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Saugstad v. American Home Mortgage Servicing Inc.

July 29, 2010

OSTEN E. SAUGSTAD, JR, PLAINTIFF,
v.
AMERICAN HOME MORTGAGE SERVICING INC.; UMOC LENDING, INC.; OPTION ONE MORTGAGE CORPORATION; DANIEL BROWN MORTGAGE DBA UMOC LENDING, INC.; SONJA WINDIFRED GORMAN; AND DOES 1 THROUGH 20, INCLUSIVE, DEFENDANTS.



ORDER GRANTING DEFENDANT‟S MOTION TO DISMISS

This matter comes before the Court on Defendant American Home Mortgage Servicing, Inc.‟s ("Defendant‟s") Motion to Dismiss, (Doc. 14), Plaintiff Osten E. Saugstad, Jr.‟s ("Plaintiff‟s") First Amended Complaint ("FAC") (Doc. 11). The motion to dismiss is brought pursuant to Federal Rule of Civil Procedure 12(b)(6), for failure to state a claim upon which relief can be granted. Plaintiff also moves the Court to strike portions of the FAC, pursuant to Federal Rule of Civil Procedure 12(f). Plaintiff opposes the motion. (Doc. 28).*fn1

I. FACTUAL AND PROCEDURAL BACKGROUND

On August 7, 2006, Plaintiff entered into a loan agreement with UMOC Lending, Inc. ("UMOC") to refinance property at 42140 6th Street, Knights Landing, California ("subject property"). This loan was secured by a Deed of Trust ("Deed"), recorded on August 22, 2006. The Deed listed Premier Trust Deed Services, Inc. as Trustee and UMOC as Lender. Plaintiff alleges that he did not receive copies of the loan documents, did not have an opportunity to review the documents, and did not receive an explanation as to the meaning of the documents at the time of closing.

On August 22, 2006, defendant Option One Mortgage Corp. ("Option One") prepared an Assignment of Deed of Trust ("Assignment") which transferred the beneficial interest in the Deed from UMOC to Option One. The Assignment was not recorded until May 14, 2007.

On or around June 16, 2008, Option One wrote a letter to Plaintiff notifying him that the servicing of his mortgage loan on the subject property was being transferred from Option One to Defendant, American Home Mortgage Servicing, Inc. ("Defendant"). Plaintiff contends that he did not receive this letter.

On August 7, 2009, Plaintiff allegedly sent a Qualified Written Request ("QWR") to Defendant pursuant to the Real Estate Settlement Procedures Act ("RESPA"), 12 U.S.C. §§ 2601-2617, which requested servicing information and documentation from Defendant and included a demand to rescind the loan under the Truth in Lending Act ("TILA"), 15 U.S.C. §§ 1601-1667(f).

On November 18, 2009, a Notice of Default and Election to Sell Under Deed of Trust was recorded, identifying Power Default Services, Inc. ("Power") as the trustee under the Deed on the subject property. Plaintiff asserts that he has not received notice of the assignment of trustee from Premier to Power.

Plaintiff‟s FAC alleges five state law causes of action as to Defendant, some of which rely on federal statutes for support. The claims are: (1) violation of the California Rosenthal Act; (2) negligence (statutory and common law); (3) fraud; (4) violation of California Business & Professions Code § 17200, et seq.; and (5) breach of contract. Defendant filed a combined motion to dismiss and motion to strike portions of Plaintiff‟s FAC.

In his Opposition to Motion to Dismiss and Motion to Strike ("Opposition"), Plaintiff asserts that he has alleged no federal claims in the FAC, and therefore this Court should not retain jurisdiction. He then emphasizes that alleged RESPA violations are an integral part of his state claims, and opposes Defendant‟s request to strike the RESPA allegations from the FAC.

Because it is clear that the RESPA claims are necessary to Plaintiff‟s other claims, the Court will retain jurisdiction and address these allegations. See Meza v. Matrix Servicing, 2010 WL 366623, at *2 (E.D. Cal. Jan. 6, 2010) ("When a complaint pleads only state causes of action, original federal jurisdiction is unavailable unless it appears that some substantial, disputed question of federal law is a necessary element of one of the well-pleaded state claims, or that one or the other claim is "really‟ one of federal law.") (citing Morongo Band of Mission Indians v. Cal. State Bd. Of Equalization, 858 F.2d 1376, 1383 (9th Cir. 1988)).

II. OPINION

A. Legal Standard

A party may move to dismiss an action for failure to state a claim upon which relief can be granted pursuant to Federal Rule of Civil Procedure 12(b)(6). In considering a motion to dismiss, the court must accept the allegations in the complaint as true and draw all reasonable inferences in favor of the plaintiff. Scheuer v. Rhodes, 416 U.S. 232, 236 (1975), overruled on other grounds by Davis v. Scherer, 468 U.S. 183 (1984); Cruz v. Beto, 405 U.S. 319, 322 (1972). "Notwithstanding this deference, it is improper for a court to assume the plaintiff can prove fact which he or she has not alleged." Ozuna v. Home Capital Funding, 2009 WL 2496804, at *1 (S.D. Cal. Aug. 13, 2009).

Assertions that are mere "legal conclusions," however, are not entitled to the assumption of truth. Ashcroft v. Iqbal, 129 S.Ct. 1937, 1950 (2009), citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). To survive a motion to dismiss, a plaintiff needs to plead "enough facts to state a claim to relief that is plausible on its face." Twombly, 550 U.S. at 570. Dismissal is appropriate where the plaintiff fails to state a claim ...


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