Van Leeuwen v. Bank of America NA
2016 UT App 212
| Utah Ct. App. | 2016Background
- In 2005 Van Leeuwen executed a deed of trust naming MERS as beneficiary and later defaulted on the loan.
- In 2010 Van Leeuwen sued (2010 Complaint) alleging MERS lacked standing to foreclose because it did not own the note; that action was removed to federal court and dismissed with prejudice.
- In 2015 Van Leeuwen filed a new complaint (2015 Complaint) against Bank of America (BANA) seeking a declaratory judgment that BANA was only a servicer (not owner) based on a 2011 compliance letter stating BANA did not own the loan.
- Van Leeuwen sought injunctive relief to prevent foreclosure and a declaration of the parties’ rights regarding the loan owner/servicer relationship.
- BANA moved to dismiss under Utah R. Civ. P. 12(b)(6), asserting res judicata based on the 2010 dismissal; the district court granted dismissal on that ground without detailed analysis.
- The Utah Court of Appeals reversed, holding it was not clear the 2015 claims were the same transactional claims as the 2010 action and remanded for further proceedings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the 2015 action is barred by claim preclusion (res judicata) | Van Leeuwen: 2015 claims arise from distinct facts — BANA’s servicer/owner status (based on a 2011 letter) was not and could not have been litigated in 2010 | BANA: 2010 dismissal precludes relitigation; claims arise from same loan/property and should have been raised earlier | Reversed dismissal — appellate court finds it not clear the 2015 claims were the same transaction and that they could/must have been raised in 2010; remand for further proceedings |
| Whether the 2015 complaint states a claim for declaratory/injunctive relief based on servicer vs owner status | Van Leeuwen: the compliance letter created a justiciable controversy about ownership and standing to foreclose | BANA: Utah foreclosure law and UCC principles may allow non-owner enforcement; ownership label is irrelevant to foreclosure | Court did not decide on the merits; noted legal effect is unclear and reserved merits for district court on remand |
| Appropriateness of 12(b)(6) dismissal without detailed analysis | Van Leeuwen: dismissal was premature given factual/transactional differences between suits | BANA: prior dismissal justified summary reliance on res judicata | Court: 12(b)(6) dismissal reversed because record did not clearly show claim preclusion elements; factual/privity inquiries needed |
| Whether the transactional test bars new claims that became factually available after prior suit | Van Leeuwen: post-2010 events (the 2011 letter and servicer change) created new claims not ripe in 2010 | BANA: claims were related to same loan and should have been raised earlier | Court: transactional test does not automatically bar claims that arise from a different nucleus of operative facts; plaintiff’s arguments plausible — remand required |
Key Cases Cited
- Capri Sunshine, LLC v. E & C Fox Invs., LLC, 366 P.3d 1214 (Utah Ct. App. 2015) (standard for reviewing 12(b)(6) dismissal)
- Mack v. Division of Securities, 221 P.3d 194 (Utah 2009) (res judicata is a question of law reviewed for correctness)
- Macris & Assocs., Inc. v. Neways, Inc., 16 P.3d 1214 (Utah 2000) (explains claim and issue preclusion and elements for claim preclusion)
- Gillmor v. Family Link, LLC, 284 P.3d 622 (Utah 2012) (endorses transactional test for claim preclusion)
- Commonwealth Prop. Advocates, LLC v. Mortgage Elec. Registration Sys., Inc., 263 P.3d 397 (Utah Ct. App. 2011) (addresses repeated MERS standing challenges)
- Mitchell v. ReconTrust Co. NA, 373 P.3d 189 (Utah Ct. App. 2016) (discusses standing and procedural dismissal of MERS-related claims)