ORDER AND FINDINGS AND RECOMMENDATIONS
This case, in which plaintiff is proceeding pro se, is before the undersigned pursuant to Eastern District of California Local Rule 302(c)(21). See 28 U.S.C. § 636(b)(1). Defendants Bank of America, N.A., U.S. Bank National Association, Mortgage Electronic Registration Systems, Inc. ("MERS"), and ReconTrust Company, N.A. move to dismiss plaintiff's first amended complaint. Dckt. No. 31. For the reasons stated herein, the motion to dismiss must be granted with leave to amend.
On May 12, 2012, plaintiff, who is proceeding pro se, filed an amended complaint alleging various state and federal claims related to property located at 3198 Log Cabin Court, Placerville, CA 95667 (the "subject property"). First Am. Compl. ("FAC"), Dckt. No. 26. Plaintiff's first amended complaint alleges eight claims for relief: (1) violation of the civil RICO statute, 18 U.S.C. §§ 1961(5), 1962(b)-(d); (2) violation of the Truth in Lending Act ("TILA"), 15 U.S.C. §§ 1601 et seq.; (3) violation of California Business and Professions Code section 17200 et seq.; (4) violation of the Real Estate Settlement and Procedures Act ("RESPA"), 12 U.S.C. § 2605; (5) constructive fraud; (6) fraudulent inducement; (7) violation of California Civil Code section 2932.5; and (8) unconscionability. Id.
Plaintiff alleges that defendants "have conspired . . . to file and record fraudulent documents resulting in the unlawful foreclosure action against" the subject property; specifically, "[d]efendants filed a fraudulent and defective Notice of Default on December 12, 2010." Id. at 1,¶¶ 1-2.*fn1 According to plaintiff, she refinanced her loan for the subject property with Countrywide Home Loans, Inc. ("Countrywide") as the lender, with defendant ReconTrust as the Trustee listed on the Deed of Trust, and with MERS listed as the beneficiary. Id. at 11, ¶ 45; id. at 4, ¶ 6; id. at 4, ¶ 4. Plaintiff alleges that defendant, Bank of America N.A. is the successor in interest to Countrywide and "recorded fraudulent robo-signed documents in the El Dorado County Recorder's office and used fraudulent documents to affect an unlawful foreclosure sale." Id. at 3, ¶ 2. According to plaintiff, defendant U.S. Bank National Association . . . is also listed as Trustee," and defendant Charmaine Dudevoir-Bottini ("Bottini") "was a Loan Officer [for Countrywide] who sold Plaintiff the mortgage at issue." Id. at 3, ¶ 3; id. at 4, ¶ 7.
Plaintiff alleges that "no interest in Plaintiff's Mortgage Notes, Deeds of Trust or Property was ever legally transferred to any of the parties in the chain and that the Defendants are in effect straw men, and parties without any standing before this Court to assert legal rights with respect to this contractual transaction." Id. at 8, ¶ 28. According to plaintiff, "none of the named Defendants are a 'person entitled to enforce' the security interest under the Notes and the Deeds of Trust, as defined in California Commercial Code § 3301." Id. at 12, ¶ 51. "No legal transfer of the Mortgage Note, Deed of Trust or any other interest in Plaintiff's Property was ever effected that gave any of the Defendants the right to be named a trustee, mortgagee, beneficiary or an authorized agent of trustee, mortgagee, or beneficiary of Plaintiff's Mortgage Note, Deed of Trust or any other interest in Plaintiff's Property." Id. at 13, ¶ 53. According to plaintiff, the named defendants "engaged in a civil conspiracy by their secreted nature of the misleading deeds alleged herein, the roles and identities of the various entities that purportedly were processing the Loan at any given time, and the transfers of the Loan documents and negotiable instruments that are the subject of this action." Id. at 14, ¶ 60.
Plaintiff also alleges that during the September 2005 refinance process, defendant Bottini, who represented that she was a loan agent for Countrywide and who "directed Plaintiff's re-financing of the Property," made numerous false and/or misleading representations to plaintiff in order to induce plaintiff to accept the loan. Id. at 9-11, ¶¶ 36-45. Specifically, "Bottini advised Plaintiff that she could refinance to eliminate the mortgage insurance premium and offered Plaintiff a Home Equity Line of Credit ("HELOC") through an adjustable rate mortgage" when she "knew or should have known that this adjustable rate loan would lead to foreclosure because Plaintiff would not have qualified for the payments when the adjusted rate matures." Id. at 10, ¶ 37. Bottini also advised plaintiff "that she could get a fixed loan . . . at a fixed rate loan interest for 30 years like the previous loan," but plaintiff was given an adjustable loan. Id. at 10, ¶ 38. "Bottini further advised Plaintiff that if the loan ever became unaffordable, she could simply refinance it into affordable loan," when Bottini "knew or should have known this information was false and misleading." Id. at 10,¶ 40. Plaintiff further alleges that "[t]he facts surrounding this loan transaction were purposefully hidden to prevent Plaintiff from discovering the true nature of the transaction and the documents involved therein." Id. at 10-11, ¶ 41.
