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Kim v. Shellpoint Partners, LLC

United States District Court, S.D. California

March 14, 2017

UN BOON KIM, Plaintiff,
v.
SHELLPOINT PARTNERS, LLC, Defendant.

          ORDER GRANTING IN PART AND DENYING IN PART MOTION TO DISMISS

         After the Court dismissed portions of the first amended complaint, Plaintiff Un Boon Kim filed a second amended complaint (“SAC”). Defendant Shellpoint Partners, LLC has moved to dismiss it, and to strike class allegations.

         In 2004, Kim, along with her late husband Byoung Kug Kim, took out a home loan for $400, 000, and signed a promissory note. (SAC, ¶ 10.) The loan was transferred to Bank of America, and later to Resurgent Mortgage Servicing. (Id., ¶ 11.) After that, the SAC alleges it was transferred to Shellpoint. In monthly statements it sent Kim, Shellpoint allegedly committed several violations of the Truth in Lending Act (TILA), 15 U.S.C. §§ 1601, et seq. Specifically, Kim alleges Shellpoint is liable under § 1640(a), which provides remedies against creditors who fail to comply with TILA's requirements. Kim does not raise any claims against Shellpoint in any other capacity. The SAC brings claims only under TILA, and has abandoned all other claims. Plaintiff seeks only statutory damages. The proposed class consists of:

All persons who have a residential mortgage loan agreement relating to real property located within California and which is owned by Shellpoint as a creditor, and who, after January 1, 2013, Received monthly billing statements from Shellpoint that did not state that the interest rate and monthly payment would change, or the date on which the interest rate would change, or the amount of any late fee should the regular payment due not be paid by a date specified.

(SAC, 8:3-9.) Shellpoint has moved to dismiss, and to strike class action allegations for lack of ascertainability and typicality. As a fallback position, Shellpoint asks that claims be limited in scope, because it only came into existence in March, 2014.

         Legal Standards

         A Rule12(b)(6) motion to dismiss tests the sufficiency of the complaint. Navarro v. Block, 250 F.3d 729, 732 (9th Cir.2001). Under Fed.R.Civ.P. 8(a)(2), only “a short and plain statement of the claim showing that the pleader is entitled to relief, ” is required, in order to “give the defendant fair notice of what the . . . claim is and the grounds upon which it rests.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 554-55 (2007). The well-pleaded facts must do more than permit the Court to infer “the mere possibility of conduct”; they must show that the pleader is entitled to relief. Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009).

         When determining whether a complaint states a claim, the Court accepts all allegations of material fact in the complaint as true and construes them in the light most favorable to the non-moving party. Cedars-Sinai Medical Center v. National League of Postmasters of U.S., 497 F.3d 972, 975 (9th Cir. 2007) (citation omitted). But the Court is “not required to accept as true conclusory allegations which are contradicted by documents referred to in the complaint, ” and does “not . . . necessarily assume the truth of legal conclusions merely because they are cast in the form of factual allegations.” Warren v. Fox Family Worldwide, Inc., 328 F.3d 1136, 1139 (9th Cir.2003) (citations and quotation marks omitted).

         At the pleading stage, the Court may consider not only the complaint itself, but also documents it refers to, whose authenticity is not questioned, and matters judicially noticed. Zucco Partners LLC v. Digimarc Corp., 552 F.3d 981, 990 (9th Cir. 2009). The Court also need not accept as true allegations that contradict properly subject to judicial notice, or incorporated into the complaint. Gonzalez v. Planned Parenthood of Los Angeles, 759 F.3d 1112, 1115 (9th Cir. 2014).

         Under Fed.R.Civ.P. 12(f), the Court can strike from a pleading any "redundant, immaterial, impertinent, or scandalous matter, " either sua sponte or in response to a motion. In general, the appropriateness of proceeding as a class action is not tested at the pleading stage, but there is no rule preventing this. As the Supreme Court has explained, most of the time determining whether a case can proceed as a class action involves deciding factual and legal questions that are closely tied up with the cause of action itself. Gen'l Tel. Co. of Southwest v. Falcon, 457 U.S. 147, 160 (1982). That being said, "[s]ometimes the issues are plain enough from the pleadings to determine whether the interests of the absent parties are fairly encompassed within the named plaintiff's claim." Id. See also Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 350 (2011) (construing Falcon as holding that it may sometimes be necessary to look beyond the pleadings to determine whether class treatment was appropriate). When it is clear from the complaint that class actions cannot be maintained, the Court may grant a motion to strike them. Sanders v. Apple, Inc., 672 F.Supp.2d 978, 990-91 (N.D. Cal. 2009).

         Judicial Notice

         Under Fed.R.Evid. 201(c)(2), the Court must take notice if a party requests it and supplies the Court with the necessary information. Shellpoint argues that it is not Kim's creditor, [1] and asks the Court to take judicial notice of documents that it says support that contention. The documents are relevant because, if Shellpoint is correct and the creditor is actually Bank of New York Mellon, then Kim has no TILA claim against Shellpoint and the case must be dismissed. See 15 U.S.C. § 1641(f)(1) (servicers of loans are not liable under TILA unless they are also the owners of the loans). See also Lisnawati v. Bank of N.Y. Mellon, 2009 WL 1468793 at *2 (N.D. Cal., May 26, 2009) (claims under TILA against / / / escrow holder and trustee were subject to dismissal, because it was not a “creditor” within the meaning of TILA).

         The documents are:

Exhibit A: A note dated March 17, 2004.
Exhibit B: The executed deed of trust, recorded on March 25, 2005.
Exhibit C: An assignment dated March 3, 2010 and recorded April 5, 2010 with the San Diego County ...

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