United States District Court, C.D. California
Attorneys Present for Plaintiffs: Varand Vartanian
Attorneys Present for Defendants: Mike Aleali
HEARING BY TELEPHONE ON DEFENDANTS BAYVIEW LOAN SERVICING,
BANK OF AMERICA, AND LAW OFFICES OF LES ZIEVE’S MOTION
TO DISMISS PLAINTIFFS’ FIRST AMENDED COMPLAINT (Dkt.
40, filed June 14, 2016)
MINUTES - GENERAL
CHRISTINA A. SNYDER J.
December 21, 2015, plaintiffs Guy Hart, Leemor Hart Lavy, and
Zeev Lavy (collectively, “plaintiffs”) filed the
instant action in the Los Angeles County Superior Court
against defendants Bayview Loan Servicing
(“Bayview”), Bank of America (“Bank of
America”), the Law Offices of Les Zieve
(“Zieve”), and Does 1 through 20, inclusive. Dkt.
1 (Compl.). Plaintiffs later identified Doe 1 as REO
Partners, LLC (“REO”). The original complaint
asserted claims for wrongful foreclosure, declaratory relief,
and “temporary restraining order and preliminary
injunctions.” See generally Compl. On February
25, 2016, defendants removed this action to federal court,
asserting diversity jurisdiction. Dkt. 1 (Notice of Removal).
March 2, 2016, defendants Bayview and Bank of America filed a
joint motion to dismiss pursuant to Federal Rule of Civil
Procedure 12(b)(6). Dkt. 7. On March 15, 2016, defendant REO
filed a separate motion to dismiss pursuant to Rule 12(b)(6).
Dkt. 12. In an order dated May 10, 2016, the Court granted
defendants’ motions to dismiss without prejudice. Dkt
33 (Order). On May 26, 2016, pursuant to a Joint Stipulation
filed by the parties, the Court dismissed defendant REO from
this action without prejudice. Dkt 35.
31, 2016, plaintiffs filed the operative first amended
complaint (“FAC”) against defendants Bayview,
Bank of America, and Zieve, again asserting claims for (1)
wrongful foreclosure and (2) declaratory relief. Dkt. 36. The
FAC also asserts, for the first time in this action, claims
for (3) fraud and (4) and intentional infliction of emotional
14, 2016, defendants Bayview, Bank of America, and Zieve
filed the instant motion to dismiss plaintiffs’ FAC.
Dkt. 40 (“Motion”). On June 27, 2016, plaintiffs
filed an opposition to defendants’ motion, dkt. 45
(“Opp’n”), and on July 6, 2016, defendants
filed a reply, dkt. 46 (“Reply”).
18, 2016, the Court provided the parties with a tentative
order and held oral argument on the instant motion. Having
carefully considered the parties’ arguments, the Court
concludes as follows.
about March 27, 2007, plaintiff Guy Hart obtained a $1, 000,
000 loan (the “subject loan”) from Countrywide
Home Loans, Inc. in order to purchase the real property
located at 20338 Via Sansovino, Los Angeles, California 91326
(the “Property”). See FAC at
¶¶ 12-13; Dkt. 8 (Request for Judicial Notice, or
“RJN”), Ex. 1. A Deed of Trust was entered evidencing
a mortgage. See RJN, Ex. 1. According to the FAC,
plaintiff Guy Hart’s sister (plaintiff Leemor Hart
Levy) and her husband (plaintiff Zeev Lavy) have resided at
the Property since 2007. FAC ¶¶ 4-5. The FAC
further alleges that the Lavys “help[ed] with all the
payments on the Property, including the mortgage, down
payment association fees, electrical, gas, etc. and
maintained the Property as part of their agreement with
Plaintiff Guy Hart that they were co-owners on the
Property.” Id. ¶ 5.
about November 18, 2011, a Notice of Default and Election to
Sell Under Deed of Trust indicating an arrearage of $78,
534.24 was recorded in the Los Angeles County
Recorder’s Office. See RJN, Ex. 2; FAC ¶
16. The FAC alleges that after the recording of the Notice of
Default, plaintiffs “communicated at length with Bank
of America in an effort to modify the loan, ” but were
informed on November 3, 2011 that the property was to be
placed in “Accelerated Foreclosure.” Id.
¶¶ 15-16. Thereafter, plaintiff Guy Hart
purportedly made numerous attempts to seek a loan
modification and prevent the foreclosure. Id. ¶
16. Specifically, plaintiffs allege that in January 2012,
they sent Bank of America a tender offer to purchase the home
in full or, in the alternative, to modify the subject loan.
