Opinion
3:23-cv-00808-JR
03-01-2024
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 NATIONAL ASSOCIATION; WASHINGTON MUTUAL BANK, N.A; ALL PERSONS UNKNOWN, CLAIMING ANY LEGAL OR EQUITABLE RIGHT, TITLE, ESTATE, LIEN, OR INTEREST IN THE PROPERTTY DESCRIBED IN THE COMPLAINT ADVERSE TO PLAINTIFF'S TITLE, OR ANY CLOUD ON PLAINTIFF'S TITLE THERETO; and DOES 1 through 50 inclusive, 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 National Association (“USB”), Washington Mutual Bank, N.A. (“WAMU”), Does 1-50, and all persons unknown claiming any legal or equitable right, title, estate, lien, or interest adverse to plaintiff's title. Plaintiff now moves to amend her complaint pursuant to Fed.R.Civ.P. 15. In addition, USB seeks judicial notice of certain documents. For the reasons stated below, USB's motion should be granted and plaintiff's motion should be denied.
BACKGROUND
At all relevant times, plaintiff was “a resident of the County of Contra Costa, State of California.” Ahmad v. Bank of Am., N.A., 2023 WL 6004213, *1 (D. Or. Aug. 7), adopted by 2023 WL 6319235 (D. Or. Sept. 27, 2023).
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. 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 some unspecified time, plaintiff defaulted on her obligations under the Note and filed for bankruptcy.” Id. Defendants thereafter “filed a Notice of Trustee's sale in the Clackamas County Oregon Recorder's Office.” Id. 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.
“In February 2023, a non-judicial foreclosure occurred in relation to the Property.” Id. 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 moved to dismiss plaintiff's complaint. Ahmad, 2023 WL 6004213 at *1-2. USB also requested judicial notice of the public records associated with bankruptcy proceedings concerning the Property. Id. On September 27, 2023, the Court granted USB's motions.
On November 30, 2023, plaintiff filed the present motion to amend. On December 14, 2023, USB opposed plaintiff's motion and also requested judicial notice. As of the date of this Findings and Recommendation, plaintiff has not filed a reply brief or responded to USB's judicial notice request.
STANDARD
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.” Steckman v. 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's original complaint was premised almost exclusively on defendants' purported violation of an active bankruptcy stay. Ahmad, 2022 WL 6004213, at *1. Plaintiff has abandoned that theory in the proposed amended complaint (“PAC”) and now alleges that defendants violated the Oregon Trust Deed Act's (“OTDA”) notice requirements. PAC ¶¶ 24-33 (doc. 34). As in her original complaint, plaintiff alleges twelve claims: (1) “violation of the Oregon Trust Deed Act ORS §§ 86.764, 86.767, 86.774 et seq., and notice requirements, ORCP § 7 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 the implied covenant of good faith and fair dealing; (10) unjust enrichment; (11) quiet title; and (12) declaratory relief. Id. at ¶¶ 24-115.
In support of her amended claims, plaintiff repeatedly asserts “[d]efendant failed to comply with the notice requirement under State of Oregon Law” and that she “does not know when, where, and to whom [d]efendants . . . served any notices” because they “intentionally concealed said notices from her.” See, e.g., id. at ¶ 12. Presumably due to the alleged notice defects, plaintiff claims that defendants' Notice of Trustee's Sale, filed with the Clackamas County Recorder's Office, violated the OTDA, as did the subsequent non-judicial foreclosure that defendants effectuated. Id. at ¶¶ 13-16.
Plaintiff also now maintains “she has performed all conditions, covenants, and promises required” of her in accordance with her lending agreement, “except those acts excused by the herein alleged breaches and wrongful conduct of [d]efendants.” Id. at ¶ 17. Relatedly, plaintiff alleges that she has “been willing to tender the amount received and/or in alleged default subject to equitable adjustment for the damage caused” by defendants' wrongful conduct. Id.
USB argues that plaintiff's motion must be denied because granting leave to amend would be futile as proper notice was provided. Def.'s Resp. to Mot. Am. 6-8 (doc. 36). USB seeks to introduce the sworn affidavit of one of its agents confirming that they personally mailed such notices, as well as the United States Postal Service's (“USPS”) tracking records. Id. at 6. According to USB, “under ORS 86.764(1), notice of sale may be by first class and certified mail return receipt requested. Personal service on the Grantor is not required where, as here, Plaintiff is not occupying the Property.” Id. at 3 n.2. Additionally, USB contends that plaintiff's claims suffer from several other pleading defects, such as the lack of a special relationship between the parties and availability of monetary damages under the OTDA. Id. at 10-14.
