Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_18-cv-02551/USCOURTS-casd-3_18-cv-02551-3/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 12:2605 RESPA: Servicing of Mortgage Loans

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

Gentleman Marshall as AGENT obo His 

Granted Federal Franchise MARSHALL 

PFEIFFER Known as #222703407-

g38455581,

Plaintiff,

v.

GENERAL MOTORS/ CORPORATION

SERVICE COMPANY; ALLY

FINANCIAL INC/ CORPORATION

SERVICE COMPANY; FEDERAL

HOME LOAN MORTGAGE

CORPORATION/AGENT; THE BANK

OF NEW YORK MELLON

CORPORATION/AGENT; NEWREZ 

LLC F/K/A NEW PENN FINANCIAL, 

LLC, D/B/A/SHELLPOINT

MORTGAGE SERVICING LLC;

QUALITY LOAN SERVICE

CORPORATION,

Defendants.

Case No.: 18-CV-2551-GPC-JLB

ORDER GRANTING MOTIONS TO 

DISMISS [ECF Nos. 73, 74, 75, 87].

This litigation arises out of a loan obtained by pro se Plaintiff Marshall Pfeiffer

(“Plaintiff”), secured by a Deed of Trust on his property, located in El Cajon, California. 

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At issue is Plaintiff’s Second Amended Complaint (“SAC”), which alleges that entities 

associated with servicing, owning, and selling his mortgage loan have improperly and 

fraudulently moved to foreclose against him. (ECF No. 71.)

Various defendants in this case (“Defendants”) have filed four motions to dismiss 

in response. On May 15, 2019, Magnum Property Investments, LLC, (“Magnum”) filed 

a motion to dismiss. (ECF No. 73.) On May 17, 2019, Federal Home Loan Mortgage 

Corporation, NewRez LLC, New Residential Investment Corp., the Bank of New York 

Mellon Corporation filed a motion to dismiss. (ECF No. 74.) On May 20, 2019, Quality 

Loan Service Corporation (“Quality Loan”) filed its motion to dismiss. (ECF No. 75.) 

On June 10, 2019, Ally Bank (erroneously sued as GMAC Bank/Ally Bank) filed a 

motion to dismiss. (ECF No. 87.) Plaintiff filed a combined response to these motions

(ECF No. 81), and additionally filed a separate response to Ally Bank’s motion (ECF No. 

93).

Pursuant to Civil Local Rule 7.1(d)(1), the Court finds the foregoing motions

suitable for adjudication without oral argument. For the reasons explained below, 

Defendants’ motions to dismiss will be granted without leave to amend. 

I. Background

A. Factual History 

On January 8, 2008, Plaintiff obtained a $475,000.00 Promissory Note (the 

“Note”) from Homecomings Financial, LLC, secured by a Deed of Trust in Plaintiff’s 

property at 4382-4384 Mississippi Street, El Cajon, California 92104. (ECF No. 87-3, at 

5.)

1 The Deed of Trust was recorded on January 11, 2008 and listed Chicago Title as 

 

1 Pursuant to Federal Rule of Evidence 201, Defendants have moved the Court to take judicial 

notice of various documents related to Plaintiff’s claims. The documents include the Deed of Trust 

executed by Plaintiff, several assignments of the Deed of Trust, two Substitution of Trustees under the 

Deed of Trust, a Notice of Default, and an Election to Sell Under Deed of Trust. All of these documents 

have been recorded in the Official Records of the San Diego County Recorder’s Office. Plaintiff has 

also proffered documents, like the Notice of Trustee’s sale, evidencing the initiation of foreclosure 

proceedings by Quality Loan. 

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Trustee and identified Mortgage Electronic Registration Systems, Inc. (“MERS”) as the 

nominee beneficiary for the lender and lender’s successors and assigns. (Id.)

