United States District Court, E.D. California
ORDER AND FINDINGS AND RECOMMENDATIONS
F. BRENNAN UNITED STATES MAGISTRATE JUDGE
case is before the court on defendants Federal Home Loan
Mortgage Corporation (“FHLMC”), Bank of America
Corporation (“Bof A”), and Michael Baker's
(“Baker”) motions to dismiss plaintiffs'
complaint for failure to state a claim pursuant to Federal
Rule of Civil Procedure (“Rule”)
12(b)(6). ECF Nos. 4 & 11. Also pending is
plaintiffs' request to file documents electronically (ECF
No. 25) and the court's November 5, 2018 order directing
the plaintiffs to show cause why sanctions should not be
imposed for their failure to timely respond to defendant
Baker's motion to dismiss (ECF No. 22). For the following
reasons, the order to show cause is discharged,
plaintiffs' request to file documents electronically is
denied, and it is recommended that defendants' motions to
dismiss be granted.
Order to Show Cause
noticed his motion to dismiss for hearing on November 7,
2018. ECF No. 11. In violation of Local Rule 230, plaintiffs
failed to timely file either an opposition or statement of
non-opposition to that motion. See E.D. Cal. L.R.
230(c) (requiring an opposition or statement of
non-opposition to be filed not less than 14 days prior to the
hearing). Accordingly, the hearing was continued and the
plaintiffs were ordered to ordered to show cause why
sanctions should not be imposed for their failure to timely
file a responsive pleading. ECF No. 22. Plaintiffs were also
ordered to file an opposition or statement of non-opposition
to the motion. Id.
response, plaintiffs explain that they mailed their
opposition to the court on September 28, 2018, but they are
not sure why it was not received. ECF No. 24. The docket
reflects that the court received plaintiffs' opposition
on November 13, 2018, ten days after the order to show cause
issued. ECF No. 23. Given that an opposition to Baker's
motion has been filed, and in light of plaintiffs'
representation, the order to show cause is discharged and no
sanctions are imposed.
Plaintiffs' Request to File Documents
request permission to electronically file documents with the
court. ECF No. 25. Local Rule 133 requires pro se parties to
file and serve paper documents unless the assigned district
judge or magistrate judge grants permission to file
electronically. E.D. Cal. L.R. 133(a), (b)(2). Here,
plaintiffs have demonstrated an ability to file documents
conventionally, and there are no circumstances warranting a
deviation from the local rule. Accordingly, the request for
permission to file electronically is denied.
Defendants' Motions to Dismiss
complaint alleges that in 2003 plaintiffs purchased a home
located at 125 Crowley Lake Dr., Mammoth Lake, California.
Compl. (ECF No. 1) ¶ 11. In 2008, they decided to
refinance their home loan with Countywide Bank FSB based on
“assurances that the loan would be a low interest,
fixed rate loan.” Id. ¶ 12. Plaintiffs
received a new loan in the amount of $417, 000, which was
secured by a deed of trust (“DOT”). Defs. FHLMC
& Bof A's Req. Judicial Notice (ECF No. 5), Ex.
In 2012, Countrywide assigned its interest in the DOT to Bof
A. Id. at Ex. B. Two years later, plaintiffs
received a loan modification from Bof A. Id. at Ex.
C. On January 26, 2016, a Notice of Default was recorded with
the Mono County Recorder's Office. Id. at Ex. D.
The notice indicates that plaintiffs were behind on their
payments in the amount of $22, 994.34. Id. On May
13, 2016, a Notice of Trustee's Sale was recorded.
Id. at Ex. E. Shortly thereafter, Bof A assigned its
interest in the deed of trust to defendant FHLMC.
Id. at Ex. F. A Trustee's Deed Upon Sale
reflects that the property was sold on December 22, 2016.
