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Esther Enunwaonye v. Aurora Loan Services LLC

November 8, 2011


The opinion of the court was delivered by: Hon. Otis D. Wright, II United States District Judge


Order GRANTING Defendants' Motions to Dismiss [48, 50] [Filed 07/01/11, 07/11/11]


Pending before the Court are Defendants' two concurrently-filed motions: (1) SBMC Mortgage's ("SBMC") Motion to Dismiss Plaintiff's Second Amended Complaint ("SAC"), and (2) Aurora Loan Services LLC and Aurora Bank FSB's (collectively, "Aurora")*fn1 Motion to Dismiss Plaintiff's SAC. (Dkt. Nos. 48, 50.)*fn2 Plaintiff, Esther Enunwayonye ("Plaintiff") filed a consolidated Opposition on August 3, 2011, (Dkt. No. 52), to which SBMC filed a Reply on August 4, 2011, (Dkt. No. 52). Having considered the papers filed in support of and in opposition to the instant Motions, the Court deems the matters appropriate for decision without oral argument. Fed. R. Civ. P. 78; L.R. 7-15. For the reasons discussed below, Defendants' Motions to Dismiss are GRANTED.


In September 2006, Plaintiff obtained a loan from SBMC to purchase property located at 800 Crenshaw Boulevard, Los Angeles, California (the "Subject Property"). (SAC at 3.) The total purchase price for the Subject Property was $1,671,275.56, of which $1,050,000.00 was financed with SBMC under a five-year, interest-only adjustable rate loan. (SAC at 3.) Shortly after the loan funded, SBMC sold Plaintiff's loan and transferred the servicing rights to Homecomings Financial.*fn3 (SBMC Mot. at 2; SAC ¶ 1, Exhs. 3b, 4.) Thereafter, Aurora obtained the servicing rights and Quality Loan Service ("Quality") was substituted as trustee under the deed of trust. (SAC at 5; Aurora Mot. at 2.)

As of January 1, 2008, Aurora increased Plaintiff's monthly payment from $3,881.00 to $4,200.00, purportedly to cover property mortgage insurance. (SAC at 6, 7.) Plaintiff alleges that this increase was unwarranted because she independently maintained property mortgage insurance on the Subject Property. (SAC at 6-7.) Notwithstanding, Plaintiff defaulted on her loan on or before April 1, 2009. (Aurora Mot. at 2.) Quality, as trustee, thereafter recorded a Notice of Default on behalf of Aurora. (SAC at 17.) Because Plaintiff failed to cure the default, the Subject Property was sold at an auction on August 9, 2010, whereby title was conveyed to Aurora. (Aurora Mot. at 2; SAC at 17.)

As a result of the foregoing events, on December 30, 2010, Plaintiff filed a Complaint in Los Angeles Superior Court. (Dkt. No. 1.) Aurora, with the consent of Quality and SBMC, subsequently removed the action to federal court. (Dkt. No. 1.) On February 4, 2011, SBMC and Aurora each filed a motion to dismiss Plaintiff's Complaint, (Dkt. Nos. 4, 6), both of which were granted. (Dkt. No. 14.) Plaintiff then filed her First Amended Complaint ("FAC") on March 23, 2011, (Dkt. No. 16), which was once again dismissed because it contained "substantially the same allegations as the original Complaint." (Dkt. No. 42.) On June 15, 2011, Plaintiff filed her SAC, (Dkt. No. 43), alleging the following ten claims against Defendants: (1) declaratory relief; (2) fraud; (3) tortious violation of statute; (4) quiet title; (5) reformation; (6) violation of California Business and Professions Code § 17200; (7) violation of California Civil Code § 2923.6; (8) violation of California Civil Code §1788.17; (9) violation of California Civil Code §1572; and (10) injunctive relief. (Dkt. No. 43.)

Defendants now move to dismiss Plaintiff's SAC in its entirety. (Dkt. Nos. 48, 50.) The Court addresses Defendants' arguments and the sufficiency of Plaintiff's claims below.


"To survive a motion to dismiss for failure to state a claim under Rule 12(b)(6), a complaint generally must satisfy only the minimal notice pleading requirements of Rule 8(a)(2)." Porter v. Jones, 319 F.3d 483, 494 (9th Cir. 2003). Rule 8(a)(2) requires "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). For a complaint to sufficiently state a claim, its "[f]actual 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). Mere "labels and conclusions" or a "formulaic recitation of the elements of a cause of action will not do." Id. Rather, to overcome a 12(b)(6) motion, "a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face." Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009) (internal quotation and citation omitted). "The plausibility standard is not akin to a probability requirement, but it asks for more than a sheer possibility that a defendant has acted unlawfully. Where a complaint pleads facts that are merely consistent with a defendant's liability, it stops short of the line between possibility and plausibility of entitlement of relief." Id. (internal quotation and citation omitted). The Ninth Circuit has summarized the governing standard, in light of Twombly and Iqbal, as follows: "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." Moss v. U.S. Secret Serv., 572 F.3d 962, 969 (9th Cir. 2009) (internal quotation marks omitted).

When considering a 12(b)(6) motion, a court is generally limited to considering materials within the pleadings and must construe "[a]ll factual allegations set forth in the complaint . . . as true and . . . in the light most favorable to [the plaintiff]." See Lee v. City of L.A., 250 F.3d 668, 688 (9th Cir. 2001) (citing Epstein v. Washington Energy Co., 83 F.3d 1136, 1140 (9th Cir. 1996)). A court is not, however, "required to accept as true allegations that are merely conclusory, unwarranted deductions of fact, or unreasonable inferences." Sprewell v. Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 2001).

Finally, when considering a 12(b)(6) motion, courts must bear in mind that leave to amend a pleading "shall be freely given when justice so requires." Fed. R. Civ. P. 15(a). While Rule 15(a) is very liberal, "a district court need not grant leave to amend where the amendment: (1) prejudices the opposing party; (2) is sought in bad faith; (3) produces an undue delay in litigation; or (4) is futile." AmerisourceBergen Corp. v. Dialysist West, Inc., 465 F.3d 946, ...

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