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Monreal v. Gmac Mortgage LLC

United States District Court, S.D. California

June 4, 2013

JUANA MONREAL, an Individual, Plaintiff,
v.
GMAC MORTGAGE, LLC FKA GMAC MORTGAGE CORPORATION; DEUTSCHE BANK NATIONAL TRUST COMPANY, A FEDERALLY CHARTERED BANKING INSTITUTION, AS TRUSTEE PURSUANT TO THE HARBOURVIEW MORTGAGE LOAN PASS-THROUGH CERTIFICATES, SERIES 2006-14; EXECUTIVE TRUSTEE SERVICES LLC D/B/A ETS SERVICES, LLC; MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC.; ALL PERSONS UNKNOWN CLAIMING ANY LEGAL OR EQUITABLE RIGHT, TITLE, ESTATE, LIEN OR INTEREST IN THE PROPERTY DESCRIBED IN THE COMPLAINT ADVERSE TO PLAINTIFF'S TITLE, OR ANY CLOUD ON PLAINTIFF'S TITLE THERETO, AND DOES 1-50, INCLUSIVE, Defendants

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[Copyrighted Material Omitted]

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For Juana Monreal, Plaintiff: Joseph La Costa, LEAD ATTORNEY, San Diego, CA.

For GMAC Mortgage, LLC, formerly known as GMAC Mortgage Corporation, Executive Trustee Services LLC, doing business as ETS Services, LLC, Mortgage Electronic Registration Systems, Inc., Defendants: Kenneth Sur Miller, LEAD ATTORNEY, Severson & Werson, Irvine, CA.

OPINION

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ORDER GRANTING DEFENDANTS' MOTION TO DISMISS (Doc. No. 4.)

Hon. Anthony J. Battaglia, U.S. District Judge.

Presently before the Court is Defendants GMAC Mortgage, LLC (" GMAC" ), Executive Trustee Services, LLC, dba ETS Services, LLC (" ETS" ), and Mortgage Electronic Registration System, Inc. (" MERS" ) (collectively, " Defendants" ) motion to dismiss, (Doc. No. 4), Plaintiff Juana Montreal's (" Plaintiff" ) Complaint, (Doc. No. 1). In accordance with Civil Local Rule 7.1.d.1, the Court finds the motion suitable for determination on the papers and without oral argument. Accordingly, the motion hearing scheduled for June 20, 2013 is hereby vacated. For the reasons set forth below, the Court GRANTS Defendants' motion to dismiss in its entirety providing Plaintiff limited leave to amend the complaint in compliance with this order.

BACKGROUND

On August 17, 2006, Plaintiff borrowed $301,600.00 (" the Loan" ) from Suntrust Mortgage, Inc. (" Suntrust" ) to purchase the property located at 4414 Newton Ave., San Diego, California 92113 (" the Property" ). (Compl. ¶ ¶ 26, 27.) The Loan was memorialized by a Promissory Note (the " Note" ) and secured by a Deed of Trust (" Deed of Trust" ) on the Property. ( Id. at ¶ 27, Ex. A; Doc. No. 4, Ex. 2.) The Deed of Trust named MERS as the beneficiary and Jackie Miller as the trustee. (Doc. No. 1, Ex. A; Doc. No. 4, Ex. 2.) On August 24, 2012, MERS assigned the beneficial interest in the Deed of Trust (" Assignment of the Deed of Trust" ) to Deutsche Bank National Trust Company as trustee for Haborview Mortgage Loan Trust Mortgage Loan Pass-Through Certificates, Series 2006-14 (" Deutsche Bank" ). (Compl., Ex. B; Doc. No. 4, Ex. 3.) The Assignment of the Deed of Trust was recorded in the official records of the San Diego County Recorder's Office on August 31, 2012, as Document No.: 2012-0527658. ( Id. ) On October 4, 2012, Deutsche Bank substituted ETS as trustee under the Deed of Trust (" Substitution of

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Trustee" ). (Doc. No. 1, Ex. C; Doc. No. 4, Ex. 4.) The Substitution of Trustee was recorded in the official records of the San Diego County Recorder's Office on November 9, 2012, as Document No.: 2012-0701420. ( Id. )

