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Candace P. Laden and Richard M. Laden v. U.S. Bank National Association As Trustee For Harborview 2005-16 Trust

February 13, 2012


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

Order DENYING Defendant's Motion to Dismiss [10]


Pending before the Court is Defendant U.S. Bank, National Association, as Trustee for Harborview 2005-16 Trust Fund's ("Defendant") January 13, 2012 Motion to Dismiss Plaintiffs Candace P. Laden and Richard M. Laden's ("Plaintiffs") pro se Complaint. (Dkt. No. 10.) Plaintiffs filed an Opposition on January 23, 2012 (Dkt. No. 12), to which Defendant filed its Reply on January 30, 2012 (Dkt. No. 17). Having carefully considered the papers filed in support of and in opposition to the instant Motions, the Court deems the matters appropriate for decision without oral argument. Fed. R. Civ. P. 78; C. D. Cal. L. R. 7-15. For the reasons discussed below, Defendant's Motion is DENIED.


On October 3, 2005, Plaintiffs obtained an adjustable-rate mortgage loan from Skyline Financial Corporation dba Skyline Funding ("Skyline") in the amount of $900,000.00. (Compl. ¶ 6 & Exh. A.) In connection with the loan, Plaintiffs executed a deed of trust ("DOT") in favor of Skyline, which encumbered Plaintiffs' property located at 4050 Hayvenhurst Avenue, Encino, California 91436 (the "Property"), as security for the loan. (Id.) The DOT identified Skyline as the lender, Equity Title as trustee, and Mortgage Electronic Registration Systems, Inc. ("MERS")-"acting solely as nominee for [Sykline and Skyline's] successors and assigns"-as the beneficiary. (Compl. ¶ 6--7 & Exh. A.)

On July 21, 2011, MERS executed an Assignment of Deed of Trust ("ADOT") assigning all beneficial interest in Plaintiffs' DOT to Defendant. (Compl. ¶ 12 & Exh. C.) On August 16, 2011, MERS executed a Substitution of Trustee substituting Recontrust Company, N.A. ("Recontrust") as trustee under Plaintiffs' DOT. (Compl. ¶ 14; Exh. D.)

As of August 16, 2011, Plaintiffs were in default in the amount of $117,599.30. (Compl. Exh. B.) As a result of Plaintiffs' default, Recontrust recorded a Notice of Default with the Los Angeles County Recorder's Office on August 18, 2011. (Id.) Subsequently, a Notice of Trustee's Sale was finalized and recorded on November 16 and November 22, 2011, respectively. (Compl. ¶ 15 & Exh. E.) The trustee's sale was scheduled to take place on December 12, 2011 (id.), although no such sale has taken place to date.

As a result of the foregoing events, Plaintiffs filed a Verified Complaint in propria persona in Los Angeles Superior Court on December 9, 2011. (Dkt. No. 1.) Plaintiffs' Complaint alleges that Defendant violated California Civil Code section 2923.5 by failing to contact Plaintiffs to assess their financial situation and explore options to avoid foreclosure; instead, Plaintiffs had to initiate such contact themselves. (Compl. ¶ 18.)

Plaintiffs also seek a declaration that the Notice of Default, Notice of Trustee's Sale, and pending foreclosure proceedings are void as a result of various infirmities in the execution of the Notice of Default and Notice of Trustee's Sale. (Compl. ¶ 24.)

On January 6, 2012, Defendant filed a Notice of Removal, removing the action to this Court on the basis of diversity-of-citizenship jurisdiction under 28 U.S.C. § 1332. (Dkt. No. 1.) Defendant now moves to dismiss the entirety of Plaintiffs' Complaint.


"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 Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). Dismissal under Rule 12(b)(6) 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). While specific facts are not necessary so long as the complaint gives the defendant fair notice of the claim and the grounds upon which the claim rests, Erickson v. Pardus, 551 U.S. 89, 93 (2007), a complaint must nevertheless "contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face." Iqbal, 129 S. Ct. at 1949 (internal quotation marks 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 citation and quotation marks omitted). The determination whether a complaint satisfies the plausibility standard is a "context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Id. at 1950.

When considering a Rule 12(b)(6) motion, a court is generally limited to considering material 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]." Lee v. City of L.A., 250 F.3d 668, 688 (9th Cir. 2001) (citing Epstein v. Wash. 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).

Finally,"[a] document filed pro se is 'to be liberally construed,' and 'a pro se complaint, however inartfully pleaded, must be held to less stringent standards than formal pleadings drafted by lawyers.'" Erickson v. Pardus, 551 U.S. 89, 94 (2007) (quoting Estelle v. Gamble, 429 U.S. 97, 106 (1976)); cf. Fed. R. ...

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