The opinion of the court was delivered by: The Honorable David O. Carter, Judge
[I hereby certify that this document was served by first class mail or Government messenger service, postage prepaid, to all counsel (or parties) at their respective most recent address of record in this action on this date.]
PROCEEDING (IN CHAMBERS): ORDER GRANTING DEFENDANTS' MOTION TO DISMISS
Before the Court is Defendants LaSalle Bank National Association ("LaSalle") and Mortgage Electronic Registration Systems, Inc.'s ("MERS") (collectively, "Defendants") Motion to Dismiss Plaintiffs' Complaint or, in the Alternative, Motion to Strike (the "Motion to Dismiss"). The Court finds this matter appropriate for decision without oral argument. FED. R. CIV. P. 78; LOCAL R. 7-15. After considering the moving, opposing, and reply papers thereon, and for the reasons set forth below, the Court hereby GRANTS Defendant's Motion to Dismiss.
Plaintiffs Joe Phuong Nguyen ("Nguyen") and Linda Hoang Vo ("Vo") (collectively, "Plaintiffs") allege wrongful foreclosure by, among other named defendants, Defendants LaSalle and MERS. On March 1, 2006, Plaintiffs took out a loan secured against their personal residence. On March 8, 2008, certain defendants informed Plaintiffs that Plaintiffs were in default on their loan, though Plaintiffs vigorously contested such allegations and demanded an explanation with respect to the allegedly owed sums. Plaintiffs also contend that they asked to modify their loan. However, the various defendants allegedly refused Plaintiffs' requests and instead foreclosed on the property. The property was ultimately sold to Defendant LaSalle at the trustee's sale on December 8, 2008. As to the instant moving Defendants, Plaintiffs allege LaSalle is engaged in the business of purchasing properties at foreclosure sales in addition to being the purchaser of Plaintiffs' residence. Furthermore, Plaintiffs contend that Defendant MERS holds itself out to be the nominee and beneficiary under the note at issue.
To summarize Plaintiffs' many claims, Plaintiffs primarily argue that the foreclosure should be set aside because certain defendants were not in possession of the actual note, did not pay consideration for the note, and/or did not receive proper endorsement of the note. Plaintiffs allege all named defendants violated a myriad of federal and state laws, and that as a result of defendants' misconduct, the loan was and is void and unenforceable, making the foreclosure proceedings also unlawful.
On February 25, 2009, a few months after purchasing the property, LaSalle brought an action for unlawful detainer against Plaintiffs in state court. On July 24, 2009, the state court entered judgment in favor of LaSalle. Prior to that judgment and on May 21, 2009, Plaintiffs filed the instant action in state court. On July 31, 2009, Defendants removed the suit to federal court. On August 17, 2009, Defendants La Salle and MERS filed the instant Motion to Dismiss.
Under Federal Rule of Civil Procedure 12(b)(6), a complaint must be dismissed when a plaintiff's allegations fail to state a claim upon which relief can be granted. Once it has adequately stated a claim, a plaintiff may support the allegations in its complaint with any set of facts consistent with those allegations. Bell Atlantic Corp. v. Twombly, 127 S.Ct. 1955, 1969 (2007). Dismissal for failure to state a claim does not require the appearance, beyond a doubt, that the plaintiff can prove "no set of facts" in support of its claim that would entitle it to relief. Twombly, 127 S.Ct. at 1968 (abrogating Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99 (1957)). However, if the complaint "lacks a cognizable legal theory" or "sufficient facts alleged under a cognizable legal theory," it must be dismissed. Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1990).
Under a 12(b)(6) motion analysis, the Court must accept as true all factual allegations in the complaint and must draw all reasonable inferences from those allegations, construing the complaint in the light most favorable to the plaintiff. Guerrero v. Gates, 442 F.3d 697, 703 (9th Cir. 2006); Balistreri, 901 F.2d at 699. Dismissal without leave to amend is appropriate only when the Court is satisfied that the deficiencies in the complaint could not possibly be cured by amendment. Jackson v. Carey, 353 F.3d 750, 758 (9th Cir. 2003) (citing Chang v. Chen, 80 F.3d 1293, 1296 (9th Cir. 1996)); Lopez v. Smith, 203 F.3d 1122, 1127 (9th Cir. 2000).
For a complaint to survive a 12(b)(6) motion, it must state a plausible claim for relief. Ashcroft v. Iqbal, 129 S.Ct. 1937, 1950 (2009). Determining whether a Complaint states a plausible claim for relief will be a context-specific task requiring the court to draw on its judicial experience and common sense. If the well-pleaded facts do nothing more than allow the court to infer the mere possibility of misconduct, then the complaint has alleged, but not shown that the pleader is entitled to relief. Id. Legal conclusions can provide the framework of a complaint; however, they must be supported by factual allegations. If there are well pleaded factual allegations, then the court must assume their veracity and then determine if they plausibly give rise to an entitlement to relief. Id.
