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Lendrick V. Brown v. Wachovia Mortgage Corp.

September 16, 2011

LENDRICK V. BROWN, PLAINTIFF,
v.
WACHOVIA MORTGAGE CORP., NDEX WEST LLC, WELLS FARGO BANK, N.A., MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC. (MERS), DEFENDANTS.



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

ORDER GRANTING DEFENDANTS' MOTION TO DISMISS [Motions filed on June 22, 2011]

Presently before the court is Wachovia Mortgage, a division of Wells Fargo Bank, N.A, and MERSCORP, INC.'s (together "Defendants'") Motion to Dismiss Case (Dkt. No. 6) and Motion to Strike Portions of Complaint (Dkt. No. 8). Having considered the parties papers and the arguments therein, the court GRANTS Defendants' Motion to Dismiss. Defendants' Motion to Strike is VACATED as moot.

I. Background

In January 2007, Plaintiff obtained a $300,000 home loan from then World Savings Bank, FSB, for the purchase of real property located at 4169 Charlene Dr., Los Angeles, California. (Def.'s Request for Judicial Notice ("RJN"), Ex. A, Ex. B.) On or about July 23, 2009, Plaintiff entered into a loan modification purchase agreement with defendant, Wachovia Mortgage Corp. (Compl. ¶ 8.) At some point thereafter, Plaintiff defaulted on his loan and on December 8, 2010, a notice of default ("NOD") was recorded with the Los Angeles County Recorder's Office. (Compl. ¶ 17; RJN, Ex. G.) On March 23, 2011, Plaintiff filed for bankruptcy under Chapter 7 of the United States Bankruptcy code. (RJN, Ex. H, Chapter 7 Voluntary Bankruptcy Petition.) On April 28, 2011, Plaintiff brought this suit for damages and to enjoin the foreclosure of his home.

II. Legal Standard

Under the Federal Rule of Civil Procedure 12(b)(6), a complaint is subject to dismissal when the plaintiff's allegations fail to state a claim upon which relief can be granted. 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 433, 447 (9th Cir. 2000).

In Ashcroft v. Iqbal, 129 S. Ct. 1937, 1950 (2009), the Supreme Court explained that a court considering a 12(b)(6) motion should first "identify[] pleadings that, because they are no more than conclusions, are not entitled to the assumption of truth."

Id. Next, the court should identify the complaint's "well-pleaded factual allegations, . . . assume their veracity and then determine whether they plausibly give rise to an entitlement to relief."

Id.; see also Moss v. U.S. Secret Serv., 572 F.3d 962, 969 (9th Cir. 2009) ("In sum, for a complaint to survive a motion to dismiss, the non-conclusory factual content, and reasonable inferences from that content, must be plausibly suggestive of a claim entitling the plaintiff to relief" (internal quotation marks omitted)).

III. Discussion

Plaintiff brings claims for fraud, violation of California's False Claims Act, violation of the Federal Racketeer Influenced and Corrupt Organizations Act ("RICO") statutes, and violation of various provisions of the California Civil Code and the California Government Code.

A. Chapter 7 Bankruptcy

In March 2011, Plaintiff filed for Chapter 7 Bankruptcy. (RJN, Ex. H, Chapter 7 Voluntary Bankruptcy Petition.) Defendants argue that because Plaintiff filed the present action after he filed for Chapter 7 Bankruptcy, Plaintiff's claims are "property of the bankruptcy estate," and therefore must be dismissed. (Def.'s Motion to Dismiss 3:23-27.) The court agrees.

As set forth in 11 U.S.C. ยง 541(a)(1), the commencement of a Chapter 7 case, such as the present, "creates an estate," and that estate is comprised of "all legal or equitable interest of the debtor in property as of the commencement of the case." Put another way, "after a person files for bankruptcy protection, any causes of action previously possessed by that person become the property of the bankrupt estate." Cloud v. Northrop Grumman Corp., 67 Cal. App. 4th 995, 1001 (1998) (citing United States v. Whiting Pools, Inc., 462 U.S. 198, 203-205, ...


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