1 – OPINION AND ORDER

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF OREGON

PORTLAND DIVISION

DEBRA K. CHRUSZCH, 

No. 3:15-cv-01131-MO

Plaintiff,

 OPINION AND ORDER

 v. 

BAYVIEW LOAN SERVICING, 

LLC; RECONTRUST COMPANY, 

N.A.; BAC HOME LOANS 

SERVICING, LP; THE BANK OF 

NEW YORK MELLON, N.A.; and

MORTGAGE ELECTRONIC 

REGISTRATION SYSTEMS, INC. 

(MERS),

Defendants.

MOSMAN, J., 

Plaintiff Debra Chruszch filed this suit and appears to seek declaratory judgement and 

quiet title. Ms. Chruszch also appears to seek damages for wrongful foreclosure and fraud. 

Defendants moved to dismiss for failure to state a claim under Federal Rule of Civil Procedure 

12(b)(6). Having concluded that Ms. Chruszch has failed to state a claim, I GRANT Defendants’ 

motion to dismiss [28, 29]. I also GRANT Defendants’ request for judicial notice [30] and 

DENY Ms. Chruszch’s Motion for Declaratory Judgment [3]. 

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2 – OPINION AND ORDER

BACKGROUND

Ms. Chruszch executed a deed of trust securing a mortgage of her residence on 

September 26, 2005. (Miller Decl. [31], Ex. 1.) The deed of trust designated First Magnus 

Financial Corporation as the lender, Fidelity National Title Company of Oregon as the trustee, 

and Mortgage Electronic Registration Systems, Inc. (MERS) as the beneficiary and as “nominee 

for Lender and Lender’s successors and assigns.” Id. The deed of trust was recorded on October 

20, 2005. Id. In her complaint, Ms. Chruszch claims that she was current on her mortgage 

payments until December 2008. (Compl. [3] at 3.) There has been no foreclosure sale of the 

property, and there is no pending foreclosure. 

LEGAL STANDARDS

On a motion to dismiss, the court reviews the sufficiency of the complaint. Scheuer v. 

Rhodes, 416 U.S. 232, 236 (1974). The court considers allegations in the complaint, any exhibits 

attached to the complaint, and judicially noticeable materials. Swartz v. KPMG LLP, 476 F.3d 

756, 763 (9th Cir. 2007). In cases where there is a jurisdictional defect, dismissal without leave 

to amend is proper where “the complaint could not be saved by any amendment.” Id. at 760 

(internal quotation omitted). When reviewing a motion to dismiss, the court must “accept all 

factual allegations in the complaint as true and construe the pleadings in the light most favorable 

to the nonmoving party.” Knievel v. ESPN, 393 F.3d 1068, 1072 (9th Cir. 2005). 

The court construes pro se pleadings “liberally,” affording pro se plaintiffs the “benefit of 

any doubt.” Hebbe v. Pliler, 627 F.3d 338, 342 (9th Cir. 2010) (internal quotations omitted). 

However, this liberal interpretation of a pro se complaint “may not supply essential elements of 

the claim that were not initially pled.” Ivey v. Bd. of Regents of Univ. of Alaska, 673 F.2d 266, 

268 (9th Cir. 1982). A court need not accept legal conclusions as true because “[t]hreadbare 

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3 – OPINION AND ORDER

recitals of the elements of a cause of action, supported by mere conclusory statements, do not 

suffice.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). 

To survive a motion to dismiss for failure to state a claim under Federal Rule of Civil 

Procedure 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.’” Iqbal, 556 U.S. at 678 (quoting Bell Atl. 

Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A pleading that offers only “labels and 

conclusions” or “‘naked assertion[s]’ devoid of ‘further factual enhancement’” will not suffice. 

Id. (quoting Twombly, 550 U.S. at 555, 557) (alteration in original). While the plaintiff does not 

need to make “detailed factual allegations” at the pleading stage, the allegations must be 

sufficiently specific to give the defendant “fair notice” of the claim and the grounds on which it 

rests. See Erickson v. Pardus, 551 U.S. 89, 93–94 (2007) (per curiam) (citing Twombly, 550 U.S. 

at 555). 

DISCUSSION

It is difficult to discern Ms. Chruszch’s legal claims. Ms. Chruszch seeks a judicial 

declaration that Defendants must show original loan documentation, prove ownership of the 

loan, and establish standing to foreclose. (Compl. [3] at 4.) In addition to the judicial 

declaration, she appears to seek damages for what might be termed a claim for wrongful 

foreclosure, alleged as “wrongfully committing the threat of taking Plaintiff’s property.” (Compl. 

