United States District Court, E.D. California
IMMOBILIARE, LLC, a California Limited Liability Company, Plaintiff,
WESTCOR LAND TITLE INSURANCE COMPANY, a South Carolina Corporation, and DOES 1-50, Defendants. WESTCOR LAND TITLE INSURANCE COMPANY, a South Carolina Corporation, Cross-Complainant,
IMMOBILIARE, LLC, a California Limited Liability Company; CORPORATE AMERICA LENDING, INC., a California Corporation, and ROES 1-20, Cross-Defendants.
MEMORANDUM DECISION AND ORDER GRANTING
CROSS-DEFENDANT'S MOTION TO DISMISS UNDER RULES 9(B) AND
12(B)(6). (ECF NO. 13)
LAWRENCE J. O'NEILL, UNITED STATES CHIEF DISTRICT JUDGE.
PRELIMINARY STATEMENT TO PARTIES AND
in the Eastern District of California carry the heaviest
caseloads in the nation, and this Court is unable to devote
inordinate time and resources to individual cases and
matters. Given the shortage of district judges and staff,
this Court addresses only the arguments, evidence, and
matters necessary to reach the decision in this order. The
parties and counsel are encouraged to contact the offices of
United States Senators Dianne Feinstein and Kamala Harris to
address this Court's inability to accommodate the parties
and this action. The parties are required to reconsider
consent to conduct all further proceedings before a
Magistrate Judge, whose schedules are far more realistic and
accommodating to parties than that of any District Judge in
the Eastern District of California, who must prioritize
criminal and older civil cases.
trials in the Eastern District of California trail until the
District Judge becomes available and are subject to
suspension mid-trial to accommodate criminal matters. Civil
trials are no longer reset to a later date if the District
Judge is unavailable on the original date set for trial.
Defendant Westcor Land Title Insurance Company
(“Westcor”) removed this action brought by
Plaintiff Immobiliare, LLC (“Immobiliare”) in the
Fresno Superior Court to this Court based on diversity
jurisdiction, Westcor filed a Cross-Complaint against
Immobiliare and Corporate American Lending, Inc.
“Cross-Defendants”) on June 7, 2019. ECF No. 1,
Exh. A; id. No. 8. The Cross-Complaint asserts four
causes of action: (1) fraudulent concealment, (2) breach of
implied covenant of good faith and fair dealing, (3)
declaratory relief, and (4) rescission. ECF No. 8. In
response, CAL brought the instant Motion to Dismiss (the
“Motion”) the Cross-Complaint under Federal Rule
of Civil Procedure 9(b) and 12(b)(3) as to the first, third,
and fourth causes of action on August 1. Id. No. 13.
Westcor, however, stipulated with CAL to dismiss its third
and fourth cross-claims on August 21, leaving only the first
cross-claim for fraudulent concealment to be subject to this
Motion. Id. No. 15. Westcor then filed its
Opposition on August 21, id. No. 16, and CAL replied
on August 29, id. No. 17.
to Local Rule 230(g), the Court finds this matter suitable
for a decision on the papers. Having carefully considered the
parties' submissions and the record in this case in light
of the relevant law, the Court GRANTS the Motion.
following facts are drawn from the Cross-Complaint and are
accepted as true only for the purposes of this Motion.
Cousins v. Lockyer, 568 F.3d 1063, 1067 (9th Cir.
2009). This entire action originates from Immobiliare's
purchase of a parking lot property (the “parking
lot”) located in the City of Fresno and owned by Cedar
Avenue Professional Offices Owners Association
(“Cedar”) through a tax sale for $11, 322 on
April 28, 2015. ECF No. 8 ¶¶ 7, 10. Cedar was
unaware of the tax sale had taken place because the notice of
the sale was sent to an incorrect address. Id.
subsequently learned about the tax sale, and its attorney
sent a letter to Immobiliare on July 30, 2015 “advising
[Immobiliare] of the situation and offering to buy
back” the parking lot, and if Immobiliare refused,
Cedar threatened to demand arbitration to resolve their
dispute pursuant to a documents for conditions, covenants and
restrictions, which ran with the land and had been recorded
in the Fresno County Recorder's Office. Id.
¶¶ 8, 12, 14. Immobiliare, through its agent CAL,
“placed an order with Tax Title Services
(‘TTS') for title insurance” on the same day
Cedar sent its letter. Id. ¶¶ 15-16. When
Immobiliare, through its agent CAL, submitted an application
for title insurance four months later, it misrepresented that
the parking lot was vacant when it was actually being used,
and that it had not been made aware or advised of any threat
of legal action regarding the validity of ownership of the
parking lot. Id. ¶¶ 14, 16. Based on the
misrepresentations, Westcor, in February 2016, “issued
a title policy to Immobiliare with policy limits of $11, 322
- the amount Immobiliare paid” for the parking lot.
Id. ¶ 18, 42-45.
Immobiliare refused to resell the parking lot back to Cedar,
Cedar filed a petition for rescission of sale of property
pursuant to improperly noticed tax sale (the “petition
for rescission”) on April 28, 2016. Id.
¶¶ 14, 22, 29. The Fresno County Tax Collector
contacted Immobiliare about the petition for rescission
sometime shortly after April 28, then again in May and on
June 9, 2016. Id. ¶ 23, 26, 29. Without
informing Westcor of the legal challenge to the ownership of
the parking lot, Immobiliare sought, through its agent CAL,
for policy limits increases twice to $150, 000 then again to
$485, 000, which Westcor approved on April 15 and June 20,
2016, respectively. Id. ¶¶ 20-21, 30, 32.
Westcor claims that Cross-Defendants knew about both the
potential legal challenge to the ownership of the parking lot
when Immobiliare applied for title insurance and the
petition for rescission when it sought to increase its policy
limits. Id. ¶¶ 14-32, 41.
12, 2016, Fresno County Board of Supervisors (the
“Board”) held a hearing on whether to rescind the
tax sale of the parking lot in which Immobiliare appeared and
participated. Id. ¶ 33. After the hearing, the
Board rescinded the tax sale and returned Immobiliare's
$11, 793 payment. Id. ¶ 34. On August 4,
Immobiliare filed with Westcor “a false claim for
policy benefits in the amount of $485, 000 based on the
rescission of the tax sale” stating that it “had
no knowledge of any claim or the Petition prior to the day
before [the July 12, 2016] hearing.” Id.
¶ 35 (internal quotation marks omitted). Westcor
proceeded to investigate Immobiliare's claim only to
discover the fraudulent concealment, so it brought the
instant cross-action after Immobiliare had filed the original
action to recover on the title insurance. Id.
motion to dismiss under Rule 12(b)(6) challenges the legal
sufficiency of the opposing party's pleadings. Dismissal
of an action under Rule 12(b)(6) is proper where there is
either a “lack of a cognizable legal theory or the
absence of sufficient facts alleged under a cognizable legal
theory.” Balistreri v. Pacifica Police Dept.,
901 F.2d 696, 699 (9th Cir. 1990). When considering a motion
to dismiss for failure to state a claim under Rule 12(b)(6),
“[a]ll factual allegations in the complaint are
accepted as true, and the pleadings construed in the light
most favorable to the nonmoving party.” Doe I v.
Nestle USA, Inc., 766 F.3d 1013, 1018 (9th Cir. 2014)
(internal quotation marks and citation omitted). “In
reviewing the sufficiency of a complaint, [courts are
limited] to the ...