Adesokan v. U.S. Bank, NA

• Decision Date: 31 October 2011
• Docket Number: Docket No. 1,CASE NO. 1:11-cv-01236-LJO-SKO
• Parties: ADEGBENGA ADESOKAN, Plaintiff, v. U.S. BANK, N.A., et al., Defendants.
• Court: U.S. District Court — Eastern District of California

ADEGBENGA ADESOKAN, Plaintiff,

v.U.S. BANK, N.A., et al., Defendants.

CASE NO. 1:11-cv-01236-LJO-SKO

Docket No. 1

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF CALIFORNIA

Dated: October 31, 2011

ORDER DISMISSING PLAINTIFF'S

COMPLAINT

I. INTRODUCTION

On July 27, 2011, Plaintiff filed a complaint against Defendants U.S. Bank, National Association, People's Choice Home Loans, Inc., NDEX West, LLC, and America's Servicing Company (collectively "Defendants") asserting the following: (1) a claim to set aside a trustee's sale; (2) violation of the Perata Mortgage Relief Act; (3) violation of the Fair Debt Collection Practices Act; (4) violation of the Real Estate Settlement Procedures Act; (5) breach of contract; (6) breach of the covenant of good faith and fair dealing; (7) claims for negligent misrepresentation and fraud (intentional misrepresentation/fraudulent concealment); (8) unjust enrichment; and (9) violation of the California Business and Professions Code § 17200.

For the reasons set forth below, the Court DISMISSES Plaintiff's complaint and GRANTS Plaintiff 30 days leave to amend.

II. BACKGROUND

Since April 2000, Plaintiff alleges that he resided at real property located in Madera, California. (Doc. 1, ¶ 12.) On October 1, 2004, Plaintiff obtained title to the property and executed a Deed of Trust, which was recorded in favor of Defendant People's Choice Home Loan, Inc. ("People's Choice"). (Doc. 8, ¶ 12.) In approximately January or February 2008, Plaintiff became delinquent in his payments to People's Choice due to a pay cut and was in default under the terms of the Deed of Trust. (Doc. 8, ¶ 13.)

Although the allegations are unclear, in March 2008, Plaintiff apparently attempted to reinstate his loan with People's Choice. (Doc. 1, ¶ 14.) However, Defendant America's Servicing Company ("ASC") was allegedly servicing loans for People's Choice, and it was ASC that returned Plaintiff's reinstatement check and offered Plaintiff a loan modification. (Doc. 1, ¶ 14.) Between July and October 2008, ASC and Plaintiff engaged in numerous correspondence regarding the loan modification. (Doc. 1, ¶¶ 15-16.) ASC sent Plaintiff a loan modification agreement in November 2008, but it was not compliant "with the spirit and intent of loan modification requirements embodied in Cal. Civil Code [§] 2923 and Perata Mortgage Relief Act." (Doc. 1, ¶ 15-16.) Thus, Plaintiff requested new loan modification documents that met with his approval, and "ASC allegedly stated that [it] would respond to Plaintiff's request for a compliant modification within 60 days, all to naught." (Doc. 1, ¶ 16.)

Before the 60 days passed, during which ASC was assertedly considering Plaintiff's request, Defendant NDEX, acting as the agent for U.S. Bank, conducted a trustee's sale of Plaintiff's property on February 11, 2009. (Doc. 1, ¶ 17.) For purposes of the trustee's sale, U.S. Bank "held itself out as the mortgage owner . . . instead of Plaintiff's mortgage owner - People's Choice . . . [and] appointed NDEX as the Successor Trustee . . . . " (Doc. 1, ¶ 18.) Plaintiff asserts that "U.S. Bank['s] claim to title of Plaintiff['s property] was never determined by evidence nor did People's [C]hoice notify Plaintiff of any assignment to U.S. Bank." (Doc. 1, ¶ 20.) Plaintiff contends that, under the original Deed of Trust, the original lender is People's Choice; there has been no valid assignment andthe chain of title does not include U.S. Bank, N.A., ASC, NDEX, or any other entities. (Doc. 1, ¶ 20(b).) Plaintiff argues that he has the right to demand that Defendants provide proof of the chain of title from the original lender to Defendants. (Doc. 1, ¶ 20(c).)

III. DISCUSSION

A. Applicable Standards

1. Screening Standard

In cases where the plaintiff is proceeding in forma pauperis, the Court is required to screen each case and shall dismiss the case at any time if the Court determines that the allegation of poverty is untrue, or the action or appeal is frivolous or malicious, fails to state a claim upon which relief may be granted, or seeks monetary relief against a defendant who is immune from such relief. 28 U.S.C. § 1915(e)(2). If the Court determines that the complaint fails to state a claim, leave to amend may be granted to the extent that the deficiencies of the complaint can be cured by amendment. Lopez v. Smith, 203 F.3d 1122, 1130 (9th Cir. 2000) (en banc).

