FINDINGS AND RECOMMENDATIONS
This case, in which plaintiffs are proceeding pro se, is before the undersigned pursuant to Eastern District of California Local Rule 302(c)(21). See 28 U.S.C. § 636(b)(1). Defendants Barclay Capital Real Estate Corporation dba HomEq Servicing and Wells Fargo Bank, N.A. as Trustee under Pooling and Servicing Agreement dated as of February 1, 2006, Securitized Asset Back Receivables LLC Trust 2006-FR1 Mortgage Pass-through Certificates, Series 2006 FR1, sued as Wells Fargo Bank, N.A. ("defendants"), move to dismiss plaintiffs' first amended complaint. Dckt. No. 17. Additionally, plaintiffs move for leave to file a second amended complaint. Dckt. No. 23. For the reasons stated herein, the undersigned recommends that defendants' motion to dismiss be granted in part, that plaintiffs' motion to amend be denied, that plaintiffs' federal claim be dismissed with prejudice, and that plaintiffs' remaining state law claims be remanded to Solano County Superior Court.
In December 2009, defendants Barclay Capital Real Estate Corporation dba HomEq Servicing and Wells Fargo Bank, N.A. ("defendants"), removed this action from Solano County Superior Court based on federal question jurisdiction, and moved to dismiss plaintiffs' complaint pursuant to Federal Rule of Civil Procedure ("Rule") 12(b)(6).*fn1 Dckt. Nos. 1, 5. Plaintiffs failed to timely file an opposition or a statement of non-opposition thereto, and the court therefore continued the hearing on the motion to dismiss and ordered plaintiffs to show cause why they should not be sanctioned for violation of Local Rule 230. Dckt. No. 8.
Thereafter, on February 10, 2010, plaintiffs filed an opposition to the motion to dismiss. Dckt. No. 9. Plaintiffs stated in the opposition that they are homeless and on social security disability status and that they had been responding to the court "with the best of their ability."
Id. Plaintiffs also requested additional time to submit an opposition and to amend their complaint. Id. Accordingly, the court granted plaintiffs additional time to file a further opposition to the motion and again continued the hearing date on defendant's motion to dismiss. Dckt. No. 10. The court also scheduled a hearing on plaintiffs' motion for leave to amend. Id. On April 13, 2010, the court granted plaintiffs' motion for leave to amend and denied defendants' motion to dismiss without prejudice. Dckt. No. 15.
On April 27, 2010, plaintiffs filed a first amended complaint. Dckt. No. 16. The first amended complaint alleges that defendants violated the federal Real Estate Settlement and Procedures Act ("RESPA"), 12 U.S.C. §§ 2601 et seq., as well as various state laws, based on the foreclosure and sale of plaintiffs' home. First Am. Compl. ("FAC"), Dckt. No. 16.
Defendants now move pursuant Rule 12(b)(6) to dismiss the first amended complaint, Dckt. No. 17, and plaintiffs seek leave to file a second amended complaint. Dckt. Nos. 23, 22.
In this action, plaintiffs challenge the foreclosure sale of their home in Suisun City,
California (the "subject property"). On September 2, 2005, plaintiffs
obtained a loan from United Home Mortgage to refinance the subject
property. Defs.' Req. for Jud. Notice, Dckt. No. 18, Ex. 1.*fn2
On July 13, 2007, defendant Quality Loan Service Corp.
recorded a "Notice of Default and Election to Sell." Id., Ex. 2.
Thereafter, on March 30, 2009, plaintiffs entered into a "Listing
Forbearance Agreement" with defendant Barclays Capital Real Estate
Corporation dba HomEq Servicing to "hold the foreclosure in abeyance,
while attempting in good faith to make a quick and reasonable sale of
said property." Id., Ex. 5. After plaintiffs failed to make their
payments and cure the default, on April 24, 2009, defendant Quality
Loan Service Corp. issued and recorded a "Notice of Trustee's Sale,"
noticing the sale for May 13, 2009. Id., Ex. 3. The subject property
was then sold at a Trustee's Sale on July 22, 2009 to defendant Wells
Fargo as Trustee. Id., Ex. 4.
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 Atl. Corp. v. Twombly, 550 U.S. 544, 555 (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, 129 S. Ct. 1937, 1949 (2009) (quoting 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." Id. Dismissal is appropriate based either on the lack of cognizable legal theories or the lack of pleading sufficient facts to support cognizable legal theories. Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1990).
In considering a motion to dismiss, the court must accept as true the allegations of the complaint in question, Hospital Bldg. Co. v. Rex Hosp. Trs., 425 U.S. 738, 740 (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, reh'g denied, 396 U.S. 869 (1969). The court will "'presume that general allegations embrace those specific facts that are necessary to support the claim.'" ...