This matter came before the court on August 12 and October 7, 2011,
for hearing of defendants' motions to dismiss pro se plaintiff Robert
Wooten's complaint. (Doc. Nos. 8 &
16.) On August 12, attorney Steven Son appeared telephonically for
the moving parties Ocwen Loan Servicing, LLC ("Ocwen") and Western
Progressive, LLC ("Western Progressive"). Plaintiff appeared at the
hearing on his own behalf. At the October 7 hearing, attorney Feather
Baron appeared telephonically for the moving party Countrywide Home
Loans ("CHL"); plaintiff did not appear at this hearing or file a
timely opposition to the motion. Following an order to
show cause issued to plaintiff after the hearing, plaintiff filed a
written response to CHL's motion, and CHL filed a reply.*fn1
Following the hearings and the completion of briefing, the
motions were taken under submission.
For the reasons set forth below, upon consideration of the briefing on file, the parties' arguments at the hearing, and the entire file, defendants' motions to dismiss will be granted. Plaintiff has failed to allege a cognizable claim giving rise to federal jurisdiction. Jurisdiction exists in this case because of a single claim brought by plaintiff pursuant to the Racketeer Influenced and Corrupt Organizations Act ("RICO"). However, that claim is inadequately plead, and without a federal claim for relief, the court would recommend that the assigned District Judge decline to exercise jurisdiction over plaintiff's remaining state law claims. The instant order addresses primarily plaintiff's RICO claim and identifies the deficiencies in that claim. Nonetheless, the court will permit plaintiff an opportunity to amend his complaint to state a cognizable RICO claim, thereby supplying grounds for jurisdiction.*fn2
In his complaint plaintiff alleges as follows. "[F]rom about 1994 through 2002," plaintiff obtained two home loans from CHL in connection with two properties located in undesirable neighborhoods. (Compl. at ¶ 5 [Doc. No. 2-2].) In 2002, plaintiff sought a third loan from CHL and was advised that, "in order to qualify for the new loan, plaintiff would have to sell the two existing properties." (Id.) Plaintiff sold the properties, but CHL declined to make a new loan directly to plaintiff.(Id.)
Instead, an unidentified real estate broker directed plaintiff to an unidentified broker, who brokered a $185,152.00 loan ("Loan") from America's Wholesale Lender ("AWL"), a dba of CHL. (Id. at¶ 6.) The Loan closed on October 14, 2002 and was evidenced by a promissory note ("Note") and secured by a deed of trust ("DOT") on the subject property in Stockton, California ("Property"). (Id. at ¶ 1; CHL Request for Judicial Notice ("RJN"), Ex. A [Doc. No. 17].) The DOT identifies plaintiff as the borrower and AWL as the lender. (Id.)
Although plaintiff admits obtaining this Loan, he complains that he was required to make a large down payment ("three times the normal down payment of five (5) percent") and was "forced into a sub-prime loan" with an interest rate that was higher than his prior loans and higher than other rates at the time. (Compl. at ¶ 6.) Plaintiff claims that these terms were improper since he had a pre-existing relationship with CHL. (Id. at¶¶ 6-7.)
In May 2005, plaintiff refinanced the Loan with a $240,000.00 loan ("Refinance Loan") from defendant Argent Mortgage Company, LLC ("Argent"). (Id. at¶¶ 9-12; RJN at Ex. B.) Plaintiff used the proceeds of the Refinance Loan to repay the Loan in full. (RJN at Ex. C.) Over five years later, in October 2010, defendant Western Progressive issued a notice of default ("NOD"), indicating that plaintiff had defaulted on the Refinance Loan, having $12,100.81 in arrearages. (RJN at Ex. D). On June 2, 2011, after plaintiff failed to cure his default, Western Progressive recorded a notice of trustee's sale, scheduling a sale date of June 24, 2011. (RJN at Ex. E.)
On June 6, 2011, plaintiff filed the instant complaint in the San Joaquin County Superior Court, alleging claims for (1) negligent misrepresentation, (2) fraudulent concealment, (3) intentional misrepresentation, (4) violation of Cal. Civil Code § 2923.5, (5) violation of Cal. Bus. & Prof. Code § 17200, (6) breach of contract and (7) violation of RICO against CHL, Western Progressive, Ocwen, Citigroup and Argent Mortgage.*fn3 He thereafter, on June 23, 2011, obtained an ex parte order from the San Joaquin Superior Court enjoining the foreclosure proceedings. (Doc. No. 2-2.) Subsequently, on July 6, 2011 Western Progressive and Ocwen removed the action to federal court based on plaintiff's federal RICO claim. (Doc. No. 2.)
Following the filing of the complaint, and before removal of the action to this court, plaintiff executed a loan modification agreement with Ocwen, the current servicer of the Refinance Loan. (Doc. No. 8 at 1.) The trustee's sale was cancelled. (Id. at 2.)
The purpose of a motion to dismiss pursuant to Rule 12(b)(6)*fn4 is to test the legal sufficiency of the complaint. N. Star Int'l v. Ariz. Corp. Comm'n, 720 F.2d 578, 581 (9th Cir. 1983). "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). A plaintiff is required to allege "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). "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." Ashcroft v. Iqbal, 556 U.S. 662,___, 129 S. Ct. 1937, 1949 (2009).
In determining whether a complaint states a claim on which relief may be granted, the court accepts as true the allegations in the complaint and construes the allegations in the light most favorable to the plaintiff. Hishon v. King & Spalding, 467 U.S. 69, 73 (1984); Love v. United States, 915 F.2d 1242, 1245 (9th Cir. 1989). In general, pro se complaints are held to less stringent standards than formal pleadings drafted by lawyers. Haines v. Kerner, 404 U.S. 519, 520-21 (1972). However, the court need not assume the truth of legal conclusions cast in the form of factual allegations. United States ex rel. Chunie v. Ringrose, 788 F.2d 638, 643 n.2 (9th Cir. 1986). While Rule 8(a) does not require detailed factual allegations, "it demands more than an unadorned, the defendant-unlawfully-harmed-me accusation." Iqbal, 129 S. Ct. at 1949. A pleading is insufficient if it offers mere "labels and conclusions" or "a formulaic recitation of the elements of a cause of action." Twombly, 550 U.S. at 555; Iqbal, 129 S. Ct. at 1950 ("Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice."). Moreover, it is inappropriate to assume that the plaintiff "can prove facts which it has not alleged or that the defendants have violated the . . . laws in ways that have not been alleged." Associated Gen. Contractors of Cal., Inc. v. Cal. State Council of Carpenters, 459 U.S. 519, 526 (1983).
In ruling on the motion, the court is permitted to consider material which is properly submitted as part of the complaint, documents that are not physically attached to the complaint if their authenticity is not contested and the plaintiff's complaint necessarily relies on them, and matters of ...