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Whitty v. First Nationwide Mortgage Corp.

December 1, 2006

FRANK WHITTY AND TAZU H WHITTY, PLAINTIFFS,
v.
FIRST NATIONWIDE MORTGAGE CORPORATION, CITIMORTGAGE INC., CITIGROUP INC., WILLIAM WHEELER, KRAWCHECK, AND DOES 1 THROUGH 80, DEFENDANTS.



The opinion of the court was delivered by: Marilyn L. Huff, District Judge United States District Court

ORDER GRANTING DEFENDANT JP MORGAN CHASE BANK N.A.'s MOTION TO DISMISS AND DENYING WITHOUT PREJUDICE DEFENDANT JP MORGAN CHASE BANK N.A.'s MOTION CORPORATION, CITIMORTGAGE TO STRIKE PRAYER FOR CHASE PUNITIVE DAMAGES MANHATTAN BANK, N.Y., SALLIE [Doc. Nos. 33 & 35]

On May 11, 2005, pro se Plaintiffs Frank and Tazu Whitty ("Plaintiffs") brought this suit alleging twenty-five causes of action arising from the foreclosure of their real property located at 13992 Putney Road in Poway, California ("the property"), the adverse judgment in state court case Whitty v. First Nationwide Mortgage Corp., et al., San Diego Superior Court Case Number GIC789369 ("the state suit"), and numerous bankruptcy proceedings. (Doc. No. 1.) On August 22, 2006, Plaintiffs filed a Second Amended Complaint ("SAC") alleging fifteen causes of action against Defendants Chase Manhattan Bank N.Y., First Nationwide Mortgage Corporation ("FNMC"), CitiMortgage Inc. ("CMI"), CitiGroup Inc. ("CGI"), Sallie Krawcheck, William Wheeler, and Does 1-80. (Doc. No. 24.) On October 27, 2006, Defendant JP Morgan Chase Bank N.A., f/k/a The Chase Manhattan Bank, sued as Chase Manhattan Bank N.Y. ("Chase") filed a motion to dismiss for failure to state a claim upon which relief may be granted, (Doc. No. 35), and a motion to strike Plaintiffs' prayer for improperly asserted punitive damages. (Doc. No. 33.) On November 13, 2006, Defendants FNMC, CMI, CGI, Sallie Krawcheck, and William Wheeler filed a notice of non-opposition to Chase's motion to dismiss. (Doc. No. 43.) Plaintiffs did not file an opposition to Chase's motion to dismiss or motion to strike prayer for punitive damages. According to Defendants FNMC, CMI, CGI, Sallie Krawcheck, and William Wheeler, Plaintiff Frank Whitty is a law school graduate and candidate for admission to the State Bar of California. (Doc. No. 38, at 3.)

This matter is submitted on the papers pursuant to Local Civil Rule 7.1(d)(1). For the following reasons, the Court GRANTS WITH PREJUDICE Chase's motion to dismiss Plaintiffs' claims for intentional interference with prospective economic advantage (claim one), negligence (claim three), wire fraud (claim four), mail fraud (claim five), interference with contract (claim six), fraud on the court (claim eleven), contempt of federal bankruptcy orders (claim twelve), interference with a court trial (claim thirteen), fixing the outcome of a trial (claim fourteen), and wrongful prevention (claim fifteen). The Court GRANTS WITHOUT PREJUDICE Chase's motion to dismiss Plaintiffs' claims for fraud (claim two), breach of contract (claim seven), conversion (claim eight), unfair business practices (claim nine), and breach of the covenant of good faith and fair dealing (claim ten). The Court GRANTS Plaintiffs 30 days from the date this order is stamped "filed" to file an amended complaint correcting the deficiencies of the SAC as to the claims dismissed without prejudice.

The Court DENIES WITHOUT PREJUDICE Chase's motion to strike Plaintiffs' prayer for punitive damages as MOOT.

