Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_14-cv-01399/USCOURTS-caed-2_14-cv-01399-1/pdf.json

Nature of Suit Code: 220
Nature of Suit: Foreclosure
Cause of Action: 28:1332 Diversity-Injunctive &amp; Declaratory Relief

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UNITED STATES DISTRICT COURT 

FOR THE EASTERN DISTRICT OF CALIFORNIA 

CHRISTOPHER J. MOENIG, 

Plaintiff, 

v. 

BANK OF AMERICA, N.A. and 

MORTGAGE ELECTRONIC 

REGISTRATION SYSTEMS (MERS), 

Defendants. 

No. 2:14-cv-01399-KJM-EFB 

ORDER 

This matter is before the court on defendants’ motion to dismiss plaintiff’s first 

amended complaint. (ECF No. 21.) Plaintiff opposes the motion. (ECF No. 25.) The court 

found the motion appropriate for decision without oral argument. As explained below, the court 

GRANTS the motion with leave to amend. 

I. BACKGROUND 

 In 2003, one Margarita Hernandez conveyed the land at 401 11th Street, 

Sacramento, to plaintiff Christopher Moenig. (First. Am. Compl. (Compl.) ¶ 23, ECF No. 20.) In 

2008, plaintiff refinanced the property with Plaza Home Mortgage, Inc. (Plaza) and signed a Note 

and Deed of Trust in Plaza’s favor. (Id. ¶ 8.) The Note provides in part that the lender could 

transfer it. (Id. ¶ 24.) The 2008 Deed of Trust identified Plaza as the lender, Commonwealth 

Title Company as the Trustee, and MERS as a nominee for the lender and its assigns and the 

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beneficiary under the security instrument. (Id. ¶¶ 26–27.) The Deed of Trust also notified 

plaintiff that the Note, together with the security instrument, could be sold without prior notice to 

the borrower. (Id. ¶ 28.) 

 In a letter dated February 21, 2008, Plaza told plaintiff the loan had been 

transferred to Countrywide Home Loans, Inc., which was then the servicer on the loan. (Id. ¶ 29.) 

In May 2009, Bank of America (BofA), as the new holder of the Note, began to send loan 

statements to plaintiff. (Id. ¶ 31.) In April and May 2013, plaintiff sent letters to BofA and 

MERS asking for copies of the loan documents. (Id. ¶¶ 32–33.) In May 2013, BofA sent a copy 

of the Note and Deed of Trust to plaintiff. (Id. ¶ 36.) The Note has an endorsement on the last 

page, stating: “PAY TO THE ORDER OF: COUNTRYWIDE BANK, FSB WITHOUT 

RECOURSE PLAZA HOME MORTGAGE, INC. . . . .” (Id.) BofA notified plaintiff that it was 

the servicer for the loan, FNMA (Fannie Mae) owned the loan, and the assignment was recorded 

through MERS. (Id. ¶¶ 45–46.) 

 In May 2013, plaintiff wrote to BofA, asking for documents showing BofA had 

been assigned the Note and Deed of Trust on the property so he could be sure payments were 

being made to the appropriate source. (Id. ¶ 51.) BofA declined to provide further written 

responses to those requests. (Id. ¶ 53.) In a subsequent letter, dated July 19, 2013, plaintiff once 

again asked BofA to provide documents showing it was the assignee of the Deed of Trust, and 

said that he would withhold payments until BofA provided such proof. (Id. ¶ 54.) 

 Neither BofA nor MERS has responded to plaintiff’s requests, but BofA has 

threatened to foreclose on the property. (Id. ¶¶ 56–67.) In December 2013, BofA sent plaintiff a 

Borrower Response Package, which included forms for a loan modification under the Home 

Affordable Modification Program (HAMP). (Id. ¶ 60.) In January 2014, plaintiff again asked 

BofA to document its legal status as noteholder. (Id. ¶ 62.) BofA replied that Fannie Mae, the 

investor, owned the loan. (Id. ¶ 63.) In May 2014, plaintiff’s counsel sent an e-mail to Fannie 

Mae asking for the date Fannie Mae purchased the promissory note and copies of documents 

showing the transfer of the note to Fannie Mae. (Id. ¶ 64.) Fannie Mae did not provide that 

information. (Id. ¶ 65.) 

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 Plaintiff commenced this action in this court on June 11, 2014, alleging three 

claims: (1) declaratory judgment; (2) breach of the implied covenant of good faith and fair 

dealing; and (3) injunctive relief. (ECF No. 1 at 8–11.) On July 9, 2014, defendants moved to 

dismiss plaintiff’s complaint. (ECF No. 7.) This court granted defendants’ motion, dismissing 

plaintiff’s second claim with prejudice and plaintiff’s first and third claims with leave to amend. 

