Samuel S. Zendejas, Jr., et al v. GMAC Wholesale Mortgage Corp., et al, No. 1:2010cv00184 - Document 24 (E.D. Cal. 2010)

Court Description: MEMORANDUM DECISION Re Defendants' Motions To Dismiss (Doc. 9 ) And Strike (Doc. 11 ), signed by Judge Oliver W. Wanger on 6/15/2010. Defendants motions to strike and to dismiss are GRANTED IN THEIR ENTIRETY. Except as otherwise noted, the di smissal is WITHOUT LEAVE TO AMEND. Defendants shall file a form of order consistent with this memorandum decision within five (5) days of electronic service. Plaintiffs shall have fifteen (15) days from service of the signed order to file an amended complaint. (Scrivner, E)

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1 UNITED STATES DISTRI CT CO URT 2 FOR THE EASTERN DISTRICT OF C ALIFORNIA 3 4 5 SAMUEL S . ZENDEJAS, JR. & MARIA ZENDEJAS , 7 8 9 MEMORANDUM DEC ISION RE DEFENDANTS MO TIONS TO DISMISS (DOC. 9) AND STRIKE (DOC. 1 1). Plaintiff s, 6 1:10-CV-00184 OWW GS A v. GMAC WHO LESALE MORTG AGE CORP., et al., Defendant s. 10 11 I. INTRODUCTION 12 GMAC Mor tgage, LLC ( named as Wholesale Mortgage 13 Corp. )( GMAC ), ETS Services, LLC (named as Exe cutive 14 Trustee Services, LL C ), and Federal National Mor tgage 15 16 17 18 19 Associat ion ( FNMA ) (col lectively Defenda nts ) move to dismiss and strike S amuel S. Zendejas, Jr. and Ma ria Zendejas complaint pursuant to Federal Rules of Civil procedur e 12(b)(6) a nd 12(f). 20 21 22 23 II. FACTUAL BACKGR OUND This act ion concerns deeds of trust encumbering t he real pro perty located at 2644 East Seeger A venue, 24 Visalia, California 93292 ( Property ). 25 that on or about Mar ch 30, 2007 they borrowed $22 0,500.00 26 from GMA C to refinan ce previous loans on the Prop erty 27 ( Loan ) . Complaint , Doc. 1, ¶16. 28 1 Plaintif fs admit Plaintiffs default ed 1 on the L oan based on personal hardships. 2 Plaintif fs allege th at they contacted GMAC and re quested 3 a loan m odification. 4 5 6 7 Id. ¶11 . Id. ¶¶ 9, 18 . GMAC failed to offer Plaintif fs and acce ptable loan modification in light of Plaintif fs declining income. Id. ¶11. Pl aintiffs further allege they continued to work with GMAC f or a 8 loan mod ification bu t that GMAC failed to offer 9 Plaintif fs other opt ions. 10 11 12 13 14 Plaintif fs admit tha t due to their default, nonjudicial foreclosure proceedings were comme nced a nd complete d. 17 18 19 20 21 22 The real property was sold at a trust ee s sale on October 23, 2009. 15 16 Id. ¶11. Id. ¶¶ 21-23. III. STANDARD OF DE CISION A. Rule 12( f) Motion to Strike. Under Ru le 12(f), a court may strike from a plead ing an insu fficient def ense or any redundant, immate rial, impertin ent, or scan dalous matter. Fed. R. Civ. P. 12(f). The function of a 12(f) motion to strike is to avoid th e expenditur e of time and money that must arise 23 from lit igating spur ious issues by dispensing wit h those 24 issues p rior to trial. 25 Co., 697 F.2d 880, 885 (9th Cir. 1983). A m otion to 26 strike s hould not be granted unless it is clear t hat the 27 28 Sidney-Vinst ein v. A.H. Robin s matter t o be stricke n could have no possible bear ing on 2 1 the subj ect matter o f the litigation. 2 Fresno, 392 F.Supp.2 d 1159, 1170 (E.D . Cal. 2005) . Neveu v. City o f 3 4 5 6 7 8 9 B. Rule 12( b)(6) Motion to Dismiss. A motion to dismiss brought under Federal Rule of Civil Pr ocedure 12(b )(6) tests the legal suffici ency of a claim. Nav arro v. Block, 250 F.3d 729, 732 (9 th Ci r. 2001). In deci ding whether to grant a motion to dismiss, 10 the cour t accept [s ] all factual allegations of the 11 complain t as true an d draw[s] all reasonable infe rences 12 in the l ight most fa vorable to the nonmoving part y. 13 Rodrigue z v. Panayio tou, 314 F.3d 979, 983 (9th Cir. 14 15 16 17 2002). To survive a motion to dismiss, a complai nt must contain sufficient factual matter, accepted as t rue, to state a claim to re lief that is plausible on its face. 18 Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (M ay 18, 2009) 19 (quoting Bell Atl. Corp v. Twombly, 5 50 U.S. 544, 570 20 (2007)). 