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Christopher v. First Franklin Financial Corp.

April 30, 2010


The opinion of the court was delivered by: Hon. Dana M. Sabraw United States District Judge


Pending before the Court is Defendants' motion to dismiss and motion to strike portions of Plaintiffs' First Amended Complaint ("FAC"). For the following reasons, the motion to dismiss is granted.


This matter arises out Plaintiff Herman Q. Cristopher's home loan and subsequent foreclosure of real property located in San Diego, California. Plaintiffs are Herman Q. Cristopher and Deshawn Reilly.*fn1 Defendants are First Franklin Financial Corporation, LaSalle Bank, Merrill Lynch Mortgage Loan Trust 2007-4, Bank of America, Mortgage Electronic Registration Systems, Inc. ("MERS), Home Loan Services, Inc., and Cal-Western Reconveyance Corp.

On or about April 20, 2007, Plaintiff Christopher obtained a loan from Defendant First Franklin Financial Corporation in exchange for a deed of trust on the real property. (FAC ¶ 18.) The deed of trust was recorded on April 26, 2007. (Id. at Ex. B.) On July 10, 2007, Christopher recorded a grant deed in favor of DBR Strategies, Inc. (Id. at ¶ 2, Ex. A.) On September 12, 2007, Defendants LaSalle Bank, Merrill Lynch, and Cal-Western Reconveyance recorded a notice of default on the property. (Id at ¶ 21, Ex. C.) On February 1, 2008, Defendants recorded a Notice of Trustee's Sale, setting the sale date for February 20, 2008. (Id. at Ex. D.) The home was sold at the trustee's sale to Defendants LaSalle and Merrill Lynch. (Id. at ¶ 23.)

Plaintiffs contend that Defendants have not obtained a valid assignment of Plaintiffs' loan and that all rights and title claimed under the loan are invalid. (Id. at ¶¶ 12, 14.) Plaintiffs assert nine claims for relief: 1) to set aside sale; 2) cancel trustee's deed; 3) quiet title; 4) unfair debt collection practices; 5) unfair business practices in violation of California's Unfair Competition Law ("UCL"), Cal. Bus. & Prof. Code § 17200, et seq.; 6) violation of 15 U.S.C. § 1639; 7) conspiracy to commit fraud and conversion; 8) conspiracy to commit fraud related to MERS; and 9) declaratory relief.

Plaintiffs' original complaint was removed from state court on January 5, 2010. (Doc. 1.) On February 5, 2010, Plaintiffs filed the FAC. (Doc. 4.) Defendants filed the instant motion on March 11, 2010. (Doc. 6.) Plaintiffs filed an opposition (Doc. 9); Defendants did not file a reply.


In two recent opinions, the Supreme Court established a more stringent standard of review for 12(b)(6) motions. See Ashcroft v. Iqbal, ___ U.S. ___, 129 S.Ct. 1937 (2009); Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007). To survive a motion to dismiss under this new standard, "a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Iqbal, 129 S.Ct. at 1949 (citing Twombly, 550 U.S. at 570). "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." Id. (citing Twombly, 550 U.S. at 556). "Determining whether a complaint states a plausible claim for relief will... be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Id. at 1950 (citing Iqbal v. Hasty, 490 F.3d 143, 157-58 (2d Cir. 2007)). In Iqbal, the Court began this task "by identifying the allegations in the complaint that are not entitled to the assumption of truth." Id. at 1951. It then considered "the factual allegations in respondent's complaint to determine if they plausibly suggest an entitlement to relief." Id. at 1951.


Initially, Defendants contend that each of Plaintiffs' claims fail because the FAC relies largely on conclusory allegations, without any factual support. Defendants argue that all of Plaintiffs' claims stem from the allegation that various assignments were invalid or unrecorded. Defendants contend that the assignments were recorded, as shown by the documents in Defendants' request for judicial notice.*fn2

Plaintiffs argue the FAC is sufficient, especially in light of the documents attached to the FAC and the documents submitted by Defendants. Plaintiffs contend there is a date discrepancy in the assignments provided by Defendant and that this indicates that one of the assignments was forged. Plaintiffs further contend that there is no chain of title from First Franklin, the original note holder, to LaSalle Bank, the entity listed on the Notice of Default, and that any contracts involving MERS are voidable because MERS has failed to pay state taxes.

Although Plaintiffs' opposition raises questions as to the validity of the assignments, the FAC itself does not provide sufficient notice to Defendants to be able to respond to Plaintiffs' claims. It is clear from the FAC that Plaintiff Christopher obtained a loan secured by a deed of trust on his property. After that, the FAC simply concludes that any subsequent activity was invalid and that the foreclosure was done improperly. Accordingly, the Court dismisses Plaintiffs' complaint, ...

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