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Cynthia Roberts v. Jp Morgan Chase Bank

March 11, 2011


The opinion of the court was delivered by: Lucy H. Koh United States District Judge


Defendant JP Morgan Chase Bank, N.A., moves to dismiss Plaintiff Cynthia Roberts's

Complaint. Pursuant to Civil Local Rule 7-1(b), the Court deems Defendant's motion suitable for 20 decision without oral argument. Having considered the submissions of the parties and the relevant 21 law, the Court GRANTS Defendant's motion to dismiss with leave to amend in part. Plaintiff's 22 amended complaint filed on February 28, 2011, is stricken as improperly filed under Federal Rule 23 of Civil Procedure 15. The Court also grants Plaintiff's motion to proceed in forma pauperis and 24 her motion for a waiver of PACER fees. If Plaintiff wishes to pursue her claims against Defendant 25

JP Morgan, she must file a Second Amended Complaint within 21 days of this order. $712,000, secured by a deed of trust concerning property located at 107 Silverwood Drive, Scotts Valley, California (the "subject property"). Compl. ¶ 16. The subject property was Plaintiff's 6 principal residence. Id. After the initial loan transaction, Washington Mutual continued to act as 7 the loan servicer, Compl. ¶ 10, apparently until Washington Mutual was closed and the Federal 8


This case arises out of a mortgage transaction between Plaintiff and Washington Mutual

Bank, FA, that took place over seven years ago. On August 4, 2003, Plaintiff obtained a loan for Deposit Insurance Corporation ("FDIC") was appointed as receiver. See Req. for Judicial Notice 9 in Supp. of JP Morgan's Mot. to Dismiss ("RJN") Ex. 13, ECF No. 12.*fn1 Thereafter, on September 25, 2008, Defendant JP Morgan purchased the assets of Washington Mutual and assumed its mortgage servicing rights and obligations. RJN Ex. 13, ¶ 2.1. defaulted on the loan. On February 26, 2008, Washington Mutual issued a Notice of Default.

Compl. ¶ 64. Plaintiff was subsequently issued two Notices of Trustee's Sale, and the property 15 was sold to JP Morgan in a trustee's sale on January 28, 2009. RJN Ex. 7-9. However, the trustee's sale was rescinded on March 23, 2009, and a third Notice of Trustee's Sale was recorded on June 3, 2009. RJN Ex. 10, 12.

At some point while Washington Mutual was acting as servicer, Plaintiff apparently

On April 29, 2009, Plaintiff filed two actions in federal court. In Case No. 09-CV-01855, Plaintiff purported to remove a case entitled JP Morgan Chase Bank, N.A. v. Cynthia Roberts, et 20 al., Case No. CV 162767, from the Santa Cruz County Superior Court. However, it does not appear that any case was actually removed from state court.*fn2 In Case No. 09-CV-01879, Plaintiff 2 filed a separate Complaint against Defendants Washington Mutual Bank, FA and JP Morgan Chase Bank, N.A. On June 11, 2009, Magistrate Judge Patricia V. Trumbull consolidated the two cases, 4 and Defendant JP Morgan moved to dismiss the actions on September 21, 2009. On November 24, State Bar and stayed the case to allow Plaintiff to seek another attorney or to proceed pro se. In 7

2009, however, Judge Trumbull learned that Plaintiff's counsel had resigned from the California September 2010, after granting several extensions of the stay, Judge Trumbull issued an interim 8 order which (1) solicited further briefing regarding Defendant's motion to dismiss; (2) declined to 9 further stay the case; and (3) referred Plaintiff to the Federal Pro Bono Project in an attempt to 10 secure pro bono representation. On November 10, 2010, the Federal Pro Bono Project indicated that it was unable to secure representation for Plaintiff. Finally, on January 5, 2011, the case was 12 reassigned to the undersigned judge, and Defendant's motion to dismiss was renoticed for hearing 13 on March 3, 2011. The Court found the motion appropriate for resolution without oral argument 14 and will now proceed to address Defendant's arguments. The Court will also address Plaintiff's 15 recently filed First Amended Complaint, her motion for pro bono PACER access, and her 16 application to proceed in forma pauperis. sufficiency of a complaint. Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). In considering 21 whether the complaint is sufficient to state a claim, the court must accept as true all of the factual 22 allegations contained in the complaint. Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009). However, 23 the court need not accept as true "allegations that contradict matters properly subject to judicial

