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Sean M. Park, et al v. National City Mortgage Bank

June 14, 2011


The opinion of the court was delivered by: Hon. Dana M. Sabraw United States District Judge


[Docket No. 41]

This case returns to the Court on Defendants Quality Loan Service Corporation, Daniel J. Goulding, Esq., Erica Trotter and Ronald Alonzo's motion to dismiss Plaintiffs' Second Amended Complaint ("SAC"). Plaintiffs filed an opposition to the motion, although they appear to be willing to dismiss Defendants from the case without prejudice. Defendants filed a reply asking for dismissal with prejudice. For the reasons discussed below, the Court grants in part and denies in part Defendants' motion.


Plaintiffs allege they are the owners of real property located at 2011-2017 W. Island Avenue, San Diego, California. On August 3, 2005, Plaintiffs obtained a loan from Defendant National City Bank of Indiana to purchase the property. On March 22, 2010, National City Bank assigned its interest in the property to Defendant Green Tree Servicing LLC. (Request for Judicial Notice in Supp. of Mot. ("RJN"), Ex. B.) On July 29, 2010, Defendant Green Tree, through Defendant Quality Loan Service Corporation, filed a Notice of Default on Plaintiffs' property. (RJN, Ex. C.) On September 10, 2010, Defendant Green Tree filed a Substitution of Trustee for Plaintiffs' property substituting Defendant Quality Loan as trustee. (RJN, Ex. D.) On November 2, 2010, Defendant Quality Loan filed a Notice of Trustee's Sale on Plaintiffs' property, scheduling the sale for November 23, 2010. (RJN, Ex. E.) The sale has since been postponed.

Plaintiffs allege that in March 2010 they entered into a contract with Defendant Green Tree to modify the loan on their property. Plaintiffs believed this was a permanent loan modification, (SAC at 29), and they made the first three payments as required. (Id. ¶ 137.) Thereafter, Plaintiffs learned that their request for a loan modification had been denied. (Id. ¶ 139.) Plaintiffs allege they sent a qualified written request ("QWR") to Defendants in which they disputed the debt and requested an accounting. (Id. ¶ 144.) Plaintiffs allege Defendants have not responded to Plaintiffs' QWR. (Id. ¶ 145.) Plaintiffs also allege that they arranged for a sale of the property, but Defendants refused to proceed with that sale, instead opting to foreclose on the property. (Id. ¶ 16.)

The Second Amended Complaint alleges the same claims presented in the First Amended Complaint ("FAC"), with the exception of the claim for injunctive relief, which has been omitted: (1) violation of the Truth in Lending Act ("TILA"), (2) violation of California's Fair Debt Collection Practices Act ("the Rosenthal Act"), (3) violation of the federal Fair Debt Collection Practices Act ("the FDCPA"), (4) wrongful foreclosure, (5) violation of the Real Estate Settlement Procedures Act ("RESPA"), (6) breach of fiduciary duty, (7) intentional misrepresentation, (8) negligent misrepresentation, (9) violation of California Business and Professions Code § 17200, (10) breach of contract, (11) breach of the implied covenant of good faith and fair dealing, (12) quiet title, (13) rescission and (14) accounting.*fn1


Defendants move to dismiss the Second Amended Complaint in its entirety. They argue each of Plaintiffs' claims fails to state a claim for relief.

A. Standard of Review

In two recent opinions, the Supreme Court established a more stringent standard of review for 12(b)(6) motions. See Ashcroft v. Iqbal, ___ U.S. ___, 129 S.Ct. 1937 (2009); Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007). To survive a motion to dismiss under this new standard, "a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Iqbal, 129 S.Ct. at 1949 (citing 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. (citing Twombly, 550 U.S. at 556).

"Determining whether a complaint states a plausible claim for relief will ... be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Id. at 1950 (citing Iqbal v. Hasty, 490 F.3d 143, 157-58 (2d Cir. 2007)). In Iqbal, the Court began this task "by identifying the allegations in the complaint that are not entitled to the assumption of truth." Id. at 1951. It then considered "the factual allegations in respondent's complaint to determine if they plausibly suggest an entitlement to relief." Id. at 1951.

In this case, the Court approaches its task of deciding the motion to dismiss while keeping in mind the admonition from the Supreme Court that "[a] document filed pro se is 'to be liberally construed,' and 'a pro se complaint, however inartfully pleaded, must be held to less stringent standards than formal pleadings drafted by lawyers[.]'" Erickson v. Pardus, 551 U.S. 89, 94 (2007) (quoting Estelle v. Gamble, 429 U.S. 97, 106 (1976)) (internal citations omitted). That Plaintiffs are proceeding pro se does not relieve Defendants of their burden to show that dismissal is appropriate. See Abbey v. Hawaii Employers Mutual Ins. Co., No. 09-000545 SOM/BMK, 2010 WL 4273111, at *4 (D. Hawaii Oct. 22, 2010) (stating that although pro se complaint "is not a model of clarity," defendant bears burden of persuading court that dismissal is warranted). Furthermore, "a motion to dismiss is not the appropriate procedural vehicle to test the merits of Plaintiff's FAC and the claims asserted therein."

Walker v. City of Fresno, No. 1:09-cv-1667-OWW-SKO, 2010 WL 3341861, at *4 (E.D. Cal. Aug. 23, 2010) (citing Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001)). Rather, on a motion to dismiss the Court's review is limited to determining whether the ...

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