21 22 23 24 25 26 27 28 A claim has facial p lausibility when the plaintif f pleads fac tual content that allows the court to draw the re asonable inference that the defendan t is liable for the misconduct alleged. The plau sibility standard is not akin to a probabi lity require ment, but it asks for more than a s heer possibi lity that defendant has acted un lawfully. Wh ere a complaint pleads facts that are merely con sistent with a defendant s liabilit y, it stops short of the line between possibil ity and plau sibility of entitlement to relief. Id. (cit ing Tw ombly, 550 U.S. 556-57) . 3 Dismissal also 1 can be b ased on the lack of a cognizable legal th eory. 2 Balistre ri v. Pacifi ca Police Dep t, 901 F.2d 696, 699 3 (9th Cir . 1990). 4 IV. DISCUSSION 5 6 A. Motion t o Strike. 7 1. Punitive Damages. 8 The righ t to recover punitive damages is governed by 9 Californ ia Civil Cod e section 3294 which states i n 10 relevant part that: 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 (a) In a n action for the breach of an obligation not aris ing from con tract, where it is proven by clear an d convincing evidence that the defendant has been guilty of o ppression, fraud or malice, the plai ntiff, in ad dition to the actual damages, may recover damages for the sake of example and by way o f punishing the defendant. *** (c) As used in this section, the following definiti ons shall ap ply: (1) Mal ice means c onduct, which is intended by the defe ndant to cause injury to the plai ntiff or des picable conduct, which is carri ed on by the defendant with a willful and consciou s disregard for the rights o r safety of others. (2) Opp ression mea ns despicable conduct that sub jects a pers on to cruel and unjust hardship in consciou s disregard of that persons rights. (3) Fra ud means an intentional misrepre sentation, d eceit, or concealment of a material fact known to the defendant with the inte ntion on the part of the defendant of there by depriving a person of property or legal ri ghts or othe rwise causing injury. Cal. Civ . Code § 329 4. Unless a defendant is fou nd guilty o f oppressio n, fraud, or malice, rising to th e 4 1 level of despicable conduct, punitive damages can not be 2 recovere d by the pla intiff. 3 Loan Ass n., 20 0 Cal. App. 3d 1154, 1169 (19 88). 4 5 6 7 8 Gaffney v. Dow ney Sa vings & Concluso ry allegatio ns of fraud, misrepresentatio n, bad faith, o ppression, malice and the like are insufficient. Lavine v . Jessup, 161 Cal. App. 2d 59, 69 ( 1958). Plaintif fs prayer f or punitive damages is wholly 9 unsuppor ted by any f actual allegations. 10 not oppo se Defendant s motion to strike the punit ive 11 damages prayer . 12 13 14 Plaintif fs do The moti on to strike the punitive damages prayer is GRANTED. 15 2. 16 Pre-judg ment i nterest is only authorized when the 17 damages are certain , or capable of being made ce rtain by 18 19 20 21 Pre-Judg ment Interest. calculat ion. Cal. Civ. Code. § 3287. Plaintiff s assert no facts to support any certain request for dam ages, nor are damages for such claims capable of being made 22 certain by calculati on. 23 Defendan ts motion t o strike the pre-judgment interest 24 prayer. 25 26 Plaintiffs do not oppose The moti on to strike the pre-judgment inter est pr ayer is GRANT ED. 27 28 5 1 3. 