ORDER AND FINDINGS AND RECOMMENDATIONS
This case is before the undersigned pursuant to Eastern District of California Local Rule 302(c)(21). See 28 U.S.C. § 636(b)(1). Defendants Select Portfolio Servicing, Inc. ("SPS") and National Default Servicing Corp. ("NDSC") removed the action from Solano County Superior Court on January 29, 2010 on the basis of federal question jurisdiction. Dckt. No. 1 (citing 28 U.S.C. §§ 1441(b), 1446(b), and 1331).
Currently pending are (1) defendant SPS's motion to dismiss plaintiff's complaint, Dckt. No. 9; (2) defendant SPS's motion to expunge a lis pendens recorded by or on behalf of plaintiff, Dckt. No. 16; (3) plaintiff's motion to remand this action to state court and request for sanctions, Dckt. No. 19; (4) defendant CMG Mortgage, Inc.'s ("CMG") motion to dismiss plaintiff's complaint, Dckt. No. 26; (5) plaintiff's motion to add Angelo Webb as a co-plaintiff in this action and U.S. Bank National Association as a co-defendant in this action, Dckt. No. 28; (6) plaintiff's motion for leave to file an amended complaint, Dckt. No. 46; and (7) plaintiff's motion for permissive joinder to add Mortgage Electronic Registration Systems ("MERS") as a co-defendant, Dckt. No. 44.
Plaintiff challenges the foreclosure sale of her home and the validity of a $295,000 refinance loan agreement, and the resulting Note and Deed of Trust, between defendant CMG and Angelo Webb on August 18, 2006. See generally Compl., Dckt. No. 1; see also Def. SPS's Req. for Judicial Notice, Dckt. No. 10, Ex. 1.*fn1 At the time the Note and Deed of Trust at issue were executed, Angelo Webb was the only borrower on the title; CMG was the lender; Alliance Title was the Trustee; and MERS was designated a nominee for the lender and the beneficiary under the Deed of Trust. Id.
Thereafter, on July 27, 2009, Webb transferred his interest in the property at issue to himself and to plaintiff as joint tenants, and a Grant Deed reflecting that transfer was recorded on August 17, 2009. Def. SPS's Req. for Judicial Notice, Dckt. No. 10, Ex. 3.*fn2 On August 7, 2009, SPS, through NDSC, recorded a Notice of Default, and on August 28, 2009, MERS executed a Corporate Assignment of Deed of Trust, wherein it assigned its beneficial interest in the Note and Deed of Trust to U.S. Bank National Association, as Trustee, on Behalf of the Holders of the CSMC Mortgage-Backed Pass-Through Certificate, Series 200701 ("U.S. Bank). Id., Exs. 2, 4.*fn3
SPS, as servicing agent for U.S. Bank then executed a Substitution of Trustee, wherein it substituted NDSC as trustee in place of Alliance Title. Id., Ex. 5.*fn4 Thereafter, on December 14, 2009, NDSC recorded a Notice of Trustee's Sale setting the sale of the property at issue for January 4, 2010. Id., Ex. 6.*fn5 Finally, on January 4, 2010, the sale occurred, and the property at issue reverted back to the beneficiary, U.S. Bank, as the highest bidder at the sale. Id., Ex. 7.*fn6
Plaintiff's complaint, which was filed in state court on December 17, 2009, alleges that on August 18, 2006, plaintiff "was led to believe she was entering into a loan agreement with Defendant CMG Mortgage, Inc. for $295,000," and that "immediately after closing the refinance loan, Plaintiff was instructed by Select Portfolio Servicing to make all her payments on the loan to Select Portfolio Servicing." Compl., Dckt. No. 1, ¶¶ 14, 15. She asserts that all of the defendants "are attempting to initiate an illegal non-judicial foreclosure sale proceeding under an alleged power of sale to foreclose contained in an alleged note allegedly secured against the property located at 980 Aster Street, Vallejo, Ca. 94589 [hereinafter "the subject property"]," which plaintiff owns. Id., ¶¶ 16, 19. Plaintiff contends that the "alleged promissory note was never executed by Plaintiff, or if it was executed, has long since been lost or intentionally destroyed, or paid in full, or assigned to a third party, such that [defendants] lacked standing to initiate a foreclosure proceeding against the subject property," even though they did initiate such proceedings. Id., ¶¶ 17-22.
