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Audrey Derusseau v. Bank of America

November 29, 2011


The opinion of the court was delivered by: Hon. Michael M. Anello United States District Judge


On October 14, 2011, Defendant Bank of America, N.A., as successor by merger to BAC Home Loans Servicing, L.P., ("BAC" or "Defendant") filed a motion to dismiss Plaintiff Audrey Derusseau's first amended complaint ("FAC") for failure to state a claim upon which relief can be granted. [Doc. No. 15.] On November 1, 2011, Defendant Federal Home Loan Mortgage Corporation ("Freddie Mac") joined BAC's motion to dismiss. [Doc. No. 21.] Plaintiff filed an opposition to Defendant's motion to dismiss [Doc. No. 18], and Defendant filed a reply [Doc. No. 23]. On November 22, 2011, the Court deemed the matter suitable for decision on the papers and without oral argument pursuant to Civil Local Rule 7.1(d)(1). [Doc. No. 26.] For the reasons set forth below, the Court GRANTS Defendant's motion to dismiss.


This action arises out of foreclosure-related events with respect to Plaintiff's real property, located at 2235 Cliff Street, San Diego, California 92116 (the "Property"). [FAC, Doc. No. 11 ¶6.]*fn1 On or about April 2, 2007, Plaintiff executed a promissory note ("Note") to obtain a loan from Bank of America, secured by a Deed of Trust, to purchase the Property. [Id. ¶28.] The Deed of Trust names PRLAP, Inc. as the trustee. [Doc. No. 11-4, Exh. D, p.15.] In March 2009, "Plaintiff initiated loan modification negotiation efforts with BAC Servicing" to lower her monthly payments. [FAC ¶37.] Plaintiff alleges BAC offered her a forbearance plan in April 2009, but abruptly cancelled it without explanation in November 2009. [Id. ¶38.] Plaintiff asserts her repeated attempts to tender her monthly loan payments were denied [Id. ¶40]; Plaintiff later defaulted on her loan on July 1, 2009. [Doc. No. 15-1, Exh A, p.6.]

Plaintiff alleges she sent BAC a Qualified Written Request ("QWR") on May 18, 2011 inquiring about her debt obligations. [FAC ¶41.] According to Plaintiff, BAC failed to respond to her QWR as required by 12 U.S.C. section 2605(e). [Id. ¶41.] Despite her interactions with BAC, Plaintiff alleges BAC and Freddie Mac are "third-party strangers" to her loan, because she cannot locate a recorded assignment in the public record that memorializes the purported transfer. [FAC ¶¶30, 42.] Plaintiff therefore contends Freddie Mac and BAC have no authority to demand loan payments or initiate foreclosure proceedings. [Id. ¶¶30, 44, 46.]

Plaintiff alleges her Note was "supposed to be sold and transferred into a trust pool ("Securitized Trust")," but Bank of America failed to properly endorse and transfer her Note and Mortgage to Freddie Mac or BAC. [Id. ¶16 (emphasis in original); see id. ¶¶26, 30.] Accordingly, her Note was not securitized and the Securitized Trust pool obtained no interest in her Note. [Id.

¶26.] Plaintiff therefore alleges that none of the Defendants can enforce her Note because "they failed to properly abide by the requirements of the Trust Agreement governing the creation of the Securitized Trust, in which they claim they deposited" her mortgage loan. [Id. ¶48.]

Finally, Plaintiff alleges Freddie Mac and BAC fraudulently and deceptively provided Plaintiff false information about her payment obligations, and they failed to correctly apply payments made, calculate interest, and manage fees charged to Plaintiff's account. [Id. ¶51.] Plaintiff asserts Defendants' conduct constitutes an illegal and fraudulent attempt to collect on her debt, and has caused her significant harm. As a result of Defendants' alleged conduct, Plaintiff initiated this action on August 8, 2011, and filed her FAC on September 27, 2011. Plaintiff's FAC alleges ten causes of action for: (1) Declaratory Relief under 28 U.S.C. §§ 2201 and 2202; (2) Negligence; (3) Quasi Contract; (4) Violation of the Truth in Lending Act, 15 U.S.C. § 1641(g);

(5) Violation of the Real Estate Settlement Procedures Act, 12 U.S.C. § 2605(e); (6) Violation of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692(e); (7) Violation of California Business and Professions Code §§ 17200 et seq.; (8) Breach of Contract; (9) Breach of the Implied Covenant of Good Faith and Fair Dealing; and (10) Accounting. [Doc. No. 11.] Defendant moves to dismiss Plaintiff's entire FAC under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief can be granted.


