Ellis v. PennyMac Loan Services LLC

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WO
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF ARIZONA
Darrell Beauford Ellis,
Plaintiff,
v.
PennyMac Loan Services LLC,
Defendant.
No. CV-25-00677-TUC-JGZ
ORDER
On December 8, 2025, pro se Plaintiff Darrell Beauford Ellis filed a Complaint.
(Doc. 1.) Plaintiff has paid the filing fee and served Defendant. (Docs. 2, 3, 4.) Upon
review of Plaintiff’s Complaint, the Court concludes it lacks jurisdiction and must
dismiss the Complaint.
I. 	Plaintiff’s Complaint
Plaintiff brings this action challenging the accuracy and validity of various
mortgage-related documents associated with his home loan. Plaintiff alleges that he
originally executed a Promissory Note naming Wyndham Capital Mortgage, Inc. as the
lender, and that the Note contains no endorsements, allonges, or markings indicating that
it was ever negotiated or transferred to any other entity. (Doc. 1 ¶ 11.) Plaintiff likewise
executed a Deed of Trust listing Wyndham Capital Mortgage, Inc. as beneficiary, and
alleges that county land records reflect no Assignment of Deed of Trust at any point after
origination. (Id. at ¶ 12.)
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Plaintiff later entered into a Loan Modification Agreement identifying PennyMac
Loan Services, LLC as “Lender,” despite the absence of any documentation showing that
PennyMac acquired the Note or beneficial interest in the Deed of Trust. (Id. at ¶ 13.)
Plaintiff states that after reviewing the Note, Deed of Trust, modified loan documents,
and publicly available land records, he observed inconsistencies relating to the identity of
the lender, beneficiary, servicer, and any party asserting ownership or enforcement rights
under the loan. (Id. at ¶ 14.)
Plaintiff relies in part on the Office of the Comptroller of the Currency (“OCC”)
Asset Securitization Manual, which he states describes documentation standards for
mortgage transfers and securitizations. (Id. at ¶¶ 15–19.) Plaintiff compares the OCC
standards to a third-party “Mortgage Audit” he obtained, which allegedly identifies
several contradictions and “document gaps” relating to his loan. According to Plaintiff,
the audit concludes that the Note was associated with “Ginnie Mae REMIC Trust 2021-
116,” 	although 	neither 	the 	Note 	nor 	the 	Deed 	of 	Trust 	reflects 	endorsements 	or
assignments supporting such a transfer. (Id. at ¶¶ 21–24.)
The Complaint further alleges discrepancies between county land records and the
MERS system, asserting that the MERS database lists an investor and servicer that do not
correspond to recorded instruments. (Id. at ¶ 26.) Plaintiff states that no custodial records,
loan schedules, or transfer receipts exist to document conveyance of the Note into any
trust, including the Ginnie Mae REMIC trust identified in the audit. (Id. at ¶¶ 27–28.)
Plaintiff summarizes these issues as demonstrating the absence of a verifiable
chain of title connecting the original lender to any entity presently claiming rights under
the loan. (Id. at ¶¶ 29–33.) He further asserts that public land records, securitization data,
and servicing records identify different entities in key roles without any documentation
establishing how or when those entities acquired an interest in the Note or Deed of Trust.
(Id. at ¶¶ 34–39.) Based on these alleged contradictions, Plaintiff brings claims for
declaratory relief, cancellation of instruments, and injunctive relief. (Id. at ¶¶ 40–52.) He
seeks a judicial declaration identifying the entity legally entitled to enforce the Note and
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Deed of Trust; cancellation of any instruments he believes to be unsupported by a valid
chain of title; and an injunction preventing PennyMac from enforcing the loan until these
issues are resolved. (Id. at ¶ 52.)
Federal courts are courts of limited jurisdiction and may only adjudicate those
cases over which they have subject matter jurisdiction—cases involving diversity of
citizenship or a federal question. Kokkonen v. Guardian Life Ins. Co. of America, 511
U.S. 375 (1994). Where there is neither diversity nor an alleged violation of federal law,
this Court has no jurisdiction and must dismiss the action. See Fed. R. Civ. P. 12(h)(3)
(“If the court determines at any time that it lacks subject-matter jurisdiction, the court
must dismiss the action.”). “[C]ourts have an independent obligation to determine
whether subject matter jurisdiction exists, even in the absence of a challenge from any
party.” Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574, 583 (1999).
Here, Plaintiff fails to allege any facts establishing federal question jurisdiction.
Although 	he 	cites 	the 	Declaratory 	Judgment 	Act, 	that 	Act 	does 	not 	itself 	confer
jurisdiction. See Staacke v. U.S. Sec’y of Lab., 841 F.2d 278, 280 (9th Cir. 1988). The
Complaint does not identify any federal statute or constitutional provision that Defendant
is alleged to have violated, and Plaintiff’s references to OCC guidelines and MERS data
do not create a private right of action or independently establish federal question
jurisdiction. See Save Our Valley v. Sound Transit, 335 F.3d 932, 939 (9th Cir. 2003);
Cervantes v. Countrywide Home Loans, Inc., 656 F.3d 1034, 1043–44 (9th Cir. 2011).
Plaintiff also does not allege when the inconsistencies occurred, how they caused him
injury, or what conduct by Defendant created a justiciable federal controversy.
