United States District Court, N.D. California
GARY N. NARDOLILLO, Plaintiff,
JPMORGAN CHASE BANK, N.A., Defendant.
ORDER DENYING MOTION TO DISMISS RE: DKT. NO.
William H. Orrick, United States District Judge
Gary Nardolillo filed this action in Superior Court, seeking
to prevent defendant JPMorgan Chase Bank, N.A.
(“Chase”) from pursuing foreclosure proceedings
on his residence (“Property”) based on alleged
violations of the California Homeowners Bill of Rights
(“HBOR”). Underlying all of these claims is
Nardolillo's allegation that Chase did not have an
ownership interest in the Note and Deed of Trust securing the
Property and, therefore, did not have the authority to
substitute former defendant MTC Financial, Inc., doing
business as Trustee Corps (“Trustee Corps”) to
record a Notice of Sale on the Property. Chase removed
this action to federal court and moves to dismiss the claims
against it, arguing that plaintiff has failed to state
sufficient facts for any of his claims. While Chase may have
valid arguments on summary judgment, the causes of action
alleged are plausible because Nardillo has specifically
identified why he asserts Chase did not own the Property and
why he believes dual tracking has occurred. Chase's
motion is DENIED.
2004, Nardolillo took out a loan with Washington Mutual Bank,
FA (“WaMu”) for $1, 462, 500. Complaint [Dkt. No.
1-1] ¶ 10. He executed a Promissory Note
(“Note”) and a Deed of Trust (“DOT”)
to secure the loan. Id. The DOT listed WaMu as the
lender and beneficiary, and California Reconveyance Company
(“CRC”) as the trustee. Id., Request for
Judicial Notice (“RJN”) [Dkt. No. 31-2], Ex.
then purchased the Property-5405 Greenville Road, Livermore,
California- using the loan from WaMu as part of the purchase
money. Id. ¶ 11. Soon after, plaintiff alleges
that WaMu sold Nardolillo's DOT and Note to a
mortgage-backed securitized trust. Id. ¶ 12.
Nardolillo's “securitization audit indicates [his]
loan was possibly sold to the WaMu Mortgage Pass-Through
Certificates Series 2004-AR12 trust-a real estate mortgage
investment conduit (‘REMIC') registered with the
Securities and Exchange Commission (‘SEC').”
2008, WaMu became insolvent and entered a receivership.
Id. ¶ 13. The Federal Deposit Insurance
Corporation (“FDIC”) acted as the receiver.
Id. Defendant JPMorgan Chase Bank, N.A.
(“Chase”) entered into a Purchase and Assumption
Agreement (“PAA”) to acquire
“certain” of WaMu's assets. Id.;
RJN, Ex. 2. Nardolillo alleges his Note and DOT were
not among the assets acquired by Chase through the PAA
because they “possibly” had already been sold and
securitized years earlier. Id. ¶ 14. Yet on
March 14, 2011, Chase held itself out to be the beneficiary
of Nardolillo's DOT and directed CRC as trustee to record
a Notice of Default against the Subject Property.
Id. ¶ 15. CRC recorded a Notice of Default,
stating the amount due as of March 11, 2011 was $36, 304.16.
RJN, Ex. 4.
October 20, 2014, in a recorded “Corporate Assignment
of Deed of Trust, ” Chase purported to act as
“attorney in fact” for the FDIC and to transfer
all beneficial interest in Nardolillo's DOT to itself.
Id. ¶ 16; RJN, Ex. 3. Nardolillo alleges this
was a void assignment because: (1) Nardolillo's DOT was
never among the assets received by the FDIC from WaMu and
transferred to Chase; and (2) Chase was not authorized to
serve as the attorney in fact for the FDIC at the time it
executed and recorded the Corporate Assignment. Id.
April 17, 2015, Chase recorded a Substitution of Trustee,
substituting former-defendant Trustee Corps in place of CRC
as trustee under the DOT. Id. ¶ 18. Nardolillo
alleges that this substitution is also void. Id.
7, 2016, Chase directed Trustee Corps to record a Notice of
Trustee's Sale against the Subject Property. Id.
¶ 20; RJN, Ex. 13. On July 22, 2016, Nardolillo
submitted his first loan modification application to Chase.
Id. ¶ 21. However, defendants have continued to
notice trustee's sale dates on the Property. Id.
filed this suit against Chase and Trustee Corps in state
court, asserting three causes of action: (1) violation of
California Civil Code § 2924.17; (2) violation of
California Civil Code § 2923.6; and (3) violation
California Civil Code § 2924(a)(6). Nardolillo seeks a
declaration of the rights of the parties to the Property,
injunctive relief to prevent defendants from asserting any
interest in the Property or attempting to dispossess
Nardolillo of the Property, and damages.
Federal Rule of Civil Procedure 12(b)(6), a district court
must dismiss a complaint if it fails to state a claim upon
which relief can be granted. To survive a Rule 12(b)(6)
motion to dismiss, the plaintiff must allege “enough
facts to state a claim to relief that is plausible on its
face.” See Bell Atl. Corp. v. Twombly, 550
U.S. 544, 570 (2007). A claim is facially plausible when the
plaintiff pleads facts that “allow the court to draw
the reasonable inference that the defendant is liable for the
misconduct alleged.” See Ashcroft v. Iqbal,
556 U.S. 662, 678 (2009) (citation omitted). There must be
“more than a sheer possibility that a defendant has
acted unlawfully.” Id. While courts do not
require “heightened fact pleading of specifics, ”
a plaintiff must allege facts sufficient to “raise a
right to relief above the speculative level.” See
Twombly, 550 U.S. at 555, 570.
deciding whether the plaintiff has stated a claim upon which
relief can be granted, the Court accepts the plaintiff's
allegations as true and draws all reasonable inferences in
favor of the plaintiff. See Usher v. City of Los
Angeles, 828 F.2d 556, 561 (9th Cir. 1987). However, the
court is not required to accept as true “allegations
that are merely conclusory, unwarranted deductions of fact,
or unreasonable inferences.” See In re Gilead Scis.
Sec. Litig., 536 F.3d 1049, 1055 (9th Cir. 2008).
court dismisses the complaint, it “should grant leave
to amend even if no request to amend the pleading was made,
unless it determines that the pleading could not possibly be
cured by the allegation of other facts.” See Lopez
v. Smith, 203 F.3d 1122, 1127 (9th Cir. 2000). In making
this determination, the court should consider factors such as
“the presence or absence of undue delay, bad faith,
dilatory motive, repeated failure to cure deficiencies by
previous amendments, undue prejudice to the opposing party
and futility of the proposed amendment.” See Moore
v. Kayport Package Express, 885 F.2d 531, 538 (9th Cir.
moves to dismiss all three claims against it under HBOR,
arguing that Nardolillo fails to ...