In re: Helena Perez Reilly

FILED
FEB 11 2020
NOT FOR PUBLICATION
SUSAN M. SPRAUL, CLERK
U.S. BKCY. APP. PANEL
OF THE NINTH CIRCUIT
UNITED STATES BANKRUPTCY APPELLATE PANEL
OF THE NINTH CIRCUIT
In re: BAP No. AZ-19-1187-SFB
HELENA PEREZ REILLY, Bk. No. 3:18-bk-05319-DPC
Debtor. Adv. No. 3:19-ap-00008-DPC
HELENA PEREZ REILLY,
Appellant,
v. MEMORANDUM*
WELLS FARGO BANK, N.A.,
Appellee.
Submitted Without Oral Argument
on January 30, 2020
Filed – February 11, 2020
Appeal from the United States Bankruptcy Court
for the District of Arizona
*
This disposition is not appropriate for publication. Although it may be cited for
whatever persuasive value it may have, see Fed. R. App. P. 32.1, it has no precedential
value. See 9th Cir. BAP Rule 8024-1.
Honorable Daniel P. Collins, Bankruptcy Judge, Presiding
Appearances: Appellant Helena Perez Reilly, pro se, on brief; Andrew
M. Jacobs and Daniel J. Inglese of Snell & Wilmer L.L.P.
on brief for appellee.
Before: SPRAKER, FARIS, and BRAND, Bankruptcy Judges.
INTRODUCTION
Chapter 131 debtor Helena Perez Reilly commenced an adversary
proceeding challenging Wells Fargo Bank’s secured claim. The bankruptcy
court ultimately granted Wells Fargo’s Civil Rule 12(b)(6) motion to
dismiss Reilly’s first amended complaint without leave to amend. Reilly
appeals the dismissal order and the order denying her Rule 9023 motion.
Reilly’s first amended complaint was premised on two legal theories.
First, she posited that Wells Fargo was required to record an assignment of
deed of trust in order to perfect its security interest in her residence.
According to Reilly, because Wells Fargo did not do so, its claimed security
interest in her residence was invalid and unenforceable. Second, she
1
Unless specified otherwise, all chapter and section references are to the
Bankruptcy Code, 11 U.S.C. §§ 101-1532, and all “Rule” references are to the Federal
Rules of Bankruptcy Procedure. All “Civil Rule” references are to the Federal Rules of
Civil Procedure, and all “Evidence Rule” references are to the Federal Rules of
Evidence.
2
insisted that the discharge she received in her prior chapter 7 case
extinguished both Wells Fargo’s lien as well as the underlying debt.
Because neither of these theories could support a legally cognizable
claim for relief, the bankruptcy court correctly dismissed her first amended
complaint. Amendment of her complaint could not cure the fatal defects in
these legal theories. Accordingly, the bankruptcy court was not obligated
to grant leave to amend.
Therefore, we AFFIRM.
FACTS
Reilly commenced her first chapter 7 case in July 2011. She listed
Wachovia Mortgage as a secured creditor with a security interest in her
residence in Flagstaff, Arizona.2 In April 2012, the bankruptcy court
granted Reilly a discharge of her debts.
Reilly commenced her second chapter 7 bankruptcy in May 2018, and
later converted the case to chapter 13. She listed Wells Fargo as a secured
creditor with a lien on her residence in the amount of $378,570.00. Though
she did not list this claim as contingent or disputed, her chapter 13 plan did
not provide for any payments either inside or outside of the plan on
account of this secured claim.
2
We have exercised our discretion to review Reilly’s bankruptcy and adversary
proceeding dockets. Estate of Blue v. Cty. of L.A., 120 F.3d 982, 984 (9th Cir. 1997); Mullis
v. Bankruptcy Ct., 828 F.2d 1385, 1388 & n.9 (9th Cir. 1987).
