Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-3_10-cv-08076/USCOURTS-azd-3_10-cv-08076-0/pdf.json

Nature of Suit Code: 290
Nature of Suit: Other Real Property Actions
Cause of Action: 28:1446 Petition for Removal

---

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

WO

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

Christine Maxa, 

Plaintiff, 

vs.

Countrywide Loans, Inc., et al.,

Defendants. 

)

)

)

)

)

)

)

)

)

)

)

)

No. CV10-8076-PCT-NVW

ORDER

Before the Court is Plaintiff’s Motion for Preliminary Injunction, Defendants’

Motion to Dissolve the Temporary Restraining Order, and Defendants’ Motion to Dismiss

Amended Complaint. (Docs. 25, 26.) Defendant Mortgage Electronic Registration

systems, Inc. (“MERS”) joins in Defendants’ Motion to Dismiss Amended Complaint by

ReconTrust Company, N.A. (“ReconTrust) and Bank of America, N.A. (“Bank of

“America”). (Doc. 32.) 

I. Facts Assumed True

On a motion to dismiss under Fed. R. Civ. P. 12(b)(6), all allegations of material

fact are assumed to be true and construed in the light most favorable to the nonmoving

party. Cousins v. Lockyer, 568 F.3d 1063, 1067 (9th Cir. 2009). Generally, material

beyond the complaint may not be considered in deciding a Rule 12(b)(6) motion. 

However, evidence on which the complaint “necessarily relies” may be considered if: 

“(1) the complaint refers to the document; (2) the document is central to the plaintiff’s

Case 3:10-cv-08076-NVW Document 46 Filed 07/19/10 Page 1 of 16
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

1

In various documents the street address has been stated as “18021 East Spoon Road,”

“18021 South Spoon Road,” and “18021 Spoon Road.” Plaintiff states the road is only two

blocks long. Because the Property is further identified by its legal description and there is

little likelihood of confusion regarding the location of the Property, the address here uses

“18021 Spoon Road.” 

2

Plaintiff does not dispute the facts regarding the Note assumed true here. She objects

to the photocopy of the Note that Defendants attached to their Motion to Dismiss for the

reason that the loan number has been redacted on each page, apparently after she signed it,

and the signature page does not have a bar code. She does not contend that the substance of

the Note has been altered in the photocopy provided by Defendants.

- 2 -

claim; and (3) no party questions the authenticity of the copy attached to the 12(b)(6)

motion.” Marder v. Lopez, 450 F.3d 445, 448 (9th Cir. 2006). The following facts are

assumed to be true for purposes of deciding Defendants’ motion to dismiss, but the Court

does not decide that they are true.

In June 2005 Plaintiff applied for a loan to purchase real property located at 18021

Spoon Road,1

 Kirkland (Peeples Valley), Arizona 86332-8718 (“Property”). In July 2005

she received a thirty-year loan with a 6% fixed interest rate from Countrywide Home

Loans, Inc., in the amount of $111,200.00. Her debt was evidenced by a Note secured by

a Deed of Trust. Plaintiff signed the Note, promising to pay to the Lender, in exchange

for the loan, $111,200 plus interest in monthly payments. The Note states the Lender is

America’s Wholesale Lender.2

 The Deed of Trust also states the Lender is America’s

Wholesale Lender, the Trustee is Fidelity National Title Insurance Company, and MERS

is “a separate corporation that is acting solely as a nominee for Lender and Lender’s

successors and assigns” and the beneficiary under the Deed of Trust. The Deed of Trust

further provides that the “Borrower irrevocably grants and conveys to Trustee [the

Property], in trust, with power of sale.”