On November 7, 2012, ETS, as trustee under the Deed of Trust, issued a notice of default and election to sell under the deed of trust (" Notice of Default" ). (Compl., Ex. D; Doc. No. 4, Ex. 5.) The Notice of Default stated that as of November 7, 2012, Plaintiff was in default of the Loan in the amount of $29,987.00. ( Id. ) The Notice of Default also informed Plaintiff that she must contact Deutsche Bank to arrange for payment in order to stop foreclosure of the Property. ( Id. ) The Notice of Default was recorded in the official records of the San Diego County Recorder's Office on November 9, 2012, as Document No.: 2012-0701421. ( Id. ) On February 12, 2012, ETS recorded a notice of trustee's sale (" Notice of Trustee's Sale" ) in the official records of the San Diego County Recorder's Office as Document No.: 2013-0103723. (Compl., Ex. E; Doc. No. 4, Ex. 6.) The Notice of Trustee's Sale informed Plaintiff that the unpaid balance on the Loan was currently $360,222.88. ( Id. ) The Notice of Trustee Sale also informed Plaintiff that the sale of the Property would take place on March 12, 2013. ( Id. ) On March 14, 2013, after the Property was sold at auction, ETS executed a trustee's deed (" Trustee Deed" ), indicating that the Property had been sold to Aslan Residential I, LLC. (Doc. No. 4, Ex. 7.) The Trustee Deed was recorded in the official records of the San Diego County Recorder's Office on March 29, 2013, as Document No.: 2013-0200241. ( Id. )

Plaintiff filed the instant complaint on March 28, 2013. (Doc. No. 1.) The complaint alleged ten causes of action: (1) violation of California's Unfair Competition Law (" UCL" ), Bus. & Prof. Code § 17200, et seq. ; (2) intentional misrepresentation; (3) negligent misrepresentation; (4) fraudulent concealment; (5) quiet title; (6) declaratory relief; (7) violation of the Truth in Lending Act (" TILA" ), 15 U.S.C. § 1601, et seq. ; (8) violation of the Home Ownership and Equity Protection Act (" HOEPA" ), 15 U.S.C. § 1639, et seq. ; (9) violation of the Real Estate Settlement Procedures Act (" RESPA" ) 12 U.S.C. § § 2601, et seq. ; and (10) violation of the Fair Debt Collection Practices Act (" FDCPA" ), 15 U.S.C. § 1692, et seq. Plaintiff was originally proceeding pro se, but elected to retain counsel before filing a response to Defendants' instant motion. (Doc. Nos. 11, 13.)

LEGAL STANDARD

I. Motion to Dismiss

Dismissal is appropriate under Federal Rule of Civil Procedure 12(b)(6) when a plaintiff's allegations fail " to state a claim upon which relief can be granted." Fed.R.Civ.P. 12(b)(6). In ruling on a motion to dismiss, the court must " accept all material allegations of fact as true and construe the complaint in a light most favorable to the non-moving party." Vasquez v. L.A. Cnty., 487 F.3d 1246, 1249 (9th Cir. 2007). Courts are not however, " bound to accept as true a legal conclusion couched as a factual allegation." Ashcroft v. Iqbal, 556 U.S. 662, 664, 129 S.Ct. 1937, 1949-50, 173 L.Ed.2d 868 (2009).

A Rule 12(b)(6) dismissal " can be based on the lack of a 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). To survive a motion to dismiss, a plaintiff must plead " enough facts to state a claim to relief that is plausible on its face." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 1960, 167 L.Ed.2d 929 (2007). Plausibility

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does not equate to probability, but it requires " more than a sheer possibility that a defendant has acted unlawfully." Iqbal, 556 U.S. at 664, 129 S.Ct. at 1949. " 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. Dismissal of claims that fail to meet this standard should be with leave to amend unless it is clear that amendment could not possibly cure the complaint's deficiencies. See Steckman v. Hart Brewing, Inc., 143 F.3d 1293, 1296 (9th Cir. 1998).

