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Vincent and Lien Tang v. Reconveyance Co.

December 22, 2010


The opinion of the court was delivered by: Lucy H. Koh United States District Judge

(re: docket #13)

United States District Court For the Northern District of California


Home Finance ("Chase"), and Washington Mutual for damages exceeding $6.5 million. Plaintiffs 19 claim that Defendants violated numerous federal laws by reporting an "alleged debt that has never 20 been validated or proven" to credit reporting agencies. Plaintiffs do not identify the nature of that 21 debt, but Defendants reveal that the "alleged debt" in question relates to Plaintiffs' failure to make 22 payments on an $825,000 residential mortgage. Defendants move to dismiss pursuant to Federal

Federal Rule of Civil Procedure 12(e). The Court held a hearing on this matter on December 21, 2010. Because Plaintiffs fail to state a claim, the Court GRANTS Defendants' motion to dismiss, in part with prejudice and in part with leave to amend.

Plaintiffs Vincent and Lien Tang, proceeding pro se, bring suit against Defendants California Reconveyance Company ("CRC"), JP Morgan Chase Bank, N.A. ("JP Morgan"), Chase 18 Rule of Civil Procedure 12(b)(6), or in the alternative, move for a more definite statement under

with little reference to facts. For example, there are repeated statements that "Beginning on or 5 about March 2008 the Defendant [who is not specified] did report to Experian, Trans Union, Equifax credit bureaus that Plaintiffs owe an alleged debt to the Defendant and has continued to do this to date." See, e.g.. Compl., Part 1, ¶ 1 [dkt. #1]. Plaintiffs do not identify the nature of the

Attached to the Complaint are various records that Plaintiffs allege demonstrate the violations of 10 federal law in detail. However, these attachments, which appear to be computer-printouts of credit are more than 120 days past due on a 40-year mortgage, on an


A.Plaintiffs' Complaint

For the most part, Plaintiffs' Complaint includes only vague and conclusory allegations, "alleged debt," and only repeat the statement that "Defendants violated Plaintiffs civil rights."

bureau reports, note that Plaintiffs 12 account that was opened in July 2005. See Compl., Exh. A [dkt. #1-1]. These same reports note that Plaintiffs have a balance of more than $900,000, and made their last monthly payment (of $3,195) in October 2009. Id. In another exhibit to the Complaint (Exhibit B), Plaintiffs attach a letter addressed to Defendant Chase, seeking "verification of the debt" and production of the

In the midst of these confusing allegations, Plaintiffs do make one clear factual allegation:

"Defendants disclosed a annual percentage rate (APR) of 4.867% when in actuality the annual 19 percentage rate was 5.0009%. See exhibit demonstrating this violation in detail." Compl., Part 6, ¶ 1. Plaintiffs do not identify the referenced "exhibit," however, it appears that Plaintiffs are citing to Exhibit D of the Complaint, a 52-page document entitled "Mortgage Forensic Analysis Report" prepared by an entity called "LogicEase Solutions, Inc." According to that so-called "Report," 4.867% is "not accurate."

"original note."

Plaintiffs were actually charged an APR of 5.009% on their loan, and thus the "disclosed rate" of

B.Defendants' Motion to Dismiss and Request for Judicial Notice

Defendants submit that the following are the relevant allegations in the Complaint and judicially noticeable facts. See Defs.' Mot. to Dismiss at 2 [dkt. #13].*fn1 Plaintiffs obtained a residential mortgage loan for $825,000 for real property located at 2739 Clover Meadow Street,

2005 with the Santa Clara County Recorder's Office. The deed of trust identifies Washington Plaintiffs as the borrowers. An assignment of the deed of trust was recorded on March 1, 2010, 7 with Bank of America, N.A., assigned all beneficial interest in the deed of trust. Plaintiffs 8 defaulted on the loan, and a Notice of Default and Election to Sell Under Deed of Trust ("NOD") 9 was recorded on or about March 1, 2010. The NOD indicated that, as of February 26, 2010, the 10 amount in arrears on Plaintiffs' loan was $14,954.54. On September 25, 2008, the Office of Thrift San Jose, California 95135. The loan was secured by a deed of trust recorded on or about July 6,

Mutual as the lender and the beneficiary, California Reconveyance Company as the trustee, and Supervision (OTS) closed Washington Mutual Bank and appointed the Federal Deposit Insurance

Corporation (FDIC) as receiver. Also on September 25, 2008, JP Morgan entered into a "Purchase 13 and Assumption Agreement" with the FDIC, and took over the assets of Washington Mutual.

Plaintiffs, in an opposition to Defendants' motion to dismiss, note that Defendant CRC filed a Notice of Trustee's Sale on June 2, 2010. See Pls.' Opp'n, Exh. B [dkt. #33]. That Notice shows an unpaid balance of $925,328.21. opportunity to clarify their claims and to identify any additional factual allegations in regard to 20 their claims pursuant to the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. 1961 et seq. Plaintiffs could point to no additional factual allegations, and repeatedly stated 22 that Defendants were colluding with each other to commit fraud. Plaintiffs stated that, without the 23 original copies of the loan documents signed in blue ink, they could not be sure that their loan had 24 not been extinguished or that Defendants had valid rights to their mortgage loan. Plaintiffs further stated that they would not identify their signatures on any loan documents unless they saw the 2 original documents with their signatures in blue ink.

C.December 21, 2010 Hearing

At the December 21, 2010 hearing on Defendants' motion, the Court provided Plaintiffs the


Dismissal under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim is "proper only where there is no cognizable legal theory or an absence of sufficient facts alleged to 6 support a cognizable legal theory." Shroyer v. New Cingular Wireless Services, Inc., 606 F.3d 658, 664 (9th Cir. 2010) (quoting Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001)). In considering whether the complaint is sufficient to state a claim, the court must accept as true all of the factual allegations contained in the complaint. Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009). However, the court need not accept as true "allegations that contradict matters properly subject to judicial notice or by exhibit" or "allegations that are merely conclusory, unwarranted deductions of fact, or unreasonable inferences." St. Clare v. Gilead Scis., Inc. (In re Gilead Scis. Sec. Litig.), 536 F.3d 1049, 1055 (9th Cir. 2008). While a complaint need not allege detailed factual allegations, it "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 Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A claim is facially plausible when it "allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 129 S.Ct. at 1949.

to grant leave to amend. "[A] district court should grant leave to amend even if no request to amend the pleading was made, unless it determines that the pleading could not possibly be cured by the allegation of other facts." Lopez v. Smith, 203 F.3d 1122, 1130 (9th Cir. 2000) (quoting Doe 22 v. United States, 58 F.3d 494, 497 (9th Cir. 1995)).

U.S.C. 1601 et seq., the Racketeer Influenced and Corrupt Organizations Act (RICO), U.S.C. 1961 et seq., and the Real Estate Settlement Procedures Act (RESPA), 12 U.S.C. ยง2601 et 28 seq. Despite this multitude of claims, ...

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