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Daneford Michael Wright v. Wells Fargo Bank

July 19, 2012


The opinion of the court was delivered by: Susan Oki Mollway Chief United States District Judge



The present action relates to a residential mortgage loan on property owed by Plaintiffs Daneford Michael Wright and Ellareen Uilani Wright. In related state court proceedings, U.S. Bank National Association, As Trustee for the Structured Asset Securities Corporation Mortgage Loan Trust 2006-NC1 ("U.S. Bank"), is in the process of foreclosing on that mortgage. A Hawaii state court has recently granted U.S. Bank's motion for summary judgment and an interlocutory decree of foreclosure.

The Wrights filed a Chapter 13 bankruptcy petition. The United States Bankruptcy Court for the District of Hawaii granted U.S. Bank relief from the automatic stay. In doing so, the bankruptcy court rejected the Wrights' contention that U.S. Bank had no valid interest in the mortgage.

After filing their Chapter 13 petition, the Wrights, proceeding pro se, filed the present action. They argue, among other things, that their mortgage was never properly assigned to U.S. Bank. Defendants Wells Fargo Bank, N.A. ("Wells Fargo"), America's Servicing Company ("ASC"), and Heather Carrico now move for judgment on the pleadings on the grounds that the Wrights' claims are barred by res judicata and the Wrights fail to state a claim upon which relief can be granted. In the alternative, Defendants seek summary judgment on the ground that there are no triable issues of material fact with respect to the validity of the assignment. Defendant Clay Chapman Iwamura Pulice & Nervell, Attorneys at Law, A Law Corporation ("Chapman Law Corporation") has filed a substantive joinder in the motion.

The court grants Defendants' motion for judgment on the pleadings with respect to five of the Wrights' six claims (Counts II through VI) on the ground that those claims, which are predicated on the alleged invalidity of the assignment of the Wrights' mortgage to U.S. Bank, are barred by the doctrine of res judicata. Relying on the Wrights' failure to state a claim, the court grants judgment on the pleadings with respect to the remaining claim (Count I) as to all Defendants except ASC, and to part of the claim in Count I against ASC. The court denies Defendants' motion for judgment on the pleadings or summary judgment with respect to only the portion of Count I asserted against ASC and based on alleged misrepresentations unrelated to the validity of the assignment.


A. Judgment on the Pleadings.

Rule 12(c) of the Federal Rules of Civil Procedure states, "After the pleadings are closed--but early enough not to delay trial--a party may move for judgment on the pleadings." The standard governing a Rule 12(c) motion for judgment on the pleadings is "functionally identical" to that governing a Rule 12(b)(6) motion. United States ex rel. Caffaso v. Gen. Dynamics C4 Sys., Inc., 637 F.3d 1047, 1054 n.4 (9th Cir. 2011). For a Rule 12(c) motion, the allegations of the nonmoving party are accepted as true, while the allegations of the moving party that have been denied are assumed to be false. See Hal Roach Studios v. Richard Feiner & Co., Inc., 896 F.2d 1542, 1550 (9th Cir. 1989). A court evaluating a Rule 12(c) motion must construe factual allegations in a complaint in the light most favorable to the nonmoving party. Fleming v. Pickard, 581 F.3d 922, 925 (9th Cir. 2009). "Judgment on the pleadings under Rule 12(c) is proper when the moving party establishes on the face of the pleadings that there is no material issue of fact and that the moving party is entitled to judgment as a matter of law." Jensen Family Farms, Inc. v. Monterey Bay Unified Air Pollution Control Dist., 644 F.3d 934, 937 n.1 (9th Cir. 2011).

Generally, when matters outside the pleadings are considered, a motion for judgment on the pleadings must be considered as one for summary judgment under Rule 56 of the Federal Rules of Civil Procedure. See Fed. R. Civ. P. 12(d). However, when adjudicating a Rule 12(c) motion, a court may consider matters subject to judicial notice without converting the motion to one for summary judgment. See Heliotrope Gen., Inc. v. Ford Motor Co., 189 F.3d 971, 981 n.18 (9th Cir. 1999) ("When considering a motion for judgment on the pleadings, this court may consider facts that are contained in materials of which the court may take judicial notice." (quotation marks omitted)). Accord Lacondeguy v. Adapa, 2011 WL 9572, at *2 (E.D. Cal. Jan. 3, 2011); Williams v. City of Antioch, 2010 WL 3632199, at *2 (N.D. Cal. Sept. 2, 2010).