At some point Plaintiff stopped making her regular monthly loan payments. BAC

Home Loans Servicing, LP sent Plaintiff a “Notice of Intent to Accelerate” dated

November 16, 2009, which stated that her loan was in default and the amount required to

reinstate her loan then was $1,678.98. The Notice also stated that if her default was not

Case 3:10-cv-08076-NVW Document 46 Filed 07/19/10 Page 2 of 16
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

- 3 -

cured by December 16, 2009, the mortgage payments would be accelerated and

foreclosure proceedings initiated. A second “Notice of Intent to Accelerate” dated

November 18, 2009, was sent, stating the amount then required to reinstate her loan was

$1,712.32, which must be paid by December 18, 2009 to avoid acceleration and

foreclosure. In late December 2009, through a representative, Plaintiff contacted Bank of

America Home Loans Servicing, L.P. to access records for her loan and to learn the full

amount necessary to reinstate her loan. 

On January 8, 2010, three documents were filed in Yavapai County. The

“Corporation Assignment of Deed of Trust Arizona” states that MERS transfers all

beneficial interest in the Deed of Trust to BAC Home Loans Servicing, LP fka

Countrywide Home Loans Servicing, LP. The “Substitution of Trustee Arizona” states

that BAC Home Loans Servicing, LP fka Countrywide Home Loans Servicing, LP

appoints ReconTrust as successor trustee under the Deed of Trust. The “Notice of

Trustee’s Sale Arizona” states that the Property will be sold pursuant to the power of sale

under the Deed of Trust on April 19, 2010. 

In late March 2010, a Notice of Trustee’s Sale was taped to the door of Plaintiff’s

home, which indicated that ReconTrust was the current trustee under the Deed of Trust,

Bank of America was the current beneficiary, and the Property was to be sold at a

trustee’s sale on April 19, 2010. 

On April 12, 2010, Plaintiff “directed” a letter to Bank of America with facsimile

copies to each of the other Defendants, demanding production of a certified copy of

Plaintiff’s original note on file with Defendants and the full sum necessary to reinstate the

loan. On April 13, 2010, Plaintiff learned the trustee’s sale had been rescheduled for

April 26, 2010. Late Friday afternoon, April 16, 2010, Plaintiff filed a complaint in

Yavapai County Superior Court, requesting immediate injunctive relief. On April 19,

2010, Plaintiff’s request for a temporary restraining order was denied for failure to satisfy

Rule 65(d) notice requirements and because it appeared that the trustee’s sale had

occurred that morning. On April 22, 2010, upon ex parte reconsideration, the Superior

Case 3:10-cv-08076-NVW Document 46 Filed 07/19/10 Page 3 of 16
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

- 4 -

Court judge ordered that Defendants be temporarily restrained from conducting the

trustee’s sale scheduled for April 26, 2010. Finding that Defendants are adequately

secured by the Deed of Trust, the judge did not require Plaintiff to post a bond, absent a

showing by Defendants that they are not adequately secured. The temporary restraining

order does not expressly state an expiration date, but states that “upon motion of any

party, this matter will be set on the Court’s expedited calendar for a hearing on the

termination of the TRO and/or the issuance of a preliminary injunction.” On April 29,

2010, Plaintiff filed a verified Amended Complaint. On May 11, 2010, ReconTrust and

Bank of America removed this action to federal district court. 

II. Motion to Dismiss

A. Legal Standard

A complaint should consist of “clear and concise averments stating which

defendants are liable to plaintiffs for which wrongs, based on the evidence.” See

McHenry v. Renne, 84 F.3d 1172, 1178 (9th Cir. 1996). Dismissal under Rule 12(b)(6)

can be based on “the lack of a 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). To avoid dismissal, a complaint must contain “only enough facts

to state a claim for relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550

U.S. 544, 570 (2007). 

First, the court must identify allegations in the complaint that are not entitled to the

assumption of truth. Ashcroft v. Iqbal, __ U.S. __, 129 S. Ct. 1937, 1949, 1951 (2009). 

The principle that a court accepts as true all of the allegations in a complaint does not

apply to legal conclusions or conclusory factual allegations. Id. at 1949, 1951. 

“Threadbare recitals of the elements of a cause of action, supported by mere conclusory

statements, do not suffice.” Id. at 1949. “A plaintiff’s obligation to provide the grounds

of his entitlement to relief requires more than labels and conclusions, and a formulaic

recitation of the elements of a cause of action will not do.” Twombly, 550 U.S. at 555. 

