Case 3:15-cv-05375-BHS Document 17 Filed 07/17/15 Page 1 of 6

The Honorable Benjamin H. Settle

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UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF WASHINGTON
AT TACOMA

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PAMELA S. OWEN,

Case No. 3:15-cv-05375-BHS

Plaintiff,

v.
FEDERAL HOUSING FINANCE AGENCY;
FEDERAL HOME LOAN MORTGAGE
CORPORATION; MTC FINANCIAL, INC.
d/b/a TRUSTEE CORPS; BISHOP
MARSHALL & WEIBEL, P.S.; and CHUCK
E. ATKINS, in his official capacity as Clark
County Sheriff,

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DEFENDANT MTC FINANCIAL INC.S

REPLY IN SUPPORT OF ITS MOTION
TO DISMISS PURSUANT TO FED. R.
CIV. P. 12(b)(6)
NOTE ON MOTION CALENDAR:
July 17, 2015

Defendants.

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I.

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INTRODUCTION TO ARGUMENT IN REPLY

Plaintiff Pamela Owens (Ms. Owen) over-length Opposition to Defendant MTC

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Financial Inc., d/b/a Trustee Corps (MTC) Motion to Dismiss Pursuant to Fed. R. Civ. P.

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12(b)(6) cannot rescue her claims against MTC from dismissal. As for Ms. Owens claims

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against MTC under 42 U.S.C. 1983, she does not and cannot challenge the point that there is

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no state action when a creditor enforce[s] a lien through purely private, non-judicial sale . . .

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even though the lien was authorized by the states legislative enactment. 1 Because nothing

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Apao v. Bank of New York, 324 F.3d 1091, 1094 (9th Cir. 2003) (citing to Flagg Bros., Inc. v. Brooks, 436 U.S.
149, 98 S.Ct. 1729, 56 L.Ed2d 185 (1978)). See also Charmicor, Inc. v. Deaner, 572 F.2d 694, 696 (9th
Cir.1978) (finding no state action where plaintiffs challenged Nevada's non-judicial foreclosure statute on due
process grounds).

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DEFENDANT MTC FINANCIAL INC.S REPLY IN
SUPPORT OF ITS MOTION TO DISMISS PURSUANT TO
FED. R. CIV. P. 12(b)(6)
(NO. 3:15-CV-05067-BHS) - 1
107977 110 fg17bp02bf

P ETERSON R USSELL K ELLY PLLC

1850 Skyline Tower 10900 NE Fourth Street
Bellevue, Washington 98004-8341
TELEPHONE (425) 462-4700 FAX (425) 451-0714

Case 3:15-cv-05375-BHS Document 17 Filed 07/17/15 Page 2 of 6

MTC did in this matter involved state action or transpired under color of state law, Ms.

Owens claims against MTC for violating her civil rights fail as a matter of law. Ms. Owens

attempt to rescue her CPA claim against MTC also fails. In fact, because Ms. Owens attempt to

save her CPA claim is based on new allegationsshe has tacitly admitted that her complaint is

insufficient. Accordingly, all of Ms. Owens claims against MTC should be dismissed.

II.

ARGUMENT IN REPLY

Ms. Owen relies on Steckman v. Hart Brewing, Inc., 143 F.3d 1293 (9th Cir. 1998) for

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the proposition that a complaint should not be dismissed unless it appears beyond a doubt that

plaintiff can prove no set of facts in support of her claim which would entitle her to relief. 2

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However, Steckman pre-dates the United States Supreme Courts decisions in both Bell Atlantic

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Corp. v. Twombly, 3 and Ashcroft v. Iqball. 4 As described by the Court of Appeals for the Ninth

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Circuit,
Twombly and Iqbal addressed the pleading required to survive a motion to dismiss for
failure to state a claim, and, distilled to their essence, impose two requirements. First, the
reviewing court, though crediting factual assertions made in the pleadings, is not required
to credit legal conclusions. Second, the complaint cannot survive a motion to dismiss
unless it alleges facts that plausibly (not merely conceivably) entitle plaintiff to relief. 5

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Each of Ms. Owens claims against MTC fails to satisfy these Twombly/Iqbal pleading
requirements.

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Ms. Owens claim against MTC for breach of the Washington Consumer Protection Act
(CPA) fails because her Complaint does not allege facts that plausibly (not merely
conceivably) entitle [her] to relief. 6 Indeed, as pointed out in MTCs Motion to Dismiss, Ms.

