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Arreola v. Greenlight Financial Services

May 24, 2010

CUITLAHUAC ARREOLA AND GUADALUPE ARREOLA, PLAINTIFFS,
v.
GREENLIGHT FINANCIAL SERVICES; MIDLAND MORTGAGE COMPANY; SPECIALIZED LOAN SERVICING, LLC; DOES 1--20, DEFENDANTS.



The opinion of the court was delivered by: Hon. Thomas J. Whelan United States District Judge

ORDER GRANTING DEFENDANT'S MOTION TO DISMISS (Doc. No. 9.)

On July 15, 2009, Plaintiffs Cuitlahuac Arreola and Guadalupe Arreola ("Plaintiffs") filed this lawsuit against Defendants Greenlight Financial Services ("Greenlight"), Midland Mortgage Company ("Midland"), and Specialized Loan Servicing ("SLS"). On April 8, 2010, SLS moved to dismiss the complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). Plaintiffs have opposed the motion.

The Court decides the matter on the papers submitted and without oral argument pursuant to Civil Local Rule 7.1(d)(1). For the following reasons, the Court GRANTS SLS's motion to dismiss.

I. BACKGROUND

Plaintiffs are the current title holders of a home located at 1700 Canon Drive, Imperial, CA 92251. (the "Property") Defendants Greenlight, Midland, and SLS are institutions that have been, or are currently, involved with the mortgage on the Property.

Plaintiffs purchased the Property on December 11, 2006. The loan secured by the First Deed of Trust totaled $278,990. The second mortgage, secured by the Second Deed of Trust, totaled $55,700.00. Both loans had adjustable interest rates. At some point, Plaintiffs began having difficulty paying their mortgage.

On March 25, 2010, Plaintiffs filed their First Amended Complaint ("FAC"). On April 8, 2010, SLS moved to dismiss the lawsuit.

II. LEGAL STANDARD

The court must dismiss a cause of action for failure to state a claim upon which relief can be granted. Fed.R.Civ.P. 12(b)(6). A motion to dismiss under Rule 12(b)(6) tests the complaint's sufficiency. See North Star Int'l. v. Arizona Corp. Comm'n., 720 F.2d 578, 581 (9th Cir. 1983). All material allegations in the complaint, "even if doubtful in fact," are assumed to be true. Id. The court must assume the truth of all factual allegations and must "construe them in the light most favorable to the nonmoving party." Gompper v. VISX, Inc., 298 F.3d 893, 895 (9th Cir. 2002); see also Walleri v. Fed. Home Loan Bank of Seattle, 83 F.3d 1575, 1580 (9th Cir. 1996).

As the Supreme Court recently explained, "[w]hile a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the 'grounds' of his 'entitlement to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Bell Atlantic Corp. v. Twombly, 127 S.Ct. 1955, 1964 (2007). Instead, the allegations in the complaint "must be enough to raise a right to relief above the speculative level." Id. at 1964--65. A complaint may be dismissed as a matter of law either for lack of a cognizable legal theory or for insufficient facts under a cognizable theory. Robertson v. Dean Witter Reynolds, Inc., 749 F.2d 530, 534 (9th Cir. 1984).

Generally, the court may not consider material outside the complaint when ruling on a motion to dismiss. Hal Roach Studios, Inc. v. Richard Feiner & Co., 896 F.2d 1542, 1555 n.19 (9th Cir. 1990). However, the court may consider any documents specifically identified in the complaint whose authenticity is not questioned by the parties. Fecht v. Price Co., 70 F.3d 1078, 1080 n.1 (9th Cir. 1995) (superceded by statute on other grounds). Moreover, the court may consider the full text of those documents, even when the complaint quotes only selected portions. Id. The court may also consider material properly subject to judicial notice without converting the motion into a motion for summary judgment. Barron v. Reich, 13 F.3d 1370, 1377 (9th Cir. 1994) (citing Mack v. South Bay Beer Distribs., Inc., 798 F.2d 1279, 1282 (9th Cir. 1986) abrogated on other grounds by Astoria Federal Savings and Loan Ass'n v. Solimino, 501 U.S. 104 (1991)).

III. DISCUSSION

The FAC contains four causes of action: (1) intentional misrepresentation; (2) fraudulent concealment; (3) quiet title; and (4) a violation of 12 U.S.C. § 2605(e) and 24 C.F.R. § 3500. Plaintiffs are only asserting the third and fourth causes of action against Defendant SLS. ...


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