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Tesi v. Recontrust N.A.

United States District Court, Ninth Circuit

May 7, 2013

Barbara Tesi, a widow and unmarried, Plaintiff,
v.
ReconTrust N.A., a California corporation; Bank of America, N.A., a foreign corporation doing business in the State of Arizona, Defendants.

REPORT & RECOMMENDATION

BERNARDO P. VELASCO, Magistrate Judge.

Pending before the Court is Defendants' Motion to Dismiss (Doc. 14). Plaintiff has filed a Response (Doc. 15) and Defendants have filed a Reply (Doc. 16). For the following reasons, the Magistrate Judge recommends that the District Court grant Defendants' Motion to Dismiss (Doc. 14).

I. FACTUAL & PROCEDURAL BACKGROUND

On August 17, 2012, Defendants removed this matter from state court. (Doc. 1). Plaintiff alleges two causes of action. In Count One, Plaintiff alleges that on approximately June 1, 2006, she and her now-deceased husband executed a Promissory Note ("Note") made payable to Homefield Financial, Inc., and also executed a Deed of Trust ("DOT") in which Homefield Financial, Inc., was named as Lender, and Zen Title was designated as Trustee.[1] (Complaint, ¶¶II-III (Doc. 1-2)). Under the DOT, Mortgage Electronic Registration Systems, Inc. ("MERS"), which was "acting solely as a nominee for Lender and Lender's successors and assignees", was named as beneficiary.[2] (Complaint, Exh. B; see also Complaint, ¶IV). Plaintiff alleges that thereafter, the Note and DOT were acquired by Fannie Mae. (Complaint, at ¶V). On approximately March 8, 2012, an Assignment of the DOT to Bank of America ("BOA") "was made by MERS by a person whose name is Jeannine Abramoff, an assistant Secretary of MERS, and recorded... on March 16, 2012." ( Id. at ¶VI). Plaintiff further alleges that she is "informed and thus believes..." that Ms. Abramoff was not an employee of MERS and did not have authority to execute such assignment. ( Id. ).

Plaintiff also alleges that on approximately March 20, 2012, "a Corporation Assignment of [DOT]... was made by Anthony Cannon as [A]ssistant Secretary of MERS and recorded...." ( Id. at ¶VII). According to Plaintiff, Mr. Cannon was not an employee or officer of MERS and did not have authority to execute such assignment. ( Id. ). Additionally, on March 20, 2012, Defendant BOA executed a Substitution of Trustee appointing Defendant ReconTrust Company ("ReconTrust") Successor Trustee. ( See Complaint, Exh. F; see also Complaint, ¶VIII).

Plaintiff alleges that because neither Defendant BOA nor Defendant ReconTrust hold the Note, they lack authority to enforce the provisions of the DOT. (Complaint, ¶X).

In Count Two, Plaintiff alleges that state legislation granting "private parties the power to foreclosure security instrument [sic] without judicial oversight[]" violates the "First and Fourteenth Amendments..." of the U.S. Constitution, and Article 2, section 4, of the Arizona Constitution. ( Id. at ¶¶ XII-XIII).

Plaintiff requests that the Court enjoin Defendants from enforcing the DOT by Trustee Sale, and that the Court declare Title 33, Chapter 6.1, Article 1, unconstitutional. ( Id. at ¶XIII).

II. DISCUSSION

Defendants contend that there is no dispute that when Plaintiff signed the loan documents, she agreed foreclosure would be the consequence of default. Defendants assert that Plaintiff indisputably defaulted. (Motion, p. 2). According to Defendants, although Defendant ReconTrust recorded a Notice of Sale for August 15, 2012, no sale has occurred. ( Id. ). Defendants seek dismissal of this action pursuant to Fed.R.Civ.P. 12(b) for failure to state a claim.

A. Standard

"To survive a motion to dismiss [under Fed.R.Civ.P. 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;' that is, plaintiff must plead[ ] factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.'" Telasaurus VPC, LLC. v. Power, 623 F.3d 998, 1003 (9th Cir. 2010), cert. denied, ___ U.S. ___ , 132 S.Ct. 95 (2011), ( quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)); see also Moss v. United States Secret Serv., 572 F.3d 962, 969 (9th Cir. 2009) (to defeat a motion to dismiss, the "non-conclusory factual content, ' and reasonable inferences from that content, must be plausibly suggestive of a claim entitling the plaintiff to relief."). 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), abrogated on other grounds by Bell Atl. Corp. v. Twombly, 530 U.S. 544 (2007).

"[T]he tenet that a court must accept as true all of the allegations contained in a complaint..." does not apply to legal conclusions. Iqbal, 556 U.S. at 678; see also Telasaurus, 623 F.3d. at 1003 (pleadings that are no more than legal conclusions "are not entitled to the assumption of truth.'") ( quoting Iqbal, 556 U.S. at 679). Thus, "[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Iqbal, 556 U.S. at 678. Moreover, the court "cannot assume any facts necessary to [the plaintiffs']... claim that they have not alleged." Jack Russell Terrier Network of Northern Calif. v. American Kennel Club, Inc., 407 F.3d 1027, 1035 (9th Cir. 2005).

However, the court will assume "well-pleaded factual allegations, '... to be true, and then determine whether they plausibly give rise to an entitlement to relief.'" Telasaurus, 623 F.3d. at 1003 ( quoting Iqbal, 556 U.S. at 679); see also Iqbal, 556 U.S. at 678 ("A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged."). "The plausibility standard is not akin to a probability requirement, ' but it asks for more than a sheer possibility that a defendant has acted unlawfully." Iqbal, 556 U.S. at 678. Determining plausibility is a "context-specific task..." that requires the court to "draw on ...


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