2 In the a bsence of a statute, or a contractual Attorney s Fees. 3 provisio n for the re covery of attorneys fees, at torneys 4 fees are not recover able as an element of damages in an 5 6 7 8 ordinary civil actio n. Cal. Code Civ. Pro. § 1021. Californ ia applies t he American Rule that attorne y s fees are gene rally not ta xable as costs against a losi ng 9 party. 10 (1976). 11 12 13 14 15 16 Young v. Red man, 55 Cal. App. 3d 827, 834 -835 Ordinari ly, a deed o f trust and primary note cont ain attorney s fee s provisions. Under California Civil Code § 1717, even if an a ttorney s fees clause purport s to give a u nilateral ri ght to one party to recover attorney s fees, the right is interpreted as reci procal. 17 Plaintif fs do not al lege the existence of any wri tten 18 agreemen t between th em and any of the Defendants on which 19 an award of attorney s fees can be based. 20 Plaintif fs cite any statute to support a claim fo r 21 attorney s fees. Pla intiffs do not oppose Defenda nts 22 23 24 25 motion t o strike the pre- judgment interest prayer. The moti on to strike the attorney s fees prayer i s GRANTED. 26 27 28 Nor do 6 1 B. Motion t o Dismiss. 2 1. Plaintif fs Have No S tanding To Assert HAMP. 3 The Home Affordable Modification Program ( HAMP ) was 4 created by Congress under the authority of the Em ergency 5 Economic Stabilizati on Act of 2008, Pub. L. 110-343. 6 7 8 9 Pursuant to this pro gram, various mortgage loan servicer s, including GMAC, entered into Servicer Particip ation Agreem ents that require the service r to 10 perform certain loan modification and foreclosure 11 preventi on services described in the agreement and in 12 program guidelines a nd procedures issued by the 13 Departme nt of the Tr easury. 14 15 16 17 See Escobedo v . Countrywi de Home Loa ns, Inc., 2009 WL 4981618, *1 (S.D. Cal. 2009) ; Compl. ¶ 25. Among o ther things, participating se rvicers are requ ired to consider all loans eligible under the 18 program, but are not required to modify mor tgages . 19 Escobedo , 2009 WL 49 81618, *2. 20 is not c odified as a public law. 21 22 23 24 25 26 Se e The H AMP program itself Although Plaintiffs do not separately identify an y of their cl aims as aris ing under HAMP, Plaintiffs ma ke numerous references to the program as a basis for their claims. For example , Plaintiffs allege that Defe ndants failed t o conform to the provisions of HAMP, Comp l. ¶13a; 27 that the y are willin g to enter into a HAMP modifi catio n 28 that the y can afford , id. at ¶20; and that GMAC s fail ure 7 1 to revie w Plaintiffs eligibility for the HAMP pr ogram is 2 a violat ion of its p articipation agreement, id. a t ¶25 . 3 Plaintif fs are not d irect beneficiaries of the HA MP 4 5 6 7 program, and can onl y have standing as third part y benefici aries. Howe ver, to sue as a third party benefici ary, the thi rd party must show that the c ontract 8 reflects the express or implied intention of the parties 9 to the c ontract to b enefit the third party. 10 2009 WL 4981618, *2 (citing Klamath W ater Users 11 Protecti ve Ass n v. Patterson, 204 F.3d 120 6, 121 0-11 12 13 14 15 (9th Cir . 2000)). Escobedo, P arties that benefit from a go vernment contract are general ly assumed to be incidental benefici aries, and m ay not enforce the contract absent a 16 clear in tent to the contrary. 17 qualifie d borrower t o a HAMP agreement would not be 18 reasonab le in relyin g on the Agreement as manifes ting an 19 intentio n to confer a right on him because the Ag reement 20 does not require [a servicer] modify eligib le loa ns. 21 22 23 24 Id. at * 3. Id. Th erefor e, qualified borrowers are incident al beneficia ries of the Agreement and do not have enforcea ble rights u nder the contract. 25 omitted] . 26 alleged breach of the Agreement. 