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Jose Luis and Griselda De La Cruz v. Citi Mortgage Inc. Et. Al

February 14, 2012


The opinion of the court was delivered by: Barbara A. McAuliffe United States Magistrate Judge





By application filed January 30, 2012, Plaintiffs have requested leave to proceed in forma pauperis pursuant to 28 U.S.C. § 1915. (Docs. 2, 3). Plaintiffs have submitted a declaration that makes the showing required by § 1915 (a). Accordingly, the request to proceed in forma pauperis IS GRANTED. 28 U.S.C. § 1915 (a).



A. Introduction

Plaintiffs Jose De La Cruz and Griselda De La Cruz ("Plaintiffs"), proceeding pro se and in forma pauperis, filed this action on January 30, 2012. (Doc. 1). Plaintiffs challenge the validity of foreclosure on certain residential real property and names CitiMortgage, Inc. and Does 1 through 50 as defendants. (Doc. 1).

B. Discussion

1. Screening Standard

Pursuant to 28 U.S.C. §1915(e)(2), the Court has reviewed the complaint for sufficiency to state a claim. The Court must dismiss a complaint or portion thereof if it determines that the action is legally "frivolous or malicious," fails to state a claim upon which relief may be granted, or seeks monetary relief from a defendant who is immune from such relief. 28 U.S.C. § 1915(e)(2). In reviewing a complaint under this standard, the Court must accept as true the allegations of the complaint in question (Hospital Bldg. Co. v. Trustees of Rex Hospital, 425 U.S. 738, 740 (1976)), construe the pro se pleadings liberally in the light most favorable to the Plaintiff (Resnick v. Hayes, 213 F.3d 443, 447 (9th Cir. 2000)), and resolve all doubts in the Plaintiff's favor (Jenkins v. McKeithen, 395 U.S. 411, 421 (1969)).

A complaint must contain "a short and plain statement of the claim showing that the pleader is entitled to relief . . .." FED. R. CIV. P. 8(a)(2). Detailed factual allegations are not required, but "[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009) (citing Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 1964-65 (2007)). Plaintiff must set forth "sufficient factual matter, accepted as true, to 'state a claim that is plausible on its face.'" Iqbal, 129 S.Ct. at 1949 (quoting Twombly, 550 U.S. at 555). While factual allegations are accepted as true, legal conclusion are not. Id. at 1949.

A pleading may not simply allege a wrong has been committed and demand relief. The underlying requirement is that a pleading give "fair notice" of the claim being asserted and the "grounds upon which it rests." Conley v. Gibson, 355 U.S. 41, 47-48 (1957); Yamaguchi v. United States Department of Air Force, 109 F.3d 1475, 1481 (9th Cir. 1997).

If the Court determines that the complaint fails to state a claim, leave to amend should be granted to the extent that the deficiencies of the complaint can be cured by amendment. Lopez v. Smith, 203 F.3d 1122, 1130 (9th Cir. 2000). Dismissal of a pro se complaint for failure to state a claim is proper only where it is obvious that the Plaintiff cannot prevail on the facts that he has alleged and that an opportunity to amend would be futile. Lopez, at 1128.

2. Plaintiffs' Allegations

Plaintiffs challenge the non-judicial foreclosure of residential property located in Riverbank, California. Complaint ¶ 1. According to the complaint, Defendant CitiMortgage, Inc., violated state and federal laws, which were enacted to protect homeowners from abusive and deceptive loan practices. Complaint ¶ 19. As Defendant has violated those laws, they cannot legally enforce a non-judicial foreclosure. Complaint ¶ 19.

On September 12, 2005, Plaintiffs purchased the residential property in Riverbank, California. Plaintiffs contend that Defendants placed them in a sub-prime loan and charged excessive fees that eventually stripped the equity from the residential property. Complaint ¶¶ 26-27. Plaintiff also alleges that the process approving the loan was flawed because it did not take into consideration the likelihood that Plaintiffs inflated their income on the loan application. Complaint ¶ 23.

Due to a financial hardship, Plaintiffs applied for a loan modification through the "Making Home Affordable Program." Defendant denied the application. Complaint ¶ 28. Plaintiffs claim they were unaware that they would not be able to refinance their loan due to negative amortization. Complaint ¶ 32. Plaintiffs further claim that Defendants falsely represented that negotiations would take place to modify the terms of the subject loan so that Plaintiff would continue to make payments on the loan. Complaint ¶ 66. Therefore, Plaintiffs continued to make payments on the loan, but without making any attempts to modify the loan terms, Defendants issued a Notice of Trustee Sale and foreclosed on the residential property. Complaint ¶ 67.

Plaintiffs assert fourteen separate causes of action: (1) violation of California Civil Code § 2923.6; (2) promissory estoppel; (3) fraud; (4) to set aside the trustee's sale; (5) to void or cancel the trustee's deed upon sale; (6) wrongful foreclosure; (7) breach of contract; (8) breach of the implied covenant of good faith and fair dealing; (9) violation of California Business and Professions Code §§ 17200 et seq.; (10) quiet title; (11) slander of title; (12) declaratory relief; (13) violation of the Fair Debt Collections Practice Act, California Civil Code § 1788.17; and (14) violation of California Civil Code § 1572.

C. Analysis

1. California Civil Code ...

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