II.Motion to Dismiss

A.Legal Standard

A motion to dismiss for failure to state a claim under Rule 12(b)(6) tests the legal notice or by exhibit" or "allegations that are merely conclusory, unwarranted deductions of fact, or 2 unreasonable inferences." St. Clare v. Gilead Scis., Inc. (In re Gilead Scis. Sec. Litig.), 536 F.3d 1049, 1055 (9th Cir. 2008). While a complaint need not allege detailed factual allegations, it "must 4 contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its 5 face.'" Iqbal, 129 S.Ct. at 1949 (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A claim is facially plausible when it "allows the court to draw the reasonable inference 7 that the defendant is liable for the misconduct alleged." Iqbal, 129 S.Ct. at 1949. If a court grants 8 a motion to dismiss, leave to amend should be granted unless the pleading could not possibly be 9 cured by the allegation of other facts. Lopez v. Smith, 203 F.3d 1122, 1130 (9th Cir. 2000). If 10 amendment would be futile, however, a dismissal may be ordered with prejudice. Dumas v. Kipp, 90 F.3d 386, 393 (9th Cir. 1996). against Washington Mutual and JP Morgan.*fn3 As discussed below, the Court agrees with Defendant

JP Morgan that all of Plaintiff's claims must be dismissed. The Court will address each claim in 16 turn. misrepresentations, failed to disclose material information, or otherwise engaged in unlawful 21 conduct during the origination of Plaintiff's loan in April 2003. Even assuming that these claims 22 are not time-barred, the Court agrees that JP Morgan cannot be held liable for any of these claims. Morgan appears to have had no involvement with Plaintiffs' loan until it acquired the assets of


Plaintiff's Complaint asserts thirteen causes of action under various state and federal laws

1.Origination-Based Claims (first, second, third, fourth, and eleventh causes of action)

A number of Plaintiff's claims are based on allegations that the Defendants made

As indicated above, Washington Mutual originated Plaintiff's loan. Compl. ¶ 8; RJN Ex. 4. JP 24 Washington Mutual in September 2008, over five years after Plaintiff entered into the mortgage 2 and security agreement with Washington Mutual. of the Purchase and Assumption Agreement (the "P & A Agreement") pursuant to which the Mutual to JP Morgan. These courts have consistently found that JP Morgan did not assume any 7 liability arising out of Washington Mutual's origination of home loans. See, e.g., Tang v. Cal. Reconveyance Co., No. 10-CV-03333-LHK, 2010 WL 5387837, at *3 (N.D. Cal. Dec. 22, 2010); As the Court noted in its prior interim order, this and other courts have taken judicial notice Federal Deposit Insurance Corporation ("FDIC") sold certain assets and liabilities of Washington Federici v. Monroy, No. C 09-4025 PVT, 2010 WL 1223192, at *3 (N.D. Cal. Mar. 25, 2010); (S.D. Cal. Jan. 29, 2010). Accordingly, JP Morgan cannot be held liable for any of Plaintiff's 13 claims that arise out of Washington Mutual's actions or practices in the origination of the loan. Lending Act ("TILA"), 15 U.S.C. § 1601 et seq.; claim (2) for violations of the Real Estate Financial Code § 4790; claim (4) for fraud; and claim (11) for violations of California Business and Professional Code §§ 17200 and 17500. Each of these claims alleges violations based on unlawful 20 loan terms and settlement fees, failure to disclose required information, and fraudulent 21 representations made to induce Plaintiff to enter into the loan. Because JP Morgan cannot be held 22 liable for Washington Mutual's conduct in originating Plaintiff's loan, these claims must be DISMISSED. In addition, because TILA and California Financial Code § 4970 are statutes that 24 impose requirements related to loan origination, the Court finds that Plaintiff cannot amend her

Complaint to state a claim against JP Morgan under these statutes. Accordingly, Plaintiff's first 26 and third causes of action under TILA and California Financial Code § 4790 are dismissed with prejudice. As it may be possible for Plaintiff to amend the other claims to allege violations based Hilton v. Wash. Mut. Bank, No. C 09-1191 SI, 2009 WL 3485953, at *2-3 & n.5 (N.D. Cal. Oct. 28, 2009); Molina v. Wash. Mut. Bank, No. 09-CV-00894-IEG (AJB), 2010 WL 431439, at *4 12 The Court finds that the following causes of actions are premised on allegations regarding Washington Mutual's conduct in originating Plaintiff's loan: claim (1) for violations of the Truth in Settlement Procedures Act, 12 U.S.C. § 2601 et seq.; claim (3) for violations of California on JP Morgan's conduct, the Court grants leave to amend the second, fourth, and eleventh causes 2 of action for fraud and violations of RESPA and the California ...

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