27 28 Further more, a [citation Thus, a P laintiff lacks standing to su e for an Id. Plaintif fs oppositi on merely directs the Court s 8 1 attentio n to the sam e HAMP guidelines and directi ves 2 cited in the complai nt. 3 issue of standing. 4 Defendan ts motion t o dismiss any claims based on 6 8 At oral argument, Plaintiffs counsel requested leav e to amend. 5 7 Plaintiffs do not addres s the HAMP for lack of sta nding is GRANTED WITH LEAVE T O AMEND consiste nt with Rule 11. 9 2. 10 No Priva te Right of Action Under 12 U.S.C. § 1701x(c) (5). Plaintif fs allege th at Defendants failed to comply 11 12 with the notice requ irements of 12 U.S.C. § 1701x (c)(5), 13 a provis ion in the N ational Housing Act whi ch req uires 14 15 16 17 private lenders serv icing non-federal ly insured home loans to advise borr owers of any home ownership counseli ng they or t he United States Depart ment of 18 Housing and Urban De velopment ( HUD ) may offer. 19 ¶32. 20 2009 WL 3244729, *10 (C.D. Cal. 2009), held that section 21 1701x(c) (5) does not create a private right of ac tion: 22 23 24 25 26 27 28 Compl. Ga itan v. Mort gage Electronic R egistration Systems, The que stion whethe r a statute creates a c ause of actio n, either ex pressly or by implication, is basic ally a matte r of statutory construc tion. Opera Plaz a Re sidential Parc el Homeowne rs Ass'n v. Hoang, 376 F.3d 831 (9th Cir. 200 4). By its s tructure, the National Housing Act govern[ s] relations between the mortgage e and the go vernment, and give[s] the mortgago r no claim f or duty owed or for the mortgage e's failure to follow the statute or its impl ementing reg ulations. Mitchel l v. C hase Home Fin ance LLC, No. 3:06-CV-2099-K, 2008 WL 9 1 623395, at *3 (N.D. Tex. Mar. 4, 2008). As such, courts h ave held tha t the National Housing Act generall y does not c ontain a private right of action. See City of Rohnert Park v. H arris, 601 F.2d 104 0, 1046-47 (9th Cir.1979); Saratoga Sav. & Loan A ss'n v. Fed. Home Loan Bank of San Francisc o, 724 F.Sup p. 683, 690 (N.D. Cal. 1989); M itchell, at *3; Fantr oy v. Countryw ide Home Loa ns, Inc., 2007 WL 2254941, No. 3:06-CV1889-K, at *2 (N.D. Tex. July 24, 2007); Go ss v. Fairfiel d Housing Au thority, No. 3:03CV09 35(WIG), 200 6 WL 1272623, at *3 (D.Conn. Mar. 14, 2006). The provision asserted by Plaintif f is no exce ption. See Fouche' v. Shapiro & Massey L.L .P., 575 F.Supp.2d 776, 780 n. 7 (S. D. Miss. 200 8). 2 3 4 5 6 7 8 9 10 11 The reas oning of Gaitan is sound. Plaintiffs fai l to cite any contrary au thority. 12 Defendan ts motion t o dismiss the claim brought u nder 13 28 U.S.C . § 1701x(c) (5) claim is GRANTED WITHOUT LEAVE TO 14 AMEND. 15 16 17 18 19 20 21 3. No Priva te Right of Action Under California to Civil Co de §§ 2923.5 and 2923.6. Plaintif fs allege that GMAC failed to comply with Californ ia Civil Cod e §§ 2923.5 (requiring lender s to contact borrower pri or to filing notice of defaul t) and 2923.6 ( requiring ce rtain waiting periods prior t o giving 22 notice o f sale). 23 right of action unde r either provision. 24 3244729, *7, succinc tly summarized the state of t he law 25 and the relevant ana lysis: 26 27 28 Co mpl. ¶ 13(b). There is no pr ivate Gaitan, 2009 WL Under Ca lifornia law , a statute will only be deemed t o contain a private right of action if the Legi slature has manifested an int ent to create s uch a right. Moradi-Shalal v. Fireman's 10 1 Fund Ins . Companies, 46 Cal.3d 287, 3 05 (19 88). 