After origination, the Deed of Trust was assigned five times, and the following 

assignments are reflected in the official records of the San Diego County Recorder’s 

Office: (1) on March 8, 2011, MERS assigned the DOT to GMAC Mortgage, LLC (ECF 

No. 87-4); (2) on July 17, 2013, GMAC Mortgage, LLC assigned the DOT to Ocwen 

Loan Servicing (ECF No. 87-5); (3) on September 14, 2015, Ocwen assigned the DOT to 

Residential Credit Solutions Inc. (ECF No. 87-6); (4) on October 10, 2016, Residential 

Credit Solutions Inc. assigned the DOT to Ditech Financial LLC (ECF No. 87-7); (5) on 

November 13, 2017, Ditech Financial LLC assigned the DOT to NewRez (ECF No. 87-

8). During this period, the identity of the Trustee also changed several times. On April 

26, 2011, GMAC Mortgage, LLC substituted CAL-Western Reconveyance Corporation 

as Trustee. (ECF No. 74-5, at 2.) On February 2, 2016, the Law Offices of Les Zieve 

was substituted in as Trustee. (ECF No. 75-3, at 29.) Thereafter, on June 28, 2018, 

NewRez substituted in Quality Loan. (ECF No. 75-3, at 35.)

At some point in 2012, Plaintiff stopped paying his monthly payments under the 

Loan. (ECF No. 71-1, at 39 (referring to default in April 2012); ECF No. 71-2, at 18

(referring to default in August 2012).) Plaintiff’s default persisted for approximately six 

years, until June 28, 2018, when Quality Loan, acting as Trustee for NewRez, recorded a 

Notice of Default and Election to Sell Under Deed of Trust. (ECF No. 75-3, at 38.) 

 

The Court will grant the requests for judicial notice. Courts routinely take judicial notice of 

deeds of trust, notice of trustee’s sales, substitutions of trustee, and other foreclosure-related documents. 

See Fimbres v. Chapel Mort. Corp., No. 09-CV-0886-IEG (POR), 2009 WL 4163332, at *3 (S.D. Cal. 

Nov. 20, 2009) (taking judicial notice of trust, notice of default, notice of trustee’s sale, assignment of 

deed of trust, and substitution of trustee); see also Gerard v. Wells Fargo Bank, N.A., No. 

CV1403935MMMSHX, 2014 WL 12599606, at *2 (C. D. Cal. Sept. 11, 2014) (taking judicial notice of 

grant deeds, a deed of trust, notice of trustee’s sale). The Court’s acknowledgment of these documents 

does not change the nature of the present proceedings, as courts are permitted to “consider certain 

materials—documents attached to the complaint, documents incorporate by reference in the complaint, 

or matters of judicial notice—without converting the motion to dismiss into a motion for summary 

judgment.” United States v. Ritchie, 342 F.3d 903, 907–08 (9th Cir. 2003). 

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Thereafter, on October 8, 2018, Quality Loan recorded a Notice of Trustee’s Sale 

indicating that Plaintiff had been in arrears in the amount of $257,460.73. (ECF No. 75-

3, 43.) The foreclosure sale took place on November 9, 2018, when Plaintiff’s property 

was sold at auction to Magnum. 

B. Procedural Background

On November 7, 2018 Plaintiff filed his original complaint (ECF No. 1), and on 

December 5, 2018, Plaintiff filed a motion to amend the complaint to add additional 

defendants. (ECF No. 28.) On December 6, 2018, the Court denied the motion to amend 

as moot because Plaintiff could amend as of right under Federal Rule of Civil Procedure 

15(a)(1)(A). (ECF No. 29.) In that motion, the Court specifically advised Plaintiff of his 

responsibility under Rule 8 to submit pleadings which were “simple, concise, and direct.” 

(Id. at 4.) It further reminded Plaintiff that failure to comply with the Federal Rules, or 

any order of the Court may result in a dismissal of the action with prejudice. (Id. at 5.)

On December 17, 2018, Plaintiff filed a First Amended Complaint (“FAC”). (ECF 

No. 29.) The FAC alleged, inter alia, that Defendants were engaged in a wrongful 

foreclosure on his property because there was a fraudulent chain of assignments of the 

DOT which demonstrated that NewRez was not the true beneficiary. Plaintiff also 

alleged that the Note had become separated from the Deed of Trust, and objected that any 

entity which sought to foreclose must show that it had physical possession of the note. 

Plaintiff further argued that Defendants improperly responded to his inquiries to ascertain 

the true noteholder. 

On March 11, 2019, after considering the Defendants’ motions to dismiss, the 

Court entered an order dismissing the FAC on three independent grounds. (ECF No. 65.) 

