Dare v. Aegis Wholesale Corporation, No. 3:2015cv02833 - Document 71 (S.D. Cal. 2019)

Court Description: ORDER Granting Defendant Nationstar Mortgage, LLC's 66 Motion to Dismiss. Signed by Judge John A. Houston on 4/1/2019. (ag)

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Dare v. Aegis Wholesale Corporation Doc. 71 1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 MICHAEL DARE, Case No. 15cv2833-JAH (BLM) Plaintiff, 12 13 v. 14 AEGIS WHOLESALE CORPORATION, et al., 15 ORDER GRANTING DEFENDANT NATIONSTAR MORTGAGE LLC’S MOTION TO DISMISS (Doc. No. 66) Defendants. 16 17 18 INTRODUCTION 19 Pending before the Court is Defendant Nationstar Mortgage LLC’s (“Defendant” or 20 “Nationstar”) motion to dismiss (“Motion”) Plaintiff Michael Dare’s (“Plaintiff”) Third 21 Amended Complaint (“TAC”) pursuant to Rule 12(b)(6) of the Federal Rules of Civil 22 Procedure. See Doc. No. 66. Plaintiff filed a response in opposition. See Doc. No. 68. 23 The Motion is fully briefed. After careful review of the pleadings submitted by both 24 parties, and for the reasons set forth below, the Court GRANTS Defendant’s motion to 25 dismiss (Doc. No. 66). 26 DISMISSED with prejudice. 27 // 28 // Plaintiff’s Third Amended Complaint (Doc. No. 64) is 1 15cv2833-JAH (BLM) Dockets.Justia.com FACTUAL BACKGROUND1 1 2 Plaintiff filed the instant action concerning the property located at 1800 S. Juniper 3 Street, Escondido, California (“Property”). See Doc. No. 1. In April of 2006, Plaintiff 4 refinanced the Property with a $400,000 loan from Aegis Wholesale Corporation (“Aegis”) 5 and secured it by a Deed of Trust on the Property recorded on April 10, 2006. Doc. No. 6 66-1 at pg. 6.2 The Deed of Trust named Commonwealth Land Title as Trustee and 7 Mortgage Electronic Registration Systems, Inc. (“MERS”) as the initial beneficiary. Id. 8 In 2011, MERS assigned the deed of trust to U.S. Bank. Id. at pg. 7. In March of 2014, 9 Nationstar, as attorney in fact for U.S. Bank, executed a substitution of trustee naming Sage 10 Point Lender Services, LLC (“Sage Point”) as trustee. Id. at pg. 3. Sage Point recorded a 11 default against the property stating that Plaintiff owed $145,198.39 as of April 15, 2014. 12 Doc. No. 66-1 at pg. 7. PROCEDURAL BACKGROUND3 13 14 On March 9, 2018, Defendant filed a motion to dismiss Plaintiff’s Second Amended 15 Complaint (“SAC”) for failure to state a claim. See Doc. No. 50. On March 12, 2018, 16 Defendant Bank of America (“Bank of America”) also filed a motion to dismiss Plaintiff’s 17 SAC for failure to state a claim. See Doc. No. 51. On September 5, 2018, the Court issued 18 an Order GRANTING both motions to dismiss Plaintiff’s SAC. See Doc. No. 60. In the 19 Order, the Court dismissed Plaintiff’s UCL and slander of title claims without prejudice. 20 Id. All other claims were dismissed with prejudice. Id. On February 11, 2019, the Court 21 received and GRANTED Plaintiff’s motion to reopen the case and file a TAC. See Doc. 22 Nos. 62, 65. Plaintiff filed the TAC on February 11, 2019. See Doc. No. 64. On February 23 25, 2019, Defendant filed the Motion to dismiss pursuant to Rule 12(b)(6) of the Federal 24 25 26 27 28 The Court addressed the case’s prior factual history in its Order granting Defendants’ motion to dismiss Plaintiff’s complaint. See Doc. No. 60. 2 Defendant Aegis Wholesale Corporation (Aegis was liquidated through chapter 11 bankruptcy). See In re Aegis Wholesale Corp., No. 07-11120-BLS (Bankr. D. Del.). 3 The Court addressed the case’s prior procedural history in its Order granting Defendants’ motion to dismiss Plaintiff’s complaint. See Doc. No. 60. 1 2 15cv2833-JAH (BLM) 1 Rules of Civil Procedure. See Doc. No. 66. Plaintiff filed a response in opposition to 2 Defendant’s Motion on March 11, 2019. 3 4 5 DISCUSSION I. Legal Standard a. Rule 12(b)(6) 6 A motion to dismiss under Rule 12(b)(6) tests the sufficiency of the complaint. 7 Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). Dismissal is warranted under Rule 8 12(b)(6) where the complaint lacks a cognizable legal theory. Robertson v. Dean Witter 9 Reynolds, Inc., 749 F.2d 530, 534 (9th Cir. 1984); see Neitzke v. Williams, 490 U.S. 319, 10 326 (1989) (“Rule 12(b)(6) authorizes a court to dismiss a claim on the basis of a 11 dispositive issue of law.”). Alternatively, a complaint may be dismissed where it presents 12 a cognizable legal theory yet fails to plead essential facts under that theory. Robertson, 13 749 F.2d at 534. While a plaintiff need not give “detailed factual allegations,” he must 14 plead sufficient facts that, if true, “raise a right to relief above the speculative level.” Bell 15 Atlantic Corp. v. Twombly, 550 U.S. 544, 545 (2007). 