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Pajarillo v. Bank of America

October 28, 2010


The opinion of the court was delivered by: Hon. Dana M. Sabraw United States District Judge


Pending before the Court is the motion of Defendants Bank of America, N.A. and ReconTrust Company, N.A. (herein, "Defendants") to dismiss Plaintiffs' complaint or, in the alternative, for a more definite statement. For the following reasons, Defendants' motion to dismiss is granted. Defendants' motion for a more definite statement is denied as moot.


This action arises from Plaintiffs' purchase of property located at 2316 Vista Royal, Vista, California in June 2006 and the mortgage acquired by Plaintiffs in conjunction with such purchase. (Comp. Ex. 5.) Plaintiffs executed a Note secured by a Deed of Trust on June 29, 2006. (Id. at ¶¶ 9, 17, 88, Ex. 5; MTD RJN Exs. A, D.)*fn1 In the event of default, the Deed of Trust authorizes the lender to invoke the power of sale and to direct the trustee to initiate foreclosure proceedings. (MTD RJN Ex. D.) Plaintiffs failed to make a mortgage payment in 2008. (Id. at Ex. E.) On August 6, 2008, a Notice of Default was recorded. (Id.) An initial Notice of Trustee's Sale was recorded on March 16, 2009. (Id. at Ex. F.)

Plaintiffs filed the instant Complaint on April 30, 2010. (Doc. 1.) Plaintiffs plead twelve claims for relief in their Complaint: (1) violation of HOEPA, (2) violation of RESPA, (3) violation of TILA, (4) violation of FCRA, (5) fraudulent misrepresentation, (6) breach of fiduciary duty, (7) unjust enrichment, (8) civil conspiracy, (9) violation of RICO, (10) quiet title, (11) usury and fraud, and (12) wrongful foreclosure/sale. On June 14, 2010, Defendants filed a motion to dismiss each of the claims in the Complaint. (Doc. 4.) Plaintiffs filed an opposition and Defendants filed a reply. (Docs. 7, 8.)


Defendants move to dismiss Plaintiffs' claims under Rule 12(b)(6) of the Federal Rules of Civil Procedure. A party may move to dismiss a claim under Rule 12(b)(6) if the claimant fails to state a claim upon which relief can be granted. Fed. R. Civ. P. 12(b)(6). The Federal Rules require a pleading to include a "short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). The Supreme Court, however, recently established a more stringent standard of review for pleadings in the context of 12(b)(6) motions to dismiss. See Ashcroft v. Iqbal, ___ U.S. ___, 129 S.Ct. 1937 (2009); Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007). To survive a motion to dismiss under this new standard, "a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Iqbal, 129 S.Ct. at 1949 (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. (citing Twombly, 550 U.S. at 556). "Determining whether a complaint states a plausible claim for relief will . . . be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Id. at 1950 (citing Iqbal v. Hasty, 490 F.3d 143, 157-58 (2d Cir. 2007)). The reviewing court must therefore "identify the allegations in the complaint that are not entitled to the assumption of truth" and evaluate "the factual allegations in [the] complaint to determine if they plausibly suggest an entitlement to relief." Id. at 1951.


In their motion to dismiss, Defendants argue (1) Plaintiffs fail to allege any claim against either Bank of America, N.A. or ReconTrust Company, N.A.; (2) Plaintiffs lack standing to challenge the foreclosure of their property because they fail to allege tender; (3) Plaintiffs' allegations regarding disclosures and Defendants' authority to foreclose on their property are belied by the contents of the loan documents received by Plaintiffs; and (4) each of Plaintiffs' claims fails because it is untimely, barred as a matter of law, and/or insufficiently pled. Plaintiffs assert Defendants' initiation of foreclosure proceedings against Plaintiffs' property was improper, Plaintiffs have standing to challenge the foreclosure, and they sufficiently plead each claim for relief in the Complaint.

A. Claims Against Bank of America

As an initial matter, Defendant Bank of America argues Plaintiffs make no specific allegations against Bank of America in their Complaint, but rather "direct their allegations of wrongful conduct at [Bank of America's] predecessor-in-interest, Countrywide Bank, N.A." (MTD at 4.) In their Opposition, Plaintiffs argue "[i]n its acquisition of Countrywide, Bank of America acquired both the assets and liabilities of this lender. . . . Bank of America is properly sued for matters regarding a loan which originated with Countrywide but is currently serviced by, and threatened to be foreclosed upon, by Bank of America." (Opp. at 4.) However, in the Complaint itself, Plaintiffs merely state that Defendant Bank of America "is sued as successor-in-interest to Countrywide Bank." (Comp. ¶ 5.) Such an allegation is insufficient to impose liability upon Bank of America through either a veil piercing or successor liability theory. See Pantoja v. Countrywide Home Loans, Inc., 640 F. Supp. 2d 1177, 1192 (N.D. Cal. 2009); see also Infante v. Bank of America Corp., 680 F. Supp. 2d 1298, 1305 (S.D. Fla. 2009). Accordingly, Plaintiffs' claims against Defendant Bank of America are dismissed with leave to amend. Nonetheless, the Court addresses Defendants' remaining arguments and Plaintiffs' claims below.

B. Tender

Defendants argue the Complaint should be dismissed in its entirety because Plaintiffs fail to allege tender of monies due under the promissory note. The tender requirement--an allegation of payment of the indebtedness or an offer in good faith and the ability to pay the indebtedness--applies to any claim for relief for irregularity in a foreclosure sale. Abdallah v. United Sav. Bank, 43 Cal. App. 4th 1101, 1109 (1996). The tender requirement also applies to bar any claim "implicitly integrated" in the foreclosure sale. Arnolds Mgmt. Corp. v. Eischen, 158 Cal. App. 3d 575, 579 (1984). Here, however, Plaintiffs allege "[u]pon the true 'lenders' full performance of its ...

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