Plaintiff alleges that defendants misled her, made material misrepresentations and omissions, and defrauded her, in violation of various laws. Id., ¶¶ 62-84. Specifically, plaintiff alleges the following claims for relief: (1) violations of the Home Ownership Equity Protection Act ("HOEPA"), 15 U.S.C. §§ 1639 et seq.; (2) violations of the Real Estate Settlement Procedures Act ("RESPA"), 12 U.S.C. §§ 2601 et seq.; (3) violations of the Truth in Lending Act ("TILA"), 15 U.S.C. §§ 1605 et seq.; (4) violation of the Fair Credit Reporting Act ("FCRA"), 15 U.S.C. § 1681; (5) fraudulent misrepresentation; (6) breach of fiduciary duty; (7) unjust enrichment; (8) civil conspiracy; (9) civil RICO; (10) set aside illegal trustee sale; (11) quiet title; (12) violation of California Business and Professions Code section 17200; (13) wrongful foreclosure -- violation of California Civil Code sections 2924, 2923.5, and 2923.6(a); (14) usury; (15) predatory lending -- violation of California Financial Code sections 4970-4979.8; (16) unfair debt collection practices; and (17) slander of title. Id., ¶¶ 90-177.
Plaintiff moves to remand this action back to Solano County Superior Court and seeks sanctions against defendants for the alleged improper removal of the case. Dckt. No. 19. Plaintiff argues that the notice of removal was frivolous and was filed "on the eve of a multi-million dollar trial." Id. at 1, 2. She contends that the removal notice misrepresents her claims and "focuses on a (federal question) to which the plaintiff has not expressed is an essential cause of action on the face of the complaint." Id. at 2. Plaintiff argues that "[b]ecause no essential element on the face of the complaint raises questions of federal law, there is no federal jurisdiction here." Id. at 3. Plaintiff is mistaken.
Defendants may remove to federal court "any civil action brought in a State court of which the district courts of the United States have original jurisdiction." City of Chicago v. Int'l College of Surgeons, 522 U.S. 156, 163 (1997) (quoting 28 U.S.C. § 1441(a)). Pursuant to 28 U.S.C. § 1331, the district courts are vested with original jurisdiction over cases "arising under the constitution, laws, or treaties of the United States." 28 U.S.C. § 1331.
Here, plaintiff's complaint alleges several claims arising under federal statutes. Specifically, she asserts claims for violations of HOEPA, 15 U.S.C. §§ 1639 et seq.; RESPA, 12 U.S.C. §§ 2601 et seq.; TILA, 15 U.S.C. §§ 1605 et seq.; FCRA, 15 U.S.C. § 1681; and the federal Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. §§ 1692 et seq. Removal of those claims was proper pursuant to 28 U.S.C. § 1441(a). Additionally, removal of plaintiff's supplemental state law claims was proper under 28 U.S.C. § 1441(c), which provides that "[w]henever a separate and independent claim or cause of action within the jurisdiction conferred by section 1331 of this title is joined with one or more otherwise non-removable claims . . . , the entire case may be removed and the district court may determine all issues therein. . . ."
Moreover, although plaintiff contends that the removal was improper because not all of the defendants consented to the removal, it appears that neither Alliance Title nor CMG had been served with process at the time of removal and thus did not need to join in or consent to the removal. See generally Emrich v. Touche Ross & Co., 846 F.2d 1190, 1193 n.1 (9th Cir. 1988) (noting that all defendants must join in the notice of removal); but see Salveson v. W. States Bankcard Ass'n, 731 F2.d 1423, 1429 (9th Cir. 1984) (superseded in irrelevant part by statute); Cmty. Bldg. Co. v. Maryland Cas. Co., 8 F.2d 678, 678-79 (9th Cir. 1925) (holding that defendants who have not yet been served in the state court action need not join in the notice of removal). Here, the proof of service filed in the state court action on January 5, 2010 only demonstrated service on SPS and NDSC. There is no indication that either Alliance Title or CMG had been served as of the time of removal. Dckt. No. 31 at 4-5; see also Dckt. No. 1 at 4, 57.
Further, although plaintiff contends that this case was removed "on the eve of trial," it does not appear that a trial has ever been scheduled in the state court action. The April 13, 2010 hearing date that plaintiff references was for a case management conference, not a trial. Dckt. No. 32, Def. SPS's Req. for Jud. Notice in Opp'n to Pl.'s Mot. to Remand, Ex. 1.*fn7 Therefore, plaintiff's motion to remand and related request for sanctions are denied.
