The opinion of the court was delivered by: Frank C. Damrell, Jr. United States District Judge
This matter is before the court on the motion of OneWest Bank, FSB ("OneWest") and Mortgage Electronic Registration System, Inc ("MERS") (collectively, "defendants") to dismiss plaintiff's first amended complaint ("FAC") pursuant to Federal Rule of Civil Procedure ("FRCP") 12(b)(6). OneWest and MERS alternatively move for a more definitive statement pursuant to FRCP 12(e).*fn1 Plaintiff Catalina Magdaleno ("plaintiff") opposes the motions. For the reasons set forth below, defendants' motion to dismiss is GRANTED with leave to amend, in part.*fn2
In May 2009, plaintiff brought this action in state court against OneWest, MERS, NDEX West, LLC ("NDEX")*fn3 and Indymac Federal Bank, FSB ("Indymac") for conduct arising out of a loan and subsequent foreclosure activity. (FAC, filed May 28, 2009, ¶¶ 1-21.). In August 2010, The Federal Deposit Insurance Corporation ("FDIC") removed the state court action to this court pursuant to 28 U.S.C. 1441(b). (FDIC's Not. of Removal, filed Oct. 5, 2010 [Docket #1].)
Plaintiff alleges that in 2005, she applied for two loans with IndyMac as the lender and MERS as the nominee beneficiary. (Id. ¶ 9.) Plaintiff secured the loans based on a thirty-year adjustable interest rate at 1.000% APR with a maximum cap of 9.950%. (Id.) Plaintiff alleges that the written contract does not reflect the true intent of the parties; instead, plaintiff asserts that IndyMac's broker, "Kevin" of Anchor Financial, "represented to plaintiff that she would receive a fixed, thirty-year 1% interest rate." (Id. ¶ 10.)
On July 11, 2008, the Office of Thrift Supervision placed IndyMac Bank into receivership and a new bank, Indymac, was created under the conservatorship of the FDIC*fn4 . (Defs.' Mot. to Dismiss ["MTD"], filed Oct 14, 2010, 2009 [Docket #7], at 8:12--15; FDIC's Not. of Removal at 1:22--2:9.). On March 19, 2009, FDIC transferred the loans to OneWest as successor in interest to Indymac. (MTD at 8:15--16.)
Plaintiff defaulted on the loans in or around April 2007 because of her alleged "lack of income and confusing terms of her loan." (FAC ¶ 12.) MERS subsequently appointed NDEX as trustee. (FAC ¶ 19.) On September 18, 2008, NDEX caused a Notice of Default to be filed. (FAC ¶ 13; Defs.' Req. for Judicial Notice ["RJN"], filed Oct. 14, 2010 [Docket #7], Ex. 4.) Plaintiff contends that NDEX did not have the authority to file the notice because NDEX, allegedly, "was not a trustee, beneficiary or authorized agent under the Deed of Trust per Civil Code Section 2924." (Id.) Plaintiff further contends that Indymac and One West, as successor in interest, engaged in misconduct by misrepresenting the terms of the loan. (FAC. ¶¶ 27-30.)
Plaintiff filed the present action on May 28, 2009, alleging claims for (1) wrongful foreclosure in violation of California Civil Code § 2924; (2) fraudulent misrepresentation; (3) fraudulent concealment; (4) reformation, California Civil Code §§ 3399, 1670.5; (5) violation of California Business & Professions Code § 17200 et seq.; and (6) violation of California Civil Code § 1632.
Under Federal Rule of Civil Procedure 8(a), a pleading must contain "a short and plain statement of the claim showing that the pleader is entitled to relief." See Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009). Under notice pleading in federal court, the complaint must "give the defendant fair notice of what the claim is and the grounds upon which it rests." Bell Atlantic v. Twombly, 550 U.S. 544, 555 (2007) (internal quotations omitted). "This simplified notice pleading standard relies on liberal discovery rules and summary judgment motions to define disputed facts and issues and to dispose of unmeritorious claims." Swierkiewicz v. Sorema N.A., 534 U.S. 506, 512 (2002).
On a motion to dismiss, the factual allegations of the complaint must be accepted as true. Cruz v. Beto, 405 U.S. 319, 322 (1972). The court is bound to give plaintiff the benefit of every reasonable inference to be drawn from the "well-pleaded" allegations of the complaint. Retail Clerks Int'l Ass'n v. Schermerhorn, 373 U.S. 746, 753 n.6 (1963). A plaintiff need not allege "'specific facts' beyond those necessary to state his claim and the grounds showing entitlement to relief." 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." Iqbal, 129 S. Ct. at 1949.