3
Wells Fargo filed a proof of claim in the amount of $371,810.67,
claiming a lien against Reilly’s residence. Wells Fargo attached to the proof
of claim a copy of an Adjustable Rate Mortgage Note dated September 11,
2006, for $396,500.00, naming Reilly as the borrower and World Savings
Bank, FSB, its successors, and/or assignees, as the lender. The note’s
signature page includes a signature for the borrower. On the back of the
signature page is an endorsement by Brenda Flores as “Vice President of
Loan Documentation,” making the note payable to “Wells Fargo Bank,
N.A., successor by merger with Wells Fargo Bank Southwest, N.A., F/K/A
Wachovia Mortgage, FSB, F/K/A World Savings Bank, FSB.”
Wells Fargo also attached to its proof of claim a deed of trust, which
on its face shows that it was recorded on September 29, 2006 in the Official
Records of Coconino County, as instrument number 3405021. The deed of
trust similarly identifies Reilly as the borrower. And once again World
Savings, its successors, and/or assignees are identified as the lender. The
deed of trust grants the lender a security interest in Reilly’s residence to
secure repayment of Reilly’s promissory note in favor of World Savings.
Wells Fargo further attached to its proof of claim a letter dated
November 19, 2007, from the Office of Thrift Supervision (“OTS”) to John
A. Stoker as Vice President and Assistant General Counsel of Wachovia
Corporation. The letter reflects OTS’s approval of World Savings’
amendment of its charter and bylaws to change its name to Wachovia
4
Mortgage, FSB, effective as of December 31, 2007.
The final document attached to the Proof of Claim is a Certification
by the Office of Comptroller of the Currency (“OCC”) dated November 1,
2009, certifying the merger of Wachovia Mortgage with and into Wells
Fargo Bank, National Association, effective as of November 1, 2009.
Reilly commenced an adversary proceeding against Wells Fargo to
determine the validity, priority or extent of Wells Fargo’s lien. In relevant
part, Reilly’s original four-page complaint alleged that “Wells Fargo fails to
provide any documentation whatsoever that supports its allegation that it
is a secured creditor.” As Reilly phrased it, because the September 2006
deed of trust identified World Savings as the lender, “Wells Fargo is
required to show proof of assignment of mortgage, and has not.” In
addition, Reilly alleged that the discharge she received in her 2011
bankruptcy case extinguished both Wells Fargo’s lien and the underlying
debt: “Wells Fargo admits to the discharge. This action reflects that
Plaintiff’s debt has been eliminated. Therefore defendant is not a creditor.”
Wells Fargo filed a motion to dismiss under Civil Rule 12(b)(6). Reilly
filed an opposition to the motion to dismiss but also filed a first amended
complaint. In her first amended complaint, Reilly included a host of
additional allegations. Many related to World Savings’ alleged practice of
securitizing the loans it originated. Other allegations effectively asserted
that, absent proof of a recorded assignment of deed of trust, Wells Fargo
5
could not establish that it was World Savings’ successor with respect to the
security interest in Reilly’s residence. Reilly also alleged that the security
interest in her residence was discharged by her 2011 bankruptcy.3 In sum,
though the first amended complaint contained numerous additional
allegations, its gravamen was not markedly different from the original
complaint. Both complaints focused on the purported need of Wells Fargo
to produce a recorded assignment of the deed of trust and the effect of the
discharge in Reilly’s 2011 case.
In response to the first amended complaint, Wells Fargo filed its
second motion to dismiss. Wells Fargo argued that it was Wachovia’s
successor by merger and that Wachovia was the same entity as World
Savings by virtue of a name change. According to Wells Fargo, the
documents attached to its proof of claim established that it was the
successor in interest to World Savings, and lienholder of record with
respect to Reilly’s residence as a result of the recorded deed of trust. As for
the effect of Reilly’s prior chapter 7 discharge, Wells Fargo cited Johnson v.
Home State Bank, 501 U.S. 78 (1991), for the proposition that the lien against
Reilly’s residence survived the discharge of the underlying debt.
