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Fields v. Bank of New York Mellon

United States District Court, N.D. California

May 1, 2017

BANK OF NEW YORK MELLON, et al., Defendants.


          JON S. TIGAR United States District Judge.

         Before the Court is Defendant Bank of New York Mellon's (“BONY”) Motion to Dismiss Plaintiff Janeece Fields' (“Fields”) Second Amended Complaint. ECF No. 4. The Court will grant the motion with prejudice in part and without prejudice in part.

         I. BACKGROUND

         This is a foreclosure case. In 2007, Plaintiff Janeece Fields applied for a loan secured by a Deed of Trust against her home in order to refinance an existing loan. ECF No. 4 at 9. In 2012, BONY commenced an action against Fields in the Sonoma County Superior Court to establish the validity and priority of the Deed of Trust (“2007 Deed of Trust”) securing the refinancing loan she took out in 2007. Id. at 10. In response to that action, Fields filed an answer asserting a number of affirmative defenses and also filed a cross-complaint against BONY and other defendants. Id. On March 24, 2014, Fields filed a Second Amended Cross-Complaint (“SACC”) alleging five causes of action: (1) fraud, deceit and concealment; (2) breach of contract; (3) quiet title (as to defendants and all others claiming right to the property); (4) equitable bill quia timet (under C.C.P. 1050); and (5) cancellation of the Note and Deed of Trust and rescission of the Notice of Default recorded June 17, 2013. SACC, ECF No. 4-11. On October 8, 2014, Fields voluntarily dismissed the SACC with prejudice, without affecting her affirmative defenses to BONY's affirmative claims. ECF No. 4-12.

         After Fields dismissed her cross-complaint, BONY also voluntarily dismissed its complaint without prejudice on or about October 24, 2014. ECF No. 17 at 9. Nearly two years later, on June 21, 2016, the law firm of Zieve, Brodnax & Steele, issued and sent a Notice of Default and Election to Sell Under [2007] Deed of Trust (“NOD”). ECF No. 4 at 11. A Notice of Trustee Sale (“NOS”) dated December 6, 2016 was signed by an agent of Zieve, Brodnax & Steele. Id.

         Fields commenced the present action against BONY on September 30, 2013, when she filed her First Amended Cross-Complaint. ECF No. 4 at 11 n.5. On December 29, 2016, Fields filed a Second Amended Complaint (“SAC”) against BONY, which is currently before the Court. It asserts eight causes of action: (1) cancellation of instruments; (2) slander of title; (3) violation of Fair Debt Collecting Practices Act; (4) Truth in Lending Act violations; (5) California Rosenthal Act violations; (6) unfair business practices under the California Unfair Competition Law; (7) Fair Credit Reporting Act violations; and (8) negligence. SAC, ECF No. 1-3. The SAC's allegations include claims from the prior action as well as new claims involving the 2016 NOD and NOS, which were not part of the prior action.


         “To survive a motion to dismiss, a 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) (internal quotation marks omitted). “A claim has facial plausibility when the pleaded factual content allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. at 663. “Dismissal under Rule 12(b)(6) is appropriate only where the complaint lacks a cognizable legal theory or sufficient facts to support a cognizable legal theory.” Mendiondo v. Centinela Hosp. Med. Ctr., 521 F.3d 1097, 1104 (9th Cir.2008). For purposes of a motion to dismiss, “all allegations of material fact are taken as true and construed in the light most favorable to the nonmoving party.” Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336, 337-38 (9th Cir.1996).


         A. Res Judicata and Collateral Estoppel

         Defendants argue that Fields' claims are barred by claim preclusion. “A federal court must give to a state-court judgment the same preclusive effect as would be given that judgment under the law of the State in which the judgment was rendered.” Migra v. Warren City Sch. Dist. Bd. of Educ., 465 U.S. 75, 81, 104 S.Ct. 892, 79 L.Ed.2d 56 (1984). “The application of claim preclusion in California focuses on three questions: (1) was the previous adjudication on the merits, (2) was it final, and (3) does the current dispute involve the same ‘claim' or ‘cause of action.'” Kay v. City of Rancho Palos Verdes, 504 F.3d 803, 808 (9th Cir. 2007) (quoting Robi v. Five Platters, Inc., 838 F.2d 318, 324 (9th Cir. 1988)). California courts have consistently found that two suits involve the same cause of action when they involve the same “primary right.” Brodheim v. Cry, 584 F.3d 1262, 1268 (9th Cir. 2009). “[A] ‘cause of action' is comprised of a ‘primary right' of the plaintiff, a corresponding ‘primary duty' of the defendant, and a wrongful act by the defendant constituting a breach of that duty.” Mycogen Corp. v. Monsanto Co., 28 Cal.4th 888, 904 (2002) (quoting Crowley v. Katleman, 8 Cal.4th 666, 681-81 (1994)). “The most salient characteristic of a primary right is that it is indivisible: the violation of a single primary right gives rise to but a single cause of action.” Id. Under this theory, the determinative factor is the harm suffered. Carollo v. Vericrest Fin., Inc., No. 11-CV-4767 YGR, 2012 WL 4343816, at *5 (N.D. Cal. Sept. 21, 2012). Thus, “if two actions involve the same injury to the plaintiff and the same wrong by the defendant then the same primary right is at stake even if in the second suit the plaintiff pleads different theories of recovery, seeks different forms of relief and/or adds new facts supporting recovery.” San Diego Police Officers' Ass'n v. San Diego City Emps. Ret. Sys., 568 F.3d 725, 734 (9th Cir. 2009) (quoting Eichman v. Fotomat Corp., 147 Cal.App.3d 1170, 197 Cal.Rptr. 612, 614 (1983)) (internal alterations omitted).

         In 2012, BONY, as beneficiary of the 2007 Deed of Trust, filed an action against Fields seeking to enforce the Deed of Trust. Fields filed an answer asserting affirmative defenses in response to BONY's action, then filed a cross-complaint asserting a number of affirmative claims stemming from her contention that “BONY lacks standing and capacity to bring . . . claims” against Fields. ECF No. 4-11 at 5. On October 8, 2014, Fields dismissed her counter-claims with prejudice, ECF No. 4-12, and BONY commenced nonjudicial foreclosure of Fields' property by filing a Notice of Default (“NOD”) and Notice of Trustee Sale (“NOS”), ECF No. 4 at 11.

         Defendant BONY argues that all of Fields' allegations are barred by claim preclusion because they were dismissed with prejudice when Fields voluntarily dismissed her SACC. Id. at 14. The SAC and SACC involve the same primary right because they are both “inextricably based on the alleged invalidity of the 2007 Deed of Trust.” Id. at 15. Furthermore, the 2016 NOD and NOS are similarly barred by claim preclusion because those documents “merely seek to enforce rights under the 2007 Deed of Trust.” Id. Therefore, BONY argues, Fields waived her right to raise a claim regarding the 2007 Deed of Trust when she dismissed her SACC with prejudice. Id. at 11.

         The Court agrees that the causes of action in the SAC are precluded by ...

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