Case 3:10-cv-08076-NVW Document 46 Filed 07/19/10 Page 4 of 16
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

- 5 -

 Second, the court must determine whether the factual allegations plausibly suggest

an entitlement to relief. Iqbal, 129 S. Ct. at 1950, 1951. This determination is “a contextspecific task that requires the reviewing court to draw on its judicial experience and

common sense.” Id. at 1950. To show that the plaintiff is entitled to relief, the complaint

must permit the court to infer more than the mere possibility of misconduct. Id.

“In alleging fraud or mistake, a party must state with particularity the

circumstances constituting fraud or mistake.” Fed. R. Civ. P. 9(b). Rule 9(b) requires

allegations of fraud to be “specific enough to give defendants notice of the particular

misconduct which is alleged to constitute the fraud charged so that they can defend

against the charge and not just deny that they have done anything wrong.” Bly-Magee v.

California, 236 F.3d 1014, 1019 (9th Cir. 2001). “While statements of the time, place and

nature of the alleged fraudulent activities are sufficient, mere conclusory allegations of

fraud are insufficient.” Moore v. Kayport Package Express, Inc., 885 F.2d 531, 540 (9th

Cir. 1989). 

B. Analysis

Plaintiff obtained a 6% fixed interest loan to purchase her home and after a few

years did not continue to make her loan payments on time. After receiving notice of her

default, she did not make the payment required to reinstate her loan and now wants to

stop the trustee’s sale. Although she already has amended her complaint previously, she

still does not allege that she has been damaged by any of Defendants’ actions. 

1. First Claim: Defendants Lack Standing to Conduct and Enforce

a Non-Judicial Foreclosure

The Amended Complaint alleges that (a) Defendants must demonstrate they are the

holder and owner of both the Note and Deed of Trust to have standing, which Plaintiff

contends is necessary, to conduct a trustee’s sale of the Property; (b) MERS is not a valid

beneficiary under the Deed of Trust because it never had ownership and possession of the

Note; and (c) MERS therefore could not assign any interest to ReconTrust. The

Case 3:10-cv-08076-NVW Document 46 Filed 07/19/10 Page 5 of 16
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

- 6 -

cornerstone of Plaintiff’s legal theory is a paragraph in Carpenter v. Longan, 83 U.S. 271,

274 (1872), which states: 

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.

In that case both the note and the mortgage were assigned to a third party before the note

matured. In addition to executing the mortgage on real property, the borrower had

delivered to the lender wheat and flour to be sold and proceeds applied to the note. The

question was whether the assignee of the note and mortgage was entitled to the full

amount on the face of the note plus interest or less the amount of the proceeds from the

sale of the wheat and flour—not whether the lender was required to show possession of

the note in order to enforce the mortgage. As noted by another district court, Carpenter

“concerns a loan that had not yet matured and not a home mortgage in default as in the

present case.” Nicholson v. OneWest Bank, No. CV10-0795, 2010 WL 2732325 at *4 n.5

(N.D. Ga. Apr. 20, 2010).

In the present case, foreclosure of the Deed of Trust is governed purely by state

statute. As Plaintiff states in her Motion for Preliminary Injunction, 

Arizona’s Deed of Trust Act (ARS 33-801, et seq.) was enacted to provide

a summary, expeditious and inexpensive process of foreclosure. It requires

only adherence, albeit strict adherence, to procedure and form – however, it

establishes no requirement that a person seeking foreclosure of mortgage be

the holder of the note.

(Emphasis in the original.)