(ECF No. 19 at 5–11.) Plaintiff filed his first amended complaint on November 12, 2014, 

identifying two claims: (1) declaratory judgment and damages and (2) injunctive relief. (ECF 

No. 20 at 16–19.) Defendants now move to dismiss plaintiff’s first amended complaint. (ECF 

No. 21.) Plaintiff opposes the motion (ECF No. 25), and defendants have replied (ECF No. 27). 

II. LEGAL STANDARD ON MOTION TO DISMISS 

 Under Rule 12(b)(6) of the Federal Rules of Civil Procedure, a party may move to 

dismiss a complaint for “failure to state a claim upon which relief can be granted.” A court may 

dismiss “based on the lack of cognizable legal theory or the absence of sufficient facts alleged 

under a cognizable legal theory.” Balistreri v. Pacifica Police Dep’t, 901 F.2d 696, 699 (9th Cir. 

1990). 

 Although a complaint need contain only “a short and plain statement of the claim 

showing that the pleader is entitled to relief,” Fed. R. Civ. P. 8(a)(2), to survive a motion to 

dismiss this short and plain statement “must contain sufficient factual matter . . . to ‘state a claim 

to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell 

Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A complaint must include something more 

than “an unadorned, the-defendant-unlawfully-harmed-me accusation” or “‘labels and 

conclusions’ or ‘a formulaic recitation of the elements of a cause of action.’” Id. (quoting 

Twombly, 550 U.S. at 555). Determining whether a complaint will survive a motion to dismiss 

for failure to state a claim is a “context-specific task that requires the reviewing court to draw on 

its judicial experience and common sense.” Id. at 679. Ultimately, the inquiry focuses on the 

interplay between the factual allegations of the complaint and the dispositive issues of law in the 

action. See Hishon v. King & Spalding, 467 U.S. 69, 73 (1984). 

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 In making this context-specific evaluation, this court must construe the complaint 

in the light most favorable to the plaintiff and accept as true the factual allegations of the 

complaint. Erickson v. Pardus, 551 U.S. 89, 93–94 (2007). This rule does not apply to “‘a legal 

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

in Twombly, 550 U.S. at 555, nor to “allegations that contradict matters properly subject to 

judicial notice” or to material attached to or incorporated by reference into the complaint. 

Sprewell v. Golden State Warriors, 266 F.3d 979, 988–89 (9th Cir. 2001). A court’s 

consideration of documents attached to a complaint or incorporated by reference or matter of 

judicial notice will not convert a motion to dismiss into a motion for summary judgment. United 

States v. Ritchie, 342 F.3d 903, 907–08 (9th Cir. 2003); Parks Sch. of Bus. v. Symington, 51 F.3d 

1480, 1484 (9th Cir. 1995); compare Van Buskirk v. Cable News Network, Inc., 284 F.3d 977, 

980 (9th Cir. 2002) (noting that even though court may look beyond pleadings on motion to 

dismiss, generally court is limited to face of the complaint on 12(b)(6) motion). 

III. REQUEST FOR JUDICIAL NOTICE 

 Defendants request this court take judicial notice of five documents recorded in the 

Sacramento County Recorder’s Office: (1) the Deed of Trust dated February 5, 2008, with book 

number 20080214, recorded on February 14, 2008; (2) the Assignment of Deed of Trust dated 

October 16, 2013, with book number 20131018, recorded on October 18, 2013; (3) the 

Substitution of Trustee dated July 16, 2014, with book number 20140728, recorded on July 28, 

2014; (4) the Notice of Default and Election to Sell under Deed of Trust dated July 23, 2014, with 

book number 20140728, recorded on July 28, 2014; and (5) the Notice of Rescission dated 

November 4, 2014, with book number 20141106, recorded on November 6, 2014. (ECF No. 22, 

Exs. A–E.) 

 Plaintiff asks this court to take judicial notice of three documents: (1) Annual 

Report 2012 from the Office of the Assessor-Recorder for the City and County of San Francisco; 

(2) a report titled “Foreclosure in California” prepared by a mortgage regulatory compliance 

consulting firm for the City and County of San Francisco’s Office of the Assessor-Recorder; and 

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(3) a Quitclaim Deed dated August 15, 2013, recorded in the Sacramento County Recorder’s 

Office, with book number 20130826, on August 26, 2013. (ECF No. 26, Exs. A–C.) 

 A court may take judicial notice of matters of public record. Lee v. City of 

Los Angeles, 250 F.3d 668, 689 (9th Cir. 2001). All of defendants’ requested documents and 

plaintiff’s third requested document were recorded in the Sacramento County Recorder’s Office 

and their accuracy may be readily determined. Fed. R. Evid. 201(b)(2). These requests are 

granted. As to plaintiff’s remaining two requests, the court does not take judicial notice of them 

and it does not rely on those exhibits in reaching its decision here. See Becker v. Wells Fargo 

Bank, N.A., Inc., No. 10-02799, 2011 WL 1103439, at *27 (E.D. Cal. Mar. 22, 2011). 