First, the Court agreed with Defendants that the FAC was so scattershot, inscrutable, and 

prolix that it ran afoul of Rule 8 with respect to many of the defendants. Second, the 

Court held that Plaintiff lacked standing to challenge the foreclosure sale because none of 

Plaintiff’s assertions of impropriety—i.e., the separation of the Note from the Deed of 

Trust, the fact that some notes were endorsed in blank, and that some defendants did not 

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satisfactorily respond to his inquiries—would render the assignments void, rather than 

voidable. Finally, because the Court found that Plaintiff lacked standing to challenge the 

foreclosure sale, the Court found that Plaintiff’s failure to tender the full amount of his 

outstanding debt precluded him from claiming wrongful foreclosure. In dismissing the 

FAC, the Court granted Plaintiff leave to file a second amended complaint, but cautioned 

Plaintiff that any such filing must address the deficiencies outlined in the dismissal order

or risk dismissal. (Id. at 16.) 

Plaintiff timely filed his SAC on May 30, 20192(ECF No. 71); an apparently 

accompanying set of exhibits to the SAC—submitted under the title of “Amended Brief 

Appendix”—was uploaded to the docket on April 12, 2019 (ECF No. 67). The 

allegations in the SAC mirror the ones previously dismissed under the FAC, with two 

notable differences. First, in an ostensible effort to comply with Rule 8, Plaintiff 

included a section, titled “specific claims against each defendant,” in which he groups his 

pleadings according to defendants. (ECF No. 71, at 10–28.) Second, Plaintiff clarified 

that his challenge to the foreclosure sale rested, in part, on a claim that NewRez had no 

beneficial interest in the Note because NewRez’s beneficial interest stemmed, if at all, 

from a void assignment of the DOT from Homecomings Financial, LLC, the original 

lender, to GMAC Mortgage, LLC, back in 2011. 

Defendants submitted motions to dismiss, arguing once more that Plaintiff’s 

pleadings violate Rule 8, and that the SAC fails to overcome any of the deficiencies 

identified previously identified by the Court with respect to his failure to state a claim 

under Rule 12(b)(6). 

II. Applicable Legal Standards

A. Rule 8

 

2 The Court’s March 11, 2019 dismissal order set a 30 day deadline for the filing of any SAC. The 

Court was made aware through the Clerk’s Office that Plaintiff caused his SAC to be received on April 

9, 2019. However, due to a docketing error, Plaintiff’s SAC was not located and uploaded on that date. 

Plaintiff then filed his SAC anew, which was then uploaded to the docket on May 30, 2019. The Court 

finds good cause to find Plaintiff’s SAC timely. 

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As the Court previously detailed in its December 6, 2018 Order, which granted 

Plaintiff leave to file a first amended complaint, (ECF No. 29), Plaintiff is beholden to the 

dictates of Rule 8. Rule 8(a)(2) requires that pleadings that state a claim for relief must 

contain “a short and plain statement of the claim showing that the pleader is entitled to 

relief.” Fed. R. Civ. P. 8(a)(2). Furthermore, “[e]ach allegation must be simple, concise, 

and direct.” Fed. R. Civ. P. 8(d)(1). 

Complaints that are too confusing and prolix to “perform the essential functions of 

a complaint” are subject to dismissal under Rule 8. See, e.g., McHenry v. Renne, 84 F.3d 

1172, 1177–80 (9th Cir. 1996) (upholding a Rule 8(a) dismissal of a complaint that was 

“argumentative, prolix, replete with redundancy, and largely irrelevant”); Hatch v. 

Reliance Ins. Co., 758 F.2d 409, 415 (9th Cir. 1985) (upholding a Rule 8(a) dismissal of a 

complaint that was confusing and conclusory). Although the pleadings of pro se plaintiffs 

are liberally construed, the basic pleading requirements of Rule 8 apply to self-represented 

and counseled plaintiffs alike. Ghazali v. Moran, 46 F.3d 52, 54 (9th Cir. 1995); Wynder 

v. McMahon, 360 F.3d 73, 79 n. 11 (2d Cir. 2004).

B. Rule 12(b)(6)

A Rule 12(b)(6) motion attacks the complaint as not containing sufficient factual 

allegations to state a claim for relief. “To survive a motion to dismiss [under Rule 

12(b)(6)], a complaint must contain sufficient factual matter, accepted as true, to ‘state a 

claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009) 

(quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). In this respect, 

“[d]ismissal under Rule 12(b)(6) is appropriate only where the complaint lacks a 

cognizable legal theory or sufficient facts to support a cognizable legal theory.” 

