United States District Court, S.D. California
ORDER: (1) GRANTING DEUTSCHE BANK, ONE WEST, AND MERS' MOTION TO DISMISS [DOC. 3]; AND
(2) TERMINATING AZTEC'S MOTION TO DISMISS AS MOOT [DOC. 7.]
THOMAS J. WHELAN, District Judge.
On August 16, 2013, Plaintiff Ricardo Macedo commenced this foreclosure action against Defendants Deutsche Bank National Trust Company ("Deutsche Bank"), One West Bank, F.S.B. ("One West"), Mortgage Electronic Registration Systems, Inc. ("MERS"), and Aztec Foreclosure Corporation ("Aztec") in the San Diego Superior Court. Thereafter, Defendants removed this action to this Court. Deutsche Bank, One West, and MERS now collectively move to dismiss Plaintiff's First Amended Complaint ("FAC") under Federal Rule of Civil Procedure 12(b)(6). Aztec also independently moves to dismiss. Plaintiff opposes both motions.
The Court decides the matter on the papers submitted and without oral argument. See Civ. L.R. 7.1(d.1). For the following reasons, the Court GRANTS WITH LEAVE TO AMEND Deutsche Bank, One West, and MERS' motion to dismiss, and TERMINATES AS MOOT Aztec's motion to dismiss.
I. LEGAL STANDARD
The court must dismiss a cause of action for failure to state a claim upon which relief can be granted. Fed.R.Civ.P. 12(b)(6). A motion to dismiss under Rule 12(b)(6) tests the legal sufficiency of the complaint. Navarro v. Block , 250 F.3d 729, 732 (9th Cir. 2001). The court must accept all allegations of material fact as true and construe them in light most favorable to the nonmoving party. Cedars-Sanai Med. Ctr. v. Nat'l League of Postmasters of U.S. , 497 F.3d 972, 975 (9th Cir. 2007). Material allegations, even if doubtful in fact, are assumed to be true. Bell Atl. Corp. v. Twombly , 550 U.S. 544, 555 (2007). However, the court need not "necessarily assume the truth of legal conclusions merely because they are cast in the form of factual allegations." Warren v. Fox Family Worldwide, Inc. , 328 F.3d 1136, 1139 (9th Cir. 2003) (internal quotation marks omitted). In fact, the court does not need to accept any legal conclusions as true. Ashcroft v. Iqbal , 556 U.S. 662, 678 (2009).
"While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the grounds' of his entitlement 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 (internal citations omitted). Instead, the allegations in the complaint "must be enough to raise a right to relief above the speculative level." Id . Thus, "[t]o 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.'" Iqbal , 556 U.S. at 678 (citing Twombly , 550 U.S. at 570). "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 . "The plausibility standard is not akin to a probability requirement, ' but it asks for more than a sheer possibility that a defendant has acted unlawfully." Id . A complaint may be dismissed as a matter of law either for lack of a cognizable legal theory or for insufficient facts under a cognizable theory. Robertson v. Dean Witter Reynolds, Inc. , 749 F.2d 530, 534 (9th Cir. 1984).
Generally, courts may not consider material outside the complaint when ruling on a motion to dismiss. Hal Roach Studios, Inc. v. Richard Feiner & Co. , 896 F.2d 1542, 1555 n.19 (9th Cir. 1990). However, documents specifically identified in the complaint whose authenticity is not questioned by parties may also be considered. Fecht v. Price Co. , 70 F.3d 1078, 1080 n.1 (9th Cir. 1995) (superceded by statutes on other grounds). Moreover, the court may consider the full text of those documents, even when the complaint quotes only selected portions. Id . It may also consider material properly subject to judicial notice without converting the motion into one for summary judgment. Barron v. Reich , 13 F.3d 1370, 1377 (9th Cir. 1994).
A. Federal Rule of Civil Procedure 9(b)
When a claim is "grounded in fraud and its allegations fail to satisfy the heightened pleading requirements of Rule 9(b), a district court may dismiss the... claim." Vess v. Ciba-Geigy Corp. USA , 317 F.3d 1097, 1107 (9th Cir. 2003). To satisfy the particularity requirement of Rule 9(b), "[a]verments of fraud must be accompanied by the who, what, when, where, and how' of the misconduct charged." Vess , 317 F.3d at 1106 (9th Cir.2003) (quoting Cooper v. Pickett , 137 F.3d 616, 627 (9th Cir.1997)). Plaintiffs must plead enough facts to give defendants notice of the time, place, and nature of the alleged fraud together with an explanation of the statement and why it was false or misleading. See id. at 1107. Averments of fraud must be pled with sufficient particularity as to give the defendants notice of the circumstances surrounding an allegedly fraudulent statement. See In re GlenFed, Inc. Sec. Litig. , 42 F.3d 1541, 1547 (9th Cir.1994) (superceded by statute on other grounds as stated in Ronconi v. Larkin , 253 F.3d 423, 429 n.6 (9th Cir.2001)). The circumstances constituting the alleged fraud must "be specific enough to give defendants notice of the particular misconduct... so that they can defend against the charge and not just deny that they have done anything wrong." Vess , 317 F.3d at 1106 (quoting Bly-Magee v. California , 236 F.3d 1014, 1019 (9th Cir.2001)) (internal quotation marks omitted). "Malice, intent, knowledge, and other conditions of a person's mind may be alleged generally." Fed.R.Civ.P. 9(b).
Plaintiff's 38-page FAC is difficult to decipher. It appears that Plaintiff brings this action in relation to some real property that he owns or owned. He alleges that someone fraudulently purported to assign the deed of trust that secured his loan from his lender to Deutsche Bank. (See FAC ¶ 26.) That interpretation is based on the following allegation in the FAC: "The Plaintiff does not assert any right was created in her [sic] favor by the late purported transfer' and instead asserts that any claims of transfer of the interest in the Note and Deed of Trust... is [sic] evidence of the falsification of that instrument and serves to establish that as yet unidentified third party agents and employees of... [Deutsche] have engaged in a pattern of fraud and deceit." (Id.) Plaintiff further alleges that "rogue employees" of Deutsche Bank executed "fabrications and forgeries" purporting to transfer his lender's interest in that trust. (FAC ¶ 31.) Throughout the FAC, Plaintiff also references "criminal violations, " "the Mortgage Boom Era, " the Internal Revenue Code, and other bits of information with questionable relevance to this action. (See FAC ¶¶ 2, 18, 24-25.)
The important allegation in Plaintiff's FAC is the one alleging that agents of Deutsche Bank fabricated the instrument assigning the deed of trust to Deutsche Bank. (FAC ¶ 31.) Each of Plaintiff's causes of action incorporates this allegation. ( Id. at 31:13-42:26.) As a result, each of Plaintiff's causes of action is grounded in fraud. See Vess , 317 F.3d at 1103-04 (citing In re Stac Elecs. Sec. Litig. , 89 F.3d 1399, 1404-05 (9th Cir.1996)) ("In cases where fraud is not a necessary element of a claim, a plaintiff may choose nonetheless to allege in the complaint that the defendant has engaged in fraudulent conduct[.] In that event, the claim is said to be grounded in fraud' or to sound in fraud, ' and the pleading of that claim as a whole must satisfy the particularity requirement of Rule 9(b).")
Plaintiff fails to plead sufficient factual matter to give Defendants notice of the "time, place, and nature of the alleged fraud together with an explanation of the statement and why it was false or misleading." See Vess , 317 F.3d at 1106. His averment of fraud lacks the required "who, what, when, where, and how' of the misconduct charged." See id. (quoting Cooper , 137 F.3d at 627). Therefore, the Court concludes that ...