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Alvarez v. MTC Financial Inc.

United States District Court, N.D. California

May 9, 2017

ANA ALVAREZ, Plaintiff,
MTC FINANCIAL INC., et al., Defendants.


          William H. Orrick United States District Judge


         After I dismissed eight of the ten causes of action in her original complaint with leave to amend, Dkt. No. 24, plaintiff Ana Alvarez filed a first amended complaint against defendants MTC Financial, Inc. dba Trustee Corps (“MTC”) and JPMorgan Chase Bank (“Chase”) reiterating the same claims arising from the defendants' failure to contact her prior to pursuing foreclosure of her residence. No foreclosure sale of the property has occurred. The amended complaint is very much like the original. Chase now moves to dismiss her claims other than her first claim under the Homeowners Bill of Rights and her second claim under Civil Code section 2923.5. Ms. Alvarez did not appear for the hearing.[1] Because her amended complaint fails to adequately address the deficiencies I previously identified, Chase's motion to dismiss is GRANTED WITHOUT LEAVE TO AMEND. The remaining two claims survive.


         On June 26, 2007, Alvarez obtained a $600, 000.00 loan from Chase secured by a deed of trust (“DOT”) for the real property 270 Beachview Avenue, #14, Pacifica, California 94044. First Am. Compl. ¶ 17 (“FAC”)(Dkt. No. 36); see also Def.'s Request for Judicial Notice (RJN), Ex. 1 (Dkt. No. 38-2).[2] She filed for bankruptcy on November 4, 2011; March 21, 2016; and September 6, 2016. RJN Exs. 5, 6, 7 (Dkt. Nos. 38-6, 38-7, 38-8).

         On June 26, 2015, MTC was substituted as the trustee under the DOT. FAC ¶ 22; RJN, Ex. 2 (Dkt. No. 38-3). On July 10, 2015, MTC issued and recorded a Notice of Default and Election to Sell (“NOD”). FAC ¶ 24; RJN, Ex. 3 (Dkt. No. 38-4). The NOD documented the amount of default as $39, 067.37. RJN, Ex. 3. MTC recorded a Notice of Trustee's Sale (“NOTS 1”) on October 16, 2015, with a sale scheduled for November 30, 2015. FAC ¶ 27; see also id., Ex. D.[3] The amount of default was estimated to be $794, 226.58. Id., Ex. D.

         MTC recorded another Notice of Trustee's Sale (“NOTS 2”) on February 11, 2016. FAC ¶ 28; see also id., Ex. E.[4] The NOTS 2 identified the amount of debt as $808, 659.89 and set the trustee's sale for March 21, 2016. FAC, Ex. E. On July 19, 2016, MTC issued a third Notice of Trustee's Sale (“NOTS 3”). RJN, Ex. 4 (Dkt. No. 38-5). The NOTS 3 indicated the estimated total amount due of $814, 966.08, and set a sale date of August 18, 2016. RJN, Ex. 4. Foreclosure sale of the property has not occurred. Mot. at 8 (Dkt. No. 38).

         On September 26, 2016, Alvarez filed this action in California Superior Court, County of San Mateo. NOR ¶ 1 (Dkt. No. 1). MTC filed a Declaration of Non-Monetary Status, thus excusing it from participating in this suit. Hafiz v. Greenpoint Mortg. Funding, Inc., 652 F.Supp.2d 1050, 1052 (N.D. Cal. 2009), aff'd sub nom. Hafiz v. Greenpoint Mortg. Funding, 409 F.App'x 70 (9th Cir. 2010)(“When a trustee under a deed of trust files a declaration of non-monetary status, the party is transformed into a ‘nominal' party, thus excusing it from participating in the action.”). Chase then removed based on diversity of citizenship, and MTC's status as a nominal party.[5]NOR ¶¶ 7-8. Chase moved to dismiss on November 10, 2016, Dkt. No. 8, and I granted the motion, except as to Alvarez's claims under the HBOR and California Civil Code section 2923.5, for which I requested additional information from Chase. See Order Regarding Defendants' Motion to Dismiss at 13:8-16 (“Prior Order”)(Dkt. No. 24). Chase filed a declaration in accordance with the Prior Order describing its efforts to comply with Section 2923.55. Liu Decl. (Dkt. No. 35). It concluded that it was unable to confirm that it had sent a certified letter to plaintiff, as required by the due diligence standard of California Civil Code section 2923.5(e), and so it “withdr[ew] its Motion with respect to the first claim for alleged violation of the Homeowner's Bill of Rights and second claim for alleged violation of Civil Code § 2923.5.” Liu Decl. ¶ 8.

         Ten days later, Alvarez filed her first amended complaint (“FAC”)(Dkt. No. 36), repeating the same ten claims: (1) violation of the Homeowners Bill of Rights (“HBOR”), FAC ¶¶ 44-53; (2) violations of California Civil Code § 2923.5, id. ¶¶ 54-59; (3) negligence, id. ¶¶ 60-72; (4) declaratory relief, id. ¶¶ 73-84; (5) fraud in the concealment, id. ¶¶ 85-107; (6) intentional infliction of emotional distress, id. ¶¶ 108-120; (7) slander of title, id. ¶¶ 121-130; (8) quiet title, id. ¶¶ 131-138; (9) recission [sic] against defendant Chase, id. ¶¶ 139-143; (10) injunctive relief, id. ¶¶ 144-157.


         Federal Rule of Civil Procedure 8(a)(2) requires a complaint to contain “a short and plain statement of the claim showing that the pleader is entitled to relief, ” Fed.R.Civ.P. 8(a)(2), in order to “give the defendant fair notice of what the claim is and the grounds upon which it rests, ” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (internal quotation marks and alterations omitted).

         A motion to dismiss for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6) tests the legal sufficiency of a complaint. Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). “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). While a complaint “need not contain detailed factual allegations” to survive a Rule 12(b)(6) motion, “it must plead enough facts to state a claim to relief that is plausible on its face.” Cousins v. Lockyer, 568 F.3d 1063, 1067-68 (9th Cir. 2009) (internal quotation marks and citations omitted). A claim is facially plausible when it “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) (internal quotation marks omitted).

         In considering whether a claim satisfies this standard, the court must “accept factual allegations in the complaint as true and construe the pleadings in the light most favorable to the nonmoving party.” Manzarek v. St. Paul Fire & Marines Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008). However, “conclusory allegations of law and unwarranted inferences are insufficient to avoid a Rule 12(b)(6) dismissal.” Cousins, 568 F.3d at 1067 (internal quotation marks omitted). A court may “reject, as implausible, allegations that are too speculative to warrant further factual development.” Dahlia v. Rodriguez, 735 F.3d 1060, 1076 (9th Cir. 2013).


         Chase moves to dismiss all claims, other than Alvarez's claim under the HBOR[7] and California Code section 2923.5.[8]

         I. ...

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