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Monique M. Pernell v. Bac Home Loans Servicing

January 31, 2011


The opinion of the court was delivered by: Kendall J. Newman United States Magistrate Judge


Presently before the court is defendants' motion to dismiss the First Amended Complaint filed by plaintiff, who is proceeding without counsel.*fn1 (Dkt. No. 22.) Because oral argument would not materially aid in the resolution of the pending motion, this matter was submitted on the briefs and record without a hearing. See Fed. R. Civ. P. 78(b); E. Dist. Local Rule 230(g). The undersigned has considered the materials submitted by the parties and, for the reasons stated below, recommends that defendants' motion to dismiss be granted and that plaintiff's First Amended Complaint be dismissed with prejudice.


On April 25, 2006, plaintiff executed and delivered to Countrywide Home Loans, Inc. ("Countrywide"), now known as BAC Home Loans Servicing, LP ("BAC Home Loans"), a written promissory note in an amount of $285,519.00 regarding the property located at 5291 Scarborough Way in Sacramento, California. (First Am. Compl. ¶ 15, Dkt. No. 17; Request for Judicial Notice*fn3 ("RFJN"), Ex. A.) Plaintiff secured payment of the principal and interest sums with a deed of trust delivered to defendant Reconstrust Company, N.A. ("Recontrust Company") as trustee, which was recorded on May 2, 2006. (Id. ¶¶ 16-17; RFJN, Ex. B.) On March 23, 2009, Recontrust Company recorded a notice of default and election to sell as instrument number 20090323 in the Sacramento County Recorder's office. (RFJN, Ex. C; see First Am. Compl. ¶ 18*fn4 .) A Notice of Trustee's Sale was recorded on July 16, 2009, and, ultimately, a Trustee's Deed Upon Sale was recorded on August 10, 2009, which reflects an unpaid debt of $294,877.65. (RFJN, Exs. D, E.) The Trustee's Deed Upon Sale conveyed the subject property to BAC Home Loans Servicing, LP. (RFJN, Ex. E.)

On November 13, 2009, plaintiff filed her complaint in Sacramento Superior Court. (Compl., attached to Notice of Removal, Dkt. No. 1, Doc. 1-2 at 3-7.) On November 18, 2009, plaintiff filed an application for a restraining order ("TRO") in the Superior Court, which was denied. (Order, Nov. 20, 2009, attached to Notice of Removal, Dkt. No. 1, Doc. 1-2 at 71-72; see also RFJN, Ex. F.) On December 23, 2009, defendants filed a notice of removal with this court. (Notice of Removal, Dkt. No. 1.) Defendants allege in their notice of removal that they were not served with plaintiff's summons and compliant and that they received notice of the complaint only after receiving plaintiff's application for a TRO in state court on November 24, 2009. (Id. at 2:9-11.) Accordingly, defendants' removal was timely. See 28 U.S.C. § 1446(b).

Plaintiff's original complaint sought declaratory relief (claim one), injunctive relief setting aside the foreclosure sale (claim two), and an accounting of money that defendants allegedly owe plaintiff. (See Pl.'s Compl. ¶¶ 9-14.) On December 30, 2009, defendants filed a motion to dismiss plaintiff's complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). (Dkt. No. 5.) After a hearing, the undesigned entered an order granting defendants' motion to dismiss, but granted plaintiff leave to file a first amended complaint. (Order, Apr. 2, 2010, Dkt. No. 16.)

Plaintiff filed a timely First Amended Complaint, which alleges claims for (1) fraud; (2) violation of the Truth In Lending Act, 15 U.S.C. §§ 1601 et seq. ("TILA"); (3) the federal Fair Debt Collections Practices Act, 15 U.S.C. §§ 1692 et seq. ("FDCPA"); (4) California's Rosenthal Fair Debt Collections Practices Act, Cal. Civ. Code §§ 1788 et seq. ("RFDCPA"); (5) unlawful foreclosure; (6) violation of "statutory good faith and fair dealing"; and (7) violation of California Business and Professions Code § 17200. (See generally First Am. Compl.) Plaintiff's claim for declaratory relief alleged in her original complaint was premised on alleged wrongful acts committed by defendants that largely overlap with the claims alleged in the First Amended Complaint, and deficiencies pertaining to many of the claims raised in the First Amended Complaint were addressed in the court's previously entered order dismissing plaintiff's original complaint. (Order, Apr. 2, 2010.)

