Tag Archives: Downstream Litigation

Oregon Court Dismisses Plaintiff’s Oregon Revised Statute § 86.745(1) Claim

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The court in Woods v. United States Bank N.A., 2013 U.S. Dist. LEXIS 146485 (D. Or. 2013) ultimately granted the defendants’ motion to dismiss, and dismissed with prejudice.

Plaintiffs sought a declaratory judgment voiding and setting aside the foreclosure of their property on the ground that the May 25, 2011, notice of default and election to sell listed only MERS as the beneficiary and did not identify USB as beneficiary, and, therefore, the Notice of Default did not comply with the requirements of Oregon Revised Statute §86.745(1).

Defendants asserted that plaintiffs’ claim was barred by Oregon Revised Statute § 86.770 because plaintiffs did not and could not allege they did not receive the notice required under Oregon Revised Statute §86.740, the foreclosure sale was completed, and the property was sold to a bona fide purchaser.

The court noted that this court, other courts in this district, and Oregon state courts have held §86.770 bars rescission of a foreclosure sale when a borrower has received the notice required under §86.740 and the property is sold to a bona fide purchaser.

Here, Plaintiffs admitted they received notice of the foreclosure sale within the time required under the OTDA, that the property was sold to a bona fide purchaser, and that the sale of the property was recorded.

The court thus concluded that plaintiff’s claim was barred under §86.770(1) and, therefore, granted defendants’ motion to dismiss.

California Appeals Court Affirms Lower Court’s Decision to Sustain Defendant’s Demurrer

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The court in deciding Nehme v. Bac Home Loans Servicing, 2013 Cal. App. Unpub. LEXIS 7366 (Cal. App. 2d Dist. Oct. 15, 2013) affirmed the lower court decision.

Plaintiff (William Nehme) brought this action for fraud, rescission, and other claims after he lost his home through foreclosure. This case was an appeal of a lower court judgment entered in favor of defendants Bank of America, N.A. as successor by merger to BAC Home Loans Servicing, LP; Recon Trust Company, N.A.; Landsafe Title of California, Inc. erroneously named as Landsafe Title Corporation; Mortgage Electronic Registration Systems, Inc.; and MERSCORP, Inc., after the trial court sustained defendants’ demurrer without leave to amend. After considering the appeal, the court affirmed the lower court’s decision.

On appeal Nehme challenged only the trial court’s rulings on the first cause of action for fraud by bait and switch, second cause of action for rescission, and sixth cause of action for unfair business practices. Nehme argued that Countrywide committed fraud by substituting a deed of trust with a power of sale for the mortgage Nehme had requested, and that he signed the deed of trust by mistake.

After considering the plaintiff’s second round of arguments, the court concluded that, even after three attempts, Nehme failed to allege facts sufficient to state claims for fraud, rescission, and unfair competition, and therefore the court affirm the lower court’s judgment.

Ohio Appeals Court Affirms Lower Court Decision Granting Summary Judgement in Favor of Bank of America

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The court in deciding Bank of Am., N.A. v. Hizer, 2013-Ohio-4621 (Ohio Ct. App., Lucas County 2013) ultimately granted the defendant’s motion for summary judgment.

This case was an appeal from a judgment of the Lucas County Court of Common Pleas that granted summary judgment in favor of appellee Bank of America, N.A. in a foreclosure action filed by the bank after appellants Jennifer and Brian Hizer defaulted in payment on a note and mortgage held by the bank. After considering the appellants appeal, the court affirmed the judgment of the trial court.

This case involved a mortgage foreclosure action, the court affirmed a lower court decision that there was no abuse in discretion by denying appellants’ motion to strike the affidavit of appellee bank’s vice president, whose identity the bank failed to disclose in discovery and whom appellants were thus unable to depose, because they did not complain of the discovery violation until the bank moved for summary judgment, and did not show that they were prejudiced by their inability to depose the vice president.

The court noted that since appellants did not deny executing the note and mortgage or dispute the authenticity of the documents the bank offered, and produced no evidence to dispute the assignment of these documents to the bank. The evidence established that the bank was the holder of the note and mortgage. Thus, the court affirmed the lower court’s ruling in that there was no error in permitting the bank summary judgment.

Texas Court Dismisses Action Claiming Fraud in Concealment, Fraud in Inducement, Quiet Title, & Rescission

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The court in deciding Diaz-Angarita v. Countrywide Home Loans, Inc., 2013 U.S. Dist. LEXIS 147091 (S.D. Tex. 2013) eventually dismissed the plaintiff’s claims.

Plaintiff asserted causes of action for “fraud in the concealment,” fraud in the inducement, to quiet title, and for rescission. Defendants moved to dismiss.

In claims one and seven, plaintiff sought a declaratory judgment that the substitute trustee’s deed was void as there was no valid notice of foreclosure and no appointment of a substitute trustee recorded, and because there was no assignment of the note and deed of trust recorded.

