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Davidson v. Countrywide Home Loans

March 16, 2010

HARRIET DAVIDSON, PLAINTIFF,
v.
COUNTRYWIDE HOME LOANS, INC., BAC HOME LOANS SERVICING, LP, MORTGAGE ELECTRONIC REGISTRATION SYSTEM, INC., LANDSAFE TITLE CORPORATION, RECONTRUST COMPANY, N.A. AS TRUSTEE, AND DOE'S 1-5, DEFENDANTS.



The opinion of the court was delivered by: Irma E. Gonzalez, Chief Judge United States District Court

ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS' MOTION TO DISMISS [Doc. No. 7]

Presently before the Court is Defendants Countrywide Home Loans, Inc., BAC Home Loans Servicing, LP, Mortgage Electronic Registration System, Inc., Landsafe Title Corporation, and ReconTrust Company, N.A.'s ("Defendants") motion to dismiss Plaintiff Harriet Davidson's ("Plaintiff") Complaint. (Doc. No. 7.)

Plaintiff filed an opposition, and Defendants filed a reply. Defendants' motion is suitable for disposition without oral argument pursuant to Local Civil Rule 7.1(d)(1). For the reasons stated herein, the Courtgrants in part and denies in part Defendants' motion to dismiss.

FACTUAL BACKGROUND

The following facts are drawn from Plaintiff's Complaint. On or about February 13, 2007, Plaintiff entered into two promissory notes ("Notes") in the total amount of $528,650 secured by property located at 3731 Ruette De Ville, San Diego, California 92130 ("the Property"). Two deeds of trust ("Trust Deeds") were recorded on February 21, 2007.

Defendant Countrywide Home Loans, Inc. ("Countrywide") is the original lender under the Notes and the current beneficiary of record. Defendant BAC Home Loans Servicing, LP ("BAC") is purportedly the current servicer. Defendant Mortgage Electronic Registration System, Inc. ("MERS") is named as the beneficiary under the Trust Deeds as nominee for Countrywide. Defendant ReconTrust Company, N.A. ("ReconTrust") is named as the trustee of the Trust Deeds. Defendant LandSafe Title Corporation ("LandSafe") is purportedly the "attorney in fact" for ReconTrust.

On May 8, 2009, LandSafe published and recorded a Notice of Default and Election to Sell against the Property. The trustee sale was scheduled for December 2, 2009.

On October 9, 2009, Plaintiff submitted a Qualified Written Request to BAC, requesting copies of the loan documents. BAC allegedly has not responded to the request. Plaintiff further alleges that on the same day, Plaintiff's counsel submitted a demand letter to BAC pursuant to California Civil Code § 2943, and BAC allegedly has not responded.

The basis for Plaintiff's claims is that the Notes are unsecured as a result of being "bundled with other notes and sold as mortgage-backed securities or otherwise assigned and split from the Trust Deeds." (Compl. ¶ 23.) Plaintiff contends therefore, that none of the Defendants have an interest in the Trust Deeds or the Property, and have no authority to foreclose.

PROCEDURAL HISTORY

On December 2, 2009, Plaintiff filed the Complaint, which sets forth four causes of action: (1) violation of the Real Estate Settlement Procedures Act, (2) violation of California Civil Code § 2943, (3) quiet title, and (4) declaratory relief.*fn1 (Doc. No. 1.) In addition to damages and attorney's fees and costs, Plaintiff seeks a determination of title in favor of Plaintiff and an order releasing the Trust Deeds and stopping the trustee sale.

OnDecember 23, 2009, Defendants filed the instant motion to dismiss the Complaint for failure to state a claim, seeking dismissal of all four causes of action. (Doc. No. 7.)

DISCUSSION

I. Legal Standard

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 ...


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