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Morfin v. Accredited Home Lenders

January 26, 2010


The opinion of the court was delivered by: Hayes, Judge


The matter before the Court is the Motion to Dismiss, filed by Defendant JPMorgan Chase Bank, N.A., as an acquirer of certain assets and liabilities of Washington Mutual Bank from the Federal Deposit Insurance Corporation acting as receiver ("Chase"). (Doc. # 13).

I. Background

On April 16, 2009, Plaintiff initiated this action by filing a Complaint in this Court. (Doc. # 1). On August 27, 2009, Plaintiff filed a First Amended Complaint. (Doc. # 6).

On September 29, 2009, Chase filed a Motion to Dismiss the First Amended Complaint. (Doc. # 13). Chase's Motion to Dismiss moves for the dismissal of all claims in the First Amended Complaint against Washington Mutual pursuant to Federal Rule of Civil Procedure 12(b)(6).*fn1

On October 19, 2009, Plaintiff filed an opposition to Chase's Motion to Dismiss. (Doc. # 19).

On October 27, 2009, Defendant Franklin Credit Management Corporation ("Franklin") filed a Motion to Dismiss the First Amended Complaint. (Doc. # 27).

On November 12, 2009, Plaintiff filed a Notice of Bankruptcy Filing, which stated that on November 10, 2009, Plaintiff filed a voluntary petition for bankruptcy under Chapter 7 of the United States Bankruptcy Code with the United States Bankruptcy Court, Southern District of California. (Doc. # 32).

On November 17, 2009, the Court issued an Order stating that "this action, which was initiated by Plaintiff prepetition, is not stayed." (Doc. # 34 at 3).

On December 4, 2009, Plaintiff filed an opposition to Franklin's Motion to Dismiss. (Doc. # 35).

On December 4, 2009, December 28, 2009 and January 13, 2010, Plaintiff and Franklin filed joint motions for extension of time for Franklin to file a reply brief in support of its Motion to Dismiss. (Doc. # 36, 38, 42). The Court granted each of these joint motions. (Doc. # 37, 39, 43). Franklin's reply brief in support of its Motion to Dismiss is currently due no later than March 1, 2010. The motions for extensions of time filed by Plaintiff and Franklin, and the orders granting those motions for extension of time, have made no reference to the Motion to Dismiss filed by Chase, which is currently pending before the Court.

II. Allegations of the First Amended Complaint

Plaintiff is the owner of real property commonly known as 6153 Paseo Granito, Carlsbad, CA 92009. This case arises out of two residential mortgage loan transactions that took place on April 5, 2006. Defendant Washington Mutual is a servicer of these loans.

Prior to the funding of the loan, the originating broker and lender misrepresented the terms of the loan. "[T]he loans and related contracts contain conflicting terms that are not reasonably comprehensible by a consumer, possibly including but not limited to the Note, Addenda, Trust Deed, Rider(s), TILA, Estimated Settlement Statement(s), Final Settlement Statement(s), Escrow Instruction(s), all containing complicated and in many cases contradictory terms." (Doc. # 6 ¶ 32). "Defendants failed to provide Plaintiff with the proper disclosures required by state and federal law." (Doc. # 6 ¶ 20). "Defendants ... received Qualified Written Requests regarding the loans from Plaintiff and failed to adequately respond to Plaintiff's requests for information, which would have enabled Plaintiff an opportunity to work out the loans...." (Doc. # 6 ¶ 23.) "Defendants failed to fulfill their lawful obligations regarding servicing of the loans; in particular, Defendants made false offers of help to Plaintiff but never provided any meaningful help." (Doc. # 6 ¶ 24.)

The First Amended Complaint alleges nine claims: (1) violation of the Real Estate Settlement Procedures Act ("RESPA"), 12 U.S.C. §§ 2605 et seq.; (2) violation of the Truth in Lending Act ("TILA"), 15 U.S.C. §§ 1601 et seq.; (3) violation of California Civil Code §§ 1632 et seq.; (4) violation of California's Unfair Competition Law, Cal. Bus. & Prof. Code § 17200; (5) negligent misrepresentation; (6) fraud; (7) rescission; (8) quasi-contract; and (9) "determination of validity of lien" (Doc. # 6 at 25).

III. Discussion

A. Standard of Review

Federal Rule of Civil Procedure 12(b)(6) permits dismissal for "failure to state a claim upon which relief can be granted." Fed. R. Civ. P. 12(b)(6). Dismissal under Rule 12(b)(6) is appropriate where the complaint lacks a cognizable legal theory or sufficient facts to support a cognizable legal theory. See Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1990). Courts may "consider ... matters of judicial notice without converting the motion to dismiss into a motion for summary judgment." U.S. v. Ritchie, 342 F.3d 903, 908 (9th Cir. 2003).

To sufficiently state a claim to relief and survive a Rule 12(b)(6) motion, a complaint "does not need detailed factual allegations" but the "[f]actual allegations must be enough to raise a right to relief above the speculative level." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). "[A] plaintiff's obligation to provide the 'grounds' of his 'entitle[ment] to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Id. (quoting Fed. R. Civ. P. 8(a)(2)). When considering a motion to dismiss, a court must accept as true all "well-pleaded factual allegations." Ashcroft v. Iqbal, --- U.S. ----, 129 S.Ct. 1937, 1950 (2009). However, a court is not "required to accept as true allegations that are merely conclusory, unwarranted deductions of fact, or unreasonable inferences." Sprewell v. Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 2001); see, e.g., Doe I v. Wal-Mart Stores, Inc., 572 F.3d 677, 683 (9th Cir. 2009) ("Plaintiffs' general statement that Wal-Mart exercised control over their day-to-day employment is a conclusion, not a factual allegation stated with any specificity. We need not accept Plaintiffs' unwarranted conclusion in reviewing a motion to dismiss."). "In sum, for a complaint to survive a motion to dismiss, the non-conclusory factual content, and reasonable inferences from that content, must be plausibly suggestive of a claim entitling the plaintiff to relief." Moss v. U.S. Secret Serv., 572 F.3d 962, 969 (9th Cir. 2009) (quotations omitted).

B. Request for Judicial Notice

"A district court ruling on a motion to dismiss may consider documents whose contents are alleged in a complaint and whose authenticity no party questions, but which are not physically attached to the plaintiff's pleading." Parrino v. FHP, Inc., 146 F.3d 699, 705-06 (9th Cir. 1998) (quotation omitted). Also, "a district court ruling on a motion to dismiss may consider a document the authenticity of which is not contested, and upon which the plaintiff's complaint necessarily relies." Id. at 706. "[U]nder Fed. R. Evid. 201, a court may take judicial notice of 'matters of public record.'" Lee v. City of Los Angeles, 250 F.3d 668, 689 (9th Cir. 2001) (citation omitted).

Chase requests that the Court take judicial notice of the documents executed by Plaintiff and relating to the property at issue, including the Deeds of Trust, which were recorded with the San Diego County Recorder. (Doc. # 13-2). Chase also requests that the Court take judicial notice of a Notice of Default and Election to Sell, and a Notice of Trustee's Sale, which both concern the first Deed of Trust and were filed with the San Diego County Recorder. Id. Plaintiff does not oppose Chase's request for judicial notice.

Plaintiff requests that the Court take judicial notice of five letters Plaintiff mailed to Washington Mutual, including three letters which purport to be Qualified Written Requests. (Doc. # 19-2). These documents are referenced in the First Amended Complaint. Chase does not oppose Plaintiff's request for judicial notice.

Each of the documents attached to the requests for judicial notice is a proper subject of a request for judicial notice. The authenticity of the documents has not been challenged. ...

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