IV. DISCUSSION 

A. First Claim 

 1. Declaratory Relief 

 Plaintiff alleges there “is no discernable chain of title establishing that [BofA] has 

any interest in [plaintiff’s] Note, Deed of Trust, or property.” (ECF No. 20 ¶ 92.) Hence, 

plaintiff argues BofA has no right to the property. (Id. ¶¶ 96–97.) 

 Under 28 U.S.C. § 2201, a court may “declare the rights and other legal relations” 

of the parties to an actual controversy. “The Declaratory Judgment Act gives the Court the 

authority to declare the rights and legal relations of interested parties, but not a duty to do so.” 

Leadsinger, Inc. v. BMG Music Pub., 512 F.3d 522, 533 (9th Cir. 2008). When the relief sought 

“will neither serve a useful purpose in clarifying and settling the legal relations in issue nor 

terminate proceedings and afford relief from uncertainty and controversy faced by the parties,” a 

court need not grant declaratory relief. United States v. Washington, 759 F.2d 1353, 1357 (9th 

Cir. 1985). 

 “Uniformly among courts, production of the note is not required to proceed in 

foreclosure and similarly no production of any chain of ownership is required.” Roque v. Suntrust 

Mortgage, Inc., No. 09-00040, 2010 WL 546896, at *3 (N.D. Cal. Feb. 10, 2010); Putkkuri v. 

Recontrust Co., No. 08-1919, 2009 WL 32567, at *2 (S.D. Cal. Jan. 5, 2009) (“Production of the 

original note is not required to proceed with a non-judicial foreclosure.”). Plaintiff’s theory of the 

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case cannot serve as a basis for declaratory relief. See Roque, 2010 WL 546896, at *3; Hafiz v. 

Greenpoint Mortgage Funding, Inc., 652 F. Supp. 2d 1039, 1043 (N.D. Cal. 2009) (“Plaintiff 

entirely misstates the law in alleging that defendants must present a note in order to foreclose 

under the deed of trust. The facts plaintiff alleges to support her declaratory relief theory could 

not possibly give rise to a cognizable legal claim.”). Because plaintiff has pled no bases for 

declaratory relief, his declaratory relief claim is dismissed. 

 The court grants plaintiff leave to amend. The court has already given plaintiff 

leave to amend his claim for declaratory relief (ECF No. 19 at 6–8), and plaintiff has not cured 

the deficiencies and continues to ground his request for declaratory relief on the same legal theory 

as before. In its discretion, however, the court finds leave to amend one more time is appropriate 

in light of the early stage of the litigation. See Gardner v. Nationstar Mortgage LLC, 

No. 14-1583, 2015 WL 1405539, at *12 (E.D. Cal. Mar. 26, 2015). Declaratory relief, as a form 

of relief, may be available if plaintiff prevails and declaratory relief is shown to be an appropriate 

remedy under the circumstances. See id. In his second amended complaint, plaintiff should 

clarify the basis for a separate declaratory relief claim. Plaintiff is advised to provide coherent 

facts and cogent legal arguments to support his second amended complaint, if he can do so 

consonant with Rule 11. 

 2. Request for Damages 

 In amending his complaint, plaintiff now seeks damages as part of his first claim 

as well. Namely, he alleges BofA “initiated foreclosure proceedings against [the] property in 

violation of Civil Code 2923.55 [sic] . . .” because the notice of default was recorded “without 

first sending written information to [plaintiff] telling him that he had the right to request a copy of 

the Note or other evidence of indebtedness, and a copy of any assignment of the Deed of Trust 

required to demonstrate the right of BofA to foreclose.” (ECF No. 20 ¶ 100.) Plaintiff also 

alleges BofA violated California Civil Code section 2924(a)(6) “which enjoins it from recording a 

Notice of Default or otherwise initiate [sic] a foreclosure unless it is the holder of the beneficial 

interest under [plaintiff’s] Deed of Trust. (Id. ¶ 102.) 

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 Defendants respond they fully complied with all of the statutory requirements. 

(ECF No. 21 at 6–7.) 

 a. California Civil Code Section 2923.55(b)(1) 

 The California Civil Code provides that a servicer may not record a notice of 

default until it sends the following information in writing to the borrower: 

A statement that the borrower may request the following: 

(i) A copy of the borrower’s promissory note or other evidence of 

indebtedness. 

(ii) A copy of the borrower’s deed of trust or mortgage. 

(iii) A copy of any assignment, if applicable, of the borrower’s 

mortgage or deed of trust required to demonstrate the right of the 

mortgage servicer to foreclosure. 

(iv) A copy of the borrower’s payment history since the borrower 

was last less than 60 days past due. 

