Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_16-cv-01077/USCOURTS-caed-2_16-cv-01077-2/pdf.json

Parties Involved:
Steve Farren
Plaintiff
Bettina L. Farren
Plaintiff
JPMorgan Chase Bank, N.A.
Defendant
Quality Loan Service Corporation
Defendant
Select Portfolio Servicing, Inc.
Defendant
U.S. Bank
Defendant

Document Text:

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

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

BETTINA L. FARREN; STEVE 

FARREN,

Plaintiffs,

v.

SELECT PORTFOLIO SERVICING, 

INC.; US BANK AS TRUSTEE ON 

BEHALF OF THE HOLDERS OF THE 

WAMU MORTGAGE PASS-THROUGH 

CERTIFICATES SERIES 2007-HY6; 

JPMORGAN CHASE BANK, N.A.; 

QUALITY LOAN SERVICE 

CORPORATION; and Does 1 

through 50, inclusive,

Defendants.

No. 2:16-cv-01077-JAM-DB

ORDER GRANTING SELECT PORTFOLIO 

SERVICING, INC. AND US BANK’S

MOTION TO DISMISS

This matter is before the Court on defendants Select 

Portfolio Servicing, Inc. and US Bank as Trustee on behalf of the 

holders of the WaMu Mortgage Pass-Through Certificates, Series 

2007-HY6’s (collectively “Defendants”) Motion to Dismiss. 

Bettina L. Farren and Steve Farren (“Plaintiffs”) have sued 

Defendants for various claims connected to the mortgage secured 

by their residence. For the reasons explained below, the Court 

Case 2:16-cv-01077-JAM-DB Document 33 Filed 11/23/16 Page 1 of 7
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

2

grants Defendants’ Motion to Dismiss with leave to amend.1

I. FACTUAL ALLEGATIONS AND PROCEDURAL BACKGROUND

The following allegations are taken as true for the purposes 

of this motion:

On March 23, 2007, Plaintiffs executed a Deed of Trust 

(“DOT”) in favor of Washington Mutual Bank, FA, securing a loan 

of $1,464,000 with their property located at 2045 Salmon Falls 

Road, El Dorado Hills, CA 95862 (“Property”). First Amended 

Complaint (“FAC”) at ¶¶ 2, 12; see DOT, FAC at Exh. 1. The DOT 

defined the “Borrower” as “Steven Farren and Bettina L. Farren, 

husband and wife and Stephen R. Hinrichs and Janine G. Hinrichs, 

husband and wife by deed which recites ‘as to an undivided 50% 

interest, all as tenants in common[.]’” DOT at 1. Plaintiffs 

believe that they executed an Adjustable Rate Note (“Note”) as a 

part of the transaction; however, Plaintiffs do not have a copy 

of the Note they signed. FAC at ¶ 12. Plaintiffs do have a copy 

of an Adjustable Rate Note signed by Stephen R. Henrichs and 

Janine G. Henrichs. FAC at Exh. 8. Additionally, Plaintiffs 

executed a Fixed/Adjustable Rate Rider and a Second Home Rider, 

which they also have signed copies of and on which Plaintiffs are 

listed as Borrowers. FAC at ¶ 12; Exh. 2, 3. Plaintiffs allege 

they executed the Second Home Rider to acknowledge that the 

Property is a Second Home to the Henrichs. FAC at ¶ 62. 

Plaintiffs claim that the home was their primary residence. Id.; 

 

1 This motion was determined to be suitable for decision without 

oral argument. E.D. Cal. L.R. 230(g). The hearing was 

scheduled for October 4, 2016.

Case 2:16-cv-01077-JAM-DB Document 33 Filed 11/23/16 Page 2 of 7
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

FAC at ¶ 9. 

At some point after that transaction, but before December 8, 

2008, Chase became the successor to Washington Mutual Bank, FA. 

FAC at ¶ 17. Then, on December 8, 2008, Chase caused a Notice of

Default to be issued against the Property. FAC at ¶ 18. On 

December 9, 2008, Chase assigned the Deed of Trust and Note to 

LaSalle Bank NA as trustee for WaMu Mortgage Pass-Through 

Certificates, Series 2007—HY6. FAC at ¶¶ 19, 32; Exh. 5. US 

Bank NA succeeded LaSalle Bank in interest as trustee for the 

WaMu Mortgage Pass-Through Certificates. FAC at ¶ 21. Chase 

continued to be the servicer of the loan throughout these 

transfers until, at a date unknown to Plaintiffs, Select 

Portfolio Servicing, Inc. (“SPS”) became the servicer. Id. at 

¶¶ 20, 22. On January 4, 2016, Quality Loan Service Corporation 

(“Quality”) became the successor trustee of the DOT. FAC at 

¶ 24. At SPS’s direction, Quality issued and caused to be 

recorded a Notice of Trustee’s Sale of the Property on March 18, 

2016. FAC at ¶ 25. 

Plaintiffs originally filed suit in the Superior Court of 

the State of California for the County of El Dorado on April 12, 

2016. Notice of Removal at ¶ 1, ECF No. 1. Chase removed the 

case to federal court on May 19, 2016, after which Plaintiffs 

requested, but were denied, a Temporary Restraining Order to 

enjoin the foreclosure trustee’s sale. ECF Nos. 1, 13, 16. 

Plaintiffs submitted their First Amended Complaint, the operative 

complaint in this proceeding, on July 22, 2016. ECF No. 17. 

Motions to Dismiss from Defendants and Chase followed soon after. 

ECF Nos. 20, 25.

