United States District Court, E.D. California
KIMBERLY J. MUELLER, District Judge.
Defendants JPMorgan Chase Bank and Chase Home Financing have filed a motion to dismiss the complaint. ECF No. 19. Plaintiffs have opposed the motion and defendants have replied. ECF Nos. 37, 38. The court ordered the motion submitted without argument and now GRANTS the motion in part and DENIES it in part.
On January 5, 2013, plaintiffs filed a complaint challenging the pending foreclosure of their home at 8770 Brockway Vista Avenue, Kings Beach, California. They name as defendants JPMorgan Chase Bank ("Chase"), California Reconveyance Company ("CRC"), Chase Home Finance, LLC, Chase Fulfillment Services, and the Federal Deposit Insurance Corporation ("FDIC"), as receiver for Washington Mutual Bank ("WaMu"). Complaint, ECF No. 1.
The complaint alleges that plaintiffs purchased the property in 1993 and refinanced it in 2002, 2004 and 2007 with Washington Mutual Bank. Id. ¶ 14. The loan was eventually sold to investors as a mortgage backed security. Id. ¶ 15.
In 2009, Chase notified plaintiffs it had acquired Washington Mutual and the note and deed of trust had been assigned to Chase. Id. ¶ 17. In September 2009, Chase wrote to plaintiffs, advising them they would be eligible for modification of their loan under the HAMP program. Id. ¶ 30. Plaintiffs applied for a HAMP modification. Id.
In early 2010, Chase offered plaintiffs a three month trial payment reduction, which plaintiffs accepted even though they were not in default. Id. ¶¶ 32-33. Chase appraised their property at 2.4 million dollars. Id. ¶ 31. Plaintiffs made all required payments during this three month period. Id. ¶ 34. At the end of the three month period, plaintiffs contacted Chase and were instructed to continue making the reduced payments, which they did. Id. ¶ 35.
In August 2010, Krista Lanini spoke with Rick Lee at Chase, who told her the file had been moved to the underwriting department in California and plaintiffs could expect to hear about the modification in September. Id. ¶ 36. On September 10, 2010, Mary Calvo of Chase informed plaintiffs the modification had been denied and they were now in arrears. Id. ¶ 37. Plaintiffs immediately contacted Rick Lee, who said they had never qualified for HAMP because the value of the property exceeded the guidelines limit of $750, 000. Id. ¶ 38. He said plaintiffs would be required to resume payments in the original amount. Id. Plaintiffs paid the original monthly amount until July 2012, when Chase rejected their payment. Id.
The complaint is comprised of the following claims: (1) violation of the one action rule against Chase; (2) breach of contract against Chase; (3) breach of the implied covenant of good faith and fair dealing against all defendants; (4) negligence; (5) fraud; (6) slander of title; (7) negligent misrepresentation; (8) violation of the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. §§ 1692, and the Rosenthal Fair Debt Collection Practices Act CAL. CIV. CODE § 1788, et seq.; (10) violation of California's Unfair Competition Law, CAL. BUS. & PROF. CODE §§ 17200, et seq.; (11) injunctive relief; and (12) accounting.
On January 22, 2013, the FDIC filed with the court a copy of a letter it wrote to plaintiffs' counsel informing him that a claim must be filed with the FDIC before any court has jurisdiction over it. ECF No. 12.
On February 22, 2013, the court adopted the parties' stipulation postponing the foreclosure sale while this action was pending. ECF No. 16.
On May 2, 2013, defendants filed the pending motion to dismiss. ECF No. 19.
The parties continued the hearing on the motion several times in order to pursue settlement. ECF Nos. 24, 27, 31, 34.
On August 19, 2013, the court approved plaintiffs' request to dismiss the FDIC as a defendant. ECF No. 29.
On January 14, 2014, the court approved plaintiffs' request to dismiss CRC as a defendant. ECF No. 36.
In a joint status report filed January 16, 2014, the parties informed the court that plaintiffs sold the property to a third party in September 2013 and Chase has been paid in full. ECF No. 38 at 2.
II. STANDARDS FOR A MOTION TO DISMISS
Under Rule 12(b)(6) of the Federal Rules of Civil Procedure, a party may move to dismiss a complaint for "failure to state a claim upon which relief can be granted." A court may dismiss "based on the lack of 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).
Although a complaint need contain only "a short and plain statement of the claim showing that the pleader is entitled to relief, " FED. R. CIV. P. 8(a)(2), in order to survive a motion to dismiss this short and plain statement "must contain sufficient factual matter... to state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A complaint must include something more than "an unadorned, the-defendant-unlawfully-harmed-me accusation" or "labels and conclusions' or a formulaic recitation of the elements of a cause of action.'" Id. (quoting Twombly, 550 U.S. at 555). Determining whether a complaint will survive a motion to dismiss for failure to state a claim is a "context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Id. at 679. Ultimately, the inquiry focuses on the interplay between the factual allegations of the complaint and the dispositive issues of law in the action. See Hishon v. King & Spalding, 467 U.S. 69, 73 (1984).
