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Sepehry-Fard v. MB Financial Services

United States District Court, N.D. California, San Jose Division

March 2, 2015




This is a case about a loan on a 2006 Mercedes-Benz automobile. Plaintiff Fareed:Sepehry-Fard, proceeding pro se, [1] sues defendant Mercedes-Benz Financial Services USA LLC[2] on a variety of claims related to this loan. Before the Court are two motions by the parties: Defendant's Motion to Dismiss the Third Amended Complaint, ECF 110, and Plaintiff's Motion for Proof of Authority of Alleged Attorney to Represent Alleged Defendant and Request for Partial Summary Judgment, ECF 112. Having carefully considered the parties' respective written submissions, the Court GRANTS Defendant's Motion to Dismiss with prejudice and DENIES Plaintiff's motion.


Before turning to the allegations in the TAC, the Court notes that Plaintiff filed, along with his TAC, a "Declaration and Request for Judicial Notice in Support of Third Amended Complaint." Pl.'s Request for Judicial Notice ("RJN"), ECF 109. The "declaration" offers no substantive testimony, only an identification of the seventeen exhibits for which Plaintiff seeks judicial notice. Most of these exhibits are not appropriate for judicial notice, as they are private correspondence between Plaintiff and Defendant or otherwise contain disputed facts that are not "generally known within the trial court's territorial jurisdiction" or can be "accurately and readily determined from sources whose accuracy cannot reasonably be questioned." Fed.R.Evid. 201; see Pl.'s RJN Exhs. A-K, M, O-P. Plaintiff, however, refers to these exhibits throughout the TAC. As such, and solely for purposes of Defendant's Motion to Dismiss, the Court shall treat the exhibits attached to Plaintiff's request for judicial notice as incorporated by reference into the TAC. United States v. Ritchie, 342 F.3d 903, 908 (9th Cir. 2003) (court may consider documents attached to the complaint, documents incorporated by reference in the complaint, or matters of judicial notice without converting the motion to dismiss into a motion for summary judgment).

A. Factual Background

Plaintiff disputes that he owes a debt on a 2006 Mercedes-Benz. The dispute is based on Plaintiff's allegations that Defendant is "a total stranger" to him; that it "misrepresented to Plaintiff that alleged Defendant has paid for Plaintiff's car when it did not"; and that Defendant "faked loaning money to Plaintiff and for several years collected money on an unsubstantiated debt." TAC ¶¶ 21-22, 25. Plaintiff questions the ability of Defendant-Mercedes-Benz Financial Services USA LLC-to collect on the car loan he signed (which he alleges to be forged), which loan was assigned to "DCFS USA LLC." Id. ¶¶ 29-31, 67; Pl.'s RJN Exh. L. As a result, Plaintiff alleges that Defendant is not the "holder in due course, " "not a real and beneficial party of interest, " and accordingly lacks legal right to collect on the debt, or to repossess Plaintiff's car to enforce the promissory note. See TAC ¶¶ 29-31, 34, 40; see also id. ¶ 45 (Defendant has no right to collect on the loan because "Defendant did not pay any money for Plaintiff's car").

It appears that at some point, after making regular payments on the loan to Defendant, Plaintiff stopped making such payments on the theory that they are not owed to Defendant. Id. ¶ 38. Plaintiff then went on the offensive and sent a series of correspondence to Defendant demanding, inter alia, Defendant's "proof of claim." Id. ¶ 39; Pl.'s RJN Exhs. A-K. Defendant did not respond to these letters, which Plaintiff interprets as Defendant's "acquiescence to judgment" for Plaintiff. TAC ¶¶ 41-42. In spite of this "acquiescence, " Plaintiff alleges that Defendant "threatened Plaintiff with physical harm and tress passed [sic] on Plaintiff's property when alleged Defendant was on notice of no tress pass [sic] in violation of PC 602." TAC ¶ 23; see also id. ¶¶ 6, 12, 42, 51.

Although not expressly alleged, Plaintiff also appears to be suggesting that the underlying car loan was securitized at some point. See TAC ¶¶ 70, 81, 88; see also Pl.'s RJN Exh. N.

