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Ash v. Onewest Bank

January 25, 2010

ROBERT ASH AND KATHLEEN ASH, PLAINTIFFS,
v.
ONEWEST BANK, FSB AS SUCCESSOR BY ACQUISITION OF INDYMAC FEDERAL BANK AND LENDER DOE, DEFENDANTS.



The opinion of the court was delivered by: Frank C. Damrell, Jr. United States District Judge

MEMORANDUM AND ORDER

This matter is before the court on the motion of defendant OneWest Bank, FSB ("OneWest") to dismiss plaintiffs Robert Ash and Kathleen Ash's ("plaintiffs") First Amended Complaint pursuant to Federal Rule of Civil Procedure ("FRCP") 12(b)(6). Plaintiffs oppose the motion. For the reasons set forth below,*fn1 defendant's motion is GRANTED.

BACKGROUND

Plaintiffs brought this action against OneWest for conduct arising out of a loan and subsequent foreclosure activity. (Pls.' First Am. Complaint ("Compl."), filed Sept. 11, 2009, ¶ 1.) On or about January 26, 2007,*fn2 plaintiffs entered into two concurrent consumer credit transactions, totaling $1,092,250, with MILA, Inc., dba Mortgage Investment Lending Associates, Inc., ("MILA"). (Id. ¶ 14.) Plaintiffs allege that MILA failed to provide them with the proper copies of the Notice of Right to Cancel at the time of signing as required by the Federal Truth in Lending Act ("TILA"), giving plaintiffs up to three years to rescind the loans. (Id. ¶ 43).

The loans were initially serviced by IndyMac Bank, FSB. (Id. ¶ 38). On July 11, 2008, IndyMac Bank was placed into receivership by the Office of Thrift Supervision, and a new bank, IndyMac Federal Bank, FSB ("Indymac"), was created under the conservatorship of the Federal Deposit Insurance Corporation ("FDIC"). (OneWest's ex. 6). At some point, the loans were transferred to OneWest as successor in interest to Indymac. (Compl. ¶ 12.)

On December 31, 2008, plaintiffs sent a letter to Indymac and MILA, which they allege was a Qualified Written Request ("QWR") under the Real Estate Settlement Procedures Act ("RESPA"), 12 U.S.C. § 2601 et seq., and a valid rescission under TILA. Plaintiffs contend that Indymac, and OneWest, as successor in interest, engaged in misconduct by failing to respond to this letter and continuing with foreclosure of plaintiffs' property. (Compl. ¶ 38-39.)

In their First Amended Complaint, plaintiffs assert claims for 1) violation of TILA, 15 U.S.C. §§ 1601 et seq., 2) violation of RESPA, 12 U.S.C. §§ 2601 et seq., 3) violation of the Rosenthal Fair Debt Collection Practices Act ("RFDCPA"), California Civil Code §§ 1788 et seq., 4) violation of California Business and Professions Code § 17200, 5) wrongful foreclosure, 6) slander of title, and 7) slander of credit. (Compl.) OneWest moves to dismiss plaintiffs' complaint for failure to state cognizable claims.

STANDARDS

Under Federal Rule of Civil Procedure 8(a), a pleading must contain "a short and plain statement of the claim showing that the pleader is entitled to relief." See Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009). Under notice pleading in federal court, the complaint must "give the defendant fair notice of what the claim is and the grounds upon which it rests." Bell Atlantic v. Twombly, 550 U.S. 544, 555 (2007) (internal quotations omitted). "This simplified notice pleading standard relies on liberal discovery rules and summary judgment motions to define disputed facts and issues and to dispose of unmeritorious claims." Swierkiewicz v. Sorema N.A., 534 U.S. 506, 512 (2002).

On a motion to dismiss, the factual allegations of the complaint must be accepted as true. Cruz v. Beto, 405 U.S. 319, 322 (1972). The court is bound to give plaintiff the benefit of every reasonable inference to be drawn from the "well-pleaded" allegations of the complaint. Retail Clerks Int'l Ass'n v. Schermerhorn, 373 U.S. 746, 753 n.6 (1963). A plaintiff need not allege "'specific facts' beyond those necessary to state his claim and the grounds showing entitlement to relief." Twombley, 550 U.S. at 570. "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 129 S.Ct. at 1949.

