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Pernell v. BAC Home Loans Servicing

April 2, 2010


The opinion of the court was delivered by: Kendall J. Newman United States Magistrate Judge


Presently before the court is defendants' motion to dismiss the complaint filed by plaintiff, who is proceeding without counsel.*fn1 (Dkt. No. 5.) The court heard this matter on its law and motion calendar on April 1, 2010. Attorney Benjamin J.B. Allen appeared via telephone on behalf of defendants. Monique M. Pernell, the plaintiff, appeared on her own behalf. The undersigned has considered the parties' briefs, oral arguments, and the record in this case and, for the reasons stated below, grants defendants' motion to dismiss without prejudice and grants plaintiff leave to file a first amended complaint within 30 days of the date of this order.*fn2


On April 25, 2006, plaintiff executed and delivered to defendant BAC Home Loans Servicing, LP ("BAC Home Loans") a written promissory note in an amount of $285,519.00 regarding the property located at 5291 Scarborough Way in Sacramento, California. (Pl.'s Compl. ¶¶ 1, 5 & Ex. B, Dkt. No. 1, Doc. 1-2 at 3, 4, 10-13.) Plaintiff secured payment of the principal and interest sums with a deed of trust delivered to defendant Reconstrust Company as beneficiary, which was recorded on May 2, 2006. (Id. ¶ 6 & Ex. C.) On August 10, 2009, defendant Recontrust Company recorded a Trustee's Deed Upon Sale, which indicates an unpaid debt, and resulting sale price paid by defendant BAC Home Loans at public auction, of $294,877.65. (Id. ¶ 7 & Ex. D.)

On November 13, 2009, plaintiff filed her complaint in Sacramento Superior Court. (Dkt. No. 1, Doc. 1-2 at 3-7.) On November 18, 2009, plaintiff filed an application for a restraining order ("TRO") in the Superior Court, which was denied. (Dkt. No. 1, Doc. 1-2 at 71-72.) On December 23, 2009, defendants filed a notice of removal with this court. (Dkt. No. 1.) Defendants allege in their notice of removal that they were not served with plaintiff's summons and compliant and that they received notice of the complaint only after receiving plaintiff's application for a TRO in state court on November 24, 2009. (Dkt. No. 1 at 2:9-11.) Accordingly, defendants' removal was timely. See 28 U.S.C. § 1446(b).

The complaint seeks declaratory relief (claim one), injunctive relief setting aside the foreclosure sale (claim two), and an accounting of money that defendants allegedly owe plaintiff. (See Pl.'s Compl. ¶¶ 9-14.) Plaintiff's declaratory relief alleges that no breach of an obligation for which the deed of trust serves as security has occurred because "(a) Plaintiff contends that Fraud and embezzlement in the inception of the purported mortgage loan, and (b) Defendant BAC HOME LOANS . . . refusal to validate the debt under the FAIR DEBT COLLECTIONS ACT and the TRUTH IN LENDING ACT, 15 U.S.C. 1601 ET SEQ (TILA)[.]" (Id. ¶ 8a*fn3 (emphasis in original); see also id. ¶ 8b (alleging perpetration of fraud and refusal to validate the debt).) In what appears to be part of the declaratory relief claim, plaintiff also alleges that Recontrust Company "improperly conducted the [trustee's] sale in that Defendant failed to comply with the publishing and posting requirements of Civil Code §2924f and by failure to comply and follow both Federal and State foreclosure procedures and non compliance of proper notification of foreclosure and trustee sale and also right to reinstate[.]" (Id. ¶ 9.)

Plaintiff's remaining claims also are tersely pled. Plaintiff's claim for injunctive relief seeks to set aside the trustee's sale and is premised on the allegations pled in support of plaintiff's declaratory relief claim. (Id. ¶¶ 11-12.) Finally, plaintiff's claim for an accounting is confined to one paragraph, which states: "The amount of money Defendants owes to Plaintiff is unknown to Plaintiff and cannot be determined without an accounting." (Id. ¶ 14.)

On December 30, 2009, defendants filed their motion to dismiss. (Dkt. No. 5.)

Plaintiff filed a written opposition to defendants' motion. (Dkt. No. 9.)


A motion to dismiss brought pursuant to Federal Rule of Civil Procedure 12(b)(6) challenges the sufficiency of the pleadings set forth in the complaint. Vega v. JPMorgan Chase Bank, N.A., 654 F. Supp. 2d 1104, 1109 (E.D. Cal. 2009). Under the "notice pleading" standard of the Federal Rules of Civil Procedure, a plaintiff's complaint must provide, in part, a "short and plain statement" of plaintiff's claims showing entitlement to relief. Fed. R. Civ. P. 8(a)(2); see also Paulsen v. CNF, Inc., 559 F.3d 1061, 1071 (9th Cir. 2009). "A complaint may survive a motion to dismiss if, taking all well-pleaded factual allegations as true, it contains 'enough facts to state a claim to relief that is plausible on its face.'" Coto Settlement v. Eisenberg, 593 F.3d 1031, 1034 (9th Cir. 2010) (quoting Ashcroft v. Iqbal, ___ U.S. ___, 129 S.Ct. 1937, 1949 (2009)). "'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.'" Caviness v. Horizon Cmty. Learning Ctr., Inc., 590 F.3d 806, 812 (9th Cir. 2010) (quoting Iqbal, 129 S.Ct. at 1949). The court accepts "all facts alleged as true and construes them in the light most favorable to the plaintiff." County of Santa Clara v. Astra USA, Inc., 588 F.3d 1237, 1241 n.1 (9th Cir. 2009). The court is "not, however, required to accept as true conclusory allegations that are contradicted by documents referred to in the complaint, and [the court does] not necessarily assume the truth of legal conclusions merely because they are cast in the form of factual allegations." Paulsen, 559 F.3d at 1071 (citations and quotation marks omitted). The court must construe a pro se pleading liberally to determine if it states a claim and, prior to dismissal, tell a plaintiff of deficiencies in his complaint and give plaintiff an opportunity to cure them if it appears at all possible that the plaintiff can correct the defect. See Lopez v. Smith, 203 F.3d 1122, 1130-31 (9th Cir. 2000).

