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Stephen Michael Pagano, Dae-Rlp Jr. and Crystal Pagano v. Onewest Bank

January 10, 2012

STEPHEN MICHAEL PAGANO, DAE-RLP JR. AND CRYSTAL PAGANO, PLAINTIFF,
v.
ONEWEST BANK, F.S.B.; INDYMAC MORTGAGE SERVICES; MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC.; US BANK NATIONAL ASSOCIATION, AS TRUSTEE OF THE LEHMAN MORTGAGE TRUST MORTGAGE PASS-THROUGH CERTIFICATES SERIES 2007-2; LAWYERS TITLE INSURANCE CORPORATION; FIDELITY NATIONAL FINANCIAL, INC.; AURORA LOAN SERVICES, LLC AND DOE DEFENDANTS 1-100, DEFENDANTS.



The opinion of the court was delivered by: David Alan Ezra United States District Judge

ORDER: (1) DISMISSING PLAINTIFFS' COMPLAINT WITHOUT PREJUDICE; AND (2) DENYING AS MOOT DEFENDANTS' MOTIONS FOR JUDGMENT ON THE PLEADINGS

On January 9, 2012, the Court held a hearing regarding Defendants OneWest Bank, F.S.B., Mortgage Electronic Registration Systems, Inc., and U.S. Bank National Association's ("OneWest Defendants") Motion for Judgment on the Pleadings and Defendant Aurora Loan Services, LLC's Motion for Judgment on the Pleadings. Plaintiffs Stephen Michael Pagano, Jr. and Crystal Pagano ("Plaintiffs") did not attend the hearing. David Rosen, Esq., appeared at the hearing on behalf of OneWest Defendants, and Stephanie Thompson, Esq., appeared on behalf of Aurora Loan Services, LLC. After reviewing the motions and the supporting memoranda, the Court DISMISSES WITHOUT PREJUDICE Plaintiffs' Complaint and DENIES AS MOOT Defendants' Motions for Judgment on the Pleadings. (Docs. ## 45, 51.)

BACKGROUND

The instant action stems primarily out of a Mortgage and Promissory Note executed by Plaintiffs on December 22, 2006 to purchase a home located at 65-5294 Puukapu Street, Kamuela, HI 96743 (the "Subject Property"). ("Compl.," Doc. #4-2, ¶¶ 1, 11.) The Mortgage and Promissory Note were executed in favor of Mortgage Electronic Registration Systems, Inc. ("MERS"), as nominee for Indymac Bank, FSB ("Indymac") for $756,000. (Id. ¶ 11.) The Mortgage was recorded on April 11, 2008, in the Bureau of Conveyances, State of Hawaii.*fn1 (Id. ¶ 12.)

On February 1, 2007, Plaintiffs' loan was securitized as part of the Lehman Mortgage Trust Mortgage Pass-Through Certificates Series 2007-2. (Id. ¶ 17.) On July 11, 2008, Plaintiffs and IndyMac entered into a loan modification agreement pursuant to which Plaintiffs were granted an eight-month deferral of their mortgage payments. (Id. ¶ 32.) Plaintiffs claim that they were not in default on the Mortgage at the time of the modification. (Id. ¶ 33.)

On November 12, 2008, Plaintiffs filed a Chapter 7 Bankruptcy Petition in the United States Bankruptcy Court, District of Hawaii. (Id. ¶ 40.) On March 31, 2009, Plaintiffs defaulted on their mortgage payments. (Id. ¶ 45.)

MERS assigned the Mortgage to OneWest Bank, FSB ("OneWest") by an Assignment of Mortgage recorded on September 15, 2009. (Id. ¶ 50; "Defs.' RJN," Doc. # 47 Ex. B.)*fn2 As a result of the default, OneWest commenced a non-judicial foreclosure by recording a Notice of Mortgagee's Intention to Foreclose Under Power of Sale ("NOI") on December 28, 2010, in the Bureau of Conveyances. (Compl. ¶ 54; Defs.' RJN Ex. C.)

