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Nancy Coburn v. the Bank of New York Mellon

March 21, 2011



This matter comes before the Court on Defendants Bank of New York Mellon ("BONY"), First Tennessee National Bank, N.A., successor in interest to First Horizon Home Loan Corporation ("First Horizon"), and Mortgage Electric Registration Systems, Inc.‟s ("MERS"), (collectively "Defendants"), Motion to Dismiss and Motion to Strike Portions of Plaintiff Nancy Coburn‟s ("Plaintiff") Complaint (Doc. #7). Plaintiff opposes the motions (Doc. #10).*fn1


On June 23, 2005, Plaintiff and First Horizon entered into 3 a home loan transaction for $904,000. The loan was memorialized 4 in a Promissory Note secured by a Deed of Trust. The Deed of 5

Trust listed MERS as the designated nominee beneficiary. The 6 loan was modified in October 2006 to include an additional tract 7 of land within the boundaries of the property. 8

In November 2008, Plaintiff told First Horizon that due to 9 a reduction in income, she would be unable to meet the terms of her loan repayment schedule. Plaintiff claims that First Horizon told Plaintiff that they could not help her modify the loan until she became delinquent on the loan. Plaintiff hired a private company to help her modify the loan but was unable to do so. Quality Loan Service Corporation ("Quality Loan") recorded a notice of Plaintiff‟s default under the Deed of Trust in the public records of Placer County on September 16, 2009. Plaintiff claims she never received a copy of the Notice of Default.

On October 19, 2009, MERS assigned the Deed of Trust to BONY. On May 25, 2010 BONY substituted Quality Loan as trustee. Plaintiff claims that the Notice of Default filed by Quality

Loan is void because Quality Loan was not the trustee at the time the Notice of Default was filed. The property was sold on August 3, 2010, but the sale was later rescinded.

Plaintiff filed her Complaint in the Superior Court of Placer Country on October 15, 2010. In the Complaint, Plaintiff alleged six state causes of action: (1) Deceit; (2) Civil Conspiracy; (3) Negligence; (4) Unlawful/Unfair Business Practices, Violations of California Business & Professions Code ("UCL") § 17200, et seq.; (5) Failure to Explore Foreclosure Avoidance, Violation of California Civil Code § 2923.5; and (6) Declaratory and Injunctive Relief. Plaintiff obtained a 5 temporary restraining order against foreclosure. The Complaint 6 was removed to this Court on November 15, 2010 based on 7 diversity jurisdiction. 8 9


A. Legal Standard

1. Motion to Dismiss

A party may move to dismiss an action for failure to state a claim upon which relief can be granted pursuant to Federal Rule of Civil Procedure section 12(b)(6). In considering a motion to dismiss, the court must accept the allegations in the complaint as true and draw all reasonable inferences in favor of the plaintiff. Scheuer v. Rhodes, 416 U.S. 232, 236 (1975), overruled on other grounds by Davis v. Scherer, 468 U.S. 183 (1984); Cruz v. Beto, 405 U.S. 319, 322 (1972). Assertions that are mere "legal conclusions," however, are not entitled to the assumption of truth. Ashcroft v. Iqbal, 129 S. Ct. 1937, 1950 (2009), citing Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). To survive a motion to dismiss, a plaintiff needs to plead "enough facts to state a claim to relief that is plausible on its face." Twombly, 550 U.S. at 570. Dismissal is appropriate where the plaintiff fails to state a claim supportable by a cognizable legal theory. Balistreri v. Pacifica Police Department, 901 F.2d 696, 699 (9th Cir. 1990).

Upon granting a motion to dismiss for failure to state a 2 claim, the court has discretion to allow leave to amend the 3 complaint pursuant to Federal Rule of Civil Procedure § 15(a).

"Dismissal with prejudice and without leave to amend is not 5 appropriate unless it is clear . . . that the complaint could 6 not be saved by amendment." Eminence Capital, L.L.C. v. Aspeon, Inc., 316 F.3d 1048, 1052 (9th Cir. 2003). 8

2. Motion to Strike

Rule 12(f) provides in pertinent part that the Court "may order stricken from any pleading any insufficient defense or any redundant, immaterial, impertinent, or scandalous matter.‟ Motions to strike are disfavored and infrequently granted. A motion to strike should not be granted unless it is clear that the matter to be stricken could have no possible bearing on the subject matter of the litigation.

Bassett v. Ruggles, et al., No. CV-F-09-528, 2009 WL 2982895, at *24 (E.D. Cal. Sept. 14, 2009) (internal citations omitted).

B. Judicial Notice

Defendants request judicial notice of the Deed of Trust, Loan Modification Agreement, Assignment of the Deed of Trust, Assignment of Substitution of Trustee, Notice of Trustee‟s Sale, Notice of Default, and Election to sell under deed of trust. (Defs.‟ Req. for Judicial Notice, Exhs. 1, 2, 3, 4, 5, & 6) (Doc. #7-1). Plaintiff does not object to Defendants‟ request.

Courts may consider extrinsic evidence when "plaintiff's claim depends on the contents of a document, the defendant attaches the document to its motion to dismiss, and the parties do not dispute the authenticity of the document. . . ." Knievel v. ESPN, 393 F.3d 1069, 1076 (9th Cir. 2005). Accordingly, the Court GRANTS ...

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