16 “To survive a motion to dismiss, a complaint must contain sufficient factual matter, 17 accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 18 129 S.Ct. 1937, 1949 (2009) (quoting Twombly, 550 U.S. at 547). A claim is facially 19 plausible when the factual allegations permit “the court to draw the reasonable inference 20 that the defendant is liable for the misconduct alleged.” 21 nonconclusory ‘factual content,’ and reasonable inferences from that content, must be 22 plausibly suggestive of a claim entitling the plaintiff to relief. Moss v. U.S. Secret Service, 23 572 F.3d 962, 969 (9th Cir. 2009). “Determining whether a complaint states a plausible 24 claim for relief will…be a context-specific task that requires the reviewing court to draw 25 on its judicial experience and common sense.” Iqbal, 129 S.Ct. at 1950. Id. In other words, “the 26 In reviewing a motion to dismiss under Rule 12(b)(6), the court must assume the 27 truth of all factual allegations and must construe all inferences from them in the light most 28 favorable to the nonmoving party. Thompson v. Davis, 295 F.3d 890, 895 (9th Cir. 2002); 3 15cv2833-JAH (BLM) 1 Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336, 337-38 (9th Cir. 1996). However, legal 2 conclusions need not be taken as true merely because they are cast in the form of factual 3 allegations. Ileto v. Glock, Inc., 349 F.3d 1191, 1200 (9th Cir. 2003); Western Mining 4 Council v. Watt, 643 F.2d 618, 624 (9th Cir. 1981). When ruling on a motion to dismiss, 5 the Court may consider the facts alleged in the complaint, documents attached to the 6 complaint, documents relied upon but not attached to the complaint when authenticity is 7 not contested, and matters of which the Court takes judicial notice. Lee v. City of Los 8 Angeles, 250 F.3d 668, 688-89 (9th Cir. 2001). If a court determines that a complaint fails 9 to state a claim, the court should grant leave to amend unless it determines that the pleading 10 could not possibly be cured by the allegation of other facts. 11 b. Rule 9(b) 12 Under Rule 9(b) of the Federal Rules of Civil Procedure, “[i]n alleging fraud or 13 mistake, a party must state with particularity the circumstances constituting fraud or 14 mistake.” Under Ninth Circuit case law, Rule 9(b) imposes two distinct requirements on 15 complaints alleging fraud. First, the basic notice requirements of Rule 9(b) require 16 complaints pleading fraud to “state precisely the time, place, and nature of the misleading 17 statements, misrepresentations, and specific acts of fraud.” Kaplan v. Rose, 49 F.3d 1363, 18 1370 (9th Cir. 1994); see also Vess v. Ciba-Geigy Corp., U.S.A., 317 F.3d 1097, 1106 (9th 19 Cir. 2003) (citation omitted) (stating that a plaintiff must set forth “the who, what, when, 20 where and how” of the alleged misconduct). Second, Rule 9(b) requires that the complaint 21 “set forth an explanation as to why the statement or omission complained of was false or 22 misleading.” Yourish v. California Amplifier, 191 F.3d 983, 993 (9th Cir. 1999) (citation 23 and quotation omitted). 24 II. Analysis 25 Defendant argues that Plaintiff fails to state a UCL claim; fails to state a claim for 26 slander of title; and cannot maintain a claim for declaratory relief. Doc. No. 66-1 at pgs. 27 11-18. 28 // 4 15cv2833-JAH (BLM) 1 a. UCL Claim 2 Defendant contends that “[t]he only allegations in Plaintiff’s TAC that differ from 3 those in the dismissed SAC are immaterial to, and thus cannot rescue, his failed UCL 4 claim.” Id. at pg. 11. Defendant argues that Plaintiff cannot identify loss of money or 5 property that would give him standing under the California Business and Professions Code 6 § 17200 et seq. (the “UCL”). Id. 7 i. Standing 8 Specifically, Defendant argues that Plaintiff lacks standing to pursue a UCL claim 9 because he cannot “(1) establish a loss or deprivation of money or property sufficient to 10 qualify as…economic injury, and (2) show that the economic injury was…caused by [ ] 11 the unfair business practice…that is the gravamen of the claim.” Id. at pg. 12 (quoting 12 Kwikset Corp. v. Superior Court, 51 Cal. 4th 310, 322 (2011) (emphasis in the original). 