Mendiondo v. Centinela Hosp Med. Ctr., 521 F.3d 1097, 1104 (9th Cir. 2008). While 

“detailed factual allegations” are unnecessary, the complaint must allege more than 

“[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory 

statements.” Iqbal, 556 U.S. at 678. “In sum, for a complaint to survive a motion to 

dismiss, the non-conclusory ‘factual content,’ and reasonable inferences from that content, 

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must be plausibly suggestive of a claim entitling the plaintiff to relief.” Moss v. U.S. Secret 

Serv., 572 F.3d 962, 969 (9th Cir. 2009). 

“Generally, a court may not consider material beyond the complaint in ruling on a 

Fed. R. Civ. P. 12(b)(6) motion.” Intri-Plex Techs., Inc. v. Crest Grp., Inc., 499 F.3d 1048, 

1052 (9th Cir. 2007). However, “[a] court may take judicial notice of ‘matters of public 

record’ without converting a motion to dismiss into a motion for summary judgment,” as 

long as the facts noticed are not “subject to reasonable dispute.” Lee v. City of Los Angeles, 

250 F.3d 668, 689 (9th Cir. 2001) (citation omitted); see also United States v. Ritchie, 342 

F.3d 903, 908–09 (9th Cir. 2003). 

III. Plaintiff’s Pleadings Comply with Rule 8 

The Court previously dismissed Plaintiff’s FAC on the grounds that his filing was 

so unclear, disjointed, and confusing, that it defied Rule 8’s demand for a “short and plain 

statement of the claim.” (ECF No. 71, at 8.) The Court also found that Plaintiff failed to 

distinguish between the defendants sued, made cursory allegations, and attempted to raise 

broad, wholesale claims of fraud against Defendants en masse. (Id. at 7–9.)

Plaintiff’s SAC still gives the Court some pause at the Rule 8 threshold. At 118 

pages (44 for the actual FAC, and 74 pages in accompanying exhibits), the allegations 

therein are still imprecise, repetitive, and disjointed. 

However, Defendant took to heart the Court’s admonition that pleadings must 

attempt to connect the alleged wrongful acts to the specific wrongdoer, so that each 

defendant is provided fair notice as to what they are to defend. To wit, Plaintiff has 

segregated out each individual Defendant and engaged in a targeted discussion of their 

alleged wrongful acts. (ECF No. 71, at 10–28.) Although those specified allegations are 

themselves somewhat meandering, they are sufficiently precise so as to give each 

defendant a fair picture of the claims against them. Indeed, despite Defendants’ 

assertions under Rule 8, they have for the most part identified Plaintiff’s primary 

contention—that of wrongful foreclosure—and articulated arguments against that claim 

on the merits. The Court will not grant dismissal pursuant to Rule 8. 

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IV. Rule 12(b)(6)

A. Wrongful Foreclosure under California Law

Under California law, wrongful foreclosure is a common law tort, taking the form 

of either “an equitable action to set aside a foreclosure sale, or an action for damages 

resulting for the sale, on the basis that the foreclosure was improper.” Sciarratta v. U.S. 

Bank National Assn., 247 Cal. App. 4th 552, 561–562 (2016). An action for wrongful 

foreclosure rests on three elements: “(1) [T]he trustee or mortgagee caused an illegal, 

fraudulent, or willfully oppressive sale of real property pursuant to a power of sale in a 

mortgage or deed of trust; (2) the party attacking the sale (usually but not always the 

trustor or mortgagor) was prejudiced or harmed; and (3) in cases where the trustor or 

mortgagor challenges the sale, the trustor or mortgagor tendered the amount of the 

secured indebtedness or was excused from tendering.” Sciarratta v. U.S. Bank National 

Assn., 247 Cal. App. 4th 552, 561–562 (2016) (internal quotation marks and citations 

omitted). 

