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Nickolas v. Bank of New York Mellon

United States District Court, D. Arizona

May 3, 2019

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


          Dominic W. Lanza, United Slates District Judge


         This is at least the fourth lawsuit Plaintiff Steven Nickolas (“Nickolas”) has filed over the last seven years in an attempt to prevent banks and financial institutions from foreclosing on his nearly million-dollar home. In this lawsuit, Nickolas alleges that (1) Defendants Bank of New York Mellon (“BoNYM”) and Structured Asset Management Mortgage Investments II LLC (“SAMI”) (together, “Defendants”) have no interest in the note or deed of trust and therefore no right to sell the deed of trust; (2) the alleged beneficiaries of the deed of trust never owned the note, have been compensated, and are not owed any money in connection with Nickolas's property; and (3) the statute of limitations has run, barring foreclosure on Nickolas's property.

         Now pending before the Court are four motions: (1) Defendants' motion to dismiss for failure to state a claim (Doc. 29); (2) Defendants' request for judicial notice in support of their motion to dismiss (Doc. 30); (3) Nickolas's “Rule 12(d) Motion To Treat Motion To Dismiss As Motion For Summary Judgment” (Doc. 38); and (4) Nickolas's motion for summary judgment (Doc. 35 at 9-14). For the following reasons, the Court grants Defendants' motion to dismiss, grants Defendants' request for judicial notice as to the documents specified in this order, denies Nickolas's motion to treat the motion to dismiss as a motion for summary judgment, and denies Nickolas's motion for summary judgment.


         I. Procedural History

         Nickolas commenced this action by filing a complaint in Maricopa County Superior Court on December 19, 2018. (Doc. 1 ¶ 1; Doc. 1-3.) Nickolas filed an amended complaint on January 2, 2019. (Doc. 6-3 at 6-35; Doc. 6-4; Doc. 6-5 at 1-16.) Defendants removed the case to this Court on January 10, 2019. (Doc. 1.)

         Defendants moved to dismiss the amended complaint on January 17, 2019. (Doc. 7.) Before the Court could rule on that motion, Nickolas filed a second amended complaint (“SAC”). (Doc. 26.)

         The SAC alleges that Defendants noticed a trustee sale of the property for January 16, 2019. (Doc. 26 ¶ 3.) The SAC further alleges that, although the party named as bringing the sale of the deed of trust is BoNYM, BoNYM has no interest in the note or deed of trust and therefore no right to foreclose. (Id. ¶¶ 4-15.) The SAC also alleges that the certificate holders listed as the beneficiary for the deed of trust have no loss and have already been paid in a class-action suit. (Id.) Finally, the SAC alleges that the six-year statute of limitations for foreclosing on the property has run because the loan was accelerated in August 2009. (Id. ¶¶ 15-18.) Based on these allegations, the SAC seeks “a Declaration that Defendants can take no action to collect on the alleged debt, including [that they] cannot proceed with a trustee sale, ” as well as an injunction barring Defendants from attempting to conduct a trustee sale. (Doc. 26 at 6.)

         On March 6, 2019, Defendants filed a motion to dismiss the SAC. (Doc. 29.) The motion seeks dismissal on the following three grounds: (1) Nickolas's note ownership claims are barred by claim preclusion; (2) Nickolas's note ownership claims lack merit; and (3) the statute of limitations has not run. (Id.)

         II. The 2017 Proceeding Between the Parties

         BoNYM has asked the Court to take judicial notice of 35 documents for purposes of ruling on the motion to dismiss. (Doc. 30.)[1] Exhibits 31 through 33 are documents from a prior proceeding in this District between these same parties relating to Defendants' right to foreclose on Nickolas's property (Case No. 2:17-cv-01234-JJT) (the “2017 lawsuit”). That earlier case was filed in April 2017.

         Nickolas objects only to Defendants' request for judicial notice of Exhibit 31, which is the complaint from his 2017 lawsuit. (Doc. 37.) He contends that “Defendant cites Exhibit 31 in support of its proposition that the Deed of Trust was assigned to BoNYM, which [he] dispute[s], ” and provides three reasons for his objection: “(1) the facts are that the assignment never took place; (2) the best evidence of the assignment if it had occurred would have been a copy of the assignment; and (3) the prior pleading is not binding in this case under the above cited authority regarding judicial estoppel.” (Id. at 2-3.)