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2

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Opposition, at p. 30 (relying on Steckman, 143 F.3d at1295).

550 U.S. 544, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007).
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556 U.S. 662, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009).
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Maya v. Centex Corp., 658 F.3d 1060, 1067-68 (9th Cir. 2011).
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Id.
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DEFENDANT MTC FINANCIAL INC.S REPLY IN
SUPPORT OF ITS MOTION TO DISMISS PURSUANT TO
FED. R. CIV. P. 12(b)(6)
(NO. 3:15-CV-05067-BHS) - 2
107977 110 fg17bp02bf

P ETERSON R USSELL K ELLY PLLC

1850 Skyline Tower 10900 NE Fourth Street
Bellevue, Washington 98004-8341
TELEPHONE (425) 462-4700 FAX (425) 451-0714

Case 3:15-cv-05375-BHS Document 17 Filed 07/17/15 Page 3 of 6

Owens Complaint barely alleges any facts at all pertaining to MTCs alleged CPA violation, or

even makes a formulaic recitation of the elements of a [CPA] cause of action against MTC. 7

In the Complaint, the essence of Ms. Owens CPA allegation against MTC appears to be

that MTC Financial fraudulently issued to Defendant Freddie Mac a Trustees Deed upon sale .

. . which misrepresented the language from Defendant Freddie Macs Form . . . to reflect the fact

that Landmark Mortgage Company, and not MERS, Inc., was the Beneficiary of the security

instrument. 8 Yet Ms. Owen can show no injury from the wording of the Trustees Deed

MTC issued to Freddie Mac after the foreclosure sale, nor can she show that the language in that

deed referring to Landmark Mortgage as the beneficiary of the deed of trust was deceptive. 9 In

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her Opposition, Ms. Owen does not even attempt to address these issues.

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Instead, Ms. Owens Opposition attempts to re-formulate her CPA claim against MTC to

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focus on MTCs actions prior to the foreclosure sale (as opposed to its actions in issuing the

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Trustees Deed to Freddie Mac). However, Ms. Owens new allegations would also not support

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a CPA claim, and amending her Complaint to add them would be futile. 10 In particular, Ms.

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Owen does not even allege that MTCas opposed to Bank of Americawas aware of her

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temporary change of address to the Clark County Jail. 11 Even if Bank of America sent the

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Notice of Default to an incorrect address, this would not support a CPA claim against MTC.

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Thus, as Ms. Owens Opposition confirmsshe has not yet plead any plausible claims against

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MTC. And, as pointed out, her new allegations likewise fail to give rise to a plausible claim

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against MTC and, therefore, fail. Ms. Owens CPA claim against MTC should be dismissed.

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Twombly, 550 U.S. at 555. Compare Complaint, at pp. 12-22, 5.1 to 5.40 (making a formulaic recitation of the
elements of a CPA claim against Defendant Federal Home Loan Mortgage Association (Freddie Mac), but not
doing so as to MTC).
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Complaint at 5.15.1.
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Compare Complaint at 5.15.1 and Exhibit 4, pp. 2-3, with Motion to Dismiss, at p. 5.
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See, e.g., Cervantes v. Countrywide Home Loans, Inc., 656 F.3d 1034, 1041 (9th Cir. 2011)
(noting that [a]lthough leave to amend should be given freely, a district court may dismiss without leave where a
plaintiff's proposed amendments would fail to cure the pleading deficiencies and amendment would be futile).
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Opposition, at 4.34.

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DEFENDANT MTC FINANCIAL INC.S REPLY IN
SUPPORT OF ITS MOTION TO DISMISS PURSUANT TO
FED. R. CIV. P. 12(b)(6)
(NO. 3:15-CV-05067-BHS) - 3
107977 110 fg17bp02bf

P ETERSON R USSELL K ELLY PLLC

1850 Skyline Tower 10900 NE Fourth Street
Bellevue, Washington 98004-8341
TELEPHONE (425) 462-4700 FAX (425) 451-0714

Case 3:15-cv-05375-BHS Document 17 Filed 07/17/15 Page 4 of 6

As for Ms. Owens claims against MTC under 42 U.S.C. 1983, they fail as a matter of

law, and should be dismissed. As pointed out in MTCs Motion, the Ninth Circuit has held that

that there is no state action when a creditor enforce[s] a lien through purely private, non-judicial

sale . . . even though the lien was authorized by the states legislative enactment. 12 Because the

non-judicial foreclosure sale here did not involve either state action or anyone acting under

color of state law, all of Ms. Owens 1983 claims based on the non-judicial sale fail as a matter

of law. 13

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Moreover, Ms. Owen completely fails to allege any plausible factual or legal basis for
holding MTC responsible for the conduct of the unlawful detainer action Freddie Mac initiated

