Opinion
3:23-cv-01120-JR
07-16-2024
VICTOR NAUMOV, Plaintiff, v. SHELLPOINT MORTGAGE SERVICING, a division of New Rez; WILMINGTON SAVINGS FUND SOCIETY FSB TRUST, COUNTRYWIDE HOME LOANS, INC., DTCC, MERS, 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”), Countrywide Home Loans, Inc., DTCC, MERS, H&H Preferred Real Estate, and Save on Auto Recycling and Towing. Plaintiff now moves for leave to file his Fourth Amended Complaint (“FAC”). For the reasons stated below, plaintiff's motion should be denied, and the complaint dismissed with prejudice.
BACKGROUND
At all relevant times, plaintiff owned a personal residence located at 4524 S.E. 282nd Avenue in Gresham, Oregon (“Property”). Naumov v. Shellpoint Mortg. Servicing, 2024 WL 1991547, *1 (D. Or. Apr. 2), adopted by 2024 WL 2153588 (D. Or. May 14, 2024). In late 2006 and/or early 2007, plaintiff took out two mortgages in relation to the Property. Id. Plaintiff subsequently defaulted on his second mortgage. Id.
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.” Id. “ARA advised plaintiff to default on his first mortgage in order to catch up on his second mortgage.” Id.“To that end, plaintiff paid ARA nearly $3000 for their purported services and was then instructed to begin making payments again with Shellpoint.” Id. However, Shellpoint “was unable to complete the loan modification [because Wilmington] recorded a Trustee's Deed and Quit claim.” Id. (citation and internal quotations omitted). Thereafter, plaintiff contacted ARA “for an explanation but was told not to contact them again . . . Plaintiff tried to call later, and the phone number was disconnected.” Id. (citation and internal quotations and brackets omitted).
In January 2023, Wilmington through its attorneys “JANEWAY LAW FIRM, LLC filed a court case . . . on the second mortgage.” Id. (citation and internal quotations omitted). According to plaintiff, he “never received correspondence regarding a foreclosure or for a court appearance on a foreclosure case that was filed by Wilmington.” Id. (citation and internal quotations omitted). Plaintiff “went to court and Judge Benjamin Johnston denied [his] request for Motion to Stay Execution and set aside Default Judgement.” Id.
“During January and February 2023, plaintiff made two monthly mortgage payments to Shellpoint, each in the amount of $1,417.” Id.
“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.(citation omitted). “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.” Id. (citation omitted). The Multnomah County Circuit Court later entered an order dismissing plaintiff's case. Id.
“Plaintiff received correspondence of eviction notice after the Trustees' Deed and Quit Claim was recorded, court proceedings had been concluded and . . . the foreclosure process [had begun].” Id. (citation and internal quotations omitted). He “did not abandon the [Property], went to work out of state and the [Property] was deemed abandoned.” Id. (citation and internal quotations omitted).
In May 2023, the Multnomah County Sherriff's Office served plaintiff with an “Eviction Trespass Notice.” Id. “At some unspecified time, plaintiff vacated the Property.” Id. “Save on Auto Recycling and Towing removed all of [plaintiff's] personal property without [his] consent.” Id.(citation and internal quotations omitted). And H&H Preferred Real Estate listed the Property “for sale, and chang[ed] utility bills from the name of Victor Naumov to Damian Pogue” without plaintiff's consent. Id. (citation and internal quotations omitted).
On August 1, 2023, plaintiff initiated this action. He filed an Amended Complaint on August 21, 2023, 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 29, 2023, the Court issued a Findings and Recommendation, reflecting that Shellpoint's motion to dismiss should be granted. Specifically, the Court found “[t]he preliminary requirements for application of claim preclusion are met in this case.” Naumov v. Shellpoint Mortg. Serv., 2023 WL 7017836, *3 (D. Or. Sept. 29, 2023), adopted by 2024 WL 81393 (D. Or. Jan. 5, 2024). The Court also detailed numerous pleading defects but recommended that plaintiff's claims be dismissed without prejudice given his pro se status. Id. at *4.
On October 10, 2023, plaintiff filed his First Amended Complaint, which reasserted and expanded upon his prior claims under the Real Estate Settlement Procedures Act (“RESPA”), Truth in Lending Act, criminal law, and 42 U.S.C. § 1983, and also denoted that ARA was not listed as a defendant “because Plaintiff is unable to find their business . . . this business was not registered.” First Am. Compl. 18 (doc. 15).
On January 5, 2024, District Judge Hernandez adopted the September 29, 2023, Findings and Recommendation.