[3] at 4.) Ms. Chruszch also appears to challenge the validity of the Deed of Trust as well as the 

securitization of the note. She also seeks damages for fraud, alleging that Defendants have 

attempted “to take possession of [Plaintiff’s] Property though fraud and malice” and participated 

in “fraudulent and unconscionable conduct.” (Compl. [2] at 2; Compl. [3] at 4.)1 Lastly, Ms. 

 

1 Ms. Chruszch has provided the court with two separate documents that together appear to constitute her complaint. 

The first document is labeled “Quiet Title” [2]. The second document, which provides much more detail than the 

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4 – OPINION AND ORDER

Chruszch appears to allege she is entitled to quiet title. (Compl. [2] at 2.) Because Ms. Chruszch 

has failed to sufficiently state any of these claims, they are all dismissed. 

I. Judicial Notice

A court may take judicial notice of a fact outside the pleadings if the fact “can be 

accurately and readily determined from sources whose accuracy cannot reasonably be 

questioned” under Federal Rule of Evidence 201. MGIC Indem. Corp. v. Weisman, 803 F.2d 

500, 504 (9th Cir. 1986) (holding that the district court, when determining whether a complaint 

fails to state a claim, may take “judicial notice of matters of public record outside the 

pleadings”). Defendants Recontrust Co. and Bank of America have requested that the court take 

judicial notice of the deed of trust signed by Ms. Chruszch and recorded in the county land 

records. Ms. Chruszch does not dispute that she signed the deed of trust, and it is publically 

available and thus easily identifiable. Defendants’ request for judicial notice [30] is thus 

GRANTED.

II. Plaintiff’s Declaratory Judgment Action 

Ms. Chruszch seeks a judicial declaration that Defendants must show original loan 

documentation, prove ownership of the loan, and establish standing to foreclosure. (Compl. [3] at 

4.) While the Declaratory Judgment Act, 28 U.S.C. § 2201, permits federal courts to hear suits 

for declaratory judgment, there must be an actual controversy between the parties. This is akin to 

the Article III case or controversy requirement: the dispute must “‘admi[t] of specific relief 

through a decree of a conclusive character, as distinguished from an opinion advising what the 

law would be upon a hypothetical state of facts.’” MedImmune, Inc. v. Genentech, Inc., 549 U.S. 

118, 127 (2007) (quoting Aetna Life Ins. Co. v. Haworth, 300 U.S. 227, 240–41 (1937)) 

 

first, is labeled “Declaratory Review and Judgment” [3]. I will treat both of these documents together as a single 

complaint for purposes of addressing Defendants’ motions to dismiss. 

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5 – OPINION AND ORDER

(alteration in original). In essence, declaratory judgment is only proper where “the facts alleged, 

under all the circumstances, show that there is a substantial controversy, between parties having 

adverse legal interests, of sufficient immediacy and reality.” Id. 

In this case, there is no foreclosure activity pending on Ms. Chruszch’s property, and 

there is no suggestion that foreclosure will be pursued presently. The mere possibility of future 

foreclosure action by Defendants is not enough to create a real and immediate controversy 

between the parties. See, e.g., Kichatov v. Nationstar Mortg., Inc., 2013 WL 3025981, at *4 (D. 

Or. June 14, 2013); Magno v. U.S. Bank N.A., 2013 WL 1636074, at *4 (D. Or. April 16, 2013); 

Clow v. Bank of America, 2011 WL 7153930, at *3 (D. Or. Dec. 19, 2011). Because no judicial 

or non-judicial foreclosure proceedings are pending, there is no case or controversy and 

declaratory relief would be inappropriate. 

Furthermore, Ms. Chruszch’s “show me the note” theory has been repeatedly examined 

by this court and rejected. Stewart v. MERS, 2010 WL 1055131, at *12 (D. Or. 2010) (noting 

that the Oregon Trust Deed Act “does not require presentment of the Note or any other proof of 

real party in interest or standing, other than the Deed of Trust”) (quotations omitted); see also 

Vettrus v. Bank of America, N.A., 2012 WL 2905167, at *6 (D. Or. July 13, 2012) (“presentation 

of the original promissory note is not required); Tabb v. OneWest Bank, 2010 WL 5684402, at *5 

(D. Or. 2010) (concluding that “Oregon . . . does not require any party to a trustee’s sale to 

produce a physical copy of the original note”). Accordingly, Ms. Chruszch’s claim for 

declaratory relief [3] fails as a matter of law and is therefore DISMISSED with prejudice. 

