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Mendez v. Selene Finance LP

United States District Court, C.D. California

April 27, 2017

SERAFIN MENDEZ, Plaintiff,
v.
SELENE FINANCE LP; THE WOLF FIRM; and DOES 1-100, inclusive, Defendants.

          ORDER GRANTING PLAINTIFF'S MOTION TO AMEND [27] AND GRANTING IN PART AND DENYING IN PART DEFENDANTS' MOTION TO DISMISS [23]

          OTIS D. WRIGHT, II UNITED STATES DISTRICT JUDGE

         I. INTRODUCTION

         Plaintiff Serafin Mendez filed this action seeking to halt the foreclosure of his home. Before the Court is Plaintiff's motion to amend the first amended complaint to add M&T Bank as a defendant. (ECF No. 27.) Also before the Court is Defendants Selene Finance LP (“Selene”) and The Wolf Firm's motion to dismiss Plaintiff's first amended complaint for failure to state a claim pursuant Federal Rule of Civil Procedure 12(b)(6). (ECF No. 23.) The Court GRANTS Plaintiff's motion and GRANTS IN PART and DENIES IN PART Defendants' motion.

         II. FACTUAL BACKGROUND

         A. Facts

         As both parties are familiar with the facts, the Court includes only those facts necessary to resolve the pending motions. On February 20, 2013, Plaintiff purchased property located in Lancaster, California. (First Amended Complaint (“FAC”) ¶¶ 1, 13, ECF No. 20.) To finance his purchase, Plaintiff obtained a loan from Pacificbanc Mortgage. (Id. ¶ 14.) At some point after the purchase, Plaintiff's mortgage note was assigned to M&T Bank. (Id. ¶ 15.) M&T Bank then transferred the servicing rights to Seneca Mortgage LLC (“Seneca”). (Id. ¶ 16.)

         Plaintiff fell behind on his mortgage payments, and on September 17, 2014, The Wolf Firm, acting at Seneca's behest, recorded a notice of default on the property indicating that Plaintiff was behind on his payments by $32, 347.67. (Id. ¶ 23, Ex. B.) Plaintiff submitted payments totaling $23, 327.49 to Seneca “sometime in the end of 2014.” (Id. ¶¶ 20, 31.) As of the “last mortgage statements” Plaintiff received, these payments had not been credited to his account. (Id. ¶ 21.) On August 20, 2015, The Wolf Firm, again acting on behalf of Seneca, recorded a notice of sale on the property. (Id. ¶ 24.) “On or about October 2016, ” M&T Bank transferred the servicing rights for Plaintiff's loan to Selene. (Id. ¶¶ 16, 25.)

         B. Procedural History

         On November 17, 2016, Plaintiff filed a complaint against Defendants in the Superior Court of California, County of Los Angeles, alleging: (1) negligence; (2) violation of California Civil Code section 2923.6; (3) entitlement to an accounting; and (4) violation of California Business and Professions Code section 17200. (Compl. ¶¶ 21-47, ECF No. 1-1.) On December 19, 2016, Defendants removed the case to federal court. (ECF No. 1.)

         On December 27, 2016, Defendants filed a motion to dismiss Plaintiff's complaint. (ECF No. 7.) On February 7, 2017, the Court granted Defendants' motion in its entirety. (ECF No. 16.) The Court gave Plaintiff leave to amend his claim for violation of California's Unfair Competition Law (“UCL”) and also gave Plaintiff leave to amend his claim for negligence to the extent that it was based on a failure to credit his previous payments of $23, 327.49.[1] (Order 8, 12.)

         On March 9, 2017, Plaintiff filed a first amended complaint alleging three causes of action: (1) negligence; (2) declaratory relief; and (3) violation of the UCL. (FAC ¶¶ 27-54.) On March 22, 2017, Defendants filed a Rule 12(b)(6) motion to dismiss Plaintiff's first amended complaint. (ECF No. 23.) On April 13, 2017, Plaintiff filed a motion to amend the first amended complaint to add M&T Bank as a defendant. (ECF No. 27.) The motions are now fully briefed and ready for decision. (ECF Nos. 26[2], 29.)[3]

         III. LEGAL STANDARD

         A. Motion to Amend Complaint Pursuant to Rule 15(a)(2)

         Leave to amend a complaint should be “freely given when justice so requires.” Fed.R.Civ.P. 15(a)(2). In determining whether leave to amend should be granted, four factors are considered: (1) undue delay; (2) bad faith or dilatory motive; (3) prejudice to the opposing party; and (4) futility of amendment. Ditto v. McCurdy, 510 F.3d 1070, 1079 (9th Cir. 2007); Foman v. Davis, 371 U.S. 178, 182 (1962).

         B. Motion to Dismiss Pursuant to Rule 12(b)(6)

         A party may seek to dismiss a complaint pursuant to Rule 12(b)(6) for lack of a cognizable legal theory or insufficient facts pleaded to support an otherwise cognizable legal theory. Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1990). To survive a motion to dismiss, a complaint need only satisfy the minimal notice pleading requirements of Rule 8(a)(2)-a short and plain statement of the claim. Porter v. Jones, 319 F.3d 483, 494 (9th Cir. 2003). The factual “allegations must be enough to raise a right to relief above the speculative level.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). That is, the complaint must “contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).

         The determination whether a complaint satisfies the plausibility standard is a “context-specific task that requires the reviewing court to draw on its judicial experience and common sense.” Id. at 679. A court is generally limited to the pleadings and must construe all “factual allegations set forth in the complaint . . . as true and . . . in the light most favorable” to the plaintiff. Lee v. City of L.A., 250 F.3d 668, 688 (9th Cir. 2001).

         IV. ...


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