Motion to Dismiss

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Notice of Motion and Motion to Dismiss 1

WILLIAM G. MALCOLM #129271DON ROBINSON #123411 MALCOLM • CISNEROS 2112 Business Center Drive 2nd Floor Irvine, California 92612 Telephone: (949) 252-9400 Telecopier: (949) 252-1032 Counsel for DEUTSCHE BANK NATIONAL TRUST COMPANY AS TRUSTEE OF THE HARBORVIEW MORTGAGE LOAN TRUST 2005-5, MORTGAGE LOAN PASS-THROUGH CERTIFICATES, SERIES 2005-5 UNDER THE POOLING AND SERVICING AGREEMENT DATED JUNE 1, 2005, and ONEWEST BANK, F.S.B.

UNITED STATES BANKRPUTCY COURT

SOUTHERN DISTRICT OF CALIFORNIA, SAN DIEGO DIVISION

CESAR DOBLE,

Debtor,

_________________________________

CESAR M. DOBLE,

Plaintiff,

vs.

DEUTSCHE BANK NATIONAL TRUST COMPANY AS TRUSTEE OF THE HARBORVIEW MORTGAGE LOAN TRUST 2005-5, MORTGAGE LOAN PASS-THROUGH CERTIFICATES, SERIES 2005-5 UNDER THE POOLING AND SERVICING AGREEMENT DATED JUNE 1, 2005, and ONEWEST BANK, FSB,

Defendants.

Case No. 6:10-bk-11926-MM13

Chapter 7

Adversary Proc. No. 10-90308-MM

NOTICE OF MOTION AND MOTION TO DISMISS COMPLAINT AGAINST DEUTSCHE BANK NATIONAL TRUST COMPANY AS TRUSTEE OF THE HARBORVIEW MORTGAGE LOAN TRUST 2005-5, MORTGAGE LOAN PASS-THROUGH CERTIFICATES, SERIES 2005-5 UNDER THE POOLING AND SERVICING AGREEMENT DATED JUNE 1, 2005, AND ONEWEST BANK, F.S.B; MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF [F. R. Civ. P. Rule 12(b)(6)] Date: October 8, 2010 Time: 10:00 a.m. Ctrm: 218

TO THE HONORABLE MARGARET M. MANN, UNITED STATES BANKRUPTCY COURT JUDGE, PLAINTIFF, AND PLAINTIFF’S ATTORNEYS OF RECORD:

PLEASE TAKE NOTICE that on October 8, 2010 at 10:00 a.m., or as soon thereafter as

the matter may be heard in Courtroom 218 of the above entitled Court, located at 325 West F

Case 10-90308-MM Filed 08/31/10 Doc 12 Pg. 1 of 14

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Notice of Motion and Motion to Dismiss 2

Street, San Diego, California 92101, Defendants Deutsche Bank National Trust Company as

Trustee of the Harborview Mortgage Loan Trust 2005-5, Mortgage Loan Pass-Through

Certificates, Series 2005-5 Under the Pooling and Servicing Agreement Dated June 1, 2005

(“Deutsche Bank”) and OneWest Bank, F.S.B. (“OneWest”) (collectively “Defendants”) will and

hereby do move the Court to dismiss the Complaint of the Debtor for Declaratory Judgment and

for Damages for Filing a False Proof of Claim and False Declaration and for Failure to Perfect

Deed of Trust on Residential Property (“Complaint”) filed by Plaintiff Cesar Doble on June 29,

2010 for failure to state a claim upon which relief may be granted. This Motion is made and

based upon Rule 12(b)(6) of the Federal Rules of Civil Procedure. This Motion will be based

upon this Notice, the attached Memorandum of Points and Authorities, the Declaration of Arturo

Matthews and the Request for Judicial Notice filed concurrently with the Motion, and upon all

pleadings, papers and documents on file herein and any oral argument which may be presented at

the time of the hearing.

