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Thomas Ryan, et al v. Bac Home Loans Servicing

February 18, 2011


The opinion of the court was delivered by: Gregory G. Hollows U. S. Magistrate Judge


Previously pending on this court's law and motion calendar for February 17, 2011 was defendant BAC Home Loans Servicing's amended motion to dismiss, filed December 17, 2010. Also before the court was plaintiffs' application for preliminary injunction, filed February 4, 2011. Plaintiffs Thomas and Karen Ryan made no appearance. Sean McElenney appeared telephonically for defendant. Having heard oral argument and reviewed the filings in support of and in opposition to the motion, the court now issues the following findings and recommendations, recommending that defendant's motion be granted and plaintiffs' motion be denied.


Plaintiffs Thomas and Karen Ryan filed this action on November 1, 2010. Plaintiffs allege that defendant induced them into a predatory loan agreement for the financing*fn1 of their primary residence, and committed numerous acts of fraud in regard to that agreement. (Compl. at 2.) Plaintiffs allege no other facts in their boilerplate complaint; however, the loan documents submitted in support of defendant's motion to dismiss indicate the loan agreement was executed on January 3, 2007. (Def.'s RJN, Exs. A, B.) According to defendant, plaintiffs defaulted on the note in April 2009, and notice of default was filed on August 20, 2009. (Def.'s RJN Ex. C.) Defendant noticed a trustee sale, which was originally scheduled for April 28, 2010, but was continued to January 14, 2011, then February 4, 2011, and most recently to March 4, 2011, according to the parties' papers. (Id., Ex. D, Def.'s Mot. at 10, Pls.' App. for Prelim. Inj. at 4, Def.'s Opp'n to Pls.' Prelim. Inj. App. at 2.)

The complaint contains claims for violation of the Truth in Lending Act ("TILA"), Real Estate Settlement Procedures Act ("RESPA"),*fn2 unjust enrichment, quiet title, breach of fiduciary duty, negligence, fraud, breach of implied covenant of good faith and fair dealing, and intentional infliction of emotional distress. Plaintiffs seek injunctive relief and costs of suit.


I. Legal Standards for Motion to Dismiss

In order to survive dismissal for failure to state a claim pursuant to Rule 12(b)(6),

a complaint must contain more than a "formulaic recitation of the elements of a cause of action;" it must contain factual allegations sufficient to "raise a right to relief above the speculative level." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 1965 (2007). "The pleading must contain something more...than...a statement of facts that merely creates a suspicion [of] a legally cognizable right of action." Id., quoting 5 C. Wright & A. Miller, Federal Practice and Procedure § 1216, pp. 235-236 (3d ed. 2004). "[A] complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, ___ U.S. ___, 129 S.Ct. 1937, 1949 (2009) (quoting Twombly, 550 U.S. at 570, 127 S.Ct. 1955). "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." Id.

In considering a motion to dismiss, the court must accept as true the allegations of the complaint in question, Hospital Bldg. Co. v. Rex Hospital Trustees, 425 U.S. 738, 740, 96 S. Ct. 1848, 1850 (1976), construe the pleading in the light most favorable to the party opposing the motion and resolve all doubts in the pleader's favor. Jenkins v. McKeithen, 395 U.S. 411, 421, 89 S. Ct. 1843, 1849, reh'g denied, 396 U.S. 869, 90 S. Ct. 35 (1969). The court will "'presume that general allegations embrace those specific facts that are necessary to support the claim.'" National Organization for Women, Inc. v. Scheidler, 510 U.S. 249, 256, 114 S.Ct. 798, 803 (1994), quoting Lujan v. Defenders of Wildlife, 504 U.S. 555, 561, 112 S. Ct. 2130, 2137 (1992). Moreover, pro se pleadings are held to a less stringent standard than those drafted by lawyers. Haines v. Kerner, 404 U.S. 519, 520, 92 S. Ct. 594, 596 (1972).

The court may consider facts established by exhibits attached to the complaint. Durning v. First Boston Corp., 815 F.2d 1265, 1267 (9th Cir. 1987). The court may also consider facts which may be judicially noticed, Mullis v. United States Bankruptcy Ct., 828 F.2d 1385, 1388 (9th Cir. 1987); and matters of public record, including pleadings, orders, and other papers filed with the court, Mack v. South Bay Beer Distributors, 798 F.2d 1279, 1282 (9th Cir. 1986). The court need not accept legal conclusions "cast in the form of factual allegations." Western Mining Council v. Watt, 643 F.2d 618, 624 (9th Cir. 1981).

II. Legal Standard for Preliminary Injunction "A plaintiff seeking a preliminary injunction must establish that he is likely to

succeed on the merits, that he is likely to suffer irreparable harm in the absence of preliminary relief, that the balance of equities tips in his favor, and that an injunction is in the public interest." Am. Trucking Ass'n, Inc. v. City of Los Angeles, 559 F.3d 1046, 1052 (9th Cir. 2009) (quoting Winter v. Natural Res. Def. Council, Inc., ___ U.S. ___, ___, 129 S. Ct. 365, 374 (2008)). "A preliminary injunction is appropriate when a plaintiff demonstrates . . . that serious questions going to the merits were raised and the balance of hardships tips sharply in the plaintiff's favor." Alliance for the Wild Rockies v. Cottrell, __F.3d__, 2011 WL 208360 *7 (9th Cir. 2011) (quoting Lands Council v. McNair, 537 F.3d 981, 97 (9th Cir. 2008) (en banc)) and finding that the "serious ...

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