Reilly did not file a formal opposition to the second motion to
dismiss. But she did file a motion to strike. She claimed that the second
3
Reilly admitted in her first amended complaint that, in September 2006, she
obtained a mortgage from World Savings encumbering her residence.
6
motion to dismiss was untimely filed and contravened Civil Rule 12(g)’s
prohibition against successive motions to dismiss. She also directly
challenged each of the assertions Wells Fargo made in its second motion to
dismiss.
Reilly filed a motion for an order to show cause the same day that she
filed her motion to strike. In relevant part, Reilly insisted that Wells Fargo
needed to present evidence to authenticate the documents it had attached
to its proof of claim.
Reilly additionally filed a motion for judgment on the pleadings. This
motion largely reiterated all of the points Reilly had made in her other
papers filed in the adversary proceeding.
On June 21, 2019, the bankruptcy court held a hearing on all of the
above-referenced motions. The bankruptcy court specifically rejected both
of Reilly’s foundational legal theories underlying her first amended
complaint. The court ruled that a recorded assignment of the deed of trust
was unnecessary in light of World Savings’ name change to Wachovia and
Wachovia’s merger into Wells Fargo. The court further ruled that Wells
Fargo’s lien survived Reilly’s prior chapter 7 discharge. Based on these
rulings, the court granted Wells Fargo’s second motion to dismiss and
denied all of Reilly’s pending motions.
Reilly then filed a motion for reconsideration under Rule 9023. In the
reconsideration motion, Reilly reiterated the points she had made in her
7
prior papers.
On July 15, 2019, the bankruptcy court entered an order granting the
second motion to dismiss and denying Reilly’s motions. Reilly timely
appealed.
JURISDICTION
The bankruptcy court had jurisdiction pursuant to 28 U.S.C. §§ 1334and 157(b)(2)(B) and (K). We have jurisdiction under 28 U.S.C. § 158.
ISSUES
1. Whether the bankruptcy court committed reversible error when it
dismissed Reilly’s first amended complaint without leave to amend?
2. Whether the bankruptcy court abused its discretion when it denied
Reilly’s reconsideration motion?
STANDARDS OF REVIEW
We review de novo the bankruptcy court’s order granting a Civil
Rule 12(b)(6) motion to dismiss. See Camacho v. Bridgeport Fin. Inc., 430 F.3d
1078, 1079 (9th Cir. 2005). When we review a matter de novo, we consider
the matter anew, as if not previously decided by the bankruptcy court.
Mele v. Mele (In re Mele), 501 B.R. 357, 362 (9th Cir. BAP 2013).
Generally speaking, we review the bankruptcy court’s denial of leave
to amend for an abuse of discretion. Reddy v. Litton Indus., Inc., 912 F.2d
291, 296 (9th Cir. 1990). We also review the denial of a Rule 9023 motion for
an abuse of discretion. Dicker v. Dye (In re Edelman), 237 B.R. 146, 150 (9th
8
Cir. BAP 1999).
The bankruptcy court abuses its discretion when its decision is based
on an incorrect rule of law or on factual findings that are clearly erroneous.
United States v. Hinkson, 585 F.3d 1247, 1261–63 (9th Cir. 2009) (en banc).
DISCUSSION
A. Civil Rule 12(b)(6) Standards.
A Civil Rule 12(b)(6) dismissal motion can challenge a complaint in
two different ways: (1) whether the complaint presents any cognizable
legal theories; and (2) whether the complaint contains sufficient factual
allegations that, if accepted as true, support those legal theories. See Johnson
v. Riverside Healthcare Sys., LP, 534 F.3d 1116, 1121–22 (9th Cir. 2008). In
other words, “for a complaint to survive a motion to dismiss, the
non-conclusory ‘factual content’ and reasonable inferences from that
content, must be plausibly suggestive of a claim entitling the plaintiff to
relief.” Moss v. U.S. Secret Serv., 572 F.3d 962, 989 (9th Cir. 2009) (citing
Ashcroft v. Iqbal, 556 U.S. 662, 677-78 (2009)).
