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Dennis Alan Neal and v. E-Trade Bank

August 25, 2011


The opinion of the court was delivered by: Frank C. Damrell, Jr. United States District Judge


This matter is before the court on the motions of defendants E-Trade Bank, E-Trade Financial Services, GMAC Mortgage, LLC ("GMAC"), Mortgage Electronic Registration System, Inc., ("MERS"), and ETS Services, LLC ("ETS") (collectively, "defendants"), to dismiss plaintiffs Dennis Alan Neal and Jacqueline Dianne Neal's ("plaintiffs") complaint pursuant toFederal Rule of Civil Procedure ("FRCP") 12(b)(6).*fn1


Plaintiff originally brought this action against defendants in California State Superior Court for the County of Yuba, alleging violations of procedural due process under the Fifth Amendment of the United States Constitution, the Federal Fair Debt Collection Practices Act ("FDCPA"), and a number of corollary state law claims. (See Pls.' Compl. ["Compl."], filed Feb. 24, 2011, [Docket #11, Ex. A].) Defendants timely removed the case to this court pursuant to 28 U.S.C. § 1441(c) based on plaintiffs' federal claims under the FDCPA and the Fifth Amendment of the United States Constitution. (Defs.' Not. of Removal, filed Apr. 11, 2011, [Docket #1].)

Plaintiffs' claims are based upon a residential home loan transaction and the subsequent foreclosure of plaintiffs' home. (Compl. ¶¶ 11, 28-30.) Plaintiffs base the majority of their claims on the federal Home Affordable Modification Program ("HAMP"). Plaintiffs allege that defendants made material misrepresentations regarding a potential remodification of their home loan. (Id. ¶¶ 11-32.) Additionally, plaintiffs claim that defendants improperly went forward with foreclosure without any good faith attempt to negotiate with plaintiffs. (Id. ¶ 29.) All defendants have moved to dismiss the action for failing to state any claims upon which relief can be granted.


Under Federal Rule of Civil Procedure 8(a), a pleading must contain "a short and plain statement of the claim showing that the pleader is entitled to relief." See Ashcroft v. Iqbal, 129S. Ct. 1937, 1949 (2009). Under notice pleading in federal court, the complaint must "give the defendant fair notice of what the claim is and the grounds upon which it rests." Bell Atlanticv. Twombly, 550 U.S. 544, 555 (2007) (internal quotations omitted). "This simplified notice pleading standard relies on liberal discovery rules and summary judgment motions to define disputed facts and issues and to dispose of unmeritorious claims." Swierkiewicz v. Sorema N.A., 534 U.S. 506, 512 (2002).

On a motion to dismiss, the factual allegations of the complaint must be accepted as true. Cruz v. Beto, 405 U.S. 319, 322 (1972). The court is bound to give plaintiff the benefit of every reasonable inference to be drawn from the "well-pleaded" allegations of the complaint. Retail Clerks Int'l Ass'n v. Schermerhorn, 373 U.S. 746, 753 n.6 (1963). A plaintiff need not allege "'specific facts' beyond those necessary to state his claim and the grounds showing entitlement to relief." Twombly, 550 U.S. at 570. "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." Iqbal, 129 S. Ct. at 1949.

Nevertheless, the court "need not assume the truth of legal conclusions cast in the form of factual allegations." United States ex rel. Chunie v. Ringrose, 788 F.2d 638, 643 n.2 (9th Cir. 1986). While Rule 8(a) does not require detailed factualallegations, "it demands more than an unadorned, the defendant-unlawfully-harmed-me accusation." Iqbal, 129 S. Ct. at 1949. A pleading is insufficient if it offers mere "labels and conclusions" or "a formulaic recitation of the elements of a cause of action." Twombly, 550 U.S. at 555; Iqbal, 129 S. Ct. at 1950 ("Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice."). Moreover, it is inappropriate to assume that the plaintiff "can prove facts which it has not alleged or that the defendants have violated the . . . laws in ways that have not been alleged." Associated Gen. Contractors of Cal., Inc. v. Cal. State Council of Carpenters, 459 U.S. 519, 526 (1983).

Ultimately, the court may not dismiss a complaint in which the plaintiff has alleged "enough facts to state a claim to relief that is plausible on its face." Iqbal, 129 S. Ct. at 1949 (citing Twombly, 550 U.S. at 570). Only where a plaintiff has failed to "nudge [his or her] claims across the line from conceivable to plausible," is the complaint properly dismissed. Id. at 1952. While the plausibility requirement is not akin to a probability requirement, it demands more than "a sheer possibility that a defendant has acted unlawfully." Id. at 1949. This plausibility inquiry is "a context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Id. at 1950.

In ruling upon a motion to dismiss, the court may consider only the complaint, any exhibits thereto, and matters which may be judicially noticed pursuant to Federal Rule of Evidence 201. See Mir v. Little Co. Of Mary Hospital, 844 F.2d 646, 649 (9thCir. 1988); Isuzu Motors Ltd. v. Consumers Union of United States, Inc., 12 F. Supp. 2d 1035, 1042 (C.D. Cal. 1998).


A. Federal Fair Debt Collection Practices Act

Plaintiffs' fourth claim for relief alleges violation of the Federal Fair Debt Collection Practices Act ("FDCPA"). (Compl. ΒΆΒΆ 58-65.) Defendants move to dismiss plaintiffs' claim under the FDCPA, asserting they have failed to allege any facts which could constitute a violation of the FDCPA. More specifically, defendants contend that plaintiff cannot state a ...

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