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Smith v. Aurora Loan Services

September 3, 2010

JAMES SMITH, PLAINTIFF,
v.
AURORA LOAN SERVICES AND DOES 1 THROUGH 100, INCLUSIVE, DEFENDANTS.



ORDER

This matter came before the court on April 16, 2010, for hearing of defendant Aurora Loan Services, LLC's motion to dismiss plaintiff's complaint pursuant to Federal Rule of Civil Procedure 12(b)(6) and motion to expunge recorded lis pendens. Attorney Melissa Robbins appeared telephonically for defendant. Plaintiff, proceeding pro se, filed no opposition to the motion and did not appear at the hearing.*fn1

Upon consideration of all written materials filed in connection with the motion, defense counsel's arguments, and the entire file, the undersigned recommends that defendant's motion to dismiss be granted without leave to amend and defendant's motion to expunge recorded lis pendens be granted as well.

BACKGROUND

Plaintiff originally commenced this action by filing his complaint in the El Dorado County Superior Court on August 20, 2009. On January 26, 2010, defendant Aurora Loan Services, LLC removed the action pursuant to 28 U.S.C. §§ 1441 and 1446 on the grounds that plaintiff's claims arise under the Real Estate Settlement Procedures Act (RESPA), 12 U.S.C. § 2601, et seq., and the Truth in Lending Act (TILA), 15 U.S.C. § 1601, et seq., and that this court had original jurisdiction over the action pursuant to 28 U.S.C. § 1441(b). Defendant also asserted that this court had supplemental jurisdiction pursuant to 28 U.S.C. § 1367 over any state law claims plaintiff was attempting to bring. See Notice of Removal (Doc. No. 1).

PLAINTIFF'S CLAIMS

In his complaint, plaintiffs alleges as follows. On or about December 13, 2005, plaintiff obtained a mortgage loan from defendant Aurora Loan Services with the loan being secured by his residence. (Notice of Removal (Doc. No. 1), Complaint at ¶4.) On or about March 1, 2008, plaintiff fell behind on his loan payments. (Id.) On or about May 1, 2008, plaintiff reached an oral agreement with defendant whereby plaintiff would make increased payments on the loan for five months to become current and, thereafter, defendant would agree to a loan modification. (Id.) At the end of the five months, defendant Aurora breached the oral agreement and demanded an additional $10,000. (Id.) Plaintiff could not pay that amount and defendant Aurora moved forward with foreclosure proceedings scheduled for August 29, 2009. (Id.)

Based on these factual allegations, plaintiff claims that the loan documents used by defendant in connection with his mortgage loan violated the requirements of TILA. (Id. at ¶ 6.) He also summarily alleges that defendant violated RESPA. (Id. at ¶ 9.) Next, plaintiff claims defendant was "unjustly enriched" by receiving payments from him "attributable to the artificial, inflated component of Plaintiff's loan contract" and the "inflated portion of his interest rate and points" and seeks restitution of those amounts paid to defendant. (Id. at ¶12.) Finally, plaintiff alleges that defendant breached the parties' contract with respect to December 13, 2005 loan upon which plaintiff had defaulted. (Id. at ¶¶ 15-17.) Plaintiff seeks damages under TILA and RESPA, general damages according to proof, interest and cost of suit.

DEFENDANT'S ARGUMENTS

At the outset, defendants have requested that the court take judicial notice of the official documents and records related to the matters at issue. (Doc. No. 7-3.) Specifically, defendants request that the court take judicial notice of the following official records and documents related to plaintiff's mortgage loan transaction: the Deed of Trust executed by plaintiff and his wife dated December 2, 2005, and recorded in the El Dorado County Recorder's Office on December 14, 2006*fn2; the Notice of Default in the amount of $21, 893.99 recorded with the El Dorado County Recorder's Office on December 18, 2009; the Substitution of Trustee recorded in the El Dorado County Recorder's Office on January 30, 2009; the Notice of Trustee's Sale recorded in the El Dorado County Recorder's Office on March 23, 2009 and the Notice of Pendency of Action recorded in the El Dorado County Recorder's Office on August 20, 2009. (Doc. No. 7-3, Exs. A-E.)

Defendants' requests for judicial notice will be granted pursuant to Federal Rule of Evidence 201. See Lee v. City of Los Angeles, 250 F.3d 668, 688-89 (9th Cir. 2001) (on a motion to dismiss, court may consider matters of public record); MGIC Indem. Corp. v. Weisman, 803 F.2d 500, 504 (9th Cir. 1986) (on a motion to dismiss, the court may take judicial notice of matters of public record outside the pleadings).

Defendant seek dismissal of plaintiff's complaint with prejudice pursuant to Federal Rule of Civil Procedure 12(b)(6) on the grounds that plaintiff's broad and conclusory allegations fail to state cognizable claims under TILA or RESPA, that those claims as well as plaintiff's causes of action for Unjust Enrichment/Restitution and Breach of Contract fail as a matter of law because of his admitted default on his mortgage loan and that his failure to tender the outstanding balance on the loan bars any claim for Wrongful Foreclosure as well as any other claims. (Def't's Mem. of P. & A (Doc. No. 7-2) at 4.)

Specifically, with respect to plaintiff's TILA claim defendant notes that plaintiff's vague and general allegations appear to complain about the loan documents used in the transaction but that defendant Aurora was not the original lender. Moreover, defendant argues, any TILA claim for either damages or rescission is time barred by the applicable statute of limitations since the Note and Deed of Trust are dated December 2, 2005 and plaintiff's complaint was not filed until three years later, on August 20, 2009. (Id. at 5.) Defendant contends that plaintiff's conclusory RESPA claim is not cognizable and, in any event, is also barred by the applicable statute of limitations. (Id. at 5-6.) Defendant argues that plaintiff has failed to allege any facts sufficient to state a claim for restitution and that "unjust enrichment," referred to in his complaint is not a cause of action. (Id. at 6-7.) Defendant also assert that plaintiff's admission in his complaint that he failed to repay the mortgage loan in question and that the foreclosure on the subject property resulted from his non-payment is fatal to any breach of contract claim against them. (Id. at 7.) Finally, defendant argues that because plaintiff lacked the authority to record the Lis Pendens, his complaint fails to state a real property claim and he has not established the probable validity of any of his claims, their motion to expunge the Lis Pendens recorded by plaintiff should be granted. (Id. at 8-9.)

Defendant's arguments are persuasive.

LEGAL STANDARDS APPLICABLE TO ...


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