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Brenda Vargas, et al v. Bank of America

April 2, 2013

BRENDA VARGAS, ET AL.,
PLAINTIFFS,
v.
BANK OF AMERICA, N.A.,
DEFENDANT.



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

ORDER GRANTING DEFENDANT'S MOTION TO DISMISS WITH LEAVE TO AMEND ) [DOC. 5]

On July 18, 2012, Plaintiffs Brenda Vargas and Joel Diaz commenced this action in the San Diego Superior Court against Defendant Bank of America, N.A. ("BANA") for violations of the Rosenthal Fair Debt Collection Practices Act ("Rosenthal Act" or "RFDCPA"), violations of California Business and Professions Code § 17200, and defamation. On September 14, 2012, Defendant removed the action to this Court. Defendant now moves to dismiss the complaint. Plaintiffs oppose.

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. 8.) For the following reasons, the Court GRANTS WITH LEAVE TO AMEND Defendant's motion to dismiss.

BACKGROUND

On May 4, 2006, Plaintiffs received a loan in the amount of $76,756.00 from Countrywide to help purchase a condominium located in Chula Vista, California. (Compl. ¶¶ 14--15.) There were two original purchase-money loans for the property because it was an "80/20" purchase, "that was broken up into the amounts of $309,096 and $76,756." (Id. ¶ 16.) Countrywide Home Loans, Inc. originated both loans. (Def.'s RJN Exs. 1--2.)

On May 19, 2009, a notice of default was recorded in the amount of $8,494.44. (Def.'s RJN Ex. 3.) On September 20, 2011, the property was sold in a non-judicial foreclosure sale. (Compl. ¶ 18.) At all times, Plaintiffs used the property as a single-family unit, and the property was "owner occupied" and never refinanced. (Id. ¶ 19.)

Since the foreclosure, Plaintiffs allege that "Defendants [sic] has been inaccurately reporting monthly to the consumer credit reporting agencies a full balance owed which is inaccurate and has had an extremely detrimental effects [sic] on the Plaintiffs' credit." (Compl.

On July 18, 2012, Plaintiffs commenced this action in the San Diego Superior Court against Defendant for violations of the RFDCPA, violations of California Business and Professions Code § 17200, and defamation. On September 14, 2012, Defendant removed the action to this Court. Defendant now moves to dismiss the complaint. Plaintiffs oppose.

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. Ashcroft v. Iqbal, 556 U.S. 662, 678 (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

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 Reynolds, Inc., 749 F.2d 530, 534 (9th Cir. 1984).

Generally, courts may not consider material outside the complaint when ruling on a motion to dismiss. Hal Roach Studios, Inc. v. Richard Feiner & Co., 896 F.2d 1542, 1555 n.19 (9th Cir. 1990). However, documents specifically identified in the complaint whose authenticity is not questioned by parties may also be considered. Fecht v. Price Co., 70 F.3d 1078, 1080 n.1 (9th Cir. 1995) (superceded by statutes on other grounds). Moreover, the court may consider the full text of those documents, even when the complaint quotes only selected portions. Id. It may also consider material properly subject to judicial notice without converting the motion into one for summary judgment. Barron v. Reich, 13 F.3d ...


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