Stephen H Johnson et al v. JPMorgan Chase Bank NA et al, No. 5:2015cv02609 - Document 23 (C.D. Cal. 2016)
Court Description: ORDER GRANTING DEFENDANT'S MOTION TO DISMISS 13 by Judge Dean D. Pregerson. For the reasons stated above, Defendant's Motion to Dismiss is GRANTED. The FAC is DISMISSED, with prejudice. ( MD JS-6. Case Terminated ) (lom)
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Stephen H Johnson et al v. JPMorgan Chase Bank NA et al Doc. 23 1 2 O 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA 10 11 STEPHEN H. JOHNSON, PAULA A. JOHNSON, 12 Plaintiffs, 13 v. 14 15 JPMORGAN CHASE BANK NA., Defendant. 16 ___________________________ 17 ) ) ) ) ) ) ) ) ) ) ) Case No. EDCV 15-02609 DDP (JEMx) ORDER GRANTING DEFENDANT’S MOTION TO DISMISS [Dkt. 13] Presently before the court is Defendant JPMorgan Chase Bank, 18 N.A.’s Motion to Dismiss. 19 parties, the court grants the motion and adopts the following 20 Order. 21 I. 22 Having considered the submissions of the Background Plaintiffs Stephen and Paula Johnson (“Plaintiffs”) filed an 23 action against Defendant JPMorgan Chase Bank, N.A. (“Defendant”) in 24 the San Bernardino County Superior Court in March 2014. (Case No. 25 5:14-cv-00777-DDP-JEMx, the “First Action”). The case was later 26 removed to this court. In the First Action, Plaintiffs alleged that 27 Defendant did not have standing to initiate foreclosure proceedings 28 against Plaintiffs’ property because Defendant did not acquire the Dockets.Justia.com 1 right to enforce a deed of trust that was executed as part of 2 Plaintiffs’ refinancing of their home in November 2006. (First 3 Action Dkt. No. 1.) Plaintiffs alleged five causes of action: “(1) 4 Quiet Title; (2) Violations of Business and Professions Code 5 section 17200, et seq.; (3) Quasi-Contract; (4) Negligence; and (5) 6 Wrongful Foreclosure. (Id.) Defendant filed a motion to dismiss 7 Plaintiffs’ Complaint, which this Court granted. (First Action Dkt. 8 No. 21.) Plaintiffs filed a motion to set aside the judgment, which 9 the Court denied. (First Action Dkt. No. 29.) 10 Plaintiffs then filed a second state court action against 11 Defendant. 12 The case, like its predecessor, was then removed to this Court. In 13 the Second Action, Plaintiffs alleged the same underlying facts as 14 the First Action and brought a claim for Quiet Title. (Second 15 Action Dkt. No. 12.) Defendant filed a motion to dismiss 16 Plaintiffs’ First Amended Complaint on res judicata grounds and the 17 court granted the motion. (Case No. 5:14-cv-01372-DDP-JEMx, the “Second Action”). 18 Plaintiffs then filed the instant action in this Court (the 19 “Third Action)” against Defendant, alleging causes of action for 20 violation of the Truth in Lending Act (“TILA”), quiet title, and 21 “cancellation of instrument.” 22 (“FAC”) alleges the same underlying facts as the First and Second 23 Actions, and bring a single claim for declaratory relief pursuant 24 to TILA and based upon a Notice of Rescission allegedly sent to 25 Defendant in July 2015. Defendant now moves to dismiss the FAC. 26 II. 27 28 Plaintiffs’ First Amended Complaint Legal Standard A complaint will survive a motion to dismiss when it contains “sufficient factual matter, accepted as true, to state a claim to 2 1 relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 2 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 3 570 (2007)). 4 “accept as true all allegations of material fact and must construe 5 those facts in the light most favorable to the plaintiff.” 6 v. Hayes, 213 F.3d 443, 447 (9th Cir. 2000). 7 need not include “detailed factual allegations,” it must offer 8 “more than an unadorned, the-defendant-unlawfully-harmed-me 9 accusation.” When considering a Rule 12(b)(6) motion, a court must Iqbal, 556 U.S. at 678. Resnick Although a complaint Conclusory allegations or 10 allegations that are no more than a statement of a legal conclusion 11 “are not entitled to the assumption of truth.” Id. at 679. 12 other words, a pleading that merely offers “labels and 13 conclusions,” a “formulaic recitation of the elements,” or “naked 14 assertions” will not be sufficient to state a claim upon which 15 relief can be granted. 