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Nicholas Weimer v. Emc-Chase Quality Loan Service

August 26, 2011


The opinion of the court was delivered by: Dean D. Pregerson United States District Judge


Presently before the court is JPMorgan Chase Bank, N.A., as successor in interest to EMC Mortgage LLC's and JPMorgan Chase Bank, N.A.'s (collectively "Defendants") Motion to Dismiss the First Amended Complaint ("FAC") of Plaintiff Nicholas Weimer. Having considered the parties' pleadings and the arguments therein, the court GRANTS Defendants' Motion to Dismiss.


On or about January 2008, Plaintiff obtained a loan in the amount of $1,000,000 to purchase real property located at 1080-1082 South Genesee Avenue, Los Angeles, California 90019 (the "Property"). (Compl. ¶ 6.) Plaintiff defaulted on the loan in February 2009. (Id. ¶ 7.) Plaintiff then entered into a modfied mortgage agreement whereby Plaintiff's monthly payment amount was reduced. (Id. ¶ 8.) Thereafter, according to Plaintiff, Defendant Chase bank purchased EMC Mortgage Corporation, and Chase Bank refused to honor the modification agreement and demanded payment of the loan pursuant to the original payment amounts. (Id. ¶¶ 9-10.) At this time, the Property was being used as a rental unit and Plaintiff was not residing at the Property. In November 2009, Plaintiff received from his tenants approximately 8-10 letters sent by Quality Loan Services warning of foreclosure and claiming that Plaintiff was in arrears on the loan for a sum of approximately $50,000. (Id. ¶ 11.)

According to Plaintiff's complaint, a sale was held on August 19, 2010, and at that time the Property was sold. (Id. ¶ 18.)

Plaintiff now brings suit for breach of the implied covenant of good faith and fair dealing, fraud, interference with prospective business advantage, unfair competition, unfair debt collection, violation of RICO, intentional infliction of emotional distress, negligent infliction of emotional distress, negligent misrepresentation, and to quiet title. (Id. ¶¶ 19-50.) As security for the $963,000 note, Jose Munoz Valasco and Lucila Munoz signed a Deed of Trust. (Deed of Trust, Compl., Ex. A.) The loan was originated by Metrostate Financial & Real Estate Corp. (Id.) In July 2007, the original purchasers conveyed their interest in the property to Hacienda Ranch Trust and named Plaintiff as trustee. (Grant Deed, Compl., Ex. B.) Shortly thereafter, the loan was in default. (Compl. ¶ 32.) On July 2, 2008, the property was sold in a foreclosure sale. (Id. ¶ 35.)

Plaintiff filed a complaint, alleging various violations of California law, in Superior Court on October 29, 2010. (Dkt. No. 1.) Defendants removed on the basis of diversity jurisdiction, and on January 18, 2010, Defendants motioned to dismiss Plaintiff's complaint.


A. Rule 12(b)(6)

Rule 8 of the Federal Rules of Civil Procedure "requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do . . . Factual allegations must be enough to raise a right to relief above the speculative level." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). When considering a 12(b)(6) motion to dismiss for failure to state a claim, "all allegations of material fact are accepted as true and should be construed in the light most favorable to the plaintiff." Resnick v. Hayes, 213 F.3d 443, 447 (9th Cir. 2000).

A court need not accept as true conclusory allegations or allegations stating a legal conclusion. In re Stac Elecs. Sec. Litig., 89 F.3d 1399, 1403 (9th Cir. 1996); Iqbal v. Ashcroft, 129 S.Ct. 1937, 1940-41 (2009) ("mere conclusions[] are not entitled to the assumption of truth."). A court properly dismisses a complaint on a Rule 12(b)(6) motion based upon the "lack of a cognizable legal theory" or "the absence of sufficient facts alleged under the cognizable legal theory." Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1990). The plaintiffs must allege "plausible grounds to infer" that their claims rise "above the speculative level." Twombly, 127 S. Ct. at 1965. That is, the plaintiffs' obligation requires more than "labels and conclusions" or a "formulaic recitation of the elements of a cause of action." Id. at 1964-65.


A. Improper Foreclosure

Both parties agree that the sale of the Property never occurred. Therefore, Plaintiff's claim of improper foreclosure is ...

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