III. Plaintiff’s Wrongful Foreclosure Claim

Ms. Chruszch further alleges that Defendants “wrongfully commit[ed] the threat of taking 

Plaintiff’s Property which has been abusive and emotionally oppressive to Plaintiff.” (Compl. [3] 

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6 – OPINION AND ORDER

at 4.) This appears to be a wrongful foreclosure claim. Where there is no pending foreclosure, 

any claim alleging wrongful foreclosure is moot. See, e.g., Staton v. BAC Home Loans Servicing, 

LP, 2014 WL 1803376, at *2 (D. Or. May 6, 2014) (“When a non-judicial foreclosure sale is 

rescinded, any claims premised on the non-judicial foreclosure are rendered moot. There is no 

cause of action under Oregon law for the tort of wrongful attempted foreclosure.”) (internal 

citations and quotation marks omitted) (emphasis in original). Here, no foreclosure sale took 

place, and there is no pending foreclosure. Thus, Ms. Chruszch’s wrongful foreclosure claim is 

moot and fails as a matter of law. 

IV. Plaintiff’s Claim that a Deed of Trust Listing MERS as a Beneficiary is Invalid 

Ms. Chruszch states that “there has been litigation regarding the right of MERS to be a 

holder of record for third parties.” (Compl. [3] at 2.) In support of this assertion, she cites a New 

York case that is not applicable to this case. While the Oregon Supreme Court did hold in 

Bandrup v. ReconTrust Co., N.A., 353 Or. 668 (2013), that “MERS could not satisfy the statutory 

definition of a beneficiary, there is nothing in that decision to support the contention that the 

mere involvement of MERS in the loan will render the lien invalid.” Staton, 2014 WL 1803376, 

at *2; see also Lind v. Fidelity Nat’l Title Ins. Co., 2014 WL 2450775, at *2 (D. Or. May 30, 

2014) (“while [Bandrup] does hold that MERS does not meet the statutory definition of a 

beneficiary, it does not hold that the mere involvement of MERS invalidates the loan”). 

Therefore, even if I generously interpreted Ms. Chruszch’s above statement to be an allegation 

that her deed of trust is invalid due to MERS being a beneficiary, the claim still would fail as a 

matter of law. 

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7 – OPINION AND ORDER

V. Plaintiff’s Challenge to the Securitization of the Note

Ms. Chruszch states that her loan was securitized. (Compl. [3] at 2-3.) Implicit 

throughout her complaint is a contention that securitization in general somehow gives rise to a 

cause of action. This is simply not the case. There is nothing unlawful about securitizing a 

loan—securitization is just another method of selling a loan. The deed of trust Ms. Chruszch 

signed and agreed to specifically states that “[t]he Note or a partial interest in the Note (together 

with this Security Instrument) can be sold one or more times without prior notice to Borrower.” 

(Miller Decl., Ex. 1 at 11, ¶ 20.) Ms. Chruszch points to no law or provision in the deed of trust

preventing this practice and cites to no law indicating that securitization can be the basis of a 

cause of action. Indeed, courts have uniformly rejected the argument that securitization of a 

mortgage loan provides the mortgagor a cause of action. See Joyner v. Bank of Am. Home Loans,

2010 WL 2953969, at *2 (D. Nev. July 26, 2010) (rejecting breach of contract claim based on 

securitization of loan); Haskins v. Moynihan, 2010 WL 2691562, at *2 (D. Ariz. July 6, 2010) 

(rejecting claims based on securitization because plaintiffs could point to no law indicating that 

securitization of a mortgage is unlawful, and “[p]laintiffs fail to set forth facts suggesting that 

Defendants ever indicated that they would not bundle or sell the note in conjunction with the sale 

of mortgage-backed securities”); Lariviere v. Bank of N.Y. as Tr., Civ. WL 2399583, at *4 (D. 

Me. May 7, 2010) (“Many people in this country are dissatisfied and upset by [the securitization] 

process, but it does not mean that the [plaintiffs] have stated legally cognizable claims against 

these defendants in their amended complaint.”). The overwhelming authority does not support a 

cause of action based upon improper securitization. Accordingly, I conclude that Ms. Chruszch 

has not sufficiently plead a claim challenging the securitization of her loan and the claim is 

dismissed. 

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8 – OPINION AND ORDER

VI. Plaintiff’s Fraud Claim 

Ms. Chruszch appears to bring a claim for fraud. She alleges that in the loan 

securitization process, Defendants made “materially misleading statements in the Registration

Statement, and omitt[ed] material facts.” (Compl. [3] at 3.) She also claims that in December 

2008, prior to her defaulting on the loan, an unidentified loan servicer told her she had to be in 

default to qualify for a loan modification, “which forced Plaintiff to cease paying, due to 

defendants [sic] fraudulent and unconscionable conduct.” (Id. at 3, 4.) 

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

constituting fraud or mistake.” Fed. R. Civ. P. 9(b). A plaintiff must “state the time, place, and 

specific content of the false representations as well as the identities of the parties to the 

misrepresentations.” Schrieber Distrib. Co. v. ServWell Furniture Co., 806 F.2d 1393, 1401 (9th 

Cir. 1986). Under Oregon case law, the elements of fraud that must be pled are: 

(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 should be acted on by the person and in the 

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

falsity; (7) [the hearer’s] reliance on its truth; (8) [the hearer’s] 

right to rely thereon; (9) and [the hearer’s] consequent and 

proximate injury.