Cal. Civ. Code § 2923.55(b)(1)(B). 

 In the instant case, plaintiff alleges defendants did not provide him with a written 

statement that plaintiff could request the information described in subsections (i) and (iii) above. 

(ECF No. 20 ¶ 100.) But the allegations of the first amended complaint are contradictory. On the 

one hand, plaintiff alleges BofA “initiated foreclosure proceedings against [the] property in 

violation of Civil Code 2923.55 [sic] . . .” because the notice of default was recorded “without 

first sending written information to [plaintiff] telling him that he had the right to request a copy of 

the Note or other evidence of indebtedness, and a copy of any assignment of the Deed of Trust 

required to demonstrate the right of BofA to foreclose.” (ECF No. 20 ¶ 100.) On the other hand, 

plaintiff alleges BofA “provided copies of the Note and Deed of Trust . . . .” (Id. ¶ 10; see also ¶¶ 

16, 35–36.) These contradictory factual allegations do not meet Rule 8’s requirement of a “short 

and plain statement.” See Rieber v. OneWest Bank FSB, No. 13-2523, 2014 WL 1796706, at *3 

(S.D. Cal. May 6, 2014); see also Zamanyan v. Northland Grp., Inc., No. 12-01212, 2012 WL 

2756644, at *1 (C.D. Cal. July 9, 2012) (“Zamanyan’s Complaint fails against all defendants 

because the contradictory nature of his factual allegations forecloses recovery.”). The court 

grants defendants’ motion to dismiss plaintiff’s claim based on California Civil Code section 

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2923.55(b)(1)(B). At the same time, the court gives plaintiff leave to amend to clarify the 

contradictory factual allegations to show he is entitled to relief, if he can do so consonant with 

Rule 11. 

 b. California Civil Code section 2924(a)(6) 

 California Civil Code section 2924(a)(6) provides: 

No entity shall record or cause a notice of default to be recorded or 

otherwise initiate the foreclosure process unless it is the holder of 

the beneficial interest under the mortgage or deed of trust, the 

original trustee or the substituted trustee under the deed of trust, or 

the designated agent of the holder of the beneficial interest. No 

agent of the holder of the beneficial interest under the mortgage or 

deed of trust, original trustee or substituted trustee under the deed 

of trust may record a notice of default or otherwise commence the 

foreclosure process except when acting within the scope of 

authority designated by the holder of the beneficial interest. 

Cal. Civ. Code § 2924. 

 While plaintiff makes multiple statements as to when and how various entities 

might have been substituted as beneficiaries or trustees, the court is unable to comprehend the 

essence of plaintiff’s claims under California Civil Code section 2924(a)(6). Accordingly, 

plaintiff’s claim under section 2924(a)(6) is dismissed with leave to amend, if plaintiff is able to 

amend consonant with Rules 8 and 11. See Gardner, 2015 WL 1405539, at *12 (granting motion 

to dismiss and leave to amend under similar circumstances). 

B. Second Claim: Injunctive Relief 

 Plaintiff argues California Civil Code section 2924.12 allows him to seek 

“injunctive relief to enjoin a material violation of [s]ection 2923.55.” (ECF No. 20 at 19.) 

 Injunctive relief is an extraordinary remedy that may only be awarded upon a clear 

showing that the moving party is entitled to such relief; it is never ordered as of right. Winter v. 

Natural Res. Def. Council, Inc., 555 U.S. 7, 22 (2008). “To seek injunctive relief, a plaintiff must 

show that he is under threat of suffering ‘injury in fact’ that is concrete and particularized; the 

threat must be actual and imminent, not conjectural or hypothetical; it must be fairly traceable to 

the challenged action of the defendant; and it must be likely that a favorable judicial decision will 

prevent or redress the injury.” Summers v. Earth Island Inst., 555 U.S. 488, 493 (2009). 

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 Plaintiff has alleged that BofA has threatened foreclosure and has filed a notice of 

default. However, plaintiff completely disregards the notice of rescission of default and notice of 

sale dated November 6, 2014. (ECF No. 22-5, Ex. E.) He does not allege that foreclosure is 

imminent. Plaintiff has not shown he is entitled to injunctive relief. The court grants defendants’ 

motion without prejudice. Because defendants recorded a notice of rescission on November 6, 

2014, only six days before plaintiff filed his first amended complaint, and plaintiff states he did 

not know about the rescission notice at that time, the court grants plaintiff leave to amend taking 

account of the rescission notice. (ECF No. 25 at 15.) 

V. CONCLUSION 

 For the foregoing reasons, the court GRANTS defendants’ motion with leave to 

amend. Plaintiff’s second amended complaint is due within twenty-one (21) days from the date 

of this order. This order resolves ECF No. 21. 

IT IS SO ORDERED. 

DATED: May 7, 2015. 

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