I. Judicial Notice
USB seeks judicial notice of: (1) the “Affidavit of Mailing for the Notice of Sale,” dated October 7, 2022; and (2) two PDF copies of the USPS's tracking website confirming the Trustee's Notice of Sale was “Delivered, Left with [an] Individual” at the Property and plaintiff's California residence. Def.'s Resp. to Mot. Am. Exs. 1-3 (doc. 36).
As previously explained, a court “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). Tracking records published on the USPS's website are also judicially noticeable so long as they are retrieved within the period in which the USPS maintains accurate records for the mail class or service used. Muhammad v. Deutsche Bank Nat'l Tr. Co., 2023 WL 3067756, at *5 n.4 (6th Cir. Apr. 25, 2023). First-Class and Certified Mail tracking data is reliable for a period of two years after the mail has been delivered. USPS Tracking: The Basics FAQ, https://faq.usps.comarticle/USPS-Tracking-The-Basics (accessed Feb. 2, 2024).
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).
USB's “Affidavit of Mailing for the Notice of Sale” specifies that USB's agent, Hue Banh, sent the Trustee's Notice of Sale via “First Class and Cert[ified]” mail to “Parveen Ahmad” and the “Occupant” at the Property, as well as to “Parveen Ahmad” at her California residence, “return receipt requested.” Def.'s Resp. to Mot. Am. Ex. 1, at 1 (doc. 36-1). USB accessed the USPS tracking records on December 8, 2023, and those tracking records indicate that the Happy Valley, Oregon, and Dublin, California, Notices of Sale were delivered on October 11 and 12, 2022, respectively. Def.'s Resp. to Mot. Am. Ex. 2 (doc. 36-2); Def.'s Resp. to Mot. Am. Ex. 3 (doc. 36-3). Because USB accessed the USPS tracking records within a two-year period, USB's request for judicial notice is granted.
II. Failure to State a Claim
All of plaintiff's proposed claims rely in some form on the allegation that defendants did not provide adequate notice under the OTDA and that they intentionally concealed such notices from her. See, e.g., PAC ¶¶ 12, 14, 26, 30, 37, 39, 44, 50, 54, 63, 66, 70, 77, 87, 93, 98, 106, 111 (doc. 34). Plaintiff's claim that defendants concealed such notices from her are broad and conclusory, lacking any particular facts and circumstances that constitute alleged concealment. As stated in this Court's previous Findings and Recommendation, vague and conclusory allegations are insufficient to state a cognizable claim for relief. SeeIvey 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).
In addition, plaintiff's allegation that she did not have notice of the sale is inconsistent with the OTDA's requirements. As the PAC acknowledges, the OTDA requires that, “[a]fter recording a notice of default . . . and at least 120 days before the . . . sale, notice of the sale . . . must be served pursuant to ORCP 7 D(2) and 7 D(3) or mailed by both first class and certified mail with return receipt requested.” PAC ¶ 28 (doc. 34) (emphasis added); see also Or. Rev. Stat. § 86.764(1). Notice served by mail is effective on the date the notice is mailed to the grantor. Or. Rev. Stat. § 86.764(3). Notice must only be mailed “to all addresses on file with the sender for the grantor”; actual notice is not required. Or. Rev. Stat. § 86.756.
The Oregon Court of Appeals has confirmed that, where a grantor does not reside at the property subject to non-judicial foreclosure, notice may be mailed to all addresses on file with the sender, and personal service is not required. See N.W. Prop. Wholesalers, LLC v. Spitz, 252 Or.App. 29, 40-41, 287 P.3d 1106 (2012), rev. denied, 353 Or. 203, 296 P.3d 1275 (2013) (explaining the service requirements for grantors residing at a property subject to non-judicial foreclosure versus those who do not reside at the property); see also Brandrup v. ReconTrust Co., N.A., 353 Or. 668, 678, 303 P.3d 301 (2013) (“[i]f the trustee has complied with the statutory notice requirements and the default is not cured, the trustee may sell the property at public auction to the highest bidder without judicial oversight”).
The judicially noticeable facts before the Court demonstrate that USB mailed the requisite notices more than 120 days before the non-judicial foreclosure sale to the Property and plaintiff's current address in Dublin, California (i.e., the same address listed on her pleadings). Accordingly, presuming plaintiff can maintain an action for damages in this context, the proposed amendments premised on a theory of inadequate notice are futile, and plaintiff's motion is denied.
The PAC also contains several other pleading defects. Similar to plaintiff's initial pleadings, the PAC fails to meet Fed.R.Civ.P. 9(b)'s heightened pleading requirements for allegations sounding in fraud. 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); see also Benson Tower Condo. Owners Assoc. v. Victaulic Co., 22 F.Supp.3d 1126, 1132 (2014) (outlining the elements of a fraud claim). Plaintiff fails to allege which of defendants' statements were false and material, how defendants intended to induce plaintiff to act with the false statements, and how plaintiff justifiably relied on those statements to her detriment.