Dated: August 24, 2010

MALCOLM ♦ CISNEROS

By: /s/ William G. Malcolm WILLIAM G. MALCOLM Attorneys for DEUTSCHE BANK NATIONAL TRUST COMPANY AS TRUSTEE OF THE HARBORVIEW MORTGAGE LOAN TRUST 2005-5, MORTGAGE LOAN PASS-THROUGH CERTIFICATES, SERIES 2005-5 UNDER THE POOLING AND SERVICING AGREEMENT DATED JUNE 1, 2005, and ONEWEST BANK, F.S


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Table of Contents and Authorities i

TABLE OF CONTENTS

I. STATEMENT OF FACTS……………………………...…………………….1

II. DISCUSSION…………………………………………….………………….3

A. Dismissal is Appropriate Under Rule 12(b)(6)……….......................…….3

B. The Declaratory and Injunctive Relief Cause of Action Fails to State a Claim for Relief………………………..…………………….…………………..4

C. The Cause of Action for Failure to Perfect Deed of Trust Fails to State a Claim for Relief……………………………...…………….…………………….4

D. The Causes of Action for Violation of the Automatic Stay and Filing a False Claim Fail to State Claims for Relief………….…………………..…..7

E. The Cause of Action for Unfair and Deceptive Acts and Practices Fails to State a Claim for Relief…………………………………………………..……..8

III. CONCLUSION…………………………………………………..…………..9


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Table of Contents and Authorities ii

TABLE OF AUTHORITIES

CASES

American Bank & Trust Co. v. Louisiana Savings Ass'n (La. Ct. App. 1980) 386 So. 2d 96. ................................................................................................................................... 6

Art Movers v. Ni W., 3 Cal.App.4th 640, 647 (1994) ...................................................................... 4

Ashcroft v. Iqbal, __ U.S. __, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009) ............................... 4

Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ..................................................................................................................................... 3, 9

Benham, 2009 U.S. Dist. LEXIS 91287, 2009 WL 2880232, at *3 ................................................ 5

Benito v. Indymac Mortg. Servs., 2010 U.S. Dist. LEXIS 51259, 19-21 (D. Nev. 2010) .......................................................................................................................................... 9

Branch v. Tunnell, 14 F.3d 449, 453-454 (9th Cir. 1994) ............................................................... 3

Carpenter v. FDIC (In re Carpenter), 205 B.R. 600, 604 (BAP 9th Cir. 1997) .............................. 3

Clegg v. Cult Awareness Network, 18 F.3d 752, 754 (9th Cir. 1994) ............................................. 3

Conley v. Gibson, 355 U.S. 41, 45-46, 78 S. Ct. 99, 2 L. Ed. 2d 80 (1957) .................................... 3

County of Santa Clara v. Astra USA, Inc., 588 F.3d 1237, 1244 (9th Cir. 2009) ............................ 8

Emrich v. Touche Ross & Co., 846 F.2d 1190, 1198 (9th Cir. 1988) .............................................. 3

Fannie Mae v. Kuipers, 314 Ill. App. 3d 631, 732 N.E.2d 723, 726, 247 Ill. Dec. 668 (Ill. App. Ct. 2000) .............................................................................................................. 6

Hafiz v. Greenpoint Mortg. Funding, Inc., 652 F. Supp. 2d 1039, 2009 WL 2137393, at *2 (N.D. Cal. 2009) ................................................................................................ 5

Jenkins v. MCI Telcoms. Corp., 973 F. Supp. 1133, 1139 (C.D. Cal. 1997) ................................... 4

Kapila v. Atl. Mortg. & Inv. Corp. (in Re Halabi), 184 F.3d 1335, 1338 (11th Cir. 1999) .......................................................................................................................................... 7

Klamath Water Users Protective Ass'n v. Patterson, 204 F.3d 1206, 1210 (9th Cir. 1999) .......................................................................................................................................... 8

Lamson & Co. v. Abrams, 305 Mass. 238, 242, 25 N.E.2d 374, 376 (Mass. 1940) ........................ 7

