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Singh v. America's Servicing Co.

September 29, 2010



This matter comes before the Court on Defendants Deutsche Bank National Trust Company and Wells Fargo Bank, N.A. d/b/a America's Servicing Company's ("Defendants'") Motion to Dismiss (Doc. 20) Plaintiff Sashi Singh's First Amended Complaint ("FAC") (Doc. 15). Defendants move to dismiss the three claims against them in the FAC, for failure to state a claim pursuant to Federal Rule of Civil Procedure 12(b)(6). Plaintiff opposes dismissal of one of the claims.*fn1 For the reasons set forth below, Defendants' motion is granted.


In March 2006, Plaintiff obtained a $344,149.00 first and $64,528.00 second mortgage ("the Loans") secured by deeds of trust on the property located at 5454 Knotty Pine Way, Sacramento, California ("the property"). The deeds of trust identified New Century Mortgage Corporation as lender and North American Title Company as trustee. Subsequently, Defendant America's Servicing Company ("ASC") began servicing the Loans. Plaintiff defaulted on the loans, and a Notice of Default was recorded on June 3, 2009. First American Loanstar Trustee Services was substituted in as trustee on July 9, 2009. On July 24, 2009, an assignment of the deeds of trust to Deutsche Bank National Trust Company as Trustee for Morgan Stanley ABS Capital 1, Inc. ("Deutsche") was recorded. A Notice of Trustee's Sale was recorded on September 24, 2009. The property was purchased by Deutsche at a foreclosure sale on January 20, 2010.

Plaintiff alleges that prior to the closing of the loan, the mortgage broker Gregory Nichols made numerous misrepresentations to Plaintiff regarding the terms of the loan. Plaintiff brought claims of fraud, negligent misrepresentation and wrongful foreclosure against Defendants. Plaintiff also brought additional claims against other defendants who are not parties to this motion. Plaintiff has voluntarily dismissed defendant First American Loanstar Trustee Services (not a party to this motion), and has voluntarily dismissed all but one of the claims against Defendants. Accordingly, the only remaining claim against Defendants is a claim for wrongful foreclosure.


A. Legal Standard

A party may move to dismiss an action for failure to state a claim upon which relief can be granted. Fed. R. Civ. P. 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. Scheur v. Rhodes, 416 U.S. 232, 236 (1974), overruled on other grounds by Davis v. Schere, 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 facts 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," are not entitled to the assumption of truth. Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949-50 (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." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 570 (2007). Dismissal is appropriate where the plaintiff fails to state a claim supportable by a cognizable legal theory. Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1990).

Upon granting a motion to dismiss, a court has discretion to allow leave to amend the complaint. See Fed. R. Civ. Pro. 15(a). "Absent prejudice, or a strong showing of any [other relevant] factor[], there exists a presumption under Rule 15(a) in favor of granting leave to amend." Eminence Capital, L.L.C. v. Aspeon, Inc., 316 F.3d 1048, 1052 (9th Cir. 2003) (emphasis in original). "Dismissal with prejudice and without leave to amend is not appropriate unless . . . it is clear that the complaint could not be saved by amendment." Id.

Generally, the court may not consider material beyond the pleadings in ruling on a motion to dismiss for failure to state a claim. Sherman v. Stryker Corp., 2009 WL 2241664, at *2 (C.D. Cal. Mar. 30, 2009) (internal citations omitted). There are two exceptions: when material is attached to the complaint or relied on by the complaint, or when the court takes judicial notice of matters of public record, provided the facts are not subject to reasonable dispute. Id. Defendants have requested that the Court take judicial notice of several of the loan documents which are matters of public record and relied on in the FAC. (Doc. 18, ex. 2). Accordingly, the Court takes judicial notice as requested.

B. Wrongful Foreclosure

The FAC alleges that Defendants wrongfully foreclosed on the property because Defendants are not persons entitled to enforce a security interest in the property pursuant to California Commercial Code §3301. Plaintiff alleges Defendants cannot produce the Note as required by Section 3301. However, as Defendants correctly note, non-judicial foreclosures are not governed by California Commercial Code §3301. See e.g. Pok v. American Home Mortg. Servicing, Inc., 2010 WL 476674, *7 (E.D. Cal. Feb. 3, 2010).

Furthermore, Plaintiff has not alleged tender, which is required under California law to challenge a foreclosure sale.

Montoya v. Countrywide Bank, FSB, 2009 WL 1813973, *11 (N.D. Cal. June 25, 2009). ("Under California law, the tender rule requires that as a precondition to challenging a foreclosure sale, or any cause of action implicitly integrated to the sale, the borrower must make a valid and viable tender of payment of the secured debt.")

Lastly, Plaintiff's opposition brief raises new allegations that the cause of action for wrongful foreclosure arises from California Civil Code ยง2923.5. The Court will not consider new allegations raised for the first time in the opposition. Moreover, Section 2923.5 does not create a private right of action. ...

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