On October 21, 2011, plaintiff filed a complaint against Bank of America N.A., Recontrust Company, N.A. (Recontrust), Countrywide Home Loans Servicing, L.P., Mortgage Electronic Registration Systems, Inc. (MERS), and The Bank of New York Mellon, as well as twenty Doe defendants,*fn1 alleging eight claims: (1) violations of California Civil Code § 2923.5; (2) wrongful foreclosure; (3) no contract exists; (4) quiet title; (5) violations of the Truth in Lending Act (TILA), 15 U.S.C. §§ 1601 et seq. and Regulation Z, 12 C.F.R. §§ 226.1 et seq.; (6) violations of the Real Estate Settlement Procedures Act (RESPA), 12 U.S.C. §§ 2601 et seq.; (7) fraud; and (8) declaratory and injunctive relief. (ECF No. 2.) All the claims arise from the acquisition of and attempt to foreclose on 5770 Fruitvale Road, Newcastle, California.
On December 6, 2011, all named defendants jointly filed a motion to dismiss and to expunge a lis pendens, together with a request for judicial notice of two documents and a motion to strike a portion of plaintiff's complaint. (ECF Nos. 15-17.) On February 10, 2012, plaintiff filed an opposition to defendants' motions to dismiss and strike. (ECF No. 19.) Defendants filed a reply to plaintiff's opposition on February 17, 2012. (ECF No. 20.) This court submitted the motions on the pleadings.
II. Request for Judicial Notice
Defendants ask the court to take judicial notice of the Deed of Trust (DOT) and Notice of Default related to the property at issue. (Req. for J. Notice (RJN).) Both documents were officially recorded in Placer County, and each was attached to plaintiff's complaint. (Compl. Exs. C, J.) However, defendants' proffered copy of the DOT contains an Adjustable Rate Rider not presented with plaintiff's complaint. (RJN Ex. A at 18-21.)
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As provided by Rule 201 of the Federal Rules of Evidence, a court may take judicial notice of facts "not subject to reasonable dispute" because they are "capable of accurate and ready determination by resort to sources whose accuracy cannot reasonably be questioned." Plaintiff now objects to the judicial notice defendants request on the ground that the accuracy of the documents' contents is reasonably questionable. (Opp'n at 3-4.) A court may generally take judicial notice of the existence of matters of public record, but must base judicial notice of the contents of those documents on their inability to be reasonably questioned. See Lee v. County of Los Angeles, 250 F.3d 668, 688 (9th Cir. 2001). A court may also notice documents referred to by the complaint if they are authentic and central to the plaintiff's claim. See Branch v. Tunnell, 14 F.3d 449, 454 (9th Cir. 1994).
Plaintiff does not allege that either document is inauthentic or that any signature on either document has been forged. In plaintiff's complaint, he avers that the DOT and the Notice of Default were filed on the dates stated by defendants. (Compl. ¶¶ 21, 27, Exs. C, J.) Plaintiff also avers that he signed the DOT. (Id. ¶ 149.) Both documents are central to plaintiff's claims. They are properly before the court. Champlaie v. BAC Home Loans Servicing, LP, 706 F. Supp. 2d 1029, 1040 (E.D. Cal. 2009). The court also takes notice of the Adjustable Rate Rider, as it is a matter of public record.
1. Standards for a Motion to Dismiss
Under Rule 12(b)(6) of the Federal Rules of Civil Procedure, a party may move to dismiss a complaint for "failure to state a claim upon which relief can be granted." A court may dismiss "based on the lack of cognizable legal theory or the absence of sufficient facts alleged under a cognizable legal theory." Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1990). A motion to dismiss under this rule may also challenge the sufficiency of fraud allegations under the more particularized standard of Rule 9(b) of the Federal Rules of Civil Procedure. Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1107 (9th Cir. 2003).
Although a complaint need contain only "a short and plain statement of the claim showing that the pleader is entitled to relief," (Fed. R. Civ. P. 8(a)(2)), in order to survive a motion to dismiss this short and plain statement "must contain sufficient factual matter . . . to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A complaint must include something more than "an unadorned, the-defendant-unlawfully-harmed-me accusation" or "'labels and conclusions'" or "'a formulaic recitation of the elements of a cause of action.'" Iqbal, 129 S.Ct. at 1949 (quoting Twombly, 550 U.S. at 555). Determining whether a complaint will survive a motion to dismiss for failure to state a claim is a "context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Iqbal, 129 S. Ct. at 1950. Ultimately, the inquiry focuses on the interplay between the factual allegations of the complaint and the dispositive issues of law in the action. See Hishon v. King & Spalding, 467 U.S. 69, 73 (1984).