Thus, the plaintiff must allege “sufficient factual matter, accepted as
true, to state a claim for relief that is plausible on its face.” Iqbal, 556 U.S. at678 (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)) (internal
quotation marks omitted). A claim is facially plausible “when the plaintiff
pleads factual content that allows the court to draw the reasonable
inference that the defendant is [legally] liable for the misconduct alleged.”
9
Id. (emphasis added). The plausibility determination is a “context-specific
task” that requires the court “to draw on its judicial experience and
common sense.” Id. When the “well-pleaded facts” do not enable the court
to reasonably infer “more than the mere possibility of misconduct,” the
complaint does not sufficiently allege that the plaintiff is entitled to relief.
Id.Generally, courts must accept the well pled factual allegations of the
complaint as true. Newcal Indus., Inc. v. Ikon Office Sols., 513 F.3d 1038, 1043
n.2 (9th Cir. 2008). However, courts should not accept as true conclusory
allegations or statements of the law cast as factual allegations. See Twombly,
550 U.S. at 555–56. Nor should the court accept as true “unwarranted
deductions of fact, or unreasonable inferences.” In re Gilead Scis. Sec. Litig.,
536 F.3d 1049, 1055 (9th Cir. 2008).
There is another important exception to the rule of accepting a
complaint’s factual allegations as true. Though the Civil Rule 12(b)(6)
inquiry generally is limited to the allegations set forth in the complaint, the
court is permitted to consider items properly subject to judicial notice.
United States v. Ritchie, 342 F.3d 903, 908 (9th Cir. 2003). A court may take
judicial notice of facts “not subject to reasonable dispute” because they are
either “(1) generally known within the territorial jurisdiction of the trial
court or (2) capable of accurate and ready determination by resort to
sources whose accuracy cannot reasonably be questioned.” Fed. R. Evid.
10
201(b). When the complaint’s allegations are at odds with matters that are
properly the subject of judicial notice, the court need not accept those
allegations as true when considering a motion to dismiss. Lazy Y Ranch Ltd.
v. Behrens, 546 F.3d 580, 588 (9th Cir. 2008).
B. Reilly’s Legal Theories In Support Of Her Claims For Relief.
In support of her dismissed claims for relief, Reilly’s appeal brief
principally focuses on two legal theories. First, she claims that Wells Fargo
should have but failed to record an assignment of the deed of trust she
executed in favor of World Savings. And second, she claims that, in her
2011 bankruptcy case, her chapter 7 discharge extinguished both the lien
and the underlying debt. We will address each of these arguments in turn.
1. Failure To Perfect Assignment Of The Deed Of Trust.
Reilly primarily argues that Wells Fargo is not a secured creditor and
cannot assert or enforce its lien against her residence because it never
perfected an assignment of the deed of trust she executed in favor of World
Savings. According to Reilly, when a security interest in real property is
acquired by assignment, the assignee must perfect its security interest by
recording an assignment of mortgage or deed of trust.
Reilly’s lack of perfection argument is factually unfounded. Wells
Fargo did not take its interest in the deed of trust by assignment. Wells
Fargo succeeded to its interest in Wachovia’s assets as the result of
Wachovia’s merger into Wells Fargo. The occurrence of this merger is not
11
subject to reasonable dispute and hence is properly subject to judicial
notice. Numerous courts have recognized that this merger occurred.4 And
the copy Wells Fargo submitted of the official OCC certificate of merger
similarly is subject to judicial notice. Graybill, 953 F. Supp. 2d at 1093 n.2;
Ferguson v. Wells Fargo Bank, N.A., Case No. 2:12-2944 WBS, 2013 WL
504709, at *2–3 (E.D. Cal. Feb. 8, 2013); Perez v. Wachovia Mortg., Case No. C
12-03407 RS, 2012 WL 12920635, at *2 (N.D. Cal. Nov. 29, 2012).
