Taylor v. MGC Mortg. Inc., CASE NO. 2:17-cv-01352-BAT

ISOM R. TAYLOR, Plaintiff, v. MGC MORTGAGE INC.; SELECT PORTFOLIO SERVICING, INC.;DOVENMUEHLE MORTGAGE INC.; LNV CORPORATION;FREEMONT INVESTMENT & LOAN; CREDIT SUISSE FINANCIAL CORPORATION;MORTGAGE ELECTRIC REGISTRATION SYSTEM, Defendants.

CASE NO. 2:17-cv-01352-BAT

UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT SEATTLE

October 9, 2018

ORDER GRANTING MOTION FOR SUMMARY JUDGMENT OF DEFENDANTS CREDIT SUISSE FINANCIAL CORPORATION AND SELECT PORTFOLIO SERVICING, INC.

Defendants Credit Suisse Financial Corporation ("Credit Suisse") and Select Portfolio Servicing, Inc. ("SPS") (collectively, "Defendants") move for summary judgment dismissal of Plaintiff Isom R. Taylor's claims. Dkt. 38.¹ Plaintiff filed no opposition to Defendants' motion.Defendants' summary judgment evidence shows that Plaintiff's claims are either moot, untimely, or subject to dismissal because Plaintiff cannot show causation or damages. Plaintiff has not offered any competent evidence to the contrary or shown that there is a genuine dispute as to any material fact. Accordingly, summary judgment in favor of Defendants is appropriate.

FACTUAL BACKGROUND

The following facts, provided by Defendants (Dkt. 38 at 2-3), are not in dispute. On or about September 22, 2006, Bonnie M. Baker-Taylor and Isom R. Taylor executed two promissory notes: (1) the first in the original principal sum of $322,000.00 (the "First Note"), and (2) a second promissory note in the amount of $73,250.00 (the "Secondary Note"). Dkt. 39, Declaration of Madison DaRonche ("DaRonche Decl."), ¶¶ 3, 4, Ex. A. These notes were each secured by a deed of trust encumbering real property commonly known as 128 24th Avenue, Seattle, WA 98122, King County, Washington. Id., Exs. B, C. The first-in-time Deed of Trust, securing the First Note, was recorded in King County Auditor's Office under recording number 20060928000840 (the "First Deed of Trust"). Id., Ex. B. The Second Deed of Trust, securing the Second Note, was recorded immediately thereafter, under recording number 20060928000841. Id., Ex. C (the "Secondary Deed of Trust"). The lender on both Deeds of Trust is listed as "Credit Suisse Financial Corporation." Id., Exs. B & C.

A. First Note & Deed of Trust

In 2008, the First Deed of Trust was assigned to LNV Corporation.² Dkt. 39, DaRonche Decl., Ex. D. This assignment was recorded on February 6, 2009. Id. Credit Suisse and SPS donot have any ownership interest in, nor have they been involved in servicing, the First Note and First Deed of Trust, since at least 2009. Id. ¶ 6. To the best of their knowledge, the First Deed of Trust is currently assigned to LNV Corporation and serviced by some other institution. See id.

B. Secondary Note & Deed of Trust

The Secondary Note was serviced by SPS, as loan servicer on behalf of Credit Suisse, since its origination in 2006 until it was paid off in 2015. Dkt. 39, DaRonche Decl, ¶ 7. During this time, the Secondary Note was in default multiple times, and loan modification was sought. Id. In at least 2013 and 2014, foreclosure proceedings were delayed due to Mr. Taylor's bankruptcy proceedings.³

Given that the loan was long in default and secured only by a junior lien, in December 2014, SPS (as agent for Credit Suisse) proposed a settlement-in-full conditioned upon receipt of a payment by Mr. Taylor in the amount of $2,500 by January 9, 2015. Dkt. 39, DaRonche Decl., ¶ 8, Ex. E. SPS's records indicate that payment of $2,500 was timely received by January 9, 2015. Id. ¶ 8. On January 9, 2015, SPS sent Mr. Taylor a letter reflecting the status of his loan account. The total debt owed as of that date was $0.00. Id., DaRonche Decl., Ex. F. On March 11, 2015, SPS sent Mr. Taylor a letter again confirming that the "mortgage loan is paid in full." Id., DaRonche Decl., ¶ 10, Ex. G. This letter also provided that "SPS makes no warranties and/or takes no responsibility for any liens senior or junior to our position being released in conjunction with this satisfaction." Id. ¶ 10. Included with the letter was the satisfaction/full reconveyance document recorded with the King County Auditor, lifting the Secondary Deed of Trust. Id.

C. This Litigation

Plaintiff filed his original Complaint in King County Superior Court on May 31, 2017. Dkt. 1. The case was removed to this Court, and Plaintiff filed his First Amended Complaint on March 12, 2018. Dkt. 12. All defendants except Credit Suisse and SPS were dismissed from the case on June 14, 2018. Dkt. 33. In that Order the Court also limited Plaintiff's claims and construed the remaining claims as relating to origination. Id. at 3-5.

