The opinion of the court was delivered by: Garland E. Burrell, Jr. United States District Judge
ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS' a MOTION TO DISMISS*fn2
Defendants Aurora Loan Services, LLC ("Aurora"), Aurora Bank, FSB ("Aurora Bank"), and Mortgage Electronic Registration Systems, Inc. ("MERS"; Aurora and MERS are collectively referenced as "Defendants") seek dismissal of Plaintiff Van Chanthavong's First Amended Complaint ("FAC") under Federal Rule of Civil Procedure ("Rule") 12(b)(6), arguing that it fails to state a claim. Defendants also move for an order under Rule 12(f) that would strike Plaintiff's request for punitive damages. Plaintiff opposes the motions.
Defendants argue that Aurora Bank should be dismissed because none of Plaintiff's claims in his FAC are alleged against Aurora Bank. (Mot. to Dismiss ("Mot.") 1:26-27.) Defendants argue that Plaintiff's original Complaint named Lehman Brothers Bank, FSB ("Lehman Brothers") as a party, which is now Aurora Bank. Id. 1:24-25. None of Plaintiff's claims are alleged against Aurora Bank or Lehman Brothers. Therefore, Aurora Bank and Lehman Brothers are not parties in this action.
To avoid dismissal under Rule 12(b)(6), 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, 570 (2007). "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." Ashcroft v. Iqbal, ---U.S. ----, 129 S. Ct. 1937, 1949 (2009). "The plausibility standard is not akin to a 'probability requirement,' but it asks for more than a sheer possibility that a defendant has acted unlawfully." Moss v. United States Secret Serv., 572 F.3d 962, 969 (9th Cir. 2009) (quoting Iqbal, 129 S. Ct. at 1951).
In analyzing whether a claim has facial plausibility, "[w]e accept as true all well-pleaded allegations of material fact, and construe them in the light most favorable to the non-moving party." Daniels-Hall v. Nat'l Educ. Ass'n, --- F.3d ----, 2010 WL 5141247, at *3 (9th Cir. 2010). However, "the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions." Iqbal, 129 S. Ct. at 1949. "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 non-conclusory 'factual content,' and reasonable inferences from that content, must be plausibly suggestive of a claim entitling the plaintiff to relief." Moss, 572 F.3d at 969 (quoting Twombly, 550 U.S. at 557).
II. REQUEST FOR JUDICIAL NOTICE
Defendants request judicial notice of the following:
1)"Findings of Fact and Conclusions of Law for Order Denying Motion to Reopen Chapter 7 Case", filed by the Bankruptcy Court of the Eastern District of California's on March 1, 2010; 2) Plaintiff's Chapter 7 Voluntary Petition, filed on April 21, 2009; and 3) documents relating to Lehman Brothers subsidiaries and its name change. (Request for Judicial Notice ("RJN") 2:6-3:7, Exs. 1-3.) Plaintiff does not oppose this request.
"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) (internal quotation marks omitted). However, a court may consider matters properly subject to judicial notice. Swartz v. KPMG LLP, 476 F.3d 756, 763 (9th Cir. 2007). A matter may be judicially noticed if it is either "generally known within the territorial jurisdiction of the trial court" or "capable of accurate and ready determination by resort to sources whose accuracy cannot reasonably be questioned." Fed. R. Evid. 201(b).
"Materials from a proceeding in another tribunal are appropriate for judicial notice." Biggs v. Terhune, 334 F.3d 910, 915 n.3 (9th Cir. 2003). "[A]mple authority exists which recognizes that matters of public record, including court records in related or underlying cases which have a direct relation to the matters at issue, may be looked to when ruling on a 12(b)(6) motion to dismiss." In re Am. Cont'l Corp./Lincoln Sav. & Loan Sec. Litig., 102 F.3d 1524, 1537 (9th Cir. 1996) (collecting cases), rev'd on other grounds by Lexecon, Inc. v. Milberg Weiss Bershad Hynes & Lerach, 523 U.S. 26 (1998). Defendants' request that the "Findings of Fact and Conclusions of Law for Order Denying Motion to Reopen Chapter 7 Case" and Plaintiff's Chapter 7 Voluntary Petition be judicially noticed is granted since these documents are matters of public record. See Pritinik v. Comerica Bank, No. C 09-03303 JF (RS), 2009 WL 3857455, at *3 (N.D. Cal. Nov. 17, 2009) (taking judicial notice of bankruptcy filings); Rosal v. First Federal Bank of California, 671 F. Supp. 2d 1111, 1121 (N.D. Cal. 2009) (taking judicial notice of bankruptcy court filings in support of motion to dismiss under Rule 12(b)(6)); Cobb v. Aurora Loan Services, LLC, 408 B.R. 351, 354 (E.D. Cal. 2009) (considering plaintiff's bankruptcy filings in deciding defendant's motion to dismiss).
Defendants also request that judicial notice be taken of documents concerning Lehman Brothers and Aurora Bank, but this request is denied since Lehman Brothers and Aurora Bank are not parties in this action.