In making this context-specific evaluation, this court must construe the complaint in the light most favorable to the plaintiff and accept as true the factual allegations of the complaint. Erickson v. Pardus, 551 U.S. 89, 93-94 (2007). This rule does not apply to "a legal conclusion couched as a factual allegation, '" Papasan v. Allain, 478 U.S. 265, 286 (1986) quoted in Twombly, 550 U.S. at 555, nor to "allegations that contradict matters properly subject to judicial notice" or to material attached to or incorporated by reference into the complaint. Sprewell v. Golden State Warriors, 266 F.3d 979, 988-89 (9th Cir. 2001). A court's consideration of documents attached to a complaint or incorporated by reference or matter of judicial notice will not convert a motion to dismiss into a motion for summary judgment. United States v. Ritchie, 342 F.3d 903, 907-08 (9th Cir. 2003); Parks Sch. of Bus. v. Symington, 51 F.3d 1480, 1484 (9th Cir. 1995); compare Van Buskirk v. Cable News Network, Inc., 284 F.3d 977, 980 (9th Cir. 2002) (noting that even though court may look beyond pleadings on motion to dismiss, generally court is limited to face of the complaint on 12(b)(6) motion).
III. REQUEST FOR JUDICIAL NOTICE
Defendants ask the court to take judicial notice of a number of documents, including the Purchase and Assumption Agreement ("PAA") dated September 25, 2008, memorializing Chase's acquisition of WaMu, taken from the FDIC's website. They also submit the Notice of Default and Election to Sell the subject property and the Notice of Trustee's Sale recorded in Placer County as proper subjects of judicial notice. Request for Judicial Notice (RJN), ECF No. 19-1.
Plaintiffs do not dispute that Chase acquired WaMu as shown by the PAA but argue the court cannot resolve the question of what the PAA conveyed through judicial notice. ECF No. 37 at 7, 8.
Under Rule 201 of the Federal Rules of Evidence, a court may take judicial notice of an adjudicative fact which "must be one not subject to reasonable dispute in that it is either (1) generally known... (2) or capable of accurate and ready determination by resort to sources whose accuracy cannot reasonably be questioned." It is the proponent's burden to show that the facts contained in the documents are proper subjects of judicial notice. Hurd v. Garcia, 454 F.Supp.2d 1032, 1054-55 (S.D. Cal. 2006).
Matters of public record are generally subject to judicial notice. Akhtar v. Mesa, 698 F.3d 1202, 1212 (9th Cir. 2012); Lee v. City of Los Angeles, 250 F.3d 668, 689 (9th Cir. 2001). Because the documents recorded in Placer County are matters of public record, the court takes judicial notice of the existence of these documents. See Grant v. Aurora Loan Servs., Inc., 736 F.Supp.2d 1257, 1264 (N.D. Cal. 2010) (taking judicial notice of records of county recorder). The court declines to take judicial notice of the amount of the default listed in the Notice, however, as plaintiffs challenge its accuracy. Lee, 250 F.3d at 690.
The PAA between the FDIC and Chase is properly subject to judicial notice, as it "reflect[s] official acts of the executive branch of the United States..." and plaintiffs do not dispute its accuracy. Ferguson v. Wells Fargo Bank, N.A., No. CIV. 2:12-2944 WBS GGH, 2013 WL 504709, at *2 (E.D. Cal. Feb. 8, 2013). Plaintiffs do argue that "what defendant received through that PAA" is in dispute; thus the court does not rely on the contents of the PAA for their truth.
Without providing documentary support for their claim, plaintiffs assert Washington Mutual Bank, F.A. changed its name to Washington Mutual Bank on April 4, 2005 and so became a dead bank, no longer able to contract in its prior name. Nevertheless, Washington Mutual Bank, F.A. named itself as the lender in the deed of trust on the property at issue in 2007, "2 ½ years after WASHINGTON MUTUAL BANK, F.A. ceased to exist." Pls.' Opp'n, ECF No. 37 at 8. In plaintiffs' view, Chase cannot foreclose because it claims the beneficiary of the loan is Washington Mutual Bank, F.A., a nonexistent entity.
Plaintiffs have cited nothing to support their claim that the bank's change of name means the bank itself ceased to exist. Mut. Bldg. & Loan Ass'n of Long Beach v. Corum, 220 Cal. 282, 292 (1934) ("A change in name does not affect the identity of a corporation...."); see also United States v. Abakporo, No. S3 12 CR 340 (SAS), 2013 WL 6188260, at *8 (S.D.N.Y. Nov. 25, 2013) (rejecting a motion to dismiss because there was no evidence the change of name meant the bank ceased to dismiss or lost its FDIC status); Haynes v. JPMorgan Chase Bank, N.A., No. 3:10-CV-11 (CDL), 2011 WL 2581956, at *5 (M.D. Ga. 2011), aff'd, 466 F.Appx. 763 (11th Cir. 2011) (unpublished) (rejecting argument similar to that made here and finding "the assignment was not invalid simply ...