United States District Court, N.D. California
GREGORY P. DI LORETO and THERESA A. DI LORETO, Plaintiffs,
CHASE MANHATTAN MORTGAGE CORPORATION; SPECIALIZED LOAN SERVICING, LLC; NBS DEFAULT SERVICES, LLC; and DOES 1 through 20, inclusive, Defendants.
ORDER GRANTING IN PART AND DENYING IN PART MOTION TO
DISMISS, GRANTING MOTION FOR PRELIMINARY INJUNCTION, AND
CONTINUING CASE MANAGEMENT CONFERENCE (DKT. NOS. 10, 16,
16-1, 17-4, 20)
CLAUDIA WILKEN UNITED STATES DISTRICT JUDGE
Specialized Loan Servicing LLC (SLS) and Chase Manhattan
Mortgage Corporation (Chase) (collectively, Defendants) move
to dismiss the complaint filed by Plaintiffs Gregory and
Theresa Di Loreto. Plaintiffs move for a preliminary
injunction against foreclosure of the real property at issue
in this case. Each side opposes the other's motion and
each has filed a reply. After considering the parties'
submissions and oral argument, the Court grants in part and
denies in part Defendants' motion to dismiss and grants
Plaintiffs' motion for a preliminary injunction.
Court also grants the unopposed requests for judicial notice
filed by all parties, and takes judicial notice of the
uncontested public documents submitted. The Court does not,
however, take judicial notice of the disputed inferences the
parties seek to draw from the documents or the parties'
respective characterization of those documents. Nor does the
Court make any finding about whether other evidence exists
regarding the disputed issues.
own real property in Contra Costa County, California. In
December 2004, Plaintiffs obtained a $1, 350, 000 refinance
loan from originating lender Chase. They secured the loan by
a deed of trust. Around the same time, Plaintiffs also
obtained a $500, 000 home equity line of credit from
non-party JP Morgan Chase Bank N.A. (JPMorgan). Shortly
thereafter, Plaintiffs transferred title to the subject
property into their family trust. In October 2015, the trust
then transferred the title back to Plaintiffs and Gregory Di
Loreto transferred his interest to Theresa Di Loreto. Oct.
11, 2017 Supp. Decl. of Gregory Di Loreto ¶ 2 & Ex.
November 2015, Chase assigned its beneficial interest in the
refinance loan to non-party U.S. Bank National Association,
as Trustee for J.P. Morgan Mortgage Trust 2006-A3 (U.S.
two years” before Plaintiffs filed this action,
Plaintiffs submitted an application for loan modification to
Chase and/or SLS. Complaint ¶ 11. Defendants requested
additional information, which Plaintiffs attempted to
provide. The application was still pending in July 2017, when
SLS advised Plaintiffs in writing that their loan
modification application was “currently under
review.” Complaint ¶ 14 & Ex. E. SLS informed
Plaintiffs that they needed to submit a “Request for
Mortgage Assistance Form” but also listed numerous
other required documents that it deemed
“complete” with no further action needed.
in January 2017, NBS caused to be recorded a notice of
default and election to sell the subject property. In July
2017, NBS caused to be recorded a notice of Trustee's
August 1, 2017, Plaintiffs filed the complaint in this action
in Contra Costa Superior Court. They enumerated separate
claims seeking: (1) declaratory relief against all
Defendants; (2) injunctive relief against Defendants Chase
and SLS; (3) accounting against Defendants Chase and SLS; (4)
relief under the federal Fair Debt Collection Practices Act
(FDCPA), 15 U.S.C. § 1692, against Defendant SLS; and
(5) relief under the California Homeowner Bill of Rights
(HBOR), Cal. Civil Code §§ 2923.6, 2924.12,
2924.18, against Defendants Chase and SLS. On August 10,
2017, the Superior Court entered an order to show cause why
the court should not issue a preliminary injunction
prohibiting the sale of the subject property as well as a
temporary restraining order prohibiting sale of the property
pending the hearing on the order to show cause. On September
8, 2017, Defendants Chase and SLS filed a notice of removal.
Motion to Dismiss
complaint must contain a “short and plain statement of
the claim showing that the pleader is entitled to
relief.” Fed.R.Civ.P. 8(a). The plaintiff must proffer
“enough facts to state a claim to relief that is
plausible on its face.” Ashcroft v. Iqbal, 556
U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 570 (2007)). On a motion under
Rule 12(b)(6) for failure to state a claim, dismissal is
appropriate only when the complaint does not give the
defendant fair notice of a legally cognizable claim and the
grounds on which it rests. Twombly, 550 U.S. at 555. A claim
is facially plausible “when the plaintiff pleads
factual content that allows the court to draw the reasonable
inference that the defendant is liable for the misconduct
alleged.” Iqbal, 556 U.S. at 678.
considering whether the complaint is sufficient to state a
claim, the court will take all material allegations as true
and construe them in the light most favorable to the
plaintiff. Metzler Inv. GMBH v. Corinthian Colleges,
Inc., 540 F.3d 1049, 1061 (9th Cir. 2008). The
court's review is limited to the face of the complaint,
materials incorporated into the complaint by reference, and
facts of which the court may take judicial notice.
