Dorado v. Shea Homes Ltd. P'ship

• Decision Date: 31 August 2011
• Docket Number: 1:11-cv-01027 OWW SKO
• Court: U.S. District Court — Eastern District of California
• Parties: CARMENCITA DORADO, an individual, Plaintiff, v. SHEA HOMES LIMITED PARTNERSHIP, a California Limited Partnership, CHICAGO TITLE COMPANY, a Business Entity, form unknown; BAC HOMES LOANS SERVICING, LP, A Business Entity, form unknown; RECONTRUST COMPANY, a Business Entity, form unknown; MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., a Delaware Corporation; and DOES 1 through 50, inclusive, Defendants.

CARMENCITA DORADO, an individual, Plaintiff,

v. SHEA HOMES LIMITED PARTNERSHIP, a California Limited Partnership,CHICAGO TITLE COMPANY, a Business Entity, form unknown; BAC HOMES LOANS SERVICING,LP, A Business Entity, form unknown; RECONTRUST COMPANY, a Business Entity, form unknown;MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., a Delaware Corporation; and DOES 1 through 50, inclusive, Defendants.

1:11-cv-01027 OWW SKO

UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF CALIFORNIA

Dated: August 31, 2011

ORDER GRANTING DEFENDANTS'

MOTION TO DISMISS COMPLAINT

(DOC. 5, 7 and 12)

I. INTRODUCTION.

Carmencita Dorado ("Plaintiff"), appearing in propria persona, asserts twenty-nine (29) causes of action arising out of an adjustable-rate home loan she entered into approximately four years ago. BAC Home Loans Servicing, L.P., Recontrust Company, Mortgage Electronic Registration Systems, Inc. ("BACDefendants"), Shea Homes, LP ("Shea Homes"), and Chicago Title Company ("Chicago Title") (collectively "Defendants") move to dismiss all of Plaintiff's claims.

All Defendants allege that Plaintiff's Complaint is "incomprehensible," "conclusory" and most of what is pleaded is irrelevant. The Complaint, Defendants assert, fails to give fair notice of the claims asserted against Defendants; fails to state any valid cause of action; and most or all of Plaintiff's claims are barred by the applicable statutes of limitation.

BAC Defendants additionally assert that Plaintiff has a Chapter 13 bankruptcy case pending in the Northern District of California and lacks standing to file this action as the trustee and not Plaintiff is the "real party in interest." (Doc. 12 at 4.)

Shea Homes specifically asserts that it has been mistakenly named and has nothing to do with Plaintiff's mortgage. "Shea Homes, a California limited partnership, sold the home to Plaintiff, [and is an] entirely separate entity [from] Shea Mortgage Inc., a California corporation, [who] was Plaintiff's lender." (Doc. 5 at 1.)

Chicago Title adds that "it is not Plaintiff's lender, loan broker, or loan servicer, and Chicago [Title] has no role in the foreclosure process." (Doc. 7 at 9.)

II. PROCEDURAL HISTORY

Plaintiff filed this action in California state court on April 27, 2011. The case was removed to this court on June 17, 2011. (Doc. 1.) Defendants' filed motions to dismiss Plaintiff's Complaint on June 24, 2011, (doc. 5, 7), and July 11, 2011, (doc. 12). Plaintiff filed oppositions to Defendants' motions on July 29, 2011. (Doc. 14, 15, 16.)

III. BACKROUND FACTS

Plaintiff is the owner of real property located at 209 Abelia Lane, Patterson, California 95363 (the "Property"). (Compl. ¶ 22.) Plaintiff obtained a loan for $421,650.00 on September 5, 2006 from Shea Mortgage, Inc. She executed a deed of trust ("Deed of Trust") against the Property, with MERS appointed as beneficiary and Chicago Title Company as the original Trustee. (Compl. ¶ 33; Chicago Tile RJN, Ex. A.)

Plaintiff's native language is Tagolog. (Compl. ¶ 38.) The terms of the loan were explained to Plaintiff in English. (Compl. ¶ 38.)

The loan contained an adjustable rate rider which Plaintiff executed on September 8, 2006. (Chicago Title RJN, Ex. A.) Plaintiff stopped paying her mortgage. As a result, Defendant Recontrust issued a Notice of Default, which was recorded in Stanislaus County on June 1, 2009. (Compl. ¶ 12; Chicago Title RJN, Ex. B, C.) It does not appear that a Notice of Trustee'sSale was ever issued or recorded. Plaintiff alleges in her Complaint at paragraph 118 that unspecified Defendants "have completed a foreclosure action under the Note [sic] by way of non-judicial sale"; however, at paragraph 119, she seeks an injunction to prevent the same trustee's sale.

On May 25, 2011, Defendant MERS substituted Recontrust as trustee under the Deed of Trust, and assigned the Deed of Trust to Citibank, N.A., as Trustee for the Holders of Bear Stearns ALT-A Trust 2006-7 Mortgage Pass-Through Certificates, Series 2006-7. (See Chicago RJN, Ex. D, E.)

Plaintiff filed for bankruptcy in the Northern District of California on August 7, 2009, approximately one month after the Notice of Default was recorded. (BAC Defendants RJN, Ex. 3.) The Second Amended Chapter 13 Plan was filed by Plaintiff on June 6, 2011 and the bankruptcy court's docket reflects that confirmation of Plaintiff's bankruptcy plan is still pending. (BAC Defendants RJN, Ex. 3, 4.) This explains why a notice of sale was not recorded, absent lifting of the automatic stay.