Lane v. Vitek Real Estate Indus. Group, 2010 U.S. Dist. LEXIS 54831, 13 (E. D. Cal. May 13, 2010) .................................................................................................................... 5

Mack v. South Bay Beer Distributors, Inc., 798 F.2d 1279, 1282 (9th Cir.1986) ........................... 3

Mayer v. Mylod, 988 F.2d 635, 638 (6th Cir. 1993) ........................................................................ 3

///


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Table of Contents and Authorities iii

McManus v. American Express Tax and Business Services, Inc., 67 F.Supp.2d 1083, 1086 (D. Ariz. 1999) ........................................................................................................ 3

Mortgage Elec. Registration Sys. v. Brosnan, 2009 U.S. Dist. LEXIS 87596 (N.D. Cal. Sept. 4, 2009) ...................................................................................................................... 6

Obuchowski v. Associates Nat'l Mortgage Ass'n (In re Briggs), 186 B.R. 830, 833 (Bankr. D. Vt. 1995) .................................................................................................................. 6

Pandora v. Countrywide Home Loans, Inc., 640 F. Supp. 2d 1177, 1190 (N.D. Cal. 2009) .......................................................................................................................................... 6

Parks School of Business, Inc. v. Symington, 51 F.3d 1480, 1484 (9th Cir.1995)........................... 3

Provident Co-Op. Bank v. James Talcott, Inc., 358 Mass. 180, 188, 260 N.E.2d 903, 908 (Mass. 1970) ................................................................................................................ 7

Rogan v. Bank One, N.A. (In re Cook), 457 F.3d 561, 567 (6th Cir. 2006) .............................. 5, 6, 7

STATUTES

11 U. S.C. § 506 ............................................................................................................................... 4

11 U.S.C. § 502(b)(1) ....................................................................................................................... 4

11 U.S.C. § 544 ............................................................................................................................ 6, 7

11 U.S.C. § 544(a) ........................................................................................................................... 4

Cal. Civ. Proc. Code § 1750 ............................................................................................................. 8

Cal. R. Ct. 3007 ................................................................................................................................ 4

Fed. R. Civ. P. 12(b)(6) ............................................................................................................ 1, 2, 3

U.S.C. § 105(a) ................................................................................................................................ 4

OTHER AUTHORITIES

Yes, There Is Life on MERS, 11 ABA Probate & Property 32, 35-36 (July/August 1997) .......................................................................................................................................... 6


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Memorandum of Points and Authorities 1

MEMORANDUM OF POINTS AND AUTHORITIES

I. STATEMENT OF FACTS

On March 9, 2005, Cesar Doble and Martha E. Doble (“Dobles”), husband wife,

executed a promissory note (“Note”) for $650,000.00 secured by a Deed of Trust (“DOT”)

executed on the same day and recorded on March 16, 2005 encumbering the real property

located at 1466 Heatherwood Avenue, Chula Vista, California 91913 (“Property”). Request for

Judicial Notice (“RJN”), Exh. 1. The DOT identified the Dobles as the “Borrower,” Plaza

Home Mortgage (“Plaza”) as the “Lender,” and Mortgage Electronic Registration Systems, Inc.

(“MERS”), “as a nominee for Lender and Lender’s successors and assigns,” as the

“Beneficiary.” Id., Exh. 1, p. 1.

June 26, 2009, MERS, as beneficiary under the DOT, assigned the DOT and Note to

Defendant OneWest Bank, F.S.B. (“OneWest”) via an Assignment of Deed of Trust

(“Assignment 1”) which was recorded on October 22, 2009. RJN, Exh. 2. On July 14, 2009, a

Notice of Default and Election to Sell Under Deed of Trust (“NOD”) was recorded showing that

the Dobles had failed to make the payment due March 1, 2009 and all subsequent payments and

owed $15,525.29 as of July 13, 2009. RJN, Exh. 3, pp. 1-2. On October 22, 2009, a Notice of

Trustee’s Sale was recorded showing the Property would be sold at public auction on November

6, 2009. RJN, Exh. 4.

