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Maria Teresa G. Macawile and Robert H. v. Pro30 Funding

July 13, 2012

MARIA TERESA G. MACAWILE AND ROBERT H. MACAWILE, PLAINTIFFS,
v.
PRO30 FUNDING, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Morrison C. England, Jr. United States District Judge

MEMORANDUM AND ORDER

Before the Court is Defendant U.S. Bank N.A., as Trustee, and Mortgage Electronic Registration Systems, Inc.'s Motion to Dismiss Plaintiffs' Complaint (ECF No. 4) ("MTD").*fn1 For the reasons that follow, Defendants' Motion to Dismiss is GRANTED with leave to amend.

BACKGROUND*fn2

In June 2006, Plaintiffs obtained, from defendant Pro30 Funding ("Pro 30"), first and second mortgages on real property located in Sacramento, California. (Compl. ¶¶ 4, 10 35.) The amount of the loan was apparently $384,000, although Plaintiffs apparently deny that Pro 30 loaned them that specific amount and contend the promissory note is a forgery. (Id. ¶¶ 69-73.) On or about January 20, 2010, Plaintiffs defaulted on their loan. (Id. ¶ 47.) At some point thereafter, a Notice of Default and Notice of Trustee's Sale were apparently recorded. (Id. ¶ 48.)

On or about December 7, 2011, Plaintiffs, at the time proceeding pro se, filed suit against various mortgage business related entities in Sacramento's Superior Court alleging:

(1) violation of the California Rosenthal Act; (2) negligence; (3) breach of fiduciary duty; (4) fraud; (5) violations of Cal. Bus. & Prof. Code § 17200; and (6) breach of the implied covenant of good faith and fair dealing.*fn3 (Id. at p. 1.)

On March 2, 2012, Defendants removed on the basis of federal question jurisdiction -- Plaintiffs' state law claims invoked various federal statutes -- and they filed the instant Motion to Dismiss on March 9.*fn4

STANDARD FOR 12(b)(6) MOTION TO DISMISS

On a motion to dismiss for failure to state a claim under Rule 12(b)(6), all allegations of material fact must be accepted as true and construed in the light most favorable to the nonmoving party. Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336, 337-38 (9th Cir. 1996). Rule 8(a)(2) requires only "a short and plain statement of the claim showing that the pleader is entitled to relief" in order to "give the defendant fair notice of what the. . . claim is and the grounds upon which it rests." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 554-55 (2007) (internal citations and quotations omitted).

Though "a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the 'grounds' of his 'entitlement to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Id. at 555 (internal citations and quotations omitted).

A plaintiff's factual allegations must be enough to raise a right to relief above the speculative level. Id. (citing 5 C. Wright & A. Miller, Federal Practice and Procedure § 1216, pp. 235-36 (3d ed. 2004) ("The pleading must contain something more. . . than . . . a statement of facts that merely creates a suspicion [of] a legally cognizable right of action")).

Moreover, "Rule 8(a)(2) . . . requires a 'showing,' rather than a blanket assertion of entitlement to relief. Without some factual allegation in the complaint, it is hard to see how a claimant could satisfy the requirements of providing not only 'fair notice' of the nature of the claim, but also 'grounds' on which the claim rests." Twombly, 550 U.S. at 555, n.3 (internal citations omitted). A pleading must contain "only enough facts to state a claim to relief that is plausible on its face." Id. at 570; see also Ashcroft v. Iqbal, 556 U.S. 662, 677-679 (2009). If the "plaintiffs . . . have not nudged their claims across the line from conceivable to plausible, their complaint must be dismissed." Twombly, 550 U.S. at 570; Iqbal, 556 U.S. at 680.

A court granting a motion to dismiss a complaint must then decide whether to grant leave to amend. Rule 15(a) empowers the court to freely grant leave to amend when there is no "undue delay, bad faith[,] dilatory motive on the part of the movant, . . . undue prejudice to the opposing party by virtue of . . . the amendment, [or] futility of the amendment. . . ." Foman v. Davis, 371 U.S. 178, 182 (1962). Leave to amend is generally denied when it is clear the deficiencies of the complaint cannot be cured by amendment.

DeSoto v. Yellow Freight Sys., Inc., 957 F.2d 655, 658 (9th Cir. 1992); Balistieri v. Pacifica Police Dept., 901 F. 2d 696, 699 (9th Cir. 1990) ("A complaint should not be dismissed under Rule 12(b)(6) unless it appears beyond doubt that the plaintiff can prove no set of facts in support of ...


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