Barefield v. HSBC Holdings PLC

• Decision Date: 02 August 2018
• Docket Number: 1:18-cv-00527-LJO-JLT
• Parties: DEBORAH BAREFIELD, as Administrator of the Estate of Thomas W. Hatch, Plaintiff, v. HSBC HOLDINGS PLC; CALIBER HOME LOANS, INC.; SUMMIT PROPERTY MANAGEMENT, INC., a California Corporation; DOES 1-20, inclusive; Defendants.
• Court: U.S. District Court — Eastern District of California

DEBORAH BAREFIELD, as Administrator ofthe Estate of Thomas W. Hatch, Plaintiff, v. HSBC HOLDINGS PLC; CALIBER HOME LOANS, INC.;SUMMIT PROPERTY MANAGEMENT, INC., a California Corporation;DOES 1-20, inclusive; Defendants.

1:18-cv-00527-LJO-JLT

UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF CALIFORNIA

August 2, 2018

MEMORANDUM DECISION AND ORDER RE MOTION TO DISMISS, MOTION TO EXPUNGE NOTICE OF PENDENCY OF ACTION OR REQUIRE A BOND, MOTION FOR JUDGMENT ON THE PLEADINGS, AND MOTION TO REMAND (ECF Nos. 6, 9, 15, and 17)

I. INTRODUCTION

On March 16, 2018, Deborah Barefield ("Plaintiff") filed a pro se complaint (First Amended Complaint, or "FAC"¹) in California Superior Court in and for the County of Kern against HSBC Mortgage Services Inc. (erroneously named as HSBC Holdings PLC); Caliber Home Loans, Inc.; Summit Property Management, LLC (erroneously named as Summit Property Management, Inc.); and Doe defendants (collectively, "Defendants"). The FAC alleges violations of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692, and state law claims for quiet title, fraud, constructive fraud, intentional infliction of emotional distress, violation of California's Rosenthal Fair Debt Collection Practices Act, and breach of the implied covenant of good faith and fair dealing. The FAC seeks general and specificdamages, in addition to punitive damages of "at least $500,0000." ECF No. 1, Ex. A (FAC) at 12. Defendants removed to this Court on April 18, 2018. ECF No. 1. Before the Court for decision are Plaintiff's motion to remand, ECF No. 17; Defendants Caliber Home Loans and Summit Property Management's motion to dismiss the FAC, ECF No. 6, and motion to expunge notice of pendency of action, ECF No. 9; and Defendant HSBC Mortgage Services, Inc.'s motion for judgment on the pleadings, ECF No. 15. The motions are ripe for review and are suitable for disposition without oral argument pursuant to Local Rule 230(g).

II. BACKGROUND

On August 19, 2005, decedent, Thomas W. Hatch, executed a loan in the amount of $477,000.00 to purchase a home located at 11301 Darlington Avenue, Bakersfield, California 93312 (the "Property"). FAC ¶ 7; ECF No. 7, Request for Judicial Notice, Ex. A. The loan was secured by a deed of trust, which identified the lender as Crevecor Mortgage Inc. ECF No. 7, Ex. A. The deed of trust further identified Mortgage Electronic Registration Systems, Inc. ("MERS") as the beneficiary. Id. According to the FAC, the decedent faced "financial difficulties" and ceased making payments on the subject loan in 2006.² FAC ¶ 8. The FAC states that HSBC took steps to begin the foreclosure process around that time but did not complete them. Id. The deed of trust was subsequently assigned to HSBC Mortgage Services, Inc. ("HSBC") in an assignment recorded July 1, 2008. ECF No. 7, Ex. B. On October 23, 2017, HSBC recorded its assignment of the deed of trust to U.S. Bank, N.A., as Trustee for LSF10 Master Participation Trust. Id., Ex. D. Caliber Home Loans ("Caliber") took over servicing the loan. Id.; FAC ¶ 10. In a document recorded on November 22, 2017, Summit Management Company, LLC ("Summit") was substituted as the trustee of record. ECF No. 7, Ex. E. Caliber initiated foreclosure proceedings by recording a notice of default on December 15, 2017, which stated that the decedent-borrower owed $497,255.30. Id., Ex. F; FAC ¶ 12. On March 13, 2018, Caliber recorded a notice of trustee's sale and set the date of sale for April 9, 2018. ECF No. 7, Ex. G. The notice stated that the amount of the unpaid balance and other charges was $994,009.90. Id. Plaintiff filed the FAC three days later. Defendants Caliber and Summit removed to this Court on April 18, 2018. ECF No. 1.

Following the filing of the motion to remand, motion to dismiss, motion for judgment on the pleadings, and motion to expunge notice of pendency of action, the Court issued an order to show cause why Plaintiff, proceeding pro se as administrator of the Estate of Thomas W. Hatch, may continue to prosecute the action. ECF No. 20. Plaintiff responded, ECF No. 25, and satisfied the Court that as the sole beneficiary of the Estate, she is entitled to represent the estate pro se, ECF No. 26.

III. STANDARD OF DECISION

A. Motion To Dismiss

Dismissal is appropriate under Rule 12(b)(6) of the Federal Rules of Civil Procedure when a plaintiff's allegations fail "to state a claim upon which relief can be granted." Fed. R. Civ. P. 12(b)(6). A dismissal under Rule 12(b)(6) "can be based on the lack of a cognizable legal theory or the absence of sufficient facts alleged under a cognizable legal theory." Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1990). In considering a motion to dismiss for failure to state a claim, the court generally accepts as true the allegations in the complaint, construes the pleading in the light most favorable to the party opposing the motion, and resolves all doubts in the pleader's favor. Lazy Y Ranch LTD. v. Behrens, 546 F.3d 580, 588 (9th Cir. 2008).

