The opinion of the court was delivered by: Marilyn L. Huff, District Judge United States District Court
TO DISMISS WITH LEAVE TO ORDER GRANTING MOTION
On May 13, 2011, Defendant GMAC Mortgage, LLC (erroneously sued as ALLY Financial Inc.) ("GMAC") filed a motion to dismiss Plaintiffs Stephen and Susan Johnston ("Plaintiffs")'s complaint. (Doc. No. 3.) On July 15, 2011, the Court submitted the motion on the papers and ordered Plaintiffs to file an opposition. (Doc. No. 4.) On July 25, 2011, Plaintiffs submitted a response to the motion to dismiss. (Doc. No. 5.) On July 26, 2011, Defendant GMAC filed a reply. (Doc. No. 6.) After due consideration, the Court GRANTS Defendants' motion to dismiss without prejudice.
On March 29, 2011, Plaintiff filed a complaint in the San Diego Superior Court against GMAC alleging causes of action for (1) breach of contract; (2) fraud; (3) breach of fiduciary duty; (4) negligence; and (5) violation of California Civil Code § 2923.6. (Doc. No. 1, Compl.) On May 6, 2011, GMAC removed the action to this Court on the basis of diversity jurisdiction. (Id., Notice of Removal.)
The Court takes judicial notice under Federal Rule of Evidence 201, of the following public documents: (1) A Deed of Trust recorded on May 1, 2006, as Document No. 2006-0304949, in the San Diego County Recorder's Office (Doc. No. 3-2, Request for Judicial Notice ("RJN") Ex. A); (2) A Deed of Trust and Request for Notice of Default recorded on May 1, 2006, as Document No. 2006-0304950, in the San Diego County Recorder's Office (Id. Ex. B); (3) A Notice of Default and Election To Sell Under Deed of Trust recorded on December 5, 2007, as Document No. 2007-0756630, in the San Diego County Recorder's Office (Id. Ex. C); (4) A Notice of Trustee's Sale recorded on February 26, 2008, as Document No. 2008-0097423, in the San Diego County Recorder's Office (Id. Ex. D); (5) A Notice of Trustee's Sale recorded on November 10, 2008, as Document No. 2008-0584701, in the San Diego County Recorder's Office (Id. Ex. E); (6) A Trustee's Deed Upon Sale recorded on December 4, 2008, as Document No. 2008-0620349, in the San Diego County Recorder's Office (Id. Ex. F); (7) A Complaint filed in San Diego Superior Court, Case No. 37-2009-00070692 on November 17, 2009 (Id. Ex. G); (8) A Notice of Entry of Order filed in San Diego Superior Court, Case No. 37-2009-00070692 on August 20, 2010 (Id. Ex. H); and (9) A Notice of Entry of Judgment filed in San Diego Superior Court, Case No. 37-2009-00070692 on August 20, 2010. (Id. Ex.I.)
On April 26, 2006, Plaintiff borrowed $770,000.00 from American Broker Conduit and executed a Deed of Trust to real property commonly known as 2570 Victoria Drive, Alpine, California as security for the loan. (Compl. ¶¶ 5-6; Doc. No. 3-2, RJN Ex. A.) Plaintiffs allege that this Mortgage later came under the control of GMAC. (Compl. ¶ 7.) Plaintiffs also allege that their property was also financed through a second mortgage in the amount of $220,000. (Id. ¶ 10.) On December 5, 2007, there was a Notice of Default, and on February 26, 2008 and November 10, 2008, there was a Notice of Trustee's Sale on Plaintiffs' property. (Id. Exs. CE.) On December 4, 2008, Plaintiffs' property was sold at a trustee's sale to Citibank, N.A. as the foreclosing beneficiary for $849,472.24. (Id. Ex. F.)
I. Motion to Dismiss Pursuant to Fed. R. Civ. P. 12(b)(6)
A motion to dismiss a complaint under Federal Rule of Civil Procedure 12(b)(6) tests the legal sufficiency of the claims asserted in the complaint. Navarro v. Black, 250 F.3d 729, 732 (9th Cir. 2001). Rule 8(a)(2) requires that a pleading stating a claim for relief contain "a short and plain statement of the claim showing that the pleader is entitled to relief." The function of this pleading requirement is to "give the defendant fair notice of what the . . . claim is and the grounds upon which it rests." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). "While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need 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. A complaint does not "suffice if it tenders 'naked assertion[s]' devoid of 'further factual enhancement.'" Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009) (quoting Twombly, 550 U.S. at 557). "Factual allegations must be enough to raise a right to relief above the speculative level." Twombly, 550 U.S. at 555 (citing 5 C. Wright &
A. Miller, Federal Practice and Procedure § 1216, pp. 235-36 (3d ed. 2004)). "All allegations of material fact are taken as true and construed in the light most favorable to plaintiff. However, conclusory allegations of law and unwarranted inferences are insufficient to defeat a motion to dismiss for failure to state a claim." Epstein v. Wash. Energy Co., 83 F.3d 1136, 1140 (9th Cir. 1996); see also Twombly, 550 U.S. at 555.
II. Plaintiff's Complaint
Plaintiffs allege that GMAC breached a contract modifying their deed of trust that the parties entered into in or about the middle of 2009. (Compl. ¶¶ 15-20.) However, although Plaintiffs allege that this contract was duly recorded, (Id. ¶ 16), Plaintiffs do not attach a copy of the contract to the complaint or state the clauses of the contract that prohibit Defendant's alleged actions. GMAC argues that this fails to satisfy the pleading standard for breach of contract claims based on a written contract. (Doc. No. 3-1 at5-6.)
To state a breach of contract claim under California law, a plaintiff must plead: (1) the existence of a contract between the parties; (2) the plaintiff's performance or excuse for nonperformance; (3) the defendant's failure to perform; and (4) resulting damages. Harris v. Rudin, Richman & Appel, 74 Cal. App. 4th 299, 307 (1999). "If the action is based on an alleged breach of a written contract, the terms must be set out verbatim in the body of the complaint or a copy of the written instrument must be attached and incorporated by reference." Otworth v. S. Pac. Transp. Co., 166 Cal. App. 3d 452, 459 (1985); see also Saldate v. Wilshire Credit Corp., 268 F.R.D. 87, 104 (E.D. Cal. 2010) ("'Where a party relies in his complaint upon a contract in writing, and it affirmatively appears that all the terms of the contract are not set forth in haec verba, nor stated in their legal effect, but that a portion which may be material has been omitted, the complaint is insufficient.'"). Because Plaintiffs failed ...