The opinion of the court was delivered by: M. James Lorenz United States District Court Judge
ORDER GRANTING MOTION TO DISMISS; DENYING AS MOOT MOTION FOR MORE DEFINITE STATEMENT and GRANTING LEAVE TO AMEND [doc. #5]
Plaintiffs, who are represented by counsel, filed this action in the Superior Court of California, County of San Diego on October 10, 2008. Defendant Citibank, N.A. as Trustee for the Holders of BSABS 2007-SD3 ("Citibank") timely removed this action. Plaintiffs have asserted claims under the Truth in Lending Act ("TILA"), 15 U.S.C. § 1601; the Home Ownership and Equity Protection Act ("HOEPA"), 15 U.S.C. § 1639; Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692 et seq.; the Real Estate Settlement Procedures Act ("RESPA"), 12 U.S.C. § 2614 and RICO.
Defendant moves to dismiss the case under Federal Rule of Civil Procedure 12(b)(6) or alternatively for a more definite statement [doc. #5]. The Court notes that under the Civil Local Rules, plaintiffs' response to defendant's motion was due on or before February 23, 2009. See IV. L.R. 7.1(e)(2). To date, plaintiffs neither filed a response nor sought additional time in which to file a response in opposition to defendant's motion.
When an opposing party does not file papers in the manner required by Civil Local Rule 7.1(e.2), the Court may deem the failure to "constitute a consent to the granting of a motion or other request for ruling by the court." CIV. L.R. 7.1(f.3.c). Notwithstanding plaintiffs' failure to file an opposition, the Court will review the motion on the merits to determine whether any legal issue exists that would preclude granting defendant's motion to dismiss.
A motion to dismiss under Rule 12(b)(6) tests the legal sufficiency of the pleadings. De La Cruz v. Tormey, 582 F.2d 45, 48 (9th Cir. 1978). A complaint may not be dismissed for failure to state a claim under Rule 12(b)(6), "unless it appears beyond a doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46 (1957). In ruling on a motion pursuant to Rule 12(b)(6), a court must construe the pleadings in the light most favorable to the plaintiff, and further, must accept as true all material allegations in the complaint, as well as any reasonable inferences to be drawn therefrom. See Broam v. Bogan, 320 F.3d 1023, 1028 (9th Cir. 2003). But a complaint may be dismissed for failure to state a claim under Rule 12(b)(6) where the factual allegations do not raise the "right to relief above the speculative level." Bell Atlantic v. Twombly, 127 S.Ct. 1955, 1965 (2007).
A. Possession of the Original Note
Plaintiffs defaulted on a home mortgage loan. Citibank purchased the property that secured the loan at a foreclosure sale conducted on September 3, 2008. But plaintiffs contend that Citibank had no right to initiate foreclosure proceedings because it did not have "in its possession the original note properly endorsed to it or assigned to it as of a date preceding the notice of default recorded by the Trustee." (Compl. at 2.) California law does not require that the original note be in the possession of the party initiating non-judicial foreclosure. See Cal. Civ. Code § 2924. Plaintiffs' allegation about the necessity of possessing the original note is without merit and must be dismissed with prejudice.
B. Unfair Debt Collection Practices
As defendant correctly notes, plaintiffs fail to state a claim against Citibank because as a trustee pursuant to a deed of trust, it is not a debt collector under the FDCPA. The "activity of foreclosing on [a] property pursuant to a deed of trust is not the collection of a debt within the meaning of the FDCPA." Hulse v. Ocwen Fed. Bank, FSB, 195 F. Supp.2d 1188, 1204 (D. Or. 2002); see also Williams v. Countrywide Home Loans, Inc., 504 F. Supp.2d 176, 190 (S.D. Tex. 2007) ("Mortgage companies collecting debts are not 'debt collectors').
Similarly, plaintiffs fail to state a claim under California's fair debt collection act which prohibits collecting consumer debts by inter alia, threats, physical force, obscene language, annoying telephone calls, false representations, simulating or threatening legal action. CAL. CIV. ODE §§ 1788.10, 1788.11, 1788.13, 1788.16. The complaint is devoid of allegations of conduct falling within the Act; therefore, plaintiff has failed to state a claim under Rule 12(b)(6).
RESPA concerns charges and disclosures occurring at or before the closing of a real estate sale or loan. The allegations in the complaint, however, deal with the foreclosure of the property. Additionally, RESPA defines a mortgage servicer as "the person responsible for servicing the loan." 12 U.S.C. § 2605(i)(2). RESPA further defines "servicing" as "receiving any scheduled periodic payments from a borrower pursuant to the terms of any loan . . . and making the payments of principal and interest and such other payments with respect to the amounts received from the borrower as may be required pursuant to ...