The opinion of the court was delivered by: Irma E. Gonzalez, Chief Judge United States District Court
ORDER GRANTING DEFENDANTS' MOTION TO AMENDED COMPLAINT DISMISS PLAINTIFF'S [Doc. No. 20]
This is a mortgage case. Plaintiff's First Amended Complaint ("FAC") asserts six causes of action arising from Defendants' conduct in issuing and servicing a mortgage loan, as well as their conduct in initiating non-judicial foreclosure proceedings when Plaintiff defaulted on the loan. [Doc. No. 18.] Presently before the Court is a motion to dismiss brought by certain Defendants: California Reconveyance Company; JPMorgan Chase Bank, N.A., an acquirer of certain assets and liabilities of Washington Mutual Bank from the FDIC acting as receiver; Chase Home Finance LLC; and Deborah Brignac (collectively "Defendants" or "the moving Defendants"). [Doc. No. 20.] Defendants seek dismissal of three of Plaintiff's causes of action. [Id.] For the reasons described below, the Court GRANTS Defendants' motion.
Plaintiff became the owner of property located at 5189 Argonne Court, San Diego, CA 92117 on or about August 15, 2007. [See FAC ¶¶ 5, 17.] He acquired the property via a loan from Defendant Washington Mutual Bank, F.A. ("WaMu"). [Id. ¶ 18.] The corresponding Deed of Trust was recorded in San Diego on August 27, 2007. [Id.] The Deed of Trust identified Defendant WaMu as the lender and Defendant California Reconveyance Company ("CRC") as the trustee. [Id.]
Plaintiff appears to have experienced problems in making his loan payments when his income decreased dramatically in 2008. [Id. ¶ 20.] In September 2008, after Defendant WaMu closed, Plaintiff alleges he received a form letter stating that Defendant WaMu had become Defendant JPMorgan Chase Bank, N.A. ("JPMorgan"). [Id. ¶ 21.] Plaintiff subsequently received statements from Defendant Chase Home Finance LLC ("Chase"), and he directed payments to Chase, assuming that Chase was the new servicer of his loan. [Id.]
In or around November 2009, Plaintiff received a letter from the Chase Home Ownership Preservation Office stating that many Americans are experiencing difficulty with their mortgage payments and that if Plaintiff was experiencing financial difficulty, there were some options available to him that would assist him with making payments. [Id. ¶ 22.] Plaintiff subsequently received several additional letters of the same nature. [Id.] According to Plaintiff, none of these letters discussed Plaintiff's actual financial situation. [Id.]
On January 25, 2010, Defendant Chase mailed Plaintiff a letter titled "Notice of Collection Activity," alleging Plaintiff was in default under the terms of his loan. [Id. ¶ 23.] The letter did not attempt to discuss any options available to Plaintiff to avoid foreclosure other than paying the full amount allegedly due. [Id.] On March 10, 2010, Defendant CRC recorded a Notice of Default on Plaintiff's property. [Id. ¶ 24.] The Notice of Default was accompanied by a Declaration of Compliance signed by Defendant Durkin for JPMorgan. [Id. ¶ 25.] The Declaration of Compliance indicates that the "mortgagee, beneficiary or authorized agent tried with due diligence but was unable to contact the borrower" to discuss the borrower's financial situation and to explore options for the borrower to avoid foreclosure as required by Cal. Civ. Code § 2923.5, and that more than thirty days had elapsed since due diligence was completed. [Id. ¶ 26.] However, except for the generic letters discussed above, none of the Defendants sent any letters or made any phone calls to Plaintiff concerning his personal financial situation and options to avoid foreclosure that were specifically available to him. [Id. ¶ 27.]
In March 2010, Plaintiff began investigating his legal rights concerning the foreclosure and retained a mortgage auditing firm. [Id. ¶ 28.] On March 23, 2010, Plaintiff sent a Qualified Written Request ("QWR") letter to Defendants CRC, JPMorgan, and Chase. [Id. ¶ 29.] The letter made several requests for documentation and information concerning Plaintiff's loan. [Id.] Defendant CRC acknowledged the receipt of the letter on March 26, 2010 and stated that it forwarded the letter to Defendant JPMorgan. [Id. ¶ 30.] Also on March 26, 2010, Defendant Chase acknowledged the receipt of Plaintiff's letter and indicated that a further response would be forthcoming. [Id.] On June 3, 2010, Chase responded to Plaintiff's letter, providing some of the requested information and indicating that other information was being withheld because it was either proprietary or unavailable. [Id. ¶32.]
On June 11, 2010, Defendant CRC executed a Notice of Trustee's Sale, indicating that the sale was scheduled for July 6, 2010 at 10:00 a.m. [Id. ¶¶ 33, 34.] The Notice of Trustee's Sale was accompanied by a Declaration Pursuant to California Civil Code Section 2923.54, stating that the undersigned loan servicer had complied with the requirements under Section 2923.54. [Id. ¶ 35.]
Based on the foregoing, Plaintiff cannot determine who directed Defendant CRC to conduct the Trustee's Sale of the Property. [Id. ¶ 36.] Plaintiff contends he never received anything indicating that JPMorgan was the new beneficiary. [Id.] As such, Plaintiff believes Defendant JPMorgan is not and was not the holder of the Note, in possession of the Note, or otherwise entitled by law to initiate a non-judicial foreclosure under the Deed of Trust or to direct Defendant CRC to foreclose and sell the property. [Id. ¶37.]
Plaintiff filed suit in July 2010. The Court issued a temporary restraining order and preliminary injunction, [Doc. Nos. 6 and 10], and later granted in part and denied in part Defendants' motion to dismiss, [Doc. No. 17.] Plaintiff filed the FAC in November 2010, [Doc. No. 18], and Defendants filed the present motion soon thereafter, [Doc. No. 20]. When the parties indicated at oral argument that their dispute might be resolved were Plaintiff to obtain a loan modification, the Court postponed ruling on the motion and directed the parties to discuss loan modification options before the Magistrate Judge. Those discussions may yet prove fruitful, but the Court must nevertheless keep the case moving by issuing the present Order.
I. Legal Standard for a Rule 12(b)(6) Motion to Dismiss
A complaint must contain "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a) (2009). A motion to dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure tests the legal sufficiency of the claims asserted in the complaint. Fed. R. Civ. P. 12(b)(6); Navarro v. Block, 250 F.3d 729, 731 (9th Cir. 2001). The court must accept all factual allegations pled in the complaint as true, and must construe them and draw all reasonable inferences from them in favor of the nonmoving party. Cahill v. Liberty Mutual Ins. Co., 80 F.3d 336, 337-38 (9th Cir. 1996). To avoid a Rule 12(b)(6) dismissal, a complaint need not contain detailed factual allegations, rather, it must plead "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). A claim has "facial plausibility when the ...