13 A federal court’s judicial power is limited to “cases” or “controversies.” U.S. Const., 14 Art. III § 2. A necessary element of Article III’s “case” or “controversy” requirement is 15 that a litigant must have “‘standing’ to challenge the action sought to be adjudicated in the 16 lawsuit.” Valley Forge College v. Americans United for Separation of Church and State, 17 Inc., 454 U.S. 464, 471 (1982); LSO, Ltd. V. Stroh, 205 F.3d 1146, 1152 (9th Cir. 2000). 18 To satisfy the standing requirement, both the UCL and the CLRA require a plaintiff to 19 allege they have suffered economic injury and that the economic injury was caused by the 20 unfair business practice of false advertising that is the mainstay of the claim. See Kwikset 21 Corp. v. Superior Court, 51 Cal. 4th 310, 321 (2011); Stearns v. Ticketmaster Corp., 655 22 F.3d 1013 (9th Cir. 2011). 23 The “irreducible constitutional minimum” of Article III standing has three elements. 24 LSO, 205 F.3d at 1152 (internal quotations omitted). First, plaintiff must have suffered 25 “an injury in fact – an invasion of a legally protected interest which is (a) concrete and 26 particularized, and (b) actual and imminent, not conjectural or hypothetical.” Lujan v. 27 Defenders of Wildlife, 504 U.S. 555, 560 (1992) (internal citations and quotations omitted). 28 Second, plaintiff must show a causal connection between the injury and the conduct 5 15cv2833-JAH (BLM) 1 complained of; i.e., “the injury has to be fairly…trace[able] to the challenged action of the 2 defendant, and not…the[e] result [of] the independent action of some third party not before 3 the court.” Id. (quoting Simon v. Eastern Ky. Welfare Rights Organization, 426 U.S. 26, 4 41-42 (1976)) (alterations in original). 5 “speculative,” that the plaintiff’s injury will be redressed by a favorable decision. Id. at 6 561. If the Court finds plaintiff lacks Article III standing, it must dismiss plaintiff’s claim. 7 Nichols v. Brown, 859 F. Supp. 2d 1118, 1127 (C.D. Cal. 2012). Third, it must be “likely,” and not merely 8 Here, Defendant asserts that Plaintiff does not plead actionable unfair, unlawful, or 9 fraudulent wrongdoing committed by Defendant. Doc. No. 66-1 at pg. 11. Defendant 10 contends that Plaintiff fails to “claim that the Property has actually been sold in foreclosure, 11 that he paid any fees to Defendant related to his default or pre-foreclosure activities, or that 12 he otherwise lost money due to any of the alleged acts of Defendant.” Id. Defendant 13 asserts that any money Plaintiff did in fact pay Defendant “resulted from his voluntary 14 Loan obligations and do not constitute actionable damages under the UCL.” Id. (citing 15 Auerbach v. Great W. Bank, 74 Cal. App. 4th 1172, 1185 (1999)). Defendant argues that 16 “Plaintiff in essence objects to accounting practices concerning the Loan based on 17 allegations that Defendant unfairly demanded payment of the Loan and, when he did not 18 timely pay, charged fees relating to his default and the ensuing foreclosure.” Id. at pg. 14. 19 In response, Plaintiff contends that his UCL claim is pled sufficiently. Doc. No. 68 20 at pg. 6. Plaintiff contends that Defendant’s “acts and practices are likely to deceive, 21 constitute a fraudulent business act or practice.” Id. Plaintiff asserts that Defendant 22 “continues to run the Plaintiff in circles.” Id. at pg. 7. Plaintiff contends that Defendant 23 refused to “allow Plaintiff to submit a loan modification package unless Plaintiff could 24 prequalify for payments based on the suspect accounting from Bank of America, which 25 further denied Plaintiff any hope of resolution without forcing Plaintiff into expensive 26 litigation.” Id. 27 The Court finds that Plaintiff lacks standing to assert a claim in the instant matter. 