JON S. TIGAR, District Judge.
This action arises out of Defendants' initiation of foreclosure proceedings on a residential property occupied by Plaintiff Theresa L. Murphy. This action constitutes Murphy's fourth attempt to assert claims in this court in connection with the foreclosure of that property. Each of these attempts has been premised on the same allegations. Because the court lacks subject matter jurisdiction over this action, the action is DISMISSED WITHOUT PREJUDICE.
Murphy brings this action against Defendants the Bank of New York Mellon, as Trustee for Certificate Holders of Structured Asset Mortgage Investments II, Inc., Bear Stearns Alt-A Trust, Mortgage Pass-Through Certificates Series 2006-2, and Bank of America as Trustee for Certificate Holders of Structured Asset Mortgage Investment II, Inc., Bear Stearns ALT-A Trust, Mortgage-Backed Certificates, Series 2006-4, for (1) declaratory judgment under 28 U.S.C. §§ 2201-02; (2) violations of 18 U.S.C. §§ 1001 and 1021; (3) "counterfeit security" under 18 U.S.C. § 513; (4) "license or registration required" under 12 U.S.C. § 5103; (5) res judicata and collateral estoppel; (6) "removal of cloud on title and cancellation of instruments" under California Civil Code § 3412; and (7) violations of the Fifth and Fourteenth Amendments. Compl., ECF No. 1.
The gravamen of the complaint is that Defendants lack the authority to execute any foreclosure proceedings with respect to a residential property occupied by Murphy, which is located at 11 High Street, Unit No. 201, in San Francisco, California ("the property").
In October 2006, Murphy filed an action in state court against Clyde Nathan Smith for breach of contract and specific performance. Case No. 13-2820, ECF No. 25 & Request for Judicial Notice ("RJN"), Ex. 1, ECF No. 15.
The recorded instruments filed by Defendants show that (1) Smith acquired the property on December 16, 2005, via grant deed, which was recorded on December 29, 2005, as document number 2005-I102706-00, RJN, Ex. 2, ECF No. 15; (2) Smith executed a deed of trust ("the first deed of trust") with lender PRO30 Funding on December 19, 2005, to secure an $833,250 loan with the property, RJN, Ex. 3; ECF No. 15;
As of October 18, 2006, Smith had not conveyed the property to Murphy. RJN, Ex. 1, ECF No. 15. Murphy dismissed the action against Smith without prejudice on September 18, 2007. RJN, Ex. 5, ECF No. 15.
Murphy filed a second action ("the second action") against Smith in state court on September 10, 2007, for an order declaring her the owner of the property on the basis that Smith conveyed the property to her when he gave her possession of the property on December 23, 2005. RJN, Ex. 6 at 5, ECF No. 15.
On January 8, 2008, the state court entered default judgment in favor of Murphy and against Smith and declared that fee simple title to the property passed to Murphy on December 29, 2005. RJN, Ex. 7, ECF No. 15. The court directed the clerk to sign a grant deed conveying the property from Smith to Murphy.
The default judgment of January 8, 2008, was amended by another state court judge on February 11, 2008. RJN, Ex. 9, ECF No. 15. The amended judgment stated that Murphy's fee simple title in the property was "free from encumbrances done, made, or suffered by [Smith] or any person claiming under him."
Approximately two years later, on July 30, 2010, the state court judge who entered the amended default judgment vacated it on the ground that several parties who were affected by the default judgment, including MERS, were not served with the complaint filed in the second action. RJN, Ex. 10, ECF No. 15. The minutes of the hearing suggest that the state court judge who vacated the amended default judgment intended the vacatur to result in the reversion to the default judgment entered on January 8, 2008. Tr. At 17, ECF No. 6.
Murphy filed a third action in state court to quiet title on the property on March 17, 2011. RJN, Ex. 11, ECF No. 15. The complaint named as defendants the Bank of New York Mellon, MERS, Pro30 Funding, JPMorgan Chase Bank, Bank of America, and the San Francisco County Assessor.
On October 10, 2012, MERS granted its entire interest in the first deed of trust through a corporate assignment to the Bank of New York Mellon "f/k/a The Bank of New York, as successor in interest to JPMorgan Chase Bank, N.A., as Trustee for Bear Stearns Asset Backed Securities, Bear Stearns Alt-A Trust, Mortgage Pass-Through Certificate Series 2006-2." RJN, Ex. 14, ECF No. 15. This assignment, which resulted in the Bank of New York Mellon becoming the new beneficiary of the first deed of trust, was recorded on December 26, 2012, as document number 2012-J571666-00. RJN, Ex. 14, ECF No. 15.