It is well settled that, when a merger occurs, the surviving entity
acquires the assets and liabilities of the constituent entity. 15 William M.
Fletcher, Fletcher Cyclopedia of the Law of Corporations § 7082 (Sept. 2019
update) (“When corporations merge, the surviving corporation succeeds to
both the rights and obligations of the constituent corporations.”) (citing
numerous cases); see also Carroll v. PNC Bank, Case No. A-13-CV-657 LY,
2014 WL 12530951, at *2 (W.D. Tex. June 24, 2014), report and
recommendation adopted, Case No. A-13-CV-657-LY, 2014 WL 125313674
See, e.g., Campidoglio LLC v. Wells Fargo & Co., 870 F.3d 963, 967 (9th Cir. 2017)
(“in 2008, Wells Fargo acquired Wachovia, including Wachovia Mortgage”); Kuzack v.
Wells Fargo Bank, NA, 597 F. App’x 424 (9th Cir. 2015) (identifying Wachovia as Wells
Fargo’s “predecessor-in-interest”); Graybill v. Wells Fargo Bank, N.A., 953 F. Supp. 2d
1091, 1093 n.2 (N.D. Cal. 2013) (“Wachovia [Mortgage] converted to a national bank
called Wells Fargo Bank Southwest, NA, which then merged with and into Wells Fargo
Bank, NA.); Toromanova v. Wells Fargo Bank, N.A., Case No. 12-CV-00328-GMN-CWH,
2012 WL 2389661, at *1 (D. Nev. June 25, 2012) (“Wachovia Mortgage merged with and
into Wells Fargo Bank, N.A. and is now known as Wachovia Mortgage, a Division of
Wells Fargo Bank, N.A.”).
12
(W.D. Tex. Aug. 4, 2014) (holding that all rights of the merger parties were
vested in the surviving entity without the need for any formal assignment);
SE Prop. Holdings, LLC v. Sandy Creek II, LLC, 954 F. Supp. 2d 1322, 1348
(S.D. Ala. 2013) (same).
In turn, Wachovia was the successor to World Savings by virtue of a
name change. The letter Wells Fargo provided from the OTS reflecting this
fact also is properly the subject of judicial notice. Graybill, 953 F. Supp. 2d at
1093 & n.2; Ferguson, 2013 WL 504709, at *1–4. When a corporation changes
names, it is still the same corporation, with all the same rights and
liabilities. 6 William M. Fletcher, Fletcher Cyclopedia of the Law of
Corporations § 2456 (Sept. 2019 update).
In her first amended complaint, Reilly acknowledges that she
obtained a “mortgage” from World Savings. For this reason, she does not
deny executing the note and deed of trust in favor of World Savings.
Rather, she challenges Wells Fargo’s interest in these documents. But Wells
Fargo has provided a clear and indisputable line of succession from World
Savings to Wachovia, and then to Wells Fargo – without the need for any
formal assignment of assets from either World Savings or Wachovia to
Wells Fargo. Accordingly, to the extent Reilly relies on the absence of a
perfected assignment of deed of trust to support her claim for relief against
Wells Fargo, her claim for relief is devoid of merit.
13
2. Effect Of Reilly’s Chapter 7 Discharge On Wells Fargo’s Lien.
Alternately, Reilly contends that, as result of the discharge she
received in her chapter 7 bankruptcy, the lien on her residence was
extinguished.5 To support her contention, Reilly relies on Johnson v. Home
State Bank, 501 U.S. 78 (1991). But Reilly’s reliance on Johnson is misplaced.
Johnson held that the chapter 7 discharge extinguishes the debtor’s personal
liability for the underlying debt, but the creditor’s rights under the
mortgage or deed of trust against the collateral securing the debt survive
and pass through bankruptcy. Id. at 82-83.
