Plaintiffs Randall Scotten and Jennifer Scotten brought an action in state court against defendants First Horizon Home Loan Corporation ("First Horizon"), Nationstar Mortgage, LLC ("Nationstar"), and the Bank of New York in state court, asserting claims arising from defendants' allegedly wrongful conduct related to a residential loan. Defendants then removed the proceeding to this court on the basis of diversity jurisdiction. (Docket No. 1.) Currently before the court is defendants' motion to dismiss the Complaint in its entirety for failure to state a claim upon which relief can be granted pursuant to Federal Rule of Civil Procedure 12(b)(6). (Docket No. 8.)
I. Factual and Procedural Background In June 2005, plaintiffs entered into a thirty-year mortgage with First Horizon. (Notice of Removal Ex. 1 ("Compl.")
¶ 7 (Docket No. 1); Defs.' Req. for Judicial Notice ("RJN") Ex. 1 (Docket No. 9).) The loan agreement between the parties was secured by property located at 16033 Covered Bridge Way in Lathrop, California (the "Covered Bridge property"). (Compl. ¶ 7, RJN Ex. 1.) Plaintiffs allege that First Horizon is also the foreclosure trustee, that Nationstar is the loan's current servicer, and that the Bank of New York is "the entity with rights to receive the income stream arising from" the promissory note associated with the Covered Bridge property. (Id. ¶¶ 8-10; see also RJN Exs. 2-3.)
In January 2010, plaintiffs filed for Chapter 7 bankruptcy. (Id. ¶ 25.) According to plaintiffs, this bankruptcy was terminated with a discharge in 2010, and plaintiffs allege that they thereafter reaffirmed their mortgage by continuing to make payments under the Note. (Id.) They further allege that MetLife, the servicer at the time, accepted payments for First Horizon after the discharge. (Id.)
In August 2011, plaintiffs allege that they learned that Nationstar was the new servicer on their loan. (Id. ¶ 26; RJN Ex. 3.) According to the Complaint, by the following month plaintiffs were unable to afford their mortgage payments and so they contacted Nationstar to "explore options to reduce their monthly payments." (Id. ¶ 27.) They allegedly spoke with someone at Nationstar named James, who said that he would fax plaintiffs an application for a loan modification that they should fill out and return. (Id.) After some delay in receiving a blank application, plaintiffs allege they received an application by email that they completed and returned to Nationstar. (Id. ¶¶ 28-29.) They further allege that nine days after they returned their application, they spoke with Michael at Nationstar who informed them that Nationstar had received their application and would make a "decision on the application by the following week." (Id. ¶ 30.)
On October 20, 2011, plaintiffs allege that Nationstar employee Tiffany Taylor left a message on their home phone asking that they call her back. (Id. ¶ 31.) According to plaintiffs, they made several phone calls over the next month and a half before they were able to speak with Taylor. (Id. ¶¶ 32-34.) When they spoke, Taylor allegedly told them that Nationstar had not received their application. (Id. ¶ 34.) Plaintiffs allege that they faxed the information again that same day. (Id.)
After sending the fax, plaintiffs allege that they called Nationstar three times between December 2011 and February 2012 to check on the status of their application, but each time had to leave a voicemail message. (Id. ¶ 35.) According to plaintiffs, when they spoke with Taylor on February 7, 2012, she informed them that the Bank of New York would "not modify their mortgage until the debt is affirmed post bankruptcy." (Id. ¶ 36.) The following day, Michael allegedly informed plaintiffs that the only way that the debt could be affirmed was by order of the bankruptcy court judge. (Id. ¶ 37.) Plaintiffs allege that Michael did not have any specialized legal training or knowledge. (Id.)
Plaintiffs bring claims for breach of fiduciary duty, fraudulent concealment, quiet title, and negligence. (Docket No. 1, Ex. 1.) The first three claims are brought against all defendants; the claim for negligence is brought against only Nationstar and the Bank of New York. (Id.) Defendants now move to dismiss all four claims for failure to state a claim pursuant to Rule 12(b)(6). (Docket No. 8.) Plaintiffs only oppose the motion as to their claims for negligence and breach of fiduciary duty, and simply request leave to amend their claims for quiet title and fraudulent concealment. (Pls.' Opp'n to Defs.' Mot. to Dismiss at 9:18-21 (Docket No. 11).)
II. Request for Judicial Notice In general, a court may not consider items outside the pleadings when deciding a motion to dismiss, but it may consider items of which it can take judicial notice. Barron v. Reich, 13 F.3d 1370, 1377 (9th Cir. 1994). A court may take judicial notice of facts "not subject to reasonable dispute" because they are either "(1) generally known within the territorial jurisdiction of the trial court or (2) capable of accurate and ready determination by resort to sources whose accuracy cannot reasonably be questioned." Fed. R. Evid. 201. Judicial notice may properly be taken of matters of public record outside the pleadings. See MGIC Indem. Corp. v. Weisman, 803 F.2d 500, 504 (9th Cir. 1986).
Defendants request that the court judicially notice several recorded documents pertaining to the Covered Bridge property. (See Defs.' Request for Judicial Notice Exs. 1-4.) The court will take judicial notice of these documents, since they are matters of public record whose accuracy cannot be questioned. See Lee v. City of Los Angeles, 250 F.3d 668, 689 (9th Cir. 2001).
To survive a motion to dismiss, a plaintiff must plead
"only enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). This "plausibility standard," however, "asks for more than a sheer possibility that a defendant has acted unlawfully," Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009), and "[w]here a complaint pleads facts that are 'merely consistent with' a defendant's liability, it 'stops short of the line between possibility and plausibility of entitlement to relief.'" Id. (quoting Twombly, 550 U.S. at 557). In deciding whether a plaintiff has stated a claim, the court must accept the allegations in the complaint as true and draw all reasonable inferences in ...