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David Katz, Pro Se; and Elizabeth Katz, Pro Se v. Aurora Loan Services

January 10, 2012


The opinion of the court was delivered by: Irma E. Gonzalez, Chief Judge United States District Court


Plaintiffs David and Elizabeth Katz bring this action, alleging that Defendants' foreclosure proceedings and unlawful detainer action violated various provisions of the Fair Debt Collection Practices Act ("FDCPA"). Currently before the Court is Defendant Aurora Loan Services, LLC ("Aurora")'s motion to dismiss for failure to state a claim. Having considered the parties' arguments, and for the reasons set forth below, the Court GRANTS the motion.


Plaintiffs are the owners of real property located at 903 Northwood Drive, Chula Vista, CA 91914 ("Property"). On August 22, 2006, they took out a loan in the amount of $1,000,000.00 with Summit Lending Solutions, Inc., secured by a promissory note and a deed of trust on the Property. (First Amended Complaint ("FAC"), Exs. A, B [Doc. No. 3-1].) The Deed of Trust listed Summit Lending Solutions, Inc. as the "lender" and Mortgage Electronic Registration Systems, Inc. ("MERS") as a "nominee for Lender" and the "beneficiary" under the Deed of Trust. (Id., Ex. B.) The Deed of Trust listed Fidelity National Title as the "trustee." (Id.) On October 15, 2008, MERS executed a Substitution of Trustee, substituting Defendant Cal-Western Reconveyance Corporation ("Cal Western") as the trustee under the Deed of Trust. (Id., Ex. D.) The Substitution of Trustee was recorded on January 27, 2009. (Id.)

On December 26, 2008, after Plaintiffs failed to make their payments on time, Cal Western recorded a Notice of Default against the Property. (Id., Ex. C.) On December 28, 2008, MERS assigned all of the beneficial interest under the Deed of Trust to Aurora. (Id., Ex. I.) The assignment was recorded on August 26, 2010. (Id.) On July 27, 2009, Cal Western recorded a Notice of Trustee's Sale against the Property, setting the sale for August 13, 2009. (Id., Ex. G.) The Property was sold to Aurora at a trustee's sale on August 13, 2010. (Id., Ex. H.)

On March 19, 2011, Aurora served Plaintiffs with a three-day Notice to Vacate. (Aurora's RJN, Ex. A.) After Plaintiffs failed to vacate, Aurora commenced an unlawful detainer action on March 25, 2011. (Id.)

Plaintiffs commenced this action on August 12, 2011. On October 3, 2011, Plaintiffs filed their FAC, alleging six causes of action for violation of the FDCPA. Aurora filed the present motion to dismiss on October 28, 2011. Plaintiffs filed an opposition, and Aurora replied. The Court took this matter under submission pursuant to Civil Local Rule 7.1(d)(1).


A motion to dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure tests the legal sufficiency of the pleadings. Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). "To survive a motion to dismiss, 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) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). "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 to relief."'" Id. (internal citation omitted). "Dismissal can be based on the lack of a cognizable legal theory or the absence of sufficient facts alleged under a cognizable legal theory." Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1990).

In ruling on a motion to dismiss, the court must "accept all factual allegations in the complaint as true and construe the pleadings in the light most favorable to the nonmoving party." Knievel v. ESPN, 393 F.3d 1068, 1072 (9th Cir. 2005). The court, however, need not accept "legal conclusions" as true. Iqbal, 129 S. Ct. at 1949. Thus, "a formulaic recitation of the elements of a cause of action will not do." Twombly, 550 U.S. at 555. It is also improper for the court to assume that plaintiff "can prove facts that it has not alleged." Associated Gen. Contractors of Cal., Inc. v. Cal. State Council of Carpenters, 459 U.S. 519, 526 (1983). On the other hand, "[w]hen there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief." Iqbal, 129 S. Ct. at 1950.


Plaintiffs' FAC contains six causes of action, each alleging various violations of the FDCPA, 15 U.S.C. § 1692 et seq. Common to each cause of action is the allegation that each Defendant qualifies as a "debt collector" under the FDCPA, 15 U.S.C. § 1692a(6). The six causes of action state and restate the following violations of the FDCPA against each Defendant: (1) 15 U.S.C. § 1692e(2) by falsely representing the character, amount, or legal status of the debt; (2) 15 U.S.C. § 1692e(10) by the use of false representation or deceptive means to collect or attempt to collect the debt or to obtain information concerning the consumer; (3) 15 U.S.C. § 1692f(1) by collecting of amount not expressly authorized by the agreement creating the debt or permitted by law; (4) 15 U.S.C. § 1692g(b), which requires the debt collector to cease collection of the debt when notified by the consumer in writing within the prescribed thirty-day period that the debt is disputed; (5) 15 U.S.C. § 1692e(6) by sale or transfer of the interest in the debt causing the consumer to lose a claim or defense; (6) 15 U.S.C. § 1692f(6) by taking or threatening to unlawfully repossess the property; and (7) 15 U.S.C. § 1692g by failing to send to Plaintiffs a written notice required by that section within the required five-day period.

Aurora moves to dismiss Plaintiffs' FAC on several grounds. First, it argues that the FAC should be dismissed in its entirety for failure to comply with Rules 8 and 9(b) of Federal Rules of Civil Procedure. Next, Aurora argues the FAC fails to state a cause of action under the FDCPA because Aurora is not a "debt collector" under the FDCPA, and because neither the foreclosure proceedings nor an unlawful detainer action constitute "debt ...

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