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Jackson v. Nationstar Mortgage LLC

United States District Court, C.D. California

May 15, 2017


          Present: The Honorable CHRISTINA A. SNYDER Judge


         Proceedings: DEFENDANT'S MOTION TO DISMISS (Filed April 7, 2017, Dkt. 20)


         On January 11, 2017, plaintiff Phillip Jackson filed this action against Nationstar Mortgage LLC ("Nationstar"), Federal Home Loan Mortgage Corporation ("Freddie Mac"), and Does one through ten, inclusive. Dkt. 1. Plaintiff is proceeding in this action pro se. On February 24, 2017, Nationstar and Freddie Mac filed a motion to dismiss. Dkt. 7. On March 17, 2017, plaintiff filed a First Amended Complaint ("FAC"). Dkt. 18. The FAC alleges claims for (1) declaratory relief; (2) rescission of mortgage pursuant to 15 U.S.C. §§ 1601 et seq.; (3) cancellation of instruments; (4) accounting; (5) violation of the California Unfair Competition Law pursuant to California Business and Professions Code §§ 17200 et seq. ("UCL"); (6) quasi contract; (7) negligence; and (8) violation of 15 U.S.C. § 1692e. IA The Court found that the filing of the FAC rendered the previous motion to dismiss moot. Dkt. 19. On April 7, 2017, defendants filed the instant motion to dismiss the FAC. Dkt. 20. On April 25, 2017, plaintiff filed an opposition. Dkt. 22. Defendants did not file a reply. On May 15, 2017, the Court held oral argument on this matter. Counsel for defendants was present. Neither plaintiff nor plaintiffs representative appeared.

         Having carefully considered the parties' arguments, the Court concludes as follows.


         Plaintiff alleges that on June 14, 2006, he executed a promissory note in favor of Mountain West Financial Inc. ("Mountain West") for $391, 999.00 secured by a deed of trust for the purchase of property located at 28598 Kristin Lane, Highland, CA 92346 ("the Property"). FACat2:3-7.[1] Jackson is the owner of the Property. Id. at 6:11-14. The security instrument signed by Jackson in relation to the Property was subject to an adjustable rate rider, whereby the applicable interest rate was calculated every six months after July 2011 and vary between 7.125% and 13.125% per annum. Id. at 45.

         At an undetermined time in 2010 and again on October 21, 2015, plaintiff obtained a loan modification from Nationstar. Id. at 7:28-8:2. Plaintiff has attached a copy of the 2015 Modification of Deed of Trust to the FAC, which was recorded in the San Bernardino County Recorder's Office on December 8, 2015 (the "2015 Modification"). Id. at 8:7-12; 51-61. The 2015 Modification lists Nationstar as the beneficiary of plaintiffs mortgage and note. Id. at 52.

         Plaintiff alleges that on June 14, 2016, he mailed a letter to Nationstar requesting information about his loan ("the Written Request"). Plaintiff has attached a copy of the Written Request to the FAC. See Id. at 62-81. On June 20, 2016, Nationstar responded with a letter informing Jackson when he might expect a response. Id. at 82-83. Nationstar's letter stated that a response to the Written Request would be provided no later than July 28, 2016. Id. at 82.

         At an undetermined time in the summer of 2016, plaintiff began to investigate "the true identity of his debt obligation" and allegedly learned that his rights had been violated. Id. at 14:17-19. Plaintiff discovered that a sequence of assignments of beneficial interest under the deed of trust regarding his Property had been executed and recorded between 2006 and 2016. The FAC states "Plaintiff adamantly disputes the contents of all Assignments of Deed of Trust." Id. at 10:1-2. Plaintiff claims that "the debt obligation" was never assigned to Nationstar, Id. at 4-5, and that neither Nationstar nor Freddie Mac has properly obtained any security interest in the Property through valid assignment, Id. at 11:10-14.