B. Summary Judgment.

Summary judgment shall be granted when "the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). A moving party has both the initial burden of production and the ultimate burden of persuasion on a motion for summary judgment. Nissan Fire & Marine Ins. Co. v. Fritz Cos., 210 F.3d 1099, 1102 (9th Cir. 2000).

The burden initially falls on the moving party to identify for the court "the portions of the materials on file that it believes demonstrate the absence of any genuine issue of material fact." T.W. Elec. Serv., Inc. v. Pac. Elec. Contractors Ass'n, 809 F.2d 626, 630 (9th Cir. 1987) (citing Celotex Corp. Catrett, 477 U.S. 317, 323 (1986)); accord Miller v. Glenn Miller Prods., Inc., 454 F.3d 975, 987 (9th Cir. 2006). "A fact is material if it could affect the outcome of the suit under the governing substantive law." Miller, 454 F.3d at 987.

Only if the moving party meets its initial burden on a summary judgment motion does the burden shift "to the nonmoving party to establish, beyond the pleadings, that there is a genuine issue for trial." Id.


On December 21, 2005, the Wrights entered into a mortgage agreement secured by property on the island of Maui. The mortgage document names New Century Mortgage Corporation ("New Century") as the mortgagee. See Defs.' Concise Statement of Facts ("Defs.' Facts") at Ex. 1, ECF No. 33-3. Defendant America's Servicing Company ("ASC") is the loan servicer.

See Compl. ¶ 40, Apr. 4, 2011, ECF No. 1. It is unclear from the pleadings when ASC became the loan servicer.

The Wrights allege that the mortgage was transferred to Lehman Brothers Bank, FSB, on or about March 22, 2006. Id. ¶ 12.

On April 2, 2007, New Century allegedly filed for bankruptcy.

Id. ¶ 13. The Wrights say that, on or about April 20, 2009, ASC told them that their mortgage had been sold, id. ¶ 20; that ASC would not accept any payment for the loan, id. ¶ 21; and that any payment made would not be applied to their loan, id. ¶ 22. On or about April 20, 2009, ASC allegedly also told the Wrights that Lehman Brothers owned the mortgage, and later, on April 28, 2009, told the Wrights that U.S. Bank owned their mortgage. Id.

¶¶ 19, 24.

The mortgage in issue was assigned to U.S. Bank through a document signed on August 19, 2009, and recorded on September 2, 2009. See Defs.' Facts at Ex. 3, ECF No. 33-5. The Wrights allege that the assignment contained false, deceptive, and misleading representations. Compl. ¶ 26. The assignment was allegedly drafted by Clay Chapman, an attorney at Defendant Chapman Law Corporation. Id. The Wrights also allege that the attorney who executed the assignment document for New Century, Defendant Carrico, did not have the authority to execute that document because New Century was already defunct. Id. ¶ 27. The Wrights maintain that the assignment was therefore fraudulent. Id. ¶¶ 28.

On December 23, 2009, U.S. Bank, represented by Chapman Law Corporation, initiated a foreclosure action in state court. Id. ¶¶ 33-34. U.S. Bank moved for summary judgment and for an interlocutory decree of foreclosure. According to Defendants, the Wrights opposed the motion on the ground that U.S. Bank lacked standing to foreclose on the property because the assignment to U.S. Bank was void and invalid. A state court orally granted U.S. Bank's motion on December 8, 2010. Defs.' Facts at Ex. 5, ECF No. 33-7.

On December 22, 2010, the Wrights filed a voluntary petition for Chapter 13 bankruptcy in the United States Bankruptcy Court for the District of Hawaii. Id. at Ex. 6, ECF No. 33-8. In keeping with the automatic stay of all judicial proceedings against a debtor under 11 U.S.C. ยง 362(a), the state court did not issue a ...

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