According to plaintiff, she "was not given a copy of any of the loan documents prior to closing as required." Id. at 11, ¶ 42. Instead, "[a]t closing, Plaintiff was only given time enough to sign the documents. The notary did not explain the loan documents nor was Plaintiff allowed to review or make any marks other than signature or initials on the documents. Plaintiff was simply told to sign, initial and date the documents provided by the notary." Id. Plaintiff further contends that she "did not receive the required notice of cancellation properly prepared for the first mortgage even though the notice of cancellation was listed in Countrywide Home Loans package contents." Id. at 11, ¶ 44. Plaintiff alleges that when the loan was completed, she "did not receive the required properly prepared documents and disclosures, including, but not limited to the TILA disclosure, and the required number of copies of the Notice of Right to Cancel stating the date that the rescission period expires." Id. at 13, ¶ 55. She also alleges that Countrywide also failed to disclose the amount "financed" and the "finance charge" in connection with the loan. Id. at 13-14, ¶¶ 57-58.
Plaintiff further alleges that after the refinance, Countrywide "began demanding mortgage payments" but "did not give Plaintiff notice that it acquired servicing rights, as required under 12 U.S.C. 2605c." Id. at 12, ¶ 47. Plaintiff contends that her "Complaint filed on November 3, 2011 contained at ¶ 49 [what was intended] to be a Qualified Written Request under RESPA ("QWR") because plaintiff had knowledge as to the alleged note holder, Harbor View Trust 2005-16 from the Notice of Default, recorded in the El Dorado County Record on December 12, 2010." Id. at 12, ¶ 49. Plaintiff alleges that she "has not received the response to the QWR although the request was made over 60 days [ago]." Id. at 12, ¶ 50.
Plaintiff contends that "[t]he misrepresentations and all allegations stated [in the complaint] were discovered within on or around December 20, 2010. She contends that the statute of limitations has not expired because the loan has not been consummated and therefore Plaintiff is not contractually obligated." Id. at 14, ¶ 62.
Defendants Bank of America, N.A., U.S. Bank National Association, Mortgage Electronic Registration Systems, Inc. ("MERS"), and ReconTrust Company, N.A. now move to dismiss plaintiff's first amended complaint pursuant to Federal Rule of Civil Procedure 12(b)(6).*fn2 Dckt. No. 31. Plaintiff opposes the motion. Dckt. Nos. 33, 35.
A. Rule 12(b)(6) Standards
To survive dismissal for failure to state a claim pursuant to Rule 12(b)(6), a complaint must contain more than a "formulaic recitation of the elements of a cause of action"; it must contain factual allegations sufficient to "raise a right to relief above the speculative level." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). "The pleading must contain something more . . . than . . . a statement of facts that merely creates a suspicion [of] a legally cognizable right of action." Id. (quoting 5 C. Wright & A. Miller, Federal Practice and Procedure § 1216, pp. 235-236 (3d ed. 2004)). "[A] complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Aschroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009) (quoting Twombly, 550 U.S. at 570). "A claim has facial plausibility when plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. Dismissal is appropriate based either on the lack of cognizable legal theories or the lack of pleading sufficient facts to support cognizable legal theories. Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1990).
In considering a motion to dismiss, the court must accept as true the allegations of the complaint in question, Hospital Bldg. Co. v. Rex Hosp. Trs., 425 U.S. 738, 740 (1976), construe the pleading in the light most favorable to the party opposing the motion, and resolve all doubts in the pleader's favor. Jenkins v. McKeithem, 395 U.S. 411, 421, reh'g denied, 396 U.S. 869 (1969). The court will "presume that general allegations embrace those specific facts that are necessary to support the claim.'" Nat'l Org. for Women, Inc. v. Scheidler, 510 U.S. 249, 256 (1994) (quoting Lujan v. Defenders of Wildlife, 504 U.S. 555, 561 (1992)).
Pro se pleadings are held to a less stringent standard than those drafted by lawyers. Haines v. Kerner, 404 U.S. 519, 520 (1972); Bretz v. Kelman, 773 F.2d 1026, 1027 n.1 (9th Cir. 1985). However, the courts liberal interpretation of a pro se litigant's pleading may not supply essential elements of a claim that are not plead. Pena v. Gardner, 976 F.2d 469, 471 (9th Cir. 1992); Ivey v. Bd. of Regents of Univ. of Alaska, 673 F.2d 266, 268 (9th Cir. 1982). Furthermore, "[t]he court is not required to accept legal conclusions cast in the form of factual allegations if those conclusions cannot reasonably be drawn from the facts alleged." Clegg v. Cult Awareness Network, 18 F.3d 752, 754-55 (9th Cir. 1994). Neither need the court accept unreasonable inferences, or unwarranted deductions of fact. W. Mining Council v. Watt, 643 F.2d 618, 624 (9th Cir. 1981).
