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Fathi v. JP Morgan Chase Bank, N.A.

United States District Court, S.D. California

July 2, 2014

HAMED FATHI, Plaintiff,
J.P MORGAN CHASE BANK, N.A., et al., Defendants.


CYNTHIA BASHANT, District Judge.

On November 1, 2013, Plaintiff Hamed Fathi, who is proceeding pro se, commenced this action related to a residential loan and subsequent initiation of foreclosure proceedings by Defendant J.P. Morgan Chase Bank, N.A. ("Chase"). Chase now moves to dismiss Mr. Fathi's First Amended Complaint ("FAC") under Federal Rule of Civil Procedure 12(b)(6).

The Court finds this motion suitable for determination on the papers submitted and without oral argument. See Civ. L.R. 7.1(d.1). For the following reasons, the Court GRANTS WITHOUT LEAVE TO AMEND Chase's motion to dismiss.


On October 17, 2005, Mr. Fathi obtained a residential loan from Washington Mutual Bank, F.A. ("WaMu") in the amount of $606, 000.00 for real property located in Escondido, California. (FAC ¶¶ 4-5, Ex. 1.) The loan was secured by a deed of trust. ( Id. ¶ 5.) According to documents that Mr. Fathi attached to the FAC, the deed of trust identifies Mr. Fathi as borrower, WaMu as lender, and California Reconveyance Company as trustee. ( Id. ¶ 5, Ex. 1.)

Mr. Fathi alleges that Chase is the successor-in-interest to WaMu. (FAC ¶ 3.) He further alleges that "Chase acquired certain assets and liabilities of WaMu from the FDIC acting as receiver, including WaMu's interest in the Loan that is the subject of this action, pursuant to the Purchase and Assumption Agreement... between the FDIC and Chase dated 09/25/208 [sic]." ( Id. ¶ 6.) Both parties attach the Purchase and Assumption Agreement between Chase and the FDIC for the acquisition of the aforementioned assets. (FAC Ex. 2; Def.'s RJN Ex. B.)

In March 2009, Quality Loan Service Corporation ("Quality Loan") was substituted as trustee under the deed of trust. (FAC ¶ 8, Ex. 4; Def.'s RJN Ex. C.) Thereafter, Quality Loan recorded a notice of default. (FAC ¶ 7, Ex. 3; Def.'s RJN Ex. D.) According to the notice of default, Mr. Fathi was $17, 051.67 in arrears as of March 17, 2009. (FAC Ex. 3; Def.'s RJN Ex. D.) In June 2009, July 2010, July 2011, December 2011, and December 2012, Quality Loan recorded notices of trustee's sale. (FAC ¶¶ 9-12, Exs. 5-7; Def.'s RJN Exs. E-I.)

Mr. Fathi also alleges that at the time WaMu issued his home loan, "it was not licensed to engage in residential lending in the State of California." (FAC ¶ 13.) According to Mr. Fathi, after the note and deed of trust were "issued and executed, " WaMu assigned the note to a trust referred to as "WaMu Securities Trust, Series 2008-2." ( Id. ¶ 14.) Through that assignment, Mr. Fathi contends that WaMu "divested itself of ownership of the Note and security interest attached to [it] which encumbered Plaintiff's property." ( Id. ) Mr. Fathi further alleges that "[w]hen Chase took over certain assets from WaMu, through the FDIC, [sic] did not acquire any interest in the WaMu Securities Trust, Series 2008-2, because at the time WaMu was taken over by the FDIC, it did not have any interest in said trust." ( Id. ¶ 15.) Consequently, when Chase entered into the Purchase and Assumption Agreement, "it did not acquire the right to foreclose on the Note and [deed of trust]." ( Id. ¶¶ 16-18.) Rather, the WaMu Securities Trust, Series 2008-2 actually retained all rights related to Mr. Fathi's note and deed of trust. ( Id. )

On November 1, 2013, Mr. Fathi commenced this action against Chase. After the Court granted Chase's motion to dismiss, Mr. Fathi was given leave to file an amended complaint as to all claims except the one brought under 42 U.S.C. § 1983. On March 3, 2014, Mr. Fathi filed his FAC in which he asserts one claim for wrongful foreclosure under 42 U.S.C. § 1983. Chase now moves to dismiss the FAC under Rule 12(b)(6). Mr. Fathi opposes.


A motion to dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure tests the legal sufficiency of the claims asserted in the complaint. Fed.R.Civ.P. 12(b)(6); Navarro v. Block, 250 F.3d 729, 731 (9th Cir. 2001). The court must accept all factual allegations pleaded in the complaint as true and must construe them and draw all reasonable inferences from them in favor of the nonmoving party. Cahill v. Liberty Mutual Ins. Co., 80 F.3d 336, 337-38 (9th Cir. 1996). To avoid a Rule 12(b)(6) dismissal, a complaint need not contain detailed factual allegations, rather, it must plead "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). 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." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly, 550 U.S. at 556). "Where a complaint pleads facts that are merely consistent with' a defendant's liability, it stops short of the line between possibility and plausibility of entitlement to relief.'" Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 557).

"[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 (quoting Papasan v. Allain, 478 U.S. 265, 286 (1986)) (alteration in original). A court need not accept "legal conclusions" as true. Iqbal, 556 U.S. at 678. Despite the deference the court must pay to the plaintiff's allegations, it is not proper for the court to assume that "the [plaintiff] can prove facts that [he or she] has not alleged or that defendants have violated the... laws in ways that have not been alleged." Associated Gen. Contractors of Cal., Inc. v. Cal. State Council of Carpenters, 459 U.S. 519, 526 (1983).

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).

As a general rule, a court freely grants leave to amend a complaint which has been dismissed. Fed.R.Civ.P. 15(a). However, leave to amend may be denied when "the court determines that the allegation of other facts consistent with the challenged pleading could not possibly cure the deficiency." ...

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