SUMMARY JUDGMENT STANDARD

Summary judgment is proper only if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c). The moving party is entitled to judgment as a matter of law when the nonmoving party fails to make a sufficient showing on an essential element of a claim in the case on which the nonmoving party has the burden of proof. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1985). There is no genuine issue of fact for trial where the record, taken as a whole, could not lead a rational trier of fact to find for the nonmoving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986) (nonmoving party must present specific, significant probative evidence, not simply "some metaphysical doubt."). See also Fed. R. Civ. P. 56(e).

Where the moving party makes out a prima facie case showing it is entitled to judgment as a matter of law, summary judgment will be granted unless the opposing party offers some competent evidence that there is a genuine dispute as to a material fact. See Scott v. Harris, 550 U.S. 372, 380 (2007). Further, where competent evidence is submitted by the moving party, the nonmoving party may not simply rely on pleadings to oppose summary judgment. Shah v. Mt.Zion Hosp. & Med. Ctr., 642 F.2d 268, 272 (9th Cir. 1981). "Despite Plaintiff's pro se status, he is required, like all other civil litigants, to comply with both the federal and local court rules of civil procedure, notwithstanding the Court's obligation to make reasonable allowances for pro se litigants." King v. Stach, No. C16-1420-JCC-BAT, 2017 WL 1250428 *1, n.2 (W.D. Wash. Apr. 5, 2017). Although Plaintiff's failure to oppose summary judgment should not be "considered by the court as an admission that the motion has merit," LCR 7(b)(2), given his failure, the Court may consider the facts shown by Defendants as "undisputed for purposes of the motion." Fed. R. Civ. Pr. 56(e)(2). This Court may also "grant summary judgment if the motion and supporting materials—including the facts considered undisputed—show that the movant is entitled to it." Id. at (e)(3).

DISCUSSION

Of the eight claims Plaintiff asserts in his First Amended Complaint, Defendants contend two claims were previously dismissed, and the remaining six claims are either moot, untimely, or subject to dismissal due to lack of causation or damages.

A. Previously Dismissed Claims - Claim 1 (Injunctive Relief) and Claim 4 (Promissory Estoppel)

The Court dismissed Claim 1 (Injunctive Relief) and Claim 4 (Promissory Estoppel) as to all defendants. See Dkt. 33 (Order Granting Motion to Dismiss of Defendants MGC Mortgage, Inc., LNV Corporation, and Dovenmuehle Mortgage, Inc.) (collectively "the MGC Defendants"). Defendants contend the rationale employed by the Court in dismissing Claims 1 and 4 as to the MGC Defendants applies equally to all defendants. The Court agrees.

As to Plaintiff's claim for injunctive relief, he alleges he is "concerned" that defendants will foreclose on the Subject Property. Dkt. 12 at ¶ 17. In dismissing this claim as to the MGCDefendants, the Court noted, as "there is no evidence that any such foreclosure is—or has ever been—pending or even threatened, the Court may not grant declaratory relief when there is no controversy." Dkt. 33 at 3.

As to Plaintiff's claim for promissory estoppel, Plaintiff avers only that he defaulted on his mortgage payments due to the advice he received from defendants that he could not receive a loan modification without defaulting. Dkt. 12 at ¶ 38. In dismissing this claim as to the MGC Defendants, the Court stated:

"Notably, Plaintiff does not claim that Defendants promised that if he defaulted on his payments then Defendants would modify the loan; he merely states that Defendants 'informed' him that loan modification is only an option for those who are delinquent in their payments. Because Plaintiff does not allege any promise, he does not state a claim for promissory estoppel."

Dkt. 33 at 4.

The Court's rationale in dismissing Claims 1 and 4 as to the MGC Defendants applies equally to the remaining defendants as there is no evidence of threatened or pending foreclosure or promise of loan modification. Additionally, when dismissing the other six claims as to only certain defendants, the Court stated that the "claims may advance as alleged against the remaining defendants." Dkt. 33 at p. 3 ll. 17-18, 23, p. 4 ll. 14-15, 23-24, p. 5 ll. 5-6. But the Court made no such statement about Claims 1 and 4. Accordingly, Defendants are entitled to summary judgment dismissal of Claim 1 (Injunctive Relief) and Claim 4 (Promissory Estoppel).

B. Moot Claims - Claim 2 (Reformation) and Claim 6 (Rescission)

Defendants contend that Claim 2 (Reformation) and Claim 6 (Rescission) are moot to the extent they relate to Plaintiff's Secondary Deed of Trust, and to the extent they relate to his First Note and Deed of Trust, the claims simply do not apply to Credit Suisse and SPS. Dkt. 38 at 5.

As to Plaintiff's Secondary Deed of Trust, the claims are moot because the Deed of Trust was already rescinded when the Secondary Note was satisfied. Dkt. 39, DaRonche Decl., ¶¶ 8-10, Exs. E-G. Where "the circumstances have evolved...