Opinion
3:23-cv-00808-JR
08-07-2023
PARVEEN AHMAD, Plaintiff, v. BANK OF AMERICA, N.A.; FIDELTIY NATIONAL TITLE INSURANCE; LASALLE BANK, N.A.; QUALITY LOAN SERVICE CORPORATION OF WASHINGTON; U.S. BANK, N.A.; WASHINGTON MUTUAL BANK, N.A.; DOES 1 through 50, inclusive; and all persons unknown claiming any legal or equitable right, title, estate, lien, or interest in the property described in the complaint adverse to plaintiff's title or any cloud on plaintiff's title thereto, Defendants.
FINDINGS AND RECOMMENDATION
JOLIE A. RUSSO, UNITED STATES MAGISTRATE JUDGE
Pro se plaintiff Parveen Ahmad brings this action against defendants Bank of America, N.A., Fidelity National Title Insurance, LaSalle Bank, N.A., Quality Loan Service Corporation of Washington (“Quality”), U.S. Bank, N.A. (“USB”), Washington Mutual Bank, N.A. (“WAMU”), and Does 1-50. USB now moves to dismiss plaintiff's complaint pursuant to Fed.R.Civ.P. 12(b)(6), and Quality joins in that motion. USB and plaintiff also seek judicial notice of certain publicly filed documents. For the reasons stated below, defendants' motions should be granted, and plaintiff's request for judicial notice is denied.
BACKGROUND
At all relevant times, plaintiff was “a resident of the County of Contra Costa, State of California.” Compl. ¶¶ 1, 10 (doc. 1-1). In March 2007, plaintiff took out a loan from WAMU to purchase a residential property located at 14387 SE Aldridge Road in Happy Valley, Oregon (“Property”). Id. To secure this transaction, plaintiff executed a promissory note (“Note”) and a deed of trust (“DOT”). Id. at ¶ 10. The Note was “transferred from or by BANK OF AMERICA, N.A.; LASALLE BANK, N.A. U.S. BANK, N.A.; WAMU Mortgage 11 Pass-Through Certificates, Series 2007-OA-4 either completely or by association or other means to other entities who are unknown.” Id. at ¶ 11.
At some unspecified time, plaintiff defaulted on her obligations under the Note and filed for bankruptcy. See, e.g., id. at ¶¶ 12, 19. Defendants thereafter “filed a Notice of Trustee's sale in the Clackamas County Oregon Recorder's Office.” Id. at ¶¶ 12-13. Quality, as “the purported Trustee or substituted Trustee . . . granted or conveyed the Subject Matter Property to other Defendants BANK OF AMERICA. N.A.; LASALLE BANK, 5 N.A. U.S. BANK, N.A.; WAMU Mortgage Pass-Through Certificates, Series 2007-OA-4 and 6 commenced an unlawful detainer action against Plaintiff.” Id. at ¶ 15.
In February 2023, a non-judicial foreclosure occurred in relation to the Property. Id. at ¶ 16; Def's Mot. Dismiss Ex. 3 (doc. 12-3).
In May 2023, plaintiff initiated this action in Clackamas County Circuit Court alleging: (1) “violation of bankruptcy stay 11 U.S.C. § 362 et. seq.”; (2) fraud; (3) negligent misrepresentation; (4) “negligence and negligent infliction of emotional distress”; (5) “set aside trustee's sale”; (6) “void or cancel trustee's deed upon sale”; (7) wrongful foreclosure; (8) breach of contract; (9) breach of implied covenant of good faith and fair dealing; (10) unjust enrichment; (11) quiet title; and (12) declaratory relief. Compl. ¶¶ 18-89 (doc. 1-1).
USB timely removed plaintiff's claims to this Court and, on June 9, 2023, filed the present motion to dismiss and request for judicial notice. Briefing was completed in regard to that motion on July 28, 2023.
STANDARD
Where the plaintiff “fails to state a claim upon which relief can be granted,” the court must dismiss the action. Fed.R.Civ.P. 12(b)(6). To survive a motion to dismiss, the complaint must allege “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). For the purposes for the motion to dismiss, the complaint is liberally construed in favor of the plaintiff and its allegations are taken as true. Rosen v. Walters, 719 F.2d 1422, 1424 (9th Cir. 1983). Regardless, bare assertions that amount to nothing more than a “formulaic recitation of the elements” of a claim “are conclusory and not entitled to be assumed true.” Ashcroft v. Iqbal, 556 U.S. 662, 680-81 (2009). Rather, to state a plausible claim for relief, the complaint “must contain sufficient allegations of underlying facts” to support its legal conclusions. Starr v. Bacca, 652 F.3d 1202, 1216 (9th Cir. 2011).