28 While the standard for reviewing standing at the pleading stage is lenient, the Court 6 15cv2833-JAH (BLM) 1 reiterates that a plaintiff cannot rely solely on conclusory allegations of injury or ask the 2 court to draw unwarranted inferences in order to find standing. See Schmeir v. U.S. Ct. of 3 Appeals for the Ninth Cir., 279 F.3d 817, 820 (9th Cir. 2001). Plaintiff fails to demonstrate 4 economic injury. Plaintiff also fails to demonstrate such economic injury was the result of 5 Defendant’s unfair business practice. Plaintiff’s does not explain why he has standing to 6 assert a UCL claim against Defendant. See Doc. No. 68 at pgs. 6-8. Plaintiff paid 7 Defendant money for his Loan obligations and did not incur damages. Doc. No. 66-1 at 8 pg. 11. Plaintiff has not sufficiently plead anything that suggests otherwise. 9 10 b. Slander of Title i. Rule 9(b) Standard 11 Defendant asserts that a “plaintiff claiming slander of title must allege: “(1) 12 publication; (2) falsity; (3) absence of privilege; and (4) disparagement of another’s land 13 which is relied upon by a third party and which results in pecuniary loss.” Doc. No. 66-1 14 at pg. 15 (citing Flores v. EMC Mortg. Co., 997 F.Supp. 2d 1088, 1122 (E.D. Cal. 2014)). 15 Defendant contends that Plaintiff’s claim for slander of title is based on a Notice of Default, 16 was privileged, did not disparage Plaintiff, and did not result in pecuniary loss. Doc. No. 17 66-1 at pgs. 15-16. 18 In response, Plaintiff asserts that Defendant relied on “fraudulent assignment” in 19 substituting in as Trustee to Plaintiff’s Deed of Trust. Doc. No. 68 at pg. 4. Plaintiff 20 contends that the “fraudulent assignment” is what gives “authorization” to Defendant. Id. 21 Specifically, Plaintiff argues that “Defendants have filed publications which misrepresent 22 their authority to assign substitute Trustees, filed fraudulent documents and concealed their 23 relationship.” Id. at pg. 5. Plaintiff also argues that “Defendants intended to defraud 24 Plaintiff by attempting to wrongfully foreclose on his property by fraudulently filing 25 documents to try and achieve this goal.” Id. at pgs. 5-6. Plaintiff asserts that these actions 26 will cause pecuniary loss “if Defendants are afforded the ability to defraud the Plaintiff in 27 the actions aforementioned.” Id. at pg. 6. Plaintiff contends that Defendants’ “slanderous 28 action have made it impossible for Plaintiff to sell or rent his property. Id. 7 15cv2833-JAH (BLM) 1 The Court finds that Plaintiff fails to sufficiently allege the “who, what, where, how, 2 and why” of Defendant’s misconduct. The pleadings do not allege with specificity how 3 Defendant made misrepresentations to Plaintiff. In addition, the pleadings do not provide 4 specific examples demonstrating Defendant’s alleged misrepresentations. 5 Plaintiff claims that Defendant’s fraudulent and subsequently “slanderous actions have 6 made it impossible for Plaintiff to sell or rent his property, resulting in a loss of income. 7 The Court finds these allegations to be speculative and are insufficiently plead. Doc. No. 8 68 at pg. 6. Accordingly, the Court finds that Plaintiff has not pled with particularity 9 sufficient to meet the 9(b) heightened standard. 10 Instead, c. Declaratory Relief 11 Plaintiff seeks declaratory relief based on his UCL claim and slander of title claim. 12 Doc. No. 66-1 at pg. 17. Because the Court finds that Plaintiff has not sufficiently pled the 13 UCL claim and claim for slander of title, Plaintiff’s claim for declaratory is dismissed as 14 well. 15 CONCLUSION 16 Based on the foregoing reasons, IT IS HEREBY ORDERED Defendant 17 Nationstar’s motion to dismiss (Doc. No. 66) is GRANTED. If a court determines that a 18 complaint fails to state a claim, the court should grant leave to amend unless it determines 19 that the pleading could not possibly be cured by the allegation of other facts. United States 20 ex rel. Lee v. SmithKline Beecham, Inc., 245 F.3d 1048, 1052 (9th Cir. 2001). The Court 21 previously dismissed Plaintiff’s UCL and slander of title claims without prejudice on 22 September 5, 2018 (Doc. No. 60) and at this time finds that Plaintiff’s pleading cannot be 23 possibly cured by the allegation of other facts. 24 // 25 // 26 // 27 // 28 8 15cv2833-JAH (BLM) 1 Thus, Plaintiff Michael Dare’s Third Amended Complaint (Doc. No. 64) is 2 DISMISSED with prejudice. 3 IT IS SO ORDERED. 4 DATED: April 1, 2019 5 6 7 8 _________________________________ JOHN A. HOUSTON United States District Judge 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 9 15cv2833-JAH (BLM)
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