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Title: Leonidas Alvarado v. Aurora Loan Services

September 20, 2012


The opinion of the court was delivered by: Honorable David O. Carter, Judge





Before the Court is Defendant Aurora Loan Services, LLC's Motion to Dismiss ("Motion") Plaintiff Leonidas Alvardo's Second Amended Complaint ("SAC"). (Dkt. 24.) The Court finds the matter appropriate for decision without oral argument. Fed R. Civ. P. 78; Local R. 7-15. After reviewing the motion, opposition, and reply, the Court herby GRANTS Defendant's Motion to Dismiss. All claims are dismissed with prejudice, except the second cause of action for breach of contract.


Plaintiff purchased the subject property on May 21, 2002 with a loan from Countrywide Home Loans ("CHL"). SAC ¶ 10. The Plaintiff executed two deeds of trust, the first for $365,000 and the second for $54,750. Id. In 2010, Plaintiff applied for and received a loan modification. SAC ¶ 12. Plaintiff alleges the loan modification was based on a calculation that included Plaintiff wife's income. Id. Plaintiff also alleges that at the time the first loan modification was approved, the Plaintiff and his wife were separated, thus Plaintiff's wife was not living with the Plaintiff or contributing to Plaintiff's household income. Id. Subsequently, Plaintiff defaulted on the modified loan. Id.

On November 8, 2011, the second deed of trust was assigned to the Defendant, and on November 16, 2011 the Defendant recorded a Notice of Default against the Plaintiff for the subject property. Id. at ¶ 13-14.

On July 3, 2012, this Court dismissed Plaintiff's First Amended Complaint ("FAC") regarding Defendant's initiation of the foreclosure process on the subject property. (Dkt. 20.) On July 26, 2012, Plaintiff filed the SAC regarding the foreclosure, which raised the following issues: (1) violation of California Civil Code § 2923.5; (2) breach of contract; (3) negligence; (4) negligent infliction of emotional distress; (5) violations of the California Business and Professional Code § 17200; and (6) injunctive relief. (Dkt. 23.)

Plaintiff alleges that the loan modification was based on an inaccurate income and he seeks a second loan modification, though in the Opposition to Defendant's Motion to Dismiss ("Opposition") the Plaintiff characterizes the request not as a second loan modification but as a correcting of the error that presumably occurred when his wife's salary was taken into account in the first loan modification. (Opp., 12:18-12:24.)*fn1

Plaintiff alleges that Defendant initiated foreclosure proceedings without contacting the Plaintiff or presenting alternatives. SAC ¶ 22. Finally, Plaintiff also alleges the property is set to sell at a foreclosure sale. SAC ¶ 18.

On August 9, 2012, Defendant filed the present motion to dismiss Plaintiff's SAC in its entirety. (Dkt. 24.)

II.Legal Standard

Under Federal Rule of Civil Procedure 12(b)(6), a complaint must be dismissed when a plaintiff's allegations fail to set forth a set of facts which, if true, would entitle the complainant to relief. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007); Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009) (holding that a claim must be facially plausible in order to survive a motion to dismiss). The pleadings must raise the right to relief beyond the speculative level; a plaintiff must provide "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(citing Papasan v. Allain, 478 U.S. 265, 286 (1986)). On a motion to dismiss, this court accepts as true a plaintiff's well-pled factual allegations and construes all factual inferences in the light most favorable to the plaintiff. Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008). The court is not required to accept as true legal conclusions couched as factual allegations. Iqbal, 556 U.S. at 678.

In evaluating a Rule 12(b)(6) motion, review is ordinarily limited to the contents of the complaint and material properly submitted with the complaint. Clegg v. Cult Awareness Network, 18 F.3d 752, 754 (9th Cir. 1994); Hal Roach Studios, Inc. v. Richard Feiner & Co., Inc.,896 F.2d 1542, 1555 n.19 (9th Cir. 1990). Under the incorporation by reference doctrine, the court may also consider documents "whose contents are alleged in a complaint and whose authenticity no party questions, but which are not physically attached to the pleading." Branch v. Tunnell, 14 F.3d 449, 454 (9th Cir. 1994), overruled on other grounds by 307 F.3d 1119, 1121 (9th Cir. 2002).

A motion to dismiss under Rule 12(b)(6) can not be granted based upon an affirmative defense unless that "defense raises no disputed issues of fact." Scott v. Kuhlmann, 746 F.2d 1377, 1378 (9th Cir. 1984). For example, a motion to dismiss may be granted based on an affirmative defense where the allegations in a complaint are contradicted by matters properly subject to judicial notice. Daniels-Hall v. Nat'l Educ. Ass'n, 629 F.3d 992, 998 (9th Cir. 2010). In addition, a motion to dismiss may be granted based upon an affirmative defense where the complaint's allegations, with all inferences drawn in Plaintiff's favor, nonetheless show that the affirmative defense "is apparent on the face of the complaint." See Von Saher v. Norton Simon Museum of Art at Pasadena, 592 F.3d 954, 969 (9th Cir. 2010).

Additionally, Federal Rule of Evidence 201 allows the court to take judicial notice of certain items without converting the motion to dismiss into one for summary judgment. Barron v. Reich, 13 F.3d 1370, 1377 (9th Cir. 1994). The 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; see also Lee v. City of Los Angeles, 250 F.3d 668, 689 (9th Cir. 2001) (noting that the court may take judicial notice of undisputed "matters of public record"), overruled on other grounds by 307 F.3d 1119, 1125-26 (9th Cir. ...

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