Defendants ultimately filed a motion to dismiss the First Amended Complaint.*fn5 Plaintiff filed a written opposition to the motion to dismiss.


A motion to dismiss brought pursuant to Federal Rule of Civil Procedure 12(b)(6) challenges the sufficiency of the pleadings set forth in the complaint. Vega v. JPMorgan Chase Bank, N.A., 654 F. Supp. 2d 1104, 1109 (E.D. Cal. 2009). Under the "notice pleading" standard of the Federal Rules of Civil Procedure, a plaintiff's complaint must provide, in part, a "short and plain statement" of plaintiff's claims showing entitlement to relief. Fed. R. Civ. P. 8(a)(2); see also Paulsen v. CNF, Inc., 559 F.3d 1061, 1071 (9th Cir. 2009), cert. denied, 130 S. Ct. 1053 (2010). "A complaint may survive a motion to dismiss if, taking all well-pleaded factual allegations as true, it contains 'enough facts to state a claim to relief that is plausible on its face.'" Coto Settlement v. Eisenberg, 593 F.3d 1031, 1034 (9th Cir. 2010) (quoting Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009)). "'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.'" Caviness v. Horizon Cmty. Learning Ctr., Inc., 590 F.3d 806, 812 (9th Cir. 2010) (quoting Iqbal, 129 S. Ct. at 1949). The court accepts all of the facts alleged in the complaint as true and construes them in the light most favorable to the plaintiff. Corrie v. Caterpillar, 503 F.3d 974, 977 (9th Cir. 2007). The court is "not, however, required to accept as true conclusory allegations that are contradicted by documents referred to in the complaint, and [the court does] not necessarily assume the truth of legal conclusions merely because they are cast in the form of factual allegations." Paulsen, 559 F.3d at 1071 (citations and quotation marks omitted). The court must construe a pro se pleading liberally to determine if it states a claim and, prior to dismissal, tell a plaintiff of deficiencies in his complaint and give plaintiff an opportunity to cure them if it appears at all possible that the plaintiff can correct the defect. See Lopez v. Smith, 203 F.3d 1122, 1130-31 (9th Cir. 2000).

In ruling on a motion to dismiss pursuant to Rule 12(b)(6), the court "may generally consider only allegations contained in the pleadings, exhibits attached to the complaint, and matters properly subject to judicial notice." Outdoor Media Group, Inc. v. City of Beaumont, 506 F.3d 895, 899 (9th Cir. 2007) (citation and quotation marks omitted). The court may take judicial notice of matters of public record, but "may not take judicial notice of a fact that is 'subject to reasonable dispute.'" Lee v. City of L.A., 250 F.3d 668, 689 (9th Cir. 2001) (citing Fed. R. Evid. 201(b)). Under the "incorporation by reference" doctrine, a court may also review 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." Knievel v. ESPN, 393 F.3d 1068, 1076 (9th Cir. 2005) (citation omitted and modification in original). The incorporation by reference doctrine also applies "to situations in which the plaintiff's claim depends on the contents of a document, the defendant attaches the document to its motion to dismiss, and the parties do not dispute the authenticity of the document, even though the plaintiff does not explicitly allege the contents of that document in the complaint." Id.*fn6

