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Dennis Ward Mcfadden v. Deutsche Bank National Trust Company

August 15, 2011

DENNIS WARD MCFADDEN; MARCIA-ANN: WILLARDSON, PLAINTIFFS,
v.
DEUTSCHE BANK NATIONAL TRUST COMPANY, AS TRUSTEE, IN TRUST FOR THE REGISTERED HOLDERS OF ARGENT SECURITIES INC., ASSET BACKED PASS THROUGH CERTIFICATES, SERIES 2003-W6, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Kendall J. Newman United States Magistrate Judge

ORDER and FINDINGS AND RECOMMENDATIONS

Presently before the court*fn1 are several motions filed by various named defendants in this case, which are addressed to plaintiffs' claims alleged in the Amended Complaint (Dkt. No. 5): (1) defendants David J. Boyer and Robert Jackson & Associates, Inc.'s motion to specially strike plaintiffs' claims pursuant to California's anti-SLAPP*fn2 statute, Cal. Civ. Proc. Code § 425.16, and to dismiss plaintiffs' claims pursuant to Federal Rule of Civil Procedure 12(b)(6) (Dkt. No. 13); (2) defendant Citi Residential Lending, Inc.'s motion to dismiss plaintiffs' claims pursuant to Rule 12(b)(6) (Dkt. No. 15); (3) defendants Fidelity National Title Company and Default Resolution Network Division's motion to dismiss plaintiffs' claims pursuant to Rule 12(b)(6) (Dkt. No. 16); and (4) defendants David J. Boyer, Robert Jackson & Associates, Inc.,*fn3 Deutsche Bank National Trust Co., American Home Mortgage Servicing Co., and Power Default Services, Inc.'s motion to dismiss or for a more definite statement filed pursuant to Rule 12(b)(6) and Rule 12(e) (Dkt. No. 18).*fn4

The court heard this matter on its law and motion calendar on February 24, 2011. (Minutes, Dkt. No. 27.) Attorney Shar Bahmani appeared via telephone on behalf of defendants David J. Boyer and Robert Jackson & Associates (collectively, the "Boyer Defendants"), as well as defendants David J. Boyer, Robert Jackson & Associates, Inc., Deutsche Bank National Trust Co., American Home Mortgage Servicing Co., and Power Default Services, Inc. (collectively, the "Deutsche Bank Defendants"). Attorney Imran Hayat appeared on behalf of defendant Citi Residential Lending, Inc. ("Citi"). Attorney Christine Starkie appeared on behalf of defendants Fidelity National Title Company and Default Resolution Network Division (collectively, the "Fidelity Defendants"). Plaintiffs, who are proceeding without counsel, appeared and represented themselves at the hearing.

The undersigned has considered the briefs, oral arguments, and appropriate portions of the record in this case and, for the reasons stated below, recommends that all of plaintiffs' claims alleged against the Boyer Defendants, Citi, the Fidelity Defendants, and the Deutsche Bank Defendants be dismissed with prejudice.*fn5

I. BACKGROUND

Plaintiffs' Amended Complaint concerns the alleged unlawful foreclosure on, and trustee's sale of, real property located at 10268 Pequot Lane in Nevada City, California. (Am. Compl. ¶ 4.) Plaintiffs are not the borrowers who defaulted on the loan; Bryan Byrd Chagnon and Shelley Y. Chagnon, who are husband and wife, are the borrowers. On or around September 2, 2003, Bryan and Shelley Chagnon executed a promissory note in the amount of $256,000 in favor of defendant Olympus Mortgage Company ("Olympus"), and the note was secured by a deed of trust naming Olympus as lender, trustee, and beneficiary. (Boyer Defs.' Req. For Judicial Notice ("Boyer Defs.' RFJN"),*fn6 Ex. A, Dkt. No. 14; see also Am. Compl. ¶¶ 18-20.) On December 23, 2008, Olympus executed an Assignment of Deed of Trust, through Citi, Olympus's "attorney-in-fact," in favor of defendant Deutsche Bank National Trust Company as trustee ("Deutsche Bank").*fn7 (Boyer Defs.' RFJN, Ex. B.) The Chagnons defaulted on their loan, and on December 26, 2008, a Notice of Default and Election to Sell Under Deed of Trust was recorded. (Id., Ex. C.)