         On July 14, 2016, after allegedly discovering the absence of any valid assignment, Jackson mailed a "Notice to Rescind" to Nationstar. Id. at 6:17-19. Plaintiff alleges that he therefore, "by operation of law, " rescinded the "Note and Deed of Trust" relating to the Property, Id. at 6:21-22, "effectively voiding the contract and debt, " Id. at 7:1-2. Plaintiff alleges that defendants "have no standing to enforce the Deed of Trust or collect payments under the contract" because defendants "failed to challenge the Notice to Rescind within the twenty (20) statutory days mandated under [the Truth in Lending Act]." Id. at 7:2-10.

         The remainder of plaintiff complaint is in the nature of a legal memorandum, containing many alleged references to applicable law and conclusory allegations regarding violations of the referenced laws and cases.


         A motion pursuant to Federal Rule of Civil Procedure 12(b)(6) tests the legal sufficiency of the claims asserted in a complaint. Under this Rule, a district court properly dismisses a claim if "there is a Tack of a cognizable legal theory or the absence of sufficient facts alleged under a cognizable legal theory.'" Conservation Force v. Salazar, 646 F.3d 1240, 1242 (9th Cir. 2011) (quoting Bahsteri v. Pacifica Police Dep't 901 F.2d 696, 699 (9th Cir. 1988)). "While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiffs obligation to provide the 'grounds' of his 'entitlement to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Bell Atlantic Corp. v. Twomblv. 550 U.S. 544, 555 (2007). "[F]actual allegations must be enough to raise a right to relief above the speculative level." Id.

         In considering a motion pursuant to Rule 12(b)(6), a court must accept as true all material allegations in the complaint, as well as all reasonable inferences to be drawn from them. Pareto v. FDIC, 139 F.3d 696, 699 (9th Cir. 1998). The complaint must be read in the light most favorable to the nonmoving party. Sprewell v. Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 2001). However, "a court considering a motion to dismiss can choose to begin by identifying pleadings that, because they are no more than conclusions, are not entitled to the assumption of truth. While legal conclusions can provide the framework of a complaint, they must be supported by factual allegations." Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009); see Moss v. United States Secret Service, 572 F.3d 962, 969 (9th Cir. 2009) ("[F]or a complaint to survive a motion to dismiss, the non-conelusory 'factual content, ' and reasonable inferences from that content, must be plausibly suggestive of a claim entitling the plaintiff to relief"). Ultimately, "[determining whether a complaint states a plausible claim for relief will... be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Iqbal, 556 U.S. at 679.

         Unless a court converts a Rule 12(b)(6) motion into a motion for summary judgment, a court cannot consider material outside of the complaint (e.g.. facts presented in briefs, affidavits, or discovery materials). In re American ContT Corp./Lincoln Sav. & Loan Sec. Litig., 102 F.3d 1524, 1537 (9th Cir. 1996), rev'd on other grounds sub nom Lexecon. Inc. v. Milberg Weiss Bershad Hvnes & Lerach, 523 U.S. 26 (1998). However, a court may consider exhibits submitted with or alleged in the complaint and matters that may be judicially noticed pursuant to Federal Rule of Evidence 201. In re Silicon Graphics Inc. Sec. Litig.. 183 F.3d 970, 986 (9th Cir. 1999); see Lee v. City of Los Angeles, 250 F.3d 668, 689 (9th Cir. 2001).

         As a general rule, leave to amend a complaint which has been dismissed should be freely granted. Fed.R.Civ.P. 15(a). However, leave to amend may be denied when "the court determines that the allegation of other facts consistent with the challenged pleading could not possibly cure the deficiency." Schreiber Distrib. Co. v. Serv-Well Furniture Co., 806 F.2d 1393, 1401 (9th Cir. 1986).


         The FAC is appropriately dismissed for failure to state a claim upon which relief can be granted.

         A. Rescission

         Plaintiffs primary claim appears to be that he has rescinded his promissory note thereby voiding any security interest in the Property, accordingly the Court addresses this allegation first. Plaintiff alleges the he was entitled to rescind his promissory note and thereby void any security interest in the Property. Plaintiff alleges and argues that he had, and exercised, the authority to rescind the transaction pursuant to 15 U.S.C. § 1635, a provision of the Truth in Lending Act. ...

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