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Harrison v. Downey Savings and Loan Amended Complaint Association

August 14, 2009

J.C. HARRISON, PLAINTIFF,
v.
DOWNEY SAVINGS AND LOAN AMENDED COMPLAINT ASSOCIATION, F.A., ET AL. DEFENDANT.



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

ORDER

(1) GRANTING IN PART DEFENDANT DEUTSCHE BANK'S MOTION TO DISMISS [Doc. No. 8.]

(2) GRANTING IN PART DEFENDANT CORNISH'S MOTION TO DISMISS [Doc. No. 10.]

(3) GRANTING PLAINTIFF'S MOTION FOR LEAVE TO FILE [Doc. No. 12.]

(4) DENYING AS MOOT DEFENDANT MERCHANTS BONDING COMPANY'S MOTION TO DISMISS [Doc. No. 17.]

On July 2, 2009, Defendant Deutsche Bank filed a motion to dismiss Plaintiff's Complaint. (Doc. No. 8.) On July 27, 2009, Plaintiff filed an opposition to Deutsche Bank's motion to dismiss. (Doc. No. 19.) On August 3, 2009, Deutsche Bank filed a reply in support of its motion to dismiss. (Doc. No. 24.)

On July 8, 2009, Defendant Chris Cornish filed a motion to dismiss and a motion to strike portions of the Complaint. (Doc. No. 10.) On July 27, 2009, Plaintiff filed oppositions to Defendant Cornish's motions. (Doc. Nos. 20, 21.) On August 3, 2009, Cornish filed a reply in support of his motion to dismiss and withdrew his motion to strike. (Doc. Nos. 26, 27.)

The Court concludes that these matters are appropriate for resolution without oral argument and submits Deutsche Bank's and Cornish's motions to dismiss on the papers under Local Civil Rule 7.1(d)(1). For the following reason, the Court grants in part Defendants' motions and dismisses Plaintiff's second cause of action against Deutsche Bank without prejudice, dismisses without prejudice Plaintiff's third cause of action against all Defendants, dismisses Plaintiff's fourth cause of action without prejudice against all Defendants, dismisses Plaintiff's fifth, sixth, seventh and eighth causes of action against all Defendants without prejudice, dismisses without prejudice Plaintiff's ninth cause of action as to Defendant Deutsche Bank, dismisses Plaintiff's eleventh cause of action without prejudice as to all Defendants, dismisses without prejudice Plaintiff's claim for statutory damages under TILA, dismisses without prejudice Plaintiff's thirteenth cause of action, dismisses without prejudice Plaintiff's fourteenth cause of action as to Defendant Deutsche Bank, and dismisses Plaintiff's fifteenth cause of action without prejudice as to all Defendants. Plaintiff may file an amended complaint curing the highlighted deficiencies no later than September 14, 2009.

Because the Court grants leave to amend, the Court grants Plaintiff's motion to amend the Complaint (Doc. No. 12.) and denies as moot Defendant Merchant Bonding Company's motion to dismiss (Doc. No. 17.).

Background

Plaintiff J.C. Harrison is the owner of real property located at 4626 Home Avenue, San Diego, California ("the Property"). (Compl. ¶ 18.) In or around January 2006, Plaintiff obtained a loan to purchase the Property ("the Loan"). (Id.) Plaintiff alleges that, as of February 2006, Plaintiff owed approximately $396,000 on the Loan to AmericaHomekey, Inc. (Id.) According to the Complaint, in or around March 2006, the servicing of the Loan was transferred to Countrywide Home Loans. (Compl. ¶ 19.)

