Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_17-cv-04880/USCOURTS-cand-3_17-cv-04880-1/pdf.json

Nature of Suit Code: 290
Nature of Suit: Other Real Property Actions
Cause of Action: 28:1332 Diversity-Petition for Removal

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United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

BELLA T. PEREZ, et al.,

Plaintiffs,

v.

MORTGAGE ELECTRONIC 

REGISTRATION SYSTEMS, INC., et al.,

Defendants.

Case No. 3:17-cv-04880-JD 

SECOND ORDER RE DISMISSAL

Re: Dkt. No. 24

The parties’ familiarity with the record is assumed. The Court dismissed the original 

complaint because plaintiffs’ claims were predicated on the theory that they could challenge the 

assignment of their mortgage loan or deed of trust on a preemptive, pre-foreclosure basis, which 

California law does not allow. Dkt. No. 22. The first amended complaint has not added any new 

or different operative facts. Dkt. No. 23. Plaintiffs do not allege that any foreclosure proceedings 

have been either threatened or actually initiated against them. See id. ¶ 30. They do not allege 

that they have received a notice of default, a notice of trustee’s sale, or any other notice alleging a 

dispute or any problem with their loan or ownership interests. To the contrary, the amended 

complaint indicates that plaintiffs are making their mortgage payments in a regular and timely 

fashion and that the parties have no disagreements about that, a fact that counsel for both sides 

confirmed at the hearing on defendants’ motion to dismiss the amended complaint. Dkt. No. 29. 

Because the facts alleged in the amended complaint are the same as in the original one, it 

fails to state a plausible claim for the same reasons discussed in the prior dismissal order. If 

anything, plaintiffs’ claims are even more doubtful since the prior proceedings. The California 

Supreme Court granted review but ultimately declined to issue a substantive decision in Keshtgar 

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United States District Court

Northern District of California

v. U.S. Bank, N.A., 226 Cal. App. 4th 1201 (Cal. Ct. App. 2014), and did not disturb the cases 

cited by the Court for the conclusion that preemptive foreclosure lawsuits such as this one are not 

viable. See Dkt. No. 22 at 2-3 (and cases cited therein). Recent decisions have embraced the same 

conclusion as the Court, for essentially the same reasons. See, e.g., Wasjutin v. Bank of America, 

N.A., 732 Fed. App’x 513, 516-17 (9th Cir. 2018) (citing Saterbak and other cases discussed in 

Dkt. No. 22 to state that “California does not allow preemptive challenges to the authority to 

foreclose”); Osburn v. Ocwen Loan Servicing LLC, Case No. 1:18-cv-00310-LJO-SAB, 2018 WL 

3093494 at *4-6 (E.D. Cal. June 22, 2018) (same). Plaintiffs’ reliance on Lundy v. Selene Fin. LP, 

Case No. 15-cv-05676-JST, 2016 WL 1059423 (N.D. Cal. Mar. 17, 2016), is misplaced. Lundy

was issued a few years ago when Keshtgar was still pending in the California Supreme Court and 

before the recent decisions were published. In effect, it has been overtaken by subsequent 

developments. See Osburn, 2018 WL 3093494 at *5. 

Plaintiffs’ suggestion that they nevertheless might have an action for declaratory relief is 

also unavailing. As an initial matter, they mention only the California Code of Civil Procedure 

and not the pertinent federal provisions in Federal Rule of Civil Procedure 57 and the Declaratory 

Judgment Act, 28 U.S.C. § 2201(a). In any event, nothing in the amended complaint plausibly 

states an actual controversy between the parties, and plaintiffs have not otherwise shown that they 

have raised an issue amenable to declaratory judgment. See Shell Gulf of Mexico, Inc. v. Center 

for Biological Diversity, Inc., 771 F.3d 632, 635 (9th Cir. 2014). The absence of an actual dispute 

could be extended to argue that there is no case or controversy between the parties to adjudicate

under Article III, but defendants did not raise that point and the Court will not address it in the 

present circumstances of this case.

The final question is whether plaintiffs should be allowed another opportunity to amend. 

The amended complaint adduced no new facts, and counsel for plaintiffs stated at the hearing that 

no additional facts could be added. Dkt. No. 29. In light of that, and because plaintiffs have 

already been permitted an opportunity to amend, the case is dismissed with prejudice. Allen v. 

City of Beverly Hills, 911 F.2d 367, 373 (9th Cir. 1990) (“The district court's discretion to deny 

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United States District Court

Northern District of California

leave to amend is particularly broad where plaintiff has previously amended the complaint.”). 

IT IS SO ORDERED.

Dated: October 26, 2018

JAMES DONATO

United States District Judge

Case 3:17-cv-04880-JD Document 30 Filed 10/26/18 Page 3 of 3