IV. STANDARD OF DECISION

A motion to dismiss brought under Federal Rule of Civil Procedure 12(b)(6) "tests the legal sufficiency of a claim." Navarro v. Block, 250 F.3d 729, 732 (9th Cir.2001). In deciding whether to grant a motion to dismiss, the court "accept[s] all factual allegations of the complaint as true and draw[s] allreasonable inferences" in the light most favorable to the nonmoving party. Rodriguez v. Panayiotou, 314 F.3d 979, 983 (9th Cir.2002). To survive a motion to dismiss, a complaint must "contain sufficient factual matter, accepted as true, to xstate a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)).

A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. The plausibility standard "is not akin to a 'probability requirement,' but it asks for more than a sheer possibility that defendant has acted unlawfully. Where a complaint pleads facts that are 'merely consistent with' a defendant's liability, it 'stops short of the line between possibility and plausibility of entitlement to relief.'" Id. (citing Twombly, 550 U.S. 556-57).

Nevertheless, the court "need not assume the truth of legal conclusions cast in the form of factual allegations." United States ex rel. Chunie v. Ringrose, 788 F.2d 638, 643 n.2 (9th Cir. 1986). While the standard does not require detailed factual allegations, "it demands more than an unadorned, the defendant-unlawfully-harmed-me accusation." Iqbal, 129 S. Ct. at 1949. A pleading is insufficient if it offers mere "labels and conclusions" or "a formulaic recitation of the elements of acause of action." Twombly, 550 U.S. at 555; Iqbal, 129 S. Ct. at 1950 ("Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.").

In ruling upon a motion to dismiss, the court may consider only the complaint, any exhibits thereto, and matters which may be judicially noticed pursuant to Federal Rule of Evidence 201. See Mir v. Little Co. of Mary Hosp., 844 F.2d 646, 649 (9th Cir. 1988).

V. DISCUSSION

A. Standing.

1. Creation of Bankruptcy Estate.

BAC Defendants contend that Plaintiff has a Chapter 13 bankruptcy case pending in the Northern District of California and lacks standing to file this action as the trustee and not Plaintiff is the "real party in interest" under Fed. Civ. Pro. R. 17(a) to prosecute this action Plaintiff does not address the bankruptcy issue.

In general, the court may not consider materials other than the facts alleged in the complaint when ruling on a motion to dismiss. Anderson v. Anngelone, 86 F.3d 932, 934 (9th Cir.1996). "[A]mple authority exists," however, "which recognizes that matters of public record, including court records in related or underlying cases which have a direct relation to the matters at issue, may be looked to when ruling on a 12(b)(6) motion todismiss." In re Am. Continental Corp./Lincoln Sav. & Loan Sec. Litig., 102 F.3d 1524, 1537 (9th Cir.1996) (collecting cases), rev'd on other grounds by Lexecon, Inc. v. Milberg Weiss Bershad Hynes & Lerach, 523 U.S. 26 (1998). Here, Defendants have provided the court with Plaintiff's petition for Chapter 13 bankruptcy protection dated August 2, 2009. (BAC Defendants RJN, Ex. 4, Dorado Bankruptcy Case Summary.) Hearing no objection from Plaintiff the bankruptcy documents will be consider this document in deciding Defendants' motion to dismiss.

The filing of a bankruptcy petition creates an estate in bankruptcy. See 11 U.S.C. § 541(a); In re Raintree Healthcare Corp., 431 F.3d 685, 688 (9th Cir.2005). A bankruptcy estate consists of "all legal or equitable interests of the debtor in property as of the commencement of the case." 11 U.S.C. § 541(a)(1). In a Chapter 13 case, the estate also includes property acquired by the debtor after the commencement of the case. 11 U.S.C. § 1306(a)(1). The property of the estate includes causes of action that arise after the commencement of the case and until the case is closed, dismissed or converted. Donato v. Metropolitan Life Ins. Co., 230 B.R. 418, 421 (N.D.Cal. 1999) (citing In re Fleet, 53 B.R. 833, 838 (Bankr. E.D.Pa. 1985).¹

The Code expressly provides that Chapter 13 debtors retain possession of property in the bankruptcy estate. See 11 U.S.C. § 1306(b) ("[e]xcept as provided in a confirmed plan or order confirming a plan, the debtor shall remain in possession of ail property of the estate"); see also, e.g., 11 U.S.C. § 1303 (providing that debtors under Chapter 13 shall have substantially the same powers as do trustees of the estate). The Bankruptcy Code provides that a debtor in possession, such as a debtor filing for the protections of Chapter 13, enjoys express authority to sue or to be sued on behalf of the bankruptcy estate:

With or without court approval, the trustee or debtor in possession may prosecute or may enter an appearance and defend any pending action or proceeding by or against the debtor, or commence and prosecute any action or proceeding in behalf of the estate before any tribunal.

Fed. R. Bankr.P. 6009 (emphasis supplied).

The Ninth Circuit has stated:

In [Chapter 7] liquidation proceedings, only the trustee has standing to prosecute or defend a claim belonging to the estate. The same cannot be said for trustees

...