16 quotation marks omitted). 17 In Id. at 678 (citations and internal “When there are well-pleaded factual allegations, a court should 18 assume their veracity and then determine whether they plausibly 19 give rise to an entitlement of relief.” Id. at 679. 20 must allege “plausible grounds to infer” that their claims rise 21 “above the speculative level.” Twombly, 550 U.S. at 555. 22 “Determining whether a complaint states a plausible claim for 23 relief” is a “context-specific task that requires the reviewing 24 court to draw on its judicial experience and common sense.” 25 556 U.S. at 679. 26 III. Discussion 27 28 Plaintiffs Iqbal, Defendant contends that this action, like the Second Action before it, is barred by the doctrine of res judicata. 3 Res judicata 1 “bars litigation in a subsequent action of any claims that were 2 raised or could have been raised in the prior action.” Owens v. 3 Kaiser Foundation Health Plan, Inc. 244 F.3d 708, 713 (9th Cir. 4 2001); W. Radio Servs. Co. v. Glickman, 123 F.3d 1189, 1192 (9th 5 Cir. 1997). It applies when there is “1) [an] identity of claims, 6 2) a final judgment on the merits, and 3) identity or privity 7 between the parties.” W. Radio Servs. Co., 123 F.3d at 1192. 8 A. 9 The Ninth Circuit relies on four factors to determine if there 10 11 Identity of Claims is an identity of claims. The factors are 14 (1) whether rights or interests established in the prior judgment would be destroyed or impaired by prosecution of the second action; (2) whether substantially the same evidence is presented in the two actions; (3) whether the two suits involve infringement of the same right; and (4) whether the two suits arise out of the same transactional nucleus of facts. 15 Harris v. Jacobs, 621 F.2d 341, 343 (9th Cir. 1980); Constantini v. 16 Trans World Airlines, 681 F.2d 1199, 1201-02 (9th Cir. 1982). 12 13 17 The central issue in determining whether there is an identity 18 of claims is whether the two suits “arise out of the same 19 transactional nucleus of facts.” Costantini, 681 F.2d at 1202; see 20 also Frank v. United Airlines, Inc., 216 F.3d 845, 851 (9th Cir. 21 2000). 22 often sufficient to find an identity of claims for res judicata 23 without analysis of the other factors. 24 Bank, No. 11-CV-02920, 2011 WL 6002599, at *8 (N.D. Cal. Nov. 30, 25 2011); see Int’l Union of Operating Eng’rs-Employers Constr. Indus. 26 Pension, Welfare and Training Trust Funds v. Karr, 994 F.2d 1426, 27 1430 (9th Cir. 1993). Indeed, satisfaction of the fourth Constantini factor is 28 4 Quinto v. JPMorgan Chase 1 When analyzing this factor, courts ask “whether [the two 2 actions] are related to the same set of facts and whether they 3 could conveniently be tried together.” W. Systems, Inc. v. Ulloa, 4 958 F.2d 864, 871 (9th Cir. 1992). 5 the same nucleus of facts; all three actions allege that Defendant 6 cannot proceed with a foreclosure of the property or enforcement of 7 the underlying debt obligation because Defendant lacks interest in 8 Plaintiffs’ loan as the result of errors in the process of 9 assigning the deed of trust and promissory note. Here, the three actions involve Claims for quiet 10 title and declaratory relief could conveniently be tried together 11 because Plaintiffs’ allegations about improper loan assignment 12 would be central to both causes of action. 13 now base their declaratory relief action for a TILA violation upon 14 a July 2015 Notice of Rescission, the underlying facts are the same 15 as contained in an earlier, April 2012 Notice of Rescission, which 16 was allegedly sent to Defendant prior to the filing of the Second 17 Action. See Owens, 244 F.3d at 714 (upholding dismissal on res 18 judicata grounds on claims not previously raised where the new 19 claims were based on the same predicate facts). Even though Plaintiffs 20 Although the similarity of the nuclei of facts would alone be 21 reason to find an identity of claims, the other three factors also 22 suggest an identity of claims. 