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Chad Rich v. Bank of America Home Loans; Federal National Mortgage Assoc

April 3, 2012

CHAD RICH, PLAINTIFF,
v.
BANK OF AMERICA HOME LOANS; FEDERAL NATIONAL MORTGAGE ASSOC.,
DEFENDANTS.



The opinion of the court was delivered by: Howard R. Lloyd United States Magistrate Judge

** E-filed April 3, 2012 **

NOT FOR CITATION

ORDER THAT CASE BE REASSIGNED TO A DISTRICT JUDGE REPORT & RECOMMENDATIONS [Re: Docket No. 4]

Pro se plaintiff Chad Rich brought this action in Santa Clara County Superior Court against 18 defendants Bank of America Home Loans Servicing (incorrectly named "Bank of America Home 19 Loans") and the Federal National Mortgage Assocation ("Fannie Mae") (collectively, "defendants"), 20 alleging violations of the federal Truth in Lending Act, 15 U.S.C. § 1601 et seq. ("TILA"), the 21 federal Equal Credit Opportunity Act, 15 U.S.C. 1691 et seq. ("ECOA"), and common law claims 22 for fraud, unconscionability, lack of standing, and wrongful foreclosure. Dkt. No. 1, Exh. A 23 ("Complaint"). Defendants timely removed the action to this court. Dkt. No. 1 ("Notice of 24 Removal"). 25

Plaintiff's complaint contains virtually no factual allegations, but appears to seek rescission 26 of a deed of trust he executed in August of 2004 for a "consumer loan." Complaint ¶¶ 13-14. He 27 does not specify whether either of the named defendants in this action was involved in the loan 28 origination, or whether they are solely successors in interest on the deed of trust. He offers no facts to explain when the relevant transaction occurred, who was involved, and what happened 2 subsequently. The court gathers from defendants' motion to dismiss and defendant's argument at the 3 hearing that Countrywide was the original loan servicer, that plaintiff defaulted on his loan 4 payments, and a foreclosure sale ultimately occurred in November 2010, after which title reverted to 5 Defendants now move to dismiss the complaint for failure to state a claim upon which relief 7 can be granted. Dkt. No. 4. Plaintiff has not opposed the motion. Because not all parties have 8 consented to the undersigned's jurisdiction, the court ORDERS the Clerk of the Court to reassign 9 this case to a district judge. Further, the undersigned RECOMMENDS that the newly assigned 10 judge grant defendants' motion to dismiss, with leave to amend.

LEGAL STANDARD

A motion to dismiss for failure to state a claim pursuant to Fed. R. Civ. P. 12(b)(6) tests the 13 legal sufficiency of the claims in the complaint. "Dismissal can be based on the lack of a cognizable 14 legal theory or the absence of sufficient facts alleged under a cognizable legal theory." Balistreri v. 15 Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1990). In such a motion, all material allegations in 16 the complaint must be taken as true and construed in the light most favorable to the claimant. See 17 Balistreri, 901 F.2d at 699. However, "[t]hreadbare recitals of the elements of a cause of action, 18 supported by mere conclusory statements, do not suffice." Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 19 (2009). Moreover, "the court is not required to accept legal conclusions cast in the form of factual 20 allegations if those conclusions cannot reasonably be drawn from the facts alleged." Clegg v. Cult 21 Awareness Network, 18 F.3d 752, 754-55 (9th Cir. 1994). Documents which properly are the 22 subject of judicial notice may be considered along with the complaint when deciding a Fed. R. Civ. 23 F.2d 500, 504 (9th Cir. 1986). 25

26 showing that the pleader is entitled to relief," meaning that the "[f]actual allegations must be enough 27 to raise a right to relief above the speculative level." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 28 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) (citations omitted). See also Iqbal, 129 S. Ct. at 1950 Fannie Mae. P. 12(b)(6) motion for failure to state a claim for relief. See MGIC Indem. Corp. v. Weisman, 803 24 Federal Rule of Civil Procedure 8(a)(2) requires "a short and plain statement of the claim ("[O]nly a complaint that states a plausible claim for relief survives a motion to dismiss."). 2

However, a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual 3 allegations and "heightened fact pleading of specifics" is not required to survive a motion to 4 dismiss. Bell Atlantic Corp., 550 U.S. at 570. Rather, the complaint need only give "enough facts to 5 state a claim to relief that is plausible on its face." Id. But, claims for fraud must be pled "with 6 particularity." Fed. R. Civ. P. 9(b). 7

I. Defendants' Request for Judicial Notice

Defendants ask this court to take judicial notice of six documents: (1) a Deed of Trust 10 executed on August 12, 2004 and recorded with the Santa Clara County Recorder on August 18, 2004; (2) a Substitution of Trustee and Assignment of the Deed of Trust recorded with the Santa Clara County Recorder on August 13, 2010; (3) a Notice of Default and Election to Sell Under Deed 13 of Trust, recorded with the Santa Clara County Recorder on August 5, 2010; (4) a Notice of 14 Corporation Assignment of Deed of Trust/Mortgage, recorded with the Santa Clara County 16 Recorder on May 12, 2011. Dkt. No. 5. 18

19 in the pleadings, exhibits attached to the complaint, and matters properly subject to judicial notice." 20

Swartz v. KPMG, LLP, 476 F.3d 756, 763 (9th Cir. 2007). A court may take judicial notice of facts 21 that are not subject to reasonable dispute. Fed. R. Evid. 201. Such facts include matters of public 22 record. Lee v. City of Los Angeles, 250 F.3d 668, 689 (9th Cir. 2001). These six documents were 23 all recorded with the Santa Clara County Recorder and are therefore in the public record. 24

Accordingly, the court recommends that the newly assigned judge judicially notice all six 25 documents. 26

A. Plaintiff's First Claim for Violation of TILA

DISCUSSION

Trustee's Sale, recorded with the Santa Clara County Recorder on ...


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