On November 3, 2009, Martha Doble filed a voluntary Chapter 13 petition, in the United

States Bankruptcy Court for the Southern District of California, San Diego Division, thereby

delaying the sale (Case No. 09-16970-LA13). RJN, Exh. 5 (Docket). On May 5, 2010, the

Chapter 13 Trustee filed an objection to confirmation of Martha Doble’s Chapter 13 plan and

moved to dismiss the case. RJN, Exh. 5, Docket # 27.

On May 19, 2010, OneWest executed but did not record an Assignment of Deed of Trust

(“Assignment 2”) transferring the note and DOT to Defendant Deutsche Bank National Trust

Company as Trustee of the Harborview Mortgage Loan Trust 2005-5, Mortgage Loan Pass-

Through Certificates, Series 2005-5 Under the Pooling and Servicing Agreement Dated June 1,

2005 (“Deutsche Bank”). RJN, Exh. 6.


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On May 24, 2010, Deutsch Bank filed a Motion for Relief from the Automatic Stay in

the Martha Doble bankruptcy case. RJN, Exh. 7 (Motion with Exhibits). On June 22, 2010, the

Bankruptcy Court granted the Chapter 13 Trustee’s motion to dismiss Martha Doble’s

bankruptcy case thereby mooting the motion for relief from the automatic stay. RJN, Exh. 5,

Docket # 40.

On June 28, 2010, Cesar Doble (“Doble”) filed a voluntary Chapter 13 petition in this

case. On June 29, 2010, Doble filed the Complaint of the Debtor for Declaratory Judgment and

for Damages for Filing a False Proof of Claim and False Declaration and for Failure to Perfect

Deed of Trust on Residential Property (“Complaint”) against Deutsche Bank and OneWest.

According to David St. John (“St. John”), Doble’s attorney, the Summons and Complaint were

served on Deutsche Bank and OneWest by certified mail on June 29, 2010. Declaration of

David A. St. John in Support of Request to Enter Default, p. 2, ¶ 2. St. John states that both

defendants received the Summons and Complaint on July 1, 2010. Id., ¶ 3.

Deutsche Bank forwarded the Summons and Complaint to OneWest to handle as part of

its servicing obligations. OneWest forwarded the Summons and Complaint to Lender

Processing Services (“LPS”), which electronically assigned the case to Burnett & Matthews on

August 4, 2010. Declaration of Arturo Matthews in Support of Motion to Vacate Default

(“Matthews Declaration”), p. 1, Exh. 1. The electronic transmittal stated that the due date for

the Adversary Response was August 11, 2010. Id., Exh. 1.

Doble filed a Request to Enter Default with Declaration of Mailing, Memorandum of

Costs and if applicable Declaration of Non-Military Status on August 4, 2010, the same day the

case was referred to Burnett & Matthews. On August 5, the Bankruptcy Court Clerk entered the

defaults of Deutsche Bank and OneWest.

On August 11, 2010, Matthews asked St. John to grant a 10-day extension of time to

answer the Complaint. Matthews Declaration, p. 1. Matthews learned about the default for the

first time on August 12, 2010 when St. John informed Matthews of the default and accused

Deutsche Bank of foreclosing based upon “falsified documents.” Id., p. 1; Exh. 2. St. John’s

response, which stated “[i]f your client’s conduct was intentional, it would not seem that they


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are entitled to any courtesy, let alone relief from default” and other comments, made it clear it

would be necessary to file the present motion to vacate the default. Id., Exh. 2.

II. DISCUSSION

A. Dismissal Is Appropriate Under Rule 12(b)(6)

A motion to dismiss will be granted where the plaintiff fails to state a claim upon which

relief can be granted. Fed.R.Civ.P. 12(b)(6).” McManus v. American Express Tax and Business

Services, Inc., 67 F.Supp.2d 1083, 1086 (D. Ariz. 1999). Rule 12(b)(6) allows a defendant “to

test whether, as a matter of law, the plaintiff is entitled to legal relief even if everything in the

alleged complaint is true." Mayer v. Mylod, 988 F.2d 635, 638 (6th Cir. 1993). Review is

limited to the contents of the complaint. Clegg v. Cult Awareness Network, 18 F.3d 752, 754

(9th Cir. 1994).

