Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_09-cv-01807/USCOURTS-azd-2_09-cv-01807-1/pdf.json

Nature of Suit Code: 470
Nature of Suit: Civil (Rico)
Cause of Action: 18:1964 Racketeering (RICO) Act

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IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

Carolann Grey, 

Plaintiff, 

vs.

First American Title Insurance Company;

America’s Servicing Company; US Bank

National Association, as Trustee for Bank

of America Funding 2007-6 Trust, 

Defendants. 

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No. CV 09-1807-PHX-JAT

ORDER

Pending before the Court are Defendants America’s Servicing Company and US Bank

National Association’s Motion to Dismiss (Doc. # 10); and Plaintiff’s Motion to Quash (Doc.

# 24). For the reasons that follow, the Court grants Defendants’ motion to dismiss, and

denies Plaintiff’s motion to quash.

I. Background

Plaintiff is the owner of certain real property located in Gold Canyon, Arizona.

Plaintiff obtained a mortgage on her property, and executed a deed of trust in January 2007.

Mortgage Electronic Registration Systems, Inc. (“MERS”) was the named beneficiary under

the deed of trust. In January 2009, MERS assigned its rights under the deed of trust to

Defendant First American Title Insurance Company (“FATC”). On January 9, 2009,

Defendant FATC recorded a notice of trustee sale after Plaintiff failed to perform her

Case 2:09-cv-01807-JAT Document 27 Filed 05/14/10 Page 1 of 6
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obligations under the deed of trust. In April 2009, Plaintiff filed the present action in Pinal

County Superior Court, seeking to force Defendants to show proof of the promissory note,

as well as enjoin Defendants from conducting the trustee’s sale. Defendants timely removed

to this Court, and now seek to dismiss Plaintiff’s claims.

II. Analysis

To survive a Rule 12(b)(6) motion for failure to state a claim, a complaint must meet

the requirements of Federal Rule of Civil Procedure 8(a)(2). Rule 8(a)(2) requires a “short

and plain statement of the claim showing that the pleader is entitled to relief,” so that the

defendant has “fair notice of what the . . . claim is and the grounds upon which it rests.” Bell

Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47

(1957)).

To survive a motion to dismiss, a complaint must contain sufficient factual matter,

which, if accepted as true, states a claim to relief that is “plausible on its face.” Ashcroft v.

Iqbal, 129 S.Ct. 1937, 1949 (2009). Facial plausibility exists if the pleader pleads factual

content that allows the court to draw the reasonable inference that the defendant is liable for

the misconduct alleged. Id. Plausibility does not equal “probability,” but plausibility

requires more than a sheer possibility that a defendant has acted unlawfully. Id.

In deciding a motion to dismiss under Rule 12(b)(6), the Court must construe the facts

alleged in the complaint in the light most favorable to the drafter of the complaint and the

Court must accept all well-pleaded factual allegations as true. See Shwarz v. United States,

234 F.3d 428, 435 (9th Cir. 2000). Moreover, the Ninth Circuit has pronounced a “policy

of liberal construction in favor of pro se litigants.” Rand v. Rowland, 154 F.3d 952, 957 (9th

Cir. 1998). This Court must construe Plaintiff’s complaint liberally and afford Plaintiff the

benefit of any doubt. Karim-Panahi v. L.A. Police Dep’t, 839 F.2d 621, 623 (9th Cir. 1988).

However, the status of pro se “does not relieve the party of the burden of alleging sufficient

facts on which a recognized legal claim could be based. Bald assertions and conclusions of

law will not suffice.” Kerr v. Wanderer & Wanderer, 211 F.R.D. 625, 629 (D. Nev. 2002)

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(citation omitted). As such, the Court does not have to accept as true a legal conclusion

couched as a factual allegation. Papasan v. Allain, 478 U.S. 265, 286 (1986).

Although Plaintiff does not include any specific causes of action or counts for relief,

it is clear after reviewing her complaint that Plaintiff’s allegations center around Defendants’

alleged failure to produce the original note securing the mortgage. As such, Plaintiff claims

that Defendants have no valid ownership interest and, hence, Defendants cannot proceed

with the trustee’s sale.

In Arizona, and “[u]nlike their judicial foreclosure cousins that involve the court, deed

of trust sales are conducted on a contract theory under the power of sale authority of the

trustee.” In re Krohn, 52 P.3d 774, 777 (Ariz. 2002). See also A.R.S. § 33-807(A)

(providing power of sale authority to trustee after default). The UCC pertaining to negotiable

instruments provides that “‘[p]ersons entitled to enforce’ an instrument [include] the holder

of the instrument, a nonholder in possession of the instrument who has the rights of a holder

or a person not in possession of the instrument who is entitled to enforce the instrument

pursuant to § 47-3309 . . . .” A.R.S. § 47-3301. Plaintiff does not cite, nor is the Court aware

of, any controlling Arizona authority requiring the production of the original note before the

commencement of a trustee’s sale. To the contrary, courts within the District of Arizona

“have routinely held that [the] ‘show me the note’ argument lacks merit.” Diessner v.

