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Scott Copeland v. Lehman Brothers Bank

January 3, 2011

SCOTT COPELAND,
PLAINTIFF,
v.
LEHMAN BROTHERS BANK, FSB; MONEYWORLD SALES/ MORTGAGES, INC.;
AURORA LOAN SERVICES, INC.; AND ALL OTHER CLAIMANTS OF WHATSOEVER KIND
AND CHARACTER AGAINST REAL PROPERTY COMMONLY KNOWN AS 7066 KEIGHLEY STREET, SAN DIEGO, CA 92120;
APN 672-390-01-00; AND DOES 1 THROUGH 100, INCLUSIVE, DEFENDANTS.



The opinion of the court was delivered by: Hayes, Judge:

ORDER

The matters before the Court are the Motion to Dismiss the Second Amended Complaint, filed by Defendants Lehman Brothers Bank, FSB ("Lehman") and Aurora Loan Services, Inc. ("Aurora") (collectively, "moving Defendants") (ECF No. 42), and the Ex Parte Motion for Leave to File an Opposition to Motion to Dismiss in Excess of 25 Pages (ECF No. 43).

I. Background

On August 14, 2009, Plaintiff Scott Copeland initiated this action by filing a Complaint in this Court. (ECF No. 1).

On December 23, 2009, the Court granted Lehman and Aurora's motion to dismiss, and dismissed the Complaint without prejudice. (ECF No. 11).

On April 20, 2010, Plaintiff filed the First Amended Complaint. (ECF No. 26).

On July 15, 2010, the Court granted Lehman and Aurora's subsequent motion to dismiss, and dismissed the First Amended Complaint without prejudice. (ECF No. 35).

On October 4, 2010, Plaintiff filed the Second Amended Complaint. (ECF No. 41).

A. Allegations of the Second Amended Complaint

Plaintiff is the owner of real property commonly known as 7066 Keighley Street, San Diego, CA 92120. On June 14, 2007, "[a]t the request of" Defendant Moneyworld Sales/Mortgages, Inc. ("Moneyworld") and Lehman, Plaintiff obtained a loan from Lehman. Id. ¶ 14. "The loan was initially funded by Lehman ..., serviced by [Aurora] (Lehman['s] ... subsidiary), brokered by Moneyworld (Lehman['s] ... agent/correspondent/wholesaler), and promptly sold at a profit to other investors currently unknown to Plaintiff." Id. Prior to the funding of the loan, Moneyworld and/or Lehman misrepresented the terms of the loan. "Defendants failed to provide Plaintiff with the proper disclosures required under state and federal law." Id. ¶ 17. At the time the loan was executed, "Defendants" engaged in "predatory lending behavior," including "[c]reating the loan with a high APR," "[c]harging improper broker fees," "[c]harging excessive prepayment penalties," and "[r]ushing the loan closing." Id. ¶ 21. The loan contract "was incomprehensible to a standard consumer." Id. ¶ 22. "Defendants Lehman ..., [Aurora] and other Defendants received a Qualified Written Request regarding the loan from Plaintiff and failed to adequately respond to Plaintiff's requests for information, which would have enabled Plaintiff an opportunity to work out the loan." Id. ¶ 18.

The Second Amended Complaint alleges eight claims: (1) violation of the Real Estate Settlement Procedures Act ("RESPA"), 12 U.S.C. § 2605 et seq.; (2) violation of the Truth in Lending Act ("TILA"), 15 U.S.C. § 1601 et seq.; (3) violation of California's Unfair Competition Law, Cal. Bus. & Prof. Code § 17200; (4) negligent misrepresentation; (5) fraud; (6) rescission; (7) quasi-contract; and (8) "determination of validity of lien" (ECF No. 41 at 28).

B. Motion to Dismiss

On October 13, 2010, the moving Defendants filed the Motion to Dismiss, seeking the dismissal of all claims against the moving Defendants in the Second Amended Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). (ECF No. 42). The moving Defendants contend that the Second Amended Complaint "continues to assert time-barred TILA claims and non-actionable [Qualified Written Request] violations under RESPA." (ECF No. 42-1 at 24). The moving Defendants contend that the Second Amended Complaint should be dismissed with prejudice as to the moving Defendants.

On November 8, 2010, Plaintiff filed a response in opposition to the Motion to Dismiss and the Ex Parte Motion for Leave to File an Opposition to Motion to Dismiss in Excess of 25 Pages. (ECF Nos. 43-44). Plaintiff contends that the Motion to Dismiss should be denied in its entirety, or, alternatively, Plaintiff should be granted leave to amend the Second Amended Complaint.

On November 8, 2010, the moving Defendants filed a reply brief in support of the Motion to Dismiss. (ECF No. 45). The moving Defendants did not file an opposition to Plaintiff's Ex Parte Motion for Leave to File an Opposition to Motion to Dismiss in Excess of 25 Pages.

II. Discussion

A. Standard of Review

Federal Rule of Civil Procedure 12(b)(6) permits dismissal for "failure to state a claim upon which relief can be granted." Fed. R. Civ. P. 12(b)(6). Dismissal under Rule 12(b)(6) is appropriate where the complaint lacks a cognizable legal theory or sufficient facts to support a cognizable legal theory. See Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1990). To sufficiently state a claim to relief and survive a Rule 12(b)(6) motion, a complaint "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 (2007). "[A] plaintiff's obligation to provide the 'grounds' of his 'entitle[ment] to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Id. (quoting Fed. R. Civ. P. 8(a)(2)). When considering a motion to dismiss, a court must accept as true all "well-pleaded factual allegations." Ashcroft v. Iqbal, --- U.S. ----, 129 S. Ct. 1937, 1950 (2009). However, a court is not "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). "In sum, for a complaint to survive a motion to dismiss, the non-conclusory 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) (quotations omitted).

B. Request for Judicial Notice

"A district court ruling on a motion to dismiss may consider documents whose contents are alleged in a complaint and whose authenticity no party questions, but which are not physically attached to the plaintiff's pleading." Parrino v. FHP, Inc., 146 F.3d 699, 705-06 (9th Cir. 1998) (quotation omitted). Also, "a district court ruling on a motion to dismiss may consider a document the authenticity of which is not contested, and upon which the plaintiff's complaint necessarily relies." Id. at 706.

The moving Defendants request that the Court take judicial notice of the documents executed by Plaintiff and relating to the property at issue, including the Deed of Trust and the Adjustable Rate Note, and the correspondence related to Plaintiff's Qualified Written Request to Aurora made pursuant to RESPA. (ECF No. 42-2). Plaintiff does not oppose the request for judicial notice.

The Second Amended Complaint either references or necessarily relies upon each of the documents which are attached to the request for judicial notice. The authenticity of the documents has not been challenged. ...


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