The opinion of the court was delivered by: Garland E. Burrell, Jr. United States District Judge
ORDER GRANTING IN PART DEFENDANT'S MOTION TO DISMISS AND REMANDING PLAINTIFFS' STATE LAW CLAIMS
Defendant moves for dismissal of Plaintiffs' First Amended Complaint under Federal Rule of Civil Procedure ("Rule") 12(b)(6), arguing Plaintiffs have failed to allege sufficient facts to state viable claims.
A Rule 12(b)(6) dismissal motion tests the legal sufficiency of the claims alleged in the complaint. Novarro v. Black, 250 F.3d 729, 732 (9th Cir. 2001). A pleading must contain "a short and plain statement of the claim showing that the pleader is entitled to relief . . . ." Fed. R. Civ. P. 8(a)(2). The complaint must "give the defendant fair notice of what the [plaintiff's] claim is and the grounds upon which relief rests . . . ." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007).
Dismissal of a claim under Rule 12(b)(6) is appropriate only where the complaint either 1) lacks a cognizable legal theory, or 2) lacks factual allegations sufficient to support a cognizable legal theory. Balistreri v. Pacific Police Dept., 901 F.2d 696, 699 (9th Cir. 1988). To avoid dismissal, a plaintiff must allege "only enough facts to state a claim to relief that is plausible on its face." Twombly, 550 U.S. at 547.
In deciding a Rule 12(b)(6) motion, the material allegations of the complaint are accepted as true and all reasonable inferences are drawn in favor of the plaintiff. See al-Kidd v. Ashcroft, 580 F.3d 949, 956 (9th Cir. 2009). However, conclusory statements and legal conclusions are not entitled to a presumption of truth. See Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949-50 (2009); Twombly, 550 U.S. at 555. "In sum, for a complaint to survive a motion to dismiss, the nonconclusory 'factual content,' and reasonable inferences from that content, must be plausibly suggestive of a claim entitling the plaintiff to relief." Moss v. United States Secret Serv., 572 F.3d 962, 969 (9th Cir. 2009).
II. REQUEST FOR JUDICIAL NOTICE
Defendant's motion includes a request that the Court take judicial notice of two Deeds of Trust recorded with the Nevada County Recorder on December 3, 2007. (Defendant's Req. for Judicial Notice in Supp. of Mot. to Dismiss First Am. Compl. ("RJN") Exs. 1-2.) Plaintiffs do not oppose this request.
"As a general rule, a district court may not consider any material beyond the pleadings in ruling on a Rule 12(b)(6) motion." Lee v. City of Los Angeles, 250 F.3d 668, 688 (9th Cir. 2001)(quotations and citation omitted). However, a court may consider matters properly subject to judicial notice. Swartz v. KPMG LLP, 476 F.3d 756, 763 (9th Cir. 2007). A matter may be judicially noticed if it is either "generally known within the territorial jurisdiction of the trial court" or "capable of accurate and ready determination by resort to sources whose accuracy cannot reasonably be questioned." Fed. R. Evid. 201(b).
Since the Deeds of Trust are publically recorded documents, they may be judicially noticed. See W. Fed. Sav. & Loan Ass'n v. Heflin Corp., 797 F. Supp. 790, 792 (1992)(taking judicial notice of documents in a county's public record, including deeds of trust). Therefore, Defendant's request that these documents be judicially noticed is granted.
Plaintiffs obtained two loans from Defendant around November of 2007, which were secured by their home in Grass Valley, California. (RJN, Exs. 1-2.) The loans were memorialized in Promissory Notes secured by Deeds of Trust on the property. (Id.) The Deeds of Trust identify Defendant as the lender. (Id.)
In essence, Plaintiffs allege Defendant directed them into unaffordable loans by overstating Plaintiffs' income by $9,000 per month on the loan application and over-appraising the property's value. (Id. ¶¶ 13, 14.) Plaintiffs also allege the parties reached an oral agreement "for a permanent ...