Background

In 1992, Plaintiffs obtained a $385,000 loan from Beverly Hills Financial, secured by the property. (SAC ¶¶ 9-10.) Beverly Hills Financial was purchased by Texas Commerce Bank in 1993, and thereafter Plaintiffs' loan was serviced by Lomas Mortgage Corporation ("Lomas") from 1993 to 1996. (Id. ¶ 10.) Lomas initiated foreclosure proceedings against the property in February 1994, alleging that Plaintiffs were in default. (Id. ¶¶ 11-12.) Plaintiffs filed bankruptcy on June 10, 1994, in order to prevent the foreclosure. (Id. ¶¶ 15-16.) In early 1996, Plaintiffs were informed that FNMC had taken over servicing Plaintiffs' loan for Chase, the new loan owner. (Id. ¶ 20.)

On September 27, 1997, Plaintiffs converted their chapter 11 bankruptcy suit to a chapter 13 suit. (Id. ¶ 23.) On July 8, 1998, the bankruptcy court issued an order limiting the arrearage to $47,602.23 as of September 1997. (Id. ¶¶ 24-25.) On April 17, 2001, Plaintiffs voluntarily dismissed their bankruptcy case, case number 96-10478. (Id. ¶ 41.)

On June 19, 2001, FNMC filed another foreclosure against the property. (Id. ¶ 42.) The property was sold at foreclosure to a third party on June 3, 2002 for $516,285.49. (Id. ¶¶ 45-47.)

On May 29, 2002, Plaintiffs filed suit against Chase and others in the state suit. (Chase's Request For Judicial Notice, Exh. 1, at 1.) On May 3, 2004, the day the state suit was to begin, the court dismissed Chase as a party to the state suit. (Id. at 6.) On June 8, 2004, Plaintiffs received the final, adverse judgment in the state suit. (Id.)

Discussion

A. Request For Judicial Notice

Attached to their motion to dismiss, Chase submitted a request that the Court take judicial notice of a copy of the court docket from Whitty v. First Nationwide Mortgage Corp. et. al, San Diego Superior Court Case Number GIC789369. Federal courts may take judicial notice of other courts' proceedings, within the federal judiciary and without, if the proceedings directly relate to the matters before the court. See U.S. ex rel. Robinson Rancheria Citizens Council v. Borneo, Inc., 971 F.2d 244, 248 (9th Cir. 1992). Accordingly, the Court takes judicial notice of the requested record.

B. Motion To Dismiss

Chase has moved to dismiss Plaintiffs' entire suit against them under Rule 12(b)(6) of the Federal Rules of Civil Procedure for failure to state a claim upon which relief can be granted. Rule 12(b)(6) permits dismissal of a claim either where that claim lacks a cognizable legal theory, or where insufficient facts are alleged to support plaintiff's theory. See Balistreri v. Pacifica Police Dept., 901 F.2d 696, 699 (9th Cir. 1990). In considering the sufficiency of a complaint under Rule 12(b)(6), courts cannot grant a motion to dismiss "unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Id. (citing Conley v. Gibson, 355 U.S. 41, 45-46 (1957)). In resolving a Rule 12(b)(6) motion, the court must: (1) construe the complaint in the light most favorable to the plaintiff; (2) accept all well-pleaded factual allegations as true; and (3) determine whether plaintiff can prove any set of facts to support a claim that would merit relief. See Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336, 337--338 (9th Cir. 1996).

Dismissal is proper, however, if a complaint is vague, conclusory, and fails to set forth any material facts in support of the allegation. See North Star Intern. v. Arizona Corp. Com'n, 720 F.2d 578, 583 (9th Cir. 1983). Furthermore, a court may not "supply essential elements of the claim that were not initially pled." Ivey v. Bd. of Regents of the Univ. of Alaska, 673 F.2d 266, 268 (9th Cir. 1982). If a complaint is found to fail to state a claim, the court should grant leave to amend unless it determines that the pleading could not possibly be cured by the allegation of other facts. See Doe v. United States, 58 F.3d 494, 497 (9th Cir.1995).

1. Sufficiency Of Alleged Facts Of The Intentional Interference With Prospective Economic Advantage And Intentional Interference With Contract Claims

The elements of Plaintiffs' first cause of action, intentional interference with prospective economic advantage, are:

(1) an economic relationship between the plaintiff and some third party, with the probability of future economic benefit to the plaintiff;

(2) the defendant's knowledge of the relationship;

(3) intentional acts on the part of the defendant designed to ...


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