Grossi v. Bosco Credit, LLC

Decision Date10 August 2017
Docket NumberCase No. 16-cv-03100-MEJ
PartiesAGOSTINO GROSSI, Plaintiff, v. BOSCO CREDIT, LLC, et al., Defendants.
CourtU.S. District Court — Northern District of California
ORDER RE: MOTION TO DISMISS

Re: Dkt. No. 22

INTRODUCTION

Plaintiff Agostino Grossi ("Plaintiff") filed this action against Defendants Bosco Credit, LLC ("Bosco"); Franklin Credit Management Corporation ("FCMC"); and T.D. Service Financial Corporation ("T.D. Service") (collectively, "Defendants") for claims arising out of foreclosure-related activities involving his home. See First Am. Compl. ("FAC"), Dkt. No. 20. Pending before the Court is Defendants' Motion to Dismiss. Mot., Dkt. No. 22. The Court previously found this matter suitable for disposition without oral argument. Dkt. No. 38. Having considered the parties' positions, the relevant legal authority, and the record in this case, the Court GRANTS Defendants' Motion.

BACKGROUND1

Plaintiff is the owner of the property located at 21 Mount Hamilton Court, Clayton, California 94517 (the "Property"). FAC ¶ 12. The Property is Plaintiff's principal residence and is security for a loan made for personal, family, or household purposes. Id. Specifically, on or around January 13, 2006, Plaintiff obtained a secured mortgage loan (the "Loan") with CalState 9Credit Union ("CalState 9"). Id. ¶ 13. Plaintiff executed a Deed of Trust in favor of CalState 9 to secure the financing. Id. Around June 30, 2008, the Loan transferred to Bosco, and FCMC began servicing the Loan. Id. ¶ 14.

Plaintiff fell behind on his mortgage payments in or around January 2008; on February 2, 2009, he filed a Chapter 7 bankruptcy petition with the United States Bankruptcy Court for the Northern District of California. Id. ¶¶ 14-15. The Property was underwater at the time of Plaintiff's bankruptcy. Id. ¶ 15. On February 2, 2009, Plaintiff filed a Schedule A and a Schedule D in his Chapter 7 petition, which stated, respectively, that the Property's current value was $550,000 while the amount of the secured claim was $901,946.71 and that the total amount owed to FCMC was $101,419. Id. Plaintiff received a discharge on May 12, 2009, and he believed that this also discharged his personal obligation to pay the debt. Id. ¶ 16.

On February 10, 2016, FCMC, on behalf of Bosco, sent Plaintiff a Notice of Default and Intent to Accelerate ("February 10 Notice"), which stated Plaintiff was past due in his payments since January 20, 2008 and that the total delinquency owed on the Loan was $76,961.99. Id. ¶ 18. Of that amount, $75,606.99 was interest and $1,260 was late charges. Id. It further "stated that to the extent the obligation has been discharged, the notice is for informational purposes only and does not constitute a demand for payment or an attempt to collect an indebtedness as your personal obligation[.]" Id. But the Notice also stated that Plaintiff could cure the default by paying $76,961.99 by March 11, 2016. Id. Plaintiff alleges that on or around March 15, 2016, FCMC, again on Bosco's behalf, caused T.D. Service2 to record a Notice of Default indicating that the amount necessary to reinstate the loan was $78,776.67, for principal and interest due on the Loan since January 2008. Id. ¶ 19.

On March 21, 2016, T.D. Service, on behalf of Bosco, sent Plaintiff a Debt Validation Notice. Id. ¶ 20. The Debt Validation Notice stated that as of March 14, 2016, the delinquency owed for the Property was $78,776.67 and that the total amount owed on the Loan was$101,419.18. Id. The total amount included unpaid principal, plus accrued interest and any accrued NSF fees,3 escrow advances, late charges, or suspense credits, and attorney and/or trustee fees and costs. Id.

Plaintiff alleges that although his Chapter 7 petition discharge order gives Bosco and FCMC a right to enforce a valid lien against the Property, he "is informed and believes" that Bosco and FCMC are not entitled to add late charges or interest to his loan given that the Property is currently underwater. Id. ¶ 21. Accordingly, Plaintiff sent T.D. Service a Debt Validation Letter on April 21, 2016. Id.

