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Almutarreb v. Nationstar Mortgage Holdings

United States District Court, N.D. California

June 20, 2016

MUHAMED ALMUTARREB, et al., Plaintiffs,
v.
NATIONSTAR MORTGAGE HOLDINGS, Defendant.

          ORDER GRANTING MOTION TO DISMISS RE: DKT. NO. 16

          DONNA M. RYU UNITED STATES MAGISTRATE JUDGE.

         Defendant Nationstar Mortgage LLC[1] ("Defendant" or "Nationstar") moves the court to dismiss the complaint by Plaintiffs Muhamed and Sophia Almutarreb ("Plaintiffs") pursuant to Federal Rule of Civil Procedure 12(b)(6). Motion to Dismiss [Docket No. 16]. The court held a hearing on the motion on June 9, 2016. For the reasons stated below, Defendant's motion to dismiss is granted.

         I. FACTUAL BACKGROUND

         The following facts are based on the complaint, the exhibits attached to the complaint, and judicially noticeable documents. On December 23, 2004, Plaintiff Muhamed Almutarreb borrowed $280, 000 from Home Loan Corporation dba Expanded Mortgage Credit ("Home Loan").[2] Complaint [Docket No. 1] ¶¶ 9-10; Ex. B at 2. As security for the loan, Muhamed and Sophia Almutarreb signed a Deed of Trust for the property located at 98 Villa Drive, San Pablo, California 94806 (the "Villa Drive Property"). Compl., Ex. B (December 23, 2004 Deed of Trust). Plaintiffs allege that Home Loan engaged in unspecified conduct regarding the loan that "amounted to material violations" of the Truth in Lending Act ("TILA"), 15 U.S.C. § 1635. Compl. ¶ 14. In August 2013, Nationstar became the beneficiary under the Deed of Trust. Request for Judicial Notice ("RJN") [Docket No. 17], Ex. G (Assignment of Deed of Trust).

         On June 8, 2015, Plaintiffs sent correspondence to Home Loan and Nationstar, which Plaintiffs contend were rescission letters pursuant to TILA. Compl. ¶¶ 15-16, Exs. C & D. Both letters stated: "I/WE HEREBY EXERCISE MY/OUR RIGHT/S TO RESCIND THE LOAN TRANSACTION IN ITS ENTIRETY. THE MORTGAGE IS NOW EXTINGUISHED AND YOUR RIGHTS UNDER THE TRUSTEE DEED HAVE BEEN TERMINATED. PLEASE GOVERN YOURSELVES ACCORDINGLY!" Compl., Exs. C & D. Plaintiffs contend that the "Deed of Trust. . .is a void instrument" because Nationstar "failed to respond within 20 days from the date of Plaintiff's [sic] mailing of the letters and all Defendants have failed to file a complaint for Declaratory Relief to attempt to prove that the Plaintiff [sic] did not have the right to rescind the loan." Compl. ¶¶ 17-19.

         Plaintiffs filed the instant action seeking quiet title and declaratory relief that the Deed of Trust is void.

         II. LEGAL STANDARD

         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). When reviewing a motion to dismiss for failure to state a claim, the court must "accept as true all of the factual allegations contained in the complaint, " Erickson v. Pardus, 551 U.S. 89, 94 (2007) (per curiam) (citation omitted), and may dismiss the case "only where there is no cognizable legal theory or an absence of sufficient facts alleged to support a cognizable legal theory." Shroyer v. New Cingular Wireless Servs., Inc., 622 F.3d 1035, 1041 (9th Cir. 2010) (citation and quotation marks omitted).

         When a complaint presents a cognizable legal theory, the court may grant the motion if the complaint lacks "sufficient factual matter to state a facially plausible claim to relief." Id. (citing Ashcroft v. Iqbal, 556 U.S. 662 (2009)). A claim has facial plausibility when a "plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 556 U.S. at 678 (citation omitted).

         "A claim may be dismissed under Rule 12(b)(6) on the ground that it is barred by the applicable statute of limitations only when ‘the running of the statute is apparent on the face of the complaint."' Von Saher v. Norton Simon Museum of Art at Pasadena, 592 F.3d 954, 969 (9th Cir. 2010) (quoting Huynh v. Chase Manhattan Bank, 465 F.3d 992, 997 (9th Cir. 2006)). For purposes of Rule 12(b)(6) review, the court reviews documents incorporated into the complaint, as well as judicially noticeable material. Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 322 (2007) ("[C]ourts must consider the complaint in its entirety, as well as other sources courts ordinarily examine when ruling on Rule 12(b)(6) motions to dismiss, in particular, documents incorporated into the complaint by reference, and matters of which a court may take judicial notice."); Knievel v. ESPN, 393 F.3d 1068, 1076-77 (9th Cir. 2005) (incorporation by reference); Skilstaf, Inc. v. CVS Caremark Corp., 669 F.3d 1006, 1016 n.9 (9th Cir. 2012) (judicial notice).

         "[A] court may take judicial notice of ‘matters of public record, '" Lee v. City of Los Angeles, 250 F.3d 668, 689 (9th Cir. 2001) (citing Mack v. S. Bay Beer Distrib., 798 F.2d 1279, 1282 (9th Cir. 1986)), and may also consider "documents whose contents are alleged in a complaint and whose authenticity no party questions, but which are not physically attached to the pleading" without converting a motion to dismiss under Rule 12(b)(6) into a motion for summary judgment. Branch v. Tunnell, 14 F.3d 449, 454 (9th Cir. 1994), overruled on other grounds by Galbraith v. Cty. of Santa Clara, 307 F.3d 1119 (9th Cir. 2002). The court need not accept as true allegations that contradict facts which may be judicially noticed. See Mullis v. United States Bankr. Court, 828 F.2d 1385, 1388 (9th Cir. 1987).

         III. REQUEST FOR JUDICIAL NOTICE

         The court first considers Nationstar's unopposed request for judicial notice. The court takes judicial notice of the Assignment of the Deed of Trust. RJN, Ex. G. Under Federal Rule of Evidence 201(b), publicly-recorded real estate instruments and notices, including deeds of trust and default and foreclosure notices, are the proper subject of judicial notice, unless their authenticity is subject to reasonable dispute. Disabled Rights Action Comm. v. Las Vegas Events, Inc., 375 F.3d 861, 866 n.1 (9th Cir. 2004); Petrovich v. Ocwen Loan Servicing, LLC, No. 15-CV-00033-EMC, 2016 WL 555959, at *3 (N.D. Cal. Feb. 12, 2016) (taking judicial notice of assignment of deed of trust).

         The court declines to take judicial notice of Exhibits A through F.[3] The court does not rely on those exhibits in reaching its ...


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