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Beliz v. Loan Simple, Inc.

United States District Court, D. Colorado

January 14, 2016

WANDA BELIZ, Plaintiff,
v.
LOAN SIMPLE, INC., a/k/a ASCENT HOME LOANS, THE CASTLE LAW GROUP, LLC, CITIMORTGAGE, INC., FEDERAL HOME LOAN MORTGAGE CORPORATION, MALCOM & CISNEROS, a Law Corporation, RONALD W. SERVIS, attorney, PATRICIA D. SACHEZ, attorney, Defendants.

RECOMMENDATION REGARDING DEFENDANTS' MOTIONS TO DISMISS & PLAINTIFF'S MOTION TO AMEND

CRAIG B. SHAFFER, Magistrate Judge.

This matter comes before the court on Defendant Federal Home Loan Mortgage Corporation's ("Freddie Mac") "Motion to Dismiss the Verified Complaint Pursuant to Rules 12(b)(1) and 12(b)(6)" (Doc. 42) filed on September 25, 2015. Also before the court is Plaintiff Wanda Beliz's "Motion for Leave to File First Amended Complaint" (Doc. 71) filed on November 13, 2015. These Motions were referred to the Magistrate Judge by Orders of Reference dated September 28, 2015 (Doc. 43) and November 13, 2015 (Doc. 72), respectively. In addition, Defendants Malcom & Cisneros, Ronald W. Servis, Patricia D. Sachse, CitiMortgage, Inc., Loan Simple, Inc., and Castle Law Group, LLC, have each filed separate Motions to Dismiss (Docs. 11, 17, 33, 76), all of which have been referred to the Magistrate Judge (Docs. 13, 18, 41, 77), and make largely the same arguments as those asserted by Freddie Mac.[1] The court has considered the motions, responses and replies, the entire case file, and the relevant legal authorities. For the following reasons, the court recommends that this case be dismissed in its entirety.

BACKGROUND & PROCEDURAL HISTORY

The facts giving rise to this case date back to January 12, 2005, when Plaintiff refinanced her home with Defendant Loan Simple, Inc.[2] ("Loan Simple"). (Doc. 1 at ¶¶ 13). In doing so, Plaintiff borrowed the principle sum of $172, 000, and in exchange, signed a Promissory Note ("the Note") in the amount of $172, 000 in favor of Loan Simple. ( Id. at ¶¶ 13-14; see also Deed of Trust, Doc. 42-3 at 6[3]). In addition to the Note, Plaintiff also executed a Deed of Trust (Doc. 42-3 at 6) securing the loan with real property located at 1780 Old Stage Road, Colorado Springs, Colorado 80906 ("the Property"). On that same day, Loan Simple assigned the Deed of Trust to Defendant CitiMortgage, Inc. ("Citi"). ( Assignment, Doc. 1 at 68).

On July 12, 2012, a "Notice of Election and Demand for Sale by Public Trustee" ("Notice & Demand") was recorded in the official property records of El Paso County. ( Notice & Demand, Doc. 1 at 71). The Notice & Demand stated that Plaintiff had violated the terms of the Deed of Trust by failing to pay principal and interest when it was due, and it asked the Public Trustee to give notice and sell the property to pay off the loan. Id. On September 7, 2012, Citi filed a Rule 120 Motion for Order Authorizing Sale. ( See Doc. 1 at ¶ 32; Rule 120 Motion, Doc. 42-1). Plaintiff filed a formal opposition, challenging the foreclosure on the grounds that Citi was not the true owner of the Note and did not have the right to foreclose. (Doc. 1 at ¶ 33; Opposition, Doc. 42-3).

Prior to the Rule 120 hearing, Plaintiff filed a Chapter 7 Bankruptcy Petition. ( Bankruptcy Petition, Doc. 42-4). In neither the statement of her financial affairs nor her asset schedules did Plaintiff identify any legal claims that she had against any of the Defendants. Id. at 7-11, 20-24. The bankruptcy court entered a discharge order in February 2013. ( Order of Discharge, Doc. 42-5). The Rule 120 proceedings remained pending during this time. ( Register of Actions, Doc. 42-2 at 3).