It appears that plaintiffs now occupy the property; plaintiffs allege that they "live on the Land." (Am. Compl. ¶¶ 3a-3b.) Plaintiffs allege that they are the "real party(s) in interest and now hold the beneficial interest in the property by assignment." (Id. ¶ 14.) They further allege that on June 5, 2010, plaintiff McFadden obtained a Quitclaim Deed pertaining to the subject property, and judicially noticeable documents substantiate that McFadden and the Chagnons executed a purported Quitclaim Deed conveying the property. (Id. ¶ 16; Deutsche Bank Defs.' Req. for Judicial Notice ("Deutsche Bank Defs.' RFJN"), Ex. 5, Dkt. No. 18, Doc. No. 18-1.) Plaintiffs further allege, and judicially noticeable documents support, that on June 11, 2010, a Grant Deed purporting to grant plaintiff Willardson fee simple title to the property was recorded-the Grant Deed purports to convey the property to "Spiritual Alliances, Corporation Sole, Marcia Ann Willardson, Public Minister." (Am. Compl. ¶ 17; Deutsche Bank Defs.' RFJN, Ex. 6.) At the hearing, plaintiffs represented that through their private transactions with the Chagnons, McFadden was somehow assigned an interest only in the "chattel paper," i.e., the promissory note and the Deed of Trust, and Willardson was somehow assigned an interest only in the physical property itself, free and clear of the Chagnon's existing obligations on the promissory note and Deed of Trust. McFadden stated at the hearing that the Chagnons received approximately $3,500 as consideration for the purported assignment.

On June 18, 2010, after plaintiffs and the Chagnons conducted their transaction, a Substitution of Trustee was recorded. (Am. Compl. ¶ 29; Boyer Defs.' RFJN, Ex. D.) The Substitution of Trustee substituted defendant Power Default Services, Inc. as trustee under the Deed of Trust, care of Fidelity National Title Company.*fn8 (Id.) The Substitution of Trustee reflects that at that point, American Home Mortgaging Servicing, Inc. was the servicer of the Chagnon's loan. (Id.)

Also on June 18, 2010, a Notice of Trustee's Sale was recorded that noticed a sale date of July 8, 2010. (Boyer Defs.' RFJN, Ex. E.) On September 17, 2010, a Trustee's Deed Upon Sale in favor of Deutsche Bank was recorded, reflecting that the sale of the property occurred on September 13, 2010. (Id., Ex. F.)

On or around September 30, 2010, McFadden found pinned to the wall of a structure on the property a three-day notice to vacate the property. (Am. Compl. ¶ 40.) The notice was signed by defendant David J. Boyer, an attorney with the law firm defendant Robert J. Jackson and Associates. (Id.; see also Boyer Defs.' RFJN, Ex. G, Exhibit B to Compl. for Unlawful Detainer.)

On October 14, 2010, Deutsche Bank instituted, through attorneys at the firm of Robert J. Jackson and Associates, an unlawful detainer action in the Nevada County Superior Court, naming Bryan and Shelley Chagnon as defendants. (Boyer Defs.' RFJN, Ex. G.) Nothing in the record suggests that a judgment has yet been entered in the unlawful detainer action, and counsel for the Boyer Defendants represented at the hearing that he was unaware of any such judgment.

On November 8, 2010, plaintiffs filed their complaint and, on November 10, 2010, filed the Amended Complaint. Plaintiffs' Amended Complaint alleges thirteen claims for relief against eleven named defendants and over 1,000 "Doe" defendants. Plaintiffs indiscriminately allege all of the following "counts," not all of which are actually stand-alone claims for relief, against all of the named defendants: (1) violation of the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692f; (2) violation of the FDCPA, 15 U.S.C. § 1692e(2)(A); (3) violation of the FDCPA, 15 U.S.C. § 1692e(5); (4) negligence; (5) slander of title; (6) "respondeat superior liability"; (7) "negligent or wanton hiring, supervision, training or retention"; (8) "joint venture liability"; (9) wrongful foreclosure; (10) unjust enrichment;

(11) civil conspiracy; (12) fraudulent misrepresentation; and (13) declaratory relief. Plaintiffs' Amended Complaint is generally and vaguely pled in that plaintiffs failed to differentiate among the various named defendants in terms of each named defendant's alleged conduct that gave rise to each specific claim.