Mortgage Elec. Registration Sys., 618 F.Supp.2d 1184, 1187-88 (D. Ariz. 2009) (quoting

Mansour v. Cal-W. Reconveyance Corp., 618 F.Supp.2d 1178, 1181 (D. Ariz. 2009)). Given

the absence of any guiding authority by the Arizona Supreme Court or the Arizona Court of

Appeals to the contrary, the Court agrees with the unanimous authority within the District

of Arizona, and dismisses Plaintiff’s claims based upon a “show me the note” argument.

Plaintiff’s only remaining allegations revolve around the Fair Debt Collection

Practices Act (“FDCPA”). Defendants argue that they are not “debt collectors” within the

meaning of the FDCPA, and the Court agrees. Diessner, 618 F.Supp.2d at 1188-89. In any

event, even if Defendants could properly be considered “debt collectors,” Plaintiff has failed

to allege any facts or otherwise suggest how Defendants violated the FDCPA. In her

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1

 Although Defendant FATC has not moved to dismiss, the Court finds that they are

in a similar position to the moving Defendants, and Plaintiff’s claims against Defendant

FATC suffer the same infirmities as discussed above. As such, the Court will dismiss

Plaintiff’s claims against Defendant FATC. Abigninin v. AMVAC Chem. Corp., 545 F.3d

733, 743 (9th Cir.2008) (“A [d]istrict [c]ourt may properly on its own motion dismiss an

action as to defendants who have not moved to dismiss where such defendants are in a

position similar to that of moving defendants.”).

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response, Plaintiff asserts that Defendant America’s Servicing Company has a telephone

greeting stating that it is attempting to collect a debt. The Court first notes that this assertion

does not appear in Plaintiff’s complaint. Schneider v. California Dep’t of Corr., 151 F.3d

1194, 1197 n.1 (9th Cir. 1998) (“In determining the propriety of a Rule 12(b)(6) dismissal,

a court may not look beyond the complaint to a plaintiff's moving papers, such as a

memorandum in opposition to a defendant’s motion to dismiss.”). Regardless, this statement

does not describe how such a greeting violates the FDCPA. Plaintiff must include at least

some factual allegations with respect to her FDCPA claim so that Defendants have “fair

notice of what the . . . claim is and the grounds upon which it rests.” Twombly, 550 U.S. at

555. Plaintiff has failed to properly allege a FDCPA claim.

The Court has reviewed the entirety of Plaintiff’s complaint and other filings. The

Court concludes that Plaintiff has failed to properly allege any claim for relief. As such, the

Court grants Defendants’ motion to dismiss under Rule 12(b)(6).1

Plaintiff filed a motion to quash, arguing that Defendants’ have not formally appeared

and, hence, are in default. Plaintiff’s argument is without merit. All Defendants have either

filed a notice of appearance, or appeared through counsel, or both. The rules do not require

an attorney to file a separate notice of appearance document before having the authority to

represent a client in this Court. Defendants are properly represented by counsel. The Court

denies Plaintiff’s motion.

III. Conclusion

Plaintiff has failed to allege a viable cause of action. Plaintiff’s “show me the note”

argument does not provide an adequate legal basis for the type of relief she is seeking.

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2

 Defendants also argue that Plaintiff’s claims must be dismissed because she failed

to timely and adequately serve Defendants. Given the Ninth Circuit’s preference for

resolution on the merits, and because Plaintiff is pro se and the Court is granting Plaintiff

leave to file an amended complaint, the Court will not dismiss Plaintiff’s complaint on the

basis of a failure to timely and properly serve Defendants. However, if Plaintiff chooses to

file an amended complaint, she is cautioned to properly serve Defendants within the time

frame directed at the end of this Order. Any such failure will result in the dismissal of her

amended complaint.

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Moreover, Plaintiff has failed to adequately allege a cause of action under the FDCPA.

Lastly, Plaintiff’s motion to quash is denied because Defendants and their counsel have

properly appeared.

Plaintiff has not yet filed an amended complaint. Although Plaintiff’s right to amend

her complaint once as a matter of course has arguably been cut-off by Defendant FATC’s

filing of an answer, the Court will nevertheless grant Plaintiff an opportunity to cure the

above defects through the filing of an amended complaint. Plaintiff is cautioned, though, that

if she chooses to re-urge her claims through the filing of an amended complaint, Plaintiff

must allege facts and not mere legal conclusions.2

Accordingly,

IT IS ORDERED that Defendants America’s Servicing Company and US Bank

National Association’s Motion to Dismiss (Doc. # 10) is granted to the extent it is premised

upon Rule 12(b)(6).

IT IS FURTHER ORDERED that Plaintiff’s Motion to Quash (Doc. # 24) is denied.

IT IS FURTHER ORDERED that Plaintiff has 30 days to file an amended complaint

to cure the deficiencies identified herein. If Plaintiff fails to file an amended complaint

within 30 days of the date of this Order, the Clerk of the Court shall, without further Court

order, enter judgment of dismissal, with prejudice as to this entire case and as to all

Defendants.

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IT IS FINALLY ORDERED that Plaintiffs shall effect service of the Amended

Complaint and Summons upon all Defendants no later than 30 days after the filing of the

Amended Complaint.

DATED this 13th day of May, 2010.

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