On January 28, 2013, the Bank of New York Mellon substituted the Wolf Firm as the new trustee of the first deed of trust. RJN, Ex. 15, ECF No. 15. This substitution was recorded on February 12, 2013, as document number —J601828.
On May 29, 2013, Murphy filed an action in this court for (1) wrongful foreclosure, (2) cancellation of void instruments, (3) removal of cloud on title, and to quiet title, Cal. Civ. Code §3412, (4) violations of California Business & Professions Code section 17200, (5) violations of California Penal Code section 115, (6) slander of title, (7) res judicata, and (8) injunctive relief. Case Number 13-cv-2424, Compl., ECF No. 1. Murphy named as defendants the Bank of New York Mellon, Merscorp Holdings, MERS, and the Wolf Firm.
In that action, Murphy sought to prevent the Wolf Firm, which she alleged was "the purported trustee" under the deed of trust, from foreclosing on her property on the ground that the Wolf Firm "was not a properly-installed substitute trustee." Compl. ¶¶ 16, 23. Murphy alleged that the Wolf Firm recorded a notice of default with respect to her property that is "invalid," "fraudulent," and "deceptive" because the Wolf Firm lacked the authority to execute that instrument.
Murphy moved for a temporary restraining order and a preliminary injunction to bar the Wolf Firm and the other defendants from proceeding with the foreclosure of her property. ECF No. 2, Case No. 13-cv-2424. On June 12, 2013, Defendants filed a response to Murphy's motion, in which they argued that the Court lacked subject matter jurisdiction over the action because diversity of citizenship does not exist and no other basis for federal jurisdiction exists.
On June 13, 2013, the Court dismissed the prior action for lack of subject matter jurisdiction, finding that although Murphy had invoked the Court's diversity jurisdiction under 28 U.S.C. § 1332, complete diversity of citizenship did not exist, as the Wolf Firm, a citizen of California, was not diverse from Murphy, who also is a citizen of California. ECF No. 25, Case No. 13-cv-2424.
On June 14, 2013, Murphy filed a second action in this court asserting the same allegations and state-law claims as the prior action, except that the complaint in this case was devoid of allegations pertaining to the Wolf Firm. Case Number 13-cv-2752, ECF No. 1. Murphy named as defendants only the Bank of New York Mellon, Merscorp Holdings, and MERS.
On June 19, 2013, Murphy filed a third action in this court against Defendants the Bank of New York Mellon, Mortgage Electronic Registration Systems ("MERS"), Merscorp Holdings, and the Wolf Firm for (1) violations of 18 U.S.C. § 1001; (2) violations of 18 U.S.C. § 1341; (3) violations of the Fair Debt Collection Practices Act ("FDCPA"); (4) violations of California's Business and Professions Code Section 17200; (5) slander of title; (6) cancellation of void instruments; (7) quiet title; and (8) wrongful foreclosure. Case Number 13-cv-2820, Compl., ECF No. 1.Compl., ECF No. 1. The gravamen of the complaint was that Defendants lacked the authority to execute any foreclosure proceedings with respect to the property.
Murphy moved for an ex parte temporary restraining order and preliminary injunction barring Defendants from recording a notice of trustee's sale. ECF No. 2. The Court denied Murphy's motion on June 20, 2013, on the ground that Murphy failed to show that she would suffer immediate and irreparable harm or that she gave proper notice to Defendants of her motion for ex parte relief. ECF No. 9. In the same order, the Court set a hearing date for Murphy's motion for a preliminary injunction and permitted the parties to file a response in support or in opposition to Murphy's motion. Defendants and Murphy filed responsive briefs.
On July 7, 2013, the Court denied the motion for a preliminary injunction. ECF No. 25. In the same order, the Court noted that it appeared to lack subject matter jurisdiction over this case. Though Murphy invoked federal question jurisdiction under 28 U.S.C. § 1331 in the complaint, the three federal claims that Murphy asserted against Defendants, namely a claim for fraud in violation of 18 U.S.C. § 1001, a claim for forgery in violation of 18 U.S.C. § 1341, and a claim for violations of the FDCPA, failed as a matter of law. ECF No. 25 at 9. For that reason, the Court concluded that these federal claims were not sufficiently substantial to confer supplemental jurisdiction over Murphy's state law claims.