Under Arizona law, real estate mortgages and deeds of trust are distinct forms of

real property liens. Compare A.R.S. § 33-701, et seq., with § 33-801, et seq. “A

mortgage is a two-party instrument between the mortgagor (borrower) and the mortgagee

(lender) by which the mortgagor pledges real property as security for the performance of

payment or other obligations to the mortgagee.” Cammack, Kent E. et al., State Bar of

Arizona, Ins and Outs of Foreclosures, § 1.1 (2007 ed.). “A deed of trust is a three-party

instrument where the trustor (borrower) transfers legal title in real property to the trustee

(legal title holder) as security for the performance by the trustor or a third party of

Case 3:10-cv-08076-NVW Document 46 Filed 07/19/10 Page 6 of 16
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

- 7 -

obligations to the beneficiary (lender).” Id. at § 1.2. From 1901 to 1971, Arizona statutes

prohibited a trustee’s exercise of a private power of sale, and a deed of trust was the

functional equivalent of a mortgage, but in 1971, the Arizona legislature authorized the

exercise of a nonjudicial power of sale under a deed of trust. Id. 

The Amended Complaint alleges that Defendants have no right to enforce the Note

because they are not holders in possession of the Note and do not have the rights of the

holder. But a trustee’s sale is not an action to enforce the Note. Rather, it is an exercise

of the power of sale upon default which the trustor granted to the trustee under the Deed

of Trust. 

Under Arizona’s Deed of Trust Act, a “deed of trust,” or “trust deed” conveys trust

property to a qualified trustee to secure the performance of a contract or contracts, such as

a note or provisions of the deed of trust. A.R.S. §§ 33-801(8), 33-801(4). “[A] power of

sale is conferred upon the trustee of a trust deed under which the trust property may be

sold . . . after a breach or default in the performance of the contract or contracts, for which

the trust property is conveyed as security.” A.R.S. § 33-807(A). Thus, the Arizona Deed

of Trust Act confers power of sale on the trustee upon default or breach of the contract

secured by the trust deed without reference to enforcing or producing a note or other

negotiable instrument.

Plaintiff cites no Arizona authority for her contention that, before exercising the

power of sale, a trustee or beneficiary must show possession of the original note

memorializing the underlying debt or other proof of being the holder of the note identified

in the security instrument, and the Court has found none. “Where the state’s highest court

has not decided an issue, the task of the federal courts is to predict how the state high

court would resolve it.” Dimidowich v. Bell & Howell, 803 F.2d 1473, 1482 (9th Cir.

1986), modified at 810 F.2d 1517 (9th Cir. 1987). Although no Arizona court or federal

appellate court has decided this issue, many district courts for the District of Arizona have

rejected the “show me the note” argument. See, e.g., Ciardi v. Lending Co., No. CV10-

0275-PHX-JAT, 2010 WL 2079735 (D. Ariz. May 24, 2010); Silvas v. GMAC Mortg.,

Case 3:10-cv-08076-NVW Document 46 Filed 07/19/10 Page 7 of 16
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

- 8 -

LLC, No. CV09-0265-PHX-GMS, 2009 WL 4573234 (D. Ariz. Dec. 1, 2009, amended

Jan. 5, 2010); Contreras v. U.S. Bank, No. CV09-0137-PHX-NVW, 2009 WL 4827016

(D. Ariz. Dec. 15, 2009); Blau v. America’s Servicing Co., No. CV08-0773-PHX-MHM,

2009 WL 3174823 (D. Ariz. Sept. 29, 2009); Goodyke v. BNC Mortg., Inc., No. CV09-

0074-PHX-MHM, 2009 WL 2971086 (D. Ariz. Sept. 11, 2009); Garcia v. GMAC Mortg.,

LLC, No. CV09-0891-PHX-GMS (D. Ariz. Aug. 31, 2009); Diessner v. Mortg. Elec.

Registration Sys., 618 F. Supp. 2d 1184 (D. Ariz. 2009); Mansour v. Cal-Western

Reconveyance Corp., 618 F. Supp. 2d 1178 (D. Ariz. 2009); but see Castro v. Exec. Tr.

Servs., LLC, No. CV08-2156-PHX-LOA, 2009 WL 438683 at *5 (D. Ariz. Feb. 23,

2009). No authority presented here suggests the Arizona state courts would arrive at a

different conclusion.