2 The Pera ta Mortgage Relief Act was enacted relative ly recently, and thus California courts have had little chan ce to examine its provisio ns. Nevertheless, section 2923.6, passed along wi th section 2 923.5, clearly does not create a private rig ht of action. That section solely creat[es] a duty between a loan servicer and a lo an pool memb er. T he s tatute in no way confers standing on a borrower to con test a breach o f that duty. Far ner v. Countrywide Home Loans, N o. 08cv2193 BTM (AJB), 2009 WL 1890 25, at *2 (S .D.Cal. Jan. 26, 2009). Other courts to consider this questi on have agreed unanimously with the Farner cour t. See Tapia v. Aurora Loan Servs., LLC, No. 1:0 9-cv- 01143 AWI (GSA), 2009 WL 27058 53, at *1 (E .D.Cal. Aug. 25, 2009); Anaya v. Advisors Le nding Group, No. CV F 0 91191 LJO DLB, 2009 W L 2424037, at *8 (E.D.Cal. Aug. 5, 2009); Panto ja v. Cou ntrywide Home Loans, I nc., ---F.Supp.2d --- -, No. C 09-01 615 JW, 2009 WL 2423703, at *7 (N.D.Cal. July 9, 2009); C onnors v. Ho me Loan Corp., No . 08cv 1134L (LSP), 2009 WL 161 5989, at *7 (S.D. Cal. June 9, 2009) . 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Whether or not secti on 2923.5 creates a private right of action, how ever, has not been the subject of unanimity among the courts. Only two courts h ave consider ed this question, and they have rea ched inconsi stent results. See Yula eva v. Green point Mortga ge Funding, Inc., No. C IV. S-09-150 4 LKK/KJM, 2009 WL 2880393, at *11 (E.D.Cal . Sept. 03, 2009) (assuming w ithout deciding that sectio n 2923.5 does not provide a private right of act ion); Ort iz v. Accredit ed Home Len ders, Inc., --- F.Supp.2d --- -, No. 09 CV 0461 JM (CAB), 20 09 WL 2058784, at *5 (S.D.Cal . Jul. 13, 2 009) (finding section 2923.5 does con tain a priva te right of action, as the Californ ia legislatu re would not have enacted this ur gency legis lation, intended to curb high for eclosure rat es in the state, without any accompan ying enforce ment mechanism. ). Under Ca lifornia law , courts are not at li berty to imput e a particul ar intention to the Legislat ure when not hing in the language of the statute implies such an intention. Dunn-Ed wards Corp. v. Bay Area Ai r Quality Management Dist., 9 Cal.Ap p. 4th 644, 658 (1992). Thus, if the Legislat ure intends to create a priva te cause of action, we generally assume it will do so directly , in clear, understandable, unmistakable 11 1 terms. Vicko Ins. S ervs., Inc. v. Oh io Indemnit y Co., 70 Ca l.App . 4t h 55, 62-63 (1999), quoting Moradi-Shala l, 46 Cal.3d at 294-295 (interna l marks omit ted). 2 3 Section 2923.5 conta ins no language that indicate s any intent whatsoever to create a private right of act ion. 4 5 6 7 8 9 Neither section 2923 .5 or 2923.6 create a private right of actio n. Plaintif fs offer no contrary authorit y or argument . Defendan ts motion t o dismiss the claims brought 10 under Ca lifornia Civ il Code Sections 2923.5 and 2 923.6 is 11 GRANTED WITHOUT LEAV E TO AMEND. 12 13 4. TILA is Inapplicable io Defendants. 14 Plaintif fs allege th at by failing to follow 15 compulso ry guidelines in foreclosure action s GMAC has 16 committe d a violatio n of 15 U.S.C. § 1601. 17 provisio n is part of Truth In Lending Act ( TILA ), which 18 19 20 21 22 23 24 mandates meaningful disclosure of credit terms at the time of loan initiat ion. Id. § 1601. regulate the f oreclosure processes. It does no t Plaintiffs do not oppose d ismissal. Defendan ts motion t o dismiss the TILA claim is GRANTED WITH LEAVE T O AMEND. 25 26 27 28 That 12 1 2 3 4 5. Californ ia Business and Professions Code § 17200. Plaintif fs allege th at Defendants are liable unde r Californ ia Bus iness and Professions Code § 17200 because 5 of GMAC s fail ure to determine [Plaintiffs ] eligibility 6 for a lo an modificat ion... and []failure to compl y with 7 HAMP. 8 of the c onduct they have lost equity in th eir ho me a nd 9 10 11 12 Compl. ¶40. Plaintiffs allege that as a result are in d anger of los ing their home. seek equ itable relie f. Id. ¶43. Plainti ffs Compl. ¶44. Section 17200 prohib its any unlawful, unfair or 13 fraudule nt business act or practice. 