The opinion of the court was delivered by: Honorable Christina A. Snyder
Present: The Honorable CHRISTINA A. SNYDER
Deputy Clerk Court Reporter / Recorder Tape No.
Attorneys Present for Plaintiffs: Attorneys Present for Defendants:
Proceedings: (In Chambers:) DEFENDANTS' MOTION TO DISMISS (filed
INTRODUCTION & BACKGROUND
On October 27, 2010, plaintiffs Nana Baidoobonso-Iam and William Collier ("Collier") filed suit in the Los Angeles County Superior Court against BAC Home Loans Servicing, L.P., improperly sued as Bank of America (Home Loans) ("BAC"); ReconTrust Company, N.A. ("ReconTrust"); Wells Fargo Bank, N.A., as trustee for the holders of SASCO 2007-mini c/o BAC Home Loan Servicing, LP ("Wells Fargo"); Mortgage Electronic Registration Systems, Inc. ("MERS"); and Does 1--XX, inclusive (collectively, "defendants"). On November 29, 2010, defendants timely removed the action to this Court on the basis of diversity jurisdiction pursuant to 28 U.S.C. § 1332.
On March 3, 2011, the Court entered an order denying plaintiffs' motion for remand and granting defendants' motion to dismiss the complaint without prejudice. See Dkt. No. 17. On May 24, 2011, plaintiffs filed a first amended complaint ("FAC"), which the Court also dismissed without prejudice. See Dkt. No. 28.
Collier thereafter filed a second amended complaint ("SAC") against defendants on August 15, 2011. In the SAC, Collier failed to join Nana Baidoobonso-Iam as a plaintiff.*fn1 The SAC advances eight claims for relief, styled as: (1) quiet title and declaratory relief; (2) injunctive relief; (3) cancellation of a voidable contract under Rev. & Tax Code §§ 23304.1, 23305A and Violation of Cal. Corp. Code §§ 191(C)(7); (4) intentional infliction of severe mental and emotional distress; (5) to void and cancel trustee's notice of default and election to sell inder [sic] deed of trust; (6) to void or cancel assignment of deed of trust; (7) conspiracy to wrongfully foreclose; and (8) violation of California Business and Professions Code §§ 17200 et seq. Collier's claims arise from a 2006 mortgage loan transaction. See SAC ¶¶ 10--11. Specifically, on July 26, 2006, Collier purchased certain real property located at 43028 23rd Street W, Lancaster, CA 93536 ("property"), for a loan in the amount of $400,000 originated by Mortgage Lenders Network USA, Inc. ("Mortgage Lenders Network"). Id.; FAC, Exh. A.*fn2 Collier alleges that on March 8, 2010, due to his financial difficulties, ReconTrust, as an agent for MERS, caused a Notice of Default to be recorded on the property. SAC ¶¶ 14--15. Collier alleges that MERS did not have legal standing to substitute ReconTrust as the trustee and did not provide proper notice as required by California Civil Code § 2923.5. Id. ¶ 16. Collier further alleges that sometime after the origination of the loan, MERS transferred its interest in the loan to BAC. Id. ¶ 19. The gravamen of plaintiff's complaint is that MERS could not be the beneficiary under the deed of trust, and that BAC, after being assigned the loan, could not initiate foreclosure proceedings because the promissory note and deed of trust are void ab initio. Id. ¶¶ 16--23.
On August 30, 2011, defendants moved to dismiss the SAC. Collier filed his opposition on September 16, 2011, and defendants replied on September 22, 2011. After carefully considering the parties' arguments, the Court finds and concludes as follows.
A Rule 12(b)(6) motion tests the legal sufficiency of the claims asserted in a complaint. "While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the 'grounds' of his 'entitlement to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). "Factual allegations must be enough to raise a right to relief above the speculative level." Id. Stated differently, only a complaint that states a claim for relief that is "plausible on its face" survives a motion to dismiss. Ashcroft v. , 129 S. Ct. 1937, 1949--50 (2009) (quoting Twombly, 550 U.S. at 570). "The plausibility standard is not akin to the 'probability requirement,' but it asks for more than a sheer possibility that a defendant has acted unlawfully." Id.
In considering a motion pursuant to Fed. R. Civ. P. 12(b)(6), a court must accept as true all material allegations in the complaint, as well as all reasonable inferences to be drawn from them. Pareto v. F.D.I.C., 139 F.3d 696, 699 (9th Cir. 1998). The complaint must be read in the light most favorable to the nonmoving party. Sprewell v. Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 2001); Parks Sch. of Bus., Inc. v. Symington,
51 F.3d 1480, 1484 (9th Cir. 1995). However, a court need not accept as true unreasonable inferences or conclusory legal allegations cast in the form of factual allegations. Sprewell, 266 F.3d at 988; W. Mining Council v. Watt, 643 F.2d 618, 624 (9th Cir. 1981).
Dismissal pursuant to Rule 12(b)(6) is proper only where there is either a "lack of a cognizable legal theory or the absence of sufficient facts alleged under a cognizable legal theory." Balistreri v. ...