Nevertheless, the court "need not assume the truth of legal conclusions cast in the form of factual allegations." United States ex rel. Chunie v. Ringrose, 788 F.2d 638, 643 n.2 (9th Cir. 1986). While Rule 8(a) does not require detailed factual allegations, "it demands more than an unadorned, the defendant-unlawfully-harmed-me accusation." Iqbal, 129 S.Ct. at 1949. A pleading is insufficient if it offers mere "labels and conclusions" or "a formulaic recitation of the elements of a cause of action." Twombly, 550 U.S. at 555; Iqbal, 129 S.Ct. at 1950 ("Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice."). Moreover, it is inappropriate to assume that the plaintiff "can prove facts which it has not alleged or that the defendants have violated the . . . laws in ways that have not been alleged." Associated Gen. Contractors of Cal., Inc. v. Cal. State Council of Carpenters, 459 U.S. 519, 526 (1983).

Ultimately, the court may not dismiss a complaint in which the plaintiff has alleged "enough facts to state a claim to relief that is plausible on its face." Iqbal, 129 S.Ct. at 1949 (citing Bell Atlantic Corp. v. Twombly, 550 U.S. 554, 570 (2007)). Only where a plaintiff has failed to "nudge [his or her] claims across the line from conceivable to plausible," is the complaint properly dismissed. Id. at 1952. While the plausibility requirement is not akin to a probability requirement, it demands more than "a sheer possibility that a defendant has acted unlawfully." Id. at 1949. This plausibility inquiry is "a context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Id. at 1950.

In ruling upon a motion to dismiss, the court may consider only the complaint, any exhibits thereto, and matters which may be judicially noticed pursuant to Federal Rule of Evidence 201. See Mir v. Little Co. Of Mary Hospital, 844 F.2d 646, 649 (9th Cir. 1988); Isuzu Motors Ltd. V. Consumers Union of United States, Inc., 12 F. Supp. 2d 1035, 1042 (C.D. Cal. 1998).

ANALYSIS

A. OneWest's Exhibits

In ruling upon a motion to dismiss, the court may consider matters which may be judicially noticed pursuant to Federal Rule of Evidence 201. See Mir v. Little Co. of Mary Hospital, 844 F.2d 646, 649 (9th Cir. 1988); Isuzu Motors Ltd. v. Consumers Union of United States, Inc., 12 F. Supp. 2d 1035, 1042 (C.D. Cal. 1998). Rule 201 permits a court to take judicial notice of an adjudicative fact "not subject to reasonable dispute" because the fact is either "(1) generally known within the territorial jurisdiction of the trial court or (2) capable of accurate and ready determination by resort to sources whose accuracy cannot reasonably be questioned." Fed. R. Evid. 201(b). The court can take judicial notice of matters of public record, such as pleadings in another action and records and reports of administrative bodies. See Emrich v. Touche Ross & Co., 846 F.2d 1190, 1198 (9th Cir. 1988).

"Even if a document is not attached to a complaint, it may be incorporated by reference into a complaint if the plaintiff refers extensively to the document or the document forms the basis of the plaintiff's claim." United States v. Ritchie, 342 F.3d 903, 908 (9th Cir. 2003). "The defendant may offer such a document, and the district 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. The policy concern underlying the rule is to prevent plaintiffs "from surviving a Rule 12(b)(6) motion by deliberately omitting references to documents upon which their claims are based." Parrino v. FHP, Inc., 146 F.3d 699, 706 (9th Cir. 1998).

Plaintiffs' complaint alleges several causes of action that are premised on (1) defendant OneWest's predecessor's failure to provide the disclosures and number of copies of the Notice of Right to Cancel; and (2) plaintiffs' ability to tender payment. (Compl. ΒΆ 43, 48.) Defendants request Judicial Notice of the Deeds of Trust recorded with the El Dorado County Recorder as well as a copy of the Voluntary Petition for Chapter 13 bankruptcy filed by plaintiffs. Plaintiffs do not oppose the requests. Accordingly, because the loan documents form the basis of the relevant causes of action and ...


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