Pro se pleadings are held to a less stringent standard than those drafted by lawyers. See, e.g., Haines v. Kerner, 404 U.S. 519, 520 (1972). The court, in many circumstances, instructs the pro se litigant regarding deficiencies in the complaint and grants leave to amend. Eldridge v. Block, 832 F.2d 1132, 1136 (9th Cir. 1987). Nevertheless, a pro se plaintiff's claims may be dismissed without leave to amend where it appears beyond doubt that the plaintiff can prove no set of facts that would entitle him or her to relief. Barrett v. Belleque, 544 F.3d 1060, 1061-62 (9th Cir. 2008).
DISCUSSION
USB argues that prejudicial dismissal is warranted because “[n]o Bankruptcy Stay was in effect at the time of foreclosure.” Def.'s Mot. Dismiss 4 (doc. 12); Def.'s Reply to Mot. Dismiss 4 (doc. 22). In support of its motion, USB relies on, and seeks judicial notice of, the bankruptcy proceedings initiated by plaintiff and her spouse. Additionally, USB contends that plaintiff's claims suffer from a number of other pleadings defects, including the lack of a special relationship and failure to allege adequate supporting facts. See, e.g., Def.'s Mot. Dismiss 7-10 (doc. 12).
Plaintiff does not respond to USB's arguments surrounding Rule 12(b)(6) or the complaint's deficiencies. See generally Pl.'s Resp. to Mot. Dismiss (doc. 21). Plaintiff does, however, oppose USB's request for judicial notice, arguing the “matter of which judicial notice is sought is hearsay” and not properly authenticated, and that the “probative value is substantially outweighed by the probability that its admission will create substantial danger of undue prejudice.” Id. at 2. Confusingly, plaintiff appears to admit the relevance of these documents while separately contending USB “erroneous[ly] reli[ed] on [the] wrong bankruptcy cases.” Compare Id. with Pl.'s Req. for Judicial Notice 2 (doc. 21-1). Plaintiff therefore requests judicial notice of the allegedly correct bankruptcy proceeding, which “was initiated on January 9, 2023.” Pl.'s Req. for Judicial Notice 2 (doc. 21-1).
I. Judicial Notice
Although not alleged in the complaint, USB denotes that plaintiff filed for bankruptcy in July 2019 in the U.S. Bankruptcy Court for the Northern District of California, Oakland Division. USB further observes that, in January 2020, plaintiff's spouse, “Tanveer Ahmad, then initiated a Chapter 7 bankruptcy proceeding also in the United States Bankruptcy Court for the Northern District of California Oakland Division.” Def.'s Mot. Dismiss 3 (doc. 12). Moreover, on December 6, 2019, the U.S. Bankruptcy Court for the Northern District of California entered an Order on Motion for Relief from Automatic Stay, which provided:
IT IS HEREBY ORDERED that the automatic stay provisions of 11 U.S.C. § 362 be and are hereby terminated with respect to the interests of [the Trust] in the real property commonly known as 14387 SE Alridge Rd, Portland, OR 97086.Def.'s Mot. Dismiss Ex. 1, at 2 (doc. 12-1). And, on March 27, 2020, the U.S. Bankruptcy Court for the Northern District of California entered an analogous Order on Motion for Relief from Automatic Stay in regard to Tanveer Ahmad's petition:
IT IS HEREBY ORDERED that the automatic stay provisions of 11 U.S.C. § 362 be and are hereby not in effect with respect to the interests of [the Trust] ... in the real property commonly known as 14387 SE Alridge Rd, Portland Oregon 97086. IT IS FURTHER ORDERED that [the Trust] may complete its foreclosure of said property and proceed with post-foreclosure remedies.Def.'s Mot. Dismiss Ex. 2, at 2 (doc. 12-2).