A motion to dismiss pursuant to Rule 12(b)(6) may also challenge a complaint's compliance with Federal Rule of Civil Procedure 9(b) where fraud is an essential element of a claim. See Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1107 (9th Cir. 2003). Rule 9(b), which provides a heightened pleading standard, states: "In alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake. Malice, intent, knowledge, and other conditions of a person's mind may be alleged generally." Fed. R. Civ. P. 9(b). These circumstances include the "'time, place, and specific content of the false representations as well as the identities of the parties to the misrepresentations.'" Swartz v. KPMG LLP, 476 F.3d 756, 764 (9th Cir. 2007) (per curiam) (quoting Edwards v. Marin Park, Inc., 356 F.3d 1058, 1066 (9th Cir. 2004)); see also Kearns v. Ford Motor Co., 567 F.3d 1120, 1124 (9th Cir. 2009) ("Averments of fraud must be accompanied by 'the who, what, when, where, and how' of the misconduct charged" (citation and quotation marks omitted).). "Rule 9(b) demands that the circumstances constituting the alleged fraud be specific enough to give defendants notice of the particular misconduct . . . so that they can defend against the charge and not just deny that they have done anything wrong." Kearns, 567 F.3d at 1124 (citing Bly-Magee v. California, 236 F.3d 1014, 1019 (9th Cir. 2001) (internal quotation marks omitted and modification in original).

III. DISCUSSION A. Plaintiff's Claim of Fraud

Plaintiff's first claim for relief alleges that defendants "used deceit and deception in creating and maintaining though its entirety a fraudulent mortgage loan." (First Am. Compl. ¶ 27.) Specifically, plaintiff alleges that BAC Home Loans, formerly Countrywide, "[f]raudulently sold Plaintiff's promissory note for value" and funded the loan check back to plaintiff. (Id.) She contends that "[i]n essence Plaintiff funded her own loan." (Id.) Defendants move for dismissal of plaintiff's fraud claim on the grounds that plaintiff has failed to plead the elements of a fraud claim and failed to plead that claim with the requisite particularly required by Federal Rule of Civil Procedure 9(b). (See Memo. of P. & A. in Supp. of Defs.' Mot. to Dismiss First Am. Compl. ("Defs.' Memo.") at 5-7.)

The elements of an intentional misrepresentation claim under California law are: "(1) a misrepresentation, (2) with knowledge of its falsity, (3) with the intent to induce another's reliance on the misrepresentation, (4) justifiable reliance, and (5) resulting damage." Conroy v. Regents of Univ. of Cal., 45 Cal. 4th 1244, 1255, 203 P.3d 1127, 1135 (2009); accord Lazar v. Superior Court, 12 Cal. 4th 631, 638, 909 P.2d 981, 984 (1996). In addition, as stated above, a claim for fraud must be pled with particularity, see Fed. R. Civ. P. 9(b), including allegations regarding the time, place, and specific content of the false representations, and the identities of the parties to the misrepresentation. See Swartz, 476 F.3d at 764.

Here, the allegations in plaintiff's First Amended Complaint do not support a claim of fraud. Although plaintiff's allegations fail to support any of the elements of a claim of fraud, most glaringly plaintiff has not identified any misrepresentation that provides the basis for such a claim. Moreover, the First Amended Complaint does not meet the particularity requirement of Rule 9(b). The complaint alleges fraud generally and does not specify the who, what, when, where, and how of the misconduct charged. See Kearns, 567 F.3d at 1124. Accordingly, the undersigned recommends that plaintiff's claim of fraud be dismissed. Such dismissal should be with prejudice because nothing in plaintiff's First Amended Complaint or written opposition suggests that she can cure her pleading deficiencies. Moreover, the court provided plaintiff with the requirements for pleading a claim of fraud when dismissing plaintiff's original complaint, and plaintiff either ignored the court's guidance or simply cannot meet these requirements. In either case, dismissal with prejudice is appropriate.

B. Plaintiff's TILA Claim

In her First Amended Complaint, plaintiff alleges that BAC Home Loans violated

TILA by failing to disclose or concealing "the vital fact" that BAC Home Loans or Countrywide "was not making Plaintiff a loan, but used 'check kiting.'"*fn7 (First Am. Compl. ΒΆ 30.) Defendants move to dismiss plaintiff's TILA claim on the grounds that: (1) the claim is time-barred, and (2) ...

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