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MacKlin v. Hollingsworth

United States District Court, E.D. California

September 8, 2014

JAMES L. MACKLIN, Plaintiff,
v.
MATTHEW HOLLINGSWORTH, et al., Defendants.

FINDINGS AND RECOMMENDATIONS

KENDALL J. NEWMAN, District Judge.

On April 15, 2014, plaintiff James L. Macklin ("plaintiff") filed a motion for leave to amend his complaint for a second time and a proposed Second Amended Complaint ("SAC"). (ECF Nos. 40, 43.) On July 1, 2014, the court granted plaintiff's motion for leave to amend and the proposed SAC became the operative complaint in this action. (ECF No. 42.) In the SAC, plaintiff alleges that defendants Select Portfolio Servicing, Inc. ("Select Portfolio"), Wells Fargo Bank, N.A. ("Wells Fargo"), [1] Deutsche Bank National Trust Co. ("Deutsche Bank"), and Quality Loan Service Corporation ("Quality Loan") committed breach of contract and violations of several Federal and California statutes governing lending and other business practices in connection with the origination, underwriting, servicing, and foreclosure of plaintiff's residential home loan. (ECF No. 43.) Presently before the court is defendants Select Portfolio, Deutsche Bank, and Quality Loan's[2] (collectively "defendants") motion to dismiss plaintiff's SAC pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief can be granted.[3] (ECF No. 45.) Plaintiff filed an opposition and defendants filed a reply. (ECF Nos. 52, 56, 59.)

The court heard this matter on its August 21, 2014 law and motion calendar. Plaintiff James Macklin appeared on his own behalf. Attorney Robert Bleicher appeared on behalf of defendants Deutsche Bank and Select Portfolio. Attorney Megan Boyd appeared telephonically on behalf of defendant Quality Loan. Attorney Robert Campbell appeared telephonically on behalf of defendant Wells Fargo.

The undersigned has fully considered the parties' briefs, the parties' oral arguments, and appropriate portions of the record. For the reasons that follow, it is recommended that defendants' motion to dismiss be granted and that defendants Deutsche Bank, Select Portfolio, and Quality Loan be dismissed from this action with prejudice.

I. Parties' Requests for Judicial Notice

As an initial matter, the court addresses defendants' and plaintiff's respective requests for the court to take judicial notice of certain documents. (ECF Nos. 46, 47, 48, 53, 63.) Pursuant to Federal Rules of Evidence 201, "the court may judicially notice a fact that is not subject to reasonable dispute because it: (1) is generally known within the trial court's territorial jurisdiction; or (2) can be accurately and readily determined from sources whose accuracy cannot reasonably be questioned."

Generally, a court may not consider material beyond the complaint in ruling on a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6). Lee v. City of Los Angeles , 250 F.3d 668, 688 (9th Cir. 2001). "However, [a] court may take judicial notice of matters of public record' without converting a motion to dismiss into a motion for summary judgment, ' as long as the facts noticed are not subject to reasonable dispute.'" Intri-Plex Technologies, Inc. v. Crest Grp., Inc. , 499 F.3d 1048, 1052 (9th Cir. 2007) (quoting Lee , 250 F.3d at 689 (citation omitted)); see also United States v. Ritchie , 342 F.3d 903, 908-09 (9th Cir. 2003).

