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Nickolas v. Bank of New York Mellon

United States District Court, D. Arizona

July 12, 2018

Steven Paul Nickolas, Plaintiff,
v.
Bank of New York Mellon, et al., Defendants.

          ORDER

          Honorable John J. Tuchi United States District Judge

         At issue is Defendants The Bank of New York Mellon f/k/a the Bank of New York as Successor in Interest to JP Morgan Chase Bank, N.A. Solely in its Capacity as Trustee for the Structured Asset Mortgage Investments II Trust 2006-AR8 Mortgage Pass-Through Certificates Series 2006-AR8 and Structured Asset Mortgage Investments II, Inc.'s Motion to Dismiss Plaintiff's Complaint (Doc. 19, MTD), to which Plaintiff Steven Paul Nickolas filed a Response (Doc. 26, Resp.) and concurrent Motion for Leave to File First Amended Complaint (Doc. 25, MTA). In this Order, the Court will also resolve Plaintiff's Application for Temporary Restraining Order, Preliminary and Permanent Injunctions (Doc. 31). No party requested oral argument for these matters, nor did the Court deem it necessary to resolve the pending Motions. See LRCiv 7.2(f).

         To begin with, Defendants did not oppose Plaintiff's Motion to Amend, so Plaintiff would ordinarily be entitled to summary disposition of that Motion. See LRCiv 7.2(i). However, Plaintiff's Response to Defendants' prior-filed Motion to Dismiss fails to meet any of the arguments in Defendants' Motion except for Defendants' request for the Court to dismiss this case on res judicata grounds. To the extent Defendants argue that Plaintiff fails to state a claim, Plaintiff simply states that the “First Amended Complaint contains sufficient factual matter that, when accepted as true and viewed in the light most favorable to the nonmoving party, ‘states a claim of relief that is plausible on its face.'” (Resp. at 2-3.) This is simply a statement of the motion to dismiss standard and not a substantive argument as to why Defendants' grounds for dismissal of Plaintiff's claim lack merit. As a result of Plaintiff's failure to meet Defendants' arguments, the Court would also find that Defendants are entitled to summary disposition of their Motion to Dismiss for failure to state a claim. See LRCiv 7.2(i). The Court has neither the obligation nor capacity to examine the Complaint or Proposed First Amended Complaint and make Plaintiff's arguments against dismissal on behalf of Plaintiff. See, e.g., F.D.I.C. v. Garner, 126 F.3d 1138, 1145 (9th Cir. 1997) (finding that the court may conclude that a party that presents no applicable case law in support of an argument waives it); Pelfresne v. Village of Williams Bay, 917 F.2d 1017, 1023 (7th Cir. 1990) (“A litigant who fails to press a point by supporting it with pertinent authority, or by showing why it is sound despite a lack of supporting authority or in the face of contrary authority, forfeits the point. We will not do his research for him.” (internal quotations omitted)).

         The Court will nonetheless examine Defendants' arguments for dismissal of Plaintiff's claims for failure to state a claim, albeit in the absence of any counterargument from Plaintiff. The Court will also consider Defendants' contention that Plaintiff's claim is barred by the doctrine of res judicata.

         I. BACKGROUND

         According to the Proposed First Amended Complaint (Doc. 25-1, PFAC) and the judicially-noticed documents in the public record or central to Plaintiff's allegations[1] (Doc. 20), in 2006, Plaintiff obtained a loan for $896, 500 through a Note and secured by a Deed of Trust against real property in Scottsdale, Arizona. The Deed of Trust states:

The 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. A Sale might result in a change in the entity (known as the “Loan Servicer”) that collects Periodic Payments due under the Note and this Security Instrument and performs other mortgage loan servicing obligations under the Note, this Security Instrument, and Applicable Law. There also might be one or more changes of the Loan Servicer unrelated to a sale of the Note.

(Doc. 20 Ex. 1.) Countrywide Bank, N.A. was the lender and Mortgage Electronic Registration Systems, Inc. (“MERS”) was the beneficiary and “nominee for the lender and the lender's successors and assigns” under the terms of the Deed of Trust. (Doc. 20 Ex. 1.)

         Once originated, the loan was deposited in a securitized trust-Plaintiff alleges wrongly-by Defendant Structured Asset Mortgage Investments II Inc. (“SAMI”) The judicially-noticed property records proffered by Defendants show that, in August 2009, MERS assigned all beneficial interest and rights under the Deed of Trust to Defendant The Bank of New York Mellon f/k/a the Bank of New York as Successor in Interest to JP Morgan Chase Bank, N.A. Solely in its Capacity as Trustee for the Structured Asset Mortgage Investments II Trust 2006-AR8 Mortgage Pass-Through Certificates Series 2006-AR8 (“BNYM”), and BNYM substituted ReconTrust Company, N.A. as successor trustee. (Doc. 20 Exs. 2-3.)

         In 2009, Plaintiff defaulted on the loan and ReconTrust recorded a Notice of Trustee's Sale but, after Plaintiff received a permanent loan modification, the sale was cancelled in January 2010. (Doc. 20 Exs. 4-6.) In 2012, Plaintiff defaulted on the loan again, and ReconTrust recorded a Notice of Trustee's Sale for a sale to take place in July 2012. In a prior lawsuit, Plaintiff filed suit against BNYM's trust, [2] MERS, and other parties on June 28, 2012. (Case No. 2:12-cv-01922-ROS.) During the pendency of that litigation, BNYM substituted Quality Loan Service Corporation (“Quality”) as trustee. (Doc. 20 Ex. 10.) In March 2015, Plaintiff stipulated to dismiss the case with prejudice. (Doc. 20 Exs. 25, 26.) Around the same time, Quality recorded a Notice of Trustee's Sale for a sale to take place in April 2015, which was eventually cancelled. (Doc. 20 Exs. 11, 13.)

         In July 2015, Plaintiff filed for Chapter 13 bankruptcy protection. (Case No. 2:15-bk-09321-BKM.) In the bankruptcy proceeding, Plaintiff filed an adversary proceeding (Case No. 2:16-ap-00060-BKM) alleging, as he does in this lawsuit, that the assignments of interest and rights under the Deed of Trust were wrongful and that BNYM lacked standing to foreclose. (Doc. 20 Exs. 28-30.) Plaintiff voluntarily dismissed the bankruptcy and adversary proceedings in December 2016 and filed the present case in April 2017. (Doc. 1, Comp.; Doc. 20 Exs. 28, 29.)

         In the PFAC, Plaintiff seeks declaratory relief in the form of a determination whether BNYM holds the Note or Deed of Trust on Plaintiff's residence such that it has a right to enforce a claim against the residence by way of a foreclosure action. (PFAC ¶ 32.) Defendant moves to dismiss Plaintiff's claim under Federal Rule of Civil Procedure 12(b)(6) both because it is barred by the doctrine of res judicata and because Plaintiff fails to state a claim as a matter of law.

         II. LEGAL STANDARD

         A complaint must include “only ‘a short and plain statement of the claim showing that the pleader is entitled to relief,' in order to ‘give the defendant fair notice of what the . . . claim is and the grounds upon which it rests.'” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)); see also Fed. R. Civ. P. 8(a). A dismissal under Rule 12(b)(6) for failure to state a claim can be based on either (1) the lack of a cognizable legal theory or (2) insufficient facts to support a cognizable legal claim. Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1990). “While a complaint attacked by a Rule 12(b)(6) motion does not need detailed factual allegations, a plaintiff's obligation to provide the ‘grounds' of his ‘entitle[ment] to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Twombly, 550 U.S. at 555 (citations omitted). The complaint must thus 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, ...


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