II. EVIDENTIARY OBJECTION

With their written opposition, plaintiffs filed an attachment that consists of a "Foreclosure Investigation Report" regarding the subject property, which was prepared by Charles J. Horner and dated November 7, 2010 (the "Horner Report"). (See Attachment to Pls.' Opp'n.) Plaintiffs' opposition to the pending motions is largely premised on this report. The reply brief filed by the Fidelity Defendants includes an evidentiary objection to the Horner Report. (Reply Br. & Evid. Objection at 5-7, Dkt. No. 22.)

The undersigned sustains the Fidelity Defendants' evidentiary objection and has not considered the Horner Report in reaching the recommendations set forth below. The Horner Report is not the proper subject of judicial notice, was not attached to the Amended Complaint, and is not subject to consideration under the incorporation by reference doctrine.*fn9 Accordingly, it is not the proper subject of consideration in the context of motions to dismiss filed pursuant to Federal Rule of Civil Procedure 12(b)(6). Furthermore, the undersigned declines to convert the pending motions into motions for summary judgment.

III. REQUESTS FOR JUDICIAL NOTICE

In support of their respective motions, the Boyer Defendants and the Deutsche Bank Defendants each filed requests for judicial notice.*fn10 The Boyer Defendants request that the court take judicial notice of documents labeled Exhibits A through G (Dkt. No. 14). Specifically, the Boyer Defendants seek judicial notice of: (a) a Deed of Trust dated September 2, 2003, which was recorded with the Nevada County Recorder's Office*fn11 on September 10, 2003, as document number DOC-2003-0048457; (b) an Assignment of Deed of Trust dated December 23, 2008, which was recorded on December 30, 2008, as document number DOC-2008-0030931-00; (c) a Notice of Default and Election to Sell Under Deed of Trust dated December 23, 2008, which was recorded on December 26, 2008, as document number DOC-2008-0030712-00; (d) a Substitution of Trustee dated June 11, 2010, which was recorded on June 18, 2010, as document number 20100014235; (e) a Notice of Trustee's Sale dated June 18, 2010, which was recorded on June 18, 2010, as document number 20100014236; (f) a Trustee's Deed Upon Sale dated September 15, 2010, which was recorded on September 17, 2010, as document number 20100022243; and (g) a summons, civil case cover sheet, and complaint pertaining to an unlawful detainer action against Bryan and Shelley Chagnon, which was filed on October 14, 2010, in the Superior Court of California, County of Nevada, as Case No. C10-224. (See Boyer Defs.' RFJN, Exs. A-G.)

The Deutsche Bank Defendants' request for judicial notice (Dkt. No. 18, Doc. No. 18-1) is partially duplicative of the Boyer Defendants' request in that the Deutsche Bank Defendants' Exhibits 2, 3, 4, 7, 8, 9, and 10 correspond with the Boyer Defendants' Exhibits A through G. The Deutsche Bank Defendants request that the court take judicial notice of three additional documents numbered as Exhibits 1, 5, and 6: (1) a Grant Deed dated September 5, 2003, which was recorded on September 10, 2003, as document number DOC-2003-0048456-00; (2) a Quitclaim Deed dated June 5, 2010, which was recorded on June 7, 2010, as document number 20100013212; and (3) a Grant Deed dated June 5, 2010, which was recorded on June 11, 2010, as document number 20100013544. (See Deutsche Bank Defs.' RFJN, Exs. 1, 5, and 6.)

The court may take judicial notice of matters of public record, but "may not take judicial notice of a fact that is 'subject to reasonable dispute.'" Lee v. City of L.A., 250 F.3d 668, 689 (9th Cir. 2001) (citing Fed. R. Evid. 201(b)). Additionally, the court may take judicial notice of filings in state court actions where the state court proceedings have a direct relation to the matters at issue. See, e.g., Betker v. U.S. Trust Corp. (In re Heritage Bond Litig.), 546 F.3d 667, 670 n.1, 673 n.8 (9th Cir. 2008); Bias v. Moynihan, 508 F.3d 1212, 1225 (9th Cir. 2007); see also Reyn's Pasta Bella, LLC v. Visa USA, Inc., 442 F.3d 741, 746 n.6 (9th Cir. 2006) ("We may take judicial notice of court filings and other matters of public record.").

