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Roy E. Cunningham; et al v. Rbc Mortgage Co.; et al

March 27, 2012



This matter comes before the court on defendant JPMorgan Chase Bank, N.A.'s motion to dismiss. (ECF 7.) This matter was decided without a hearing. For the following reasons, defendant's motion is granted.


On December 17, 2003, plaintiffs entered into a deed of trust, which established them as borrowers, RBC Mortgage Company ("RBC") as lender, Placer Title Company ("Placer") as trustee, and Mortgage Electronic Registration Systems, Inc. ("MERS") as nominee for lender. (Def.'s Req. for Judicial Notice, Ex. A, ECF 8-1.)*fn1 The deed of trust states "[t]he beneficiary of this Security Instrument is MERS . . . and the successors and assigns of MERS." (Id. at 2.) It further states, "Borrower understands and agrees that MERS holds only legal title to the interests granted by Borrower in this Security Instrument, but, if necessary to comply with law or customs, MERS . . . has the right: to exercise any and all of those interests, including, but not limited to, the right to foreclose and sell the Property . . . ." (Id. at 3.) On May 18, 2011, an assignment of deed of trust was recorded, whereby MERS assigned all beneficial interest under the deed of trust to defendant. (Def.'s Req. for Judicial Notice, Ex. B, ECF 8-1.) Also on May 18, 2011, defendant recorded a substitution of trustee, whereby it substituted California Reconveyance Company ("CRC") as trustee in its place. (Def.'s Req. for Judicial Notice, Ex. C, ECF 8-1.) The same day, CRC recorded a notice of default. (Def.'s Req. for Judicial Notice, Ex. D, ECF 8-1.)

Plaintiffs filed their complaint on May 25, 2011, pleading four claims for relief:

1) declaratory judgment against defendants; 2) negligent misrepresentation against JP Morgan Chase, erroneously sued as Chase Home Finance LLC; 3) quiet title against defendants; and 4) breach of covenant of good faith and fair dealing against defendants.

Defendant filed the present motion to dismiss on July 21, 2011. (ECF 7.) Plaintiffs filed their opposition*fn2 on September 2, 2011. (ECF 11.) Defendant filed its reply on September 9, 2011. (ECF 12.)


A. Standard

Under Rule 12(b)(6) of the Federal Rules of Civil Procedure, a party may move to dismiss a complaint for "failure to state a claim upon which relief can be granted." A court may dismiss "based on the lack of 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).

Although a complaint need contain only "a short and plain statement of the claim showing that the pleader is entitled to relief," FED. R. CIV. P. 8(a)(2), in order to survive a motion to dismiss this short and plain statement "must contain sufficient factual matter . . . to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 1949 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A complaint must include something more than "an unadorned, the-defendant-unlawfully-harmed-me accusation" or "'labels and conclusions' or 'a formulaic recitation of the elements of a cause of action.'" Id. (quoting Twombly, 550 U.S. at 555). Determining whether a complaint will survive a motion to dismiss for failure to state a claim is a "context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Id. at 1950. Ultimately, the inquiry focuses on the interplay between the factual allegations of the complaint and the dispositive issues of law in the action. See Hishon v. King & Spalding, 467 U.S. 69, 73 (1984).

In making this context-specific evaluation, this court must construe the complaint in the light most favorable to the plaintiff and accept as true the factual allegations of the complaint. Erickson v. Pardus, 551 U.S. 89, 93-94 (2007). This rule does not apply to "'a legal conclusion couched as a factual allegation,'" Papasan v. Allain, 478 U.S. 265, 286 (1986) (quoted in Twombly, 550 U.S. at 555), nor to "allegations that contradict matters properly subject to judicial notice" or to material attached to or incorporated by reference into the complaint. Sprewell v. Golden State Warriors, 266 F.3d 979, 988-89 (9th Cir. 2001). A court's consideration of documents attached to a complaint or incorporated by reference or matter of judicial notice will not convert a motion to dismiss into a motion for summary judgment. United States v. Ritchie, 342 F.3d 903, 907 (9th Cir. 2003); Parks Sch. of Bus. v. Symington, 51 F.3d 1480, 1484 (9th Cir. 1995); compare Van Buskirk v. CNN, 284 F.3d 977, 980 (9th Cir. 2002) (noting that even though court may look beyond pleadings on motion to dismiss, generally court is limited to face of the complaint on 12(b)(6) motion).

B. Application

1. Negligent Misrepresentation

Defendant contends plaintiffs' claim for negligent misrepresentation fails to satisfy the requirements of Federal Rule of Civil Procedure 9(b), as plaintiffs have not pled the contents of the alleged representations, the speaker and his or her authority to speak, when the alleged representations were made, or in what manner the alleged representations were false or misleading. (Mot. at 12-13.) Defendant also contends plaintiffs' claim for negligent misrepresentation fails because plaintiffs have failed to establish that defendant owes plaintiffs any duty and plaintiffs have not alleged they suffered an injury. (Id. at 13-15.) Defendant contends that ...

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