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Kemp v. American Home Mortgage Servicing

February 2, 2010


The opinion of the court was delivered by: Garland E. Burrell, Jr. United States District Judge


On September 21, 2009, Defendant American Home Mortgage Servicing, Inc. ("AHMSI") filed a motion under Federal Rule of Civil Procedure 12(b)(6)("Rule 12(b)(6)") to dismiss Plaintiff's first amended complaint. (Docket No. 16.) On October 14, 2009, Defendants Sand Corporation f/k/a Option One Mortgage Corporation ("Option One") and H & R Block Mortgage Corporation ("H & R Block") also filed a motion under Rule 12(b)(6) seeking an order dismissing Plaintiff's first amended complaint, or alternatively, an order compelling a more definite statement under Federal Rule of Civil Procedure 12(e). (Docket No. 25.)*fn2


A motion under Federal Rule of Civil Procedure 12(b)(6) ("Rule 12(b)(6)") "challenges a complaint's compliance with . . . pleading requirements." Champlaie v. BAC Home Loans Servicing, LP, No. S-09-1316 LKK/DAD, 2009 WL 3429622, at *1 (E.D. Cal. Oct. 22, 2009). A pleading must contain "a short and plain statement of the claim showing that the pleader is entitled to relief . . . ." Fed. R. Civ. P. 8(a)(2). The complaint must "give the defendant fair notice of what the [plaintiff's] claim is and the grounds upon which relief rests . . . ." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). Further, "[a] pleading that offers labels and conclusions or a formulaic recitation of the elements of a cause of action will not do. Nor does a complaint suffice if it tenders naked assertions devoid of further factual enhancement." Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009).

To avoid dismissal, the plaintiff must allege "only enough facts to state a claim to relief that is plausible on its face." Twombly, 550 U.S. at 547. "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. Plausibility, however, requires more than "a sheer possibility that a defendant has acted unlawfully." Id. "When a complaint pleads facts that are merely consistent with a defendant's liability, it stops short of the line between possibility and plausibility of entitlement to relief." Id. (quotations and citation omitted).

In evaluating a dismissal motion under Rule 12(b)(6), the court "accept[s] as true all facts alleged in the complaint, and draw[s] all reasonable inferences in favor of the plaintiff." Al-Kidd v. Ashcroft, 580 F.3d 949, 956 (9th Cir. 2009). However, neither conclusory statements nor legal conclusions are entitled to a presumption of truth. See Iqbal, 129 S.Ct. at 1949-50.

All parties request that judicial notice be taken of two documents: (1) a Deed of Trust, recorded on July 24, 2006; and (2) an assignment of the Deed of Trust. Plaintiff also requests that judicial notice be taken of three other documents: (1) a copy of the qualified written request ("QWR") Plaintiff sent to AHMSI on April 17, 2009; (2) a copy of a mortgage statement sent by AHMSI to Plaintiff demanding payment; and (3) a copy of the loan servicing notice sent to Plaintiff on July 14, 2006. Option One and H & R Block also attached two exhibits to their motion to dismiss: (1) a Truth in Lending Disclosure Statement; and (2) Notices of Right to Cancel.

While, "as a general rule, a district court may not consider materials not originally included in the pleadings in deciding a Rule 12 motion . . . it may take judicial notice of matters of public record and may consider them without converting a Rule 12 motion into one for summary judgment." U.S. v. 14.02 Acres of Land More or Less in Fresno County, 547 F.3d 943, 955 (9th Cir. 2008)(quotations and citations omitted). However, to take judicial notice of a fact, it must be either "generally known within the territorial jurisdiction of the trial court" or "capable of accurate and ready determination by resort to sources whose accuracy cannot reasonably be questioned."

Fed. R. Evid. 201(b). The Deed of Trust and the assignment of the Deed of Trust are publically recorded documents of which judicial notice may properly be taken. The other documents submitted by Plaintiff, however, are not appropriate for judicial notice since they are not publicly recorded or otherwise easily verifiable.

However, under the doctrine of "incorporation by reference," a court may consider "documents, whose contents are alleged in a complaint and whose authenticity no party questions, but which are not physically attached to plaintiff's pleading." Knievel v. ESPN, 393 F.3d 1068, 1076 (9th Cir. 2005)(quotations and citations omitted). The purpose of this doctrine is to "prevent plaintiffs from surviving a Rule 12(b)(6) motion by deliberately omitting documents upon which their claims are based . . . ." Swartz v. KPMG LLP, 476 F.3d 756, 763 (9th Cir. 2007). Plaintiff's first amended complaint refers to the QWR it sent to AMHSI as well as the Truth in Lending Disclosure and Notice of Right to Cancel documents. (First Amended Compl. ("FAC") ¶¶ 26, 30, 37, 55, 80.) Since no party has questioned the authenticity of these three documents, they may be considered under the incorporation by reference doctrine without converting Plaintiff's motion into one for summary judgment. Plaintiff, however, has not demonstrated that the other two documents - the mortgage statement sent by AHMSI and a copy of the loan servicing notice sent to Plaintiff - may properly be considered on a dismissal motion. These two documents, are therefore, disregarded.


On or about July 13, 2006, Plaintiff obtained a mortgage loan from H & R Block for the amount of two hundred fifty five thousand dollars. (Request for Judicial Notice Ex. 1.) The loan was secured by a Deed of Trust on the property located at 167 Creekside Circle in Sacramento, California. (Id.) The Deed of Trust identifies Premier Trust Deed Services, Inc. as the trustee and H & R Block as the lender. (Id.)

Plaintiff alleges that in July 2006, Kathi Aldridge represented to Plaintiff that "she was the loan officer for Defendant H & R [Block], and solicited her to refinance her residence." (FAC ¶ 20.) Plaintiff's claims stem from her allegations that Aldridge induced her into purchasing an allegedly unaffordable loan through misrepresentations, non-disclosure, and fraudulent conduct. Specifically, Plaintiff alleges that "Aldridge advised Plaintiff that she could get her the 'best deal' and the 'best interest rates' available on the market" and if the loan ever became unaffordable, she would be able to refinance. (Id. ¶¶ 21, 25.) Further, Plaintiff alleges that Aldridge "fraudulently overstated" Plaintiff's income on her loan application. (Id. ¶ 23-24.)

Plaintiff filed her initial complaint in this federal district court on June 15, 2009. AHMSI filed a motion to dismiss on August 7, 2009 that was mooted by Plaintiff's filing of an amended complaint on August 28, 2009. Plaintiff's first amended complaint ...

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