Arvizu v. GMAC Mortgage, LLC et al, No. 1:2010cv00990 - Document 57 (E.D. Cal. 2011)
Court Description: MEMORANDUM DECISION Regarding Defendants' 43 Motion to Dismiss First Amended Complaint/ORDER, signed by Judge Oliver W. Wanger on 03/22/2011.REMANDING CASE to Superior Court of California, County of Kern. Copy of remand order sent to other court. CASE CLOSED (Martin, S)
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Arvizu v. GMAC Mortgage, LLC et al Doc. 57 1 2 3 4 UNITED STATES DISTRICT COURT 5 EASTERN DISTRICT OF CALIFORNIA 6 7 8 MATTHEW ARVIZU, Plaintiff, 9 10 11 1:10-cv-00990-OWW-JLT MEMORANDUM DECISION REGARDING DEFENDANTS MOTION TO DISMISS FIRST AMENDED COMPLAINT (Doc. 43) v. GMAC MORTGAGE, LLC, et al., 12 Defendants. 13 I. INTRODUCTION. 14 15 Plaintiff Matthew Arvizu ( Plaintiff ) asserts eighteen causes 16 of action against various Defendants involved in transactions 17 related to a loan secured by Plaintiff s real property. Plaintiff filed a first amended complaint ( FAC ) on November 18 19 4, 2010. (Doc. 42). 20 ( Greenpoint ) filed a motion to dismiss the FAC on November 19, 21 2010. 22 ( ETS ), GMAC Mortgage, LLC ( GMAC ), and Mortgage Electronic 23 Registration Systems, Inc. ( MERS ) also filed a motion to dismiss 24 on November 19, 2010. (Doc. 42). Defendant Greenpoint Mortgage Funding, Inc. Defendant Executive Trustee Services, LLC (Doc. 44). 25 Plaintiff filed opposition to the motions to dismiss on 26 February 9, 2011. (Doc. 52). Defendants filed replies on February 27 18, 2011. 28 /// (Docs. 53, 54). 1 Dockets.Justia.com II. FACTUAL BACKGROUND. 1 2 On or about November 21, 2006, Plaintiff purchased a residence 3 ( the Property ) using funds acquired through a loan from Defendant 4 Greenpoint. 5 promissory 6 Adjustable Rate Note, and Interim Interest Addendum to Note. 7 The Deed of Trust appears to have been executed on November 8 21, 2006; however, the Uniform Residential Loan Application was 9 completed on November 27, 2006. Plaintiff contends that Greenpoint The note, terms which of was the loan secured were by a memorialized Deed of in Trust, a and 10 manipulated the lending process to the detriment of Plaintiff. 11 Plaintiff alleges he did not receive the required documents and 12 disclosure upon consummation of the lease. 13 On or about March 17, 2009, a Notice of Default on the 14 Property was recorded. 15 Notice of Default. 16 behalf of ETS Services LLC as Agent for Beneficiary. 17 alleges that he never received the Notice of Default. 18 March 17, 2009, GMAC recorded a Substitution of Trustee purporting 19 to designate ETS as Trustee under the Deed of Trust; in this 20 document, MERS identified itself as the present beneficiary under 21 the Deed of Trust. 22 Plaintiff alleges he never received the The notice was signed by Maria DeBelen on Plaintiff Also on On or about June 19, 2009, ETS recorded a Notice of Trustee s 23 Sale, stating a foreclosure sale date of July 15, 2009. 24 the sale, ETS executed a Trustee s Deed Upon Sale which stated that 25 GMAC, as foreclosing beneficiary, acquired title to the Property as 26 grantee pursuant to the foreclosure sale. 27 GMAC is not and was not the holder of the Note, and that GMAC had 28 no right to initiate foreclosure 2 under Following Plaintiff alleges that the Deed of Trust. 1 Plaintiff alleges that Defendants engage in a pattern and practice 2 of unlawfully foreclosing on properties. 3 After learning of the foreclosure proceedings, Plaintiff sent 4 GMAC a Qualified 5 2605(e)(1)(B); Written 8 pursuant to 12 U.S.C. GMAC failed to respond. III. LEGAL STANDARD. 6 7 Request A. Rule 12(b)(6) Dismissal under Rule 12(b)(6) is appropriate where the 9 complaint lacks sufficient facts to support a cognizable legal 10 theory. Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th 11 Cir.1990). To sufficiently state a claim to relief and survive a 12 12(b) (6) motion, the pleading does not need detailed factual 13 allegations but the [f]actual allegations must be enough to raise 14 a right to relief above the speculative level. Bell Atl. Corp. v. 15 Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). 