However, exhibits attached to the complaint, as well as matters of public record may be considered in determining whether dismissal was proper without converting to the motion to one for summary judgment. See Parks School of Business, Inc. v. Symington, 51 F.3d 1480, 1484 (9th Cir.1995); Mack v. South Bay Beer Distributors, Inc., 798 F.2d 1279, 1282 (9th Cir.1986).

Carpenter v. FDIC (In re Carpenter), 205 B.R. 600, 604 (BAP 9th Cir. 1997). See also Emrich

v. Touche Ross & Co., 846 F.2d 1190, 1198 (9th Cir. 1988).

In the present case, the Deed of Trust, Assignments 1 and 2, NOD, Notice of Trustee’s

Sale, and the bankruptcy cases are all matters of public record. As such, these documents may

be considered without converting the 12(b)(6) motion to a motion for summary judgment. See,

e.g., Branch v. Tunnell, 14 F.3d 449, 453-454 (9th Cir. 1994).

In the past, courts held that a dismissal is warranted only where “it appears beyond doubt

that the Plaintiff can prove no set of facts which would entitle him [or her] to relief.” Conley v.

Gibson, 355 U.S. 41, 45-46, 78 S. Ct. 99, 2 L. Ed. 2d 80 (1957) (emphasis added). The United

States Supreme Court rejected this test in Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 127

S.Ct. 1955, 167 L.Ed.2d 929 (2007) and held that in order to survive a motion to dismiss for

failure to state a claim a complaint must set forth “enough facts to state a claim for relief that is

plausible on its face.” Id., 550 U.S. at 570 (emphasis added).


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A claim has “facial plausibility” when the pleaded factual allegations “allow the court to

draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft

v. Iqbal, __ U.S. __, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009). “[T]hreadbare recitals of

the elements of a cause of action, supported by mere conclusory statement do not suffice.” Id.

[O]nly a complaint that states a plausible claim for relief survives a motion to dismiss.” Id., 129

S.Ct. at 1950.

Doble’s Complaint fails to state plausible claims for relief. Consequently, the Complaint

should be dismissed

B. The Declaratory and Injunctive Relief Cause of Action Fails to State a Claim for Relief

The first cause of action claiming that Doble is entitled to declaratory relief and an

equitable decree enjoining defendants from continuing to file false claims and declarations or

from continuing to assert any claim to an enforceable secured or unsecured claim against

property in the bankruptcy is based on the other causes of action set forth in the Complaint.

As the United States District Court for the Central District of California has observed,

causes of action for declaratory and injunctive relief “are not claims for relief, they are the

relief.” Jenkins v. MCI Telcoms. Corp., 973 F. Supp. 1133, 1139 (C.D. Cal. 1997). Moreover,

an injunction or declaratory relief “may not be issued if the underlying cause of action is not

established.” Art Movers v. Ni W., 3 Cal.App.4th 640, 647 (1994).

Since the underlying causes of action do not set forth claims for relief, as discussed

below, the declaratory and injunctive relief cause of action does not set forth a claim for relief

and should be dismissed.

C. The Cause of Action for Failure to Perfect Deed of Trust Fails to State a Claim for Relief

The second cause of action alleges:

[N]one of the Defendants hold a perfected and secured claim in the residential real estate of the Debtor and the property of this estate in bankruptcy and … all of the said Defendants are estopped and precluded from asserting an unsecured claim against this estate pursuant to Sections 105(a). 502(b)(1), 506 and 544(a) of the Bankruptcy Code and Rule 3007 of the Bankruptcy Rules.

Complaint, p. 12, ¶ 54.