2. Legal Standard

In determining whether a complaint fails to state a claim, the Court applies the same pleading standard used under Federal Rule of Civil Procedure 8(a). Under Rule 8(a), a complaint must contain a "short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). "[T]he pleading standard Rule 8 announces does not require 'detailed factual allegations,' but it demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation." Ashcroft v. Iqbal, __ U.S. _, 129 S. Ct. 1937, 1949 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). "[A] complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Id. (quoting Twombly, 550 U.S. at 557). "[A] complaint [that] pleads facts that are 'merely consistent with' a defendant's liability . . . 'stops short of the line between possibility and plausibility of entitlement to relief.'" Id. (quoting Twombly, 550 U.S. at 557). Further, although a court must accept as true all factual allegations contained in a complaint, a court need not accept a plaintiff's legal conclusions as true. Id. "Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Id. (quoting Twombly, 550 U.S. at 555).

A court may also dismiss a complaint for failure to comply with Federal Rule 9(b). See Vess, v. Ciba-Geigy Corp, USA, 317 F.3d 1097, 1107 (9th Cir. 2003). Rule 9 provides that "[i]n alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake. Malice, intent, knowledge, and other conditions of a person's mind may be alleged generally." Fed. R. Civ. P. 9(b). Such circumstances include the "time, place, and specific content of the false representations as well as the identifies of the parties to the misrepresentations." Swartz v. KPMG LLP, 476 F.3d 756, 764 (9th Cir. 2007) (quoting Edwards v. Marin Park, Inc., 356 F.3d 1058, 1066 (9th Cir. 2004)). "In the context of a fraud suit involving multiple defendants, a plaintiff must, at a minimum 'identif[y] the role of [each] defendant[] in the alleged fraudulent scheme.'" Id. at 765 (quoting Moore v. Kayport Package Express, 885 F.2d 531, 541 (9th Cir. 1989)). Claims subject to Rule 9(b) pleading requirements must also satisfy the ordinary pleading requirements of Rule 8.

B. Plaintiff's Claims

1. Claim to Set Aside Trustee's Sale

Plaintiff's claim to set aside the trustee's sale centers on an allegation that he is not aware of any evidence that U.S. Bank was properly assigned the mortgage from People's Choice. (Doc. 1, ¶ 20 ("U.S. Bank['s] claim to title of Plaintiff was never determined by evidence nor did People's [C]hoice notify Plaintiff of any assignment to U.S. Bank.").)

"A party may not without payment of the debt, enjoin a sale by trustee under a power conferred by a deed of trust, or have his title quieted against the purchaser at such a sale . . . . " Sipe v. McKenna, 99 Cal. App. 2d 1001, 1006 (1948). A default borrower is "required to allege tender of the amount of [the lender's] secured indebtedness in order to maintain any cause of action for irregularity in the sale procedure." Hamilton v. Bank of Blue Valley, 746 F. Supp. 3d, 1060, 1069 (E.D. Cal. 2010); Abdallah v. United Sav. Bank, 43 Cal. App. 4th 1101, 1109 (1996), cert. denied, 519 U.S. 1081 (1997).

An action to set aside a foreclosure sale, unaccompanied by an offer to redeem, does not state a cause of action which a court of equity recognizes. Karlsen v. Am. Sav. & Loan Ass'n, 15 Cal. App. 3d 112, 117 (1971). Moreover, an offer of performance is of no effect if the person makingthe offer is unable to perform. Id. at 118. In other words, if the offeror "is without the money necessary to make the offer good and knows it[,]" the tender is without legal force or effect. Id. "It would be futile to set aside a foreclosure sale on the technical ground that notice was improper, if the party making the challenge did not first make full tender and thereby establish his ability to purchase the property." U.S. Cold Storage v. Great W. Sav. & Loan Ass'n, 165 Cal. App. 3d 1214, 1224 (1985). "A cause of action 'implicitly integrated' with the irregular sale fails unless the trustor can allege and establish a valid tender." Arnolds Mgmt. Corp. v. Eischen, 158 Cal. App. 3d 575, 579 (1984); see also Anaya v. Advisors Lending Grp., No. 09-cv-1191 LJO DLB, 2009 WL 2424037, at *10 (E.D. Cal. Aug. 3, 2009) ("Plaintiff offers nothing to indicate that she is able to tender her debt to warrant disruption of non-judicial foreclosure."); Alicea v. GE Money Bank, No. C 09-00091 SBA, 2009 WL 2136969, at * 3 (N.D. Cal. July 16, 2009) ("When a debtor is in default of a home mortgage loan, and a foreclosure is either pending or has taken place, the debtor must allege a credible tender of the amount of the secured debt to maintain any cause of action for foreclosure.").

There is no allegation in the complaint that Plaintiff has tendered the amount due on the loan or that he has a meaningful ability to do so. The record's silence on Plaintiff's tender or his ability to tender the outstanding amount implies an inability to do so. Further, the allegations do not indicate facts that the sale under the deed of trust could be considered void such that an exception to the tender rule might apply. See Nguyen v. Wells Fargo Bank, N.A., 749 F. Supp. 2d 1022, 1034-35 (N.D. Cal. 2010) (dismissing wrongful foreclosure claim noting that plaintiff...