14 Merit Pr operty Manag ement, Inc., 152 Cal. A pp. 4t h 154 4, 15 1554 (20 07). 16 prong of this statut e borrows violations of oth er laws 17 when com mitted pursu ant to business activity. 18 19 20 21 See Berryman v. An act ion brought under the unlawf ul Farmers Ins. Exc hange v. Sup erior Court, 2 Cal. 4th 377, 383 (1992). A pra ctice may o therwise be prohib ited if it is unfair or decepti ve, even if not unlawful. Cal-Tech 22 Communic ations v. L. A. Cellular Tel. Co., 2 0 Cal. 4th 23 163, 180 (1999). 24 facts to show how an y of the purported conduct was 25 unlawful , unfair, or fraudulent. 26 27 28 He re, Plaintiffs have failed to state That is, Plaint iffs entire c ause of acti on is based on Defendants pur ported failure to provide P laintiffs a loan modification . 13 No 1 law prov ides such a duty and Plaintiffs have not alleged 2 that thi s failure is otherwise unfair. 3 they wor ked with GMA C to explore a loan modificat ion but 4 5 6 7 8 9 10 Plaintiff s admit ultimate ly admit the y did not receive one because of their de creasing inc ome. HAMP does not require G MAC to enter in to loan modi fications. Nothing in the co mplaint suggests GMAC acted unlawfully or even unfairly. Defendan ts motion t o dismiss the § 17200 claim i s GRANTED WITHOUT LEAV E TO AMEND. 11 12 13 14 15 16 17 6. Breach o f Covenant o f Good Faith and Fair Dealing. Plaintif fs allege th at Defendants initiated forclosu re on the su bject pro perty without legal standing to do so and failed to determine that Plaintiffs were eligible pursuant to HAMP, all in breach of the c ovenant 18 of good faith and fa ir dealing. 19 further claim that t hey were denied the benefits under 20 the loan documents b ecause the documents were con fusing. 21 Id. ¶49. 22 23 24 25 26 Compl. ¶47. Pla intiffs A covena nt of good f aith and fair dealing exists in every co ntract, requ iring each party to act in go od faith and fair dealing it its performance not to deny t he opposing party the b enefi t of the bargain. See Carma 27 Develope rs, Inc. v. Marathon Development Californ ia, 28 Inc., 2 Cal. 4 th 342, 371 (1992). 14 A prereq uisite for any 1 action f or breach of this covenant is the existen ce of a 2 contract ual relation ship between the parties, bec ause the 3 covenant is an impli ed term in the contract. 4 5 6 7 Smi th v. San Fran cisco, 225 Cal. App. 3d 38, 49, (1990). Defendan ts argue tha t Plaintiffs have failed to i dentify the cont ract giving rise to the covenant. Their 8 oppositi on simply as serts that [t]he failure to 9 negotiat e or delay t he foreclosure was a breach o f the 10 implied covenant, c iting Sto rek & Storek, Inc. v. 11 Citicorp Real Estate , Inc., 100 Cal. App. 4 th 44 (2002 ). 12 But, Sto rek do es not stand for this proposition a t all. 1 13 14 15 In Storek, a l ender refused to continue fin ancing a failing development project. The investors sued, 16 alleging breach of t he implied covenant of good faith and 17 fair dea ling. 18 no duty to act in go od faith in determining wheth er a 19 conditio n prec edent to its performance of the loan 20 agreemen t had been f ulfilled. 21 22 23 24 Storek ultimately held that the lender had Id. at 62. How Plainti ffs counsel gleaned from this case the proposition th at [t]he f ailure to ne gotiate or delay the fo reclosure w as a breach of the impl ied covenant is a complete m ystery. 25 Plaintif fs present n o other evidence or authority in 26 oppositi on. 27 1 28 Pe rh ap s re co gn iz in g thi s fa il ur e, Pla in ti ff s c ou ns el d oes n ot pro vi de a p in ci te . 15 1 Defendan ts motion t o dismiss the claim of breach of 2 the cove nant of good faith and fair dealing is GR ANTED 3 WITHOUT LEAVE TO AME ND. 4 5 7. Cancella tion of Inst rument. 