After Murphy filed her response, the court dismissed the action for lack of subject matter jurisdiction. ECF No. 46. The court reasoned that diversity jurisdiction did not exist because Murphy was not diverse from the Wolfs Firm. The court also concluded that federal jurisdiction did not exist, either, because all of the federal claims in the operative complaint failed as a matter of law, and Murphy's proposed addition of new federal claims would be futile.
Murphy filed the instant action on May 2, 2013. ECF No. 1. Murphy filed a motion to proceed in forma pauperis, and Defendants filed a motion to dismiss soon thereafter. ECF Nos. 2, 4. As will be discussed below, the court finds that it continues to lack subject matter jurisdiction over Murphy's claims.
"Federal courts are courts of limited jurisdiction. They possess only that power authorized by Constitution and statute, which is not to be expanded by judicial decree. It is to be presumed that a cause lies outside this limited jurisdiction, and the burden of establishing the contrary rests upon the party asserting jurisdiction."
"The district courts shall have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs, and is between citizens of different states." 28 U.S.C. § 1332.
Murphy alleges that diversity of citizenship under § 1332 exists because (1) she is a California citizen, (2) the Bank of New York is incorporated and has its principal place of business in New York, and (3) Bank of America is incorporated and has its principal place of business in Delaware, and is headquartered in North Carolina. Compl. ¶ 2. Notably, in the present complaint, like in the complaint she filed in case number 13-cv-2752, Murphy failed to assert claims against the Wolf Firm, a California citizen and the trustee under the deed of trust at issue, even though the court previously determined that this entity is an indispensable party under Rule 19(b). Because the allegations in the present complaint are based on the same events and theories as the ones alleged in the complaint Murphy filed in case number 13-cv-2752, and because the court has already determined that the Wolf Firm must be joined as a defendant and that its joinder would destroy diversity, diversity jurisdiction under § 1332 does not exist.
Murphy asserts the following federal claims in the complaint: (1) declaratory judgment under 28 U.S.C. §§ 2201-02; (2) violations of 18 U.S.C. §§ 1001 and 1021; (3) "counterfeit security" under 18 U.S.C. § 513; (4) "license or registration required" under 12 U.S.C. § 5103; and (5) violations of the Fifth and Fourteenth Amendments.
The court already addressed Murphy's claim under 18 U.S.C. § 1001 in case number 13-cv-2828.
Murphy's claim for violations of 18 U.S.C. § 1021 fails for similar reasons. Section 1021 is a criminal statute that prohibits a United States officer from making false certifications with respect to the recording of conveyances of real property. 18 U.S.C. § 1021. The statute contains no private cause of action.
Finally, Murphy's claim for violations of 18 U.S.C. § 513 also fails. The statute bars the creation and use of forged securities of a State. 18 U.S.C. § 513. The statute contains no private cause of action.
Murphy's Fifth Amendment claim fails as a matter of law because "the Fifth Amendment Due Process Clause applies only to the federal government."
Likewise, Murphy's Fourteenth Amendment claim fails as a matter of law because the Fourteenth Amendment "shields citizens from unlawful governmental actions, but does not affect conduct by private entities."
Murphy's claim under 12 U.S.C. § 5103 also fails because the statute does not provide a private cause of action. Section 5103 is a part of the Secure and Fair Enforcement for Mortgage Licensing Act of 2008, which is codified at 12 U.S.C. §§ 5101-5116.
Murphy's claim for declaratory relief, 28 U.S.C. § 2201, fails because a court can grant declaratory relief only "[i]n a case of actual controversy within its jurisdiction." 28 U.S.C. § 2201(a). Indeed, "[t]he DJA . . . does not confer jurisdiction" and requires an "independent jurisdictional basis."
Because the court does not have jurisdiction under 28 U.S.C. § 1331 or § 1332, the court cannot exercise supplemental jurisdiction over Murphy's state-law claims, and the action must be dismissed for lack of subject matter jurisdiction.
Accordingly, this action is DISMISSED for lack of subject matter jurisdiction. All pending motions and deadlines are DENIED AS MOOT. Murphy may re-file her claims in state court. The Clerk shall terminate this action.
The court notes that if Murphy files another complaint in this court based on the same allegations contained in each of the complaints discussed in this order, the court may designate her as a vexatious litigant.