B. Procedural History

Plaintiff filed the instant lawsuit on June 18, 2013 asserting claims against Defendant for negligence; violation of the Telephone Consumer Protection Act of 1991 ("TCPA"), 47 U.S.C. § 227; violation of California's Unfair Competition Law ("UCL"), Cal. Bus. & Prof. Code § 17200 et seq.; violation of the Fair Debt Collections Practices Act ("FDCPA"), 15 U.S.C. § 1692 et seq.; and for recoupment. On January 13, 2014, the Court granted Defendant's first motion to dismiss, affording Plaintiff leave to amend the TCPA and recoupment claims and the UCL claim under the unlawful prong. Order re Mots. at 4-7, ECF 59. In dismissing Plaintiff's FDCPA claim without leave to amend, the Court determined that "Defendant is not subject to the FDCPA regarding its alleged efforts to collect on the debt owed to itself regarding the vehicle, " concluding that Defendant does not fall with the FDCPA's definition of "debt collector" in 15 U.S.C. § 1692a(6). Id. at 5-6. The Court also dismissed without leave to amend Plaintiff's UCL claims under the unfair and fraudulent prongs. Id. at 7.

Plaintiff filed his First Amended Complaint ("FAC") on February 6, 2014, and this case was reassigned to the undersigned on April 17, 2014. On May 10, 2014, this Court granted Defendant's second motion to dismiss and gave Plaintiff leave to amend only his TCPA claim and his UCL claim under the unlawful prong. Order Granting Mot. to Dismiss FAC at 10, ECF 85. Plaintiff filed his Second Amended Complaint ("SAC") on June 13, 2014, followed shortly thereafter by a motion for leave to file a Third Amended Complaint ("TAC") on July 1, 2014. Defendant filed a statement of non-opposition to the latter motion, and this Court accordingly granted Plaintiff's motion for leave to amend on September 15, 2014. See ECF 107. The TAC filed September 16, 2014 at ECF 108 is now the operative complaint.

In sharp contrast to prior iterations of the complaint, Plaintiff's TAC now asserts fifteen causes of action ("COA") against Defendant for: (1) unjust enrichment (First COA); (2) violations of the Racketeering Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. §§ 1961 et seq. (Second, Third, Fourth, Fifth, and Sixth COAs); (3) violation of 42 U.S.C. § 1981 (Seventh COA); (4) violation of 42 U.S.C. § 1982 (Eighth COA); (5) violation of California's Unfair Competition Law, Cal. Bus. & Prof. Code §§ 17200 et seq. (Ninth COA); (6) accounting (Tenth COA); (7) "tort" (Eleventh COA); (8) malicious conduct (Twelfth COA); (9) violation of the California UCL under the "under the unlawful prong" (Thirteenth COA); (10) "IRS Whistel [sic] Blower Program (Under the Unlawful Prong of UCL)" (Fourteenth COA); and (11) attorney fees (Fifteenth COA). The only claim from the original complaint that remains is the Thirteenth COA under the UCL.


A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) tests the legal sufficiency of the claims alleged in the complaint. Ileto v. Glock Inc., 349 F.3d 1191, 1199-200 (9th Cir. 2003). Dismissal under Rule 12(b)(6) may be based on either the "lack of a cognizable legal theory" or on "the absence of sufficient facts alleged." Balistreri v. Pacifica Police Dept., 901 F.2d 696, 699 (9th Cir. 1988).

To survive a motion to dismiss, a complaint must plead sufficient factual matter that, when accepted as true and construed in the light most favorable to the non-moving party, "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). The court does not accept as true "allegations that are merely conclusory, unwarranted deductions of fact, or unreasonable inferences." In re Gilead Scis. Sec. Litig., 536 F.3d 1049, 1055 (9th Cir. 2008). A pleading that offers "labels and conclusions, " "a formulaic recitation of the elements of a cause of action, " or "naked assertions devoid of further factual enhancement" will not survive a motion to dismiss. Iqbal, 556 U.S. at 678 (citing and quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555, 557 (2007)).

Here, the Court is mindful that "a document filed pro se is to be liberally construed, ' and a pro se complaint, however inartfully pleaded, must be held to less stringent standards than formal pleadings drafted by lawyers.'" Erickson v. Pardus, 551 U.S. 89, 94 (2007) (quoting Estelle v. Gamble, 429 U.S. 97, 106 (1976)). "Unless it is absolutely clear that no amendment can cure the defect... a pro se litigant is entitled to notice of the complaint's deficiencies and an opportunity to amend prior to dismissal of the action." Lucas v. Dep't of Corr., 66 F.3d 245, 248 (9th Cir. 1995) (quoted with approval in Merritt v. Countrywide Fin. Corp., 759 F.3d 1023, 1041 (9th Cir. 2014)). Conversely, leave to amend may be denied if amendment would be futile, and a district court's discretion to deny leave to amend is "particularly ...

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