It is unnecessary to decide whether Defendants satisfy the qualifications of a

“person entitled to enforce” an instrument under A.R.S. § 47-3301 because conducting a

trustee’s sale under power granted by the Deed of Trust is not the same as enforcing an

instrument under the Uniform Commercial Code. In the Deed of Trust Plaintiff not only

conveyed the power of sale to the trustee, but also agreed to empower MERS, as the

lender’s nominee, to exercise the lender’s rights, including the right to foreclose. To date,

Arizona law does not require the trustee or beneficiary to possess the Note in order to

exercise the power of sale granted by the Deed of Trust. Therefore, the first claim of the

Amended Complaint fails to state a claim upon which relief can be granted, and it cannot

be cured by further amendment.

2. Second Claim: Fraudulent Misrepresentation

To allege fraudulent misrepresentation, a plaintiff must allege that “the defendant

made a false, material representation that he knew was false or was ignorant of its truth,

with the intention that the hearer of the representation act on it in a manner reasonably

contemplated, that the hearer was ignorant of the representation’s falsity, rightfully relied

on the truth of the representation, and sustained consequent and proximate damage.” 

Haisch v. Allstate Ins. Co., 197 Ariz. 606, 610, ¶ 14, 5 P.3d 940, 944 (Ct. App. 2000).

Case 3:10-cv-08076-NVW Document 46 Filed 07/19/10 Page 8 of 16
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

- 9 -

The Amended Complaint alleges that MERS’ representation that it is a

“beneficiary” under the Deed of Trust is false because it is not the owner and holder of

the Note. As discussed above, no Arizona authority has been found that requires a

beneficiary under the Deed of Trust to be the owner and holder of the Note or that holds

MERS cannot be named as a nominal beneficiary under a deed of trust. It cannot be

concluded that MERS knew that representing itself as a “beneficiary” under the Deed of

Trust was false. Thus, the second claim of the Amended Complaint also fails to state a

claim upon which relief can be granted, and further amendment would be futile.

3. Third Claim: Fraud

Under Arizona law,

A showing of fraud requires (1) a representation; (2) its falsity; (3) its

materiality; (4) the speaker’s knowledge of its falsity or ignorance of its

truth; (5) the speaker’s intent that it be acted upon by the recipient in the

manner reasonably contemplated; (6) the hearer’s ignorance of its falsity;

(7) the hearer’s reliance on its truth; (8) the right to rely on it; (9) his

consequent and proximate injury. Each element must be supported by

sufficient evidence. “Fraud may never be established by doubtful, vague,

speculative, or inconclusive evidence.”

Echols v. Beauty Built Homes, Inc., 132 Ariz. 498, 500, 647 P.2d 629, 631 (1982)

(citations omitted).

The Amended Complaint alleges that Defendants’ representation that the sole

purpose of the Note was to secure a residential home loan was false and their real purpose

was to obtain “various wrongful fees, rebates, refunds, kickbacks, profits and/or gains

from each of the parties who participated in this unlawful scheme.” First, some of these

Defendants did not participate in the loan origination, and Plaintiff has failed to identify

who did what with enough particularity to satisfy Fed. R. Civ. P. 9(b). Second, Plaintiff

did obtain a loan to purchase her residence, so the alleged misrepresentation can be false

only with respect to asserting that providing Plaintiff with a residential home loan was

their “sole purpose.” Third, if Defendants actually represented that they would not obtain

any profit or other benefit from providing Plaintiff with a home loan, Plaintiff had no

right to rely on such an incredible representation. Fourth, the Amended Complaint does

Case 3:10-cv-08076-NVW Document 46 Filed 07/19/10 Page 9 of 16
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

- 10 -

not allege any injury that Plaintiff suffered as a result of her reliance on the allegedly false

representation. It alleges generalized injury to the state and nation from Defendants’

alleged scheme to “create and collect unearned fees, charges and interests by selling

highly speculative and risky security instruments unrelated to plaintiff and/or her real

property,” but it does not allege that Plaintiff’s reliance on a false statement caused her

any particular injury.

The Amended Complaint further alleges that Countrywide, ReconTrust, and

MERS are foreign corporations and, pursuant to A.R.S. § 10-1502, not authorized to

maintain a proceeding in any court of Arizona. A.R.S. § 10-1502(A) provides that a

foreign corporation transacting business in this state may not maintain a proceeding in

any court in this state, but conducting a trustee’s sale is not a proceeding in court. 

