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Pabalate v. Nationstar Mortgage LLC

United States District Court, N.D. California

June 6, 2017

NATIONSTAR MORTGAGE LLC, et al., Defendants.


          MARIA-ELENA JAMES United States Magistrate Judge.


         Pending before the Court is Defendants'[1] Motion to Dismiss pursuant to Federal Rule of Civil Procedure (“Rule”) 12(b)(6). Mot., Dkt. No. 6. Plaintiff Amelia Pabalate filed an Opposition (Dkt. No. 17)[2] and Defendants filed a Reply (Dkt. No. 18). The Court previously vacated the May 25, 2017 hearing on the Motion (see Dkt. Nos. 14, 15), and finds the matter may be decided without oral argument. See Civ. L.R. 7-1(b). Having considered the parties' positions, the relevant legal authority, and the record in this case, the Court GRANTS Defendants' Motion for the following reasons.


         Plaintiff alleges she owns real property located in South San Francisco, California (the “Property”). See Compl. at 2, Dkt. No. 1-1. Plaintiff executed a promissory note on August 4, 2006 in favor of Aegis Wholesale Corporation in the amount of $749, 950 (the “Note”). Id. at 4. The Note was secured by a Deed of Trust (“DOT”) on the Property. Id. Plaintiff alleges unknown entities were involved in an attempt to securitize her loan, but because they failed to follow “various agreements and established laws” Plaintiffs loan was not assigned. Id. at 5. In 2011, Plaintiff fell behind on her mortgage payments and initiated loan modifications with her mortgage servicer, Bank of America. Id. at 6. The modification agreement was executed on November 16, 2011 and stated the lender was Bank of America; the loan modification was not recorded until March 12, 2013. Id. Plaintiff again fell behind on her mortgage payments and initiated loan modification negotiations once more. Id. Plaintiffs mortgage had been transferred from Bank of America to Nationstar. Id. Nationstar denied Plaintiff s request for a loan modification. Id. Although Aegis failed to assign or transfer the Note to U.S. Bank, U.S. Bank nonetheless attempted to collect on the Note and enforce the DOT “with the knowledge that they have no legal right to do so.” Id. at 4-5, 7.

         Based on these allegations, Plaintiff filed suit in Superior Court of San Mateo County, asserting claims for declaratory relief, negligence, quasi contract, breach of contract, breach of the implied covenant of good faith and fair dealing, violation of the California Homeowner's Bill of Rights, Cal. Civ. Code §§ 2924.17, 2924(a)(6) (“HBOR”); California Civil Code § 2934(a)(1)(A); and California's Unfair Competition Law (“UCL”), Cal. Bus. & Profs. Code § 17200 et seq. See Compl.

         Defendants removed the action to this Court based on diversity jurisdiction. See Not. of Removal, Dkt. No. 1. They now move to dismiss the action, with prejudice, because Plaintiff lacks standing to pursue her securitization claims (first through third, and sixth through eighth claims), and because she fails to state a basis for any of her claims. See Mot. In her Opposition, Plaintiff argues she has sufficiently stated claims for declaratory relief, negligence, HBOR, breach of contract, breach of the implied covenant of good faith and fair dealing, and the UCL. She does not argue she has pleaded a claim for quasi contract or under Section 2934(a)(1)(A).


         Rule 8(a) requires that a complaint contain a “short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). A complaint must therefore provide a defendant with “fair notice” of the claims against it and the grounds for relief. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (internal quotations and citation omitted).

         A court may dismiss a complaint under Rule 12(b)(6) when it does not contain enough facts to state a claim to relief that is plausible on its face. Id. at 570. “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. (quoting Twombly, 550 U.S. at 557). “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 ‘entitle[ment] to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do. Factual allegations must be enough to raise a right to relief above the speculative level.” Twombly, 550 U.S. at 555 (internal citations and parentheticals omitted).

