Flores v. Emc Mortg. Co.

• Citation: 997 F.Supp.2d 1088
• Decision Date: 18 February 2014
• Docket Number: Case No. CV F 14–0047 LJO GSA.
• Court: U.S. District Court — Eastern District of California
• Parties: Vincent Elijah FLORES, et al., Plaintiffs, v. EMC MORTGAGE COMPANY, et al., Defendants.

997 F.Supp.2d 1088

Vincent Elijah FLORES, et al., Plaintiffs,

v.EMC MORTGAGE COMPANY, et al., Defendants.

Case No. CV F 14–0047 LJO GSA.

United States District Court,

E.D. California.

Signed Feb. 18, 2014.

Henry Dorame Nunez, Law Offices of Henry D. Nunez, Fresno, CA, for Plaintiffs.

Todd R. Whitehorn, Gwen H. Ribar, Wright, Finlay & Zak, LLP, Newport Beach, CA, for Defendants.

ORDER TO DISMISS CERTAIN DEFENDANTS AND JUDGMENT THEREON (Doc. 5.)

LAWRENCE J. O'NEILL, District Judge.

PRELIMINARY STATEMENT TO PARTIES AND COUNSEL

Judges in the Eastern District of California carry the heaviest caseload in the nation, and this Court is unable to devote inordinate time and resources to individual cases and matters. This Court must best manage its voluminous caseload without incurring needless delay and misuse of its limited resources. As such, this Court cannot address all arguments, evidence and matters raised by parties and addresses only the arguments, evidence and matters necessary to reach the decision in this order given the shortage of district judges and staff. The parties and counsel are encouraged to contact United States Senators Dianne Feinstein and Barbara Boxer to address this Court's inability to accommodate the parties and this action.

INTRODUCTION

Defendants Bank of New York Mellon (“Mellon”), National Default Servicing (“NDS”) and Mortgage Electronic Registration Systems Inc. (“MERS”) ¹ seek to dismiss as meritless and legally barred plaintiffs Vincent Elijah Flores (“Mr. Flores”) and Joe Flores' (collectively “plaintiffs' ”) wrongful foreclosure and related claims arising from Mr. Flores' loan default and foreclosure of his Visalia, California property (“property”). Plaintiffs respond that invalid assignment of Mr. Flores' loan documents entitles plaintiffs to pursue their claims. This Court considered defendants' F.R.Civ.P. 12(b)(6) motion to dismiss on the record and VACATES the February 20, 2014 hearing, pursuant to Local Rule 230(g). This Court construes plaintiffs' action as an attempt to thwart, delay and complicate property foreclosure and, for further reasons discussed below, DISMISSES this action against defendants.

BACKGROUND

Mr. Flores' Property Loan And Default

Mr. Flores obtained from BSM Financial, L.P. (“BSM Financial”) a $208,000 loan secured by a deed of trust (“DOT”) record August 19, 2005 against the property. ² The DOT identifies Mr. Flores as borrower, BSM Financial as lender, First American Title Company as trustee, and MERS as beneficiary. By an assignment of deed of trust recorded on May 19, 2010, MERS assigned to Mellon all beneficial interest under the DOT.

After Mr. Flores defaulted on his loan, a notice of default and election to sell under deed of trust was recorded on June 19, 2012. On September 24, 2012, a substitution of trustee was recorded to substitute NDS as DOT trustee and a notice of trustee's sale of the property was recorded. On October 29, 2012, a Trustee's Deed Upon Sale was recorded to grant the property to Mellon after an October 17, 2012 auction.

Plaintiffs' Claims

On November 4, 2013, prior to removal to this Court, plaintiffs filed their 86–page complaint (“complaint”), excluding exhibits, to purport to allege “unlawful conduct” and “illegal practices” committed by defendants and others. ³ The complaint appears to take issue with assignment of the DOT to Mellon and in turn the trustee's sale to Mellon. The complaint appears to assert that DOT assignment violated a consent judgment (“consent judgment”) entered in a U.S. District Court action in the District of Columbia and that Mr. Flores is a third-party beneficiary to the consent judgment. The complaint further appears to allege that Mellon violated a pooling and servicing agreement (“PSA”) because Mellon lacks possession of Mr. Flores' promissory note and DOT and/or failed to securitized the promissory note. The complaint concludes that the “Property was wrongfully was [sic] sold at a non-judicial foreclosure auction” and alleges federal and California statutory claims and common law claims which will be addressed below.

