject them to multiple or inconsistent

obligations. See Fed. R. Civ. P. 19(a)(1)(B)(ii). For example, they point out that should Ms.

Mclean be unsuccessful in this action, Mr. Mclean could then sue on the same facts and

theories. For her part, Ms. Mclean simply argues Mr. Mclean probably would be bound by

the judgment. (Opp’n to Mot. to Dismiss, 13:18–19 (“[A]ny determinations on the merits

made by this Court would most likely preclude Mr. Mclean from asserting the same claims

brought in the instant action.”)) But the general rule is that absent parties are not bound by

judgments in personam in litigation to which they are not parties, even if the issues are the

same. See Puyallup Indian Tribe v. Port of Tacoma, 717 F.2d 1251, 1254 (9th Cir. 1983)

(explaining that trustee holding legal title would not be bound by judgment to which beneficial

owner was a party, unless trustee was formally joined as a party).

The Court therefore concludes Mr. Mclean is a necessary party, and because Ms.

Mclean concedes he can feasibly be joined, the complaint will be dismissed without

prejudice.

Although the complaint suggested Ms. Mclean was bringing a “produce the note”

action, her opposition to the motion to dismiss clarifies that she isn’t challenging her

obligation to make mortgage payments; rather, she is challenging whether Aurora Loan

Servicing (rather than some other lender or assignee) has the right to collect her mortgage

payments. In fact, the complaint does appear to be a “produce the note” action, seeking to

enjoin a foreclosure sale. See, e.g., Compl., ¶¶ 14 (“AURORA LOAN SERVICING has

consistently refused to produce the original Note and relevant assignments of the Deed of

Trust.”), 24 (“It is fundamental and basic that a party seeking to exercise a right (here, the

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power of sale) has the contractual right to do so at the time of its exercise.”) In general, such

“produce the note” cases fail because, under California law, the loan trustee on a promissory

note secured by a deed of trust need not have the original promissory note in its possession

in order to proceed with a nonjudicial foreclosure. See Sicairos v. NDEX West, LLC, 2009

WL 385855 at *2–3 (S.D.Cal. Feb. 13, 2009).

Aurora argues that Ms. Mclean’s claim for declaratory relief is improper because no

actual dispute exists between the parties, and that her claim for unfair business practices

fails because she has not alleged any unlawful, unfair, or fraudulent business practices. That

may be true with regard to the complaint as it now exists, but it does not follow that the

complaint cannot be amended to raise these claims. If, as Ms. Mclean believes, Aurora is

demanding and collecting mortgage payments even though it is not entitled to do so, that

would be an unfair business practice. Supposing that to be true, Aurora would have been

collecting money it had no right to, and leaving the Mcleans subject to later demands for

payment by the true assignee. It may be that this is the proper subject for declaratory relief,

although until the claim is properly pleaded, it is uncertain.

The motion to dismiss is GRANTED IN PART. The complaint is DISMISSED

WITHOUT PREJUDICE. No later than 21 calendar days from the date this order is issued,

Plaintiff may file an amended complaint joining Mr. Mclean as a party and including only

claims that meet the standard articulated in Bell Atlantic Corp. v. Twombly, 550 U.S. 544

(2007) and Ashcroft v. Iqbal, 556 U.S. 662 (2009). Because Ms. Mclean has represented that

she is currently making mortgage payments and is not in danger of foreclosure, she must not

include claims pertaining to either judicial or nonjudicial foreclosure, unless circumstances

have changed and she provides an explanation of this.

IT IS SO ORDERED.

DATED: 2/16/2012 ___________________________________

HONORABLE LARRY ALAN BURNS

United States District Judge 

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