The undersigned grants the respective requests for judicial notice filed by the Boyer Defendants and the Deutsche Bank Defendants. The court may review these documents in connection with the pending motions because they consist of public records that are not the subject of reasonable dispute, directly relevant state court filings, or both.

IV. LEGAL STANDARDS

A. Motion to Dismiss Pursuant to Federal Rule of Civil Procedure 12(b)(6)

A motion to dismiss brought pursuant to Federal Rule of Civil Procedure 12(b)(6) challenges the sufficiency of the pleadings set forth in the complaint. Vega v. JPMorgan Chase Bank, N.A., 654 F. Supp. 2d 1104, 1109 (E.D. Cal. 2009). Under the "notice pleading" standard of the Federal Rules of Civil Procedure, a plaintiff's complaint must provide, in part, a "short and plain statement" of plaintiff's claims showing entitlement to relief. Fed. R. Civ. P. 8(a)(2); see also Paulsen v. CNF, Inc., 559 F.3d 1061, 1071 (9th Cir. 2009). "A complaint may survive a motion to dismiss if, taking all well-pleaded factual allegations as true, it contains 'enough facts to state a claim to relief that is plausible on its face.'" Coto Settlement v. Eisenberg, 593 F.3d 1031, 1034 (9th Cir. 2010) (quoting Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009)). "'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.'" Caviness v. Horizon Cmty. Learning Ctr., Inc., 590 F.3d 806, 812 (9th Cir. 2010) (quoting Iqbal, 129 S. Ct. at 1949). The court accepts all of the facts alleged in the complaint as true and construes them in the light most favorable to the plaintiff. Corrie v. Caterpillar, 503 F.3d 974, 977 (9th Cir. 2007). The court is "not, however, required to accept as true conclusory allegations that are contradicted by documents referred to in the complaint, and [the court does] not necessarily assume the truth of legal conclusions merely because they are cast in the form of factual allegations." Paulsen, 559 F.3d at 1071 (citations and quotation marks omitted).

A motion to dismiss pursuant to Rule 12(b)(6) may also challenge a complaint's compliance with Federal Rule of Civil Procedure 9(b) where fraud is an essential element of a claim. See Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1107 (9th Cir. 2003). Rule 9(b), which provides a heightened pleading standard, states: "In alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake. Malice, intent, knowledge, and other conditions of a person's mind may be alleged generally." Fed. R. Civ. P. 9(b). These circumstances include the "time, place, and specific content of the false representations as well as the identities of the parties to the misrepresentations." Swartz v. KPMG LLP, 476 F.3d 756, 764 (9th Cir. 2007) (per curiam) (citation and quotation marks omitted); see also Kearns v. Ford Motor Co., 567 F.3d 1120, 1124 (9th Cir. 2009) ("Averments of fraud must be accompanied by 'the who, what, when, where, and how' of the misconduct charged.") (citation and quotation marks omitted). "Rule 9(b) demands that the circumstances constituting the alleged fraud be specific enough to give defendants notice of the particular misconduct . . . so that they can defend against the charge and not just deny that they have done anything wrong." Kearns, 567 F.3d at 1124 (citing Bly-Magee v. California, 236 F.3d 1014, 1019 (9th Cir. 2001) (internal quotation marks omitted and modification in original).

