United States District Court, N.D. California, San Jose Division
TSVETEN S. TORBOV, Plaintiff,
CENLAR AGENCY, INC., et al., Defendants.
ORDER GRANTING MOTION TO DISMISS WITH LEAVE TO AMEND IN PART AND WITHOUT LEAVE TO AMEND IN PART; AND ORDERING PLAINTIFF TO SHOW CAUSE WHY ACTION AGAINST DEFENDANT TORNQUIST SHOULD NOT BE DISMISSED FOR FAILURE TO EFFECT TIMELY SERVICE OF PROCESS
[Re: ECF 91]
BETH LABSON FREEMAN, District Judge.
Defendants Cenlar Agency, Inc. ("Cenlar") and Nationstar Mortgage LLC ("Nationstar") seek dismissal of the fourth amended complaint ("FAC") under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief may be granted. The Court has considered the briefing and the oral argument presented at the hearing on April 23, 2015. For the reasons discussed below, the motion is GRANTED WITH LEAVE TO AMEND IN PART AND WITHOUT LEAVE TO AMEND IN PART. Additionally, Plaintiff is hereby ORDERED TO SHOW CAUSE why the action against Defendant Gregory S. Tornquist ("Tornquist") should not be dismissed without prejudice for failure to effect timely service of process.
The facts of this case are well-known to the parties and to the Court and need not be recited in full here. In brief, Plaintiff Tsveten S. Torbov claims that he made timely monthly mortgage payments for fifteen years; that starting in March 2013 his monthly mortgage payment checks were returned without explanation and his account was not credited with those payments; and that subsequently he was informed that his mortgage was in default and that a foreclosure sale had been scheduled. Plaintiff, acting pro se, filed this action on January 9, 2014. Plaintiff subsequently filed several iterations of the complaint, first as of right and then with leave of court. Plaintiff ultimately retained counsel, who filed the operative FAC on December 5, 2014. The FAC asserts claims against Cenlar, Cenlar's chief executive officer, Tornquist, and Nationstar for: (1) injunctive relief; (2) declaratory relief; (3) accounting; (4) breach of the implied covenant of good faith and fair dealing; (5) intentional infliction of emotional distress; and (6) negligent infliction of emotional distress.
Cenlar and Nationstar filed the present motion to dismiss on December 19, 2014. Although Plaintiff was represented by counsel at that time, no timely opposition to the motion was filed. On March 24, 2015, shortly before the scheduled hearing date, new counsel substituted in and filed a late opposition on Plaintiff's behalf. The Court continued the hearing date in order to afford Defendants adequate time to respond to the late-filed opposition.
II. LEGAL STANDARD
"A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief can be granted tests the legal sufficiency of a claim.'" Conservation Force v. Salazar, 646 F.3d 1240, 1241-42 (9th Cir. 2011) (quoting Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001)). When determining whether a claim has been stated, the Court accepts as true all well-pled factual allegations and construes them in the light most favorable to the plaintiff. Reese v. BP Exploration (Alaska) Inc., 643 F.3d 681, 690 (9th Cir. 2011). However, the Court need not "accept as true allegations that contradict matters properly subject to judicial notice" or "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) (internal quotation marks and citations omitted). While a complaint need not contain detailed factual allegations, it "must contain sufficient factual matter, accepted as true, 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, 570 (2007)). A claim is facially plausible when it "allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id.
A. General Observations
Before addressing the merits of Plaintiffs' claims, the Court makes some general observations. First, moving parties object to Plaintiffs' late-filed opposition. The opposition was due on January 5, 2015 but it was not filed until March 24, 2015. At the hearing, current counsel stated that he substituted in as counsel of record and filed opposition as soon as he was able to complete his due diligence investigation. While that statement accounts for the month of March 2015, it does not account for the nearly two months that elapsed after the opposition was due and before current counsel became involved in the case. Ordinarily, the Court would not consider such a late filing without adequate explanation, particularly where (as here) accepting the untimely opposition necessitated a continuance of the hearing date. When a plaintiff seeks to stave off foreclosure, any delay is a victory. However, because the untimely filing appears to be the fault of Plaintiff's former counsel, because there is no prejudice to moving parties, and in light of the strong policy favoring resolution of cases on their merits, the Court overrules Defendants' objection and has considered the late-filed opposition. See Eitel v. McCool, 782 F.2d 1470, 1472 (9th Cir. 1986) ("Cases should be decided upon their merits whenever reasonably possible.").
Second, the FAC does not contain any substantive allegations against Tornquist. Moreover, the docket does not reflect that service of process has been effected upon Tornquist. He was added as a defendant in the third amended complaint filed on July 29, 2014. See Third Am'd Compl., ECF 67. Under Federal Rule of Civil Procedure 4(m), Plaintiff had 120 days, or until November 26, 2014 to effect service of process. Plaintiff is hereby ORDERED TO SHOW CAUSE, in writing and on or before May 19, 2015, why the action against Tornquist should not be dismissed for failure to effect timely service of process. See Fed.R.Civ.P. 4(m) ("If a defendant is not served within 120 days after the complaint is filed, the court - on motion or on its own after notice to the plaintiff - must dismiss the action without prejudice against that defendant or order that service be made within a specified time.").
Third, the FAC and some of Plaintiff's briefing were not filed in PDF format as required by the Court's Civil Local Rules. See Civ. L.R. 5-1(e) (documents filed electronically must be filed in PDF format "to permit text searches and to facilitate transmission and retrieval"). Plaintiff shall file all future documents in compliance with the Court's Civil Local Rules.
B. Requests for Judicial Notice
Defendant has filed a timely request for judicial notice of publicly recorded documents relating to the property and of Plaintiff's Chapter 13 Bankruptcy petition filed on December 5, 2014. See Ds' RJN, ECF 92. The Court may take judicial notice of matters of public record and court filings. See Reyn's Pasta Bella, LLC v. Visa USA, Inc., 442 F.3d 741, 746 n.6 (9th Cir. 2006) ("We may take judicial notice of court filings and other matters of public record."); Mir v. Little Co. of Mary Hosp., 844 F.2d 646, 649 (9th ...