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Rami Karimi v. Gmac Mortgage; Ets Services

August 2, 2011


The opinion of the court was delivered by: Lucy H. Koh United States District Judge


Before the Court is Defendants GMAC Mortgage, LLC‟s ("GMAC") and Executive Trustee Services, LLC‟s ("ETS") Motion to Dismiss Plaintiff‟s Complaint. Dkt. No. 15 ("Mot."); 23 see also Dkt. No. 20 ("Reply"). Plaintiff opposes this motion. Dkt. No. 19 ("Opp‟n"). Pursuant to 24 Civil Local Rule 7--1(b), the Court deems this motion suitable for disposition without oral 25 argument. Therefore, the hearing and Case Management Conference set for August, 4, 2011, are 26 VACATED. Having considered the submissions of the parties and the relevant law, the Court 27 GRANTS Defendants‟ motion to dismiss with leave to amend.


A.Defendants' Request for Judicial Notice

Because this is a motion to dismiss for failure to state a claim under Fed. R. Civ. P.12(b)(6), "all allegations of material fact are taken as true and construed in the light most favorable 4 to the nonmoving party." Facebook, Inc. v. MaxBounty, Inc., 274 F.R.D. 279, 282 (N.D. Cal. 5 2011) (citing Cahill v. Liberty Mutual Ins. Co., 80 F.3d 336, 337--338 (9th Cir. 1996)). As a 6 general rule, a district court may not consider any material beyond the pleadings in ruling on a 12(b)(6) motion. Lee v. Los Angeles, 250 F.3d 668, 688 (9th Cir. 2001). However, a court may 8 take judicial notice of matters of public record outside the pleadings. Id. at 689. In this case, 9 Defendants request judicial notice of four documents recorded with the Santa Clara County of accurate and ready determination by resort to sources whose accuracy cannot reasonably be 14 questioned." Fed. R. Evid. 201(b); United States v. Bernal-Obeso, 989 F.2d 331, 333 (9th Cir. 1993). The Court concludes that the public documents submitted by Defendant are not subject to 16 reasonable dispute and are proper subjects of judicial notice. See Lopez v. Wachovia Mortg., No. C 10-01645, 2010 WL 2836823, at *2 (N.D. Cal. 2010) (taking judicial notice of nearly identical 18 documents).

Accordingly, the Court GRANTS Defendants‟ request for judicial notice. entering into a mortgage with GreenPoint Mortgage for $1,032,000. Complaint ("Compl."), 22 attached as Ex. 1 to Dkt. No. 1, Notice of Removal, at ¶ 9; Deed of Trust, RJN Ex. A, at 2. The Deed of Trust named Marin Conveyancing Corp. as the original trustee and Mortgage Electronic Registration Systems, Inc. ("MERS") as beneficiary. Deed of Trust, at 2. The mortgage was later 25 transferred to GMAC. Compl. ¶ 9. Plaintiff subsequently encountered financial trouble which 26 made it difficult for him to keep up with his mortgage payments. Compl. ¶ 10. In January 2010, 27 Plaintiff contacted GMAC to apply for a loan modification. Compl. ¶ 11. GMAC denied this first 28 application in February 2010 but advised Plaintiff that GMAC would continue to review Plaintiff‟s Recorder‟s Office in connection with Plaintiff‟s mortgage. Dkt. No. 16, Request for Judicial Notice ("RJN"), at 2 & Exs. A-D.

A district court may take notice of facts not subject to reasonable dispute that are "capable.

B.Factual and Procedural Background

In December 2006, Plaintiff Rami Karimi refinanced his home in Los Gatos, California, by loan for other possible modifications. Compl. ¶ 12. Plaintiff considered a short sale of his home, 2 but instead reapplied for a loan modification at GMAC‟s invitation. Compl. ¶ 15. He continued to 3 supply GMAC with information and documents in support of this loan modification application 4 through January 3, 2011, complying with all application deadlines set by GMAC. Compl. ¶¶ 17-5 On June 25, 2010, ETS, acting as agent for MERS, recorded a Notice of Default onPlaintiff‟s mortgage with the Santa Clara County Recorder‟s Office. Notice of Default, RJN Ex. C, 8 at 1. MERS then appointed ETS as substitute trustee on October 15, 2010. Substitution of Trustee, 9 18. 6 RJN Ex. B, at 1. On October 19, 2010, ETS noticed a Trustee‟s Sale of the property, set to occur 10 on November 18, 2010. Notice of Trustee‟s Sale, RJN Ex. D, at 1.

Removal, at 2. Defendants removed the case to federal court on February 28, 2011. Id. Plaintiff‟s Complaint asserts seven claims for relief under California law: (1) declaratory relief; (2) wrongful 15 foreclosure; (3) breach of the covenant of good faith and fair dealing; (4) breach of fiduciary duty; Court considers the state law claims pursuant to its diversity jurisdiction. 28 U.S.C. § 1332.

Defendants now move to dismiss Plaintiff‟s Complaint under Fed. R. Civ. P. 12(b)(6). sufficiency of a complaint. Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). In considering 22 whether the complaint is sufficient to state a claim, the Court must accept as true all of the factual 23 allegations contained in the complaint. Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009). However, 24 the Court need not accept as true "allegations that contradict matters properly subject to judicial 25 notice or by exhibit" or "allegations that are merely conclusory, unwarranted deductions of fact, or 26 unreasonable inferences." In re Gilead Scis. Sec. Litig., 536 F.3d 1049, 1055 (9th Cir. 2008).

While a complaint need not allege detailed factual allegations, it "must contain sufficient factual 28 matter, accepted as true, to "state a claim to relief that is plausible on its face.‟" Iqbal, 129 S. Ct. at

Plaintiff initially filed this case on January 13, 2011, in the Superior Court of California,

County of Santa Clara, against Defendants GMAC, ETS, and 100 Doe defendants. Notice of (5) negligence; (6) negligent infliction of emotional distress; and (7) quiet title. Compl. 3-6. The to the below causes of action with leave to amend. Should Plaintiff choose to amend his Complaint 10 after reviewing this Order, he must cure all the deficiencies identified or risk dismissal of this 14 breached "by failing to adequately review his application and communicate with Plaintiff re [sic] 15 information or payments needed, or any repayment plan offered." Compl. ΒΆ 32. However, under California law, lenders do not owe any fiduciary duty to borrowers. "The relationship between a 17 lending institution and its borrower-client is not fiduciary in nature." Nymark v. Heart Fed. Sav. 18 and Loan Ass'n, 231 Cal. App. 3d 1089, 1093 n.1 (Cal. Ct. App. 1991). Plaintiff has not pled any 19 facts to establish any relationship between Plaintiff and Defendants beyond that of borrower and 20 lenders, nor has Plaintiff alleged any facts to establish a fiduciary duty owed to Plaintiff ...

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