Nevertheless, the court "need not assume the truth of legal conclusions cast in the form of factual allegations." United States ex rel. Chunie v. Ringrose, 788 F.2d 638, 643 n.2 (9th Cir. 1986). While Rule 8(a) does not require detailed factual allegations, "it demands more than an unadorned, the defendant-unlawfully-harmed-me accusation." Iqbal, 129 S. Ct. at 1949. A pleading is insufficient if it offers mere "labels and conclusions" or "a formulaic recitation of the elements of a cause of action." Twombly, 550 U.S. at 555; Iqbal, 129 S. Ct. at 1950 ("Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice."). Moreover, it is inappropriate to assume that the plaintiff "can prove facts which it has not alleged or that the defendants have violated the . . . laws in ways that have not been alleged." Associated Gen. Contractors of Cal., Inc. v. Cal. State Council of Carpenters, 459 U.S. 519, 526 (1983).
Ultimately, the court may not dismiss a complaint in which the plaintiff has alleged "enough facts to state a claim to relief that is plausible on its face." Iqbal, 129 S. Ct. at 1949 (citing Twombly, 550 U.S. at 570). Only where a plaintiff has failed to "nudge [his or her] claims across the line from conceivable to plausible," is the complaint properly dismissed. Id. at 1952. While the plausibility requirement is not akin to a probability requirement, it demands more than "a sheer possibility that a defendant has acted unlawfully." Id. at 1949. This plausibility inquiry is "a context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Id. at 1950.
In ruling upon a motion to dismiss, the court may consider only the complaint, any exhibits thereto, and matters which may be judicially noticed pursuant to Federal Rule of Evidence 201.
See Mir v. Little Co. Of Mary Hospital, 844 F.2d 646, 649 (9th Cir. 1988); Isuzu Motors Ltd. v. Consumers Union of United States, Inc., 12 F. Supp. 2d 1035, 1042 (C.D. Cal. 1998).
In ruling upon a motion to dismiss, the court may consider matters which may be judicially noticed pursuant to Federal Rule of Evidence 201. See id. "Even if a document is not attached to a complaint, it may be incorporated by reference into a complaint if the plaintiff refers extensively to the document or the document forms the basis of the plaintiff's claim." United States v. Ritchie, 342 F.3d 903, 908 (9th Cir. 2003). "The defendant may offer such a document, and the district court may treat such a document as part of the complaint, and thus may assume that its contents are true for purposes of a motion to dismiss under Rule 12(b)(6)." Id. The policy concern underlying the rule is to prevent plaintiffs "from surviving a Rule 12(b)(6) motion by deliberately omitting references to documents upon which their claims are based." Parrino v. FHP, Inc., 146 F.3d 699, 706 (9th Cir. 1998).
Plaintiff's complaint alleges several claims that are premised on
defendants' alleged failure to provide certain required disclosures
concerning the terms of the loans. Defendants submit several documents
relevant to the terms of the loans: the Deed of Trust; the assignment
of deed of trust recorded December 18, 2008; the second assignment of
deed of trust, recorded June 17, 2009; the notice of default; and
Master Purchase Agreement between the FDIC and OneWest.*fn5
As these documents form the bases of certain of plaintiff's
claims, the court considers them and assumes that the contents are
true for the purpose of the motion.
B. Defendants' General Theories in Favor of Dismissal Preliminarily, defendants move to dismiss plaintiff's FAC for three general and alternative reasons: (1) plaintiff failed to join an indispensable party, thus requiring dismissal of her complaint in its entirety; (2) plaintiff failed to exhaust administrative remedies as required by 18 U.S.C. § 1821
(d)(5)--(14), and thus, her complaint as a whole cannot stand; and
(3) plaintiff failed to allege the ability to tender the amount of indebtedness, and thus, her claims are not cognizable. For the reasons set forth below, none of these contentions supply a basis for the complete dismissal of the complaint.
1. Failure to Join an Indispensable Party
Defendants contend that plaintiff's failure to join the current note holder and beneficiary of the deed, US Bank, is fatal to the entire complaint. (MTD at 6:14--7:1.) This argument is unavailing for two reasons: (1) failure to join indispensable parties is governed by the Federal Rules of Civil Procedure, not state law and (2) the California appellate decision defendants exclusively rely upon is inapposite.
Joinder of parties in federal courts is strictly a matter of procedure governed by the Federal Rules of Civil Procedure. See 35A C.J.S. Federal Civil Procedure § 136 (2010); Fed. Rs. Civ. P. 18-20. FRCP 19 specifically governs the joinder of indispensable parties. Thus, defendants' citation to and reliance on ...