United States District Court, D. Arizona
DAVID G. CAMPBELL, District Judge.
Defendants Mortgage Electronic Registration Systems, Inc. ("MERS") and Bank of America, N.A. as successor by merger to LaSalle Bank National Association ("LaSalle") have filed a motion to dismiss pursuant to Rule 12(b)(6) for failure to state a claim upon which relief can be granted, and Rule 12(b)(7) for failure to join an indispensable party. Doc. 13. The motion has been fully briefed. Docs. 19, 20. For the reasons that follow, the Court will grant the motion.
On November 9, 2006,  Plaintiff David Standish and his wife, Cynthia Standish, executed a Deed of Trust for $618, 750.00 with Encore Credit Corp., secured by the property at 8320 E. Quill Street, Mesa, AZ 85207 ("Subject Property"). Doc. 14, Ex. 1. The Deed of Trust was subsequently assigned by MERS, as Encore Credit Corp.'s nominee, to LaSalle Bank, N.A., and recorded on December 11, 2008. Doc. 14, Ex. 2. LaSalle substituted Quality Loan Service Corporation ("Quality") as Trustee. Doc. 14, Ex. 3. More than two years later, after Quality scheduled and then canceled a trustee's sale, LaSalle substituted California Reconveyance Company ("CRC") as trustee under the Deed of Trust. Doc. 14 at Ex. 6. CRC noticed a trustee's sale. Doc. 1-1 at 40. Plaintiff and his wife filed bankruptcy on October 26, 2011, but the bankruptcy case was dismissed one year later for Plaintiff's failure to comply with the bankruptcy court's requirements. Doc. 14 at Ex. 8.
On August 2, 2013, Plaintiff filed his complaint in Maricopa County Superior Court to halt the trustee's sale of the property, and at the same time recorded a lis pendens. Docs. 1, 1-1. The case was removed to this Court on September 5, 2013.
II. Failure to Join Wife.
Under Rule 12(b)(7), a case may be dismissed for "failure to join a party under Rule 19." Rule 19 requires the joinder of a person if, "in that person's absence, the court cannot accord complete relief among existing parties, " or if disposing of the action in the person's absence would "impair or impede the person's ability to protect the interest" the party has in the case, or "leave an existing party subject to a substantial risk of incurring double, multiple, or otherwise inconsistent obligations."
It is well-established that "all parties who may be affected by the determination of the action are indispensable." Lomayaktewa v. Hathaway, 520 F.2d 1324, 1325 (9th Cir. 1975). To justify dismissal of a case for failure to join an indispensable party, however, joinder of the party must not be feasible. Fed.R.Civ.P. 19(b).
Plaintiff has asserted that his failure to join his wife as a party was in error and he seeks to amend his complaint to correct the error. Doc. 19 at 2. Given this, failure to join Plaintiff's wife is not grounds for dismissal of this case, as her joinder is feasible and the Court will grant Plaintiff's request to amend his complaint to correct this error.
II. Failure to State a Claim.
A. Legal Standard.
When analyzing a complaint for failure to state a claim for relief under Rule 12(b)(6), the well-pled factual allegations are taken as true and construed in the light most favorable to the nonmoving party. Cousins v. Lockyer, 568 F.3d 1063, 1067 (9th Cir. 2009). Legal conclusions couched as factual allegations are not entitled to the assumption of truth, Ashcroft v. Iqbal, 556 U.S. 662, 680 (2009), and therefore are insufficient to defeat a motion to dismiss for failure to state a claim, In re Cutera Sec. Litig., 610 F.3d 1103, 1108 (9th Cir. 2010). To avoid a Rule 12(b)(6) dismissal, the complaint must plead enough facts to state a claim to relief that is plausible on its face. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). This 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 (quoting Twombly, 550 U.S. at 556). "[W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged B but it has not show[n]' B that the pleader is entitled to relief.'" Id. at 679 (quoting Fed.R.Civ.P. 8(a)(2)). Dismissal is appropriate where the complaint lacks a cognizable legal theory, lacks sufficient facts alleged under a cognizable legal theory, or contains allegations disclosing some absolute defense or bar to recovery. See Balistreri v. Pacifica Police Dept., 901 F.2d 696, 699 (9th Cir. 1988); Weisbuch v. County of L.A., 119 F.3d 778, 783, n.1 (9th Cir. 1997).
Plaintiff asserts five causes of action: (1) lack of standing to foreclose by Defendants and allegations that MERS is not a real party in interest; (2) breach of contract for failure to adhere to a Deed of Trust provision granting power to appoint a substitute trustee to the Lender, not the beneficiary or Lender's successors or assigns; (3) slander of title under A.R.S. § 33-420, for assignment of the Deed of Trust to an invalid trustee; (4) declaratory relief in the form of a judicial determination of the rights, obligations and interests of the parties with regard to ...