Debtors like Plaintiff face an additional hurdle—that of standing. As a third party 

to any assignments of the mortgage, the general presumption is that a debtor lacks 

standing to assert wrongful foreclosure. See, e.g., Yhundai v. IMPAC Funding Corp., 1

Cal. App. 5th 1252 (2016) (holding that borrower could not challenge foreclosure on the 

assignment of the deed of trust to the foreclosing party bore defects rendering it voidable 

because any such claim belonged to the parties to the assignment); see also 7 Cal. Jur. 3d 

(2012) Assignments § 43 (“Where an assignment is merely voidable at the election of the 

assignor, third parties, and particularly the obligor, cannot avoid the obligation or 

successfully challenge the validity or effectiveness of the transfer.” (emphasis added)). 

However, in Yvanova v. New Cent. Mortgage Corp., 62 Cal. 4th 919, 923 (2016), 

the California Supreme Court clarified that a third-party debtor may nonetheless have 

standing if she alleges that an assignment is void, as opposed to merely voidable. In so 

holding, the court distinguished between void and merely voidable assignments. A 

challenge to a void assignment, the court reasoned, does not involve the debtor’s 

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assertion of the rights of parties to the assignment, but rather rests upon the debtor’s 

“assert[ion of] her own interest in limiting foreclosure on her property to those with legal 

authority to order a foreclosure sale.” Id. at 937. Instead, debtor’s standing is predicated 

upon the loss of ownership of her home due to an allegedly illegal trustee’s sale that, but 

for the purported beneficiary’s actions in ordering the sale based upon the allegedly void 

assignment, would not have occurred. Id.

The burden of alleging a void sale rests with the debtor. Saterbak v. JP Morgan 

Chase Bank, N.A., 245 Cal. App. 4th 808, 814 (2016). “A sale is not rendered void 

merely because of minor or technical defects.” Ram v. OneWest Bank, FSB, 234 Cal. 

App. 4th 1, 11 (2015). However, “a sale is rendered void . . . when the defects are 

substantial,” such as when “the foreclosure sale is conducted by an entity that lacks 

authority to do so.” Id. (citing Dimock v. Emerald Properties, 81 Cal. App. 4th 868, 878 

(2000)). 

B. Plaintiff Lacks Standing to Plead Wrongful Foreclosure

Plaintiff articulates three reasons for why the assignments—cumulating in NewRez 

as the purported beneficiary—should be deemed void. First, Plaintiff argues that there 

has been a separation of the Note and the Deed of Trust. Second, Plaintiff argues that 

Defendants committed fraud by misleading him and refusing to disclose the legitimate 

Note holder when Plaintiff demanded they verify the true Noteholder. Third, Plaintiff 

contends that significant irregularities in the transfer of the Deed of Trust made the 

transfers and assignments of the Note ineffectual. 

Defendants retort that Plaintiff’s arguments for standing are merely duplicative of 

the contentions in his FAC. Thus, they must be rejected because Plaintiff has not alleged 

anything which would render the assignments void, as opposed to voidable. 

After reviewing the applicable law, and the parties’ briefing, the Court concludes 

that Plaintiff once again has failed to allege that he has standing to sue. Plaintiff’s 

arguments are nearly identical to arguments previously raised in his FAC, and are 

unavailing for reasons discussed in the Court’s March 11, 2019 order. The Court 

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addresses Plaintiff’s theories in turn. 

1. Separation of the Note from the Deed of Trust

Plaintiff’s first argument for the invalidity of Defendants’ assignments rests on his 

assertion that the Note and Deed of Trust are inseparable, and that Defendants must 

produce the actual Note in order to foreclose. For this proposition, Plaintiff leans on the 

common law rule recited by the Ninth Circuit in In re Veal, 450 B.R. 897, 916 (9th Cir. 

2011) (“The note and mortgage are inseparable; the former as essential, the latter as an 

incident. An assignment of the note carries the mortgage with it, while an assignment of 

the latter alone is a nullity.” (quoting Carpenter v. Longan, 83 U.S. 271, 274–75 (1875)). 

Courts have repeatedly rejected the contentions advanced by Plaintiff. As stated 

by the Court of Appeals in Debrunner, California’s comprehensive non-judicial 

foreclosure statute, Cal. Civ. Code § 2924, “does not require a beneficial interest in both 

the Note and the Deed of Trust to commence a non-judicial foreclosure sale,” and 

accordingly, the separation of the note and deed of trust does not prevent a party from 

concluding a non-judicial foreclosure sale. Debrunner v. Deutsche Bank Nat’l Trust Co., 

204 Cal. App. 4th 433, 441 (2012) (quoting Lane v. Vitek Real Estate Indus. Grp., 713 F. 

Supp. 2d 1092, 1098 (E.D. Cal. 2010)). Nor is there a rule prohibiting the separation of 

the Note from the Deed of Trust. On the contrary, both California courts and federal 

courts interpreting California law have concluded that nothing “precludes foreclosure 

when the foreclosing party does not possess the original promissory note.” Id. at 440.

