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Paul Junod, An Individual, and Patricia Junod, An Individual v. Dream House Mortgage Company

January 5, 2012

PAUL JUNOD, AN INDIVIDUAL, AND PATRICIA JUNOD, AN INDIVIDUAL, PLAINTIFFS,
v.
DREAM HOUSE MORTGAGE COMPANY, U.S. BANK HOME MORTGAGE D/B/A AMERICA'S SERVICING COMPANY, U.S. BANK, N.A. AS TRUSTEE FOR CSMC MORTGAGE BACKED TRUST 2006-6, AND DOES 1-10, INCLUSIVE, DEFENDANTS.



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

I. INTRODUCTION

ORDER GRANTING DEFENDANTS' MOTION TO DISMISS [25] AND GRANTING DEFENDANTS' MOTION TO EXPUNGE LIS PENDIS [26]

Currently before the Court are Defendants America's Servicing Company ("ASC") and U.S. Bank N.A.'s, ("U.S. Bank" and collectively, "Defendants") Motion to Dismiss Plaintiffs Paul and Patricia Junod's ("Plaintiffs") First Amended Complaint ("FAC") and Motion to Strike Lis Pendens. (Dkt. Nos. 25-26.) After careful consideration, the Court deems the matter appropriate for decision without oral argument. See Fed. R. Civ. P. 78; L.R. 7-15. For the following reasons, the Court GRANTS Defendants' Motion.

II. FACTUAL BACKGROUND

On April 27, 2006, Plaintiffs executed a promissory note in the amount of $395,000.00. The promissory note was secured by a deed of trust ("DOT") identifying Dream House Mortgage Corporation as the lender, the trustee as Stewart Title Company, and the beneficiary as Mortgage Electronic Registration Systems, Inc. ("MERS"). MERS, acting as nominee to Dream House, substituted in NDEx West, LLC ("NDEx") as successor trustee, and assigned all beneficial interests to U.S. Bank. Plaintiffs eventually defaulted on the loan and a notice of default was recorded on March 15, 2010. Subsequently, a Notice of Trustee's Sale was finalized and recorded on June 21 and June 30, 2011 respectively.

Plaintiffs allege generally that the foreclosure proceedings were invalid largely due to Defendant's role leading up to the proceedings. Namely, Plaintiffs aver that in California, there can be no beneficial ownership in the DOT as it is nothing more than security for the Promissory Note. Plaintiffs, as a result, allege that MERS could not transfer any interest in the DOT to another. Accordingly, by engaging in a series of recordings and assignments, Plaintiffs contend that Defendants engaged in unlawful mortgage transactions.

Based on the foregoing, Plaintiffs instituted this action on August 25, 2011. Plaintiffs' FAC asserts the following claims: (1) Declaratory Relief; (2) Violation of 15 U.S.C. § 1692 et seq. ("FDCPA"); (3) Violation of 15 U.S.C. § 1641(g) ("TILA"); (4) Violation of 15 U.S.C. § 2605 et seq. ("RESPA"); (5) Violation of 12 U.S.C. 17200 et seq. ("UCL"); (6) Wrongful Foreclosure and To Set Aside Trustee's Sale; (7) Void or Cancel Trustee's Deed Upon Sale; (8) Breach of Contract; and (9) Breach of the Implied Covenant of Good Faith and Fair Dealing. At this time, Defendants move to dismiss Plaintiffs' Complaint in its entirety.

III. LEGAL STANDARD

"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. Twombley, 550 U.S. 554, 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).

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). Thus, 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 nonconclusory 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).

IV. DISCUSSION

A. PLAINTIFFS'SECOND CLAIM -FDCPA

Plaintiffs' second claim pursuant to FDCPA fails because Defendant U.S. Bank is not a debt collector as the statute defines. "The [FDCPA] prohibits debt collector[s] from making false or misleading representations and from engaging in various abusive and unfair practices." Heintz v. Jenkins, 514 U.S. 291, 292 (1995). To be liable for a violation of the FDCPA, a defendant must, as a threshold matter, be a "debt collector" within the meaning of those acts. Heintz, 514 U.S. at 294. The FDCPA defines a "debt collector" as "any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another." 15 U.S.C. § 1692a(6) (2009).

In this case, Plaintiffs allege that "Defendant U.S. Bank is a debt collector pursuant to the [ ] FDCPA." (FAC ¶ 61.) Such bare allegations are not sufficient and courts have rejected similar conclusory statements pertaining to FDCPA claims. See e.g., Martinez v. Quality Loan Serv. Corp., No. CV 08-07767, 2009 WL 586725, at *8-9 (C.D. Cal. Feb. 10, 2009). For example, additional facts directed to the debt collecting activity may be necessary to show that U.S. Bank conducted in such activities. See 15 U.S.C. § 1692a(5) ("debt collector" is a person whose business' primary purpose is the collection of debt or a person who "regularly" engages in debt collection activity). Without these facts, merely alleging conclusory statements that U.S. Bank is a "debt collector" will not suffice. Twombley, 550 U.S. at 555. Accordingly, the Court GRANTS Defendants' Motion as to Plaintiffs' second claim.

B. PLAINTIFFS'THIRD CLAIM -TILA

Plaintiffs do not dispute that their TILA claim is time barred. Rather, Plaintiffs argue that equitable estoppel and equitable tolling apply tolling TILA's statute of limitations. Plaintiffs, however, have not demonstrated a basis for equitable tolling or equitable estoppel. "[Courts] apply equitable tolling in situations where, despite all due diligence, the party invoking equitable tolling is unable to obtain vital information bearing on the existence of the claim." Cervantes v. Countrywide Home Loans, Inc., 656 F.3d 1034, 1045 (9th Cir. 2011) (quoting Socop--Gonzalez v. I.N.S., 272 F.3d 1176, 1193 (9th Cir. 2001)). In addition, equitable estoppel "halts the statute of limitations when there is active conduct by a defendant, above and beyond the ...


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