16 Mere labels and conclusions or a formulaic recitation of the 17 elements of a cause of action will not do. Id. Rather, there must 18 be enough facts to state a claim to relief that is plausible on 19 its face. Id. at 570. In other words, the complaint must contain 20 sufficient factual matter, accepted as true, to state a claim to 21 relief that is plausible on its face. Ashcroft v. Iqbal, --- U.S. 22 ----, ----, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009) (internal 23 quotation marks omitted). 24 The Ninth Circuit has summarized the governing standard, in 25 light of Twombly and Iqbal, as follows: In sum, for a complaint to 26 survive a motion to dismiss, the nonconclusory factual content, and 27 reasonable 28 suggestive of a claim entitling the plaintiff to relief. Moss v. inferences from that 3 content, must be plausibly 1 U.S. Secret Serv., 572 F.3d 962, 969 (9th Cir.2009) (internal 2 quotation marks omitted). Apart from factual insufficiency, a 3 complaint is also subject to dismissal under Rule 12(b)(6) where it 4 lacks a cognizable legal theory, Balistreri, 901 F.2d at 699, or 5 where the allegations on their face show that relief is barred 6 for some legal reason, Jones v. Bock, 549 U.S. 199, 215, 127 S.Ct. 7 910, 166 L.Ed.2d 798 (2007). 8 In deciding whether to grant a motion to dismiss, the court 9 must accept as true all well-pleaded factual allegations in the 10 pleading under attack. Iqbal, 129 S.Ct. at 1950. A court is not, 11 however, required to accept as true allegations that are merely 12 conclusory, 13 inferences. Sprewell v. Golden State Warriors, 266 F.3d 979, 988 14 (9th Cir.2001). When ruling on a Rule 12(b)(6) motion to dismiss, 15 if a district court considers evidence outside the pleadings, it 16 must normally convert the 12(b)(6) motion into a Rule 56 motion for 17 summary 18 opportunity to respond. United States v. Ritchie, 342 F.3d 903, 19 907 court 20 materials-documents 21 incorporated by reference in the complaint, or matters of judicial 22 notice-without converting the motion to dismiss into a motion for 23 summary judgment. Id. at 908. (9th unwarranted judgment, and Cir.2003). A deductions it must attached of give may, to fact, the unreasonable nonmoving however, the or party consider complaint, an certain documents 24 B. Rule 9(b) 25 Rule 9(b) imposes an elevated pleading standard with respect 26 27 28 to certain claims. Rule 9(b) provides: In alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake. Malice, intent, knowledge, and other conditions 4 1 of a person's mind may be alleged generally. 2 "To comply with Rule 9(b), allegations of fraud must be specific 3 enough to give defendants notice of the particular misconduct which 4 is alleged to constitute the fraud." Swartz v. KPMG LLP, 476 F.3d 5 756, 764 (9th Cir. 2007) (internal quotation marks omitted). 6 Allegations of fraud must include the "time, place, and specific 7 content of the false representations as well as the identities of 8 the parties 9 marks omitted). The "[a]verments of fraud must be accompanied by 10 the who, what, when, where, and how of the misconduct charged." 11 Kearns v. Ford Motor Co., 567 F.3d 1120, 1124 (9th Cir. 2009) 12 (internal quotation marks omitted). A plaintiff alleging fraud 13 "must set forth more than the neutral facts necessary to identify 14 the transaction. The plaintiff must set forth what is false or 15 misleading about a statement, and why it is false." Vess v. 16 Ciba-Geigy Corp. USA, 317 F.3d 1097, 1106 (9th Cir. 2003) (emphasis 17 and internal quotation marks omitted). to the misrepresentations." Id. (internal quotation IV. DISCUSSION. 18 19 A. Federal Claims 20 1. Plaintiff s RESPA1 Claim 21 The RESPA claim alleged in Plaintiff s original complaint was 22 dismissed on two grounds: (1) it appeared to be time-barred; and 23 (2) Plaintiff did not plead damages resulting from any alleged 24 RESPA 25 deficiencies that required dismissal of the original complaint. 