The court must construe a pro se pleading liberally to determine if it states a claim and, prior to dismissal, tell a plaintiff of deficiencies in his complaint and give plaintiff an opportunity to cure them if it appears at all possible that the plaintiff can correct the defect. See Lopez v. Smith, 203 F.3d 1122, 1130-31 (9th Cir. 2000) (en banc); accord Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1990). In ruling on a motion to dismiss pursuant to Rule 12(b)(6), the court "may generally consider only allegations contained in the pleadings, exhibits attached to the complaint, and matters properly subject to judicial notice." Outdoor Media Group, Inc. v. City of Beaumont, 506 F.3d 895, 899 (9th Cir. 2007) (citation and quotation marks omitted). Additionally, under the "incorporation by reference" doctrine, a court may also review documents "whose contents are alleged in a complaint and whose authenticity no party questions, but which are not physically attached to the [plaintiff's] pleading." Knievel v. ESPN, 393 F.3d 1068, 1076 (9th Cir. 2005) (citation omitted and modification in original). The incorporation by reference doctrine also applies "to situations in which the plaintiff's claim depends on the contents of a document, the defendant attaches the document to its motion to dismiss, and the parties do not dispute the authenticity of the document, even though the plaintiff does not explicitly allege the contents of that document in the complaint." Id.

B. Anti-SLAPP Special Motion to Strike, Cal. Civ. Proc. Code § 425.16

One of the motions before the court was filed, in part, pursuant to California's anti-SLAPP statute, California Code of Civil Procedure § 425.16. The Ninth Circuit Court of Appeals has summarized the purpose and general mechanics of California's anti-SLAPP statute as follows:

The anti-SLAPP statute establishes a procedure to expose and dismiss meritless and harassing claims that seek to chill the exercise of petitioning or free speech rights in connection with a public issue. Analysis of an anti-SLAPP motion to strike involves a two-step process. First, the defendant must show that the cause of action arises from any "act of that person in furtherance of the person's right of petition or free speech under the United States or California Constitution in connection with a public issue. . . ." Cal. Code Civ. P. § 425.16(b)(1).

If the court determines that the defendant has met this burden, it must then determine whether the plaintiff has demonstrated a probability of prevailing on the merits. To establish a probability of prevailing, the plaintiff must show that "the complaint is both legally sufficient and supported by a sufficient prima facie showing of facts to sustain a favorable judgment if the evidence submitted by the plaintiff is credited."

Kearny v. Foley & Lardner, LLP, 590 F.3d 638, 648 (9th Cir. 2009) (footnote and citations omitted); accord Metabolife Int'l, Inc. v. Wornick, 264 F.3d 832, 839-40 (9th Cir. 2001); Jarrow Formulas, Inc., 31 Cal. 4th at 733, 74 P.3d at 740. "The [anti-SLAPP] statute is to be 'construed broadly.'" Mindys Cosmetics, Inc. v. Dakar, 611 F.3d 590, 595 (9th Cir. 2010) (citing Cal. Civ. Proc. Code § 425.16(a), and Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1109 (9th Cir. 2003)).

Generally, a party may bring an anti-SLAPP special motion to strike in federal court. Thomas v. Fry's Elecs., Inc., 400 F. 3d 1206, 1206 (9th Cir. 2005) (per curiam); Vess, 317 F.3d at 1109. But such a motion has limited reach. A party may seek to specially strike state law claims brought in federal court on the basis of the court's diversity subject matter jurisdiction and state law claims that are supplemental to federal claims in a federal question jurisdiction matter. See Hilton v. Hallmark Cards, 599 F.3d 894, 900 n.2 (9th Cir. 2010) (stating that "we have long held that the anti-SLAPP statute applies to state law claims that federal courts hear pursuant to their diversity jurisdiction") (citing United States ex rel. Newsham v. Lockheed Missiles & Space Co., 190 F.3d 963, 970-73 (9th Cir. 1999)); Globetrotter Software, Inc. v. Elan Computer Group, Inc., 63 F. Supp. 2d 1127, 1130 (N.D. Cal. 1999) ("[I]t appears that under the Erieanalysis set forth in Lockheedthe anti-SLAPP statute may be applied to state law claims which, as in this case, are asserted pendent to federal question claims."). However, a party may not use an anti-SLAPP special motion to strike to seek the dismissal of claims based on federal law. See Hilton, 599 F.3d at 901 (stating that "a federal court can only entertain anti-SLAPP special motions to strike in connection with state law claims"); accord Restaino v. Bah (In re Bah), 321 B.R. 41, 46 (B.A.P. 9th Cir. 2005) (holding that the anti-SLAPP statute does not apply to federal claims); Summit Media LLC v. City of L.A., 530 F. Supp. 2d 1084, 1094 (C.D. Cal. 2008) ("Several District Courts have determined that the ...


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