In evaluating a 12(b)(6) motion, review is "limited to the contents of the complaint." Clegg v. Cult Awareness Network, 18 F.3d 752, 754 (9th Cir. 1994). However, exhibits attached to the complaint, as well as matters of public record, may be considered in determining whether dismissal was proper without converting the motion to one for summary judgment. See Parks School of Business, Inc. v. Symington, 51 F.3d 1480, 1484 (9th Cir. 1995); Mack v. South Bay Beer Distributors, Inc., 798 F.2d 1279, 1282 (9th Cir. 1986). Further, the Court may consider documents "on which the complaint 'necessarily relies' if: (1) the complaint refers to the documents; (2) the document is central to the plaintiff's claim; and (3) no party questions the authenticity of the copy attached to the 12(b)(6) motion." Marder v. Lopez, 450 F.3d 445, 448 (9th Cir. 2006). "The Court may treat such a document as 'part of the complaint, and thus may assume that its contents are true for purposes of a motion to dismiss under Rule 12(b)(6)." Id.
Defendants La Salle and MERS request that this Court take judicial notice of the following documents: (1) the summons and complaint filed in the action entitled LaSalle Bank, N.A., as trustee for Morgan Stanley Mortgage Loan Trusts 2006-AR6 v. Joe Phuong Nguyen et al., Superior Court of the State of California, County of Orange (Case No. 30-2009 00247774); (2) the answer in the aforementioned suit; and (3) the Notice of Ruling and Minute Order reflecting entry of judgment in favor of La Salle in the aforementioned suit. Since the foregoing documents are matters of public record, Defendants' request for judicial notice is GRANTED.
B. Temporary Restraining Order and Preliminary and Permanent Injunctive Relief
Plaintiffs seek a temporary restraining order and urge that injunctive relief is warranted because Plaintiffs are in imminent danger of being removed from their home by LaSalle, and Defendants do not and did not have actual physical possession of the note. As such, Plaintiffs allege that Defendants are not entitled to proceed with non-judicial foreclosure against Plaintiffs' property. Plaintiffs further urge that the issues raised here were not considered by the Superior Court in the unlawful detainer action and are therefore not subject to res judicata.
"A party seeking a temporary restraining order ("TRO") must submit an application, a proposed TRO, and a proposed order to show cause why a preliminary injunction should not issue." FED. R. OF CIV. P. 65; LOCAL R. 65-1. Here, Plaintiffs did not move for a temporary restraining order or preliminary injunction in this Court through the proper motion papers. Furthermore, even if Plaintiffs had properly filed a motion with this Court, the Court is unable to enjoin an event that has already occurred. See Bernhardt v. County of L.A., 279 F.3d 862, 871 (9th Cir. 2002) ("Where the activities sought to be enjoined already have occurred, ... the action is moot, and must be dismissed"); U.S. v. Oregon State Medical Soc., 343 U.S. 326, 333, 72 S.Ct. 690 (1952) ("The sole function of an action for an injunction is to forestall future violations"). Additionally, a claim for injunctive relief is not an independent cause of action. Brittain v. Indymac Bank, No. C-09-2953 SC, 2009 WL 2997394, at *6 (N.D. Cal. Sept. 16, 2009.) An injunction enjoining the foreclosure proceedings, as well as the unlawful detainer action, is clearly an unavailable remedy.
Plaintiffs' requested relief is also barred on the basis of res judicata, as discussed in detail below, because there was already state court action on the issue of LaSalle's purchase of the home. This Court simply cannot (and will not attempt to) enjoin a state court action.
C. Possession of the Note is Not Required
Plaintiffs allege throughout their complaint that Defendants must have actual physical possession of the note to proceed with a non-judicial foreclosure. However, physical possession of the original promissory note is not a pre-requisite to initiating foreclosure proceedings. Cal. Civ. Code § 2924(a)(1). Various courts interpreting the statute agree. For instance, in Moeller v. Lien, 30 Cal.Rptr.2d 777, 785 (Ct. App. 1994), the court noted, "The comprehensive statutory framework established to govern non-judicial foreclosure sales is intended to be exhaustive. It includes a myriad of rules relating to notice and right to cure. It would be inconsistent with the comprehensive and exhaustive statutory scheme regulating non-judicial foreclosures to incorporate another unrelated cure provision into statutory non-judicial foreclosure proceedings." In, Farner v. Countrywide Home Loans, No. 08-CV-2193 BTM, 2009 WL 189025, at *2 (S.D. Cal. Jan. 26, 2009), plaintiffs urged that defendants were required to produce the original note to conduct non-judicial foreclosure proceedings. Pointing to Cal. Civ. Code §§ 2924, et seq., the court explained that "there does not appear to be any requirement under California law that the original note be produced in order to render the foreclosure proceedings valid." Farner, 2009 WL 189025, at *2. Thus, Plaintiffs' allegations that Defendants must have physical possession of the note to proceed with foreclosure are erroneous.
D. Plaintiffs' Complaint is Unclearly and Ambiguously Directed at Multiple Defendants for Multiple Causes of Action
A primary problem with the complaint is that it is devoid of sufficient facts even under the lenient standards of Fed. R. Civ. P. 8, requiring "a short and plain statement of the claim showing that the pleader is entitled to relief." FED. R. CIV. P. 8(a)(2). Plaintiffs' allegations are confusing, conclusory, and fail to differentiate between various defendants. For example, it appears that LaSalle was only a purchaser of the subject property at the foreclosure sale. Thus, Plaintiffs' complaint fails to implicate LaSalle in most of the alleged conduct. ...