Indeed, Johnson is directly on point against Reilly. In Johnson, the
debtor had, similar to Reilly, received a chapter 7 discharge. The Supreme
Court was confronted with the question of whether the secured creditor’s
lien rights survived the discharge and, if so, whether those lien rights
constituted a “claim” that could be scheduled and adjusted in the debtor’s
subsequent chapter 13 bankruptcy case. Id. at 80-81. The Supreme Court
5
Reilly further asserts that she asked Wells Fargo in 2011 to enter into a
reaffirmation agreement with her, but Wells Fargo refused. Essentially, Reilly seems to
believe that Wells Fargo’s lien against her residence only could have survived her 2011
chapter 7 discharge if a reaffirmation agreement had been entered into. This is not
correct. “Since liens ordinarily survive bankruptcy regardless of reaffirmation, the
reaffirmation of a secured debt has the main effect of preserving the debtor’s personal
liability for the debt.” In re Roderick, 425 B.R. 556, 563 (Bankr. E.D. Cal. 2010). While we
agree that Reilly’s personal liability to Wells Fargo was discharged in her first
bankruptcy, the existence or absence of a reaffirmation agreement under § 524(c) does
not affect the survival of the lien.
14
held that the secured creditor’s lien rights survived the chapter 7 discharge
and that those lien rights constituted a “claim” for bankruptcy purposes
that was subject to adjustment in the subsequent chapter 13. Id. at 84-87. In
so holding, Johnson explained that the “bankruptcy discharge
extinguishe[d] only one mode of enforcing a claim—namely, an action
against the debtor in personam—while leaving intact another—namely, an
action against the debtor in rem.” Id. at 84.
In short, Reilly’s argument that Wells Fargo’s lien was extinguished
when she received her prior chapter 7 discharge has no merit. The
argument is based on her misreading of Johnson, which actually held that
the lien survives the discharge of the underlying debt.
C. Reilly’s Other Arguments.
Most of Reilly’s other arguments on appeal are procedural in nature
and have little or nothing to do with the substantive legal theories she
asserted in her complaint, which theories all sought to invalidate Wells
Fargo’s lien. She asserts that the bankruptcy court should have granted her
motion for judgment on the pleadings and her motion to strike Wells
Fargo’s second motion dismiss. As Reilly reasons, the bankruptcy court
should have granted her motions for two reasons: (1) Wells Fargo’s second
motion to dismiss constituted an impermissible successive motion to
dismiss in contravention of Civil Rule 12(g)(2); and (2) the second motion
to dismiss was untimely.
15
Neither of these reasons is well founded. When Reilly filed her first
amended complaint, Well Fargo needed to – and was entitled to – respond
to it. See Civil Rule 15(a)(3); see also Virginia A. Phillips, et al., Rutter Group
Prac. Guide: Fed. Civ. P. Before Trial ¶ 6:22 (Apr. 2019 Update) (“Rutter
Group”) (“If plaintiff amends the complaint, defendant must respond to
the amended complaint (unless the court allows the original answer to
stand as answer to the amended complaint).”). Under Civil Rules 12(g)(2)
and (h)(1), a defendant may forfeit a defense under Civil Rules 12(b)(2)-(5)
if it was available but not raised in the defendant’s first motion to dismiss.
See Schnabel v. Lui, 302 F.3d 1023, 1034 (9th Cir. 2002); see also Rutter Group
at ¶ 9:25.10 (“The filing of an amended complaint does not revive the right
to present defenses waived prior to the amendment if such defenses were
available prior to the amendment.”).
Reilly filed her first amended complaint rather than oppose the
original motion to dismiss. As a result, the court never ruled upon the
original motion. Wells Fargo had the right to respond to the first amended
complaint under Civil Rule 15(a)(3). It filed the second motion to dismiss
after the first amended complaint mooted the original motion. The second
motion to dismiss largely incorporated the original motion. In this regard,
Wells Fargo did not seek to litigate successive motions but to have its
original defenses decided for the first time. We thus reject Reilly’s
argument based on Civil Rule 12(g).
