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James Gary Hamilton, et al v. Us Bank

November 28, 2011

JAMES GARY HAMILTON, ET AL.,
PLAINTIFFS,
v.
US BANK, N.A., ET AL., DEFENDANTS.



The opinion of the court was delivered by: Hon. Dana M. SABRAWUnited States District Judge

ORDER GRANTING DEFENDANTS' MOTIONS TO DISMISS

In this mortgage foreclosure action, pending before the Court are (1) a motion to dismiss filed by Defendants Home Sales, Inc.; (2) a motion to dismiss, or in the alternative for a more definite statement, filed by Defendant U.S. Bank, N.A.; and (3) a motion to dismiss first amended complaint, to strike it pursuant to California Code of Civil Procedure Section 425.16, or alternatively for a more definite statement, filed by Defendants Randall D. Naiman and Naiman Law Group. Plaintiffs, proceeding pro se, opposed all motions and Defendants replied. For the reasons which follow, Defendants' motions to dismiss are GRANTED. Their alternative motions for a more definite statement or to strike the first amended complaint are DENIED as moot.

Factual and Procedural Background

According to the First Amended Complaint, in or about December 1999 Plaintiffs purchased their residence located at 17576 Via del Bravo in Rancho Santa Fe, California ("Property"). They borrowed $700,000 from Downey Savings & Loan Association, F.A. ("Downey"), and secured the loan by a Deed of Trust on the Property. (See First Am. Compl. Ex. A.) Downey subsequently sold the note to a mortgage-backed security. (See, e.g., First Am. Compl. at 18.) Some time before February 26, 2010, Defendant U.S. Bank, N.A. (U.S. Bank") became a successor-in-interest to the Federal Deposit Insurance Corporation as receiver for Downey. (Id. Ex. C; see also id. at 5.)

Plaintiffs defaulted on the loan, and admit they "have been unable to make the monthly payments . . . for some time now." (First Am. Compl. at 6.) On November 25, 2009, a Notice of Default and Election to Sell Under Deed of Trust was recorded on the Property. (HomeSales, Inc.'s Req. for Jud. Notice, Ex. 3.)*fn1 In the notice, Plaintiffs were notified they could bring their account current by paying $17,652.94.

At a non-judicial foreclosure sale held December 2, 2010, the Property was sold to Defendant HomeSales, Inc. ("HomeSales"). (HomeSales Req. for Jud. Notice, Ex. 6 (Trustee's Deed Upon Sale).) The amount of unpaid debt at that time was $702,087.16. (Id.) On or about April 19, 2011, Plaintiffs were given Notice to Vacate the Property, and on or about May 5, 2011, HomeSales, represented by Defendants Randall D. Naiman and Naiman Law Group, PC (collectively "Naiman"), filed an unlawful detainer action against Plaintiffs. (Naiman's Req. for Jud. Notice Ex. 1 (complaint).)

On May 5, 2011, Plaintiffs filed the instant action in this Court. In their initial complaint they alleged claims violation of their constitutional rights under 42 U.S.C. Section 1983, violation of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq. ("FDCPA"), quiet title, wrongful foreclosure, slander of title, and fraudulent inducement.

Although the initial as well as the operative complaint lack the requisite jurisdictional allegations, see Fed. R. Civ. Proc. 8(a)(1), it is apparent the Court has federal question pursuant to 28 U.S.C. Section 1331 because Plaintiffs alleged claims under federal law. The Court has supplemental jurisdiction over Plaintiffs' state law claims pursuant to 28 U.S.C. Section 1367(a).*fn2

The initial complaint was dismissed with leave to amend pursuant to the order filed August 8, 2011granting Defendant Chase Home Finance, LLC's ("Chase") motion to dismiss. Defendants have filed motions to dismiss the First Amended Complaint. Although Plaintiffs removed Chase from the First Amended Complaint, the same claims remained against other Defendants. Accordingly, Plaintiffs alleged claims for violation of their federal constitutional rights, FDCPA violations, quiet title, wrongful foreclosure, slander of title, and fraudulent inducement. Although not set out as a separate claim, it appears, as before, that Plaintiffs intended to allege a claim for violation of the Real Estate Settlement Procedures Act, 12 U.S.C. § 2601 et seq. ("RESPA"). Among other things, they seek damages and declaratory as well as injunctive relief to set aside the foreclosure sale and quiet title to the Property.

Discussion

A Rule 12(b)(6) motion to dismiss tests the sufficiency of the complaint. Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). Dismissal is warranted where the complaint lacks a cognizable legal theory. Shroyer v. New Cingular Wireless Serv., Inc., 622 F.3d 1035, 1041 (9th Cir. 2010) (internal quotation marks and citation omitted); see Neitzke v. Williams, 490 U.S. 319, 326 (1989) ("Rule 12(b)(6) authorizes a court to dismiss a claim on the basis of a dispositive issue of law"). Alternatively, a complaint may be dismissed where it presents a cognizable legal theory yet fails to plead essential facts under that theory. Robertson v. Dean Witter Reynolds, Inc.,749 F.2d 530, 534 (9th Cir. 1984); see also Shroyer, 622 F.3d at 1041.

In this regard, "to survive a motion to dismiss, a complaint must contain sufficient factual matter to state a facially plausible claim to relief." Shroyer, 622 F.3d at 1041, citing Ashcroft v. Iqbal, 556 U.S. 662, __, 129 S. Ct. 1937, 1949 (2009). "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, citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556 (2007). "Determining whether a complaint states a plausible claim for relief will . . . be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Iqbal, 129 S. Ct. at 1950.

In reviewing a motion to dismiss under Rule 12(b)(6), the Court must assume the truth of all factual allegations and must construe them in the light most favorable to the nonmoving party. Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336, 337-38 (9th Cir. 1996). Legal conclusions need not be taken as true merely because they are couched as factual allegations. Twombly, 550 U.S. at 555. Similarly, "conclusory allegations of law and unwarranted inferences are ...


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