JAIME ENGLER, AND ALL SIMILARLY SITUATED PERSONS ET AL., Plaintiff (s),
RECONTRUST COMPANY, a Foreign Corporation, BAC HOME LOANS SERVICING, L.P., a Foreign Corporation, BANK OF AMERICA, N.A., a foreign Corporation, MORTGAGE ELECTRONIC REGISTRATION SYSTEMS INC, AKA MERS, a Foreign Corporation, MERS CORP, A Foreign Corporation, AMERICAN FIRST REAL ESTATE SERVICES, Inc, A California Corporation, 43-126 Parkway Esplanade East, La Quinta, CA 92253, in rem. property, ALL PERSONS KNOWN AND UNKNOWN CAUSE OF ACTIONING ANY LEGAL OR EQUITABLE RIGHT, TITLE, ESTATE, LIEN OR INTEREST IN REAL PROPERTY DESCRIBED HEREIN ADVERS TO PLAINTIFFS TITLE OR ANY CLOUD ON PLAINTIFFS TITLE THERETO, REFERRED TO AS 43-126 Parkway Esplanade East, La Quinta, CA 92253, Defendants. PEOPLE OF CALIFORNIA, UNITED STATES OF AMERICA, RIVERSIDE COUNTY, CALIFORNIA Parties In Interest.
ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS' MOTION TO DISMISS
CONSUELO B. MARSHALL, District Judge.
Before the Court is a Motion to Dismiss under Federal Rule of Civil Procedure 12(b)(6) and Motion to Strike Punitive Damages filed by Defendants ReconTrust N.A., Bank of America Corp., and Bank of America, N.A. (collectively, "Defendants"). (Docket No. 39 ("Motion").) Defendants have also filed a Request for Judicial Notice ("RJN"). (Docket No. 40.)
Plaintiff is proceeding pro se. The Court again advises Plaintiff that the Central District of California offers Pro Se Clinics in Riverside, Santa Ana, and Los Angeles to provide information and guidance to pro se litigants, such as Plaintiff, who are not represented by counsel. The Los Angeles Pro Se Clinic is located in:
The Los Angeles Pro Se Clinic is open on Mondays, Wednesdays, and Fridays from 9:30 am - 12:00 pm and then from 2:00 pm - 4:00 pm. Plaintiff can find more information about all the Clinics, including hours and addresses, at http://court.cacd.uscourts.gov/cacd/ProSe.nsf/.
This Court has jurisdiction pursuant to 28 U.S.C. §§ 1331, 1337, 2201. This Court has supplemental jurisdiction over the state law causes of action pursuant to 28 U.S.C. § 1367.
II. PROCEDURAL AND FACTUAL OVERVIEW
This case is about a foreclosure of Plaintiff's property initiated by Defendant ReconTrust N.A. Defendants include Bank of America Corp. ("BAC"); ReconTrust, N.A. ("ReconTrust"); and Bank of America, N.A. ("BANA"). In 2007, Plaintiff decided to refinance a residence located at 126 Parkway Esplanade East, La Quinta, California (the "Property"). On June 21, 2007, Plaintiff signed a Deed of Trust (the "Note") to refinance the Property. (SAC ¶ 16.) The initial trustee on the Note was Chicago Title Company ("Chicago Title"), and the original beneficiary was Mortgage Electronic Registration Systems, Inc. ("MERS"). (RJN, Exh. A.)
A nonjudicial foreclosure process began on March 24, 2011 when ReconTrust issued a "Notice of Default" document to inform Plaintiff that he was in default on his mortgage. (RJN, Exh. D.) On March 25, 2011, a "Substitution of Trustee" was recorded, which stated that MERS substituted ReconTrust as the trustee on the Note (replacing Chicago Title). (RNJ, Exh. B.) On the same day, a "Corporation Assignment of Deed of Trust" was recorded, which stated that MERS assigned its beneficial rights under the Note to BAC Home Loans Servicing, LP. (RJN, Exh. C.)
Three months later, on June 24, 2011, a "Notice of Trustee's Sale" was recorded, which stated that the Property would be sold at auction in a July 20, 2011 foreclosure sale. (RJN, Exh. E.) At the sale, Defendant BANA purchased the Property. (RJN, Exh. F.)
At some point between the time ReconTrust was substituted as the trustee (March 25, 2011) and the foreclosure sale (July 20, 2011), ReconTrust securitized Plaintiff's loan in connection with a mortgage loan trust called Countrywide Alternative Loan Trust 2008-HY1. (SAC ¶ 139.)