Under Rule 12(b)(6), complaints alleging fraud must satisfy the heightened pleading requirements of Federal Rule of Civil Procedure 9(b). Rule 9(b) requires that in all averments of fraud or mistake, the circumstances constituting fraud or mistake shall be stated with particularity. Fed.R.Civ.P. 9(b). Malice, intent, knowledge, and other conditions of a person's mind may be alleged generally. A pleading is sufficient under Rule 9(b) if it " state[s] the time, place and specific content of the false representations as well as the identities of the parties to the misrepresentation." Misc. Serv. Workers, Drivers & Helpers v. Philco-Ford Corp., 661 F.2d 776, 782 (9th Cir. 1981) (citations omitted); see also Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1106 (9th Cir. 2003) (quoting Cooper v. Pickett, 137 F.3d 616, 627 (9th Cir. 1997)) (" Averments of fraud must be accompanied by 'the who, what, when, where, and how' of the misconduct charged." ). Additionally, " the plaintiff must plead facts explaining why the statement was false when it was made." Smith v. Allstate Ins. Co., 160 F.Supp.2d 1150, 1152 (S.D. Cal. 2001) (citation omitted). Regardless of the title given to a particular claim, allegations grounded in fraud are subject to Rule 9(b)'s pleading requirements. See Vess, 317 F.3d at 1103-04. Thus, even where fraud is not an essential element of a consumer protection claim, Rule 9(b) applies where a complaint " rel[ies] entirely on [a fraudulent course of conduct] as the bases of that claim . . . the claim is said to be 'grounded in fraud' or to 'sound in fraud,' and the pleading . . . as a whole must satisfy the particularity requirement of Rule 9(b)." Kearns v. Ford Motor Co., 567 F.3d 1120, 1125 (9th Cir. 2009) (quoting Vess, 317 F.3d at 1103-04).

DISCUSSION

I. Defendants' Request for Judicial Notice

Defendants seek judicial notice of seven documents: (1) Grant Deed (Exhibit 1); (2) Deed of Trust (Exhibit 2); (3) Assignment of the Deed of Trust (Exhibit 3); (4) Substitution of Trustee (Exhibit 4); (5) Notice of Default (Exhibit 5); (6) Notice of Trustee's Sale (Exhibit 6); and (7) Trustee's Deed upon Sale (Exhibit 7). (Doc. No. 5.) The first six exhibits were attached to Plaintiff's complaint and Plaintiff did not otherwise object to Defendants' request. (Compl., Exs. A-E.) Accordingly, because each of the documents was recorded in the official records of the San Diego County Recorder's Office, the Court grants Defendants' request with respect to all seven documents. See Fed.R.Evid. 201(b)(2) (stating that the court may take notice of facts that are " not subject to reasonable dispute in that [they are] . . . capable of accurate and ready determination by resort to sources whose accuracy cannot be reasonably questioned." ); Reyn's Pasta Bella, LLC v. Visa USA, Inc., 442 F.3d 741, 746 n.6 (9th Cir. 2006) (finding that matters that are part of the public record may be judicially noticed).

II. Defendants' Motion to Dismiss

Defendants move to dismiss the entire complaint on three grounds: (1) Plaintiff has not alleged she can tender the full

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amount due and owing on the Loan; (2) under Gomes v. Countywide, 192 Cal.App.4th 1149, 121 Cal.Rptr.3d 819 (Cal. Ct. App. 2011), Plaintiff does not have standing to bring a judicial action to challenge the validity of the nonjudicial foreclosure; and (3) notwithstanding Plaintiff's inability to tender the amount due or Plaintiff's standing to challenge the foreclosure/sale of the Property, each of Plaintiff's claims fail for separate, independent reasons. (Doc. No. 4 at 3-4.) The Court considers each of Plaintiff's individual causes of action in turn, addressing Defendants' arguments regarding tender and standing as applicable.

A. Violation of the UCL

Plaintiff's first cause of action is for unfair competition in violation of the UCL. (Compl. ¶ ¶ 69-81.) California Business and Professions Code Section 17200 defines unfair competition as " any unlawful, unfair or fraudulent business act or practice" and any " unfair, deceptive, untrue or misleading advertising." Cal. Bus. & Prof. Code § 17200. Because the statute is written in the disjunctive, it prohibits three separate types of unfair competition: (1) unlawful acts or practices, (2) unfair acts or practices, and (3) fraudulent acts or practices. Cel-Tec ...


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