6 Plaintif fs allege in their Cancellati on of Instrument 7 claim th at the Notic e of Default, Notice of Trust ee s 8 Sale and Trustee s D eed are invalid because Defen dants 9 10 11 12 purporte dly did not have the right to foreclose. ¶¶ 57-58 . Compl. To plead a cause of action for cancellation of instrume nt, plaintif f must show that he will be i njured 13 or preju diced if the instrument is not cancelled, and 14 that suc h instrument is void or voidable. 15 § 3412. 16 the inst ruments in q uestion are void or voi dable. 17 Plaintif fs do not ad dress this failure in their 18 19 20 21 22 Cal. C iv. Code Plaintiffs fail to allege any valid reas on why oppositi on. Defenda nts motion to dismiss the cancella tion of inst rument claim is GRANTED WITHO UT LEAVE TO AMEND . 8. Quiet Ti tle. 23 24 Plaintif fs seek to q uiet title to the Property, 25 alleging Defen dants do not have any right, title , 26 interest , or estate in the Property. 27 state a claim for qu iet title plaintiff s complai nt must 28 16 Compl. ¶64 . To 1 be verif ied and must include (1) a description of the 2 property including b oth its legal description and its 3 street a ddress or co mmon designation; (2) plainti ff s 4 5 6 7 title an d the basis upon which it is asserted; (3 ) that adverse claims as ag ainst which a determination i s sought; (4) the date as of which a determination is 8 sought a nd, if other than the date the complaint is 9 filed, a statement w hy the determination is sough t as of 10 that dat e; and (5) a prayer for determination of 11 plaintif f s title ag ainst the adverse claims. 12 13 14 15 Code Civ . Pro. § 761 .020. See Cal. The purpose of a quiet title action i s to settle all conflicting claims to the property and to decl are each interest or estate t o which 16 the part ies are enti tled. 17 Newman v. Cornel ius, 3 Cal. App. 3d. 279, 284 (1 970). 18 In addit ion to the r equired elements for a quiet 19 title ac tion, a borr ower cannot quiet title to a Prope rty 20 without discharging any debt owed. 21 22 23 24 See Dis tor v. U.S. Bank, NA , 2009 WL 34 29700 *6 (N.D. Ca l. Oct. 22, 2009); see also Aguilar v. Bocci, 39 Cal. App. 3d 475, 477 (1974). Plaintiffs have not alleged that they di scharged 25 the debt and are therefore the rightf ul own ers of the 26 Property . 27 cannot d ischarge the debt. 28 In fact, Plaintiffs admit they have no t and As such, Plaintiffs h ave not 17 1 2 3 4 5 6 7 stated a claim for Q uiet Title. Plaintif fs cite Kelly v. Mortgage Electric Registra tion Systems , Inc., 6 42 F. Su pp. 1048 (N.D. Cal. 2009), a gain with no pincite, for the proposition that their qu iet title cl aim should survive because Pl aintiffs were onc e the rightf ul owners of the property and were 8 seeking a loan modif ication prior to the foreclos ure 9 sale. 10 Rather, Kelly dismissed a quiet title claim because the 11 plaintif fs did not a llege that they satisfied the ir 12 13 14 15 K elly d oes not support this proposition at all. obligati ons under th e deed of trust. Id. a t *7. Defendan ts motion t o dismiss the quiet title cla im is GRANT ED WIT HOUT L EAVE TO AMEND. 16 9. 17 Plaintif fs allege th ey are entitled to an account ing 18 19 20 21 Accounti ng. and for a return of all of the payments they made on the Loan und er 15 U.S.C. § 1635(b) and 12 U.S.C. § 26 05. Compl. ¶ 67. Title 1 5, United States Code section 1635 (b) 22 provides for a right of rescission under certain 23 circumst ances where there has been a violation of TILA. 24 As discu ssed above, TILA is inapplicable to the f acts of 25 this cas e. 26 27 28 Accordin gly, Plaintiffs would not be eligible for resc ission under section 1635(b). Likewise, Title 12 United S tates Code, section 2605, which imposes u pon a 18 1 loan ser vicer an obl igation to respond to borrowe r 2 inquirie s, does not provide for an accounting. 