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Gomez v. Bayview Loan Servicing, LLC

United States District Court, N.D. California

February 2, 2015

ITALO GOMEZ, Plaintiff,


CHARLES R. BREYER, District Judge.

This case arises from foreclosure proceedings against a property which Plaintiff Italo Gomez previously co-owned. The gravamen of Gomez's Complaint (dkt. 1) is that Defendant Bayview Loan Servicing, LLC ("Bayview") recorded false instruments to dispossess him of his property. In essence, Gomez seeks invalidation of a trustee's sale of his property. Currently pending before this Court is Bayview's motion to dismiss Gomez's Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). Having considered the papers submitted by the parties and the hearing on the motion, the Court GRANTS the motion to dismiss with leave to amend.


Gomez challenges action taken against property located at 305 Nevada Street in San Francisco, California. Am. Notice of Removal ¶ 1, Ex. A ("Compl.") ¶ 1. In September 2006, Gomez executed a promissory notice and Deed of Trust on the property to secure his obligation under a $468, 000 loan. Id . Ex. 6. The Deed of Trust identified Mortgage Electronic Registration System, Inc. ("MERS") as (1) the nominee for the lender, AEGIS, and (2) the beneficiary under the Deed of Trust. Id.

On July 23, 2009, CR Title Services Inc., acting as the agent for MERS, recorded a Notice of Default. The notice stated that the amount of default was $22, 033.12. Opp. (dkt. 17) Ex. 1.

On August 23, 2010, CR Title Services Inc. recorded a Notice of Rescission of Notice of Default[2], stating that MERS withdrew a Declaration of Default and a Demand for Sale which were previously delivered to Gomez and his co-owner. Compl. Ex. 1. Gomez maintains that this instrument "accelerated [his] debt obligation" because it contained language declaring that "all sums secured by [the deed of trust]" are "immediately due and payable." Opp. at 8. Gomez also alleges that this instrument is false because MERS did not deliver the Declaration of Default or the Demand for Sale to him, as stated in the Notice of Rescission of the Notice of Default. Compl. ¶ 25. Gomez adds that"no default, as was defined in the Notice of Default, was present" and therefore Bayview has "no admissible evidence to support [its] false instrument." Id.

Thereafter, the Deed of Trust was assigned several times, the last assignee being Bayview. Id . ¶ 7 and Ex. 2; Mot. (dkt. 6) Ex. A. Gomez alleges that AEGIS ceased to exist before the assignment to Bayview. Compl. ¶ 10. Therefore, Gomez contends that the agency relationship between MERS and AEGIS had terminated, and MERS was "precluded from acting for [AEGIS]" in assigning the Deed of Trust to Bayview. Compl. ¶¶ 10-11.

On May 8, 2012, Seaside Trustee Inc., acting as agent for Bayview, recorded a Notice of Default, stating that the amount of default was $54, 793.84. Mot. Ex. B. On August 9, 2012, Bayview recorded a Substitution of Trustee naming Seaside Trustee Inc. as the new trustee. Compl. Ex. 3. Gomez alleges that the substitution of Seaside as trustee was invalid under California law and the terms of the deed of trust because (1) "Bayview knew, or had a duty to know, that it is not a beneficiary" and (2) "Bayview fails to name the principal for whom it purports to execute the Substitution of Trustee." Compl. ¶ 62.

A Notice of Trustee's Sale soon followed. Id . Ex. 4. Id . Ex. 4. On January 6, 2014, Bayview acquired the property for $505, 600. Id . Ex. 5.

On July 2, 2014, Gomez filed his Complaint in the Superior Court of California for the County of San Francisco and served Bayview on August 4, 2014. Am. Notice of Removal ¶¶ 1-2. Bayview removed the action to this Court on September 3, 2014, invoking jurisdiction under 28 U.S.C. § 1331 and 1441, and filed an Amended Notice of Removal on September 16, 2014. Id . Bayview now moves to dismiss Gomez's Complaint in its entirety. See Mot.


A complaint may be dismissed for failure to state a claim upon which relief can be granted under Rule 12(b)(6) of the Federal Rules of Civil Procedure. Such a motion tests the legal sufficiency of the complaint. Ileto v. Glock, Inc., 349 F.3d 1191, 1199-1200 (9th Cir. 2003) (citing Fed.R.Civ.P. 12(b)(6)). Dismissal is proper if a complaint fails to state a claim upon which relief can be granted. Fed.R.Civ.P. 12(b)(6). To survive dismissal, a complaint must contain factual allegations sufficient 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, 555 (2007)). "On a motion to dismiss, all well-pleaded allegations of material fact are taken as true and construed in a light most favorable to the non-moving party." Wyler-Summit P'ship v. Turner Broad. Sys., Inc., 135 F.3d 658, 661 (9th Cir. 1998). If a court grants a motion to dismiss, it should grant the plaintiff leave to amend unless it is clear that the claims could not be saved by amendment. Swartz v. KPMG LLP, 476 F.3d 756, 760 (9th Cir. 2007).

Claims for fraud must meet the heightened pleading standard of Federal Rule of Civil Procedure 9(b), which requires a party "alleging fraud or mistake [to] state with particularity the circumstances constituting fraud or mistake." Fed.R.Civ.P. 9(b). Rule 9(b) "requires an account of the time, place, and specific content of the false representations as well as the identities of the parties to the misrepresentations." Swartz, 476 F.3d at 764 (internal quotation marks omitted).


Gomez's Complaint sets forth five causes of action: (1) breach of contract; (2) violation of section 1691(d)(2) of the Equal Credit Opportunity Act (15 U.S.C. § 1691 et seq.); (3) violation of the Fair Credit Reporting Act (15 U.S.C. § 1681 et seq.); (4) fraud; and (5) cancellation of trustee's deed upon sale. Bayview seeks to dismiss Gomez's five causes of action for failure to state a claim upon which relief can be granted under ...

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