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Mendiola v. MTC Financial

May 29, 2009

JORGE CORRAL MENDIOLA, PLAINTIFF,
v.
MTC FINANCIAL, INC., ET AL., DEFENDANTS.



The opinion of the court was delivered by: M. James Lorenz United States District Court Judge

ORDER GRANTING MOTIONS TO DISMISS [doc. #3, 4]; FOR EXPUNGEMENT OF LIS PENDENS [doc. #5] and FOR LEAVE TO AMEND COMPLAINT

Defendants MTC Financial Inc. dba Trustee Corps ("Trustee Corps") and Central Mortgage Company ("CMC") (collectively "defendants") each move to dismiss the above-captioned case under Federal Rule of Civil Procedure 12(b)(6). CMC also moves for expungement of lis pendens and requests attorneys' fees under California Civil Procedure Code § 405.38 against plaintiff's counsel.

The Court notes that under the Civil Local Rules, plaintiff's response to the motions was due on or before February 2, 2009. See CIV. L.R. 7.1(e)(2). Plaintiff neither filed a timely response nor sought additional time in which to file a response to defendants' motions. After the due date of the response had passed, the State Bar of California provided the Court with a "Notice of Cessation of Law Practice of Mitchell Roth and MW Roth." (Notice filed April 13, 2009, Doc. # 8.) Mitchell Roth was counsel of record for plaintiff Mendiola.

As a result of the Notice from the State Bar of California, the Court granted plaintiff an additional 20 days in which to file a response to defendants' motions or a notice of substitution of counsel. See Order filed April 13, 2009. [doc. #7] To date, defendants' motions remain unopposed. 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 plaintiff's failure to file an opposition, the Court will review the motions on the merits to determine whether any legal issue exists that would preclude the granting of defendants' motions to dismiss.

Legal Standard

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).

Background

Plaintiff obtained a real property loan secured by a Deed of Trust from CMC in May 2006. In 2008, plaintiff defaulted on the loan and defendants foreclosed on the property. See Exh. A.

1. Unfair Debt Collection Practices

Plaintiff's first cause of action, that is based on information and belief, asserts that defendants engaged in unfair debt collection practices under California's Rosenthal Fair Debt Collection Practices Act, Civil Code § 1788(e) and (l); the federal Fair Debt Collections Act, 11 U.S.C. § 1692; and the Real Estate Settlement Procedures Act ("RESPA"), 12 U.S.C. § 2614.

(Comp. at ¶ 20.)

Under Federal Rule of Civil Procedure 8, complaints are required to set forth (1) the grounds upon which the court's jurisdiction rests, (2) a short and plain statement of the claim showing entitlement to relief; and (3) a demand for the relief plaintiff seeks. Rule 8 requires only "sufficient allegations to put defendants fairly on notice of the claims against them." McKeever v. Block, 932 F.2d 795, 798 (9th Cir. 1991); see also Swierkiewicz v. Sorema, 534 U.S. 506 (2002). A "[p]leading must be sufficiently intelligible for the court to be able to make out one or more potentially viable legal theories on which the claimant might proceed, and it must not be so vague or ambiguous that the opposing party cannot respond, even with a simple denial, in good faith or without prejudice to himself." CHARLES ALAN WRIGHT & ARTHUR R. ILLER, FEDERAL PRACTICE AND PROCEDURE (2d ed.) § 1376. When the factual detail is so sketchy that the complaint does not provide the type of notice of the claim to which the defendant is entitled under Rule 8, dismissal is proper.

Rule 8(a)(2) [ ] still requires a "showing," rather than a blanket entitlement to relief. Without some factual allegations in the complaint, it is hard to see how a claimant could satisfy the requirement of providing not only "fair notice" of the ...


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