Opinion
3:23-cv-01120-JR
09-29-2023
VICTOR NAUMOV, Plaintiff, v. SHELLPOINT MORTGAGING SERVICE, a division of New Rez; WILMINGTON SAVINGS FUND SOCIETY FSB, H&H PREFERRED REAL ESTATE, and SAVE ON RECYCLING AND TOWING, Defendants.
FINDINGS AND RECOMMENDATION
Jolie A. Russo, United States Magistrate Judge
Pro se plaintiff Victor Naumov brings this action against defendants Shellpoint Mortgage Servicing (“Shellpoint”), Wilmington Savings Fund Society FSB (“Wilmington”), H&H Preferred Real Estate, and Save on Auto Recycling and Towing. Shellpoint now moves to dismiss plaintiff's complaint pursuant to Fed.R.Civ.P. 12(b)(6). Shellpoint also seeks judicial notice of certain publicly filed documents. For the reasons stated below, Shellpoint's request for judicial notice should be granted in part and denied in part, and its motion to dismiss should be granted.
BACKGROUND
At all relevant times, plaintiff owned a personal residence located at 4524 S.E. 282nd Avenue in Gresham, Oregon (“Property”). Am. Compl. pg. 1 (doc. 3).At some unspecified time, and in unspecified amounts, plaintiff took out two mortgages in relation to the Property. Id. at pgs. 2-3; see also Compl. pg. 5 (doc. 1); Pl.'s Resp. to Mot. Dismiss 3 (doc. 7). Plaintiff subsequently defaulted on his second mortgage. Id.
Neither the complaint nor amended complaint are numericized, such that the Court cites to the page numbers assigned in the docket.
The Court refers to plaintiff's original complaint and response brief in order to provide a timeline and context for his claims, as his amended complaint provides a dearth of details but the underlying facts do not appear to be in dispute.
In May 2022, plaintiff contacted American Relief Advisors (“ARA”), a third-party unaffiliated with defendants, to obtain assistance in “stop[ping] the foreclosure procedure, reinstating the mortgage loan, [and] reducing the interest rate and monthly payment.” Compl. pgs. 5, 29 (doc. 1). ARA advised plaintiff to default on his first mortgage in order to catch up on his second mortgage. Pl.'s Resp. to Mot. Dismiss 3 (doc. 7). To that end, plaintiff paid ARA nearly $3000 for their purported services and was then instructed to begin making payments again with Shellpoint. Id.; Compl. pgs. 5, 31-33 (doc. 1). New trust deeds were allegedly recorded in October and December 2022 by “JANEWAY LAW FIRM, LLC” but Shellpoint ultimately “could not complete the Loan Modification process.” Compl. pg. 5 (doc. 1).
Thereafter, plaintiff contacted ARA with questions regarding the filing of the new trust deeds. Pl.'s Resp. to Mot. Dismiss 3-4 (doc. 7). ARA instructed plaintiff to stop contacting them and, eventually, changed their phone number. Id. at 4.
In January 2023, “JANEWAY LAW FIRM, LLC filed a court case . . . on the second mortgage.”Compl. pg. 5 (doc. 1); Am. Compl. pgs. 2-3 (doc. 3); Pl.'s Resp. to Mot. Dismiss 4 (doc. 7). Plaintiff “went to court and Judge Benjamin Johnston denied [his] request for Motion to Stay Execution and set aside Default Judgement.” Compl. pg. 5 (doc. 1).
According to Shellpoint, these allegations reference the “landlord-tenant cause of action [Wilmington initiated in Multnomah County Circuit Court] wherein judgment and a writ of restitution were entered against Naumov in relation to the Property.” Def.'s Mot. Dismiss 2-3 (doc. 4). Shellpoint seeks judicial notice of these proceedings to establish that plaintiff's claims “have been previously adjudicated.” Id. Yet Shellpoint neither produces any related documentation nor does it assert it was a party to these proceedings. Judicial notice is therefore improper. See Fed.R.Evid. 201(c)(2) (judicial notice is appropriate only if “the court is supplied with the necessary information” by the moving party); see also Peterson v. McCorkhill, 849 Fed.Appx. 708, 709 (9th Cir. 2021) (affirming the district court's denial of a judicial notice request where “Peterson supplied no evidence of the judgments for which she sought judicial notice”). The Court, however, does take judicial notice of the civil state court proceedings plaintiff initiated as there is sufficient information to conclude they are “matters of public record” and “readily verifiable.” Reyn's PastaBella, LLC v. Visa USA, Inc., 442 F.3d 741, 746 n.6 (9th Cir. 2006).
