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Fullmer v. JPMorgan Chase Bank

June 16, 2010



Defendants' motions to dismiss came on for hearing May 20, 2010. Kimberlee A. Rode appeared for plaintiff. LaShon Harris appeared for defendant JPMorgan Chase Bank, N.A. Joshua Mandell appeared for defendant OneWest Bank, FSB. Upon review of the motions and the documents in support and opposition, upon hearing the arguments of counsel and good cause appearing therefor, THE COURT FINDS AS FOLLOWS:


The court incorporates by reference the recitation of facts in its January 6, 2010 order.


On April 17, 2009, plaintiff filed the instant action and, proceeding on an amended complaint, alleged that defendants: (1) violated the Truth in Lending Act ("TILA"), 15 U.S.C. 1601 et seq., by failing to provide two accurate copies of Notice of Right to Cancel and failing to timely respond to plaintiffs' rescission letter; (2) violated the Real Estate Settlement Procedures Act ("RESPA"), 12 U.S.C. § 2601 et seq. by likewise failing to respond to the same correspondence; (3) violated the Rosenthal Fair Debt Collection Practices Act ("RFDCPA"), California Civil Code § 1788 et seq., by continuing to try to collect on the relevant loan after receiving plaintiff's letter; (4) violated California's Unfair Competition Law ("UCL"), California Business & Professions Code § 17200 et seq.; (5) breached the Implied Covenant of Good Faith and Fair Dealing; (6) are pursuing wrongful foreclosure; (7) have recorded documents impairing plaintiff's title, constituting slander of title; and (8) have taken and/or failed to take actions impairing plaintiff's credit.

On August 31, 2009, defendant OneWest Bank, FSB, filed a motion to dismiss and a motion to strike. Also on August 31, 2009, defendant JP Morgan Chase Bank, N.A., filed a motion to dismiss.

On January 6, 2010, the undersigned (1) dismissed with prejudice the TILA claims; (2) dismissed the RESPA claims; (3) denied plaintiff's request for joinder; (4) dismissed plaintiff's RFDCPA claims with leave to amend, allowing plaintiff an opportunity to allege how defendants violated the RFDCPA and the specific code section defendants allegedly violated; (5) dismissed the UCL claims; (6) dismissed the Good Faith and Fair Dealing claims; (7) dismissed the wrongful foreclosure claims; (8) dismissed the slander of title and credit claims; and (9) granted defendant OneWest's motion to strike plaintiff's request for punitive damages, but denied it in all other respects. To the extent plaintiff would be able to cure the deficiencies discussed in the order, plaintiff was granted thirty days to file a second amended complaint.

On February 4, 2010, plaintiff filed a second amended complaint in which he again claims violations of TILA, RESPA, and RFDCPA, and further adds the following claims:

(1) negligence, (2) civil conspiracy, (3) constructive fraud, and (4) deceit.

On February 22, 2010, defendants filed separate motions to dismiss. On March 19, 2010, plaintiff filed an opposition. On March 25, 2010, defendants filed separate replies.


The purpose of a motion to dismiss pursuant to Rule 12(b)(6) is to test the legal sufficiency of the complaint. N. Star Int'l v. Ariz. Corp. Comm'n, 720 F.2d 578, 581 (9th Cir. 1983). "Dismissal can be based on the lack of a cognizable legal theory or the absence of sufficient facts alleged under a cognizable legal theory." Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1990). A plaintiff is required to allege "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 1974 (2007). Thus, a defendant's Rule 12(b)(6) motion challenges the court's ability to grant any relief on the plaintiff's claims, even if the plaintiff's allegations are true.

In determining whether a complaint states a claim on which relief may be granted, the court accepts as true the allegations in the complaint and construes the allegations in the light most favorable to the plaintiff. Hishon v. King & Spalding, 467 U.S. 69, 73 (1984); Love v. United States, 915 F.2d 1242, 1245 (9th Cir. 1989).

The court is permitted to consider material properly submitted as part of the complaint, documents not physically attached to the complaint if their authenticity is not contested and the complaint necessarily relies on them, and matters of public record. Lee v. City of Los Angeles, 250 F.3d 668, 688-89 (9th Cir. 2001). Matters of public record include pleadings and other papers filed with a court. Mack v. South Bay Beer Distributors, 798 F.2d 1279, 1282 (9th Cir. 1986). The court need not accept as true conclusory allegations, unreasonable inferences, or unwarranted deductions of fact. Western Mining Council v. Watt, 643 F.2d 618, 624 (9th Cir. 1981).

On January 6, 2010, the court took judicial notice of the following:

1. Plaintiff and his wife acquired title to 4048 Monte Verde Drive, El Dorado Hills, CA, by grant deed recorded on March 3, 2006.

2. Plaintiff and his wife obtained a mortgage loan for $500,000.00 secured by a deed of trust against said real estate recorded on March 3, 2006. The deed of trust identifies 1st National Lending Services as the lender, Mortgage Electronic Registration Systems, Inc. as the nominee beneficiary, and Greenhead Investments, Inc. as the trustee, with plaintiff and his wife as borrowers.

3. Plaintiff and his wife obtained a second mortgage loan in the sum of $45,000.00 on or about March 3, 2006. That deed of trust identifies 1st National as the lender, Greenhead as the trustee and plaintiff and his wife as the borrowers.

4. Notice of default was recorded on June 23, 2009.*fn1

The notice of default was signed by Clayton Goff for NDEx West, LLC as Agent for Beneficiary, and directed plaintiff to contact OneWest Bank, FSB, c/o NDEx West, LLC, 15000 Surveyor Boulevard, Suite 500, Addison, Texas 75001-9813 to "find out the amount [he] must pay, or to arrange for payment to stop the foreclosure, or if [the] property is in foreclosure for any other reason."

On February 22, 2010, defendant JP Morgan Chase Bank requested judicial notice of the grant deed recorded on March 3, 2006; the deed of trust recorded on March 3, 2006, and the second deed of trust recorded on March 3, 2006. Because the court has already noticed these documents, defendant's request will be denied as redundant.


As an initial matter, defendants argue that plaintiff's newly added claims in the second amended complaint go beyond the scope of this court's January 6, 2010 order. In that order, plaintiff was granted an opportunity to file a second amended complaint "[t]o the extent [he] may be able to cure the deficiencies noted [in the order] . . . ." Interpreting the order liberally, plaintiff was granted leave to (1) identify Lender Doe One and/or Lender Doe Two with regard to the TILA claim; (2) plead sufficient facts showing a cognizable RESPA violation, specifically by showing actual pecuniary damage; and (3) plead sufficient facts to allow the court to determine whether the conduct alleged violates the RFDCPA.

Rule 15 of the Federal Rules of Civil Procedure provide that a party may amend its pleading once as a matter of course and, in all other cases, with leave of court. Fed. R. Civ. P. 15(a)(1)-(2). The Ninth Circuit has held that the liberality in granting leave to amend under Federal Rule of Civil Procedure 15(a) is subject to several limitations. See Ascon Properties, Inc. v. Mobil Oil Co., 866 F.2d 1149, 1160 (9th Cir. 1989) ("Leave need not be granted where the amendment of the complaint would cause the opposing party undue prejudice, is sought in bad faith, constitutes an exercise in futility, or ...

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