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Brian Hicks and Connie Hicks v. Equifirst Corporation

February 2, 2011

BRIAN HICKS AND CONNIE HICKS,
PLAINTIFFS,
v.
EQUIFIRST CORPORATION, AND DOES STATE CLAIMS 1 THROUGH 100, DEFENDANTS.



The opinion of the court was delivered by: Garland E. Burrell, Jr. United States District Judge

ORDER GRANTING MOTION TO DISMISS IN PART AND REMANDING

Defendant EquiFirst Corporation ("Defendant") moves for dismissal of Plaintiffs' Complaint under Federal Rule of Civil Procedure ("Rule") 12(b)(6), arguing Plaintiffs fail to state a cognizable claim against it. Plaintiffs did not file an opposition or statement of non-opposition in response to Defendant's motion as required by Local Rule 230(c). Nor did Plaintiff file a response to a Rule 4(m) order concerning whether other defendants in this action should be dismissed for lack of service of process. Those defendants are dismissed in a separate order.

This case was removed from state court based on federal question jurisdiction, premised on Plaintiffs claim under the Truth in Lending Act ("TILA"). For the reasons stated below, Plaintiffs' TILA claim will be dismissed with prejudice, and this action will be remanded to the state court from which it was removed.

I. LEGAL STANDARD

Dismissal of a claim under Rule 12(b)(6) is appropriate only where the complaint either 1) lacks a cognizable legal theory, or 2) lacks factual allegations sufficient to support a cognizable legal theory. Balistreri v. Pacific Police Dept., 901 F.2d 696, 699 (9th Cir. 1988). To avoid dismissal, a plaintiff must allege "enough facts to state a claim to relief that is plausible on its face." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 547 (2007).

In deciding a Rule 12(b)(6) motion, the material allegations of the complaint are accepted as true and all reasonable inferences are drawn in favor of the plaintiffs. See al-Kidd v. Ashcroft, 580 F.3d 949, 956 (9th Cir. 2009). However, "the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions." Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009). "A pleading that offers 'labels and conclusions' or 'a formulaic recitation of the elements of a cause of action will not do.' Nor does a complaint suffice if it tenders 'naked assertion[s]' devoid of 'further factual enhancement.'" Id. (quoting Twombly, 550 U.S. at 555, 557). "In sum, for a complaint to survive a motion to dismiss, the nonconclusory 'factual content,' and reasonable inferences from that content, must be plausibly suggestive of a claim entitling the plaintiff to relief." Moss v. United States Secret Serv., 572 F.3d 962, 969 (9th Cir. 2009).

Defendant's motion includes a request that a deed of trust and promissory note be considered under the incorporation of reference doctrine. (Def.'s Mot. to Dismiss ("Mot.") 4 n.2.; Decl. of Dawn N. Williams ("Williams Decl."), Exs. A-B.)

"As a general rule, a district court may not consider any material beyond the pleadings in ruling on a Rule 12(b)(6) motion." Lee v. City of Los Angeles, 250 F.3d 668, 688 (9th Cir. 2001) (quotations and citation omitted). However, under the "incorporation by reference" doctrine, the court 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." In re Silicon Graphics Inc. Sec. Litig., 183 F.3d 970, 986 (9th Cir. 1999) (quotation omitted). Here, Plaintiffs allege the existence of both the deed of trust and promissory note in their complaint and have not disputed the authenticity of the documents that Defendant seeks to have considered. See, Compl. ¶¶ 5, 6. Therefore, the deed of trust and promissory note are considered as Defendant requests.

II. BACKGROUND

On or about August 30, 2007, Plaintiffs obtained a loan from Defendant, which was secured by their real property, located at 26618 N. Highway 99, Acampo, California. (Compl. ¶¶ 5-6, Williams Decl., Exs. AB.)

The relevant deed of trust identifies Defendant Liberty Title Company as the trustee and Defendant Mortgage Electronic Registration Systems, Inc. ("MERS") as a nominee for the lender and the lender's successors and assigns. (Williams Decl., Ex. 1.)

Plaintiffs' claims stem from their allegations that Defendants fraudulently induced them to enter into the loan, and are improperly pursuing foreclosure proceedings against them. (Compl. ¶¶ 5, 7.)

III. DISCUSSION

A. TILA Damages ...


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