On June 21, 2013, the El Paso County District Court authorized the sale of Plaintiff's property under Rule 120. ( Order, Doc. 42-6). After notice and advertisement of the sale, the property was sold to Citi on August 7, 2013. ( Public Trustee's Certificate of Purchase, Doc. 1 at 73). Following the expiration of the redemption period, a Confirmation Deed was executed in favor of Citi, ( Confirmation Deed, Doc. 1 at 72), who then transferred the property to Freddie Mac via a Special Warranty Deed. ( Deed, Doc. 42-15). The El Paso County Court ultimately affirmed the Public Trustee's sale to Citi on November 19, 2013. ( Order, Doc. 42-7).

On June 17, 2015, Plaintiff filed her Complaint (Doc. 1) against the Defendants[4] asserting fifteen claims including, among others, claims of fraud; violations of the Federal and Colorado Fair Debt Collection Practices Acts; conspiracy; and violations of the Colorado Consumer Protection Act. See Id. at ¶¶ 68-210. Although they have filed separate motions to dismiss to address Plaintiff's respective claims against them, each Defendant maintains that Plaintiff lacks standing to pursue her action because she failed to disclose any of her claims in her bankruptcy petition. ( See Doc. 11 at 7-8; Doc. 17 at 7-10; Doc. 33 at 10-16; Doc. 42 at 10-13; Doc. 76 at 4 (Castle Law Group joining the position of the other Defendants)).

Following a Status Conference, wherein this court advised Plaintiff regarding federal question jurisdiction, (Doc. 47 at 10-12), Plaintiff moved to amend her complaint to add an additional claim arising under federal law. (Doc. 71). Citi, Freddie Mac, and Loan Simple oppose Plaintiff's attempt to amend on the basis that any amendment would be futile. (Doc. 73, 74, 75).

STANDARDS OF REVIEW

A. Fed.R.Civ.P. 12(b)(1)

Federal courts, as courts of limited jurisdiction, must have a statutory basis for their jurisdiction. See Morris v. City of Hobart, 39 F.3d 1105, 1111 (10th Cir. 1994) (citing Castaneda v. INS, 23 F.3d 1576, 1580 (10th Cir. 1994)). Pursuant to Federal Rule of Civil Procedure 12(b)(1), the court may dismiss a complaint for lack of subject matter jurisdiction. The determination of a court's jurisdiction over subject matter is a question of law. Madsen v. United States ex rel. U.S. Army, Corps of Eng'rs, 841 F.2d 1011, 1012 (10th Cir. 1987). "A court lacking jurisdiction cannot render judgment but must dismiss the cause at any stage of the proceedings in which it becomes apparent that jurisdiction is lacking." Basso v. Utah Power & Light Co., 495 F.2d 906, 909 (10th Cir. 1974).

A motion to dismiss for a lack of subject matter jurisdiction may take two forms. See Holt v. United States, 46 F.3d 1000, 1002 (10th Cir. 1995). It may facially attack a complaint's allegations or it may challenge the facts upon which subject matter jurisdiction depends. Id. at 1002-1003.

When reviewing a factual attack on subject matter jurisdiction, a district court may not presume the truthfulness of the complaint's factual allegations. A court has wide discretion to allow affidavits, other documents, and a limited evidentiary hearing to resolve disputed jurisdictional facts under Rule 12(b)(1). In such instances, a court's reference to evidence outside the pleadings does not convert the motion to a Rule 56 motion.

Id. at 1003 (internal citations omitted); see also Wheeler v. Hurdman, 825 F.2d 257, 259 n.5 (10th Cir. 1987). "The burden of establishing subject-matter jurisdiction is on the party asserting jurisdiction." Montoya v. Chao, 296 F.3d 952, 955 (10th Cir. 2002) (citing ...


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