Editor: David Reiss
Brooklyn Law School

January 18, 2014

California Court Finds Plaintiff Lacked Standing to Bring Action

By Ebube Okoli

The court in deciding Mottale v. Kimball Tirey & St. John, LLP, 2013 U.S. Dist. 146293 (S.D. Cal. Oct. 9, 2013) ultimately granted the defendants’ motion to dismiss.

Plaintiff alleged unnamed investors brought an unlawful detainer action in state court foreclosed his home. Plaintiff also alleged his loans were securitized from a pool of funds provided by unknown investors who misrepresented the identities of the actual lenders. Plaintiff alleged that the assignment was invalid and fraudulent because the assignment documents were forged and defective. Plaintiff further alleged the notice of default (“NOD”) was void because BAC had “no prior recorded interest” in the Property when Recontrust recorded the NOD. Lastly, the plaintiff alleged that the NTS 2 was also fraudulent because Reconstrust had no legal right to record a substitution of trustee.

Defendants moved to dismiss plaintiff’s complaint on several grounds. First, defendants argued that the plaintiff failed to show he tendered the amount owed under default, and thus plaintiff lacked standing to challenge the foreclosure.

Second, defendants argue several courts in California have rejected plaintiff’s securitization theory. Defendants further contend that possession of the promissory note was not a pre-requisite to commence a non-judicial foreclosure proceeding. Defendants also pointed to a number of deficiencies in the complaint, including failure to joint an indispensible party and defective and insufficient claims under other statutes.

After considering both arguments, the court granted defendants’ motion to dismiss.

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