During January and February 2023, plaintiff made two monthly mortgage payments to Shellpoint, each in the amount of $1,417. Id. at pgs. 5, 10, 21.
In March 2023, plaintiff filed a case in Multnomah County Circuit Court against Shellpoint seeking “verification of debt” and “the original wet ink signature Promissory Note.” Id. at pg. 5; Am. Compl. pgs. 2-3 (doc. 3); Def.'s Mot. Dismiss Ex. A, at 2 (doc. 4-1); Pl.'s Resp. to Mot. Dismiss 4 (doc. 7). Pursuant to those proceedings, plaintiff moved to compel production of the “wet ink signature of Promissory Note” relating to his mortgage debt on the Property. Def.'s Mot. Dismiss Ex. A, at 7 (doc. 4-1). Later that month, plaintiff publicly filed “a Deed of Trust, Modification and Supplement to Deed of Trust, and Substitution of Trustee,” where he claims to have established himself as sole and rightful owner of the Property (i.e., essentially expunging his unpaid mortgage debt). Compl. pg. 5 (doc. 1); Am. Compl. pgs. 2-3 (doc. 3); Pl.'s Resp. to Mot. Dismiss 3 (doc. 7).
In May 2023, the Multnomah County Sherriff's Office served plaintiff with an “Eviction Trespass Notice.” Compl. pgs. 6, 49 (doc. 1); Pl.'s Resp. to Mot. Dismiss 4 (doc. 7). Plaintiff responded by posting a “No Trespassing” sign on the Property. Compl. pgs. 6, 48 (doc. 1); Pl.'s Resp. to Mot. Dismiss 4 (doc. 7).
In July 2023, Multnomah County Circuit Court entered an order dismissing plaintiff's case. Def.'s Mot. Dismiss 2-3 (doc. 4); Def.'s Mot. Dismiss Ex. A, at 47-65 (doc. 4-1); Pl.'s Resp. to Mot. Dismiss 4 (doc. 7). At some unspecified time, plaintiff vacated the Property. Pl.'s Resp. to Mot. Dismiss 4 (doc. 7).
In August 2023, plaintiff initiated this action seeking a declaration he “is the owner of the Property and entitled to possession,” and that defendants “have no estate, right, title, or interest whatsoever in or to the Property,” as well as $100,000,000 in damages. Am. Compl. pg. 4 (doc. 3). On September 5, 2023, Shellpoint filed the present motion to dismiss. Briefing was completed in regard to that motion on September 27, 2023.
The only allegations pertaining to Save On Auto Recycling and Towing and H&H Preferred Realty state: “Save On Auto Recycling and Towing [should] return all of my personal automobiles at their cost, that they towed off my property. H&H Preferred Realty [should] cease and desist on listing my home for sale.” Am. Compl. pg. 3 (doc. 3).
STANDARD OF REVIEW
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
Shellpoint argues dismissal with prejudice is warranted because plaintiff's “claims are barred by claim preclusion,” as they “aris[e] from the same facts and see[k] the same relief as his previous causes of action.” Def.'s Mot. Dismiss 2 (doc. 4). Additionally, Shellpoint contends that plaintiff's claims fail at the pleadings level because he “admits . . . that he did not make mortgage payments from 2020 to late February 2023, and that his mortgage payments were due to Shellpoint.” Id. at 8.
Plaintiff's response, although untimely, indicates he opposes Shellpoint's motion on the grounds that a “wet ink signature on the Promissory Note” was never produced, such that the debt was never “verified” and therefore must be discharged. Pl.'s Resp. to Mot. Dismiss 1 (doc. 7).
I. Claim Preclusion
“The doctrine of claim preclusion, formerly known as res judicata, generally prohibits a party from relitigating the same claim or splitting a claim into multiple actions against the same opponent.” Bloomfield v. Weakland, 339 Or. 504, 510, 123 P.3d 275 (2005). This “rule forecloses a party that has litigated a claim against another from further litigation on that same claim on any ground or theory of relief that the party could have litigated in the first instance.” Id. at 511. Thus, unlike issue preclusion, “[c]laim preclusion does not require actual litigation of an issue of fact or law . . . Nor does it require that the determination of the issue be essential to the final or end result reached in the action, claim, or proceeding.” Drew v. EBI Cos., 310 Or. 134, 140, 795 P.2d 531 (1990). Rather, in order for claim preclusion to attach, only finality and the “opportunity to litigate the question” are required, and “courts employ a broad definition” in regard to the latter. Id. at 140-1.
