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Venkatraman v. The Bank of New York Mellon

United States District Court, N.D. California, San Jose Division

July 11, 2019

RAJAMADAM C. VENKATRAMAN, et al., Plaintiffs,
v.
THE BANK OF NEW YORK MELLON, et al., Defendants.

          ORDER GRANTING DEFENDANTS' MOTION TO DISMISS PLAINTIFFS' COMPLAINT WITH PREJUDICE IN PART AND WITHOUT PREJUDICE IN PART RE: DKT. NO. 9

          LUCY H. KOH UNITED STATES DISTRICT JUDGE.

         Plaintiffs Rajamadam Venkatraman and Radhika Venkatraman (“Plaintiffs”) sue Defendants The Bank of New York Mellon (“BONY Mellon”), Accredited Home Lenders, Inc. (“Accredited”), Mortgage Electronic Registration Systems, Inc. (“MERS”), Caliber Home Loans (“Caliber”), and Barrett Daffin Frappier Treder & Weiss, LLP (“Barrett”) (collectively, “Defendants”) for claims arising from a January 2015 foreclosure. Plaintiffs filed their complaint pro se, but are now represented by counsel. Before the Court is Defendants' motion to dismiss Plaintiffs' complaint. Having considered the parties' submissions, the relevant case law, and the record in this case, the Court hereby GRANTS Defendants' motion to dismiss Plaintiffs' complaint with prejudice in part and without prejudice in part.

         I. BACKGROUND

         A. Factual Background

         Plaintiffs are individuals and the former owners of the property at 1031 Harlan Drive, San Jose, CA (“Property”). ECF No. 1-1, Ex. A (“Compl.”), ¶ 1. Plaintiffs acquired title to the property on July 31, 1997. Id. ¶ 13.

         On or about December 1, 2006, Plaintiffs refinanced the Property and received an $860, 000 loan from Defendant Accredited. Id. ¶ 14. The loan was secured by a deed of trust. Id. The deed of trust lists Defendant MERS as beneficiary for Defendant Accredited and non-party Old Republic Title Company as trustee. Id.; see also Compl., Ex. 1 (2006 deed of trust). The deed of trust states that if Plaintiffs are in default under the deed of trust, the lender “may invoke the power of sale” and that the trustee may record a notice of default. Ex. 1 at 13.

         On March 24, 2010, pursuant to an Assignment of Deed of Trust recorded with the Santa Clara County Recorder's Office, Defendant MERS assigned its interest as beneficiary in the deed of trust to Defendant BONY Mellon. ECF No. 10, Ex. B.[1]

         On April 21, 2014, Defendant Caliber executed a form titled “California Declaration of Compliance with (Cal. Civ. Code § 2923.55(C)).” Compl., Ex. 2 at 4. Defendant Caliber checked the box that stated the following: “The mortgage servicer has tried with due diligence to contact the borrower as required by California Civil Code § 2923.55(f) but has not made contact despite such due diligence. The due diligence efforts were satisfied on September 5, 2013.” Id.

         On May 21, 2014, pursuant to a Substitution of Trustee recorded with the Santa Clara County Recorder's Office, the beneficiary Defendant BONY Mellon substituted Defendant Barrett as trustee in place of Old Republic Title Company. ECF No. 10, Ex. C. On June 16, 2014, Defendant Barrett recorded a notice of default with the Santa Clara County Recorder's Office and began foreclosure proceedings against the Property. Compl. ¶ 15; see id., Ex. 2 (notice of default).

         On November 10, 2014, Defendant Barrett recorded a notice of trustee's sale with the Santa Clara County Recorder's Office. Compl. ¶ 17; see Compl., Ex. 3 (notice of trustee's sale). The notice stated that a trustee's sale was scheduled for December 8, 2014. Id. at 1. At the time, Plaintiffs' unpaid loan balance was $936, 891.18. Id.

         Plaintiffs allege that on an unspecified occasion, Plaintiffs requested a loan modification. Id. ¶ 19. Plaintiffs allege that Defendants “agreed to accept partial payment towards reinstatement of the defaulted loan as consideration for postponing the tentative Trustee's Sale in furtherance of a loan modification.” Id. ¶ 21. Plaintiffs allege that on or about January 15, 2015, Plaintiffs made a partial payment of $60, 000 to Defendant Caliber. Id. ¶ 22.

         On February 2, 2015, Defendant Barrett recorded a trustee's deed upon sale that indicated Skyway Investments, LLC had purchased the Property. ECF No. 1-1, Ex. 4.

         B. Procedural History

         On January 16, 2019, Plaintiffs, proceeding pro se, filed a complaint against Defendants in California Superior Court for the County of Santa Clara. Compl. at 1. Plaintiffs' complaint alleges four causes of action: (1) violation of California Civil Code § 2923.5 against all Defendants; (2) breach of contract against all Defendants; (3) breach of good faith and fair dealing against all Defendants; and (4) accounting and open book against Defendant Caliber. Id. at ¶¶ 25- 75. Plaintiffs' complaint attaches several documents, including Plaintiffs' deed of trust, the notice of default under the deed of the trust, and the notice of trustee's sale of the Property. See id., Exs. 1-4.

         On February 22, 2019, Defendant Barrett filed a declaration of non-monetary status in state court. ECF No. 1-1, Ex. B. Plaintiffs did not object to Defendant Barrett's declaration of non-monetary status in state court. ECF No. 1-1, Ex. E. Pursuant to California law, Defendant Barrett is thus a nominal party and is not considered for purposes of removal jurisdiction. Hafiz v. Greenpoint Mortg. Funding, Inc., 652 F.Supp.2d 1050, 1052 (N.D. Cal. 2009) (citing Cal. Civ. Code § 29241(d)).

         On March 14, 2019, Defendants removed the case to federal district court on the basis of diversity jurisdiction. ECF No. 1. Defendants explained that Plaintiffs are residents of California, as alleged in the Complaint. Id. at 3. Defendant Accredited is a defunct entity that dissolved in December 2012. ECF No. 1-1, Ex. C. All other Defendants are incorporated and have their principal places of business in states other than California. ECF No. 1 at 4.

         The case was originally assigned to United States Magistrate Judge Nathanael Cousins. ECF No. 3. On March 21, 2019, Defendants filed the instant motion to dismiss. ECF No. 9 (“Mot.”). On April 8, 2019, the case was reassigned to the undersigned after Plaintiffs failed to consent or decline magistrate judge jurisdiction by the April 3, 2019 deadline. ECF No. 12.

         On June 25, 2019, Plaintiffs filed an untimely opposition to Defendants' motion to dismiss. ECF No. 17 (“Opp.”). On June 25, 2019, Jonathan Black was substituted in as Plaintiffs' counsel. ECF No. 18. On July 3, 2019, Defendants filed their reply. ECF No. 22 (“Reply”).

         II. LEGAL STANDARD

         A. Motion to Dismiss Under Federal Rule of Civil ...


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