On January 31, 2024, plaintiff filed the Second Amended Complaint pursuant to several federal statutes - i.e., “12 U.S.C. § 412, et al, 18 U.S.C. § 1956 (LAUNDERING OF MONETARY INSTRUMENTS), 12 U.S.C. § 504 (CIVIL MONEY PENALTY - FEDERAL RESERVE ACT), 18 U.S.C. § 2314 (TRANSPORTATION OF STOLEN SECURITIES) 18 U.S.C. § 1348 (SECURITIES AND COMMODITIES FRAUD),” and “Article 18 U.S. Code § 241 and 242 and 42 U.S. Code § 1983” - and Oregon common law (“breach of contract, non-disclosure, fraud, claiming title to land that is private, and fraudulent foreclosure”). Second Am. Compl. pgs. 2, 14 (doc. 22). Once again, plaintiff premised his claims on his “allodial title/land patent” and unfulfilled requests for a “wet ink signature.” See, e.g., id. at pgs. 4-5, 10, 12.
On April 2, 2024, the Court issued a Findings and Recommendation, indicating that defendants' motion to dismiss the Second Amended Complaint should be granted because it “contained several pleading defects,” including any claims sounding in allodial title, a “show me the note theory,” fraud, adverse possession, quiet title, and breach of contract. Naumov, 2024 WL 1991547 at *4-5. Additionally, the Court explained there was no “private right of action under the identified criminal statutes [or] the civil statues cited by plaintiff, including portions of the Federal Reserve Act and Uniform Commercial Code.” Id. at *5. In concluding, the Court emphasized that “any claims premised on criminal statutes, the Federal Reserve Act, a ‘wet ink signature' or ‘show me the note' theory, and/or plaintiff's purported allodial title are frivolous and therefore should not be realleged.” Id. at *6.
On April 15, 2024, plaintiff filed his Third Amended Complaint, which again asserted iterations of his prior claims. See generally Third Am. Compl. (doc. 35).
On May 14, 2024, District Judge Hernandez adopted the Court's April 2, 2024, Findings and Recommendation.
On June 11, 2024, plaintiff lodged the present motion for leave to file a fifth complaint (Fourth Amended Complaint, FAC). Briefing was completed in regard to that motion on July 9, 2024.
STANDARDS OF REVIEW
Leave to amend pleadings “shall be freely given when justice so requires.” Fed.R.Civ.P. 15(a). Courts apply Rule 15 with “extreme liberality.” Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048, 1051 (9th Cir. 2003) (citations omitted). In determining whether a motion to amend should be granted, the court generally considers four factors: (1) undue delay; (2) bad faith; (3) futility; and (4) prejudice to the opposing party. Forsyth v. Humana, Inc., 114 F.3d 1467, 1482 (9th Cir. 1997) (citation omitted).
These factors are not weighted equally: “futility of amendment alone can justify the denial of a motion [to amend].” Ahlmeyer v. Nev. Sys. of Higher Educ., 555 F.3d 1051, 1055 (9th Cir. 2009). A proposed amendment is futile if it would be immediately “subject to dismissal.” Steckmanv. Hart Brewing, Inc., 143 F.3d 1293, 1298 (9th Cir. 1998). Thus, the proposed 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).
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
Plaintiff abandons his allegations of allodial title and criminal liability in the FAC. However, that is where the material differences end. That is, plaintiff continues to allege his mortgages are “fraudulent” and that defendants impermissibly “separated” the deed of trust from the promissory note. Proposed FAC pgs. 8-9 (doc. 37). He also reasserts his adverse possession claim, although omits any allegations related to hostile possession. Id. at pgs. 5, 9-10. And, while plaintiff no longer pursues any claims explicitly premised on a “show me the note” theory, the FAC does allege that defendants violated RESPA, the Fair Debt Collection Practices Act (“FDCPA”), and Uniform Commercial Code based, in part, on the securitization of his loan and/or MERS' involvement in the non-judicial foreclosure process. Id. at pgs. 13-14. Plaintiff also alleges two claims under Oregon law for breach of fiduciary duty and wrongful foreclosure. Id. at pg. 14.
Thus, plaintiff's claims fail for the same reasons stated in the Court's prior opinions. Namely, as the Court discussed previously, “[t]here is a Multnomah County Circuit Court Order binding on the parties that dismisses plaintiff's ‘verification of debt' claims in their entirety [and] plaintiff does not dispute that his present claims could have been brought in his prior lawsuit.” Naumov, 2023 WL 7017836 at *3; see also Gresham v. Premier Mortg. Res., LLC, 2018 WL 4945215, *4-6 (D. Or. May 18, 2018) (issue preclusion and the Rooker-Feldman doctrine barred reconsideration of a state court judgment surrounding the wrongfulness of the plaintiff's nonjudicial foreclosure).
Concerning allegations sounding in fraud, the FAC again fails to meet Fed.R.Civ.P. 9(b)'s heightened pleading requirements. In other words, beyond broadly alleging that defendants “improper[ly] handl[ed] and enforce[d] the mortgage loan secured by” the Property, it is unclear from the FAC how defendants' actions were fraudulent. Proposed FAC pg. 8 (doc. 37); see also 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).