Because a “party need not possess [the] promissory note to foreclose,” there is no 

reason to credit Plaintiff’s assertion that the assignments are void for want of the Note. 

Robertson v. Citibank, NA, 713 F. App’x. 612, 613 (9th Cir. 2018) (unpublished) (citing 

Debrunner, 204 Cal. App. 4th at 440). Nor is there any legal basis for Plaintiff’s 

contention that the alleged separation of the Note and the Deed of Trust poses a bar to 

foreclosure on the subject property. 

2. Allegations of Fraud

Next, Plaintiff argues that the assignments are invalid because Defendants 

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committed fraud during the course of their interactions with Plaintiff. 

Under California law, the necessary elements of fraud are: (1) misrepresentation 

(false representation, concealment, or nondisclosure); (2) knowledge of falsity (scienter); 

(3) intent to defraud (i.e., to induce reliance); (4) justifiable reliance; and (5) resulting 

damage.” Alliance Mortgage Co. v. Rothwell, 10 Cal. 4th 1266, 1239 (2016); accord

Moore v. Brewster, 96 F.3d 1240, 1245 (9th Cir. 1996); see also CAL. CIV. CODE § 1572. 

The burden to establish fraud is “heavy,” Robi v. Five Platters, Inc., 918 F.2d 1439, 1444 

(9th Cir. 1990), particularly because, in addition to pleading the elements of fraud, “‘a 

party must state with particularity the circumstances constituting fraud.’” Kearns v. Ford 

Motor Co., 567 F.3d 1120, 1124 (9th Cir. 2009) (quoting Fed. R. Civ. P. 9(b)). Rule 9(b) 

requires that the facts constituting the fraud be pled with specificity. Conclusory 

allegations are insufficient. See Moore v. Kayport Package Exp., Inc., 885 F.2d 531, 540 

(9th Cir. 1989) (“A pleading is sufficient under Rule 9(b) if it identifies the circumstances 

constituting fraud so that a defendant can prepare an adequate answer to the allegations. 

While statements of the time, place and nature of the alleged fraudulent activities are 

sufficient, mere conclusory allegations of fraud are insufficient.”).

The precise contours of Plaintiff’s pleadings are somewhat hazy, but Plaintiff

appears to allege two theories of fraud. First, Plaintiff argues that on February 23, 2011, 

MERS, the nominee beneficiary, fraudulently caused the Note to be assigned to GMAC 

Mortgage, LLC, when Homecomings Financial, the original lender, had previously sold

its beneficiary interest to GMAC Bank on January 8, 2008. Second, Plaintiff appears to 

argue that his foreclosure occurred as a result of misleading and fraudulent letters issued 

by Defendants in response to his inquiries for Defendants to verify the true Note holder.

Plaintiff’s fraud allegations with respect to MERS are not pleaded with the 

specificity demanded by Rule 9(b). Plaintiff’s allegations are cursory in nature, advising 

MERS only that its sale of the Loan to GMAC Mortgage, LLC, in 2011 was done 

“fraudulently.” (ECF No. 71, at 12.) Plaintiff does not provide specific allegations as to 

MERS’s scienter, intent to defraud, or any resulting damage. These mandatory elements 

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are pleaded only at the grossest levels of generality. (See id. at 31–33). Plaintiff does not 

articulate any allegations of how MERS knew that its assignment was improper, nor does 

he plead the dates, circumstances, and occasions on which he either relied on 

representations made by MERS or made Loan payments to MERS (or the servicer at the 

time) which might be construed as damages. Plaintiff’s allegations as to MERS do not 

pass muster under Rule 9(b).