USB also requests that the Court take judicial notice of the Trustee's Deed Upon Sale, publicly recorded in Clackamas County on February 24, 2023, commemorating the non-judicial foreclosure of the Property. See generally Def.'s Mot. Dismiss Ex. 3 (doc. 12-2).
Plaintiff, in turn, requests judicial notice of a Chapter 7 Bankruptcy Petition filed by “Scottie N. Oldfield” in the U.S. Bankruptcy Court for the District of Oregon. Pl.'s Req. for Judicial Notice Ex. 1, at 1 (doc. 21-1). This document identifies the debtor's address as “9472 SE Emerald Loop Happy Valley, OR 97086” and indicates “[n]o property appears to be available to pay creditors.” Id. at 1-2.
Review of a 12(b)(6) motion is generally limited to the complaint. United States v. Ritchie, 342 F.3d 903, 907 (9th Cir. 2003). A court nonetheless “may judicially notice a fact that is not subject to reasonable dispute because it: (1) is generally known within the trial court's territorial jurisdiction; or (2) can be accurately and readily determined from sources whose accuracy cannot reasonably be questioned.” Fed.R.Evid. 201(b).
As such, “court filings and other matters of public record” are ordinarily considered appropriate subjects of judicial notice because they are “readily verifiable.” Reyn's Pasta Bella,LLC v. Visa USA, Inc., 442 F.3d 741, 746 n.6 (9th Cir. 2006). Additionally, a court may take judicial notice of extrinsic documents that are undisputed and integral to the plaintiff's claims. Parrino v. FHP, Inc., 146 F.3d 699, 706 n.4 (9th Cir. 1998), superseded by statute on other grounds as recognized in Abrego v. The Dow Chem. Co., 443 F.3d 676, 681 (9th Cir. 2006).
In contrast, “certified public records [that] are not relevant” to the underlying dispute are not subject to judicial notice. Santa Monica Food Not Bombs v. City of Santa Monica, 450 F.3d 1022, 1025 n.2 (9th Cir. 2006); see also Khoja v. Orexigen Therapeutics, Inc., 899 F.3d 988, 1001 (9th Cir. 2018) (declining to take judicial notice of a report where the “report alone, does not establish” the fact for which it was introduced).
Plaintiff's broad objections to USB's request are therefore unpersuasive, especially considering that plaintiff seeks judicial notice of the precise type of publicly filed document as USB.
Moreover, the bankruptcy filings produced by USB identify plaintiff or Tanveer Ahmad, who bears the same last name as plaintiff, as the debtors and originate from plaintiff's admitted county of residence. Def.'s Mot. Dismiss Ex. 1, at 1 (doc. 12-1); Def.'s Mot. Dismiss Ex. 2, at 1 (doc. 12-2). They also specifically identify the Property by address. Def.'s Mot. Dismiss Ex. 1, at 2 (doc. 12-1); Def.'s Mot. Dismiss Ex. 2, at 2 (doc. 12-2). Likewise, the Trustee's Deed Upon Sale identifies plaintiff, the underlying loan, and the Property using the same lot description as plaintiffs complaint. Compare Compl. ¶ 1 (doc. 1-1), with Def.'s Mot. Dismiss Ex. 3, at 1-2 (doc. 12-2). Finally, as addressed in greater detail below, each of plaintiff's claims hinge on the “bankruptcy petition [that] was filed concerning the Subject Matter property located at 14387 SE Aldridge Road, Portland, Oregon.” Compl. ¶ 19 (doc. 1-1).
Conversely, the bankruptcy petition introduced by plaintiff bears a different name, was filed outside of plaintiff's admitted county of residence, and does not appear to concern the Property or effectuate an automatic stay in relation thereto. See generally Pl.'s Req. for Judicial Notice Ex. 1 (doc. 21-1). And, critically, plaintiff does not dispute filing for bankruptcy in July 2019 or that the U.S. Bankruptcy Court for the Northern District of California lifted the automatic stay in relation to the Property.