A. Defendants' Requests

Defendants request that the court take judicial notice of 31 different documents. (ECF No. 46.) In particular, defendants request that the court take judicial notice of the following: (1) the docket in Placer County Superior Court Case No. SCV 26905 (the "Superior Court Action"); (2) the docket in the present action; (3) the docket in United States Bankruptcy Court for the Eastern District of California Case No. 10-44610 (the "Bankruptcy Case"); (4) the docket in United States Bankruptcy Court for the Eastern District of California, Case No. 11-002024 (the "Adversary Proceeding"); (5) the docket in United States District Court for the Eastern District of California, Case No. 2-12-cv-01752-GEB-JFM (the "Withdrawal Case"); (6) the notice of default on plaintiff's loan, recorded in the Placer County Recorder's Office on December 8, 2008; (7) the substitution of trustee document for plaintiff's loan, recorded in the Placer County Recorder's Office on January 30, 2008; (8) the notice of trustee's sale for plaintiff's property, recorded in the Placer County Recorder's Office on November 25, 2009; (9) the assignment of deed of trust document for plaintiff's loan, recorded in the Placer County Recorder's Office on November 26, 2009 (10) the notice of trustee's sale for plaintiff's property, recorded in the Placer County Recorder's Office on November 25, 2009; (11) the trustee's deed upon sale for plaintiff's property, recorded in the Placer County Recorder's Office on December 21, 2009; (12) the complaint in the Superior Court Action; (13) the first amended complaint in the Civil Action; (14) the complaint in the Adversary Proceeding; (15) the order for preliminary injunction in the Adversary Proceeding; (16) the first amended complaint in the Adversary Proceeding; (17) the judgment for Deutsche Bank National Trust in the Unlawful Detainer Action; (18) the memorandum of decision granting in part and denying in part Deutsche Bank's motion to dismiss the first amended complaint in the Adversary Proceeding; (19) Deutsche Bank's motion to withdraw the bankruptcy reference, filed in the Withdrawal Case; (20) plaintiff's opposition to the motion to withdraw the bankruptcy reference, filed in the Adversary Proceeding; (21) the order denying the motion to withdrawal the bankruptcy reference in the Withdrawal Case; (22) the appellate opinion affirming trial court's judgment for Deutsche Bank in the Unlawful Detainer Action; (23) the proposed second amended complaint in the Adversary Proceeding; (24) the Order denying plaintiff's motion for leave to amend to file a second amended complaint in the Adversary Proceeding; (25) the minute order denying plaintiff's motion to file a second amended complaint in the Adversary Proceeding; (26) the memorandum opinion and decision granting summary judgment for Deutsche Bank in the Adversary Proceeding; (27) the order granting summary judgment for Deutsche Bank in the Adversary Proceeding; (28) the judgment for Deutsche Bank in the Adversary Proceeding; (29) the minute order denying plaintiff's motion to vacate judgment in the Adversary Proceeding; (30) the civil minutes denying plaintiff's motion to vacate judgment in the Adversary Proceeding; and (31) the Ninth Circuit Bankruptcy Appellate Panel order dismissing plaintiff's appeal of judgment in the Adversary Proceeding. (Id.)

Because defendants' requests for judicial notice for the documents filed in the Bankruptcy Case, the Adversary Proceeding, the Withdrawal Case, and plaintiff's appeal from the Adversary Proceeding involve matters of public record in related judicial proceedings, these requests are granted. See Biggs v. Terhune , 334 F.3d 910, 916 n.3 (9th Cir. 2003) ("Materials from a proceeding in another tribunal are appropriate for judicial notice."), overruled on other grounds by Hayward v. Marshall , 603 F.3d 546, 555 (9th Cir. 2010); Headwaters Inc. v. United States Forest Serv. , 399 F.3d 1047, 1051 n.3 (9th Cir. 2005) (taking judicial notice of the docket in a related case). Specifically, the court grants defendants' request for judicial notice as to the documents filed as defendants' Exhibits 3, 4, 5, 14, 15, 16, 18, 19, 20, 21, 23, 24, 25, 26, 27, 28 29, 30, and 31 to their request for judicial notice. (ECF Nos. 46-3, 46-4, 46-5, 46-14, 46-15, 46-16, 47-2, 47-3, 47-4, 47-5, 47-7, 47-8, 48-1, 48-2, 48-3, 48-4, 48-5, 48-6, 48-7, 48-8.) The court takes judicial notice of these documents filed in these earlier actions for the purpose of recognizing the judicial acts taken and the subject matter of the plaintiff's adversary proceeding before the Bankruptcy Court. See Bank v. Magna Bank of Missouri , 894 F.Supp. 1337, 1341 (E.D. Mo. 1995) aff'd, 92 F.3d 743 (8th Cir. 1996) (taking judicial notice of records from prior related bankruptcy proceeding to recognize the judicial acts taken and the subject matter of that prior proceeding). Such facts are not reasonably in dispute by the parties.[4] However, the court declines to take judicial notice of any of the requested documents not listed above because the court finds that judicial notice of those documents is not necessary to decide the present motion to dismiss.