         In considering a motion to dismiss, a court must accept all of the plaintiffs allegations as true and construe them in the light most favorable to the plaintiff. Id. at 550; Erickson v. Pardus, 551 U.S. 89, 93-94 (2007); Vasquez v. Los Angeles Cty., 487 F.3d 1246, 1249 (9th Cir. 2007). In addition, courts may consider documents attached to the complaint. Parks Sch. of Bus., Inc. v. Symington, 51 F.3d 1480, 1484 (9th Cir. 1995) (citation omitted).

         If a Rule 12(b)(6) motion is granted, the “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.” Lopez v. Smith, 203 F.3d 1122, 1127 (9th Cir. 2000) (en banc) (internal quotations and citations omitted). However, the Court may deny leave to amend for a number of reasons, including “undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, [and] futility of amendment.” Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048, 1052 (9th Cir. 2003) (citing Foman v. Davis, 371 U.S. 178, 182 (1962)).


         A. Request for Judicial Notice

         The Court may take judicial notice of “fact[s] that [are] not subject to reasonable dispute because [they are] generally known” or “can be accurately and readily determined from sources whose accuracy cannot reasonably be questioned.” Fed.R.Evid. 201(d). Defendants ask the Court to take judicial notice of seven documents: the Note (Request for Judicial Notice (“RJN”), Ex. 1, Dkt. No. 7), the DOT Executed by Plaintiff (RJN, Ex. 2), Assignment of the DOT (RJN, Ex. 3), the Corporate Assignment of DOT (RJN Ex. 4), the Substitution of Trustee (RJN, Ex. 5), the Notice of Default (RJN Ex. 6), and the Notice of the Trustee's Sale (RJN, Ex. 7). Except for the Note, each of these exhibits is a true and correct copy of documents recorded in the Official Records of San Mateo County. See RJN at 1-2. Exhibits 2-7 are judicially noticeable because they are matters of public record and because their accuracy can be readily determined by resorting to sources whose accuracy cannot reasonably be questioned. Fed.R.Evid. 201(b); Lee v. City of L.A., 250 F.3d 668, 689 (9th Cir. 2001) (“A court may take judicial notice of matters of public record . . . But a court may not take judicial notice of a fact that is subject to reasonable dispute.”); see also Rees v. PNC Bank, N.A., 308 F.R.D. 266, 271 (N.D. Cal. 2015) (taking judicial notice of recorded deed of trust, recorded assignments of deed of trust, recorded notice of default, and recorded notice of trustee's sale); Almutarreb v. Nationstar Mortg. Holdings, 2016 WL 3384067, at *2 (N.D. Cal. June 20, 2016) (“[P]ublicly-recorded real estate instruments and notices, including deeds of trust and default and foreclosure notices, are the proper subject of judicial notice, unless their authenticity is subject to reasonable dispute.”).

         Plaintiff does not object to the RJN, and does not dispute the authenticity of these public records; indeed, she attached copies of several of these same documents to the Complaint, including the Note, which Defendants attach as Exhibit 1 to their RJN. See Compl., Ex. A (DOT), Ex. D (the Note), Ex. E (Assignment of the DOT), Ex. F (Corporate Assignment of DOT), Ex. G (Substitution of Trustee). The Court accordingly takes judicial notice of the existence of RJN Exhibits 1-5, but not of the truth of their contents. As the Court does not rely on Exhibits 6-7, it denies Defendants' request as to those two exhibits as moot.

         In addition, the Court may rely upon the exhibits Plaintiff has attached to the Complaint, including the DOT, the Note, the Assignments, and the Substitution of Trustee. See Akhtar v. Mesa, 698 F.3d 1202, 1212 (9th Cir. 2012) (quoting Swartz v. KPMG LLP, 476 F.3d 756, 763 (9th Cir. 2007)); Parks Sch. of Bus., 51 F.3d at 1484.

         B. Analysis

         1. Standing

         a. Plaintiff's ...

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