Under these circumstances, the Court has no reasonable basis to question the accuracy or authenticity of the publicly filed documents produced by USB. See Bank of N..Y. Mellon v. Nev. Assoc. Servs., 2023 WL 1868519, *1-2 (D. Nev. Feb. 9, 2023) (taking judicial notice of publicly filed foreclosure documents and the plaintiff's bankruptcy filings). The complaint also makes clear that plaintiff's claims necessarily rely on her bankruptcy filings related to the Property. Cf. Worley v. Pite Duncan, LLP, 2014 WL 793076, *5 (D. Or. Feb. 23, 2014), aff'd, 649 Fed.Appx. 574 (9th Cir. 2016) (while the court is required to accept the complaint's well-pleaded allegations as true, “the fact remains that [the plaintiffs] cannot insulate themselves against dismissal by omitting reference to relevant facts or documents”) (citing Parrino, 146 F.3d at 706). Thus, the Court grants USB's request for judicial notice and denies plaintiff's request for judicial notice.
II. Failure to State a Claim
As an initial matter, plaintiff's silence as to USB's substantive arguments alone warrants dismissal. See Justice v. Rockwell Collins, Inc., 117 F.Supp.3d 1119, 1134 (D. Or. 2015), aff'd, 720 Fed.Appx. 365 (9th Cir. 2017) (“if a party fails to counter an argument that the opposing party makes . . . the court may treat that argument as conceded”) (citation and internal quotations and brackets omitted). Plaintiff's claims also fail for the additional reasons articulated below.
A. Claims Based on the Bankruptcy Stay
All of plaintiff's claims are premised, at least in part, on the fact that defendants took the aforementioned actions while “a federal bankruptcy stay was in effect.” See, e.g., Compl. ¶¶ 20, 29, 40, 47, 51, 54, 58, 66, 72, 76-78, 83, 87 (doc. 1-1). However, as plaintiff acknowledges, “[s]ection 362(a) creates an ‘automatic stay' upon the filing of a bankruptcy petition that affords debtors expansive relief from virtually all post-petition collection activities by creditors . . . unless a bankruptcy court grants relief from the automatic stay.” Id. at ¶ 21.
The judicially noticeable facts before the Court demonstrate that the U.S. Bankruptcy Court for the Northern District of California lifted the automatic stay such that foreclosure of the Property was expressly permitted to go forward no later than March 2020. Because the non-judicial foreclosure and sale occurred after the stay was removed, plaintiff failed to plausibly allege a violation of 11 U.S.C. § 362 et. seq. SeeIn re Matheson, 84 B.R. 435, 436 (Bankr. N.D. Tex. 1987) (foreclosure sale that occurred in accordance with state law did not violate the bankruptcy court's order that lifted the automatic stay “in all respects”); see also In re Ripon Self Storage, LLC, 2011 WL 3300087, *6 (9th Cir. BAP Apr. 1, 2011) (“Ripon was not entitled to damages as a result of the Bank's foreclosure on the [underlying property because it] was not protected by the automatic stay”); Peterson v. Wells Fargo Bank, N.A., 2022 WL 972415, *16 (D. Conn. Mar. 31, 2022), aff'd, 2023 WL 4363239 (2d Cir. July 6, 2023) (observing that, generally, “a lender may proceed with a previously authorized foreclosure sale upon the lifting of a bankruptcy stay”). As a result, USB's motion should be granted as to each of plaintiff's claims.
B. Claims Based on Notice Requirements
The majority of plaintiff's claims also allege that defendants violated Oregon's “foreclosure notice requirements.” Compl. ¶¶ 13, 30, 40, 47, 51, 54, 61, 66, 74, 83, 87 (doc. 1-1). Yet the complaint does not include any facts, well-plead or otherwise, to support these allegations, such as the manner in which the notices were deficient, who they were issued by or to, or when. Stated differently, vague and conclusory allegations are insufficient to state a cognizable claim for relief in this context. See Ivey v. Bd. of Regents of Univ. of Alaska, 673 F.2d 266, 268 (9th Cir. 1982) (vague and conclusory allegations, even from a pro se litigant, are not sufficient to withstand a motion to dismiss). Accordingly, plaintiff's claims fail for this additional reason.
Similarly, plaintiff's remaining allegation of wrongdoing - i.e., that defendants acted negligently by “failing to properly and accurately credit payments made by Plaintiff toward the loan” - is conclusory and lacks adequate factual support sufficient to state a cognizable claim. Compl. ¶ 47 (doc. 1-1).