B. Plaintiff's Requests

Plaintiff also filed multiple requests for judicial notice. In his initial filing, plaintiff requests that the court judicially notice the following five documents: (1) a Brief by the Consumer Financial Protection Bureau as Amicus Curiae in Support of Plaintiff-Appellant and Reversal filed in Rosenfield v. HSBC Bank, USA, Case No. 10-1442, in the United States Tenth Circuit Court of Appeals; (2) the Ninth Circuit Court of Appeals' decision in Merritt v. Countrywide Fin. Corp., 09-17678, 2014 WL 3451299 (9th Cir. July 16, 2014); (3) a portion of the record for the Accredited Mortgage Loan Trust Series 2006-2 available on the United States Securities and Exchange Commission's website; (4) a loan application form plaintiff purports to have used in conjunction with obtaining his home loan; and (5) a Truth in Lending Disclosure form purportedly signed by plaintiff during his home loan application process and plaintiff's federal tax return for the 2005 tax year. (Id.) Defendants filed an opposition to all of plaintiff's requests in this filing except for his request for judicial notice of Ninth Circuit Court of Appeals' decision in Merritt. (ECF No. 57.) On August 21, 2014, just prior to the hearing on defendants' motion to dismiss, plaintiff also filed a supplemental request for judicial notice requesting that the court take judicial notice of the United States Security and Exchange Commission's record of the "Master Sales and Servicing Agreement" concerning the Accredited Mortgage Loan Trust Series 2006-2. (ECF No. 63.)

Plaintiff asks the court to take judicial notice of documents that are quite different from documents held to be proper subjects for judicial notice by the Ninth Circuit Court of Appeals. It appears that plaintiff seeks judicial notice of all of the above documents so that he may utilize them in support of the substantive allegations made in his SAC. "As a general rule, a court may not take judicial notice of proceedings or records in another cause so as to supply, without formal introduction of evidence, facts essential to support a contention in a cause then before it." M/V Am. Queen v. San Diego Marine Const. Corp. , 708 F.2d 1483, 1491 (9th Cir. 1983).

Accordingly, the court cannot judicially notice the Amicus Curiae brief filed in Rosenfield. Furthermore, the court declines to take judicial notice of any of the other documents plaintiff requests because none of those documents have any relevance to defendants' motion to dismiss currently before the court. Accordingly, plaintiff's requests for judicial notice are denied.

II. Background

A. Procedural History

On April 2, 2010, plaintiff filed his original complaint in the Placer County Superior Court alleging claims against Deutsche Bank, Select Portfolio, and other defendants regarding the origination, underwriting, and servicing of the mortgage loan on plaintiff's home. (ECF No. 2-1.) Defendants removed the action to this court on May 3, 2010, on the basis of both diversity and federal question jurisdiction. (ECF No. 2.) On June 4, 2010, plaintiff requested leave to amend his complaint and filed a proposed first amended complaint. (ECF Nos. 12, 13.) The court subsequently granted plaintiff's motion. (ECF No. 14.) The defendants named in the first amended complaint filed an answer on June 24, 2010, and subsequently filed a motion for summary judgment. (ECF Nos. 15, 16.)

On September 16, 2010, plaintiff filed a Chapter 13 bankruptcy petition in the Bankruptcy Court, which was subsequently converted into a proceeding under Chapter 7. (ECF No. 46-3 at 2, 5.) On October 6, 2010, the court stayed the proceedings in the present action pursuant to 11 U.S.C. ยง 362 in light of plaintiff's pending bankruptcy proceedings. (ECF No. 25.) The court further ordered the parties to notify the court within ten days of the resolution of plaintiff's bankruptcy proceedings. (Id.)