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The theory that none of the defendants hold a perfected security interest in Doble’s

residence is based on three premises: (A) that MERS could not assign its beneficial interest in

the deed of trust to OneWest because MERS is a stranger to the Pooling and Servicing

Agreement; (2) that the post-petition assignment of the deed of trust from OneWest to Deutsche

is void as a violation of the automatic stay; and (3) that an unrecorded assignment is void or

voidable. The second premise is dealt with in connection with the cause of action for violation

of the automatic stay.

As the United States District Court for the Eastern District of California recently

observed, MERS “may assign its beneficial interest to another party.” Lane v. Vitek Real Estate

Indus. Group, 2010 U.S. Dist. LEXIS 54831, 13 (E. D. Cal. May 13, 2010).1 The fact that the

loan has been securitized and assigned to a trust pool agreement is irrelevant.

As the District Court stated in Lane:

[P]laintiffs contend that none of the defendants have the authority to foreclose because their loan was packaged and resold in the secondary market, where it was put into a trust pool and securitized. The argument that parties lose their interest in a loan when it is assigned to a trust pool has also been rejected by many district courts. See, e.g., Benham, 2009 U.S. Dist. LEXIS 91287, 2009 WL 2880232, at *3 ("Other courts . . . have summarily rejected the argument that companies like MERS lose their power of sale pursuant to the deed of trust when the original promissory note is assigned to a trust pool."); Hafiz v. Greenpoint Mortg. Funding, Inc., 652 F. Supp. 2d 1039, 2009 WL 2137393, at *2 (N.D. Cal. 2009). Accordingly, the court must grant CMI and MERS's motion to dismiss plaintiffs' wrongful foreclosure claim.

Lane v. Vitek Real Estate Indus. Group, supra, 2010 U.S. Dist. LEXIS at 13-14.

Moreover, as the Sixth Circuit Court of Appeals found in an analogous context, whether

MERS violated the Trust Agreement by assigning the DOT to Deutsche Bank is “immaterial

because neither the Debtor nor the Trustee are parties to the Trust Agreement … [and] [t]hey

lack standing to enforce it ….” Rogan v. Bank One, N.A. (In re Cook), 457 F.3d 561, 567 (6th

Cir. 2006).

The suggestion that an assignment executed by MERS is invalid for any other reason is

not only conclusory, but also absurd. “[E]very state permits a person or entity to hold legal title

in the public land records as nominee for another person or entity that is the true party in

1 A copy of this decision is attached to the Malcolm Declaration as Exhibit A.


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interest. See, e.g., American Bank & Trust Co. v. Louisiana Savings Ass'n (La. Ct. App. 1980)

386 So. 2d 96.” Yes, There Is Life on MERS, 11 ABA Probate & Property 32, 35-36

(July/August 1997). Participation in MERS is not illegal. See, e.g., Pandora v. Countrywide

Home Loans, Inc., 640 F. Supp. 2d 1177, 1190 (N.D. Cal. 2009) (“California courts have found

the argument, allowing the power of sale provision to grant MERS the right to foreclose,

persuasive.”).

As the Honorable Claudia Wilken, United States District Court Judge for the Northern

District of California, recently noted:

. . . MERS has thousands of clients, which include some of the country's best known mortgage companies and banks, and is involved in approximately 60 million loan transactions.

Mortgage Elec. Registration Sys. v. Brosnan, 2009 U.S. Dist. LEXIS 87596 (N.D. Cal. Sept. 4,

2009).2

No court has ever held that naming MERS as the nominal beneficiary of a deed of trust

violates California law or precludes MERS from assigning the deed of trust.