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some three months after the foreclosure sale. Her Oppositions new assertion that [b]y

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unlawfully foreclosing upon Plaintiffs home, Defendant MTC Financial is directly responsible

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and liable for causing Sheriff Atkins unconstitutional conduct is a textbook example of

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confusing a condition precedent (or a but for cause) with a proximate cause. 14 MTC no more

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proximately caused Freddie Macs or Sheriff Atkins actions in the unlawful detainer action than

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Ms. Owen herself did by defaulting on her mortgage.

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Apao v. Bank of New York, 324 F.3d 1091, 1094 (9th Cir. 2003) (citing to Flagg Bros., Inc. v. Brooks, 436 U.S.
149, 98 S.Ct. 1729, 56 L.Ed2d 185 (1978)). See also Charmicor, Inc. v. Deaner, 572 F.2d 694, 696 (9th
Cir.1978) (finding no state action where plaintiffs challenged Nevada's non-judicial foreclosure statute on due
process grounds).
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A plaintiff advancing a claim under 42 U.S.C. 1983 must establish that the defendant acted under color of state
law. See, e.g., Am. Mfrs. Mut. Ins. Co. v. Sullivan, 526 U.S. 40, 49-50, 119 S. Ct. 977, 985, 143 L. Ed. 2d 130
(1999). See also Johnson v. Knowles, 113 F.3d 1114, 1118 (9th Cir. 1997) (noting that when a plaintiff is required
to establish state action for purposes of their constitutional claims, [the courts] treat the under-color-of-state-law
requirement and the state-action requirement as equivalent).
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Opposition, at p. 7, 2.17. Compare Arnold v. Int'l Bus. Machines Corp., 637 F.2d 1350, 1355 (9th Cir. 1981)
(noting that the causation requirement of sections 1983 and 1985 is not satisfied by a showing of mere causation in
fact. . . . Rather, the plaintiff must establish proximate or legal causation). See also Hoffman v. Halden, 268 F.2d
280, 296-97 (9th Cir. 1959), overruled in part on other grounds, Cohen v. Norris, 300 F.2d 24 (9th Cir. 1962)
(noting that in the context of a commitment proceeding the various preliminary steps would not cause damage
unless they could be said to be the proximate cause of the injury. In the usual case, the order of the court would be
the proximate cause and the various preliminary steps would be remote causes of any injury from imprisonment or
restraint under the court order). Here, MTCs conduct of the foreclosure sale was at most a preliminary step
towards, and no more than a remote cause of, the unlawful detainer action.

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DEFENDANT MTC FINANCIAL INC.S REPLY IN
SUPPORT OF ITS MOTION TO DISMISS PURSUANT TO
FED. R. CIV. P. 12(b)(6)
(NO. 3:15-CV-05067-BHS) - 4
107977 110 fg17bp02bf

P ETERSON R USSELL K ELLY PLLC

1850 Skyline Tower 10900 NE Fourth Street
Bellevue, Washington 98004-8341
TELEPHONE (425) 462-4700 FAX (425) 451-0714

Case 3:15-cv-05375-BHS Document 17 Filed 07/17/15 Page 5 of 6

Also, as noted in MTCs Motion, Ms. Owens cursory allegation of a conspiracy

between MTC and Freddie Mac is facially inadequate. 15 To show a conspiracy between

private and state actors for 1983 purposes, there must be an agreement or meeting of the minds

to violate a person's constitutional rights. 16 No such meeting of the minds between MTC and

Freddie Mac, or MTC and the Clark County Sheriff is or could plausibly be alleged here.

Similarly, Ms. Owen does not and could not plausibly allege that MTC had any control over

Freddie Macs actions, let alone those of the Sheriff. 17 Accordingly, Ms. Owens 1983 claims

against MTC fail as a matter of law. These claims should be dismissed without leave to amend,

because they could not be saved by any amendment. 18

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III.