Case 2:16-cv-01077-JAM-DB Document 33 Filed 11/23/16 Page 3 of 7
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

II. OPINION

Defendants argue that all of Plaintiffs claims must be 

dismissed because Plaintiffs have no evidence supporting the 

allegation that they are parties to the underlying Note. Motion 

to Dismiss (“MTD”) at 5. Further—and, as Defendants note, more 

importantly for a Motion to Dismiss—Defendants argue Plaintiffs 

have failed to allege any facts supporting a plausible inference 

that they executed the Note. Id. Plaintiffs argue that their 

signatures on the Deed of Trust operated as a ratification of the 

Note obligation, making them parties to the Note as a matter of 

law. Opp. at 1–2. In the alternative, Plaintiffs allege that 

they executed an Adjustable Rate Note in the exact same terms and 

provisions as the Note executed by the Hinrichs. Opp. at 2. 

“To survive a motion to dismiss, 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, 678 (2009) (citation and quotation marks omitted). “The 

[Iqbal/]Twombly plausibility standard, which applies to all civil 

actions, does not prevent a plaintiff from pleading facts alleged 

upon information and belief where the facts are peculiarly within 

the possession and control of the defendant, or where the belief 

is based on factual information that makes the inference of 

culpability plausible.” Arista Records, LLC v. Doe 3, 604 F.3d 

110, 120 (2nd Cir. 2010); see Fitzgerald v. Bosco Credit LLC, No. 

16-cv-01473-MEJ, 2016 WL 5791253 (N.D. Cal. Oct. 4, 2016) (noting 

that several district courts in the Ninth Circuit have adopted 

the Second Circuit’s standard). The Court is not “required to 

accept as true allegations that are merely conclusory, 

Case 2:16-cv-01077-JAM-DB Document 33 Filed 11/23/16 Page 4 of 7
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

unwarranted deductions of fact, or unreasonable inferences.” In 

re Gilead Sci. Sec. Litig., 536 F.3d 1049, 1055 (9th Cir. 2008). 

Although Plaintiffs need only allege facts sufficient to 

state a plausible claim, the FAC fails to do so. Plaintiffs 

argue that their signatures on the DOT made them parties to the 

Note by operation of law. FAC at ¶¶ 14–16; Opp. at 1–2. The 

Court finds Plaintiffs’ argument to be without merit. As the 

Court explained when it denied Plaintiffs’ Motion for a Temporary 

Restraining Order, the cases that Plaintiffs repeatedly rely on 

for their ratification theory are inapplicable to Plaintiffs’ 

situation. See Order Denying Plaintiffs’ Ex Parte Application 

for Temporary Restraining Order at 5-6, ECF No. 16. Unless 

Plaintiffs provide some other basis for their theory, it will 

continue to fail. 

The FAC alleges that Plaintiffs signed the Note and that it 

has been lost. FAC at ¶¶ 119–21. But, in their “General 

Allegations,” Plaintiffs allege “on information and belief they 

executed [the Note]” for the reasons that they signed the Deed of 

Trust, executed the Fixed/Adjustable Rate Rider, executed the 

Second Home Rider, and were sent the Notice of Default and Notice 

of Trustee’s Sale in their name. FAC at ¶ 12. By basing the 

allegation on “information and belief” Plaintiffs draw a 

conclusion that the Court itself cannot draw. The Plaintiffs are 

in the best position to know whether or not they signed the Note 

and to allege facts based upon that knowledge. For their 

assertion to be plausible, it must be based on more than an 

inference that they must have signed the Note because they signed 

the other documents. As Defendants point out, the Deed of Trust 

Case 2:16-cv-01077-JAM-DB Document 33 Filed 11/23/16 Page 5 of 7
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

specifically discusses situations in which one might sign the 

Security Instrument but not execute the Note. See DOT at ¶ 13. 

In such a situation, that party is considered a co-signor and is 

not personally obligated to pay the sums secured by the DOT even 

though their interest in the Property is conveyed. Id. Thus, 

Plaintiffs’ signatures on the DOT do not necessarily imply they 

signed the Note. Although Plaintiffs state their allegation more 

concretely elsewhere in the FAC, see FAC at ¶¶ 70(c), 70(e), 77, 

and 119, it seems that these assertions flow from Plaintiffs’ 

initial inference that the Court now rejects. Unless Plaintiffs 

can amend their complaint to plausibly allege that they, in fact,

signed the Note, this entire action must fail. 

Thus, the Court grants Defendants’ Motion to Dismiss with 

leave to amend. The Court need not and does not reach the 

arguments concerning each individual claim at this time. 

III. ORDER

For the reasons set forth above, the Court GRANTS 

Defendant’s Motion to Dismiss with leave to amend. If Plaintiffs 

desire to file a second amended complaint they must do so within 

twenty days from the date of this Order. Defendants’ responsive 

pleadings are due within twenty days after the filing of the 

second amended complaint.

Defendants’ reply brief exceeds the Court’s page limit by 

four and a quarter pages. See Order Re Filing Requirements, ECF 

No. 4-2. In accordance with the Order Re Filing Requirements, 

Defendants are sanctioned in the amount of $200.00 ($50.00 per 

page). Defendants’ counsel is to pay this amount within five 

Case 2:16-cv-01077-JAM-DB Document 33 Filed 11/23/16 Page 6 of 7
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

days of the date of this order:

IT IS SO ORDERED.

Dated: November 22, 2016

Case 2:16-cv-01077-JAM-DB Document 33 Filed 11/23/16 Page 7 of 7