Federal Rule of Civil Procedure 9(b) requires a party alleging fraud to "state with particularity the circumstances constituting [the] fraud[.]" Fed. R. Civ. P. 9(b). This heightened pleading standard requires the party to do more than simply identify a transaction and allege in a conclusory manner that the transaction was fraudulent. See In re GlenFed, Inc. Sec. Litig., 42 F.3d 1541, 1548 (9th Cir. 1994) (en banc), superseded by statute on other grounds. Rather, the party must set forth in detail "the who, what, when, where, and how" of the alleged fraudulent conduct. Vess v. Ciba-Geigy Corp. USA, 317F.3d 1097, 1106 (9th Cir. 2003) (citation omitted). The purpose of Rule 9(b) is to protect defendants from factually baseless claims of fraud inasmuch as it is meant to give defendants notice of the claims asserted against them. See Kearns v. Ford Motor Co., 567 F.3d 1120, 1125 (9th Cir. 2009). When a party averring fraud fails to meet the heightened pleading standard of Rule 9(b), dismissal of the claim is proper. See Vess, 317 F.3d at 1107 ("A motion to dismiss a complaint or claim 'grounded in fraud' under Rule 9(b) for failure to plead with particularity is the functional equivalent of a motion to dismiss under Rule 12(b)(6) for failure to state a claim.").

B. Motion For Judgment On The Pleadings

Federal Rule of Civil Procedure 12(c) permits a party to seek judgment on the pleadings "after the pleadings are closed— but early enough not to delay trial." Fed. R. Civ. P. 12(c). A motion for judgment on the pleadings "challenges the legal sufficiency of the opposing party's pleadings." Morgan v. County of Yolo, 436 F. Supp. 2d 1152, 1154-55 (E.D. Cal. 2006), aff'd, 277 F. App'x. 734 (9th Cir. 2008). A Rule 12(c) motion operates in the same way as a motion to dismiss under Rule 12(b)(6). Chavez v. United States, 683 F.3d 1102, 1108 (9th Cir. 2012) ("Analysis under Rule 12(c) is substantially identical to analysis under Rule 12(b)(6) because, under both rules, a court must determine whether the facts alleged in the complaint, taken as true, entitle the plaintiff to a legal remedy.") (internal quotation marks and citation omitted); Cafasso, U.S. ex rel. v. Gen. Dynamics C4 Sys., Inc., 637 F.3d 1047, 1054 n.4 (9th Cir. 2011) (the legal standard of review governing 12(c) and 12(b)(6) motions are "functionally identical").

"A judgment on the pleadings is a decision on the merits." 3550 Stevens Creek Assocs. v. Barclays Bank of Cal., 915 F.2d 1355, 1357 (9th Cir. 1990). "A district court will render a 'judgment on the pleadings when the moving party clearly establishes on the face of the pleadings that no material issue of fact remains to be resolved and that it is entitled to judgment as a matter of law.'" Enron Oil Trading & Transp. Co. v. Walbrook Ins. Co., Ltd., 132 F.3d 526, 529 (9th Cir. 1997) (quoting George v. Pacific—CSC Work Furlough, 91 F.3d 1227, 1229 (9th Cir. 1996); Geraci v. Homestreet Bank, 347 F.3d 749, 751 (9th Cir. 2003) ("A motion for judgment on the pleadings should be granted where it appears the movingparty is entitled to judgment as a matter of law.").

"All allegations of fact by the party opposing the motion are accepted as true, and are construed in the light most favorable to that party." Gen. Conference Corp. of Seventh-Day Adventists v. Seventh-Day Adventist Congregational Church, 887 F.2d 228, 230 (9th Cir. 1989); Schuett v. FedEx Corp., 119 F. Supp. 3d 1155, 1159 (N.D. Cal. 2016) ("A judgment on the pleadings is appropriate when the pleaded facts, accepted as true and viewed in the light most favorable to the non-moving party, entitle the moving party to a judgment as a matter of law"). "As a result, a plaintiff is not entitled to judgment on the pleadings when the answer raises issues of fact that, if proved, would defeat recovery." Seventh-Day Adventist Congregational Church, 887 F.2d at 230. A motion for judgment on the pleadings will not be granted unless it appears "beyond doubt that the [non-moving party] can prove no set of facts in support of his claim which would entitle him to relief." Enron Oil Trading & Transp. Co., 132 F.3d at 529 (quoting B.F. Goodrich v. Betkoski, 99 F.3d 505, 529 (2d Cir. 1996)); Morgan, 436 F. Supp. 2d at 1155.

When deciding a Rule 12(c) motion, courts may consider facts set forth in the pleadings as well as facts that are contained in materials of which the court may take judicial notice. Heliotrope General, Inc. v. Ford Motor Co., 189 F.3d 971, 981 n.18 (9th Cir. 1999) (citation omitted); see also Herbert Abstract Co. v. Touchstone Props., Ltd., 914 F.2d 74, 76 (5th Cir. 1990) (a Rule 12(c) motion "is designed to dispose of cases where the material facts are not in dispute and a judgment on the merits can be rendered by looking to the substance of the pleadings and any judicially noticed facts") (per curiam). Under Rule 10(c) of the Federal Rules of Civil Procedure, a copy of any written instrument which is an exhibit...