In deciding a Rule 12(b)(6) motion to dismiss, the court may consider facts established by exhibits attached to the complaint. Durning v. First Boston Corp., 815 F.2d 1265, 1267 (9th Cir. 1987). The court may also consider facts which may be judicially noticed, Mullis v. U.S. Bankr. Ct., 828 F.2d at 1338, and matters of public record, including pleadings, orders, and other papers filed with the court. Mack v. South Bay Beer Distribs., 798 F.2d 1279, 1282 (9th Cir. 1986).
Plaintiff alleges that defendants violated 18 U.S.C. §§ 1961(5), 1962(b), 1962(c), and 1962(d). FAC at 15-19. Specifically, plaintiff alleges that "all Defendants did acquire and/or maintain, directly or indirectly, an interest in or control of a RICO enterprise of individuals who were associated in fact and who did engage in, and whose activities did affect, interstate and foreign commerce . . . ." Id. at 15, ¶ 2; id. at 17, ¶ 11; id. at 18, ¶ 17. Plaintiff further alleges that "all Defendants did conduct and/or participate, either directly or indirectly, in the conduct of the affairs of said RICO enterprise through a pattern of racketeering activity . . . ." Id. at 17, ¶ 12; id. at 18, ¶ 18. "Plaintiff further alleges that all Defendants did commit two (2) or more of the offenses itemized above in a manner which they calculated and premeditated intentionally to threaten continuity, i.e. a continuing threat of their respective racketeering activities . . . ." Id. at 16, ¶ 6; id. at 17, ¶¶ 13-14; id. at 18, ¶¶ 19-20. According to plaintiff, "[e]vidence that Defendant Countrywide committed the predicate acts was established by the United States Department of Justice (DOJ) investigation into Countrywide's practice of discrimination in loan origination for primarily of African Americans and Hispanics predominately in California and Illinois. Plaintiff is African American and the loans were originated in California." Id. at 15, ¶
4. Plaintiff alleges that she "has been harmed" by the violations. Id. at 19, ¶ 23.
Defendants move to dismiss plaintiff's RICO claims, arguing that the claim fails because plaintiff fails to sufficiently allege the existence of a RICO enterprise and fails to allege a pattern of racketeering activity. Dckt. No. 31 at 12-13.*fn3
To state a civil RICO claim, a plaintiff must allege: (1) conduct, (2) of an enterprise, (3) through a pattern, (4) of racketeering activity (known as "predicate acts"), (5) causing injury to plaintiff's business or property. Sanford v. Memberworks, Inc., 625 F.3d 550, 557 (9th Cir. 2010); Walter v. Drayson, 538 F.3d 1244, 1247 (9th Cir. 2008); Grimmett v. Brown, 75 F.3d 506, 510 (9th Cir. 1996). The alleged enterprise must exist "separate and apart from that inherent in the perpetration of the alleged [activity]." Chang v. Chen, 80 F.3d 1293, 1300-01 (9th Cir. 1996). A "pattern of racketeering activity" means at least two criminal acts enumerated by statute. 18 U.S.C. § 1961(1), (5) (including, among many others, mail fraud, wire fraud, and financial institution fraud). Those so-called "predicate acts" under RICO, if based on a theory of fraudulent conduct, must be alleged with specificity in compliance with Rule 9(b). Schreiber Distrib. Co. v. Serv-Well Furniture Co., 806 F.2d 1393, 1400-01 (9th Cir. 2004); see also Lancaster Community Hospital v. Antelope Valley Hospital Dist., 940 F.2d 397, 405 (9th Cir. 1991) (holding with respect to the predicate act of mail fraud that a plaintiff must allege with "particularity the time, place, and manner of each act of fraud, plus the role of each defendant in each scheme"); Alan Neuman Productions, Inc. v. Albright, 862 F.2d 1388, 1392-93 (9th Cir. 1988); Pineda v. Saxon Mortgage Services, 2008 WL 5187813, at *4 (C.D. Cal. Dec. 10, 2008) ("It is not enough for [plaintiff] to rely on mere labels and conclusions" to establish a RICO claim but rather, plaintiff must give each defendant notice of the particular predicate act it participated in and must allege each predicate act with specificity).
Here, the allegations found in the amended complaint with respect to a civil RICO claim are inadequate. The amended complaint offers no factual allegations in support of the civil RICO claim, and certainly no specific facts sufficient to meet the heightened pleading requirements under Rule 9(b). Instead, the amended complaint offers mere conclusory allegations. As noted above, predicate acts must be described specifically and in relation to each defendant's particular, alleged illegal conduct. Plaintiff's amended complaint fails to set forth these specifics. Accordingly, plaintiff's civil RICO claim must be dismissed. Although it appears amendment would likely be futile, the court cannot say that "it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief," plaintiff will be given leave to amend her civil RICO claims to cure those deficiencies. Franklin v. Murphy, 745 F.2d 1221, 1228 (9th Cir. 1984) (quoting Haines v. Kerner, 404 U.S. 519, 521 (1972) (when evaluating the failure to state a ...