The preliminary requirements for application of claim preclusion are met in this case. There is a Multnomah County Circuit Court Order binding on the parties that dismisses plaintiff's “verification of debt” claims in their entirety. Def.'s Mot. Dismiss Ex. A, at 65 (doc. 4-1). And plaintiff does not dispute that his present claims could have been brought in his prior lawsuit. Indeed, his objections to Shellpoint's Motion to Dismiss in his state court proceedings are virtually identical to those asserted here. Compare id. at 57, with Pl.'s Resp. to Mot. Dismiss 1 (doc. 7).
Given the procedural posture of this case, allowing plaintiff to proceed with his claims would essentially require this Court to conclude that Multnomah County Circuit Court's rulings were wrongful. Yet plaintiff has not cited to any authority that allows a federal court to sit in direct review of a state court judgment under the present circumstances. Cf. Reusser v. Wachovia Bank,N.A., 525 F.3d 855, 859 (9th Cir. 2008) (Rooker-Feldman doctrine precludes recourse in federal court for an allegedly erroneous state court decision).
II. Pleading Defects
Plaintiff's pleadings also contain several pleading defects. As an initial matter, plaintiff's allegations are vague and conclusory, such that it is unclear how and when each defendant caused him harm. See McHenry v. Renne, 84 F.3d 1172, 1176-78 (9th Cir. 1996) (each averment of a pleading must be simple, concise, and direct, stating which defendant is liable for which wrong); see also Plong v. Coutts, 2023 WL 4275505, *3-7 (C.D. Cal. May 31), adopted by 2023 WL 4269755 (C.D. Cal. June 28, 2023) (granting the defendants' Rule 12(b)(6) motion where, amongst other reasons, the plaintiffs' claims premised on the lack of a “wet ink signature” failed “to allege how each of the nine defendants were involved in the foreclosure proceedings and on what ground each defendant should be held liable”). Indeed, ARA is the only entity specifically alleged to have wronged plaintiff, however, they are not named as a party to this suit.
Concerning allegations sounding in fraud, the complaint fails to meet Fed.R.Civ.P. 9(b)'s heightened pleading requirements. SeeCafasso 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 he seeks to quiet title or pursue contractual claims, plaintiff attacks defendants' actions but does not otherwise dispute that he has defaulted on his mortgages, 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); see also Collier v. Wilmington Savings Fund Soc'y, FSB as Trustee of Stanwich Mortg. Loan Trust A, 2022 WL 1223253, *2 (D. Or. Apr. 26, 2022) (“[p]laintiffs remain responsible for fulfilling their ongoing debt obligation, and equity would not be served by the court granting a quiet title claim that would nullify a security interest without also ensuring that the underlying debt had been satisfied”) (citation and internal quotations omitted).
Finally, courts in this District have uniformly rejected the “show me the note” theory, a version of which plaintiff appears to be making via these proceedings:
In 2009, a foreclosure defense colloquially termed “show me the note” began circulating through courts across the country. Advocates of this theory believe that only the holder of an original wet-ink signature note has the lawful power to initiate a nonjudicial foreclosure. Courts have routinely rejected the defense on the ground that foreclosure statutes simply do not require production of the original note at any point during the proceedings. In Oregon, the Oregon Trust Deed Act, O.R.S. § 86.705 et seq., does not require presentment of the Note or any other proof of “real party in interest” or “standing,” other than the Deed of Trust . . . Any claim by plaintiffs that defendant must produce the original wet ink signature note should be dismissed.Hubbard v. Bank of Am., 2011 WL 2470021, *3 (D. Or. Apr. 21), adopted by 2011 WL 2462961 (D. Or. June 20, 2011) (citations and internal quotations omitted).
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. See Rigor v. Freemont Inv. & Loan, 2012 WL 913631, *2 (D. Or. Feb. 13), adopted by 2012 WL 913566 (D. Or. Mar. 16, 2012) (declining to dismiss the pro se plaintiff's complaint with prejudice under analogous circumstances).
RECOMMENDATION
For the reasons stated herein, Shellpoint's Motion to Dismiss (doc. 4) should be granted. Any motion to amend the complaint must 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.