         The Court will overrule Nickolas's objection in part. Exhibit 31 is a document filed in an earlier federal lawsuit. Such documents are the proper subject of a request for judicial notice. United States ex rel. Robinson Rancheria Citizens Council v. Borneo, Inc., 971 F.2d 244, 248 (9th Cir. 1992) (“[W]e ‘may take notice of proceedings in other courts . . . within . . . the federal judicial system, if those proceedings have a direct relation to matters at issue.'”) (citation omitted); Reyn's Pasta Bella, LLC v. Visa USA, Inc., 442 F.3d 741, 746 n.6 (9th Cir. 2006) (“[Courts] may take judicial notice of court filings and other matters of public record.”). The only limitation, at least at the motion-to-dismiss stage, is that the Court may not take judicial notice of any disputed facts contained within such records. See, e.g., Khoja v. Orexigen Therapeutics, Inc., 899 F.3d 988, 999 (9th Cir. 2018); Lee v. City of Los Angeles, 250 F.3d 668, 688-90 (9th Cir. 2001). Thus, to the extent Nickolas disputes facts contained within Exhibit 31, the Court may not take judicial notice of them. It is, however, unclear why Nickolas refers to the “judicial estoppel” effect of Exhibit 31, when Defendants are asserting claim preclusion, not judicial estoppel. Nickolas provides no argument regarding why Exhibit 31 is irrelevant for claim preclusion purposes. Accordingly, the Court will take judicial notice of Exhibits 31 through 33 and the non-disputed facts within them.


         As an initial matter, the Court will deny Nickolas's request to treat Defendants' motion to dismiss as a motion for summary judgment. (Doc. 35 at 8-9; see also Doc. 38 [“Plaintiff's Rule 12(d) Motion To Treat Motion To Dismiss As Motion For Summary Judgment”].) To the extent Nickolas is arguing that Defendants have engaged in conduct requiring their motion to dismiss to be converted into a summary judgment motion, he's incorrect. To be sure, the usual rule is that, if a district court considers evidence outside the pleadings when ruling on a motion to dismiss, it must convert the motion into a motion for summary judgment and give the nonmovant an opportunity to respond. United States v. Ritchie, 342 F.3d 903, 907 (9th Cir. 2003). “A court may, however, consider certain materials-documents attached to the complaint, documents incorporated by reference in the complaint, or matters of judicial notice-without converting the motion to dismiss into a motion for summary judgment.” Id. at 908. Here, the documents being proffered by Defendants are subject to judicial notice, so conversion isn't necessary.

         Meanwhile, to the extent Nickolas seeks conversion because he wishes to proffer new evidentiary material (which isn't mentioned in the complaint or subject to judicial notice) in opposition to Defendants' motion, that request will be denied. Gerritsen v. Warner Bros. Ent. Inc., 112 F.Supp.3d 1011, 1021 (C.D. Cal. 2015) (“Courts regularly decline to consider declarations and exhibits submitted in . . . opposition to a motion to dismiss . . . if they constitute evidence not referenced in the complaint or not a proper subject of judicial notice.”). Accordingly, the Court will decline to consider the statement of facts and declaration attached to Nickolas's response to the motion to dismiss (Doc. 36).



         I. Motion to Dismiss

         A. Legal Standard

         “[T]o survive a motion to dismiss, a party must allege ‘sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.'” In re Fitness Holdings Int'l, Inc., 714 F.3d 1141, 1144 (9th Cir. 2013) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). “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.” Id. (quoting Iqbal, 556 U.S. at 678). “[A]ll well-pleaded allegations of material fact in the complaint are accepted as true and are construed in the light most favorable to the non-moving party.” Id. at 1144-45 (citation omitted). However, the court need not accept legal conclusions couched as factual allegations. Iqbal, 556 U.S. at 679-80. Moreover, “[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Id. at 679. The court also may dismiss due to “a lack of a cognizable legal theory.” Mollett v. Netflix, Inc., 795 F.3d 1062, 1065 (9th Cir. 2015) (citation omitted).

         B. Analysis

         1. Claim Preclusion

         Defendants argue that this lawsuit, with the exception of the statute of limitations claim, is barred by claim preclusion. (Doc. 29 at 8-12.)

         “Claim preclusion, often referred to as res judicata, bars any subsequent suit on claims that were raised or could have been raised in a prior action.” Cell Therapeutics, Inc. v. Lash Grp., Inc., 586 F.3d 1204, 1212 (9th Cir. 2009). “Under the doctrine of claim preclusion, a final judgment forecloses ‘successive litigation of the very same claim, whether or not relitigation of the claim raises the same issues as the earlier suit.'” Olivas-Motta v. Whitaker, 910 F.3d 1271, 1279 (9th Cir. 2018) (citation omitted). Similarly, claim preclusion “bars all grounds for recovery which could have been asserted, whether they were or not, in a prior suit between the same parties on the same cause of action.” Clark v. Bear Stearns & Co., 966 F.2d 1318, 1320 (9th Cir. 1992). “Claim preclusion ‘applies when there is (1) an identity of claims; (2) a final judgment on the merits; and (3) identity or privity between the parties.'” Cell Therapeutics, 586 F.3d at 1212 (citation omitted).

         a. Ident ...

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