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David Cho, An Individual v. Citibank

July 30, 2012

DAVID CHO, AN INDIVIDUAL,
PLAINTIFF,
v.
CITIBANK, N.A., A NATIONAL ASSOCIATION, AMERICAS SERVICE COMPANY, A LOAN SERVICING CORPORATION, MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., A DELAWARE CORPORATION, DEFENDANTS.



The opinion of the court was delivered by: M. James Lorenz United States District Court Judge

ORDER GRANTING MOTION TO DISMISS FIRST AMENDED COMPLAINT WITHOUT LEAVE TO AMEND [DOC. # 3]

This action arises from Plaintiff David Cho's allegation that the deed of trust for a residential home mortgage involving Defendants Citibank, Americas Service Company ("ASC"), and Mortgage Electronic Registration Systems ("MERS") (collectively "Defendants") was defective and therefore could not provide as the basis for foreclosure. Defendants now moves to dismiss the First Amended Complaint ("FAC"), which asserts five causes of action: 1) Declaratory Judgment Re: Trust Deed; 2) Slander of Title; 3) Lack of Standing and Request to Set Aside Trustee's Sale; 4) Wrongful Eviction; and 5) Injunction. Plaintiff opposes.

The Court found this motion suitable for determination on the papers submitted and without oral argument. See Civ. L.R. 7.1(d.1). (Doc. 5.) For the following reasons, the Court GRANTS WITHOUT LEAVE TO AMEND Defendant's motion to dismiss the FAC.

BACKGROUND

Shannon Cho owned real property located at 9629 Misty Meadow Lane, Escondido, California ("Property"). (FAC ¶ 8.) On January 19, 2007, she executed a promissory note secured by a deed of trust ("DOT") on the property. (Id. at ¶ 10-11.) Homewide Lending, Corp. was the lender of the loan, First American Title Company was the trustee under the deed of trust, and MERS was designated as the beneficiary under the deed of trust, acting solely as the nominee for Lender and Lender's successors and assigns. (Id. at ¶ 11, Ex. C.)

On or around January 27, 2010, Cho defaulted under the terms of the note and was served with a Notice of Default and Election to Sell ("NOD") by NDex West, LLC, acting as an agent for defendant ASC. (FAC ¶ 12, Ex. D.) Around January 2010, Cho alleges that she initiated her loan modification. (FAC ¶ 13.) Plaintiff David Cho ("Plaintiff"), Shannon Cho's brother, alleges that Defendant ASC failed to inform her that it was the mortgagee under the 2007 DOT and that Cho had believed her loan payments were being made to the lender Homewide. (FAC ¶ 12-13.)

Defendant MERS recorded an Assignment of Deed of Trust on February 16, 2010, where it purportedly assigned the 2007 DOT to Defendant Citibank. (FAC ¶ 14, Ex. E.) On March 3, 2010, a Substitution of Trustee was recorded by NDex West, as agent for defendant Citibank, where the trustee under the 2007 DOT, First American Title Company, was substituted out in place of NDex West. (FAC ¶ 15, Ex. F.) On April 28, 2010, a Notice of Trustee's Sale was recorded by defendant Citibank against the Property with the trustee's sale to take place on May 20, 2010. (FAC ¶ 15, Ex. G.) The Property was sold to defendant Citibank on December 2, 2010 at the trustee's sale. (FAC ¶ 17, Ex. I.)

On or around May 12, 2011, Plaintiff, through a power of attorney, filed a complaint in the Superior Court of the State of California, County of San Diego. (Def.'s Motion 1:12-14.) Defendant filed a demurrer to the Original Complaint pursuant to California Code of Civil Procedure § 430.10(e). (Def.'s Motion 1:21-22.) On May 15, 2012, Plaintiff served Defendant his First Amended Complaint. (Id. at 1:23.) In his FAC, Plaintiff asserts five causes of action:

1) Declaratory Judgment Re: Trust Deed; 2) Slander of Title; 3) Lack of Standing and Request to Set Aside Trustee's Sale; 4) Wrongful Eviction; and 5) Injunction.

On June 11, 2012, Defendants removed this action to the United States District Court of the Southern District of California in San Diego, California under 38 U.S.C. § 1446(b)(3). (Doc. 1.) Defendants now moves to dismiss the FAC based on Federal Rule of Civil Procedure 12(b)(6). (Doc. 3.)

LEGAL STANDARD

The court must dismiss a cause of action for failure to state a claim upon which relief can be granted. Fed. R. Civ. P. 12(b)(6). A motion to dismiss under Rule 12(b)(6) tests the legal sufficiency of the complaint. Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). The court must accept all allegations of material fact as true and construe them in light most favorable to the nonmoving party. Cedars-Sanai Med. Ctr. v. Nat'l League of Postmasters of U.S., 497 F.3d 972, 975 (9th Cir. 2007). Material allegations, even if doubtful in fact, are assumed to be true. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). However, the court need not "necessarily assume the truth of legal conclusions merely because they are cast in the form of factual allegations." Warren v. Fox Family Worldwide, Inc., 328 F.3d 1136, 1139 (9th Cir. 2003) (internal quotation marks omitted). In fact, the court does not need to accept any legal conclusions as true. See Ashcroft v. Iqbal, 556 U.S. 662, 667 (2009).

"While 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." Twombly, 550 U.S. at 555 (internal citations omitted). Instead, the allegations in the complaint "must be enough to raise a right to relief above the speculative level." Id. "To survive a motion to dismiss, a complaint must 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 (citing Twombly, 550 U.S. at 570). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. "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."

A complaint may be dismissed as a matter of law either for lack of a cognizable legal theory or for insufficient facts under a cognizable theory. Robertson v. Dean Witter ...


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