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Mendaros v. JP Morgan Chase Bank, National Association

United States District Court, N.D. California

May 31, 2017



          HAYWOOD S. GILLIAM, JR. United States District Judge

         Plaintiff Mark A. Mendaros filed the instant case against Defendants JPMorgan Chase Bank, N.A., Select Portfolio Servicing, Inc., Deutsche Bank National Trust Co., in its capacity as trustee for the Long Beach Mortgage Loan Trust 2006-11, and James E. Albertelli, PA dba ALAW (“ALAW”) (collectively “Defendants”) in San Francisco County Superior Court on September 12, 2016. Defendants JPMorgan and Deutsche Bank removed this action on October 21, 2016, on the basis of diversity jurisdiction. Dkt. No. 1. Defendants have moved to dismiss the complaint based on the doctrine of res judicata and for failure to state a claim. Dkt. Nos. 9, 12. For the reasons detailed below, the Court GRANTS the motions to dismiss.

         I. BACKGROUND

         Plaintiff's complaint alleges twelve causes of action against Defendants related to the foreclosure and sale of his personal residence (the “Property”) located in San Francisco, California. Dkt. No. 1-2.

         A. Factual Allegations

         According to the Complaint, Plaintiff obtained a mortgage loan (the “Note”) secured by the Property from First Allied Funding on October 16, 2006. Id. ¶ 48. This mortgage was secured by a deed of trust, also dated October 16, 2006. Id. ¶¶ 48-49. First Allied assigned Plaintiff's loan to Long Beach Securities Corporation. Id. ¶ 87. In November or December 2006, Long Beach Securities Corporation, in turn, bundled Plaintiff's mortgage into the Long Beach Mortgage Loan Trust 2006-11 (the “Trust”) - a mortgage-based securities trust set up under Delaware law. Id. Long Beach Securities Corporation then sold securities certificates to multiple investors. Id. Plaintiff alleges that the assignment to the Trust did not conform with California law because the transfer of the Note was not properly endorsed and the assignment of the Deed of Trust was not recorded. Id. ¶ 88. Plaintiff similarly argues that First Allied and Long Beach Securities Corporation breached the Trust's Pooling Services Agreement (“PSA”) when they failed to assign the Note and Deed of Trust to the trustee by the Trust's closing date. Id. ¶ 98. Consequently, Plaintiff argues, this sale and all subsequent assignments were improper. Id. ¶¶ 66, 88, 98. Because of the “break in the chain of title, ” the new beneficiary in and real party in interest to the mortgage are undocumented and unknown. Id. ¶ 98. According to Plaintiff, Defendants unlawfully foreclosed on and sold the Property in 2014.

         B. Procedural History

         Following the foreclosure sale, Plaintiff filed an action in San Francisco Superior Court on October 28, 2014, seeking to set aside the foreclosure sale and quiet title to the Property (the “First Action”). See Dkt. 12-1, Exs. A, B (Mendaros v. First Allied Funding, Deutsche Bank National Trust Co., No. CGC-14-542418 (San Francisco Superior)). Deutsche Bank demurred to the complaint three times and the court granted Plaintiff two opportunities to amend the complaint. See id., Exs. C-G. After Plaintiff failed to fix the deficiencies, the court entered judgment in favor of Deutsche Bank on October 17, 2016. See id., Exs. H, I.

         While the First Action was still pending, Plaintiff filed the instant action (the “Second Action”) in September 2016. Dkt. No. 12-1, Ex. B. Defendants Deutsche Bank and JPMorgan removed the Second Action to federal court on October 21, 2016. Plaintiff alleges twelve causes of action against Defendants premised on allegedly faulty assignments from First Allied to the Trust.


         A defendant may move to dismiss a complaint for failing to state a claim upon which relief can be granted under Federal Rule of Civil Procedure 12(b)(6). “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). To survive a Rule 12(b)(6) motion, a plaintiff must 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 is facially plausible when a 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).

         In reviewing the plausibility of a complaint, courts “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 & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008). Nevertheless, the Court does not “accept as true allegations that are merely conclusory, unwarranted deductions of fact, or unreasonable inferences.” In re Gilead Scis. Secs. Litig., 536 F.3d 1049, 1055 (9th Cir. 2008).


         Defendants move to dismiss Plaintiff's complaint on numerous grounds, including that the doctrine of res judicata bars Plaintiff's claims and that the complaint otherwise fails to state a claim upon which relief can be granted. The Court first addresses Defendants' res judicata argument and then addresses Plaintiff's remaining claims.

         A. Res Judicata

         Defendants Deutsche Bank, ALAW, and Select Portfolio argue that the doctrine of res judicata bars Plaintiff's claims against them. See Dkt. Nos. 12, 26. To determine the preclusive effect of the San Francisco Superior Court judgment in this case, the Court applies California law.[1]Under California law, the doctrine of res judicata, or claim preclusion, [2] “acts to bar claims that were, or should have been, advanced in a previous suit involving the same parties.” DKN Holdings LLC v. Faerber, 61 Cal.4th 813, 824 (Cal. 2015). To invoke the doctrine, Defendants must establish that the second suit involves (1) the same cause of action; (2) between the same parties; (3) after a final judgment on the merits in the first suit. DKN Holding, 61 Cal.4th at 824. The Court finds that these requirements are met for Defendants Deutsche Bank and ALAW.

         1.Same ...

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