Id. at Ex. G.
subsequently filed this action against defendants Baker,
FHLMC, Bof A, and Service Link, LLC, alleging claims under
the Real Estate Settlement Procedures Act
(“RESPA”) and Truth in Lending Act
(“TILA”), as well as state law claims for breach
of contract, wrongful foreclosure, quiet title, fraudulent
concealment, and violation of the Homeowner Bill of Rights
(“HBOR”). ECF No. 1 at 17-33. The crux of
plaintiffs' complaint is that defendants were not
authorized to conduct foreclosure proceedings under the DOT
for several reasons. They claim that the DOT was never
properly executed because a notary was not present at the
time they signed it. Id. ¶¶ 31-33. They
further allege that the assignments of the DOT were invalid
because the promissory note had previously been split from
the DOT and securitized. Id. ¶¶ 39-41.
Plaintiffs also claim that the entity that conducted the
trustee's sale was not the trustee under the DOT.
Id. ¶¶ 113-115. Plaintiffs also allege
that Bof A failed to properly credit their payments, which
resulted in the loan being in default. Id.
¶¶ 97, 102. Lastly, plaintiffs claim that
defendants failed to respond to their request for information
and to evaluate them for a loan modification. Id. at
Baker, Bof A, and FHLMC now move to dismiss plaintiffs'
complaint for failure to state a claim under Rule 12(b)(6).
ECF Nos. 4 & 11.
Rule 12(b)(6)'s Standards
complaint may be dismissed for “failure to state a
claim upon which relief may be granted.” Fed.R.Civ.P.
12(b)(6). To survive a motion to dismiss for failure to state
a claim, a plaintiff must allege “enough facts to state
a claim to relief that is plausible on its face.”
Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570
(2007). 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) (citing
Twombly, 550 U.S. at 556). The plausibility standard
is not akin to a “probability requirement, ” but
it requires more than a sheer possibility that a defendant
has acted unlawfully. Iqbal, 556 U.S. at 678.
under Rule 12(b)(6) may be based on either: (1) lack of a
cognizable legal theory, or (2) insufficient facts under a
cognizable legal theory. Chubb Custom Ins. Co., 710
F.3d at 956. Dismissal also is appropriate if the complaint
alleges a fact that necessarily defeats the claim.
Franklin v. Murphy, 745 F.2d 1221, 1228-1229 (9th
pleadings are held to a less-stringent standard than those
drafted by lawyers. Erickson v. Pardus, 551 U.S. 89,
93 (2007) (per curiam). However, the Court need not accept as
true unreasonable inferences or conclusory legal allegations
cast in the form of factual allegations. See Ileto v.
Glock Inc., 349 F.3d 1191, 1200 (9th Cir. 2003) (citing
Western Mining Council v. Watt, 643 F.2d 618, 624
(9th Cir. 1981)).
purposes of dismissal under Rule 12(b)(6), the court
generally considers only allegations contained in the
pleadings, exhibits attached to the complaint, and matters
properly subject to judicial notice, and construes all
well-pleaded material factual allegations in the light most
favorable to the nonmoving party. Chubb Custom Ins. Co.
v. Space Sys./Loral, Inc., 710 F.3d 946, 956 (9th Cir.
2013); Akhtar v. Mesa, 698 F.3d 1202, 1212 (9th Cir.
Defendant Baker's Motion
Baker argues that the claims against him are barred by the
doctrine of res judicata. ECF No. 11-1 at 5-7.
Alternatively, he further argues that the complaint fails to
sufficiently allege a claim against him. Id. at 7-9.
courts “are required to give state court judgments the
preclusive effect they would be given by another court of
that state.” Brodheim v. Cry, 584 F.3d 1262,
1268 (9th Cir. 2009) (citing Migra v. Warren City Sch.
Dist. Bd. of Educ., 465 U.S. 75, 84 (1984)). In dealing
with the judgment of a state court, federal courts must look
to the preclusion rules of the relevant state to determine
whether a decision is preclusive. Miofsky v. Superior
Court of California, 703 F.2d 332, 336 (9th Cir. 1983).
In California, res judicata, or claim preclusion,
bars a second lawsuit between the same parties on the same
cause of action. People v. Barragan, 32 Cal.4th 236,
252 (2004). Collateral estoppel, or issue preclusion, bars
the relitigation of issues that were actually litigated and
determined in the first action. Id. at 252-53. The
elements for applying either claim preclusion or issue
preclusion to a second action are the same: “(1) A
claim or issue raised in the present action is identical to a
claim or issue ...