16
As for Reilly’s timeliness argument, she correctly points out that
Wells Fargo did not timely file its second motion to dismiss. It was not filed
within either fourteen days after service of Reilly’s first amended
complaint, or within the time to respond to Reilly’s original complaint. See
Civil Rule 15(a)(3). Even so, this does not mean that Wells Fargo thereafter
was prohibited from filing its second motion to dismiss. If Reilly sought to
prohibit Well Fargo from responding to her first amended complaint, her
recourse was to seek entry of default. See Civil Rule 55; see also Rutter
Group at ¶ 6:42 (“Entry of a defendant's default cuts off his or her right to
appear in the action or to present evidence.”). But Reilly did not do so. As a
result, Wells Fargo permissibly filed its belated second motion to dismiss,
and the bankruptcy court was not obliged to strike it based on Reilly’s
untimeliness argument. See Sugarfina, Inc. v. Sweet Pete's LLC, Case No.
17-CV-4456-RSWL-JEM, 2017 WL 4271133, at *3 (C.D. Cal. Sept. 25, 2017)
(holding that default cannot be entered after defendant has a filed a Civil
Rule 12(b)(6) motion to dismiss shortly after the deadline for responsive
pleadings); Aguilera v. Bigham, Case No. 2:15-cv-1781-KJM-EFB PS, 2016 WL
4540834, at *1 (E.D. Cal. Aug. 30, 2016) (same).
Accordingly, Reilly has not demonstrated that the bankruptcy court
committed reversible error when it denied her motion for judgment on the
pleadings and her motion to strike Wells Fargo’s second motion to dismiss.
Reilly next argues that the bankruptcy court should have held an
17
evidentiary hearing and should have required Wells Fargo to authenticate
the documents attached to its proof of claim. In support of these
arguments, Reilly invokes Rule 3001 and Evidence Rule 901(a).6 Rule 3001
specifies the form and content required for filing a proof of claim. Among
other things, this Rule provides that claims based on a writing should
include a copy of that writing or writings. Rule 3001(c)(1). Under Rule 3001,
a claimant also must submit additional information when the claim asserts
a security interest in the debtor’s principal residence. See Rule 3001(c)(2)(C);
Official Form B410.
On its face, Wells Fargo’s Proof of Claim satisfies the form and
content requirements set forth in Rule 3001. Consequently, Wells Fargo
was entitled to the presumption of prima facie validity of its claim in the
amount stated. Rule 3001(f). Therefore, if the bankruptcy court had held a
claim objection evidentiary hearing, Reilly would have needed to present
evidence “show[ing] facts tending to defeat the claim by probative force
equal to that of the allegations of the proofs of claim themselves.” Lundell v.
Anchor Const. Specialists, Inc., 223 F.3d 1035, 1039 (9th Cir. 2000). In this
instance, Reilly’s first amended complaint did not allege facts that, even if
accepted as true, would have been sufficient to overcome the presumption
6
Reilly actually cited Evidence Rule 902, which governs self-authenticating
documents. Instead of Evidence Rule 902, Reilly presumably meant to invoke Evidence
Rule 901(a), which sets forth the general authentication requirement for documentary
evidence.
18
of the validity of Wells Fargo’s claim.
As for Evidence Rule 901(a), it provides that a proponent of
documentary evidence generally must “produce evidence sufficient to
support a finding that the item is what the proponent claims it is.”
Reilly has not cited any authority indicating why either of these rules
pertain to a Civil Rule 12(b)(6) motion to dismiss. Nor are we aware of any
such authority. Indeed, other than matters properly subject to judicial
notice, evidence plays no role in the resolution of a motion to dismiss
because such motions examine only the sufficiency of allegations and legal
theories set forth in the complaint. They do not involve the presentation of,
or objections to, evidence. See Johnson v. Riverside Healthcare Sys., LP, 534
F.3d at 1121-22.