Although the third claim of the Amended Complaint could be amended to identify

which Defendants allegedly committed particular fraudulent acts, further amendment

would be futile because Plaintiff did receive a residential home loan, it is reasonable for

entities involved in loan transactions to earn a profit for their services, and it would have

been unreasonable for Plaintiff to rely on any representation that the for-profit entities

involved in her loan transaction would receive no benefit from providing their services. 

The third claim will therefore be dismissed, without leave to amend, for failure to state a

claim upon which relief can be granted.

4. Fourth Claim: Deceptive Practices and Fraudulent Inducement

Under the heading “Deceptive Practices and Fraudulent Inducement,” in

paragraphs 43 through 53, the Amended Complaint alleges that Countrywide made

representations and took actions in the process of attracting and soliciting borrowers, but

it does not allege that any of those representations and actions were deceptive or

fraudulent, form the basis for a legal cause of action, or caused harm to Plaintiff. The

fourth claim of the Amended Complaint does not mention ReconTrust, Bank of America,

or MERS, which are the only served Defendants in this lawsuit. 

Case 3:10-cv-08076-NVW Document 46 Filed 07/19/10 Page 10 of 16
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

- 11 -

Further, Plaintiff did not attempt to defend the fourth claim in her response to the

motion to dismiss and therefore has abandoned it. Nevertheless, the Court considers the

merits and concludes the fourth claim of the Amended Complaint fails to state a claim

upon which relief can be granted and further amendment would be futile.

5. Fifth Claim: Damages for Identity Theft

The fifth claim of the Amended Complaint alleges that Plaintiff is a member of a

class of consumers affected by the alleged theft in 2008 by a Countrywide employee of

personal information and financial data, which is the basis of a federal multidistrict

lawsuit in the Western District of Kentucky. It further alleges that Plaintiff received

notice that she could opt out of a proposed settlement agreement, but speculates that in

the future she may incur damages exceeding the amount she would have been entitled to

recover under the settlement agreement. It does not allege that Plaintiff has incurred any

actual damages as a result of the alleged 2008 identity theft, but rather seeks leave to

amend the Amended Complaint when she discovers them. Plaintiff’s response to the

motion to dismiss states that she excluded herself from the settlement class and has

preserved her right to sue Countrywide, but does not explain how any of the Defendants

are liable for Countrywide’s former employee’s alleged conduct. The fifth claim of the

Amended Complaint, therefore, fails to state a claim upon which relief can be granted,

and further amendment would be futile.

6. Sixth Claim: Unconscionable Conduct

The sixth claim of the Amended Complaint alleges that all of the Defendants are

liable for “unconscionable conduct” because “Plaintiff was not informed of the sale of her

note by the loan officer.” It does not allege any legal theory by which any of the

Defendants could be held liable for “unconscionable conduct,” and none of the served

Defendants were involved in the loan origination. Further, the general allegations that the

“terms of the Deed of Trust executed by Countrywide are so one-sided as to be abusive

and unconscionable,” do not provide Defendants with sufficient notice as to which terms

were “abusive and unconscionable” and actually caused Plaintiff harm. Therefore, this

Case 3:10-cv-08076-NVW Document 46 Filed 07/19/10 Page 11 of 16
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

- 12 -

claim also fails to state a claim upon which relief can be granted, and further amendment

would be futile.

7. Seventh Claim: Unjust Enrichment and Civil Conspiracy

The seventh claim of the Amended Complaint alleges that Defendants conspired to

commit fraud and “retain the benefits from their actions of charging fees, rebates,

kickbacks, profits,....” This claim states nothing more than “labels and conclusions, and a

formulaic recitation of the elements of a cause of action” and therefore fails to state a

claim upon which relief can be granted. See Twombly, 550 U.S. at 555. 