Plaintiff’s remaining fraud claims against the other Defendants, predicated on 

Defendants’ alleged failure to disclose the Note holder at Plaintiff’s written request, also 

fail. Fraud requires an allegation of “resulting damages.” Alliance Mortgage Co., 10 

Cal. 4th at 1239. To the extent that Plaintiff asserts damages in terms of Loan payments

made to parties not entitled to collect under the DOT, those allegations fail as to the other 

Defendants for the same reasons as they failed as to MERS. To the extent that Plaintiff 

asserts that he was damaged because Defendants’ refusal to verify the Note holder 

somehow resulted in his coming into default, that notion fails as a matter of logic and 

chronology. 

Plaintiff became in default of his loan obligations in 2012, but asserts injury arising 

out of Defendants’ responses to Plaintiff’s questions regarding his Loan. According to 

judicially-noticeable documents, the earliest of Plaintiff’s inquiries was submitted on 

August 30, 2013. (See ECF No. 71-1, at 39 (referring to default in April 2012); ECF No. 

71-2, at 18 (referring to default in August 2012).) Given that any fraudulent 

representations would have taken place after Plaintiff’s default, the Court cannot see how 

any of the Defendants’ alleged actions could have caused Plaintiff any damages. See 

Banares, 2014 WL 985532, at *7 (“Plaintiff alleges that she suffered damages as a result 

of Defendants’ ‘illegal and fraudulent foreclosure activities,’ but does not allege how 

Wells Fargo’s response to the questions regarding her Loan servicing would have helped 

her avoid foreclosure, especially since Plaintiff was already in default prior to ending the 

letter.”). 

3. Irregularities in the Transfer of the Note

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Finally, Plaintiff asserts that NewRez, the entity that caused Quality Loan as 

Trustee to initiate non-judicial foreclosure, lacked the requisite beneficial interest in the 

Loan because of an earlier defect in the chain of title. Specifically, Plaintiff contends that 

the DOT was never legitimately assigned to GMAC Mortgage, LLC, rendering the 

ensuing chains in the assignment of title void.

Plaintiff’s contentions rest on a January 8, 2008 letter printed on Homecomings 

Financial letterhead, advising him that his “mortgage loan has been purchased by GMAC 

Bank from Homecomings Financial, LLC.” (ECF No. 71, at 7.) If Homecomings 

Financial relinquished its beneficial interest to GMAC Bank back in 2008, Plaintiff 

argues, it could not have possibly assigned its interest again on February 23, 2011, when 

MERS, as the nominee designated by Homecoming Financial, purported to execute an 

assignment of the DOT to GMAC Mortgage, LLC. According to Plaintiff, MERS’s 

assignment to GMAC Mortgage, LLC was void, and all subsequent assignments, 

including to NewRez, are defective as a result. 

Plaintiff’s argument, however, is unavailing given the explicit language of the 

Deed of Trust. The Deed of Trust identifies Homecomings Financial as the “Lender” and 

names MERS “as [t]he beneficiary of this Security Instrument . . . (solely as nominee for 

Lender and Lender’s successors and assigns) and the successors and assigns of MERS.” 

(ECF No. 85-3, at 4.)3 It also provides that the borrower, i.e., Plaintiff, “understands and 

agrees that MERS holds only legal title to the interests granted by the Borrower in this 

Security Instrument,”—i.e., the DOT—and that “MERS (as nominee for Lender and 

Lender’s successors and assigns) has the right: to exercise any of those interests.” (Id.) 

According to the DOT, then, MERS has the right to assign the beneficiary interest in the 

DOT on behalf of not only Homecomings Financial, but also any of Homecoming 

 

3 Typically, the owner of a promissory note is the beneficiary of the associated deed of trust. 

Orcilla v. Big Sur, Inc., 244 Cal. App. 4th 982, 1003 (2016). “Under the MERS System, however, 

MERS is designated as the beneficiary in deeds of trust, acting as ‘nominee’ for the lender, and granted 

the authority to exercise legal rights of the lender.” Id. 

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Financial’s successors and assigns. So, even if the Court were to construe the January 8, 

2008 letter as evidencing an actual assignment by Homecomings Financial to GMAC 

Bank, MERS, would nonetheless have had the authority to assign away any interest

vested in GMAC Bank, since GMAC Bank would have been an assignee of 

Homecomings Financial. See, e.g., Calvo v. HSBC Bank USA, N.A., 199 Cal. App. 4th 

118, 125 (2011) (holding that the nominee had the right to initiate foreclosure on behalf 

of an assignee of the original lender based on similar contract language); Gomes v. 