On January 13, 2011, plaintiff filed a complaint in an adversary proceeding against Deutsche Bank before the Bankruptcy Court. (Pl.'s Adversary Compl. (ECF No. 46-14).) The adversary complaint alleged, among other things, claims against Deutsche Bank for fraudulent conveyance, libel, quiet title, and violations of the Truth in Lending Act ("TILA"). (Id.) Deutsche Bank filed a motion to dismiss the adversary complaint, which was granted with leave to amend by the Bankruptcy Court on May 12, 2011. (Electronic Docket for Adversary Proceeding (ECF No. 46-4 at 11).)

On June 17, 2011, plaintiff filed an amended adversary complaint alleging the following ten claims against Deutsche Bank: (1) violations of TILA; (2) violations of the Real Estate Settlement Procedures Act ("RESPA"); (3) violations of the Fair Credit Reporting Act ("FCRA"); (4) fraud; (5) unjust enrichment; (6) civil RICO violations; (7) violation of California's Unfair Competition Law ("UCL"); (8) breach of a security instrument; (9) wrongful foreclosure; and (10) quiet title. (Pl.'s Am. Adversary Compl. (ECF No. 46-16).) Deutsche bank filed a motion to dismiss the amended adversary complaint on August 3, 2011. (ECF No. 46-4 at 15.) On February 12, 2012, the Bankruptcy Court granted Deutsche Bank's motion to dismiss in part, dismissing the first eight claims alleged in the amended adversary complaint with prejudice, and denying the motion as to plaintiff's final two claims for wrongful foreclosure and quiet title. (ECF No. 47-2.) On February 28, 2012, Deutsche Bank filed an answer to the two surviving causes of action. (ECF No. 46-4 at 22.)

On July 2, 2012, through a separate action, Deutsche Bank filed a motion to withdraw the bankruptcy reference so that the adversary proceeding in plaintiff's bankruptcy case could be consolidated with the present action. (ECF No. 46-5 at 2.) The district judge presiding over the withdrawal case denied Deutsche Bank's motion primarily on grounds that having the district court become familiar with the facts and law of the claims underlying the adversary proceeding "would duplicate much of what [the bankruptcy court] has already accomplished." (ECF No. 47-5 at 6-7.)

After the denial of Deutsche Bank's motion, the adversary proceeding resumed. On October 4, 2012, plaintiff filed a motion for leave to amend his adversary complaint for a second time, seeking to again add claims for violations of TILA and California's UCL, in addition to stating his surviving wrongful foreclosure and quiet title claims. (ECF No. 47-7.) The Bankruptcy Court denied this motion, stating several reasons why plaintiff's proposed TILA and UCL claims were not cognizable as stated in the proposed second amended adversary complaint. (ECF Nos. 48-1, 48-2.)

On February 23, 2013, plaintiff filed a motion for summary judgment as to his surviving wrongful foreclosure and quiet title claims; Deutsche Bank filed a cross-motion for summary judgment on these claims. (ECF No. 46-4 at 30-31.) On May 23, 2013, the Bankruptcy Court granted Deutsche Bank's cross-motion for summary judgment and denied plaintiff's motion for summary judgment. (ECF Nos. 48-3, 48-4.) Judgment for Deutsche Bank in the adversary proceeding was entered on July 2, 2013. (ECF No. 48-5.) Plaintiff filed a motion to vacate the judgment; however, that motion was denied. (ECF No. 46-4 at 33; ECF No. 48-6; ECF No. 48-7.) Plaintiff then appealed the judgment. (ECF No. 46-4 at 35.) On December 16, 2013, the Ninth Circuit Court of Appeal's Bankruptcy Panel denied plaintiff's appeal for lack of jurisdiction. (ECF No. 48-8.)

On December 23, 2013, defendants filed a notice stating that plaintiff's bankruptcy proceedings had reached a final resolution. (ECF No. 26.) As a result, the court lifted the stay on the present action on February 4, 2014. (ECF No. 29.) Plaintiff subsequently filed a motion for leave to amend his complaint for a second time along with a proposed second amended complaint. (ECF Nos. 40, 43.) On July 1, 2014, the court granted plaintiff's motion and deemed the proposed second amended complaint the operative complaint. (ECF ...


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