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CONCLUSION

For the reasons stated above and in its Motion, this Court should grant MTCs Motion to

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Dismiss Ms. Owens claims against MTC for failure to state a claim upon which relief can be

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granted.

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DATED: July 17, 2015.

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PETERSON RUSSELL KELLY, PLLC

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By:

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/s/ Michael S. DeLeo

Michael S. DeLeo, WSBA # 22037
Attorneys for Defendant MTC Financial Inc.,
d/b/a Trustee Corps

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Complaint, at 6.9 (alleging that MTC Financials wrongful foreclosure . . . was pursuant to a conspiracy with
Defendants Federal Housing Finance Agency and Federal Home Loan Mortgage Corporation to manipulate
Washingtons Deed of Trust Act). Compare Motion, at pp. 8-9.
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Trujillo v. City of Ontario, 428 F. Supp. 2d 1094, 1114 (C.D. Cal. 2006) aff'd sub nom. Bernhard v. City of
Ontario, 270 F. App'x 518 (9th Cir. 2008).
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See Arnold, 637 F.2d at 1357 (noting that to be considered to be in joint activity with the state, the private actor
needs to have some control over the state actors' decision making).
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Steckman, 143 F.3d at 1296.

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DEFENDANT MTC FINANCIAL INC.S REPLY IN
SUPPORT OF ITS MOTION TO DISMISS PURSUANT TO
FED. R. CIV. P. 12(b)(6)
(NO. 3:15-CV-05067-BHS) - 5
107977 110 fg17bp02bf

P ETERSON R USSELL K ELLY PLLC

1850 Skyline Tower 10900 NE Fourth Street
Bellevue, Washington 98004-8341
TELEPHONE (425) 462-4700 FAX (425) 451-0714

Case 3:15-cv-05375-BHS Document 17 Filed 07/17/15 Page 6 of 6

CERTIFICATE OF SERVICE

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I certify that I caused to be served in the manner noted below a copy of the foregoing
pleading on the following individual(s):

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Steven J. Dixson
422 W Riverside Ave, Ste 1100
Spokane, WA 99201
E-Mail: aliciaa@witherspoonkelley.com,
sjd@witherspoonkelley.com

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[X]

Via Facsimile
Via First Class Mail
Via Messenger
Via Email
Via CM/ECF Electronic Notice

Barbara L. Bollero
Bishop White Marshall & Weibel PS
720 Olive Way, Ste 1201
Seattle, WA 98101
E-Mail: tburt@bwmlegal.com,
bbollero@bwmlegal.com

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[]
[]
[]
[X]

Via Facsimile
Via First Class Mail
Via Messenger
Via Email
Via CM/ECF Electronic Notice

[]
[]
[]
[]
[X]

Via Facsimile
Via First Class Mail
Via Messenger
Via Email
Via CM/ECF Electronic Notice

[]
[]
[]
[]
[X]

Via Facsimile
Via First Class Mail
Via Messenger
Via Email
Via CM/ECF Electronic Notice

[]
[X]
[]
[]
[]

Via Facsimile
Via First Class Mail
Via Messenger
Via Email
Via CM/ECF Electronic Notice

Jody M. McCormick
Witherspoon, Kelley, Davenport & Toole
1100 US Bank Bldg
422 W Riverside Ave, Ste 1100
Spokane, WA 99201
E-Mail: erinh@witherspoonkelley.com,
jmm@witherspoonkelley.com

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William P. Richardson
Clark County Prosecution -Civil Division
1300 Franklin St
Vancouver, WA 98660
E-Mail: thelma.kremer@clark.wa.gov,
bill.richardson@clark.wa.gov

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Pamela S. Owen
3912 NE 57th Avenue
Vancouver WA 98661

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DATED: July 17, 2015, at Bellevue, Washington.

/s/ Rachel White
Rachel White, Paralegal

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DEFENDANT MTC FINANCIAL INC.S REPLY IN

SUPPORT OF ITS MOTION TO DISMISS PURSUANT TO
FED. R. CIV. P. 12(b)(6)
(NO. 3:15-CV-05067-BHS) - 6
107977 110 fg17bp02bf

P ETERSON R USSELL K ELLY PLLC

1850 Skyline Tower 10900 NE Fourth Street
Bellevue, Washington 98004-8341
TELEPHONE (425) 462-4700 FAX (425) 451-0714