DISCUSSION

F.R.Civ.P. 12(b)(6) Motion To Dismiss Standards

A F.R.Civ.P. 12(b)(6) dismissal is proper where there is either a “lack of a cognizable legal theory” or “the absence of sufficient facts alleged under a cognizable legal theory.” Balistreri v. Pacifica Police Dept., 901 F.2d 696, 699 (9th Cir.1990); Graehling v. Village of Lombard, Ill., 58 F.3d 295, 297 (7th Cir.1995). A F.R.Civ.P. 12(b)(6) motion “tests the legal sufficiency of a claim.” Navarro v. Block, 250 F.3d 729, 732 (9th Cir.2001).

In addressing dismissal, a court must: (1) construe the complaint in the light most favorable to the plaintiff; (2) accept all well-pleaded factual allegations as true; and (3) determine whether plaintiff can prove any set of facts to support a claim that would merit relief. Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336, 337–338 (9th Cir.1996). Nonetheless, a court is not required “to accept as true allegations that are merely conclusory, unwarranted deductions of fact, or unreasonable inferences.” In re Gilead Sciences Securities Litig., 536 F.3d 1049, 1055 (9th Cir.2008) (citation omitted). A court “need not assume the truth of legal conclusions cast in the form of factual allegations,” U.S. ex rel. Chunie v. Ringrose, 788 F.2d 638, 643, n. 2 (9th Cir.1986), and must not “assume that the [plaintiff] can prove facts that it has not alleged or that the defendants have violated ... laws in ways that have not been alleged.” Associated General Contractors of California, Inc. v. California State Council of Carpenters, 459 U.S. 519, 526, 103 S.Ct. 897, 74 L.Ed.2d 723 (1983). A court need not permit an attempt to amend if “it is clear that the complaint could not be saved by an amendment.” Livid Holdings Ltd. v. Salomon Smith Barney, Inc., 416 F.3d 940, 946 (9th Cir.2005).

A plaintiff is obliged “to provide the ‘grounds' of his ‘entitlement to relief’ [which] requires more than labels and conclusions,and a formulaic recitation of the elements of a cause of action will not do.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 1964–65, 167 L.Ed.2d 929 (2007) (internal citations omitted). Moreover, a court “will dismiss any claim that, even when construed in the light most favorable to plaintiff, fails to plead sufficiently all required elements of a cause of action.” Student Loan Marketing Ass'n v. Hanes, 181 F.R.D. 629, 634 (S.D.Cal.1998). In practice, a complaint “must contain either direct or inferential allegations respecting all the material elements necessary to sustain recovery under some viable legal theory.” Twombly, 550 U.S. at 562, 127 S.Ct. at 1969 (quoting Car Carriers, Inc. v. Ford Motor Co., 745 F.2d 1101, 1106 (7th Cir.1984)).

In Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009), the U.S. Supreme Court explained:

... a complaint must contain sufficient factual matter, accepted as true, to “state a claim to relief that is plausible on its face.” ... 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 a defendant has acted unlawfully. (Citations omitted.)

After discussing Iqbal, the Ninth Circuit summarized: “In sum, for a complaint to survive [dismissal], the non-conclusory ‘factual content,’ and reasonable inferences from that content, must be plausibly suggestive of a claim entitling the plaintiff to relief.” Moss v. U.S. Secret Service, 572 F.3d 962, 969 (9th Cir.2009) (quoting Iqbal, 556 U.S. 662, 129 S.Ct. at 1949).

The U.S. Supreme Court applies a “two-prong approach” to address dismissal:

First, the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions. Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.... Second, only a complaint that states a plausible claim for relief survives a motion to dismiss.... Determining whether a complaint states a plausible claim for relief will ... be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.... But where the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged—but it has not “show[n]”-“that the pleader is entitled to relief.” Fed. Rule Civ. Proc. 8(a)(2).

In keeping with these principles a court considering a motion to dismiss can choose to begin by identifying pleadings that, because they are no more than conclusions, are not entitled to the assumption of truth. While legal conclusions can provide the framework of a complaint, they must be supported by factual allegations. When there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief.

Iqbal, 556 U.S. 662, 129 S.Ct. at 1949–1950.

Moreover, a court may consider exhibits submitted with the complaint. Durning v. First Boston Corp., 815 F.2d 1265, 1267 (9th Cir.1987); Van Winkle v. Allstate Ins. Co., 290 F.Supp.2d 1158, 1162, n. 2 (C.D.Cal.2003). A “court may consider evidence on which the complaint ‘necessarily relies' if: (1) the complaint refers to the document; (2) the document is central to the plaintiff's claim; and (3) no party questions the authenticity of the copy attachedto the 12(b)(6) motion.” Marder v. Lopez, 450 F.3d 445, 448 (9th Cir.2006). A court may treat such a document as “part of the complaint, and thus may assume that its contents are true for purposes of a motion to dismiss under Rule 12(b)(6).” United States v. Ritchie, 342 F.3d 903, 908 (9th Cir.2003). Such consideration prevents “plaintiffs from...