23 interests as established in the prior litigation could be destroyed 24 or impaired by the prosecution of this action, as Defendant will 25 not be allowed to continue foreclosure proceedings or recover on 26 the debt obligation for the duration of the lawsuit, if ever. 27 28 First, Defendant’s rights and Second, the evidence needed to prove Plaintiffs’ cause of action for declaratory relief for a TILA violation centers around 5 1 the assignment of the original lender’s deed of trust to Defendant. 2 Plaintiffs could use the same evidence to prove that Defendant 3 lacks the ability to enforce the promissory note or deed of trust 4 in an action for declaratory relief that would have been needed in 5 the earlier actions for quiet title based on the same, allegedly 6 improper assignment.1 7 Third, all three actions involve the alleged wrongful 8 foreclosure. Plaintiffs’ claim the right at issue in the instant 9 action is not the same as that presented by the earlier actions 10 because the TILA violation alleged here is based on Defendant’s 11 failure to adequately respond to the July 2015 Notice of Rescission 12 within the 20 days required by statute. 13 mailed a similar notice in April 2012, and thus, could have brought 14 the TILA violation for declaratory relief in the Second Action. 15 (Third Action Dkt. No. 12 at 8:9-17.) 16 to assert that they sent both notices because they allege that 17 Defendant has no interest in the promissory note and deed of trust, 18 which is important for both the quiet title and declaratory relief 19 claims, Plaintiffs do not explain why both causes of action could 20 not have been brought at the same time. See United States v. 21 Liquidators of European Fed. Credit Bank, 630 F.3d 1139, 1151 (9th 22 Cir. 2011) (finding that if the new claim “arose at the same time 23 as the harm alleged in the previous action, then there is no reason 24 why the plaintiff could not have brought the claim in the first Plaintiffs, however, Although Plaintiffs appear 25 26 27 28 1 Such evidence might include, for example, documentssuch as a Property Securitization Analysis Report that was filed in the Second Action. (Second Action Dkt. Nos. 12 at 35-44 and 12-1.) 6 1 action . . . [t]he plaintiff simply could have added a claim to the 2 complaint”) (citation omitted). 3 4 Accordingly, the identity of claims factor of the res judicata test is satisfied. 5 B. 6 There was a final judgment on the merits of both the First and Final Judgment on the Merits 7 Second Actions. 8 after Plaintiffs failed to oppose Defendant’s motion to dismiss. 9 The Federal Rules of Civil Procedure provide that, unless otherwise 10 specified, a dismissal for failure to prosecute or to comply with a 11 court order “operates as an adjudication on the merits.” Fed. R. 12 Civ. P. 41(b); see Stewart v. U.S. Bancorp, 297 F.3d 953, 956 (9th 13 Cir. 2002); Owens, 244 F.3d at 714; In re Schimmels, 127 F.3d 875, 14 884 (9th Cir. 1997)(“[I]nvoluntary dismissal generally acts as a 15 judgment on the merits for the purposes of res judicata”); Johnson 16 v. United States Dep't of Treasury, 939 F.2d 820, 825 (9th Cir. 17 1991) (noting that dismissal for failure to prosecute is “treated 18 as an adjudication on the ‘merits’ for purposes of preclusion”) 19 (citation omitted). 20 adjudicated on the merits, the Second Action was dismissed based on 21 res judicata grounds after Plaintiffs opposed Defendant’s Motion to 22 Dismiss and filed a Motion to Remand, which was denied. (Second 23 Action Dkt. No. 21.) The First Action was dismissed with prejudice Even if the First Action had not been 24 C. 25 Lastly, there is no dispute that there is an identity of Identity of Parties 26 parties. Plaintiffs and Defendant were parties to both the First 27 and Second Actions. 28 7 1 Thus, because there is “1) [an] identity of claims, 2) a final 2 judgment on the merits, and 3) identity or privity between the 3 parties” here and in the prior actions, the doctrine of res 4 judicata applies, and Plaintiffs’ FAC must be dismissed. 5 Servs. Co., 123 F.3d at 1192. 6 IV. 7 8 W. Radio Conclusion For the reasons stated above, Defendant’s Motion to Dismiss is GRANTED. The FAC is DISMISSED, with prejudice. 9 10 11 IT IS SO ORDERED. 12 13 14 Dated: August 1, 2016 DEAN D. PREGERSON United States District Judge 15 16 17 18 19 20 21 22 23 24 25 26 27 28 8
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