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Flores v. GMAC Mortgage

February 10, 2010


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


On August 7, 2009, Defendants filed a motion to dismiss Plaintiffs' First Amended Complaint ("FAC") under Federal Rule of Civil Procedure 12(b)(6), for failure to state a claim upon which relief can be granted. Defendants also argue Plaintiffs are judicially estopped from bringing their TILA claim since Plaintiffs failed to disclose the TILA claim in their bankruptcy proceedings. For the following reasons, Defendants' motion is granted.

I. Plaintiffs' Factual Allegations in Their First Amended Complaint

On January 12, 2006, Plaintiffs Jose and Nancy Flores obtained a loan in the amount of $514,000.00 to purchase the residential property located at 1707 Relvas Court in Folsom, California. (FAC ¶ 10.) MortgageIT acted as lender and GMAC Mortgage LLC serviced the loan. (FAC ¶ 13.) Deutsche Bank National Trust Company now owns MortgageIT. (FAC ¶ 16.) MortgageIT failed to provide Plaintiffs with two copies of their "Notice of Right to Cancel" at the consummation of the loan as required by the Truth in Lending Act ("TILA"). (FAC ¶¶ 25-26.) On December 31, 2008, Plaintiffs sent a letter to Defendants in which they demanded rescission of their loan under the provisions of TILA. (FAC ¶¶ 24, 38; FAC Ex. B.)

Plaintiffs allege the following claims: (1) violation of TILA, 15 U.S.C. §§ 1601 et seq.; (2) violation of the Real Estate Settlement Procedures Act ("RESPA"), 12 U.S.C. §§ 2601, et seq.; (3) violation of California Business and Professions Code section 17200; (4) violation of the Fair Credit Reporting Act ("FCRA"), 12 U.S.C. §§ 1681, et seq.; and (5) breach of the implied covenant good faith and fair dealing.

II. Legal Standard

"A Rule 12(b)(6) motion tests the legal sufficiency of a claim." Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). To avoid dismissal, Plaintiffs must allege "enough facts to state a claim to relief that is plausible on its face." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007). When considering a dismissal motion, all "allegations of material fact are taken as true and construed in the light most favorable to the nonmoving party."

Thompson v. Davis, 295 F.3d 890, 895 (9th Cir. 2002). However, this "tenet . . . is inapplicable to threadbare recitals of a cause of action's elements, supported by mere conclusory statements." Ashcroft v. Iqbal, 556 U.S. ---, 129 S.Ct. 1937, 1940 (2009).

III. Judicial Notice

Defendants request that the Court take judicial notice of the following documents related to Plaintiffs' bankruptcy proceedings:

(1) Voluntary Petition for Chapter 7 bankruptcy protection filed by Plaintiffs in the United States Bankruptcy Court, Eastern District of California, Case No. 08-37210, dated November 24, 2008; (2) Amended Schedules B and C, filed in Case No. 08-37210, dated December 1, 2008; (3) the Report of No Assets Case, filed by Bankruptcy Trustee Michael F. Burkhart in Case No. 87-37210, dated December 24, 2008; (4) Motion of Relief from Automatic Stay and Points and Authorities in Support of the Motion, filed in Case No. 08-37210, each dated February 17, 2009; (5) the Discharge of Debtor Order in Case No. 08-37210, dated March 3, 2009; and (6) the Order Granting Motion for Relief from Automatic Stay in Case No. 08-37210, dated April 3, 2009. (Request for Judicial Notice ("RJN") Exs. 1-6.)

"Materials from a proceeding in another tribunal are appropriate for judicial notice." Biggs v. Terhune, 334 F.3d 910, 915 n.3 (9th Cir. 2003). "[A]mple authority exists which recognizes that matters of public record, including court records in related or underlying cases which have a direct relation to the matters at issue, may be looked to when ruling on a 12(b)(6) motion to dismiss." In re Am. Cont'l Corp./Lincoln Sav. & Loan Sec. Litig., 102 F.3d 1524, 1537 (9th Cir. 1996) (collecting cases), rev'd on other grounds by Lexecon, Inc. v. Milberg Weiss Bershad Hynes & Lerach, 523 U.S. 26 (1998).

Plaintiffs have not objected to Defendants' request for judicial notice. The Court has reviewed the Bankruptcy Docket in Case No. 08-37210, and takes judicial notice of these documents under Federal Rule of Evidence 201 since they are matters of public record. See Pritinik v. Comerica Bank, 2009 WL 3857455, *3 (N.D. Cal. 2009) (taking judicial notice of bankruptcy filings); Rosal v. First Federal Bank of California, -- F. Supp. 2d ---, 2009 WL 2136777, *4 (N.D. Cal. 2009) (taking judicial notice of bankruptcy court filings in support of motion to dismiss under Rule 12(b)(6)); Cobb v. ...

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