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Mark Miller v. Gmac Mortgage

April 21, 2011



Through this action, Plaintiff Mark Miller ("Plaintiff") seeks redress for the alleged deceit and negligence of Defendants GMAC Mortgage, LLC ("GMAC"), Quicken Loans Inc. ("Quicken"), and Mortgage Electronic Registration Systems, Inc. ("MERS") (collectively "Defendants") in connection with a home mortgage transaction. There are two matters presently before the Court.

First, on February 2, 2011, Defendants GMAC and MERS filed an Amended Motion to Dismiss for failure to state a claim upon which relief can be granted pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure.*fn1 (ECF No. 10.) Plaintiff has not filed a timely opposition to that motion. Second, on February 17, 2011, Quicken filed a separate Motion to Dismiss pursuant to Rule 12(b)(6). (ECF No. 12.) Plaintiff did file a timely opposition to Quicken's motion to dismiss. (ECF No. 15.) For the reasons set below, both motions are granted.*fn2


The instant dispute arises out of an alleged mortgage transaction between Plaintiff and Quicken. In December 2007, Plaintiff spoke with Suren Srabian ("Srabian"), a mortgage broker employed by Quicken, about purchasing real property. Plaintiff allegedly provided Srabian with his financial information so that Srabian could complete Plaintiff's loan application. Although Plaintiff's actual monthly income was $6,083.33, Srabian allegedly listed Plaintiff's income on the application as $8,125.00.

As a result, Plaintiff's monthly income on the mortgage application was inflated by $2,041.66. Based on the application, Quicken agreed to issue a loan to Plaintiff.

On January 11, 2008, Plaintiff signed the loan documents in the presence of a notary, who was sent to Plaintiff's home by Quicken to execute the documents. Quicken, and/or Srabian, purportedly did not explain the terms of the loan, and did not counsel Plaintiff to read the documents carefully. Plaintiff further claims that he was rushed when signing the loan documents, and did not have an adequate opportunity to read them. Srabian and Quicken allegedly guaranteed that the loan would become more affordable as Plaintiff's salary increased, and that the loan could later be refinanced.

Plaintiff alleges that GMAC is currently the servicer of the subject loan, and that MERS is the beneficiary on the deed of trust. Although Plaintiff alleges that Defendants have initiated collection proceedings, and threatened foreclosure, Plaintiff does not allege that foreclosure proceedings have actually been instituted. In its pending motion to dismiss, Quicken asserts that Plaintiff is current on his payments, and that foreclosure proceedings have not been initiated.


On a motion to dismiss for failure to state a claim under Rule 12(b)(6), all allegations of material fact must be accepted as true and construed in the light most favorable to the nonmoving party.

Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336, 337-38 (9th Cir. 1996). Rule 8(a)(2) requires only "a short and plain statement of the claim showing that the pleader is entitled to relief," to "give the defendant fair notice of what the...claim is and the grounds upon which it rests." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (internal citations and quotations omitted). Although "a complaint attacked by a Rule 12(b)(6) motion" need not contain "detailed factual allegations, a plaintiff's obligation to provide the 'grounds' of his 'entitlement to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Id. at 555 (quoting Papasan v. Allain, 478 U.S. 265, 2869 (1986)). A plaintiff's "factual allegations must be enough to raise a right to relief above the speculative level." Id. (citing 5 C. Wright & A. Miller, Federal Practice and Procedure § 1216 (3d ed. 2004) ("[T]he pleading must contain something more...than...a statement of facts that merely creates a suspicion [of] a legally cognizable right of action.")).

Further, "Rule 8(a)(2)...requires a 'showing,' rather than a blanket assertion, of entitlement to relief. Without some factual allegation in the complaint, it is hard to see how a claimant could satisfy the requirements of providing ...grounds on which the claim rests." Twombly, 550 U.S. at 555 n.3 (internal citations omitted). A pleading must therefore contain "enough facts to state a claim to relief that is plausible on its face." Id. at 570.

If the "plaintiffs...have not nudged their claims across the line from conceivable to plausible, their complaint must be dismissed." Id.

Once the court grants a motion to dismiss, they must then decide whether to grant a plaintiff leave to amend. Rule 15(a) authorizes the court to freely grant leave to amend when there is no "undue delay, bad faith, or dilatory motive on the part of the movant." Foman v. Davis, 371 U.S. 178, 182 (1962). In fact, leave to amend is generally only denied when it is clear that the deficiencies of the complaint cannot possibly be cured by an amended version. See DeSoto v. Yellow Freight Sys., Inc., 957 F.2d 655, 658 (9th Cir. 1992); Balistieri v. Pacifica Police Dept., 901 F. 2d 696, 699 (9th Cir. 1990) ("A complaint should not be dismissed under Rule 12(b)(6) ...

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