III. Motions to Dismiss Plaintiff's Complaint
SPS moves to dismiss plaintiff's complaint for failure to state a claim or, in the alternative, for a more definite statement and/or to strike.*fn8 Dckt. No. 9. Additionally, CMG moves to dismiss plaintiff's complaint for failure to state a claim. Dckt. No. 26.
To survive dismissal for failure to state a claim pursuant to Rule 12(b)(6), a complaint must contain more than a "formulaic recitation of the elements of a cause of action"; it must contain factual allegations sufficient to "raise a right to relief above the speculative level." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). "The pleading must contain something more . . . than . . . a statement of facts that merely creates a suspicion [of] a legally cognizable right of action." Id. (quoting 5 C. Wright & A. Miller, Federal Practice and Procedure § 1216, pp. 235-236 (3d ed. 2004)). "[A] complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009) (quoting 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. Dismissal is appropriate based either on the lack of cognizable legal theories or the lack of pleading sufficient facts to support cognizable legal theories. Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1990).
In considering a motion to dismiss, the court must accept as true the allegations of the complaint in question, Hospital Bldg. Co. v. Rex Hosp. Trs., 425 U.S. 738, 740 (1976), construe the pleading in the light most favorable to the party opposing the motion, and resolve all doubts in the pleader's favor. Jenkins v. McKeithen, 395 U.S. 411, 421, reh'g denied, 396 U.S. 869 (1969). The court will "'presume that general allegations embrace those specific facts that are necessary to support the claim.'" Nat'l Org. for Women, Inc. v. Scheidler, 510 U.S. 249, 256 (1994) (quoting Lujan v. Defenders of Wildlife, 504 U.S. 555, 561 (1992)).
Pro se pleadings are held to a less stringent standard than those drafted by lawyers. Haines v. Kerner, 404 U.S. 519, 520 (1972); Bretz v. Kelman, 773 F.2d 1026, 1027 n.1 (9th Cir. 1985). However, the court's liberal interpretation of a pro se litigant's pleading may not supply essential elements of a claim that are not plead. Pena v. Gardner, 976 F.2d 469, 471 (9th Cir. 1992); Ivey v. Bd. of Regents of Univ. of Alaska, 673 F.2d 266, 268 (9th Cir. 1982). Furthermore, "[t]he court is not required to accept legal conclusions cast in the form of factual allegations if those conclusions cannot reasonably be drawn from the facts alleged." Clegg v. Cult Awareness Network, 18 F.3d 752, 754-55 (9th Cir. 1994). Neither need the court accept unreasonable inferences, or unwarranted deductions of fact. W. Mining Council v. Watt, 643 F.2d 618, 624 (9th Cir. 1981).
The court may consider facts established by exhibits attached to the complaint. Durning v. First Boston Corp., 815 F.2d 1265, 1267 (9th Cir. 1987). The court may also consider facts which may be judicially noticed, Mullis v. U.S. Bankr. Ct., 828 F.2d at 1388, and matters of public record, including pleadings, orders, and other papers filed with the court. Mack v. South Bay Beer Distribs., 798 F.2d 1279, 1282 (9th Cir. 1986).
A pro se litigant is entitled to notice of the deficiencies in the complaint and an opportunity to amend, unless the complaint's deficiencies could not be cured by amendment. See Noll v. Carlson, 809 F.2d 1446, 1448 (9th Cir. 1987).
Defendants move to dismiss all of plaintiff's loan origination claims, including plaintiff's claim that defendants violated HOEPA, 15 U.S.C. §§ 1639 et seq., by failing to make certain disclosures prior to closing the refinance loan at issue on August 18, 2006. Compl., Dckt. No. 1 at 32. They argue that plaintiff's claims are premised on alleged misconduct at the loan origination stage (in August 2006) and that plaintiff lacked any interest in the subject property. Accordingly, defendants argue, plaintiff is not the real party in interest and lacks standing to bring those claims. Dckt. No. 9 at 15-16; Dckt. No. 22 at 3-5; see also Def. SPS's Req. for Judicial Notice, Dckt. No. 10, Ex. 1. Defendants contend that Angelo Webb was the owner of the subject property and the only borrower on title at the time the Note and Deed of Trust were originated, and that plaintiff did not have any ownership interest in the property until August 17, 2009, when a grant deed was filed making her a joint tenant with Webb. Id. Thus, they argue, plaintiff cannot sue for injuries that only Webb could have suffered, noting that the substantive law protects the borrower from fraudulent or wrongful conduct of the lender at origination. Id. According to defendants, since plaintiff did not obtain the loan or own the home at the time the loan was obtained, she has no standing to allege a HOEPA claim based on disclosures defendants allegedly failed to make at the time of the loan origination. Dckt. No. 22 at 4. The court agrees.