8. Eighth Claim: Breach of Contract, Failure or Refusal to

Reinstate

The eighth claim of the Amended Complaint alleges that the Deed of Trust

provides her a right to reinstate after default subject to certain conditions; as of April 26,

2010, she had not received from Defendants the amount required to reinstate; and as of

April 26, 2010, she stood “ready, willing and able to fulfill her obligation under

paragraph 19” of the Deed of Trust. Paragraph 19 provides, in part:

19. Borrower’s Right to Reinstate After Acceleration. If

Borrower meets certain conditions, Borrower shall have the right to have

enforcement of this Security Instrument discontinued at any time prior to

the earliest of: (a) five days before sale of the Property pursuant to any

power of sale contained in this Security Instrument. . . . Those conditions

are that Borrower: (a) pays Lender all sums which then would be due under

this Security Instrument and the Note as if no acceleration had occurred. . . .

In November 2009 Plaintiff had notice of default and the amount of payment required

then to reinstate her loan. The Amended Complaint does not allege that Plaintiff tendered

payment for reinstatement then or at any time. It alleges that she called Bank of America

on April 13, 2010, requesting the amount of payment required to reinstate and that she

had not received the information before initiating this lawsuit on April 16, 2010. The

Amended Complaint does not allege which Defendants are liable under this claim for

relief. It does not allege whether or not Plaintiff received the information and tendered

payment five days before the rescheduled date of the trustee’s sale, April 26, 2010. It

does not allege that any of the Defendants refused her tender or denied her the

Case 3:10-cv-08076-NVW Document 46 Filed 07/19/10 Page 12 of 16
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

- 13 -

information needed to make a tender. In sum, the Amended Complaint does not allege

what any of the Defendants did that breached the Deed of Trust.

In her response to Defendants’ motion to dismiss, Plaintiff did not defend her

claim for breach of contract and right to reinstate and, therefore, has abandoned it. 

Nevertheless, the Court decides on the merits that the eighth claim of the Amended

Judgment fails to state a claim upon which relief can be granted and further amendment

would be futile.

9. Ninth Claim: Quiet Title

A quiet title action seeks an equitable ruling that an individual is the rightful owner

of real property. Chantler v. Wood, 6 Ariz. App. 134, 138, 430 P.2d 713, 717 (1967). It

necessarily depends on the plaintiff successfully asserting some legal or equitable theory

for why he is the rightful owner. As discussed above, none of the other claims of the

Amended Complaint provide any legal or equitable theory under which Plaintiff can be

found to be the rightful owner of the Property. Therefore, the ninth claim of the

Amended Complaint fails to state a claim upon which relief can be granted and is not

subject to cure by amendment.

III. Leave to Amend

Leave to amend should be freely given “when justice so requires.” Fed. R. Civ. P.

15(a)(2). But, “[f]utility of amendment can, by itself, justify the denial of a motion for

leave to amend.” Bonin v. Calderon, 59 F.3d 815, 845 (9th Cir. 1995). As explained

above, amendment of any of Plaintiff’s claims for relief would be futile. 

Most of Plaintiff’s claims flow from her reliance on Carpenter v. Longan, 83 U.S.

271, 274 (1872), and the theory that a trustee’s power of sale granted by a deed of trust

cannot be exercised unless the beneficiary holds the note and that securitization of

residential loan debt is fraudulent. As previously discussed, Arizona law does not support

Plaintiff’s principal theories. 

Further, Plaintiff does not identify any compensable damages she has incurred as a

direct or foreseeable result of any of the Defendants’ actions. She alleges, generally,

Case 3:10-cv-08076-NVW Document 46 Filed 07/19/10 Page 13 of 16
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

- 14 -

injury to the national economy arising from lenders’ securitization schemes, adverse

economic impact on her small business, personal injury arising from Defendants’ use of

public TARP funds, mental anguish, and speculative future injury she may incur resulting

from possible identity theft that allegedly occurred two years ago. Even if explained in

more detail, none of her alleged generalized injuries appears to be connected to any viable

legal theory of recovery.

