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Arvizu v. GMAC Mortgage

October 8, 2010


The opinion of the court was delivered by: Oliver W. Wanger United States District Judge


(Doc. 6)


Plaintiff Matthew Arvizu ("Plaintiff") proceeds with an action asserting eighteen causes of action against various Defendants involved in transactions related to a loan secured by Plaintiff's real property.

Defendants removed this action to federal court on June 3, 2010. (Doc. 1). Defendants filed a motion to dismiss Plaintiff's complaint on June 10, 2010. (Doc. 6).

Plaintiff filed opposition to the motion to dismiss on July 20, 2010. (Doc. 23). Defendants filed a reply on August 19, 2010. (Doc. 33).


On or about November 21, 2006, Plaintiff purchased a residence ("the Property") using funds acquired through a loan from Defendant Greenpoint. (Complaint at 7). The terms of the loan were memorialized in a promissory note, which was secured by a Deed of Trust, and Adjustable Rate Note, and Interim Interest Addendum to Note; these documents were recorded in Kern County on or about December 6, 2006. (Complaint at 7-8). The Deed of Trust identified Defendant MERS as a beneficiary as nominee for Greenpoint, Greenpoint as the servicer, and Marin Conveyancing Corp. as the Trustee. (Complaint at 8).

The Deed of Trust appears to have been executed on November 21, 2006; however, the Uniform Residential Loan Application was completed on November 27, 2006. (Complaint at 8). Plaintiff contends that Greenpoint manipulated the lending process to the detriment of Plaintiff. (Complaint at 8). Plaintiff alleges he did not receive the required documents and disclosure upon consummation of the lease. (Complaint at 8).

On or about March 17, 2009, a Notice of Default on the Property was recorded. The notice was signed by Maria DeBelen on behalf of "ETS Services LLC as Agent for Beneficiary." (Complaint at 8). Plaintiff alleges that he never received the Notice of Default. (Complaint at 18). Also on March 17, 2009, GMAC recorded a Substitution of Trustee purporting to designate ETS and Executive Trustee Services as Trustee under the Deed of Trust; in this document, MERS identified itself as the present beneficiary under the Deed of Trust. (Complaint at 17).

On or about June 19, 2009, ETS and Executive recorded a Notice of Trustee's Sale, stating a foreclosure sale date of July 15, 2009. (Complaint at 17). Following the sale, ETS and Executive executed a Trustee's Deed Upon Sale which stated that GMAC, as foreclosing beneficiary, acquired title to the Property as grantee pursuant to the foreclosure sale. (Complaint at 18). Plaintiff alleges that GMAC is not and was not the holder of the Note, and that GMAC had no right to initiate foreclosure under the Deed of Trust. (Complaint at 18). Plaintiff alleges that Defendants engage in a pattern and practice of unlawfully foreclosing on properties.

After learning of the foreclosure proceedings, Plaintiff sent GMAC a "Qualified Written Request" pursuant to 12 U.S.C. 2605(e)(1)(B); GMAC failed to respond. (Complaint at 19).


A. Rule 12(b)(6)

Dismissal under Rule 12(b)(6) is appropriate where the complaint lacks sufficient facts to support a cognizable legal theory. Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir.1990). To sufficiently state a claim to relief and survive a 12(b) (6) motion, the pleading "does not need detailed factual allegations" but the "[f]actual allegations must be enough to raise a right to relief above the speculative level." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). Mere "labels and conclusions" or a "formulaic recitation of the elements of a cause of action will not do." Id. Rather, there must be "enough facts to state a claim to relief that is plausible on its face." Id. at 570. In other words, the "complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face." Ashcroft v. Iqbal, --- U.S. ----, ----, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009) (internal quotation marks omitted).

The Ninth Circuit has summarized the governing standard, in light of Twombly and Iqbal, as follows: "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. U.S. Secret Serv., 572 F.3d 962, 969 (9th Cir.2009) (internal quotation marks omitted). Apart from factual insufficiency, a complaint is also subject to dismissal under Rule 12(b)(6) where it lacks a cognizable legal theory, Balistreri, 901 F.2d at 699, or where the allegations on their face "show that relief is barred" for some legal reason, Jones v. Bock, 549 U.S. 199, 215, 127 S.Ct. 910, 166 L.Ed.2d 798 (2007).

In deciding whether to grant a motion to dismiss, the court must accept as true all "well-pleaded factual allegations" in the pleading under attack. Iqbal, 129 S.Ct. at 1950. A court is not, however, "required to accept as true allegations that are merely conclusory, unwarranted deductions of fact, or unreasonable inferences." Sprewell v. Golden State Warriors, 266 F.3d 979, 988 (9th Cir.2001). "When ruling on a Rule 12(b)(6) motion to dismiss, if a district court considers evidence outside the pleadings, it must normally convert the 12(b)(6) motion into a Rule 56 motion for summary judgment, and it must give the nonmoving party an opportunity to respond." United States v. Ritchie, 342 F.3d 903, 907 (9th Cir.2003). "A court may, however, consider certain materials-documents attached to the complaint, documents incorporated by reference in the complaint, or matters of judicial notice-without converting the motion to dismiss into a motion for summary judgment." Id. at 908.

B. Rule 9(b)

Rule 9(b) imposes an elevated pleading standard with respect to certain claims. Rule 9(b) provides:

In alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake. Malice, intent, knowledge, and other conditions of a person's mind may be alleged generally.

"To comply with Rule 9(b), allegations of fraud must be specific enough to give defendants notice of the particular misconduct which is alleged to constitute the fraud." Swartz v. KPMG LLP, 476 F.3d 756, 764 (9th Cir. 2007) (internal quotation marks omitted). Allegations of fraud must include the "time, place, and specific content of the false representations as well as the identities of the parties to the misrepresentations." Id. (internal quotation marks omitted). The "[a]verments of fraud must be accompanied by the who, what, when, where, and how of the misconduct charged." Kearns v. Ford Motor Co., 567 F.3d 1120, 1124 (9th Cir. 2009) (internal quotation marks omitted). A plaintiff alleging fraud "must set forth more than the neutral facts necessary to identify the transaction. The ...

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