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Dare v. Aegis Wholesale Corp.

United States District Court, S.D. California

March 27, 2017



          JOHN A. HOUSTON United States District Judge.


         Pending before the Court is Defendants' U.S. Bank National Association (“US Bank”) and Nationstar Mortgage, LLC (“Nationstar”) motion to dismiss the complaint for failure to state a claim upon which relief can be granted pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure.[1] (See Doc. 6). Plaintiff Michael Dare (“Plaintiff”) filed an opposition to the motion. (See Doc. 10). After a careful review of the pleadings and relevant exhibits submitted by the parties, this Court GRANTS Defendants' motion to dismiss.


         Plaintiff is a resident of San Diego County and is the recorded title holder to the property located at 1800 S. Juniper Street, Escondido, CA 92025. (Compl.¶1.) Defendant U.S. Bank is a national banking association with its main office in Cincinnati, Ohio. (Doc. 1. at 3). Defendant Nationstar is a Delaware limited liability company with its principal place of business in Lewisville, Texas. (Id.)

         On April 5, 2006, Plaintiff refinanced his property with a loan from Aegis Wholesale Corporation (“Aegis”). (Doc. 1., Exhibit A). The loan was secured by a deed of trust on the property recorded April 10, 2006. (Doc. 1., Exhibit B). The deed of trust named Commonwealth Land Title as trustee and Mortgage Electronic Registration Systems, Inc. (“MERS”) as the initial beneficiary. (Id.)

         In June of 2011, MERS assigned the deed of trust to U.S. Bank. (Doc. 1., Exhibit C).[2] In March of 2014, Nationstar, as attorney in fact for U.S. Bank, executed a substitution of trustee naming Sage Point Lender Services, LLC (“Sage Point”) as trustee. (Doc. 6., Exhibit 4). Sage Point recorded a default against the property on April 15, 2014. (Id., Exhibit 5). The default stated that Plaintiff owed $145, 198.39 as of April 15, 2014. (Id.) U.S. Bank subsequently executed a substitution of trustee appointing Barret Daffin Frappier Treder & Weiss, LLS (“Barret Daffin”) as trustee in July of 2015. (Id., Exhibit 6). Barrett Daffin then recorded a notice of trustee's sale against the property, indicating the property would be sold at foreclosure on October 9, 2015. (Id., Exhibit 7).


         Plaintiff initiated the instant complaint in San Diego Superior Court on November 17, 2015. (See Doc. 1, Exhibit 1). Plaintiff alleges seven causes of action: 1) fraud in the concealment; 2) unconscionable contract; 3) breach of fiduciary duty; 4) intentional infliction of emotion distress; 5) declaratory relief; 6) wrongful foreclosure; and 7) violation of the California Homeowner Bill of Rights. (See Compl.) The complaint was removed on December 16, 2015. (See Doc. 1). On January 13, 2016, Defendants filed a motion to dismiss for failure to state a claim upon which relief can be granted pursuant to Fed.R.Civ.P. 12(b)(6). (See Doc. 6). Plaintiff filed an opposition to the motion on February 3, 2016. (See Doc. 10). Defendants filed a reply to the opposition on March 7, 2016. (See Doc. 13). The motion was subsequently taken under submission without oral argument pursuant to Local Rule 7.1(d.1).


         1. Legal Standards

         a. 12(b)(6)

         A motion to dismiss under Rule 12(b)(6) tests the sufficiency of the complaint and the claims alleged. See Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). A complaint may be dismissed where it fails to plead essential facts under a legal theory. See Robertson v. Dean Witter reynolds, Inc., 749 F.2d 530, 534, (9th Cir. 1984). While a plaintiff need not give “detailed factual allegations, ” he must plead sufficient facts that, if true, “raise a right to relief above the speculative level.” See Bell Atl. Corp. v. Twombly, 550 U.S. 544, 545 (2007).