In claim two, plaintiff sought a declaratory judgment that Defendants had no standing to foreclose. Claim three asserted “fraud in the concealment” based on the allegation that Defendants failed to inform Schonacher, the original borrower, that the loan was securitized. Plaintiff’s fourth claim asserted a fraud in the inducement claim based on the allegation that defendants misrepresented their entitlement to foreclose and that they were the holder and owner of the note.

In claim five, plaintiff asserted a quiet title claim under Texas law. In claim six, plaintiff asserted a cause of action for rescission, which is a remedy and not a recognized cause of action. After categorically analyzing the plaintiff’s claims the court ultimately dismissed all seven of the plaintiff’s claims.

Although a court typically may grant the plaintiff at least one chance to amend the complaint under Rule 15(a) before dismissing the action with prejudice. In this case, the court found that the plaintiff, who is represented by counsel, filed a complaint based on key facts that were within his own knowledge. The court noted that it appeared unlikely that the plaintiff could amend to state viable claims for relief. As a result, the Court enters the dismissal without leave to amend and dismissed with prejudice.

California Court Dismisses Claim Due to lack of Standing and Failure to State a Claim

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The court in deciding Britto v. Bank of Am., N.A., 2013 U.S. Dist. LEXIS 146978 (N.D. Cal. 2013) granted defendant’s motion to dismiss.

In this foreclosure action, defendants moved to dismiss the complaint for lack of standing and failure to state a claim. The court granted defendants’ motion to dismiss.

Plaintiffs alleged a host of violations during the securitization process. Realty Mortgage allegedly did not endorse or record a sale or assignment of the deed of trust to any entity and Countrywide Home Loans allegedly did not endorse or record a sale or assignment to BNY Mellon.

Plaintiffs also argued that BOA did not retain servicing rights to the deed of trust, BNY Mellon did not have any interest as legal trustee of the trust, and “no entity . . . had any valid lien or legal, recorded, documentable, standing on the plaintiff’s mortgage loan”

Moreover, defendant (MERS) was named beneficiary and nominee in the deed of trust prior to the securitization. In 2011, MERS transferred all of its beneficial interest under the deed of trust to BNY Mellon. Plaintiffs thus alleged that after the deed of trust and promissory note were securitized in 2006 and improper transfers of ownership to the deed of trust occurred, MERS’ nominal rights were extinguished. Thus, MERS could not have properly transferred its interests to BNY Mellon in 2011, and BNY Mellon cannot foreclose on the property.

The court rejected these arguments finding that the plaintiff’s argument failed.

California Court Dismisses All 12 Claims

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The court in deciding Scott v. Saxon Mortg. Servs., 2013 U.S. Dist. LEXIS 146988 (N.D. Cal. Oct. 10, 2013) granted defendant’s motion to dismiss with leave to amend in part.

Plaintiff’s brought 12 claims against defendants. Plaintiff’s first claim for violation of California Business and Professions Code section 17200 predicated on violation of California Civil Code section 2923.5 and Plaintiff’s ninth claim for violation of California Civil Code section 2923.5. The court dismissed both without leave to amend.

Plaintiff’s second claim for breach of good faith and fair dealing was also dismissed with leave to amend; the third claim for slander of title was likewise dismissed without leave to amend.

Plaintiff’s fourth claim for “alter ago liability” and fifth claim for breach of contract were both dismissed without leave to amend. Unlike the former claims, plaintiff’s sixth claim for unjust enrichment was dismissed with leave to amend. However, plaintiff’s seventh claim for violation of California Business and Professions Code section 17200 was dismissed without leave to amend. Plaintiff’s eighth claim for predatory lending and violation of TILA were dismissed without leave to amend.

Plaintiff’s tenth claim for defamation and eleventh claim for false light were also dismissed without leave to amend. Lastly, plaintiff’s twelfth claim to void or cancel assignment of the deed of trust and the thirteenth claim for cancellation of a voidable contract were dismissed without leave to amend

California Court Finds That Defendants Complied With Statutory Mandate That the Notice of Default Include Sufficient Contact Information

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The court in deciding Wagma Safi v. Bank of Am., N.A., 2013 U.S. Dist. LEXIS 147005 (E.D. Cal. Oct. 9, 2013) ultimately granted defendant’s motion to dismiss.

In her first cause of action, the plaintiff asked for declaratory relief in the form of a judicial declaration that the plaintiff had the right to reinstate the loan for which the deed of trust was collateral, and that the defendants were required to provide her with the information necessary to do so.

The court dismissed the plaintiff’s first cause of action for declaratory relief. Despite defendants’’ alleged refusal to provide plaintiff with information regarding the loan, their compliance with the notice requirements of section 2924c(b)(1) provided plaintiff with sufficient information to exercise her right to reinstate the loan.

In her second cause of action, plaintiff asked for declaratory relief, contending that “Bank of America was the sole beneficiary under the deed of trust and that MERS had no authority to transfer or assign any rights under the deed” Plaintiff alleged that MERS signed the deed of trust “solely as nominee” and thus lacked the authority to assign its interest to a third party.

The court found that plaintiff made no showing that would call into question the validity of MERS’ assignment. The court found that she failed to state a claim and the second cause of action was dismissed.