In making this context-specific evaluation, this court must construe the complaint in the light most favorable to the plaintiff and accept as true the factual allegations of the complaint. Erickson v. Pardus, 551 U.S. 89, 93-94 (2007). This rule does not apply to "'a legal conclusion couched as a factual allegation,'" Papasan v. Allain, 478 U.S. 265, 286 (1986) (quoted in Twombly, 550 U.S. at 555), nor to "allegations that contradict matters properly subject to judicial notice" or to material attached to or incorporated by reference into the complaint. Sprewell v. Golden State Warriors, 266 F.3d 979, 988-89 (9th Cir. 2001). A court's consideration of documents attached to a complaint or incorporated by reference or matter subject to judicial notice will not convert a motion to dismiss into a motion for summary judgment. United States v. Ritchie, 342 F.3d 903, 907 (9th Cir. 2003); Parks Sch. of Bus. v. Symington, 51 F.3d 1480, 1484 (9th Cir. 1995); Van Buskirk v. CNN, 284 F.3d 977, 980 (9th Cir. 2002) (noting that even though court may look beyond pleadings on motion to dismiss, generally court is limited to face of the complaint on 12(b)(6) motion).
2. Threshold Requirement of Tender (All Claims)
Defendants first seek to dismiss all of plaintiff's claims because plaintiff has not made a credible offer of tender of his entire debt. (Mot. at 2-4.) Defendants argue that California state law requires that a claimant allege he has tendered the full amount of his debt to bring any action related to a foreclosure sale. See Abdallah v. United Savs. Bank, 43 Cal. App. 4th 1101, 1109 (1996); Arnolds Mgmt. Corp. v. Eischen, 158 Cal. App. 3d 575, 579 (1984) (applying the tender requirement to claims of fraud and wrongful foreclosure because they are "implicitly integrated" with a foreclosure sale).
The court acknowledges, but declines to participate in, the debate over whether a party must tender the full amount of the indebtedness when challenging a foreclosure that has not yet occurred. Compare Chan Tang v. Bank of Am., N.A., No. 11-2048, 2012 WL 960373, at *4 (C.D. Cal. Mar. 19, 2012) (declining to require tender when the plaintiff challenges a pending sale) with Yazdanpanah v. Sacramento Valley Mortg. Group, C 09--2024 SBA, 2009 WL 4573381, at *7 (N.D.Cal. Dec. 1, 2009) (dismissing claim for wrongful foreclosure on grounds that "debtor must allege a credible tender of the amount of the secure debt" regardless of pending or past status of foreclosure). As explained below, plaintiff's complaint is not sufficiently pleaded as to any cause of action that might require a tender.
However, California courts have expressly held that claims seeking postponement of sale under California Civil Code § 2923.5 do not require an allegation of tender because § 2923.5 specifically confers a right to be contacted in order to explore alternatives to foreclosure before a notice of default. Mabry v. Superior Court, 185 Cal. App. 4th 208, 225 (2010). Plaintiff's § 2923.5 claim survives this argument for dismissal.
Defendants argue that the tender requirement applies to plaintiff's federal claims as well as state claims. (Mot. at 3, 12.) A plaintiff must make an offer of complete tender in order to state a TILA claim for rescission. See Yamamoto v Bank of New York, 329 F.3d 1167, 1170-71 (9th Cir. 2003); Von Brincken v. Mortgageclose.com, Inc., No. 10-2153, 2011 WL 2621010, at *3 (E.D. Cal. June 30, 2011). However, defendant cites no authority that requires an offer of tender in order to state a RESPA claim or a TILA damages claim. Plaintiff's RESPA and TILA claims survive this argument for dismissal, though there are additional problems with the claims as pled, noted below.
3. California Civil Code § 2923.5 (Claim 1)
Plaintiff alleges that defendants did not try to contact him prior to filing a Notice of Default as required by California Civil Code § 2923.5. (Compl. ¶¶ 58-68.) Defendants argue they met their statutory duty by providing a declaration that they tried with due diligence to contact plaintiff. (Mot. at 4-5.)
Plaintiff has admitted to receiving a copy of the declaration required by § 2923.5(b). (Compl. ¶ 28, Ex. K.) However, that declaration is not sufficient for full compliance with § 2923.5; actual attempts to contact the borrower as required by § 2923.5(a)(2) or § 2923.5(g) must be made to satisfy the statute. Mabry, 185 Cal. App. 4th at 232 ("In addition to the substantive act of contacting the borrower, section 2923.5 requires a statement in the notice of default."). In Mabry, the appellate court noted that the parties disagreed about whether or not actual contact was made and therefore remanded the case to the trial court for an evidentiary hearing. Id. at 235-36. Similarly, plaintiff here ...