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Ruiz v. Deutsche Bank National Trust Co.

United States District Court, Ninth Circuit

August 21, 2013

Virginia Ruiz, Plaintiff,
Deutsche Bank National Trust Company, as Trustee, Defendant.


G. MURRAY SNOW, District Judge.

Pending before the Court is Defendant's Motion to Dismiss. (Doc. 5.) For the reasons discussed below, the Court grants the Motion.


In March 2006, Plaintiff Virginia Ruiz took out a mortgage of $148, 000 from Long Beach Mortgage Company ("LBMC"). The mortgage was secured by a deed of trust on property located at 1520 North 194th Ave., Buckeye, Arizona (the "Property") with LBMC as the beneficiary and Empire Title Agency of Arizona as the trustee ("Empire"). (Doc. 5-1, Exs. A, B.)[2] On September 4, 2008, California Reconveyance Company ("CRC") was substituted as trustee. (Doc. 8-1, Ex. E.)

After Ruiz defaulted on her mortgage payments, CRC recorded a Notice of Trustee's Sale on March 4, 2011. (Doc. 5-1, Ex. C.) A trustee's sale was held on September 24, 2012, and a trustee's deed was issued the following day, conveying interest in the Property to Defendant Deutsche Bank National Trust Company ("Deutsche Bank"). ( Id., Ex. D.) After the non-judicial foreclosure, Deutsche Bank did not file an assignment of deed of trust or transfer the mortgage into a trust. (Doc. 1-1 ΒΆΒΆ 16-17.)

On February 1, 2013, Ruiz brought a state action to quiet title in the Property, seeking declaratory relief that title is vested in her alone and that Deutsche Bank has no interest in the Property. ( Id. at 4-5.) Deutsche Bank removed the action to this Court on February 27, 2013 and now moves to dismiss the Complaint. (Doc. 1.)



To survive dismissal for failure to state a claim pursuant to Federal Rule of Civil Procedure 12(b)(6), a complaint must contain more than "labels and conclusions" or a "formulaic recitation of the elements of a cause of action"; it must contain factual allegations sufficient to "raise a right to relief above the speculative level." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). While "a complaint need not contain detailed factual allegations... it must plead enough facts to state a claim to relief that is plausible on its face.'" Clemens v. DaimlerChrysler Corp., 534 F.3d 1017, 1022 (9th Cir. 2008) (quoting Twombly, 550 U.S. at 570). "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." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly, 550 U.S. at 556). The plausibility standard "asks for more than a sheer possibility that a defendant has acted unlawfully." Id. When a complaint does not "permit the court to infer more than the mere possibility of misconduct, the complaint has alleged-but it has not shown-that the pleader is entitled to relief." Id. at 679 (internal quotation omitted).

When analyzing a complaint for failure to state a claim under Rule 12(b)(6), "[a]ll allegations of material fact are taken as true and construed in the light most favorable to the nonmoving party." Smith v. Jackson, 84 F.3d 1213, 1217 (9th Cir. 1996). However, legal conclusions couched as factual allegations are not given a presumption of truthfulness, and "conclusory allegations of law and unwarranted inferences are not sufficient to defeat a motion to dismiss." Pareto v. FDIC, 139 F.3d 696, 699 (9th Cir. 1998).


A. Standing

Under Arizona law, title cannot be quieted unless Plaintiff pays off the full amount of the mortgage. Bean v. BAC Home Loans Servicing, L.P., 11-CV-553-PHX-GMS, 2012 WL 10349, at *5 (D. Ariz. Jan. 3, 2012) (citing Farrell v. West, 57 Ariz. 490, 491, 114 P.2d 910, 911 (1941) ("[I]f it appears there is an unsatisfied balance due a defendant-mortgagee, or his assignee, the court will not quiet the title until and unless [the plaintiff-mortgagor] pays off such mortgage lien.")); Eason v. Indymac Bank, 2010 WL 1962309, at *2 (D. Ariz. May 14, 2010) ("[Q]uiet title is not a remedy available to the trustor until the debt is paid or tendered.").

Ruiz does not allege that she has tendered the full amount of the mortgage nor that she is "ready, willing and able" to do so. Eason, 2010 WL 1962309, at *2. Ruiz cites to Dimock v. Emerald Properties, 97 Cal.Rptr.2d 255 (Cal.Ct.App. 2000), for the proposition that "a borrower attaching a voidable assignment of deed of trust is not required to tender any of the amounts due under the note." (Doc. 7 at 4.) She further argues that the "Tender Rule" should not apply here because she alleges that Deutsche Bank is not entitled to payment in the first instance. Dimock involved a situation where a former trustee, not the successor trustee under the deed of trust, had conducted the trustee's sale and consequently, the trustee's sale was void. 97 Cal.Rptr.2d at 259-262. Here, CRC was the trustee at the time it conveyed title to Deutsche Bank and ...

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