The opinion of the court was delivered by: Irma E. Gonzalez, Chief Judge United States District Court
ORDER: (1) GRANTING DEFENDANT'S MOTION TO DISMISS PLAINTIFF'S COMPLAINT (Doc. No. 6); and (2) DENYING AS MOOT DEFENDANT'S MOTION TO STRIKE (Doc. No. 7).
Presently before the Court are Defendant Aurora Loan Services LLC's ("Aurora") motion to dismiss Plaintiff's Complaint and motion to strike portions of Plaintiff's Complaint. (Doc. Nos. 6 & 7.) Plaintiff filed an opposition, and Aurora filed a reply.
The Court finds the motions suitable for disposition without oral argument pursuant to Local Civil Rule 7.1(d)(1). For the reasons stated herein, the Court grants the motion to dismiss and denies as moot the motion to strike.
This matter concerns the refinancing of Plaintiff Armando Ibarra's ("Plaintiff") principal residence in Chula Vista, San Diego. The following facts are drawn from Plaintiff's Complaint unless otherwise noted.
On September 6, 2006, Plaintiff obtained a loan from Loan City, brokered by Equipoint Financial Network, Inc. dba Harborside Financial Network ("Harborside"). Plaintiff had received an unsolicited letter from Harborside offering to refinance Plaintiff's home. Plaintiff called Harborside and was put in touch with Sal Sandjep, a Harborside representative. Mr. Sandjep informed Plaintiff that he could get Plaintiff a loan at a reasonable rate of interest. The initial interest rate listed on the Good Faith Estimate was 1%. Mr. Sandjep told Plaintiff that because of the low interest rate, Plaintiff's monthly obligations would be "well within the range of affordable." The interest rate stated on the Deed of Trust is 6.875%. (Def.'s Req. for Jud. Notice in Supp. of Mot. to Dismiss ("RJN"), Exhibit 1.)
In March of 2008, Aurora was assigned the servicing rights to the loan. (RJN, Exhibit 2.) In early 2009, foreclosure proceedings were initiated. According to Plaintiff, because the interest rate was higher than represented to him, his monthly payments started rising, until they were no longer affordable. Also, in early 2009, Plaintiff allegedly discovered numerous Truth in Lending Act violations, as well as the failure to provide disclosures in violation of federal and state law. On July 9, 2009, Plaintiff sent a letter to Loan City, World Savings, Harborside, and Aurora rescinding the contract.
Subsequently, the property was sold at the foreclosure sale to Aurora. (RJN, Exhibit 5.)
OnAugust 18, 2009, Plaintiff filed the Complaint in the Superior Court for the County of San Diego, naming Aurora, Loan City, Cal-Western Reconveyance Corp., Wachovia Financial Services, Inc., and Harborside as Defendants. The case was removed to this Court. (Doc. No. 1.)
The Complaint sets forth eight causes of action: (1) violation of the Truth in Lending Act ("TILA"), (2) violation of California Business and Professions Code § 17200, (3) declaratory relief, (4) predatory lending, (5) breach of fiduciary duties, (6) constructive fraud, (7) fraud, and (8) negligent misrepresentation.
On October 29, 2009, Aurora filed the instant motion to dismiss Plaintiff's Complaint for failure to state a claim and motion to strike portions of Plaintiff's Complaint. (Doc. No. 6 & 7.) Aurora seeks dismissal of all eight causes of action and requests judicial notice of several documents in support of its motion.
I. 12(b)(6) Motion to Dismiss
A complaint must contain "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a) (2009). A motion to dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure tests the legal sufficiency of the claims asserted in the complaint. Fed. R. Civ. P. 12(b)(6); Navarro v. Block, 250 F.3d 729, 731 (9th Cir. 2001). The court must accept all factual allegations pled in the complaint as true, and must construe them and draw all reasonable inferences from them in favor of the nonmoving party. Cahill v. Liberty Mutual Ins. Co., 80 F.3d 336, 337-38 (9th Cir.1996). To avoid a Rule 12(b)(6) dismissal, a complaint need not contain detailed factual allegations, rather, it must plead "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). 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." Ashcroft v. Iqbal, --- U.S. ---, 129 S.Ct. 1937, 1949 (2009) (citing Twombly, 550 U.S. at 556).
However, "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." Twombly, 550 U.S. at 555 (citation omitted). A court need not accept "legal conclusions" as true. Ashcroft v. Iqbal, --- U.S. ---, 129 S.Ct. 1937, 1949 (2009). In spite of the deference the court is bound to pay to the plaintiff's allegations, it is not proper for the court to assume that "the [plaintiff] can prove facts that [he or she] has not alleged or that 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).
B. Request for Judicial Notice
In ruling on a motion to dismiss for failure to state a claim, "a court may generally consider only allegations contained in the pleadings, exhibits attached to the complaint, and matters properly subject to judicial notice." Swartz v. KPMG LLP, 476 F.3d 756, 763 (9th Cir. 2007). Federal Rule of Evidence 201 provides, "[a] judicially noticed fact must be one not subject to reasonable dispute in that it 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 (2009).
2. Documents Relating to the Loan Origination
On October 29, 2009, Aurora filed a request for judicial notice of the following documents relating to Plaintiff's loan, recorded in the Official Records of the County of San Diego: (1) the Deed of Trust, filed on September 25, 2006; (2) the Notice of Default, filed on March 17, 2009; (4) Notice of Sale, filed on July 13, 2009; and (5) the Trustee's Deed Upon Sale, filed on September 15, 2009. Because these documents are recorded with the County of San Diego, they are public records appropriate for judicial notice. A court may consider matters of public record on a motion to dismiss, and in doing so "does not convert a Rule 12(b)(6) motion to one for summary judgment." Mack v. South Bay Beer Distrib., 798 F.2d 1279, 1282 (9th Cir. 1986), abrogated on other grounds by Astoria Fed. Sav. & Loan Ass'n v. Solimino, 501 U.S. 104, 111 (1991).
The Notice of Assignment, Sale, or Transfer of Servicing sent to Plaintiff on March 27, 2008, is also appropriate for judicial notice because Plaintiff relies on this document, or the lack thereof, and does not question its authenticity. "[A] court may consider a writing referenced in a complaint but not explicitly incorporated therein if the complaint relies on the document and its authenticity is unquestioned." Id. (quoting Parrino v. FHP, Inc., 146 F.3d 699, 706 (9th ...