Plaintiff does not respond to any of the deficiencies identified by Defendants with

specific offers to cure by amendment. She does request leave to amend the Amended

Complaint to add “newly discovered” facts about MERS, which apparently would be

related to an antitrust claim. However, the facts she would add, even if assumed to be

true, do not establish that she has in fact been damaged, only that she “is damaged by

MERS’ monopolistic practices by being denied the benefit of a competing ERS that

would result in lower prices, more favorable terms, public access to the electronic record

(now denied), and greater transparency in the mortgage process (presently deliberately

opaque).” 

The Court cannot conceive of any factual allegations Plaintiff could add to the

Amended Complaint that would salvage any of her claims and also be consistent with the

factual allegations she previously verified. Nowhere does the Amended Complaint

suggest that the terms of Plaintiff’s 6% fixed interest home loan were unfair, that any

specific fees or charges were excessive or unreasonable, or that anything about the loan

origination process was improper (other than Countrywide’s alleged failure to explain to

her that her loan would be assigned). Although Plaintiff quibbles about the redacted

photocopies attached to Defendants’ motions and contends that a notice was improperly

served because it was mailed to her using an address with “East” instead of “South” (or

no directional term as in the address given in one of her supporting affidavits), she does

not contend that any of the documents are substantively different from those she signed

and does not claim that she did not receive actual notice of the trustee’s sale. 

Case 3:10-cv-08076-NVW Document 46 Filed 07/19/10 Page 14 of 16
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

- 15 -

Moreover, the district court’s discretion to deny leave to amend a complaint is

“especially broad” where the plaintiff already has had one or more opportunities to amend

his complaint. Ascon Properties, Inc. v. Mobil Oil Co., 866 F.2d 1149, 1161 (9th Cir.

1989). “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). 

Because Plaintiff already has unsuccessfully amended her complaint previously and

further amendment would be futile, the Amended Complaint will be dismissed without

leave to amend.

IV. Plaintiff’s Motion for Preliminary Injunction and Defendants’ Motion to

Dissolve Temporary Restraining Order

To obtain a preliminary injunction, a plaintiff must demonstrate “that he is likely

to succeed on the merits, that he is likely to suffer irreparable harm in the absence of

preliminary relief, that the balance of equities tips in his favor, and that an injunction is in

the public interest.” Winter v. NRDC, 555 U.S. __, __, 129 S. Ct. 365, 374 (2008). 

“[T]he less certain the district court is of the likelihood of success on the merits, the more

plaintiffs must convince the district court that the public interest and balance of hardships

tip in their favor.” Sw. Voter Registration Educ. Project v. Shelley, 344 F.3d 914, 918

(9th Cir. 2003) (en banc) (per curiam). As found above, all of the claims of the Amended

Complaint will be dismissed, and Plaintiff has no likelihood of succeeding on the merits. 

Therefore, Plaintiff’s Motion for Preliminary Injunction will be denied and the ex parte

temporary restraining order issued April 22, 2010, by the Yavapai County Superior Court

will be vacated.

IT IS THEREFORE ORDERED that Defendants’ Motion to Dissolve the

Temporary Restraining Order and Defendants’ Motion to Dismiss Amended Complaint. 

(Docs. 25, 26) are granted, and Plaintiff’s Motion for Preliminary Injunction is denied.

IT IS FURTHER ORDERED vacating the ex parte temporary restraining order

issued April 22, 2010, by the Yavapai County Superior Court in this matter.

Case 3:10-cv-08076-NVW Document 46 Filed 07/19/10 Page 15 of 16
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

- 16 -

IT IS FURTHER ORDERED vacating the hearing on Plaintiff’s Motion to

Continue Hearing on Preliminary Injunction and Defendant’s Motion to Dissolve TRO

set for August 13, 2010. 

IT IS FURTHER ORDERED that the Clerk enter judgment dismissing Plaintiffs’

Amended Complaint with prejudice for failure to state a claim upon which relief can be

granted. The Clerk is directed to terminate this case. 

DATED this 16th day of July, 2010.

Case 3:10-cv-08076-NVW Document 46 Filed 07/19/10 Page 16 of 16