Put differently, there was no need for the bankruptcy court to hold an
evidentiary hearing or to require Wells Fargo to authenticate either the
OCC certificate of merger or the OTS letter regarding World Savings’ name
change. Those documents and their contents reflected official acts of the
executive branch of the United States and as such the bankruptcy court
properly took judicial notice of the truth of those matters. Graybill, 953 F.
Supp. 2d at 1093 n.2; Ferguson, 2013 WL 504709, at *2. Similarly, the duly
recorded deed of trust that Reilly executed in favor of World Savings is
part of the official records of Coconino County, is properly subject to
judicial notice, and the bankruptcy court properly took judicial notice of
19
that matter as well. See Graybill, 953 F. Supp. 2d at 1093 n.2 (taking judicial
notice of recorded deed of trust); Perez, 2012 WL 12920635, at *2 (same).
In short, neither Reilly's authentication argument nor her evidentiary
hearing argument justify reversal of the order granting Wells Fargo's
motion to dismiss.
Finally, Reilly claims that the bankruptcy court should have granted
her leave to amend. “‘Dismissal without leave to amend is improper,
unless it is clear, upon de novo review, that the complaint could not be
saved by any amendment.’” IntriPlex Techs., Inc. v. Crest Grp., Inc., 499 F.3d
1048, 1056 (9th Cir. 2007) (quoting Sparling v. Daou (In re Daou Sys.), 411
F.3d 1006, 1013 (9th Cir. 2005)). When, as here, the plaintiff is not
represented by counsel, the pro se litigant must be afforded an opportunity
to amend “unless it is clear the deficiencies cannot be cured by
amendment.” McGuckin v. Smith, 974 F.2d 1050, 1057 & n.6 (9th Cir. 1992),
overruled on other grounds by WICKAM Technologies, Inc. v. Miller, 104 F.3d
1133, 1136 (9th Cir. 1997).
Here, there was nothing Reilly could have alleged, consistent with
her existing legal theories and factual allegations, that would have cured
the fatal defects we have identified above. “In determining whether
amendment would be futile, the court examines whether the complaint
could be amended to cure the defect requiring dismissal ‘without
contradicting any of the allegations of [the] original complaint.’” Cady v.
20
Anthem Blue Cross Life & Health Ins. Co., 583 F. Supp. 2d 1102, 1105 (N.D.
Cal. 2008) (quoting Reddy, 912 F.2d at 296). Given the establishment of
Wells Fargo’s interest in the recorded deed of trust, and the well
established rule that liens survive discharge within bankruptcy, Reilly
could not assert any set of facts to cure these deficiencies. Thus, the
bankruptcy court did not abuse its discretion when it dismissed Reilly’s
first amended complaint without leave to amend.
Reilly also appealed from the bankruptcy court’s order denying her
motion for reconsideration under Rule 9023, which incorporates Civil Rule
59(e). Even though Reilly’s appeal brief did not make any arguments with
respect to the denial of this motion, we have reviewed Reilly’s
reconsideration motion. In large part, it merely reiterated the positions she
took in all of her other papers and motions that she filed in response to
Wells Fargo’s second motion to dismiss. Under these circumstances, the
bankruptcy court did not commit reversible error when it denied the
reconsideration motion. A Rule 9023 motion should not be used to
relitigate matters already decided. In re Upland Partners, Case No. 97-03746,
2005 WL 3964426, at *1 (Bankr. D. Haw. Dec. 15, 2005); see also In re Mannie,
299 B.R. 603, 608 (Bankr. N.D. Cal. 2003) (“A motion to reconsider should
not be used to ask the court to rethink what the court had already thought
through—rightly or wrongly —or to reiterate arguments previously
raised”) (citations and internal quotations omitted) .
21
CONCLUSION
For the reasons set forth above, we AFFIRM the bankruptcy court’s
order dismissing Reilly’s first amended complaint without leave to amend,
and its order denying Reilly’s reconsideration motion.
22