Doble’s theory that he can avoid the mortgage pursuant to Bankruptcy Code § 544 is

unavailing as a matter of law. The Sixth Circuit explicitly rejected the proposition that a Trustee

could avoid the unrecorded assignment of a recorded mortgage in Cook with the following

observation:

Bank One was not required to record its interest in the promissory note and the mortgage because, according to the bankruptcy court, the recording of the original mortgage to NCS was "constructive notice that a mortgage lien existed against the Cooks' real property." As a result, Bank One's failure to record the assignment of the mortgage prior to the bankruptcy proceedings "did not affect the perfection of the lien as against the mortgagors and those claiming through them." See, e.g., Fannie Mae v. Kuipers, 314 Ill. App. 3d 631, 732 N.E.2d 723, 726, 247 Ill. Dec. 668 (Ill. App. Ct. 2000) (holding that the assignee of a mortgage was not required to record the assignment because the assignee "stood in the shoes" of the mortgage company, which had recorded its interest); Obuchowski v. Associates Nat'l Mortgage Ass'n (In re Briggs), 186 B.R. 830, 833 (Bankr. D. Vt. 1995) (holding that a bankruptcy trustee could not avoid a mortgage lien based on the fact that the mortgage assignment was unrecorded, because the recording of the original mortgage gave the trustee constructive notice).

In re Cook, supra, 457 F.3d at 567.

2 A copy of the decision is attached to the Malcolm Declaration as Exh. B.


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D. The Causes of Action for Violation of the Automatic Stay and Filing a False Claim Fail to State Claims for Relief

In the third and fourth cause of action, Doble alleges that Deutsche Bank filed a false

claim based on the unrecorded assignment from OneWest and that OneWest’s execution of the

assignment to Deutsche Bank after Doble’s wife filed bankruptcy violated the automatic stay

such that Doble is entitled to recover actual and punitive damages. Complaint , p. 12-13, ¶¶ 56,

59. The allegations are frivolous.

The allegation that Deutsche Bank filed a false claim is based on the premise that an

unrecorded assignment does not confer standing to foreclose and is void or voidable pursuant to

Bankruptcy Code § 544, which the Sixth Circuit Court of Appeals rejected in In re Cook, supra,

457 F.3d at 567. In fact, an unrecorded assignment can confer standing to foreclose. See, e.g.,

Lamson & Co. v. Abrams, 305 Mass. 238, 242, 25 N.E.2d 374, 376 (Mass. 1940)(noting that the

"holder of the unrecorded assignment was entitled to possession and to foreclose by sale");

Provident Co-Op. Bank v. James Talcott, Inc., 358 Mass. 180, 188, 260 N.E.2d 903, 908 (Mass.

1970).

As the Eleventh Circuit has noted:

From the point of view of the mortgagor or someone standing in his shoes, a subsequent assignment of the mortgagee's interest - whether recorded or not - does not change the nature of the interest of the mortgagor or someone claiming under him. Nor should a failure to record any subsequent assignment afford the mortgagor … an opportunity to avoid the mortgage.

Kapila v. Atl. Mortg. & Inv. Corp. (in Re Halabi), 184 F.3d 1335, 1338 (11th Cir. 1999).

The Sixth Circuit Court of Appeals rejected the argument that the post-petition recording

of the assignment of a deed of Trust violated the automatic stay in In re Cook, supra, 457 F.3d

561, based on the reasoning of the Eleventh Circuit in In re Halabi, supra, 184 F.3d 1135. In

both cases, the Courts held that a mortgage or deed of trust in which the debtor is the trustor or

borrower is not property of the bankruptcy estate. In re Halabi, supra, 184 F.3d at 1337; In re

Cook, supra, 457 F.3d at 568. Therefore, the assignment of a mortgage post-petition is not

voidable as a violation of the automatic stay or an unauthorized post-petition transfer. Halabi,

supra, 184 at 1337; Cook, supra, 457 F.3d at 568.

///


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E. The Cause of Action for Unfair and Deceptive Acts and Practices Fails to State a Claim for Relief

In the fifth and final cause of action, Doble alleges that by filing false claims and

proceeding with the foreclosure despite the fact that Doble allegedly qualified for a loan

modification OneWest committed false, fraudulent, deceptive, unfair and illegal acts within the

meaning of the California Consumer Legal Remedies Act contained in Civil Code § 1750 et seq.

Complaint, pp. 13-14, ¶¶ 65-66, 68-69. The cause of action is conclusory, based on the

erroneous assumption that defendants filed a false claim because one of the assignments was

recorded post-petition and the other assignment was unrecorded, and premised on the incorrect

assumption that Doble is a third party beneficiary of the Home Affordable Modification

Program (“HAMP”) contract between OneWest and the United States. Complaint, p. 14, ¶ 66.

