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Gens v. Colonial Savings, F.A.

United States District Court, N.D. California, San Jose Division

March 27, 2014

LAURA ANN GENS and TIMOTHY GENS, Plaintiffs,
v.
COLONIAL SAVINGS, F.A.; MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC. Defendants.

ORDER GRANTING IN PART MOTION OF DEFENDANTS COLONIAL SAVINGS, F.A. AND MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC. MOTIONS TO DISMISS [Re Docket Nos. 100, 101]

RONALD M. WHYTE, District Judge.

In the prior order on defendants' motions to dismiss ("MTD"), Dkt. No. 113, the court required Colonial Savings, F.A. ("Colonial") and Mortgage Electronic Registration Systems, Inc. ("MERS") to re-serve their motions to dismiss on plaintiffs. Dkt. No. 100 (Colonial MTD); Dkt. No. 101 (MERS MTD).[1] Plaintiffs opposed Colonial's motion to dismiss but did not file an opposition to MERS' motion to dismiss. Dkt. No. 118. The court addresses the motions on the papers.

ANALYSIS

To survive a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6), a complaint must make "factual allegations [that are sufficient] to raise a right to relief above a speculative level." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). On a motion to dismiss, a court must take all of the factual allegations in a complaint as true, but the court need not accept as true "[t]hreadbare recitals of the elements of a cause of action, " or legal conclusions presented as facts. Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949-50 (2009). A trial court may also dismiss a claim sua sponte under Rule 12(b)(6) if it determines that a claimant clearly cannot win relief. See Omar v. Sea-Land Service, Inc., 813 F.2d 986, 991 (9th Cir. 1987).

A. Colonial Motion to Dismiss

Plaintiffs assert four causes of action against Colonial in the Second Amended Complaint (SAC): trespass, conversion, RICO, and violations of the Wisconsin Deceptive Trade Practices Act.

1. Trespass

Plaintiff alleges that an unknown agent of Colonial forcibly entered their residence and caused property damages. SAC ¶ 16 (trespass in March 2009), ¶ 19 (trespass in January 2010). Colonial's response is that as a servicer of the Gens' mortgage they were entitled to "make reasonable entries upon and inspections of the Property." Dkt. No. 100 at 12. Taking the plaintiffs' allegations as true, the court has no doubt that kicking in a door or forcibly removing locks on the property is not a "reasonable entry." See SAC ¶¶ 16, 19. Gens has plausibly alleged that an agent of Colonial committed a trespass, and Colonial's motion to dismiss count 4, trespass, is denied.

2. Conversion

Plaintiff alleges that when their house was vandalized in March 2009 by the unknown Colonial agent, "computers, cameras, and other electronics including a professional/scientific low-light camera" were converted. SAC ¶¶ 17, 54. Plaintiff also alleges "personal possessions were stolen" in the January 2010 break-in. SAC ¶¶ 19, 54. Colonial argues that plaintiff has failed to plead that Colonial intended to permanently deprive plaintiffs of their property, which is a required element of conversion under Wisconsin law. Wis.Stat. § 943.20. Plaintiff's response is that they inadvertently removed the "intent to permanently deprive" allegation, which was present in their First Amended Complaint. See Dkt. No. 56, ¶ 54. Plaintiff requests leave to amend their complaint to re-allege the removed facts.

Because plaintiff did not adequately plead conversion, the fifth cause of action against Colonial is dismissed, but the court grants leave to add paragraph 54 of the First Amended Complaint to a Third Amended Complaint.

3. RICO

Plaintiff alleges that Colonial violated the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. § 1961(c). To state a civil RICO claim, a plaintiff must allege: (1) conduct; (2) of an enterprise; (3) through a pattern; (4) of racketeering activity. Sedima, S.P.R.L v. Imrex Co., Inc., 473 U.S. 479, 496 (1985); see also Slaney v. The Int'l Amateur Athletic Fed'n, 244 F.3d 580, 597 (7th Cir. 2001); Mira v. Nuclear Measurements Corp., 107 F.3d 466, 473 (7th Cir. 1997). A pattern of racketeering activity is defined as at least two instances of such activity. See 18 U.S.C. § 1961(5). To adequately plead a RICO claim, a plaintiff must do more than merely "restate[ ] the elements of [the relevant RICO subsection] in boilerplate fashion." Roa v. BP Products N. Am., Inc., 589 F.3d 389, 399 (7th Cir. 2009).

Racketeering activity can include obstruction of justice, 18 U.S.C. § 1503, and tampering with or intimidating a witness, 18 U.S.C. §§ 1512, 1513. See 18 U.S.C. § 1961(1). Plaintiff alleges that at each of two break-ins described above, and at a third attempted break-in in 2013, a Colonial agent left a note saying things like "DROP LAWSUIT OR ELSE MORE TO COME" and "PAYBACK FOR SUING A TEXAS ...


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