         The Supreme Court has held that, while a complaint does not need detailed factual allegations “[a] plaintiff's obligation to provide ‘grounds' of his ‘entitle(ment) to relief requires more than labels and conclusions.... Factual allegations must be enough to raise a right to relief above the speculative level....” See Salsman v. Access Sys. Ams., Inc., 2010 U.S. Dist. 9, 5 (N.D. Cal. 2010) (Citing to: Twombly, 550 U.S. at 555). A claim is facially plausible when the factual allegations permit “the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. In other words, “the non-conclusory ‘factual content, ' and reasonable inferences from that content, must be plausibly suggestive of a claim entitling the plaintiff to relief.” See Moss v. U.S. Secret Serv., 572 F.3d 962, 969 (9th Cir. 2009). “Determining 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.” See Ashcroft v. Iqbal, 129 S.Ct. 1937, 1950 (2009).

         In reviewing a motion to dismiss under Rule 12(b)(6), the court may consider documents referenced in a complaint as long as the documents do not convert the motion to one for summary judgment. See Emrich v. Touche Ross & Co., 846 F.2d 1190, 1198 (9th Cir. 1988). In considering a motion to dismiss, a court must assume the truth of all factual allegations and must construe all inferences from them in the light most favorable to the nonmoving party. See Thompson v. Davis, 295 F.3d 890, 895 (9th Cir. 2002); Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336, 337-38 (9th Cir. 1996). However, legal conclusions need not be taken as true merely because they are cast in the form of factual allegations. See Ileto v. Glock, Inc., 349 F.3d 1191, 1200 (9th Cir. 2003); Western Mining Council v. Watt, 643 F.2d 618, 624 (9th Cir. 1981). When ruling on a motion to dismiss, the court may consider the facts alleged in the complaint, documents attached to the complaint, documents relied upon but not attached to the complaint when authenticity is not contested, and matters of which the court takes judicial notice. See Lee v. City of Los Angeles, 250 F.3d 668, 688-89 (9th Cir. 2001). If a court determines that a complaint fails to state a claim, the court should grant leave to amend unless it determines that the pleading could not possibly be cured by the allegation of other facts. See Doe v. United States, 58 F.3d 494, 497 (9th Cir. 1995).

         b. 9(b)

         Pursuant to Rule 9(b), “[i]n all averments of fraud or mistake, the circumstances constituting fraud or mistake shall be stated with particularity.” According to Rule 9(b), the complaint must contain specific allegations of who, what, where, when and how of the misconduct as to each defendant's role in the alleged fraud. See United States ex rel. Cafasso v. Gen. Dynamics C4 Sys., Inc., 637 F.3d 1047, 1055 (9th Cir. 2011); Vess v. Ciba-Geigy Corp., 317 F.3d 1097, 1106 (9th Cir. 2003).

         2. Analysis

         In the instant motion, Defendants contend (a) Plaintiff's fraud claim is insufficiently pled and time-barred; (b) Plaintiff's “unconscionable contract[s]” claim fails because there are no factual allegations supporting procedural or substantive unconscionability; (c) Plaintiff's breach of fiduciary duty claim fails to allege the existence of a fiduciary duty; (d) Plaintiff's intentional infliction of emotional distress claim fails to detail outrageous conduct; and (e) Plaintiff's declaratory judgment, wrongful foreclosure, and HBOR claims should be dismissed for lack of tender. (See Doc. 6).

         A. Fraud, Unconscionable Contract[s], and Breach of Fiduciary Duty Claims

         Defendants assert that Plaintiff's fraud claim is not pled with particularity and fails to meet Rule 9(b)'s pleading requirements. (See Doc. 6 at 9). A fraud claim contains five elements: 1) misrepresentation or concealment; 2) knowledge of the falsity; 3) intent to defraud; 4) justifiable reliance; and 5) resulting damage. Kearns v. Ford Motor Co., 567 F.3d 1120, 1126 (9th Cir. 2009) (quoting Engalla v. Permanente Med. Grp., Inc., 15 Cal.4th 951, 974, (Cal 1997)). Additionally, a fraud allegation must include ...

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