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Philip Frank Kennedy; Dana Lynn Kennedy v. Lehman Brothers Bank

August 10, 2011

PHILIP FRANK KENNEDY; DANA LYNN KENNEDY,
PLAINTIFFS,
v.
LEHMAN BROTHERS BANK, FSB; AURORA LOAN SERVICES, LLC; ET AL.,
DEFENDANTS.



The opinion of the court was delivered by: Honorable Janis L. Sammartino United States District Judge

ORDER: (1) GRANTING (2) GRANTING IN PART AND DENYING IN PART PLAINTIFFS' REQUEST FOR JUDICIAL NOTICE; (3) GRANTING DEFENDANTS' MOTION TO DISMISS DEFENDANTS' REQUEST FOR JUDICIAL NOTICE; (ECF No. 19)

Presently before the Court is Defendants Lehman Brothers Bank, FSB and Aurora Loan Services, LLC's (collectively, Defendants) motion to dismiss Plaintiffs' first amended complaint. (ECF No. 19.) Also before the Court are Plaintiffs' opposition and Defendants' reply. (ECF Nos. 20, 25.) Having considered the parties' arguments and the law, the Court GRANTS Defendants' motion to dismiss.

BACKGROUND

"On or about August 2007," Plaintiffs obtained a loan from Defendant Lehman Brothers secured by a first deed of trust on the property located at 2798 Pala Mesa Lane, Fallbrook, California (the property). (FAC ¶ 5, ECF Nos. 17 to 17-3.) As evidence of the obligation to repay, Plaintiffs executed a promissory note with Defendant Lehman Brothers (the note). (Id. ¶ 6.) Sometime thereafter, Plaintiffs "received a series of notices and documents in the mail regarding the planned foreclosure on the loan . . . ." (Id. ¶ 5; see Defs.' RJN Ex. 1, ECF No. 19-1 (Notice of Default and Election to Sell); id. Ex. 2 (Notice of Trustee's Sale).) In fact, a notice of default and election to sell was recorded against Plaintiffs' property on May 18, 2009. (Defs.' RJN Ex. 1.) A notice of trustee's sale was recorded on August 20, 2009, setting the sale date for September 8, 2009. (Id. Ex. 2.) On January 19, 2010, the property was sold to Defendant Aurora at a trustee's sale. (Id. Ex. 4 (Trustee's Deed Upon Sale).)

LEGAL STANDARD

Federal Rule of Civil Procedure 12(b)(6) permits a party to raise by motion the defense that the complaint "fail[s] to state a claim upon which relief can be granted," generally referred to as a motion to dismiss. The Court evaluates whether a complaint states a cognizable legal theory and sufficient facts in light of Federal Rule of Civil Procedure 8(a), which requires a "short and plain statement of the claim showing that the pleader is entitled to relief." Although Rule 8 "does not require 'detailed factual allegations,' . . . it demands more than an unadorned, the-defendant unlawfully-harmed-me accusation." Ashcroft v. Iqbal, - U.S. -, 129 S. Ct. 1937, 1949 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). In other words, "a plaintiff's obligation to provide the 'grounds' of his 'entitle[ment] to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Twombly, 550 U.S. at 555 (citing Papasan v. Allain, 478 U.S. 265, 286 (1986)). "Nor does a complaint suffice if it tenders 'naked assertion[s]' devoid of 'further factual enhancement.'" Iqbal, 129 S. Ct. at 1949 (citing Twombly, 550 U.S. at 557). Rule 8 "does not unlock the doors of discovery for a plaintiff armed with nothing more than conclusions." Id. at 1950.

"To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Id. (quoting Twombly, 550 U.S. at 570); see also Fed. R. Civ. P. 12(b)(6). A claim is facially plausible when the facts pled "allow[] the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. (citing Twombly, 550 U.S. at 556). That is not to say that the claim must be probable, but there must be "more than a sheer possibility that a defendant has acted unlawfully." Id. Facts "'merely consistent with' a defendant's liability" fall short of a plausible entitlement to relief. Id. (quoting Twombly, 550 U.S. at 557). Further, the Court need not accept as true "legal conclusions" contained in the complaint. Id. This review requires context-specific analysis involving the Court's "judicial experience and common sense." Id. "[W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged-but it has not 'show[n]'-'that the pleader is entitled to relief.'" Id.

ANALYSIS

Plaintiffs' first amended complaint alleges four causes of action for (1) quiet title; (2) wrongful foreclosure; (3) fraudulent concealment; and (4) misrepresentation (See FAC.) The Court addresses each cause of action in turn.

1. Requests for Judicial Notice

A. Defendants' Request

Defendants move the Court to take judicial notice of four documents: (1) the notice of default and election to sell, (2) the notice of trustee's sale, (3) a grant deed from Dana Lynn Kennedy to New Hope Ministries, and (4) the trustee's deed upon sale. (Def.'s RJN Exs. 1--4.) The Court previously took judicial notice of these documents in ruling on Defendants' earlier motion to dismiss. (Order 3--4, Nov. 2, 2010, ECF No. 16.) Accordingly, for the reasons stated in the Court's earlier Order, Defendants' request for judicial notice is GRANTED.

B. Plaintiff's Requests

First, Plaintiff requests judicial notice of their notice of intent to preserve an interest. (Pls.' First RJN, ECF No. 24.) Defendants do not oppose this request and the Court finds that the document is properly judicially noticed. It is publicly recorded and its authenticity is not in dispute. See Lee v. City of L.A., 250 F.3d 668, 669 ...


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