Plaintiff acknowledges that she was not the owner of the subject property at the time of the loan origination at issue nor did she obtain the loan at issue. See Dckt. Nos. 28, 37 (acknowledging that the loan originated with Angelo Webb and not plaintiff). Therefore, she is not the real party in interest on this HOEPA claim and does not have standing to support her HOEPA claim since she cannot allege an injury based on defendants' purported failures to make certain disclosures prior to closing the refinance loan at issue. See Fed. R. Civ. P. 17(a)(1) ("An action must be prosecuted in the name of the real party in interest."). Therefore, plaintiff's HOEPA claim must be dismissed without leave to amend.
Plaintiff seeks leave to add Angelo Webb as a plaintiff, who did obtain the loan at issue. Accordingly, the court will address defendants' other arguments in support of dismissal.*fn9 As SPS argues, since SPS was "not in any way involved in the loan origination process" and instead "is merely the servicer to the Subject Loan," Dckt. No. 9 at 16, plaintiff has not and cannot state a HOEPA claim against SPS for failure to provide disclosures prior to the closing of the refinance loan.
Moreover, plaintiff's HOEPA claim is barred by the statute of limitations. See Dckt. No. 9 at 16; Dckt. No. 22 at 5. The loan at issue closed on August 18, 2006, but this action was not filed until December 17, 2009. Compl., Dckt. No. 1 at 11. The statute of limitations for violations of HOEPA based on failures to provide disclosures prior to the loan closing is one year for affirmative relief and three years for a right to rescind. 15 U.S.C. §§ 1640(e), 1635(f); In re Cmty. Bank of N. Va., 418 F.3d 277, 304-05 (3d Cir. 2005) ("[T]he Court notes that HOEPA is simply a component of TILA, and thus, it is governed by the same statute of limitations."). Since plaintiff has not alleged any facts suggesting that the statutes of limitation should be equitably tolled, plaintiff's HOEPA claim is time barred.
Defendants also move to dismiss plaintiff's second claim for relief, which alleges that defendants violated RESPA, 12 U.S.C. § 2607, by accepting charges "for the rendering of real estate services which were in fact charges for services other than the services actually performed." Dckt. No. 1 at 34. Defendants argue that plaintiff is not the real party in interest and lacks standing to bring her RESPA claim since, as discussed above, the claim is premised on alleged misconduct at the origination stage of the loan at issue. Plaintiff did not have an interest in the subject property at the time the loan at issue originated (in August 2006). Dckt. No. 9 at 15-16; Dckt. No. 22 at 3-5; see also Def. SPS's Req. for Judicial Notice, Dckt. No. 10, Ex. 1. Specifically, defendants argue that since plaintiff was not a party to the loan transaction, she cannot state a RESPA claim that the cost of the loan was higher as a result of kickbacks between real estate providers related to the loan. Dckt. No. 22 at 4.
As discussed above, plaintiff acknowledges that she was not the owner of the subject property at the time of the loan origination at issue nor did she obtain the loan at issue. Since plaintiff's RESPA claim is based on allegations surrounding the loan origination, that claim must be dismissed without leave to amend for lack of standing.
Further, as SPS argues, since SPS was "not in any way involved in the loan origination process" and instead "is merely the servicer to the Subject Loan," Dckt. No. 9 at 16, plaintiff has not and cannot state a RESPA claim against SPS.
Moreover, plaintiff's RESPA claim is barred by the statute of limitations. See Dckt. No. 9 at 17; Dckt. No. 22 at 5. The statute of limitations for violation of Section 8 of RESPA,12 U.S.C. § 2607, is one year. 12 U.S.C. § 2614. Since the loan at issue closed on August 18, 2006, but this action was not filed until December 17, 2009, and since plaintiff has not alleged any facts suggesting that the statute of limitations should be equitably tolled, plaintiff's RESPA claim is barred by the statute of limitations.*fn10
Defendants move to dismiss plaintiff's third claim for relief, which alleges that defendants violated TILA, 15 U.S.C. §§ 1601 et seq., by failing to make certain disclosures and improperly calculating the annual percentage rate at the time the refinance loan at issue closed in August 2006. Dckt. No. 1 at 34-35. Again, defendants argue that plaintiff is not the real party in interest and lacks standing. As discussed above, the claim is premised on alleged misconduct at the origination stage of the loan at issue but plaintiff did not have an interest in the subject property at the ...