MERS Gets It's ASS Handed To It!
On January 11, 2012, Defendants filed a civil action in the
Los Angeles County Superior Court to quiet title to the Property
and expunge the Deed of Trust.
On January 11,2012, Defendants filed a civil action in the Los Angeles County Superior Court to quiet title to the Property and expunge the Deed of Trust. See Compl. 130. Defendants named United Pacific Mortgage – the original Lender under the Deed of Trust, as a defendant in the quiet title action; however, Defendants did not name MERS – the nominee of United Pacific Mortgage, as a party or provide any notice of the lawsuit to MERS. Id. ,33. Because United Pacific Mortgage did not appear in the action, Defendants secured a default judgment, thereby expunging the Deed of Trust on the Property. Id. , 35, Ex. 4. On April 25, 2013, Defendants recorded the judgment expunging the Deed of Trust on the Property in the Official Records of the Recorder’s Office of Los Angeles County as instrument number 20130621913. Id.
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A. Plaintiffs Fail to State a Claim under Cal. Code Civ. Proc. § 762.010
The gravamen of the parties’ dispute raises a single, all-important question: Were Plaintiffs entitled to notice of Defendants , quiet title action before Defendants brought that action in Califomia state court? Defendants unsurprisingly answer this question in the negative, reasoning that Plaintiffs were not entitled to notice of the quiet title action because Plaintiffs are merely the nominee or agent of the Lender under the Deed of Trust and therefore have no
independent interest in the Property. See Mot. 14:19-26; see also Mot. 18:19-12 (“Plaintiffs’ claim of ownership, and of the rights of a beneficiary with status as a party in interest, is strictly a fiction. “). Plaintiffs, on the other hand, answer in the affirmative, declaring that as the identified “beneficiary of record” under the Deed of Trust, they have an interest in the Property sufficient to entitle them to notice of Defendants’ quiet title action. See Opp. 2:14-16 (“As the plainly identified beneficiary of record under a deed of trust, MERS claimed an interest that entitled it to so notice.”). For the reasons explained infra, the Court must side with Defendants. Plaintiffs were not entitled to notice of the quiet title action.
The Court therefore DISMISSES Plaintiffs’ section 762.010 claim to set aside the judgment in the quiet title action WITH LEAVE TO AMEND.
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The Court thus DISMISSES Plaintiffs’ slander of title claim WITH LEAVE TO AMEND.
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Because Plaintiffs here present no other viable state law claims for relief, they necessarily fail to assert a claim for cancellation of instruments as well. See Reade, 2013 U.S.Dist. LEXIS 160681, at *26. Accordingly, the Court DISMISSES the claim WITH LEAVE TO AMEND.
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The Court thus DISMISSES Plaintiffs’ claim for declaratory relief WITH LEAVE TO AMEND.
Thus, for the foregoing reasons, the Court GRANTS Defendants’ Motion to Dismiss. If Plaintiffs wish to file an amended complaint, they must do so by March 3, 2014. Failure to file an amended complaint by this date will result in the dismissal with prejudice of the action.