GBB1, INC. AND VICTOR FRANCO, Plaintiffs,
JP MORGAN CHASE BANK NATIONAL ASSOCIATION; and DOES 1-250 inclusive, Defendants.
ORDER GRANTING DEFENDANT'S MOTION TO DISMISS AND MOTION TO EXPUNGE RECORDED LIS PENDENS (ECF No. 6).
JANIS L. SAMMARTINO, District Judge.
Presently before the Court is Defendant JP Morgan Chase Bank, N.A.'s ("JP Morgan" or "Defendant") Motion to Dismiss Plaintiff's Complaint and Motion to Expunge Recorded Lis Pendens. (Mot. to Dismiss, ECF No. 6). Also before the Court is Plaintiffs GBB1, Inc. ("GBB1") and Victor Franco's ("Franco, " and collectively, "Plaintiffs") response in opposition (Resp. in Opp'n, ECF No. 22) and JP Morgan's reply in support, (Reply in Supp., ECF No. 23). Having considered the parties' arguments and the law, the Court GRANTS JP Morgan's motion to dismiss and motion to expunge.
1. Factual Background
This action arises from a residential loan for $520, 000 that plaintiff Franco entered into on March 23, 2007. (Request for Judicial Notice ("RJN"), Ex. 1, at 2, ECF No. 6-1). This loan was secured by a Deed of Trust on the real property located at 2502 and 2508 Rainbow Valley Blvd., Fallbrook, California, 92028 ("the Property"). (RJN, Ex. 1, ECF No. 6-1). Washington Mutual is listed as the beneficiary on the Deed of Trust. ( Id. at 8-9). Subsequently, on September 25, 2008, JP Morgan purchased the loan on the Property from Washington Mutual by way of a Purchase and Assumption Agreement. (RJN, Ex. 3, ECF No. 6-1). Plaintiff Franco then defaulted on the loan and a Notice of Default ("NOD") was recorded on September 22, 2010. (RJN, Ex. 4, ECF No. 6-1). On November 3, 2010, a Substitution of Trustee was recorded, in which Quality Loan Service, Corp. was substituted as trustee. (RJN, Ex. 5, ECF No. 6-1). On December 28, 2010 a Notice of Trustee Sale was recorded, ( RJN, Ex. 6, ECF No. 6-1), and JP Morgan later purchased the Property at public auction for $610, 055.91 on August 26, 2011. (Mot. to Dismiss 2, ECF No. 6-2). Plaintiff Franco then attempted to transfer the Property to GBB1, Inc. on August 27, 2011. (Notice of Removal, Ex. A, ¶ 5, ECF No. 1). Thereafter, JP Morgan recorded the Trustee's Deed Upon Sale from the public auction sale on January 5, 2012. (RJN, Ex. 6, ECF 6-1).
2. Procedural Background
Plaintiffs filed this action in the Superior Court of California for the County of San Diego on February 24, 2012. (Notice of Removal, Ex. A, at 11, ECF No. 1). The original complaint asserts one cause of action for rescission of notice of default. ( Id. at 13-14). Plaintiffs' theory is that the notice of default filed by JP Morgan is void because the notice lists JP Morgan as beneficiary, instead of Washington Mutual, the beneficiary that appears listed on the Deed of Trust, or Finance America, LLC, the lender that appears listed on the promissory note. (Notice of Removal ¶¶ 7-8, ECF No. 1). Plaintiffs also filed a Notice of Pendency of Action ("Lis Pendens") with the San Diego County Recorder's Office on March 1, 2012 under Document Number XXXX-XXXXXXX. (RJN, Ex. 8, EFC No. 6-1).
On April 6, 2012, JP Morgan removed the action to this Court on grounds of diversity jurisdiction, (Notice of Removal, ECF No. 1), and thereafter filed a motion to dismiss on April 12, 2012, (Mot. to Dismiss, ECF No. 6). Before the deadline to respond to the motion to dismiss and just one day after the period for amendment as a matter of course, see Fed.R.Civ.P. 15(a)(1)(B), Plaintiffs filed a motion for leave to file an amended complaint. (ECF No. 9). On August 17, 2012, the Court granted Plaintiffs' motion and allowed Plaintiffs fourteen days to file their amended complaint. (ECF No. 19). The Court concurrently denied as moot Defendant's motion to dismiss. ( Id. ).
Plaintiffs subsequently failed to file an amended complaint by the deadline set by the Court. Instead, on October 29, 2012, Plaintiffs filed an emergency motion seeking additional time to file the amended complaint. (ECF No. 20). On November 14, 2012, the Court denied Plaintiffs' motion for extension of time. (ECF No. 21). The Court reinstated the original complaint as the operative pleading, vacated its prior ruling denying Defendant's motion to dismiss, and ordered Plaintiffs to respond to Defendant's motion.
Thereafter, Plaintiffs filed a response in opposition to Defendant's motion to dismiss on December 6, 2012. (Resp. in Opp'n, ECF No. 22). Defendant filed a reply in support of its motion to dismiss on December 13, 2012. (Reply in Supp., ECF No. 23).
Federal Rule of Civil Procedure 12(b)(6) permits a party to raise by motion the defense that the complaint "fail[s] to state a claim upon which relief can be granted, " generally referred to as a motion to dismiss. The Court evaluates whether a complaint states a cognizable legal theory and sufficient facts in light of Federal Rule of Civil Procedure 8(a), which requires a "short and plain statement of the claim showing that the pleader is entitled to relief." Although Rule 8 "does not require detailed factual allegations, '... it [does] demand more than an unadorned, the-defendant-unlawfully-harmed-me accusation." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). In other words, "a plaintiff's obligation to provide the grounds' of his entitle[ment] to relief' requires 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)). "Nor does a complaint suffice if it tenders naked assertion[s]' devoid of further factual enhancement.'" Iqbal, 556 U.S. at 677(citing Twombly, 550 U.S. at 557).
"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.'" Id. (quoting Twombly, 550 U.S. at 570); see also Fed.R.Civ.P. 12(b)(6). A claim is facially plausible when the facts pled "allow the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. (citing Twombly, 550 U.S. at 556). That is not to say that the claim must be probable, but there must be "more than a sheer possibility that a defendant has acted unlawfully." Id. Facts "merely consistent with' a defendant's liability" fall short of a plausible entitlement to relief. Id. (quoting Twombly, 550 U.S. at 557). Further, the Court need not accept as true "legal conclusions" contained in the complaint. Id. This review requires context-specific analysis involving the Court's "judicial experience and common sense." Id. at 678 (citation omitted). "[W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged-but it has not show[n]'-that the pleader is entitled to relief.'" Id. Moreover, "for a complaint to be dismissed because the allegations give rise to an affirmative defense[, ] the defense clearly must appear on the face of the pleading." McCalden v. Ca. Library Ass'n, 955 F.2d 1214, ...