III. PLAINTIFF'S ALLEGATIONS
On August 24, 2007 Plaintiff and Lehman Brothers "entered into a loan agreement for the refinancing of" Plaintiff's real property located at 1900 H Street, Sacramento, California (the "Property"). (FAC ¶¶ 1, 6.) Plaintiff executed an adjustable rate note (the "Note") and a deed of trust (the "Deed"). Id. Exs. A-B. The Deed lists Lehman Brothers as the lender and MERS "as a nominee for Lender and Lender's successors and assigns. MERS is the beneficiary under this Security Instrument." Id. Ex. B. Plaintiff "default[ed] under the terms of the Note." Id. ¶12. Plaintiff alleges that on August 15, 2008, a Notice of Default was recorded that listed MERS as the contact to "find out the amount you must pay, or to arrange for payment to stop the foreclosure[.]" Id. Ex. C. Plaintiff also alleges that on October 16, 2008, MERS recorded a substitution of trustee in which MERS is the "'nominee for LEHMAN BROTHERS BANK, FSB,' . . . the original beneficiary." Id. ¶ 14. Plaintiff alleges "[u]pon information and belief, MERS is not, and never has been in possession of the Note[.]" Id. ¶ 15.
Plaintiff filed for bankruptcy protection in the Eastern District of California on April 21, 2009. Id. ¶ 20. Plaintiff alleges Defendants violated the automatic stay on April 24, 2009 by causing "to be published a Notice of Trustee's sale, and posted it" at the Property. Id. ¶ 21. Aurora filed a motion for relief from the automatic bankruptcy stay on June 3, 2009, that would allow it to enforce its lien against the Property. (RJN Ex. 1.) The Bankruptcy Court granted the relief motion by terminating the stay on July 30, 2009. Id. MERS, as nominee for Lehman Brothers, transferred all beneficial interest under the Deed to Aurora on June 8, 2009. (FAC Ex. E.) Plaintiff alleges that "[t]his [transfer] action was void because it violated the automatic stay" and "[t]here is no endorsement or allonge evidencing that LEHMAN BROTHERS, MERS, or AURORA LOAN SERVICES is or was the holder of the note." Id. ¶¶ 22-23.
Plaintiff's bankruptcy case was closed August 14, 2009, and the Order Discharging the Debtors was entered on August 30, 2009. (Id. ¶ 25; RJN Ex. 1.) "Plaintiff alleges that since there is no evidence that LEHMAN BROTHERS, MERS, nor AURORA ever took actual possession of the note, its security interest was never perfected, [and was] not perfected at the time of filing the debtor's bankruptcy, and thus the underlying debt was discharged[.]" (FAC ¶ 26.)
Plaintiff alleges that both before and after the bankruptcy filing, "Plaintiff's agent, Boomie Cotton, and AURORA Loan Services had engaged in discussions of loan modification." Id. ¶ 27. Plaintiff further alleges: "On September 7, 2009, plaintiff's agent contacted AURORA and was advised that the payment could not be made and was told that they would give a 10 day grace period. Payment was sent and payment was received and credited to plaintiff's account on or about September 24, 2009." Id. ¶ 29. "On September 11, 2009, Defendants caused to be published a Notice of Trustee's Sale set for September 30, 2009." Id. ¶ 30; Ex. G. Plaintiff alleges he was unaware that a Notice of Trustee's Sale had been filed and never received notice. Id. ¶ 31.
Plaintiff received a Special Forbearance Agreement from Aurora dated August 28, 2009; which he signed on September 21, 2009. Id. 4:19-23, 5:5-7; Exs. F, H. He faxed that agreement to Aurora but he "never received [a] signed copy of the Agreement back from AURORA." Id. 4:22-23. Plaintiff alleges his agent contacted Aurora on September 24, 2009, to clarify the agreement "and was told the agreement was a six month trial period[.]" Id. ¶ 33. "[P]laintiff's agent was told by representatives of AURORA that there was no sale date and that the property was not in foreclosure, but that the property was in an 'active loan mod.'" Id. 5:13-15. "Plaintiff's Agent contacted AURORA on a monthly basis and was repeatedly told that there was no foreclosure date set[.]" Id. 5:16-17.
Plaintiff alleges his agent mailed Plaintiff's October payment to Aurora on October 19, 2009, and again asked "if there was a sale date[; the agent] was told the loan was not in foreclosure and there was no sale date." Id. ¶ 38. Plaintiff alleges: "On or about October 30, 2009, defendants conducted a private foreclosure sale without notice to plaintiff or his agent of any default in the loan modification agreement." Id. ¶ 39. Plaintiff alleges the Notice of Trustee's Sale was never posted on the premises, mailed by certified mail, or received by the Plaintiff. Id. ¶¶ 40-41.
Plaintiff alleges he was advised that the Property was for sale on November 2, 2009, when a real estate agent came to the Property. Id. ¶ 44. Plaintiff alleges the same day "plaintiff's agent spoke with defendant AURORA and asked when the loan modification/forbearance agreement was canceled, and was told that it was canceled on October 20, 2009. Plaintiff [alleges he] never received a notice of cancellation." Id. ¶ 46. Plaintiff alleges on November 3, 2009, his "agent contacted the foreclosure trustee and discovered for the first time that the trustee's sale had been continued from month to month and also learned for the first time that a new notice of trustee's sale had been published and a new sale date set for October 30, 2009. AURORA advised that . . . the property was sold on October 30, 2009." Id. ¶ 52. "[P]laintiff's agent . . . discovered that sales dates had been set on 2/2/09, 3[/]4/09, 5/12/09, 9/12/09, ...