Id. at 1061. However, the court need not accept
legal conclusions, including threadbare “recitals of
the elements of a cause of action, supported by mere
conclusory statements.” Iqbal, 556 U.S. at 678 (citing
Twombly, 550 U.S. at 555).
granting a motion to dismiss, the court is generally required
to grant the plaintiff leave to amend, even if no request to
amend the pleading was made, unless amendment would be
futile. Cook, Perkiss & Liehe, Inc. v. N. Cal.
Collection Serv. Inc., 911 F.2d 242, 246-47 (9th Cir.
1990). In determining whether amendment would be futile, the
court examines whether the complaint could be amended to cure
the defect requiring dismissal “without contradicting
any of the allegations of [the] original complaint.”
Reddy v. Litton Indus., Inc., 912 F.2d 291, 296 (9th
Cir. 1990). The court's discretion to deny leave to amend
is “particularly broad” where the court has
previously granted leave. Chodos v. West Publ'g
Co., 292 F.3d 992, 1003 (9th Cir. 2002).
order to satisfy Article III's standing requirements,
plaintiffs must allege that: (1) they suffered an
“injury in fact” that is (a) concrete and
particularized and (b) actual or imminent, not conjectural or
hypothetical; (2) that the injury is fairly traceable to the
defendants' challenged conduct; and (3) that it is
likely, as opposed to merely speculative, that the injury
will be redressed by a favorable decision. Lujan v.
Defenders of Wildlife, 504 U.S. 555, 560-61 (1992).
Court evaluates a motion to dismiss for lack of Article III
standing under Federal Rule of Civil Procedure 12(b)(1).
See Maya v. Centex Corp., 658 F.3d 1060, 1067 (9th
Cir. 2011); White v. Lee, 227 F.3d 1214, 1242 (9th
Cir. 2000). The threshold question of whether plaintiffs have
standing is distinct from, and precedes, analysis of the
merits of their claims. Maya, 658 F.3d at 1068. A
“plaintiff must demonstrate standing for each claim he
seeks to press and for each form of relief that is
sought.” Davis v. Fed. Election Comm'n,
554 U.S. 724, 734 (2008) (internal quotations omitted).
motion to dismiss under Rule 12(b)(1) may be “facial or
factual.” White, 227 F.3d at 1242. Where a defendant
makes a facial attack on jurisdiction, the court takes the
factual allegations of the complaint as true, and construes
them in the light most favorable to the plaintiffs. Leite
v. Crane Co., 749 F.3d 1117, 1121 (9th Cir. 2014). Where
a defendant makes a factual attack, however, the court
“need not presume the truthfulness of the
plaintiffs' allegations” and, where the
jurisdictional question is separable from the merits of the
case, may resolve factual disputes without converting the
motion into one for summary judgment. White, 227 F.3d at
1242; see also Thornhill Publ'n Co. v. Gen. Tel.
& Elecs. Corp., 594 F.2d 730, 733 (9th Cir. 1979).
The plaintiff then “bears the burden of proving by a
preponderance of the evidence that each of the requirements
for subject-matter jurisdiction has been met.” Leite,
749 F.3d at 1121.
Motion for Preliminary Injunction
plaintiff seeking a preliminary injunction must establish
that he is likely to succeed on the merits, that he is likely
to suffer irreparable harm in the absence of preliminary
relief, that the balance of equities tips in his favor, and
that an injunction is in the public interest.”
Winter v. Natural Res. Def. Council, Inc., 555 U.S.
7, 20 (2008). Alternatively, “a preliminary injunction
could issue where the likelihood of success is such that
serious questions going to the merits were raised and the
balance of hardships tips sharply in plaintiff's favor,
” so long as the plaintiff demonstrates irreparable
harm and shows that the injunction is in the public interest.
Alliance for the Wild Rockies v. Cottrell, 632 F.3d
1127, 1131 (9th Cir. 2011) (citation and internal quotation
and editing marks omitted).
employs a sliding scale when considering a plaintiff's
showing as to the likelihood of success on the merits and the
likelihood of irreparable harm. Id. “Under
this approach, the elements of the preliminary injunction
test are balanced, so that a stronger showing of one element
may offset a weaker showing of another.” Id.
Motion to Dismiss
contend that the Court should disregard Plaintiffs'
untimely opposition brief and grant the motion to dismiss as
unopposed. Defendants' motion to dismiss was filed on
September 26, 2017. Plaintiffs' opposition was due on
October 10, 2017. On October 17, 2017, Defendants filed a
notice that Plaintiffs had not opposed the motion. That same
day, Plaintiffs filed a “Memorandum of Points and
Authorities in Opposition to Defendant's Motion to
Strike, ” which, despite the title, generally appears