On or around May 19, 2016, FCMC, again on behalf of Bosco, provided relevant loan documents, including FCMC's loan history summary and payoff letter. Id. ¶ 22. FCMC's loan history shows a monthly $45 late charge from June 2009 to June 2010, that is, the period after Plaintiff's Chapter 7 discharge. Id. A May 18, 2016 payoff statement from T.D. Service also shows that as of May 31, 2016, the total amount necessary to pay off the loan was $185,439.21, which consists of a principal balance of $101,419.18 plus $81,540.80 of interest; $1,355 of fees; $45 of release fees; and $1,079.23 of estimated foreclosure fees and costs. Id.; see id., Ex. B (statement dated May 18, 2016 from T.D. Service).

Plaintiff filed his initial complaint on June 7, 2016 and the operative FAC on August 10, 2016. See Compl., Dkt. No. 1; FAC. Plaintiff's FAC asserts claims of (1) violations of the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692e, against T.D. Service and FCMC; (2) violations of California Civil Code section 2924e against Bosco and FCMC; (3) violations of California Civil Code section 2924.17 against FCMC; and (4) negligence against Bosco and FCMC. Id. ¶¶ 24-70.

REQUEST FOR JUDICIAL NOTICE

Before proceeding to the substantive arguments, the Court addresses Defendants' Request for Judicial Notice ("RJN"). RJN, Dkt. No. 23; id., Exs. 1-4. Under Federal Rule of Evidence 201(b), "[t]he court may judicially notice a fact that is not subject to reasonable dispute because it:(1) is generally known within the trial court's territorial jurisdiction; or (2) can be accurately and readily determined from sources whose accuracy cannot reasonably be questioned." Documents in the public record may be judicially noticed to show, for example, that a judicial proceeding occurred or that a document was filed in another case, but a court may not take judicial notice of findings of facts from another case. Lee v. City of L.A., 250 F.3d 668, 689 (9th Cir. 2001); Reyn's Pasta Bella, LLC v. Visa USA, Inc., 442 F.3d 741, 746 n.6 (9th Cir. 2006) (courts "may take judicial notice of court filings and other matters of public record."). Nor may a court take judicial notice of any matter that is in dispute. Lee, 250 F.3d at 689-90; see also Ruiz v. City of Santa Maria, 160 F.3d 543, 548 n.13 (9th Cir. 1998) (finding judicial notice inappropriate where the facts to be noticed were not relevant to the disposition of the issues before the court). Defendants request the Court take judicial notice of the following documents:

1. A Deed of Trust recorded on January 13, 2006 in the Contra Costa County Recorder's Office, bearing instrument number 2006-0013396-00. RJN, Ex. 1.
2. An Assignment of Deed of Trust recorded on June 30, 2008 in the Contra Costa County Recorder's Office, bearing instrument number 2008-0145894-00. Id., Ex. 2.
3. A Notice of Default and Intent to Accelerate dated February 10, 2016. Id., Ex. 3.
4. A Debt Validation Notice dated March 21, 2016. Id., Ex. 4.

As Exhibits 1 and 2 are matters of public record, the Court GRANTS Defendants' request as to them. There is no indication Exhibits 3 and 4 publicly available documents; however, as Plaintiff does not object to them, the Court GRANTS Defendants' request as to Exhibits 3 and 4 as well.

LEGAL STANDARD

Rule 8(a) requires that a complaint contain a "short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). A complaint must therefore provide a defendant with "fair notice" of the claims against it and the grounds for relief. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (internal quotations and citation omitted).

A court may dismiss a complaint under Rule 12(b)(6) when it does not contain enough facts to state a claim to relief that is plausible on its face. Id. at 570. "A claim has facialplausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). "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." Id. (quoting Twombly, 550 U.S. at 557). "While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the 'grounds' of his 'entitle[ment] to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do. Factual allegations must be enough to raise a right to relief above the speculative level." Twombly, 550 U.S. at 555 (internal citations and parentheticals omitted).

In considering a motion to dismiss, a court must accept all of the plaintiff's allegations as true and construe them in the light most favorable to the plaintiff. Id. at 550; Erickson v. Pardus, 551 U.S. 89, 93-94 (2007); Vasquez v. L.A. Cty., 487 F.3d 1246, 1249 (9th Cir. 2007). In addition, courts may consider documents attached to the complaint. Parks Sch. of Bus., Inc. v. Symington, 51 F.3d 1480, 1484 (9th Cir. 1995) (citation omitted).

If a Rule 12(b)(6) motion is granted, the "court should grant leave to amend even if no request to amend the pleading was made, unless it determines that the pleading could not possibly be cured by the allegation of other facts." Lopez v. Smith, 203 F.3d 1122, 1127 (9th Cir. 2000) (en banc) (internal quotations and citations omitted). However, the Court may deny leave to amend for a number of reasons, including "undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, [and] futility of amendment." Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d...

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