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Solis v. National Default Servicing Corp.

United States District Court, N.D. California, San Jose Division

May 3, 2017

JORGE SOLIS, Plaintiff,


          LUCY H. KOH United States District Judge.

         Before the Court is Defendants Portfolio Servicing, Inc. (“Portfolio”) and U.S. Bank National Association's (“U.S. Bank”) (collectively, “Defendants”) unopposed motion to dismiss. Having considered the briefing on the motion, record in the case, and the relevant law, the Court hereby GRANTS Defendants' motion to dismiss with prejudice.

         I. BACKGROUND

         A. Factual Background

         The following facts are from Plaintiff's complaint and Defendants' unopposed motion to dismiss. On August 3, 2006, Plaintiff and Arturo Andrade Avalos (“Avalos”) obtained a loan from Washington Mutual Bank, FA in the amount of $776, 000.00. The loan was secured by a deed of trust encumbering the real property located at 37 Webb Road, Watsonville, California 95076 (“Webb Road property”).

         On July 9, 2012, the beneficial interest under the Deed of Trust was assigned to U.S. Bank as trustee of the WaMu Mortgage Pass-Through Certificates Series 2006-AR13 Trust (“Trust”). On August 5, 2015, National Default Servicing Corporation was substituted as trustee under the Deed of Trust.

         After Plaintiff defaulted on the loan, a Notice of Default and Election to Sell Under Deed of Trust (“Default Notice”) was recorded against the Webb Road property. Notices of Trustee's Sale were recorded against Webb Road property on October 22, 2012, March 1, 2013, September 9, 2013, January 8, 2014, August 12, 2015, July 27, 2016. Exhibits 5-10. Plaintiff claims that Defendants' actions during the foreclosure violated various provisions of California and federal law, namely lack of standing to foreclose, fraud in the concealment, fraud in the inducement, intentional infliction of emotional distress, quiet title, slander of title, declaratory relief, violations of the Truth in Lending Act, violations of the Real Estate Settlement Procedures Act, and rescission. ECF No. 1-1.

         B. Procedural History

         On June 25, 2014, Plaintiff filed an earlier lawsuit against Portfolio, U.S. Bank, and JP Morgan Chase Bank, N.A. in Santa Cruz County Superior Court. Exhibit 11 (“2014 Action”). The 2014 Action alleged violation of Cal. Civil Code § 2923.6(c), violation of Cal. Civil Code § 2923.7, violation of Cal. Civil Code § 2924.10, violation of Cal. Civil Code § 2924(a)(6), violation of Cal. Business & Professions Code § 17200, negligent misrepresentation, breach of the implied covenant of good faith and fair dealing, and a demand for accounting. All counts stemmed from Defendants' foreclosure on the Webb Road property. The Superior Court dismissed the first lawsuit due to Plaintiff's failure to timely amend his complaint on April 2, 2015, and entered judgment in favor of Defendants on April 22, 2015. Exhibits 12-13.

         On September 15, 2016, Plaintiff filed a second lawsuit against Defendants and Avalos in Santa Cruz County Superior Court. Exhibit 14 (“2016 Action”). The 2016 Action alleged that Avalos had improperly failed to participate in Plaintiff's application for a loan modification. Id. Plaintiff sought to quiet title and to enjoin Defendants from foreclosing on the property until Plaintiff secured title in his name alone. Id. On December 12, 2016, the Superior Court granted Defendants' motion for judgment on the pleadings, dismissed the complaint, and entered judgment in favor of Defendants. Exhibit 15-16.

         Approximately two weeks after the 2016 Action was dismissed, Plaintiff filed the instant action in Santa Cruz county Superior Court. ECF No. 1-1. Defendants removed the case to this Court on January 24, 2017. ECF No. 1.


         A. Rule 12(b)(6) Motion to Dismiss

         Rule 8(a)(2) of the Federal Rules of Civil Procedure requires a complaint to include “a short and plain statement of the claim showing that the pleader is entitled to relief.” A complaint that fails to meet this standard may be dismissed pursuant to Rule 12(b)(6). Rule 8(a) requires a plaintiff to plead “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). “The plausibility standard is not akin to a probability requirement, but it asks for more than a sheer possibility that a defendant has acted unlawfully.” Id. (internal quotation marks omitted). For purposes of ruling on a Rule 12(b)(6) motion, the Court “accept[s] factual allegations in the complaint as true and construe[s] the pleadings in the light most favorable to the nonmoving party.” Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008).

         The Court, however, need not accept as true allegations contradicted by judicially noticeable facts, see Shwarz v. United States, 234 F.3d 428, 435 (9th Cir.2000), and it “may look beyond the plaintiff's complaint to matters of public record” without converting the Rule 12(b)(6) motion into a motion for summary judgment, Shaw v. Hahn, 56 F.3d 1128, 1129 n.1 (9th Cir.1995). Nor must the Court “assume the truth of legal conclusions merely because they are cast in the form of factual allegations.” Fayer v. Vaughn, 649 F.3d 1061, 1064 (9th Cir.2011) (per curiam) (internal quotation marks omitted). Mere “conclusory allegations of law and unwarranted inferences are insufficient to defeat a motion to dismiss.” Adams v. Johnson, 355 F.3d 1179, 1183 (9th Cir. 2004).

         B. Leave to Amend

         If the Court determines that the complaint should be dismissed, it must then decide whether to grant leave to amend. Under Rule 15(a) of the Federal Rules of Civil Procedure, leave to amend “shall be freely given when justice so requires, ” bearing in mind “the underlying purpose of Rule 15 to facilitate decisions on the merits, rather than on the pleadings or technicalities.” Lopez v. Smith, 203 F.3d 1122, 1127 (9th Cir. 2000) (en banc) (alterations and internal quotation marks omitted). When dismissing a complaint for failure to state a claim, “a district court 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.” Id. at 1130 (internal quotation marks omitted). Accordingly, leave to amend generally shall be denied only if allowing amendment would unduly prejudice the opposing party, cause undue delay, or be futile, or if the moving party has acted in bad faith. Leadsinger, Inc. v. BMG Music Publ'g, 512 F.3d 522, 532 (9th Cir. 2008).

         C. Requests for ...

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