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Medrano v. Carrington Foreclosure Services, LLC

United States District Court, D. Arizona

November 21, 2019

Tracy Medrano, Plaintiff,
v.
Carrington Foreclosure Services LLC, et al., Defendants.

          ORDER

          Dominic W. Lanza United States District Judge

         Pending before the Court are (1) a motion to dismiss by Carrington Foreclosure Services, LLC (“CFS”) (Doc. 10), and (2) a motion to dismiss by Bank of America, N.A. (“BANA”) and Recontrust Company (“Recontrust”) (Doc. 15), which CFS has joined (Doc. 16). For the following reasons, the former motion will be stricken based on non-compliance with Local Rule 12.1(c), the latter motion will be granted, and this action will be terminated.

         BACKGROUND

         I. Factual Background

         The facts alleged in the complaint, and as set forth in CFS's unopposed request for judicial notice (Doc. 11) and in the judicially noticeable documents referenced in and/or attached to the complaint and the BANA/Recontrust motion to dismiss, [1] are as follows.

         On July 13, 2009, Plaintiff Tracy Medrano executed a written agreement with Paramount Residential Mortgage Group to obtain a mortgage loan in the amount of $157, 102. (Doc. 1 at 10 ¶ 11.) “To secure repayment of the loan, and as part of the same transaction, [Medrano] made and executed a written deed of trust . . . .” (Id.) Great American Title Agency was the original trustee and Mortgage Electronic Registration Systems the original beneficiary. (Id. at 27.) The property is located at 16544 West Grant Street, Goodyear, Arizona. (Id. at 28.)

         On October 6, 2011, BANA became the trust beneficiary. (Doc. 15 at 12.)

         On July 17, 2012, BANA recorded a substitution naming Recontrust the successor trustee. (Doc. 1 at 37.) The complaint alleges this substitution was “unlawful[]” and “without notice” to Medrano. (Id. at 11 ¶ 15.)

         That same day, Recontrust recorded a notice of trustee's sale. (Id. at 39.) The complaint alleges this recording was also “unlawful[]” and “without notice” to Medrano. (Id. at 11 ¶ 17.) Two days later, Recontrust cancelled the notice of sale. (Doc. 15 at 14.)

         On or about May 29, 2013, BANA and Medrano executed a loan modification agreement. (Doc. 1 at 43-44.) This agreement increased the loan principal to $171, 295.55. (Id.) Although the complaint does not explain the origin of this agreement, [2] it alleges that BANA had “no standing to execute” the document and the agreement “did not clear any lien or encumbrance on the real property.” (Id. at 11-12 ¶ 19.)

         On June 23, 2015, BANA and Medrano entered into another loan modification agreement that decreased the principal to $139, 697.62. (Id. at 46-52.) The complaint alleges this modification agreement was legally deficient for the same reasons as the previous one. (Id. at 12 ¶ 20.)

         On February 8, 2017, BANA assigned its interest as beneficiary of the deed of trust to Carrington Mortgage Services, LLC (“CMS”) (which is a different entity than CFS, the defendant named in the complaint). (Id. at 56.) The complaint alleges, however, that BANA “[did] not have standing or the legal authority to record or cause the purported assignment of the deed of trust under [Medrano's] Note to be recorded” because BANA was “not the holder of [Medrano's] Note in due course” and thus the assignment was “fraudulent.” (Id. at 12 ¶ 23.) The complaint further alleges that BANA did not hold the note in due course because it was “not a party to the contract that secured [Medrano's] Note and deed of Trust” and “[did] not have any lawful and original assignment instruments from the lender.” (Id. at 12-13 ¶ 24.)

         On February 5, 2019, CFS was substituted as the trustee.[3] (Id. at 58.) The complaint alleges this substitution was “invalid . . . and of no force and effect” because CMS lacked “standing or legal authority” to complete this substitution. (Id. at 13 ¶ 27.)

         On February 12, 2019, CFS recorded a Notice of Trustee's Sale. (Id. at 61-62.) The complaint alleges this recording was “unlawful[]” and “without notice” to Medrano. (Id. at 13 ¶ 28.)

         To sum up, the complaint alleges that, over the course of approximately 10 years, legal and beneficial ownership of Medrano's deed of trust changed hands numerous times, no such change was legally valid, and both attempted foreclosure sales were unlawful and without notice to Medrano. Additionally, over these 10 years, all defendants “act[ed] in concert and conspiracy” to “conceal[] the fact that the loans were “securitized, ” which had a “materially negative effect on [Medrano].” (Id. at 15 ¶ 34.) Had Medrano known the “truth” about the agreements, she “would not have entered into the Loan agreement.” (Id. at 15 ¶ 35.) This concealment also “prevented [her] from discovering . . . the wrongdoing complained of herein.” (Id. at 11 ¶ 18.) Finally, both as a result of the “constant emotional nightmare of losing her real Property” caused by the “fraudulent foreclosure proceedings, ” as well as the fact that “her title to the Property has been disparaged and slandered, ” Medrano has suffered “many sleepless nights, severe depression, lack of appetite, and loss of productivity at [her] place of employment.” (Id. at 18 ¶¶ 53-56, 21 ¶¶ 70-72.)

         Medrano requests special, compensatory, and punitive damages in an amount to be determined at trial, a “decree permanently enjoining defendants . . . from asserting any adverse claim to plaintiffs' title to the property, ” “disgorgement of all profits obtained by Defendants by virtue of their misconduct, ” “[r]estitution as allowed by law, ” attorney's fees and costs, costs of suit, and other relief the Court may deem proper. (Id. at 25.)

         II. Procedural Background

         On June 21, 2019, Medrano (who is proceeding pro se) initiated this action by filing a complaint in Maricopa County Superior Court. (Doc. 1 at 6.)

         On August 19, 2019, BANA removed this action to federal court based on diversity jurisdiction. (Doc. 1 at 3 [citing 28 U.S.C. §§ 1332 and 1441].) The case was originally assigned to Judge Humetawa. (Doc. 2.)

         On August 27, 2019, CFS filed a motion to dismiss. (Doc. 10.)

         On September 3, 2019, the case was reassigned to the current judge. (Doc. 14.) On September 9, 2019, BANA and Recontrust filed a motion to dismiss. (Doc. 15.) The following day, CFS filed a joinder in their motion. (Doc. 16.)

         On September 26, 2019, Medrano responded to both motions to dismiss. (Docs. 18, 19.)

         On October 3, 2019, BANA and Recontrust filed a reply. (Doc. 20.)

         On October 7, 2019, CFS filed a reply in support of its motion, which also asserted that CFS was joining the ...


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