Wieber v. FedEx Ground Package System, Inc., 231 Or. App. 469, 480, 220 P.3d 68 (2009). 

 Ms. Chruszch’s ambiguous allegations of fraud fall well short of meeting the heightened 

pleading standard of Rule 9(b). She does not identify what the alleged misrepresentations were, 

who made them, when they were made, how they were made, or how that person or those 

persons were authorized to speak on behalf of Defendants. Furthermore, Ms. Chruszch does not 

allege any facts showing that Defendants knew the representations were false or intended that 

Ms. Chruszch rely on them. While she alleges that an unidentified loan servicer told her that she 

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9 – OPINION AND ORDER

had to be in default in order to qualify for a loan modification, she does not allege that either of 

Defendants was the loan servicer. Accordingly, Ms. Chruszch’s fraud claim is dismissed with 

leave to amend. 

VII. Plaintiff’s Quiet Title Claim 

Ms. Chruszch’s request that the court quiet title in her favor must be dismissed for failure 

to state a claim. Ms. Chruszch says that she “dispute[s] and allege[s] that as a result of improper 

procedures, the true owner of Plaintiff’s mortgage is unclear; and as a result; [sic] Plaintiff 

alleges she has been paying improper entitles an excess amount whom question legal standing on 

her Property.” (Compl. [2] at 2.) This claim is found on a document labeled “Quiet Title,” and as 

such, I will construe it as a claim to quiet title. 

Generally, “a person may bring an equitable quiet title action to obtain resolution of a 

dispute relating to adverse or conflicting claims to real property.” Staton, 2014 WL 1803376, at 

*8 (citing Spears v. Dizick, 235 Or. App. 594, 598, 234 P.3d 1037 (2010)). In order to prevail in 

a quiet title action, a plaintiff “must prove that [she has] a substantial interest in, or claim to, the

disputed property and that [her] title is superior to that of the defendants.” Coussens v. Stevens, 

200 Or. App. 165, 171, 113 P.3d 952 (2005). A plaintiff must rely on the strength of her own 

title, not the weakness of a defendant’s title. Id. To rely on the strength of her own title, a 

“plaintiff must expressly allege that: (1) [her] title is superior to that of defendants’ and (2) ‘the 

subject loan has been satisfied or that plaintiff is ready, willing and able to tender the full amount 

on the loan.’” Oliver v. Delta Financial Liquidating Trust, 2012 WL 3704954, at *5 (D. Or. Aug. 

27, 2012) (quoting Rigor v. Freemont Inv. & Loan, 2012 WL 913631, at *1 (D. Or. Feb 13, 

2012)). Here, Ms. Chruszch does not allege that she tendered the amounts due under the deed of 

trust. Accordingly, her quiet title claim fails to meet this crucial element and must be dismissed. 

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Ms. Chruszch’s cause of action could also be construed as an action to remove a cloud on 

title, i.e. Ms. Chruszch appears to allege an unenforceable lien, claim, or other encumbrance. The 

pleading requirement to remove a cloud on title requires the plaintiff to specifically describe the 

instrument or other source creating the cloud and further allege specifically why it is invalid. See 

Nehalem Timber Co. v. Columbia Co., 97 Or. 100, 108–09, 189 P. 212, 190 P. 318 (1920). Ms. 

Chruszch fails to plead to whom she has been allegedly tendering payments, why that servicer is 

not the proper entity to collect her payments, or why the deed of trust lien is not valid. Without 

these allegations, a cloud of title claim cannot survive a motion to dismiss. Accordingly, Ms. 

Chruszch’s quiet title claim is dismissed with leave to amend. 

CONCLUSION

 Because no foreclosure proceedings are pending on Ms. Chruszch’s residence, her 

requests for a declaratory judgment fail for lack of subject matter jurisdiction. I have found that 

there is no concrete controversy between the parties such that Article III jurisdiction may be 

exercised over these claims. Further, all of Ms. Chruszch’s claims must be dismissed for failure 

to state a claim on which relief can be granted with leave to amend her fraud and quiet title 

claims. Defendants’ motions to dismiss [28, 29] are GRANTED. As noted above, I GRANT 

Defendants’ request for judicial notice [30] and DENY Ms. Chruszch’s Motion for Declaratory 

Judgment [3] with prejudice. 

IT IS SO ORDERED. 

DATED this 4th day of November, 2015. 

/s/ Michael W. Mosman____ 

MICHAEL W. MOSMAN

United States District Judge

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