Id. ¶¶ 17-18. Plaintiffs further allege,
however, that while they were engaged with Bank of America in
ongoing efforts to modify the loan, the Deed of Trust had
already been assigned to The Bank of New York Mellon in
October 2011. Id. ¶ 19. The assignment was
recorded on November 1, 2011. Id.
further aver that throughout 2014 and 2015, negotiations to
modify the loan were ongoing between plaintiff Guy Hart and
defendant Bayview Loan Servicing. See generally id.
¶¶ 20-29. Nonetheless, on November 4, 2015, a
Notice of Trustee’s Sale was recorded in the Los
Angeles County Recorder’s Office indicating that the
estimated amount of the “unpaid balance and other
charges” on the loan was $1, 341, 448.66. RJN, Ex. 3.
Pursuant to the Notice of Trustee’s Sale, a sale of the
Subject Property was held on November 30, 2015. RJN, Ex. 4.
operative complaint, plaintiff Guy Hart alleges that on
December 2, 2015, he contacted defendant Bayview Loan
Servicing regarding the status of the loan modification and
discovered, to plaintiffs’ surprise, that the property
had already been sold days earlier. Id. ¶ 32.
Plaintiffs allege that they had no notice of the impending
Trustee’s Sale and that the resulting sale was wrongful
and must be set aside. See id. ¶¶ 33-35,
44-56. Plaintiffs also aver that defendants “conducted
this illegal sale during the widely-publicized Porter Ranch
gas leak when the area was under evacuation.”
Id. ¶ 41.
operative complaint also asserts claims for fraud and
intentional infliction of emotional distress, neither of
which was asserted in their original complaint. More
specifically, plaintiffs assert that defendants intended to
deceive plaintiffs by failing to disclose or provide proper
notice of the foreclosure sale. Id. ¶ 65.
Plaintiffs further allege that they have suffered severe
emotional distress as a result of defendants’ conduct.
Id. ¶ 71.
motion pursuant to Federal Rule of Civil Procedure 12(b)(6)
tests the legal sufficiency of the claims asserted in a
complaint. Under this Rule, a district court properly
dismisses a claim if “there is a ‘lack of a
cognizable legal theory or the absence of sufficient facts
alleged under a cognizable legal theory.’ ”
Conservation Force v. Salazar, 646 F.3d 1240, 1242
(9th Cir. 2011) (quoting Balisteri v. Pacifica Police
Dep’t, 901 F.2d 696, 699 (9th Cir. 1988)).
“While a complaint attacked by a Rule 12(b)(6) motion
to dismiss does not need detailed factual allegations, a
plaintiff’s obligation to provide the
‘grounds’ of his ‘entitlement to
relief’ requires more than labels and conclusions, and
a formulaic recitation of the elements of a cause of action
will not do.” Bell Atlantic Corp. v. Twombly,
550 U.S. 544, 555 (2007). “[F]actual allegations must
be enough to raise a right to relief above the speculative
considering a motion pursuant to Rule 12(b)(6), a court must
accept as true all material allegations in the complaint, as
well as all reasonable inferences to be drawn from them.
Pareto v. FDIC, 139 F.3d 696, 699 (9th Cir. 1998).
The complaint must be read in the light most favorable to the
nonmoving party. Sprewell v. Golden State Warriors,
266 F.3d 979, 988 (9th Cir. 2001). However, “a court
considering a motion to dismiss can choose to begin by
identifying pleadings that, because they are no more than
conclusions, are not entitled to the assumption of truth.
While legal conclusions can provide the framework of a
complaint, they must be supported by factual
allegations.” Ashcroft v. Iqbal, 556 U.S. 662,
679 (2009); see Moss v. United States Secret
Service, 572 F.3d 962, 969 (9th Cir. 2009) (“[F]or
a complaint to survive a motion to dismiss, the
non-conclusory ‘factual content, ’ and reasonable
inferences from that content, must be plausibly suggestive of
a claim entitling the plaintiff to relief.”).
Ultimately, “[d]etermining whether a complaint states a
plausible claim for relief will . . . be a context-specific
task that requires the reviewing court to draw on its
judicial experience and common sense.” Iqbal,
556 U.S. at 679.
a court converts a Rule 12(b)(6) motion into a motion for
summary judgment, a court cannot consider material outside of
the complaint (e.g., facts presented in briefs,
affidavits, or discovery materials). In re American
Cont’l Corp./Lincoln Sav. & Loan Sec. Litig.,
102 F.3d 1524, 1537 (9th Cir. 1996), rev’d on other
grounds sub nom Lexecon, Inc. v. Milberg Weiss Bershad Hynes
& Lerach, 523 U.S. 26 (1998). A court may, however,
consider exhibits submitted with or alleged in the complaint
and matters that may be judicially noticed pursuant to
Federal Rule of Evidence ...