Plaintiff's original quiet title and contractual claims failed because she did not dispute that she had defaulted under the Note. See Ahmad, 2023 WL 6004213 at *1. The PAC continues to indicate that, at the time of the non-judicial foreclosure, plaintiff was not ready, willing, and able to cure her default. To maintain a quiet title action, the plaintiff must show “the financial ability to cure the entire amount in default” prior to the date of the trustee's sale. Woods v. U.S. Bank N.A., 831 F.3d 1159, 1166 (9th Cir. 2016) (emphasis added). Although plaintiff concludes she “has performed all conditions, covenants, and promises required by her . . . in accordance with the terms and conditions of the contract” and has “been willing to tender the amount received and/or in alleged default,” she makes these allegations subject to an offset due to her as a result of defendants' purported wrongful actions. PAC ¶¶ 17, 86, 94, 100, 107 (doc. 34) (internal quotations omitted). Yet, as discussed herein, the judicially noticeable facts indicate defendants provided notice in accordance with the OTDA and, in any event, plaintiff may not retroactively excuse her breaches with an alleged wrong that occurred after she was already in default.
Further, as previously explained, 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 PAC, however, does not contain any allegations to that effect, similar to the original complaint.
Although the PAC now concludes that “a special fiduciary relationship existed between [d]efendants and her due to her interests in the Subject Matter real property,” courts within this District have found “no special relationship between mortgage lenders and the borrower to support a claim sounding in negligence.” Ahmad, 2023 WL 6004213 at *5 (citations omitted); PAC ¶¶ 42, 52, 61, 75 (doc. 34). Critically, the PAC does not describe a relationship where the lender exercised independent judgement to further plaintiff's monetary interests. See Conway v. Pac. Univ., 324 Or. 231, 241, 924 P.2d 818 (1996) (a special relationship exists where a party has relinquished control, placing their monetary liability in the hands of another party “authorized the other to exercise independent judgement in ... her behalf'); Austin v. Univ. of Or., 205 F.Supp.3d 1214, 1229 (2016) (for a special relationship to be found, one party must relinquish autonomy and entrust the other party with control and independent decision-making authority); see also Lowe v. Philip Morris USA, Inc., 207 Or.App. 532, 551, 142 P.3d 1079 (2006), aff'd, 344 Or. 403, 183 P.3d 181 (2008) (under Oregon law, a plaintiff can recover “for emotional distress caused by ordinary negligence, but only if the distress is accompanied by physical impact').
Additionally, “Oregon courts do not recognize a tort claim for wrongful foreclosure,' such that plaintiff's claim to that effect fails as a matter of law. Horner v. Plaza Home Mortg., 2016 WL 3574551, at *3 (D. Or. Jul. 1, 2016) (citation omitted); see also Rapacki v. Chase Home Fin. LLC, 797 F.Supp.2d 1085, 1091-92 (D. Or. 2011) (concluding Oregon law does not support an unlawful foreclosure tort claim).
Finally, plaintiff's reliance on criminal statutes in support of her allegation that defendants “uttered false documents' - specifically Or. Rev. Stat. § 165.002, et seq. - are unavailing. See Schwettmann v. Starns, 2023 WL 8284064, *2 (E.D. Cal. Nov. 30, 2023) (“[a] citizen does not have authority to bring criminal charges, either under state or federal law”); see also Hart v. Granado, 2023 WL 7301872, *2-3 (D. Ariz. Nov. 6, 2023) (dismissing the pro se plaintiff's claims pursuant to criminal statutes with prejudice, explaining “criminal provisions provide no basis for civil liability”) (quoting Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th Cir. 1980)).
As such, plaintiff's derivative declaratory relief claim also fails. Cf. Stock W., Inc. v. Confederated Tribes of the Colville Rsrv., 873 F.2d 1221, 1225 (9th Cir. 1989) (the Declaratory Judgment Act “only creates a remedy and is not an independent basis for jurisdiction”); see also Collier v. Wilmington Savings Fund Soc'y, FSB as Tr. of Stanwich Mortg. Loan Tr. A, 2022 WL 1223253, *3 (D. Or. Apr. 26, 2022) (“a district court may exercise its discretion to entertain an independent declaratory relief claim that meets the case or controversy requirement and satisfies jurisdictional prerequisites, but it is not required to do so”) (emphasis in original).
RECOMMENDATION
For the foregoing reasons, USB's motion for judicial notice (doc. 36) should be granted, and plaintiff's Motion to File an Amended Complaint (doc. 34) should be 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.