The United States District Court for the District of Nevada explicitly rejected the third

party beneficiary theory upon which Doble relies with the following observation:

The HAMP contract states that it is governed by federal law. (Opp'n, Ex. 5 at 9.) Under federal law, "[b]efore a third party can recover under a contract, it must show that the contract was made for its direct benefit-that it is an intended beneficiary of the contract." Klamath Water Users Protective Ass'n v. Patterson, 204 F.3d 1206, 1210 (9th Cir. 1999). "Demonstrating third-party beneficiary status in the context of a government contract is a comparatively difficult task." County of Santa Clara v. Astra USA, Inc., 588 F.3d 1237, 1244 (9th Cir. 2009). Generally, third parties who benefit from a government contract are "assumed to be incidental beneficiaries, rather than intended ones, and so may not enforce the contract absent a clear intent to the contrary." Id. (citations, quotation, emphasis omitted). A plaintiff does not show clear intent "by a contract's recitation of interested constituencies, vague, hortatory pronouncements, statements of purpose, explicit reference to a third party, or even a showing that the contract operates to the third parties' benefit and was entered into with [them] 'in mind." Id. (quotations, citations, alterations omitted). Instead, the contract's precise language must demonstrate a clear intent to rebut the presumption that the plaintiff is an incidental beneficiary. Id.

Plaintiffs have not identified anything in the HAMP contract which clearly expresses a promissory intent to benefit borrowers. Rather, the HAMP contract contains a provision stating that the "Agreement shall inure to the benefit of and be binding upon the parties to the Agreement and their permitted successors-in-interest." (Opp'n, Ex. 5 at 10.) The Agreement nowhere states that it gives borrowers any rights or otherwise expressly intends to confer third party beneficiary status on borrowers. As OneWest points out, even Fannie Mae, which has rights under the contract, cannot force OneWest to make any particular loan modification. It can take other steps against OneWest, including terminating the HAMP agreement, but it


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cannot impose a modification. (Id. at 6-7.) Thus, a borrower could not require OneWest to make any particular loan modification under the HAMP contract either. Although the overall HAMP program undoubtedly has a goal of assisting homeowners, the HAMP contract does not express any intent to grant borrowers a right to enforce the HAMP contract between the government and the loan servicer.

Moreover, Plaintiffs have not presented any evidence that OneWest actually violated the HAMP contract. Plaintiffs have not presented evidence that any one of them was eligible for modification but was denied in some way that would violate the contract.

Benito v. Indymac Mortg. Servs., 2010 U.S. Dist. LEXIS 51259, 19-21 (D. Nev. 2010).

Since the cause of action fails to state a claim for relief, it should be dismissed with

prejudice.

III. CONCLUSION

In order to survive a motion to dismiss for failure to state a claim, a complaint must set

forth “enough facts to state a claim for relief that is plausible on its face.” Bell Atlantic Corp. v.

Twombly, supra, 550 U.S. at 570. Doble’s Complaint contains nothing more than the formulaic

recitation of some of the elements of various causes of action lacking in specific facts and

implausible on its face. Since Doble would not be entitled to legal relief even if everything he

alleged in the Complaint were true, the Complaint should be dismissed with prejudice.

Dated: August 31, 2010

MALCOLM ♦ CISNEROS

By: /s/ William G. Malcolm WILLIAM G. MALCOLM Attorneys for DEUTSCHE BANK NATIONAL TRUST COMPANY AS TRUSTEE OF THE HARBORVIEW MORTGAGE LOAN TRUST 2005-5, MORTGAGE LOAN PASS-THROUGH CERTIFICATES, SERIES 2005-5 UNDER THE POOLING AND SERVICING AGREEMENT DATED JUNE 1, 2005, and ONEWEST BANK, F.S.B.


Documents

Motion to Dismiss