26 /// violations. The FAC does not correct either of the 27 28 1 The Real Estate Settlement Procedures Act, 12 U.S.C. § 2601 et seq. 5 1 Plaintiff alleges two RESPA violations. First, Plaintiff 2 contends that his lender violated RESPA at the time of closing by 3 failing to provide required documents and disclosures. 4 24). 5 original complaint, any claim for RESPA violations occurring at the 6 loan closing is time-barred. 7 (providing either one or three year statute of limitations for 8 RESPA actions). 9 tolling. (FAC at ¶ As noted in the Memorandum Decision dismissing Plaintiff s (Doc. at ); 12 U.S.C. § 2614 Plaintiff asserts he is entitled to equitable Plaintiff contends that because of Greenpoint s alleged 10 fraud, Plaintiff did not have reason to know of his RESPA claim 11 until learning of the foreclosure proceedings and Trustee s sale. 12 (Opposition at 4-5). 13 There is no nexus between Greenpoint s conduct and Plaintiff s 14 knowledge of the alleged RESPA violations that occurred at closing. 15 Nor is there any nexus between the foreclosure proceedings and 16 Plaintiff s knowledge of the alleged RESPA violations. Plaintiff s 17 opposition 18 providing any documents at closing; Plaintiff had notice of the 19 RESPA violations related to disclosures in 2006, more than three 20 years before Plaintiff filed his original complaint in this action. represents Plaintiff s argument is unintelligible. that there was a complete failure of 21 Second, Plaintiff contends that Defendants violated RESPA by 22 failing to respond to a qualified written request ( QWR ) sent by 23 Plaintiff in 2009. 24 allege any damages resulting from the purported failure to respond 25 to Plaintiff s QWR. 26 already been foreclosed at the time of Plaintiff s QWR. 27 Plaintiff s conclusory statement on information and belief that 28 Defendants engage in a pattern and practice of RESPA violations is As in the original complaint, the FAC does not As Plaintiff concedes, the Property had 6 Finally, 1 insufficient to satisfy federal pleading standards. Each of the 2 deficiencies requring dismissal of the RESPA claim pled in the FAC 3 is a deficiency Plaintiff was specifically instructed to correct in 4 the memorandum decision dismissing Plaintiff s original complaint. 5 Plaintiff has not done so. 6 WITH PREJUDICE. Plaintiff s RESPA claim is DISMISSED, 7 2. Plaintiff s Fair Debt Collection Act Claim 8 The FAC alleges Defendants violated the federal Fair Debt 9 Collection Practices Act ( FDCPA ). Plaintiff s opposition to the 10 motion to dismiss states that Plaintiff s FDCPA claim is withdrawn. 11 (Opposition at 7-8). 12 13 14 15 16 17 18 19 20 21 22 23 24 25 In dismissing Plaintiff s FDCPA claim in the original complaint, the court provided the following analysis: Plaintiff contends that Defendants violated California s Rosenthal Fair Debt Collection Practices Act ( RFDCPA ) and the federal Fair Debt Collection Practices Act (FDCPA) by foreclosing on Plaintiff s property, filing an unlawful detainer action, falsely stating the amount of debt, and increasing the amount of the debt by including amounts not permitted by law or contract. Plaintiff s contentions regarding misrepresentation and inflation of the amount of debt at issue are not supported by sufficient factual allegations in the complaint. Further, foreclosing on a property pursuant to a deed of trust is not debt collection within the meaning of the RFDCPA or the FDCA. See Izenberg v. ETS Servs., LLC, 589 F. Supp. 2d 1193, 1198-99 (C.D. Cal. 2008); Ines v. Countrywide Home Loans, Inc., 2008 U.S. Dist. LEXIS 88739, 2008 WL 4791863, at *2 (S.D. Cal. Nov. 3, 2008). The complaint fails to allege facts sufficient to support the inference that Defendants are debt collectors. Plaintiff s argument that because the foreclosure proceeding was invalid, all the Defendants conduct constituted debt collection lacks merit because, inter alia, the complaint does not allege sufficient facts to establish the illegality of the foreclosure proceeding. 