Plaintiff originally filed suit against Defendants BAC and MERS on June 6, 2012. (Docket No. 1.) On March 1, 2013, the Court dismissed Plaintiff's First Amended Complaint with leave to amend. (Docket No. 28.) The operative Complaint currently before the Court is Plaintiff's Second Amended Complaint (the "SAC"), which alleges thirteen causes of action: (1) Declaratory Relief; (2) Violation of RICO; (3) "Common Law Conspiracy;" (4) "Filing of Invalid Lien;" (5) "Fraudulent Conveyance Deceptive Practices Code of Federal Regulations 17 CFR Parts 204-249;" (6) Fraudulent Concealment; (7) Fraudulent Inducement; (8) Wrongful Foreclosure; (9) Violation of the Real Estate Settlement Procedures Act; (10) Violation of the Fair Credit Reporting Act; (11) Violation of the Federal Fair Debt Collection Practices; (12) Violation of the Truth in Lending Act; and (13) Constructive Fraud.
On August 27, 2013, Defendants filed the instant Motion. On September 30, 2013, Plaintiff filed his Opposition three weeks late. (Docket No. 43.) Under the Local Rules, the Court may decline to consider any document that a party files late. C.D. Cal. R. 7-12. The Court can also issue sanctions against Plaintiff for late filing. C.D. Cal. R. 7-13, 83-7. Plaintiff is reminded that the Local Rules apply to all litigants, including litigants like him who proceed pro se without a lawyer. Future rule violations may be met with sanctions.
III. STANDARD OF LAW
Federal Rule of Civil Procedure 12(b)(6) allows a court to dismiss a complaint for "failure to state a claim upon which relief can be granted." Dismissal of a complaint can be based on either a lack of a cognizable legal theory or the absence of sufficient facts alleged under a cognizable legal theory. Somers v. Apple, Inc., 729 F.3d 953, 959-960 (9th Cir. 2013). On a motion to dismiss for failure to state a claim, the court accepts as true all well-pleaded allegations of material fact and construes them in a light most favorable to the non-moving party. Blantz v. Cal. Dep't of Corr. & Rehab., 727 F.3d 917, 922 (9th Cir. 2013). To survive a motion to dismiss, the complaint "must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 663, 129 S.Ct. 1937, 1940, 173 L.Ed.2d 868 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 1974, 167 L.Ed.2d 929 (2007)). A claim is facially plausible when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. Salameh v. Tarsadia Hotel, 726 F.3d 1124, 1129 (9th Cir. 2013). The plausibility standard requires more than the sheer possibility or conceivability that a defendant has acted unlawfully. Id. If a complaint cannot be cured by additional factual allegations, dismissal without leave to amend is proper. Id.
Plaintiff's First, Second, Third, Fourth, Fifth, Sixth, Seventh, Ninth, Tenth, Eleventh, Twelfth, and Thirteenth Causes of Action are dismissed with prejudice. Defendants' Motion to Dismiss Plaintiff's Eighth Cause of Action is denied. Defendants' Motion to Strike Plaintiff's request for punitive damages is denied. The only remaining cause of action in this case is the Eighth Cause of Action.
A. First Cause of Action: "Declaratory Relief - Fraudulent Reconveyance"
Plaintiff's first cause of action is styled as "Declaratory Relief Defendants Made a Fraudulent Conveyance" under the Uniform Fraudulent Conveyance Act. (SAC at 17; SAC ¶ 57.) The Uniform Fraudulent Conveyance Act ("UCTA") has been repealed and replaced by the Uniform Fraudulent Transfer Act ("UFTA"). See CAL. CIV. CODE § 3439 et seq. UFTA applies to transfers on or after January 1, 1987. CAL CIV. CODE § 3439.12. Because the transfer challenged by Plaintiff occurred after 1987, UFTA is the applicable law. Id.
Plaintiff does not specifically allege which UCTA statute Defendants violated. To survive Defendants' Motion to Dismiss, the facts he alleges must satisfy one of the UFTA causes of action. There are three possibilities under California Civil Code §§ 3439.04(a)(1), 3439.04(a)(2), and 3439.05. Under these statutes, a debtor's transfer is fraudulent as to a creditor if certain criteria are met. See CAL. CIV. CODE §§ 3439.04(a)(1), 3439.04(a)(2), 3439.05. These statutes provide a cause of action for a creditor. A creditor is a person who has a "right to payment." CAL. CIV. CODE § 3439.01(b), (c). Here, Plaintiff has not alleged that he has a right to payment that Defendants owe him, so he is not a creditor. Accordingly, Plaintiff has not alleged facts satisfying the elements of either fraudulent transfer cause of action.
Plaintiff's First Cause of Action is dismissed with prejudice.
B. Second Cause of Action: Violation of RICO by MERS.
In its May 1, 2013 Order, the Court dismissed Plaintiff's RICO claim without prejudice. Plaintiff has again failed to plead facts satisfying the elements of a RICO claim.
To state a claim under RICO, Plaintiff must plead facts satisfying five elements: (1) the existence of an enterprise affecting interstate commerce, (2) that Defendants were associated with or employed by the enterprise, (3) that Defendants participated in the conduct of the affairs of the enterprise, (4) that Defendants participated in a pattern of racketeering which included at least two predicate acts; and (5) that Plaintiff incurred actual injury to business or property. See Sedima, S.P.R.L. v. Imrex Co., 473 ...