C. Additional Defects
Plaintiff's pleadings also contain several other pleading defects. Concerning allegations sounding in fraud, the complaint fails to meet Fed.R.Civ.P. 9(b)'s heightened pleading requirements. See Cafasso v. Gen. Dynamics C4 Sys., Inc., 637 F.3d 1047, 1055 (9th Cir. 2011) (“[t]o satisfy Rule 9(b)” - which applies to challenges raised under Fed.R.Civ.P. 12 - “a pleading must identify the who, what, when, where, and how of the misconduct charged, as well as what is false or misleading about [the purportedly fraudulent] statement, and why it is false”) (citations and internal quotations omitted).
To the extent she seeks to quiet title or pursue contractual claims, plaintiff attacks defendants' actions but does not otherwise dispute that she has defaulted under the Note, which is a requisite element. See Lamb-Weston, Inc. v. Or. Auto Ins. Co., 219 Or. 110, 116, 341 P.2d 110 (1959) (the party seeking to recover under the terms of an express contract must prove their own substantial performance, or a valid excuse for the failure to perform, in order to recover); Staton v. BAC Home Loans Servicing, L.P., 2012 WL 1624296, *8-9 (D. Or. May 5, 2012), aff'd in relevant part, 671 Fed.Appx. 459 (9th Cir. 2016) (dismissing the plaintiff's quiet title claim where there were no facts indicating she could cure her default).
Further, the existence of a valid contract between the parties bars any claim for breach of the implied duty of good faith and fair dealing or unjust enrichment absent allegations indicative of conduct that goes beyond that which is reasonably contemplated by the parties' contract - e.g., intentional misconduct, an improper motive, improper behavior, etc. See Or. Univ. Sys. v. Or. Pub.Emps. Union, Local 503, 185 Or.App. 506, 511, 60 P.3d 567 (2002) (duty of good faith and fair dealing “may be implied as to a disputed issue only if the parties have not agreed to an express term that governs that issue”); see also Gillett v. Tucker, 317 Or.App. 570, 582, 506 P.3d 323 (2022) (“[a] valid contract defines the obligations of the parties as to matters within its scope, displacing to that extent any inquiry into unjust enrichment”) (citation and internal quotations omitted). The complaint, however, does not contain any allegations to that effect.
Finally, plaintiff's claims sounding in negligence neglect to allege the existence of a special relationship that gives rise to a duty owed by the lender or loan servicer to avoid purely economic losses. See Conway v. Pac. Univ., 324 Or. 231, 241, 924 P.2d 818 (1996) (a heightened duty of care exists where “one party has authorized the other to exercise independent judgment in his or her behalf and, consequently, the party who owes the duty has a special responsibility to administer, oversee, or otherwise take care of certain affairs belonging to the other party”); see also Andre v. Bank of Am., N.A., 2011 WL 7565310, *4-5 (D. Or. Dec. 14, 2011) (finding no special relationship between mortgage lenders and the borrower to support a claim sounding in negligence), adopted in relevant part by 2012 WL 965106 (D. Or. Mar. 21, 2012).
Despite the complaint's deficiencies, the Court declines to dismiss plaintiff's claims with prejudice. Plaintiff is proceeding pro se and has not yet had the opportunity to seek amendment, such that the Court cannot conclude, at least at this stage in the proceedings, that the claims' deficiencies are incurable as a matter of law.
RECOMMENDATION
For the foregoing reasons, USB's Motion to Dismiss and request for judicial notice (doc. 12), and Quality's Motion to Dismiss (doc. 19) should be granted. Plaintiff's request for judicial notice (doc. 21-1) is denied. Any motion to amend the complaint must conform with this Findings and Recommendation, and be filed within 30 days of the District Judge's order.
This recommendation is not an order that is immediately appealable to the Ninth Circuit Court of Appeals. Any notice of appeal pursuant to Rule 4(a)(1), Federal Rules of Appellate Procedure, should not be filed until entry of the district court's judgment or appealable order. The parties shall have fourteen (14) days from the date of service of a copy of this recommendation within which to file specific written objections with the court. Thereafter, the parties shall have fourteen (14) days within which to file a response to the objections. Failure to timely file objections to any factual determination of the Magistrate Judge will be considered as a waiver of a party's right to de novo consideration of the factual issues and will constitute a waiver of a party's right to appellate review of the findings of fact in an order or judgment entered pursuant to this recommendation.