26 (Doc. 39 at 9-10). Because the FAC does not remedy the 27 deficiencies identified in the memorandum 28 7 decision dismissing 1 Plaintiff s original FDCPA claim, the FDCPA claim is DISMISSED WITH 2 PREJUDICE. 3 3. Plaintiff s Rico Claim 4 Plaintiff s opposition to the motion to dismiss states that 5 Plaintiff s RICO claim is withdrawn. 6 alleged in Plaintiff s original complaint, the court provided the 7 following analysis: 8 In dismissing the RICO claim Plaintiff s RICO claims are based on Defendants alleged scheme to wrongfully foreclose on Plaintiff s property. (Complaint at 30-35). To the extent that Plaintiff s RICO claims rely on the predicate act of initiating a foreclosure without having possession of the Note, Plaintiff s claims are untenable. See, e.g., Castaneda, 687 F. Supp. 2d at 1201 (E.D. Cal. 2009) ("Under California law, there is no requirement for the production of the original note to initiate a non-judicial foreclosure"). Plaintiff s conclusory allegation that Defendants attempted to acquire the subject Property through deception and fraud is not supported by sufficient factual allegations. Plaintiff s RICO claims are dismissed, without prejudice. 9 10 11 12 13 14 15 16 (Doc. 39 at 13). The FAC fails to properly plead deception or 17 fraud. throughout his 18 dismiss, Plaintiff repeats the discredited argument that if you 19 can carve out the power of sale from a deed of trust and give 20 it 21 jurisprudence that holds that the note and mortgage are inseparable 22 because a deed of trust without an ability to be enforced lacks its 23 ability to be a security instrument. (Opposition at 11) (citations 24 omitted). Because the 25 identified in memorandum 26 original RICO claim, the RICO claim is DISMISSED WITH PREJUDICE. 27 /// 28 /// to Further, a trustee , the you run FAC opposition afoul does of not decision 8 to the motion century-old remedy the dismissing to American deficiencies Plaintiff s 1 B. State Law Claims 2 In a case that is removed to federal court based on federal 3 question jurisdiction, once all federal claims are eliminated from 4 the action, federal courts have discretion to remand the remaining 5 state law claims to the state court. 6 Ins. Co., 934 F.2d 203, 205 (9th Cir. 1991). To make the remand 7 decision, a court should consider factors such as judicial economy, 8 convenience, fairness, comity, and forum manipulation. City of Chi. 9 v. Int'l College of Surgeons, 522 U.S. 156, 173 (1997). E.g. Harrell v. 20th Century Based on 10 these factors, "it is generally preferable for a district court to 11 remand remaining pendent claims to state court." Harrell, 934 F.2d 12 at 205. 13 and fairness weigh in favor of exercising pendent jurisdiction, 14 federal courts should remand state law claims to avoid needless 15 decisions of state law. 16 715, 726 (1966) superceded by statute on other grounds as stated in 17 Berrios-Cintron v. Cordero, 976 F. Supp. 110, 111 n.2 (D.P.R. 18 Unless considerations of judicial economy, convenience, United Mine Workers v. Gibbs, 383 U.S. 1997). 19 Neither judicial economy, convenience, or fairness weighs in 20 favor of exercising pendent 21 interest in weighs 22 Plaintiff s state law causes of action implicate the propriety of 23 a non-judicial foreclosure sale of real property under state law 24 and 25 concerning the Property, all maters inherently local in nature. 26 Accordingly, Plaintiff s remaining state law claims are REMANDED. 27 /// 28 /// a state comity court judgment jurisdiction heavily in 9 an in in favor unlawful this case. of The remand, detainer as action ORDER 1 2 For the reasons stated above: 3 1) Plaintiff s federal claims are DISMISSED, with prejudice; 4 2) The remainder of Plaintiff s claims are REMANDED to the 5 Superior Court of California, County of Kern; and 6 3) Defendants shall lodge a formal order consistent with this 7 decision within five (5) days following electronic service of 8 this decision by the clerk. 9 10 IT IS SO ORDERED. Dated: hkh80h March 22, 2011 /s/ Oliver W. Wanger UNITED STATES DISTRICT JUDGE 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 10
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