Regarding adverse possession, as the Court previously explained, hostile possession is a requisite element that the FAC implicitly acknowledges plaintiff cannot satisfy. See Nietzche v. Freedom Home Mortg. Corp., 2019 WL 5057174, *23 (D. Or. Oct. 8, 2019), aff'd, 2023 WL 2570417 (9th Cir. Mar. 20, 2023) (a debtor does “not have hostile possession of the property during the time they were the lawful owners” pursuant to a mortgage) (emphasis in original); see also Asnake v. Deutsche Bank Nat'l Tr. Co., 313 F.Supp.3d 84, 88 (D. D.C. 2018) (“a mortgagor and mortgagee cannot be hostile to one another until one party repudiates the relationship, such as if the mortgagor defaults and the mortgagee forecloses on the property”).
To the extent the FAC seeks to quiet title, plaintiff attacks defendants' actions but once again does not dispute he defaulted on his mortgages. See 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).
Moreover, mortgage servicers and assignees of a creditor “are not debt collectors” within the meaning of the FDCPA where, as here, “they obtained the right to collect on a loan before it was in default.” Lettenmaier v. Fed. Home Loan Mortg. Corp., 2011 WL 3476648, *13-14 (D. Or. Aug. 8, 2011); see also Nelson v. Fay Servicing, LLC, 2023 WL 6122685, *12 (D. Or. Sept. 15, 2023) (dismissing FDCPA claims against the loan servicer with prejudice based on more recent Oregon and Ninth Circuit precedent); Gresham, 2018 WL 4945215 at *6 (“foreclosing on a trust deed is an entirely different path than collecting funds from a debtor . . . Because the money collected from a trustee's sale is not money owed by a consumer, it isn't ‘debt' as defined by the FDCPA”) (citations and internal quotations omitted).
Plaintiff's RESPA claim is vague and conclusory. Plaintiff alleges Shellpoint “fail[ed] to maintain proper loan documentation and respond adequately to information requests,” but he does not identify any RESPA provision that defendants allegedly violated. Proposed FAC pg. 13 (doc. 37). To the extent plaintiff is alleging his requests for “validation of debt” were Qualified Written Requests (“QWR”), his claim fails. In order to be protected under RESPA, the plaintiff's correspondence must, among other qualifications, “relate to servicing of the loan.” Lettenmaier, 2011 WL 3476648 at *11 (collecting cases). Plaintiff does not append any of his correspondences or allege any particulars in relation to his “information requests,” which alone is fatal to his claim. Id. at *12.
However, plaintiff's prior lawsuit and filings in this case suggest that none of these correspondences concerned scheduled periodic payments pursuant to the existing terms of the loan as 12 U.S.C. § 2605(i)(3) requires. Instead, they reflect that plaintiff sought proof of ownership of the loan in the form of a “wet signature on the Promissory Note.” See, e.g., Pl.'s Resp. to Mot. Dismiss 1 (doc. 7); see also see also Vettrus v. Bank of Am., N.A., 2012 WL 2905167, *6-7 (D. Or. July 13, 2012) (“RESPA governs the servicing of the loan, rather than the creation or modification of the loan” and “Oregon does not require any party to a trustee's sale to produce a physical copy of the original note”) (citations and internal quotations and ellipses omitted).
And courts within this District have dismissed state law claims under analogous circumstances. See, e.g., Vettrus, 2012 WL 2905167 at *7, 11; Nelson, 2023 WL 6122685 at *9-10; see also Haun v. JPMorgan Chase Bank, N.A., 2023 WL 4235315, *2 (D. Or. June 28, 2023) (“without more, the fact that MERS was involved in [the underlying] loan does not support a claim [as] Brandrup did not render invalid every deed of trust listing MERS as ‘beneficiary' . . . courts simply treat the lender as the true beneficiary”); Elizabeth Retail Props. LLC v. Key Bank Nat'l Ass'n, 83 F.Supp.3d 972, 991 (D. Or. 2015) (“Oregon does not recognize a wrongful foreclosure tort claim”) (citations and internal quotations omitted); Hogan v. N.W. Tr. Servs., Inc., 2010 WL 1872945, *9 (D. Or. May 7, 2010), aff'd, 441 Fed.Appx. 490 (9th Cir. 2011) (“long-held Oregon legal principles [dictate] that, arms-length banking and loan transactions do not constitute a special or fiduciary relationship”) (citation omitted).
Finally, plaintiff lacks standing to challenge the mortgage securitization process or enforce the pooling and servicing agreement since he is not a third-party beneficiary, and the assignment of his loan did not affect underlying debt or create a new encumbrance on the Property. Oliver v. Delta Fin. Liquidating Tr., 2012 WL 3704954, *4 (D. Or. Aug. 27, 2012). In sum, the proposed amendments are futile.
RECOMMENDATION
For the reasons stated herein, plaintiff's Motion for Leave to File an Amended Complaint (doc. 37) should be denied and the case dismissed with prejudice. After five attempts to file a complaint, including specific instructions from the Court noting deficiencies in the complaint and instructions regarding alleging enough facts to state a claim that is plausible on its face, it appears beyond doubt that the plaintiff can prove no set of facts that would entitle him to relief.
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.