ORDER GRANTING WITH PREJUDICE MOTION TO DISMISS THE FIRST AMENDED COMPLAINT AND GRANTING MOTION TO EXPUNGE LIS PENDENS [doc. #14]
Defendant Aurora Loan Services Corporation*fn1 moves to dismiss plaintiffs' first amended complaint and to expunge lis pendens. The motions have been fully briefed and considered without oral argument under Civil Local Rule 7.1(d)(1).
Motion to Dismiss Legal Standard
A Rule 12(b)(6) motion to dismiss tests the sufficiency of the complaint. Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). "While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the grounds of his entitlement to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do. Factual allegations must be enough to raise a right to relief above the speculative level." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007) (internal quotation marks, brackets and citations omitted). Federal Rule of Civil Procedure 8(a) requires a complaint to contain "a short and plain statement of the claim showing that the pleader is entitled to relief . . . ." FED. R. CIV. P. 8(a).
In reviewing a motion to dismiss under Rule 12(b)(6), the court must assume the truth of all factual allegations and must construe them in the light most favorable to the nonmoving party. Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336, 337-38 (9th Cir. 1996). Legal conclusions need not be taken as true merely because they are cast in the form of factual allegations. Roberts v. Corrothers, 812 F.2d 1173, 1177 (9th Cir. 1987); W. Mining Council v. Watt, 643 F.2d 618, 624 (9th Cir. 1981). Similarly, "conclusory allegations of law and unwarranted inferences are not sufficient to defeat a motion to dismiss." Pareto v. Fed. Deposit Ins. Corp., 139 F.3d 696, 699 (9th Cir. 1998).
In determining the propriety of a Rule 12(b)(6) dismissal, a court may not look beyond the complaint for additional facts, e.g., facts presented in plaintiff's memorandum in opposition to a defendant's motion to dismiss or other submissions. United States v. Ritchie, 342 F.3d 903, 908 (9th Cir. 2003); Parrino v. FHP, Inc., 146 F.3d 699, 705-06 (9th Cir. 1998); see also 2 OORE'S FEDERAL PRACTICE, § 12.34 (Matthew Bender 3d ed.) ("The court may not . . . take into account additional facts asserted in a memorandum opposing the motion to dismiss, because such memoranda do not constitute pleadings under Rule 7(a).").
A court may, however, consider items of which it can take judicial notice without converting the motion to dismiss into one for summary judgment. Barron v. Reich, 13 F.3d 1370, 1377 (9th Cir. 1994). Judicial notice may be taken of facts "not subject to reasonable dispute" because they are either "(1) generally known within the territorial jurisdiction of the trial court or (2) capable of accurate and ready determination by resort to sources whose accuracy cannot reasonably be questioned." FED. R. EVID. 201. Additionally, a court may take judicial notice of "'matters of public record' without converting a motion to dismiss into a motion for summary judgment.'" Lee v. City of Los Angeles, 250 F.3d 668, 689 (9th Cir. 2001) (quoting MGIC Indem. Corp. v. Weisman, 803 F.2d 500, 504 (9th Cir. 1986)). Under the incorporation by reference doctrine, courts may also consider documents "whose contents are alleged in a complaint and whose authenticity no party questions, but which are not physically attached to the [plaintiff's] pleading." In re Silicon Graphics Inc. Sec. Litig., 183 F.3d 970, 986 (9th Cir.1999) (quoting Branch v. Tunnell, 14 F.3d 449, 454 (9th Cir. 1994) (alteration in original)).
In September 2006, plaintiffs obtained a home mortgage loan from defendant Homecomings Financial Network for property located in Oceanside, California and executed a Deed of Trust as security for the loan. When plaintiffs failed to make payments as required, a Notice of Default and Election to Sell under the Deed of Trust was recorded on January 12, 2009. A Notice of Trustee Sale was recorded on August 17, 2009, which set the sale of the property for September 3, 2009. The record does not disclose whether the Trustee Sale has been conducted.
Plaintiffs' initial complaint contained 18 causes of action. After the filing of Aurora's motions to dismiss and to expunge lis pendens, plaintiffs filed an amended complaint that alleged nine causes of action to which Aurora filed the present motions. In response to defendant's motion, plaintiffs withdrew their sixth and seventh causes of action: violation of California Civil Code § 1632 and Business & Professions Code § 17200. The second cause of action, breach of fiduciary duty, is not brought against Aurora.
A. Intentional Misrepresentation
As Aurora correctly notes, the allegations concerning intentional misrepresentation refer to actions of defendants Finance West and Homecoming. For example, plaintiffs contend Finance West and Homecoming inserted inflated income for the plaintiffs in the loan application, failed to inform plaintiffs of their rights to rescind, and misstated the APR and finance charge. (Amended Complaint at 6.) Plaintiffs offer no facts to suggest that Aurora, the later-added loan servicer, was involved in any manner with alleged misrepresentations at the time of the loan origination. Because plaintiffs have had an opportunity to amend the complaint to assert facts showing involvement by Aurora with the alleged misrepresentations, this claim will be dismissed with prejudice.
The purpose of a quiet title action is to establish one's title against adverse claims to real or personal property or any interest therein. See CAL. CIV. PROC. CODE § 760.020(a). Plaintiffs contend that Quality Loan Services recorded the Notice of Default before it was substituted in as trustee for the Deed of Trust. As a result, plaintiffs contend that the notice of default ...