Plaintiff also fails to establish diversity jurisdiction. Although he alleges that he
resides in Arizona and that PennyMac Loan Services, LLC has its principal place of
business in California (Doc. 1 at ¶¶ 8–9), an LLC’s citizenship is determined by the
citizenship of each of its members. Johnson v. Columbia Props. Anchorage, LP, 437 F.3d
894, 899 (9th Cir. 2006). Plaintiff does not identify the citizenship of any of PennyMac’s
members, nor does he allege the amount in controversy as required by 28 U.S.C. §
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1332(a). Without these allegations, the Court cannot conclude that diversity jurisdiction
exists.
II. 	Filing an Amended Complaint
Within 	30 	days, 	Plaintiff 	may 	submit 	an 	amended 	complaint 	to 	cure 	the
deficiencies outlined above. The court-approved general civil complaint form is attached
to this Order and available on the Court website (the form is titled “Complaint for a Civil
Case”). Alternatively, Plaintiff may use the Court’s “Create a New Complaint: Electronic
Pro 	Se 	(E-Pro 	Se) 	Program” 	available 	on 	the 	Court’s 	website 	at
https://publicapps.azd.uscourts.gov/eprose or seek assistance from Step Up to Justice, a
free legal clinic.1
Plaintiff must clearly designate on the face of the document that it is the “first
amended complaint.” 	The first amended complaint must be retyped or rewritten in its
entirety on the court-approved form or by using the E-Pro Se online program, and may
not incorporate any part of the original Complaint by reference. 	Plaintiff may include
only one claim per count.
In an amended complaint, Plaintiff must allege a cognizable legal theory, identify
the statutory or constitutional basis for each cause of action, state facts showing each
defendant’s involvement in the wrongful acts alleged, and explain how the alleged
documentary inconsistencies give rise to a claim within the Court’s jurisdiction. As
currently drafted, the Complaint does not provide sufficient factual detail to determine
who took what actions, when those actions occurred, or whether the asserted claims are
properly before the Court.
1 	The 	Clerk 	of 	Court 	sent 	Plaintiff 	the 	Notice 	to 	Pro-Se 	Non-Prisoner 	Parties
Representing Themselves, the Court’s Notice to Self-Represented Litigant, and the Step
Up to Justice flyer for Free Civil Legal Help. 	(Doc. 3.) 	The Plaintiff is advised the
resources available to self-represented parties are listed on the District Court website:
https://www.azd.uscourts.gov/proceeding-without-attorney-0. 	That 	webpage 	also
contains 	A 	Handbook 	for 	Self-Represented 	Litigants,
https://publicapps.azd.uscourts.gov/prose-survey/, as well as the Federal Rules of Civil
Procedure and Local Rules of Practice for the District of Arizona (also known as the
Local Rules of Civil Procedure, or LRCiv).
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In 	addition 	to 	alleging 	facts 	to 	support 	federal 	jurisdiction, 	the 	Amended
Complaint must comport with Rule 8 of the Federal Rules of Civil Procedure which
provides that the pleading shall contain “a short and plain statement of the claim showing
that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). The purpose of Rule 8 is to
prevent vague and ambiguous claims and ensure that defendants will be able to frame a
responsive pleading.
In drafting the Amended Complaint, the Plaintiff must include sufficient factual
details so that this Court can determine each claim existing against each Defendant. The
Plaintiff must refer by name to particular Defendants, whenever possible, in the body of
the Amended Complaint, so that it is possible to determine which Defendant is being
charged with responsibility for each particular grievance. 	See Jackson v. Nelson, 405
F.2d 872, 873 (9th Cir. 1968).
Plaintiff’s “obligation to provide the grounds of his entitlement to relief requires
more than labels and conclusions, and a formulaic recitation of the elements of a cause of
action will not do.” 	Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). 	At the
pleading stage, the Plaintiff must allege enough facts, if taken as true, to suggest that a
claim exists. 	This does not impose a probability requirement at the pleading stage, it
simply calls for enough facts to raise a reasonable expectation that discovery will reveal
evidence to support the claim. 	Id. at 555–556. “[F]actual allegations must be enough to
raise a right to relief above the speculative level, . . . on the assumption that all the
allegations in the complaint are true even if doubtful in fact.” Id.
A first amended complaint supersedes the original Complaint. Ferdik v. Bonzelet,
963 F.2d 1258, 1262 (9th Cir. 1992), as amended (May 22, 1992); Hal Roach Studios,
Inc. v. Richard Feiner & Co., 896 F.2d 1542, 1546 (9th Cir. 1989). 	After amendment,
the Court will treat the original Complaint as nonexistent. See Ferdik, 963 F.2d at 1262.
III. 	Warnings
Address Changes
If Plaintiff moves residences, he must file a notice of a change of address in
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accordance with Rule 83.3(d) of the Local Rules of Civil Procedure. 	Plaintiff must not
include a motion for other relief with a notice of change of address. 	Failure to comply
may result in dismissal of this action.
Possible Dismissal
If Plaintiff fails to timely comply with every provision of this Order, including
these warnings, the Court may dismiss this action without further notice. See Ferdik, 963
F.2d at 1260–61 (a district court may dismiss an action for failure to comply with any
order of the Court).
Accordingly,
IT IS ORDERED:
(1) the Complaint (Doc. 1) is dismissed sua sponte.
(2) 	Plaintiff has 30 days from the date this Order is filed to file a first amended
complaint in compliance with this Order.
(3) If Plaintiff fails to file an amended complaint within 30 days, the Clerk of
Court must, without further notice, enter a judgment of dismissal of this action
with prejudice and deny any pending unrelated motions as moot.
Dated this 15th day of December, 2025.
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