3 To the e xtent Plaint iffs assert a claim for an ac counting 4 5 6 7 under st ate law, thi s claim fails as well. To state a cause of action for accounting, plaintiff must pl ead the existenc e of a relat ionship that requires and acc ounting, 8 and that the balance due from the def endant s can only be 9 ascertai ned by an ac counting. 10 Cal. App . 4th 156, 1 79 (2009). 11 that the y owe a balance to Defendants on the Loan. 12 13 14 15 Teselle v. McLoughlin, 173 Here, Plaintiffs asserts Th ey are not entitled to an accounting as a matter of law. See Pant oja v. Countrywide Home Loans, Inc., 640 F. Su pp. 2d 1177, 1191- 92 (N.D. Cal 2009)(dismissing claim for 16 accounti ng because: (1) plaintiff did not claim h e was 17 owed any thing; and ( 2) it was not difficult to ca lculate 18 what the plaintiff o wed the defendant because the notice 19 of defau lt set forth any arrearages due). 20 21 Defendan ts motion t o dismiss the accounting clai m is GRANTED WITHOUT LEAV E TO AMEND. 22 23 10. 24 Plaintif fs allege th at the loan transaction is 25 26 27 28 Rescissi on. voidable . Compl. ¶7 0. To the extent Plaintiffs seek rescissi on under TIL A, 15 U.S .C. § 1635(b), TILA is inapplic able to the facts of this case. 19 1 Californ ia Civil Cod e Section 1689 permits rescis sion 2 if the consent of t he party rescinding ... was g iven by 3 mistake, or obtained through ... fraud. 4 5 6 7 § 1689(b )(1)). Cal. Ci v. Code. To o btain rescission, plaintiff m ust restore or offer to restore to the other party ev erything of value they receiv ed under the contract. Cal. Civ. 8 Code § 1 691(b). 9 restore to Defendant s the benefit of the Loan con ferred 10 on them. Rather, Pl aintiffs allege a substitute 11 tender. Compl. ¶ 7 2. 12 13 14 15 Her e, Plaintiffs fail to offer t o Plaintiffs fail to identi fy what the subs titute tende r is and whether it is in the amount of the b enefit of th e Loan conferred on them. Mo reover, Plaintif fs fail to a llege that the loan itself wa s 16 founded upon f raud or was entered into by mistake. 17 Plaintif fs fail to state a claim for rescission. 18 19 Defendan ts motion t o dismiss the rescission clai m is GRANTED WITHOUT LEAV E TO AMEND. 20 21 22 11. Declarat ory Relief Plaintif fs seek a de claration that that the loan 23 and fore closur e are inval id. 24 this req uest is base d entirely on their other 25 allegati ons, all of which have been dismissed, th ere is 26 27 28 Compl. ¶¶ 85, 88-89. As no basis for declara tory relief. Defendants moti on to dismiss the rescissi on claim is. 20 1 12. 2 The Comp laint contai ns a separate cla im for Injuncti ve Relief. 3 injuncti ve relief. 4 of their legal claim s, they are not entitled to 5 6 7 8 9 10 injuncti ve relief. As Plaintiffs cannot prevail on any See San Francisco Newsp aper Printi ng Co., Inc . v. Superio r Court, 170 Cal. App. 3d 438 , 442 (1985). Defendan ts motion t o dismiss the rescission clai m is GRANTED. 11 V. CONCLUSI ON 12 13 For the reasons set forth above, Defendants motio ns 14 to strik e and to dis miss are GRANTED IN THEIR ENT IRETY. 15 Except a s otherwise noted, the dismissal is WITHO UT LEAVE 16 TO AMEND . 17 18 19 20 21 22 23 24 25 26 Defendan ts shall fil e a form of order consistent with this mem orandum deci sion within five (5) days of electron ic service. Plaintif fs shall hav e fifteen (15) days from serv ice of the s igned order to file an amended complaint. SO ORDER ED DATED: JUNE 1 5, 2010 /s/ O liver W. Wanger Oliver W. Wang er United States Distri ct Judge 27 28 21

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