United States District Court, D. Arizona
Dominic W. Lanza, United Slates District Judge
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
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.
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.)
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.)
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.)
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.
The 2017 Proceeding Between the Parties
has asked the Court to take judicial notice of 35 documents
for purposes of ruling on the motion to dismiss. (Doc.
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.
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.)
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.
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.
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).
Motion to Dismiss
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).
argue that this lawsuit, with the exception of the statute of
limitations claim, is barred by claim preclusion. (Doc. 29 at
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).