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). "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 [her] entitlement to relief 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) (internal quotation marks, brackets and citations omitted).

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 cast in the form of factual allegations. Roberts v. Corrothers, 812 F.2d 1173, 1177 (9th Cir. 1987); W. Mining Council v. Watt, 643 F.2d 618, 624 (9th Cir. 1981). Similarly, "conclusory allegations of law and unwarranted inferences are not sufficient to defeat a motion to dismiss." Pareto v. Fed. Deposit Ins. Corp., 139 F.3d 696, 699 (9th Cir. 1998).

In determining the propriety of a Rule 12(b)(6) dismissal, a court may not look beyond the complaint for additional facts, e.g., facts presented in plaintiff's memorandum in opposition to a defendant's motion to dismiss or other submissions. United States v. Ritchie, 342 F.3d 903, 908 (9th Cir. 2003); Parrino v. FHP, Inc., 146 F.3d 699, 705-06 (9th Cir. 1998); see also 2 Moore's Federal Practice, § 12.34[2] (Matthew Bender 3d ed.) ("The court may not . . . take into account additional facts asserted in a memorandum opposing the motion to dismiss, because such memoranda do not constitute pleadings under Rule 7(a)."). A court may, however, consider items of which it can take judicial notice without converting the motion to dismiss into one for summary judgment. Barron v. Reich, 13 F.3d 1370, 1377 (9th Cir. 1994).

Defendant filed a Request for Judicial Notice concurrently with its motion to dismiss. [Doc. No. 15-1.] Plaintiff objects to Defendant's request on the ground that the Court may take judicial notice of the existence of the documents, but not the truth of the facts contained therein. [Doc. No. 18, p.4-5.] In support, Plaintiff cites California law. [Id.] Federal law, however, governs whether judicial notice is appropriate in this action. In re Turnstone Sys. Sec. Litig., 2003 U.S. Dist. LEXIS 26709 *105 (N.D. Cal. Feb. 4, 2003) ("Federal Rule of Evidence 201 governs judicial notice in federal court") (citing Fed. R. Evid. 201). Under Federal Rule of Evidence 201(b), judicial notice may be taken of facts that are "not subject to reasonable dispute" because they are "capable of accurate and ready determination by resort to sources whose accuracy cannot reasonably be questioned." Fed. R. Evid. 201(b). Applying Rule 201(b), federal courts routinely take judicial notice of facts contained in publically recorded documents, including Deeds of Trust, Substitutions of Trustee, and Notices of Defaults, because they are matters of public record, and are not reasonably in dispute. See, e.g., Lee v. City of Los Angeles, 250 F.3d 668, 689 (9th Cir. 2001) (quoting MGIC Indem. Corp. v. Weisman, 803 F.2d 500, 504 (9th Cir. 1986)); Lingad v. IndyMac Fed. Bank, 682 F. Supp. 2d 1142, 1146 (E.D. Cal. 2010); Vogan v. Wells Fargo Bank, N.A., 2011 U.S. Dist. LEXIS 132944 *6-8 (E.D. Cal. Nov. 17, 2011); Tiqui v. First Nat'l Bank of Arizona, 2010 U.S. Dist. LEXIS 33326 *2 n.2 (S.D. Cal. April 5, 2010).

Here, Defendant requests judicial notice of two publically recorded documents. Plaintiff does not identify any particular fact contained within the documents that is reasonably subject to dispute, and instead, summarily challenges the authenticity of the documents because Plaintiff could not locate them in the public record. [Doc. No. 10, p.5.] Accordingly, based on the current record the Court does not find the records are reasonably in dispute, and therefore GRANTS Defendant's request for judicial notice.


The Court addresses Plaintiff's three federal claims before turning to her seven state-based causes of action.


In her fifth cause of action-brought only against BAC-Plaintiff alleges BAC violated section 2605(e) of the Real Estate Settlement Procedures Act ("RESPA") by failing to respond to her Qualified Written Request ("QWR"), sent on May 18, 2011. [FAC ΒΆΒΆ99-107; Exh. A.] Although Plaintiff provides sparse allegations to support her RESPA claim, she has attached her QWR as Exhibit A to her FAC. On ...

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