In ruling on a motion to dismiss pursuant to Rule 12(b)(6), the court "may generally consider only allegations contained in the pleadings, exhibits attached to the complaint, and matters properly subject to judicial notice."*fn4 Outdoor Media Group, Inc. v. City of Beaumont, 506 F.3d 895, 899 (9th Cir. 2007) (citation and quotation marks omitted). However, under the "incorporation by reference" doctrine, a court may also review 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." Knievel v. ESPN, 393 F.3d 1068, 1076 (9th Cir. 2005) (citation omitted and modification in original). The incorporation by reference doctrine also applies "to situations in which the plaintiff's claim depends on the contents of a document, the defendant attaches the document to its motion to dismiss, and the parties do not dispute the authenticity of the document, even though the plaintiff does not explicitly allege the contents of that document in the complaint." Id.

A motion to dismiss pursuant to Rule 12(b)(6) may also challenge a complaint's compliance with Federal Rule of Civil Procedure 9(b) where fraud is an essential element of a claim. See Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1107 (9th Cir. 2003). Rule 9(b), which provides a heightened pleading standard, states: "In alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake. Malice, intent, knowledge, and other conditions of a person's mind may be alleged generally." Fed. R. Civ. P. 9(b). These circumstances include the "'time, place, and specific content of the false representations as well as the identities of the parties to the misrepresentations.'" Swartz v. KPMG LLP, 476 F.3d 756, 764 (9th Cir. 2007) (quoting Edwards v. Marin Park, Inc., 356 F.3d 1058, 1066 (9th Cir. 2004)); see also Kearns v. Ford Motor Co., 567 F.3d 1120, 1124 (9th Cir. 2009) ("Averments of fraud must be accompanied by 'the who, what, when, where, and how' of the misconduct charged" (citation omitted).). "Rule 9(b) demands that the circumstances constituting the alleged fraud be specific enough to give defendants notice of the particular misconduct . . . so that they can defend against the charge and not just deny that they have done anything wrong." Kearns, 567 F.3d at 1124 (citing Bly-Magee v. California, 236 F.3d 1014, 1019 (9th Cir. 2001) (internal quotation marks omitted and modification in original).


A. Plaintiff's Claim for Declaratory Relief

1. Failure to Tender

Defendants first argue that all of plaintiff's claims for relief should be dismissed because plaintiff has not alleged that she tendered the full amount owed on the loan prior to commencing her lawsuit. (Memo. of P. & A. in Supp. of Defs.' Mot. to Dismiss at 4-5.) Plaintiff does not directly respond to defendants' argument in her opposition brief, but she stated at the hearing on defendant's motion to dismiss that she has not tendered the amount of the loan.

"Under California law, in an action to set aside a trustee's sale, a plaintiff must demonstrate that he has made a valid and viable tender [offer] of payment of the indebtedness." Pantoja v. Countrywide Home Loans, Inc., 640 F. Supp. 2d 1177, 1183-84 (N.D. Cal. 2009) (citations and quotation marks omitted); see also Alcaraz v. Wachovia Mortgage FSB, 592 F. Supp. 2d 1296, 1304 (E.D. Cal. 2009) ("'A valid and viable tender of payment of the indebtedness owing is essential to an action to cancel a voidable sale under a deed of trust.'") (citing Karlsen v. Am. Sav. & Loan Ass'n, 15 Cal. App. 3d 112, 92 Cal. Rptr. 851 (Ct. App. 1971)). A tender must be one of full performance and must also be unconditional. Arnolds Mgmt. Corp. v. Eischen, 158 Cal. App. 3d 575, 580, 205 Cal. Rptr. 15, 18 (Ct. App. 1984).

The California Court of Appeal has held that the tender rule applies in an action to set aside a trustee's sale for irregularities in the sale notice or procedure and has stated that "[t]he rationale behind the rule is that if plaintiffs could not have redeemed the property had the sale procedures been proper, any irregularities in the sale did not result in damages to the plaintiffs." FPCI RE-HAB 01 v. E & G Invs., Ltd., 207 Cal. App. 3d 1018, 1021, 255 Cal. Rptr. 157, 160 (Ct. App. 1989). Furthermore, a party must allege full tender "in order to maintain any cause of action for irregularity in the sale procedure." Abdallah v. United Savs. Bank, 43 Cal. App. 4th 1101, 1109, 51 Cal. Rptr. 2d 286, 292 (Ct. App. 1996); see also Arnolds Mgmt. Corp., 158 Cal. App. 3d at 579, 205 Cal. Rptr. at 18 ("A cause of action 'implicitly integrated' with the irregular sale fails unless the trustor can allege and establish a valid tender" (citation omitted)). However, an offer of tender may not be required where it would be inequitable. Pantoja, 640 F. Supp. 2d at 1184 (citing Humboldt Sav. Bank v. McCleverty, 161 Cal. 285, 291, 119 P. 82 (1911) (holding that it would be inequitable to impose the tender requirement where a portion of the debt at issue did not belong to the party subject to the tender rule); see also Vissuet v. ...

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