Countrywide Home Loans, Inc., 192 Cal. App. 4th 1149, 1157 n. 9 (2011) (same). 

Accordingly, MERS was authorized to assign the DOT in 2011. That being the 

case, Defendants have contradicted Plaintiff’s claim of voidness by a series of judiciallynoticeable documents demonstrating that there are no defects in the chain of title

beginning with MERS and ending with NewRez. See Gamboa v. Tr. Corps, No. 09-

0007 SC, 2009 WL 656285, at *4 (N.D. Cal. Mar. 12, 2009) (rejecting borrower’s 

assertion that a beneficiary was not the holder of a properly-endorsed note because record 

documents demonstrated an unbroken chain of assignments of the Deed of Trust

concluding with the foreclosing party). The recorded assignments at hand—from MERS 

to GMAC Mortgage, LLC, from GMAC Mortgage, LLC to Ocwen Loan Servicing, LLC, 

from Ocwen to Residential Credit Solutions, Inc. to Ditech Financial LLC, from Ditech 

to NewRez—defeat Plaintiff’s allegations that NewRez lacked authority to foreclose. See 

Sprewell v. Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 2001) (courts entertaining 

motions to dismiss need not accept as true allegations that “contradict matters properly 

subject to judicial notice”). 

4. Conclusion as to Standing

“A third party to an assignment lacks standing to challenge its effectiveness unless 

the assignment is void, as opposed to voidable.” Banares, 2014 WL 985532, at *3. All 

three of Plaintiff’s theories for voidness fail, once more, as a matter of law. Plaintiff 

therefore lacks standing to assert a wrongful foreclosure claim.

C. Failure to Tender

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Even if the Court were to assume that Plaintiff has standing, his failure to tender the 

amount of his indebtedness would doom his case. 

As Defendants point out, a defaulted borrower is “required to allege tender of the 

amount of [the lender’s] secured indebtedness in order to maintain any cause of action for 

irregularity in the sale procedure.” Abdallah v. United Savings Bank, 43 Cal. App. 4th 

1101, 1109 (1996). “The tender rule requires a plaintiff to (1) ‘demonstrate a willingness 

to pay’ and (2) ‘show the ability to pay.’” Farah v. Wells Fargo Home Mortgage, No. 

5:13-cv-01127-PSG, 2014 WL 261562, at *2 (Jan. 23, 2014 (quoting In re Worcester, 811 

F.2d 1224, 1231 (9th Cir. 1987)). “The rationale behind the rule is that if plaintiffs could 

not have redeemed the property had the sale procedures been proper, any irregularities in 

the sale did not result in damages to the plaintiffs.” FPCI RE-HAB 01 v. E & G 

Investments, Ltd., 207 Cal. App. 3d 1018, 1022 (1989). 

Plaintiff has not made any offer to tender the amount still owing on his loan. His

failure to tender the amount of his indebtedness is yet another reason why his claims cannot 

prevail. 

V. Conclusion

To conclude, although Plaintiff clears the Rule 8 threshold, his SAC fails because 

he lacks standing to mount a wrongful foreclosure claim, and because he has failed to 

tender the amount of the debt. As such, Defendants’ motions to dismiss under Rule 

12(b)(6) are GRANTED with prejudice.4 The motion hearing set for July 12, 2019 is 

hereby VACATED. 

The Clerk is directed to enter judgment against Plaintiff. 

 

4 Leave to amend need not be given if a complaint as amended is subject to dismissal. Moore v. 

Kayport Package Exp., Inc., 885 F.2d 531, 538 (9th Cir. 1989). The Court’s discretion to deny or grant 

leave to amend is particularly broad where Plaintiff has previously been permitted to amend his complaint. 

See Sisseton–Wahpeton Sioux Tribe v. United States, 90 F.3d 351, 355 (9th Cir. 1996). Failure to cure 

deficiencies by previous amendments is one of the factors to be considered in deciding whether justice 

requires granting leave to amend. Moore, 885 F.2d at 538. The Court previously identified in its March 

11, 2019 Order deficiencies which Plaintiff has failed to cure in the instant pleading. The Court finds that 

any further amendments would be futile. As such, the dismissal is without leave to amend. 

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IT IS SO ORDERED. 

Dated: June 26, 2019

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