On February 22, 2011, Plaintiffs, proceeding pro se, filed their Complaint in the Circuit Court of the Third Circuit of the State of Hawaii. They allege three causes of action: (1) negligence (Compl. ¶¶ 57--65); (2) fraud (id. ¶¶ 66--69); and "Non-Judicial Foreclosure." (Id. ¶¶ 70--72.) Plaintiffs request monetary damages, attorney's fees and costs, quiet title, removal of negative credit reporting, and satisfaction of the amounts due and owing under other mortgages on the Subject Property. On March 23, 2011, Defendants removed to this Court. (Doc. # 1.) On April 1, 2011, Defendants filed an Amended Notice of Removal of Action Based on Diversity Jurisdiction. (Doc. # 4.)

On September 20, 2011, Defendants OneWest, MERS, and U.S. Bank National Association, as Trustee of the Lehman Mortgage Trust Mortgage Pass-Through Certificates Series 2007-2 ("U.S. Bank") filed the instant Motion for Judgment on the Pleadings (Doc. # 45) and a Memorandum in Support of the Motion. (Doc. # 46.) On November 8, 2011, Defendant Aurora Loan Services, LLC ("Aurora") filed the instant Motion for Judgment on the Pleadings. (Doc. # 51.) The same day, Aurora also filed a Joinder in OneWest Defendants' Motion for Judgment on the Pleadings. (Doc. # 52.) Plaintiffs did not file an opposition to Defendants' Motions. On December 23, 2011, Defendants OneWest, MERS, and U.S. Bank filed a Notice of No Opposition Filed in Response to their Motion. (Doc.# 58.)

STANDARD OF REVIEW

I. Motion for Judgment on the Pleadings Rule 12(c) states, "[a]fter the pleadings are closed-but early enough not to delay trial-a party may move for judgment on the pleadings." Fed. R. Civ. P. 12(c). Judgment on the pleadings is properly granted when the court, accepting all the allegations in the pleadings as true and construing them in the light most favorable to the nonmoving party, concludes that the moving party is entitled to judgment as a matter of law. Fleming v. Pickard, 581 F.3d 922, 925 (9th Cir. 2009). No issue of material fact may be in dispute. Id.

When Rule 12(c) is used to raise the defense of failure to state a claim upon which relief can be granted, the standard governing the Rule 12(c) motion for judgment on the pleadings is the same as that governing a Rule 12(b)(6) motion. See McGlinchy v. Shell Chemical Co., 845 F.2d 802, 810 (9th Cir. 1988); Luzon v. Atlas Ins. Agency, Inc., 284 F. Supp. 2d 1261, 1262 (D. Haw. 2003). As a result, a motion for judgment on the pleadings for failure to state a claim may be granted "'only if it is clear that no relief could be granted under any set of facts that could be proven consistent with the allegations.'" McGlinchy, 845 F.2d at 810 (quoting Hishon v. King & Spalding, 467 U.S. 69, 73 (1984)); see also Dworkin v. Hustler Magazine, Inc., 867 F.2d 1188, 1192 (9th Cir. 1989) ("The principal difference between motions filed pursuant to Rule 12(b) and Rule 12(c) is the time of filing. Because the motions are functionally identical, the same standard of review applicable to a Rule 12(b) motion applies to its Rule 12(c) analog.").

Thus, "[a] judgment on the pleadings is properly granted when, taking all allegations in the pleading as true, the moving party is entitled to judgment as a matter of law." Enron Oil Trading & Transp. Co. v. Walbrook Ins. Co., 132 F.3d 526, 528 (9th Cir. 1997) (citing McGann v. Ernst & Young, 102 F.3d 390, 392 (9th Cir. 1996)). "Not only must the court accept all material allegations in the complaint as true, but the complaint must be construed, and all doubts resolved, in the light most favorable to the plaintiff." McGlinchy, 845 F.2d at 810.

To withstand a motion to dismiss, a plaintiff must allege "enough facts to state a claim to relief that is plausible on its face." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007). A claim has "facial plausibility" if the plaintiff pleads facts that allow "the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 129 S. Ct. 1937, 1940 (2009). Although the court must accept all well-pleaded factual allegations as true, "[t]hread-bare recitals of the elements of a cause of action, supported by mere conclusory ...


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