United States District Court, D. Utah, Central Division
MEMORANDUM DECISION AND ORDER GRANTING
DEFENDANT'S MOTION TO DISMISS
A. KIMBALL, UNITED STATES DISTRICT JUDGE.
matter is before the court on Defendant MSNI Benefit
LLC's (MSNI) Motion to Dismiss. On September 13, 2017,
the court held a hearing on the motion. At the hearing, the
Plaintiff Dan Kitches (Kitches) was represented by Brett W.
Hastings and MSNI was represented by Hillary R. McCormack.
The court took the motion under advisement. Based on the
briefing filed by the parties and the law and facts relevant
to the pending motion, the court issues the following
Memorandum Decision and Order GRANTING MSNI's Motion to
about August 2007, Kitches obtained a loan from JPMorgan
Chase Bank on his personal residence. The note was assigned
multiple times and is now owned by MSNI. The note is
subordinate to a first position promissory note held by a
party that is undisclosed and not subject to this case. The
Note is secured by a Trust Deed on Kitches' personal
May 2008, Kitches failed to make payments on both the first
and second position promissory notes. Shortly thereafter, the
holder of the first position promissory note commenced
foreclosure proceedings and gave notice to Kitches that a
sale was scheduled on May 29, 2009. The sale was subsequently
canceled because the first priority promissory note was
restructured through the Home Affordable Modification
has not made payments on the subordinate note since May 2008.
On or about July 5, 2016, Kitches received a letter from
Lunberg & Associates law firm notifying Kitches that he
is in default on the second position promissory note and must
pay $236, 917.95 to MSNI to cure the default.
refused to cure the default because he claims that the six
year statute of limitations for collecting on the debt has
expired. Lundberg responded by asserting that the statute of
limitations did not commence until the loan was accelerated
pursuant to its July 5, 2016 letter.
Trust Deed states that the Trustor is in default if he does
not meet the repayment terms, and the Lender has the right,
at its option, to declare the entire indebtedness immediately
due and payable. The Note provides that the maturity date on
the principal amount of $235, 000 is August 17, 2037.
September 16, 2016, MSNI recorded a notice of Default and
Election to Sell in the Salt Lake County Recorder's
Office. The Notice of Default states, “The monthly
payment obligation set forth in the promissory note is in
default. All delinquent monthly payments, together with all
unpaid taxes, insurance and other obligations under the
promissory note and trust deed are due. Under the provisions
of the promissory note and trust deed, the unpaid principal
balance is accelerated and now due, together with accruing
interest, late charges, costs, and trustees' and
argues that the statute of limitations has passed and
therefore his complaint seeks: 1. A temporary restraining
order enjoining the sale of the property that was previously
scheduled on April 14, 2017; 2. Declaratory relief to quiet
title; and 3. An award of damages, including attorneys'
is appropriate under Rule 12(b)(6) of the Federal Rules of
Civil Procedure when the complaint, standing alone, is
legally insufficient to state a claim on which relief may be
granted. Sutton v. Utah State Sch. For the Deaf &
Blind, 173 F.3d 1226, 1236 (10th Cir. 1999). When
considering a motion to dismiss for failure to state a claim,
all well-pleaded facts are presumed to be true, but
conclusory allegations need not be considered. Cory v.
Allstate Ins., 583 F.3d 1240, 1244 (10th Cir. 2009).
filed this motion to dismiss asserting it has a legal right
to foreclose on the property because the statute of
limitations has not expired. Kitches contends that the
statute of limitations expired pursuant to Utah Code Ann.
§ 78B-2-309(2) which holds “An action may be
brought within six years upon any contract, obligation, or
liability founded upon an instrument in writing.” Utah
Code Ann. § 57-1-34 further provides that “[a]
person shall, within the period prescribed by law for the
commencement of an action on an obligation secured by a trust
deed: (1) commence an action to foreclose the trust deed; or
(2) file for record a notice of default under Section