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Farias v. FCM Corp.

November 18, 2010



Litton Loan Servicing moves to dismiss plaintiff's complaint and to expunge lis pendens, and Kent Wilson moves to withdraw as counsel of record for plaintiff Aurelio S. Farias. The motions have been fully briefed. The Court considers these motions on the papers submitted and without oral argument pursuant to Civil Local Rule 7.1(d)(1).

Motion to Dismiss

1. Legal Standard

A Rule 12(b)(6) motion to dismiss tests the sufficiency of the complaint. Navarro v. , 250 F.3d 729, 732 (9th Cir. 2001). 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). "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).

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). A pro se plaintiff's pleadings are read liberally. Hebbe v. Pliler, 2010 WL 2947323 *3 (9th Cir. July 29, 2010)

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[2] (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).").

2. Background

Plaintiff brought this action on February 2, 2010, against defendants FCM Corporation, Quality Loan Service Corp., and Litton Loan Servicing*fn1 alleging a variety of causes of action related to a home mortgage loan. FCM was the lender on the loan transaction; Litton was the servicing company on the loan; and Quality was the trustee under the Deed of Trust.

The complaint sets forth that plaintiff executed a promissory note to defendant FCM on September 1, 2006, that was secured by a deed of trust. In time plaintiff failed to make payments under the terms of the note and as a result of his defaults, foreclosure was initiated on the property. A Notice of Trustee's Sale was recorded on September 25, 2009 and on December 7, 2009, the foreclosure sale of the property occurred. On February 2, 2010, plaintiff recorded a Notice of Pendency of Action.

Litton's pending motion to dismiss is directed to the two causes of action brought against it: plaintiff's fourth cause of action for quiet title and fifth cause of action for accounting and violation of 12 U.S.C. § 2605(e) and 24 C.F.R. § 3500.

3. Quiet Title

A plaintiff may bring an action to quiet title "to establish title against adverse claims to real or personal property or any interest therein." CAL. CODE CIV. P. § 760.020(a). The Code defines a "'Claim' [as] includ[ing] a legal or equitable right, title, estate, lien, or interest in property or cloud upon title." CAL. CODE. CIV. P. § 760.010(a). To state a claim to quiet title, a complaint must be verified and include (1) a legal description of the property and its street address or common designation; (2) the title of the plaintiff and the basis of the title; (3) the adverse claims to the title of the plaintiff; (4) the date as of which the determination is sought; and (5) a prayer for the determination of the title of the plaintiff against the adverse claims. CAL. IV. PRO. § 761.020.

Plaintiff states that he has alleged fraud in his complaint and as a result, has properly pleaded the basis of his quiet title cause of action. Although unclear, it appears plaintiff is suggesting that the fraud allegations, which the Court notes have not been pleaded with particularity, would support rescission and therefore, would sustain a claim to quiet title.

The complaint contains no allegations with respect to the interest claimed by Litton in the property likely because Litton was the loan servicer and had no ownership interest in the property. Also, the complaint does not set forth facts sufficient to show that Litton has asserted an adverse claim to plaintiff's title. Furthermore, the complaint is not verified. ...

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