In or around April 2006, Defendant Tyler Adams, an employee of Defendant Atvantage Group, Inc., allegedly contacted Plaintiff and offered to arrange a refinance of the Loan with Defendant Downey Savings and Loan under more favorable terms. (Compl. ¶ 21.) Plaintiff states that he was unable to respond to the offer at that time and no agreement was reached. (Id.) The Complaint alleges that, on or about May 25, 2006, while Plaintiff was out of town, Defendant Adams forged Plaintiff's signature on loan documents outside of Plaintiff's presence and without his knowledge or consent. (Compl. ¶ 22.) Defendant Chris Cornish, a notary public, allegedly notarized the documents signed by Adams, knowing that Plaintiff had not signed the documents. (Compl. ¶ 23.) According to the Complaint, Defendants' actions led to the Loan being refinanced without his knowledge or authorization -- and under significantly less favorable terms. (Compl. ¶ 24.)

Plaintiff alleges that he became aware of the refinance after he returned home in June 2006 and a mortgage payment to Countrywide was returned. (Compl. ¶ 25.) The Complaint states that Plaintiff subsequently contacted Defendant Atvantage and spoke with Defendant Dan Holbrook. (Compl. ¶ 26.) Shortly thereafter, Defendant Cornish allegedly visited Plaintiff at his home and attempted to have Plaintiff sign his notary journal. (Id.) Plaintiff refused. On a later visit, Defendant Cornish allegedly handed Plaintiff a letter from Cornish to Defendant Adams regarding the unauthorized refinance. (Id.) Plaintiff was unable to retain a copy of the letter. (Id.) At that time, Plaintiff alleges that he refused to sign an additional acknowledgment. (Id.) On a later date, Cornish allegedly visited Plaintiff yet again and stated that he had notarized documents outside of Plaintiff's presence because Defendant Adams was his friend. (Id.)

After unsuccessful attempts to resolve the matter with Defendants Atvantage and Downey, Plaintiff filed his Complaint and commenced this action. The Complaint alleges causes of action against Defendants for (1) official misconduct or neglect of a notary public in violation of California Government Code § 8214; (2) negligence; (3) breach of fiduciary duty; (4) aiding and abetting breach of fiduciary duty; (5) fraud; (6) constructive fraud; (7) fraudulent deceit; (8) aiding and abetting fraud; (9) financial elder abuse in violation of California Welfare and Institutions Code § 15610.30; (10) aiding and abetting financial elder abuse; (11) violation of RESPA; (12) violation of TILA; (13) violation of California Business and Professions Code § 17200; (14) unjust enrichment; and (15) rescission or cancellation under California Civil Code § 1689. (Compl.)

Discussion

I. Motion to Dismiss -- Legal Standard

Federal Rule of Civil Procedure 8 requires a plaintiff to "plead a short and plain statement of the elements of his or her claim, identifying the transaction or occurrence giving rise to the claim and the elements of the prima facie case." Bautista v. Los Angeles County, 216 F.3d 837, 840 (9th Cir. 2000). This statement must be sufficient to "give the defendant fair notice of what the plaintiff's claim is and the grounds upon which it rests." Conley v. Gibson, 355 U.S. 41, 47 (1957). Rule 12(b)(6) provides that a complaint may be dismissed for "failure to state a claim upon which relief may be granted." Fed. R. Civ. P. 12(b)(6). A complaint may be dismissed as a matter of law if it lacks a cognizable legal theory or states insufficient facts under a cognizable legal theory. Robertson v. Dean Witter Reynolds, Inc., 749 F.2d 530, 534 (9th Cir. 1984).

The Supreme Court holds that the factual allegations of a complaint must be "enough to raise a right to relief above the speculative level." Bell Atlantic Corp. v. Twombly, 127 S.Ct. 1955, 1965 (2007). A plaintiff must plead more than conclusory allegations to show "plausible liability" and avoid dismissal. Id. at 1966 n.5. The Court has recently reiterated this principle, stating that the pleading standard of Rule 8 "demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation" and a complaint does not suffice "if it tenders 'naked assertion[s]' devoid of 'further factual enhancement.'" Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009) (quoting Twombly, 127 S.Ct. at 1966). The Court applies this standard to Plaintiff's challenged allegations.

In general, the scope of review on a motion to dismiss for failure to state a claim is limited to "allegations contained in the pleadings, exhibits attached to the complaint, and matters properly subject to judicial ...


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