Hamilton v. Bank of Blue Valley

• Decision Date: 20 October 2010
• Docket Number: Case No. CV F 10–1740 LJO SKO.
• Citation: 746 F.Supp.2d 1160
• Parties: Edward B. HAMILTON, et al., Plaintiffs,v.BANK OF BLUE VALLEY, et al., Defendants.
• Court: U.S. District Court — Eastern District of California

746 F.Supp.2d 1160

Edward B. HAMILTON, et al., Plaintiffs,

v.BANK OF BLUE VALLEY, et al., Defendants.

Case No. CV F 10–1740 LJO SKO.

United States District Court, E.D. California.

Oct. 20, 2010.

William Craig Collier, Law Offices of McDonald Collier, Mariposa, CA, for Plaintiffs.David Christopher Scott, McCarthy & Holthus, LLP, San Diego, CA, for Defendants.

ORDER ON DEFENDANTS' F.R.Civ.P. 12 MOTION TO DISMISS (Doc. 8.)

LAWRENCE J. O'NEILL, District Judge.

INTRODUCTION

Defendants JP Morgan Chase Bank, N.A. (“Chase”) and Mortgage Electronic Systems, Inc. (“MERS”) seek to dismiss as legally and time barred plaintiffs Edward Hamilton (“Mr. Hamilton”) and Anne Marie Hamilton's (“Mrs. Hamilton's”) claims arising from foreclosure of their Oakhurst, California residence (“property”). Mr. and Mrs. Hamilton appear to chiefly oppose dismissal in that Chase and MERS (collectively “defendants”) did not respond to Mr. and Mrs. Hamilton's request for documents and do not “own” the property to permit foreclosure. This Court considered defendants' F.R.Civ.P. 12(b)(6) motion to dismiss on the record and VACATES the November 1, 2010 hearing, 2010 WL 4483476, pursuant to Local Rule 230(g). For the reasons discussed below, this Court DISMISSES this action against defendants.

BACKGROUND

Mr. And Mrs. Hamilton's Loan And Default

On August 19, 2005, Mr. and Mrs. Hamilton borrowed $275,000 under a promissory note to purchase the property. To secure the loan against the property, Mr. and Mrs. Hamilton executed a Deed of Trust (“DOT”), which was recorded on August 30, 2005.¹ The DOT identifies defendant Bank of Blue Valley (“Blue Valley”) as lender, Orange Coast Title as trustee, and MERS as beneficiary and the lender's nominee.

On May 6, 2010, a Notice of Default and Election to Sell Under Deed of Trust was recorded to reflect that Mr. and Mrs. Hamilton were $10,489.67 in arrears as of May 5, 2010. By a May 18, 2010 Assignment of Deed of Trust, the record interest under the DOT was assigned to Chase. By a June 7, 2010 Substitution of Trustee, Quality Loan Service Corp. (“Quality”) substituted as DOT trustee. On August 12, 2010, Quality recorded a Notice of Trustee's Sale to set a September 1, 2010 public auction sale of the property. The property was sold, and a Trustee's Deed Upon Sale was recorded on September 21, 2010.

Mr. And Mrs. Hamilton's Claims

On August 23, 2010, Mr. and Mrs. Hamilton filed their operative complaint (“complaint”) in Madera County Superior Court to allege claims that defendants violated federal and state statutes and to seek to quiet title in their favor in the property and to enjoin a foreclosure sale of the property. The complaint's claims are entitled:

1. “Violation of the Rosenthal Fair Debt Collection Practices Act under California Civil Code § 1788”;

2. “Quiet Title”;

3. “Predatory Lending Practices”;

4. “Declaratory Relief”; and

5. “Injunctive Relief.” ²

Defendants removed the action to this Court.

DISCUSSION

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

Defendants attack the complaint's failure “to allege facts sufficient to constitute any viable cause of action” given the absence of a “factual basis for any of [its] loosely asserted claims.” Defendants further take issue with Mr. and Mrs. Hamilton's failure to tender amounts owed under the loan to bar their challenges to the foreclosure sale.

A F.R.Civ.P. 12(b)(6) motion to dismiss is a challenge to the sufficiency of the pleadings set forth in the complaint. “When a federal court reviews the sufficiency of a complaint, before the reception of any evidence either by affidavit or admissions, its task is necessarily a limited one. The issue is not whether a plaintiff will ultimately prevail but whether the claimant is entitled to offer evidence to support the claims.” Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 40 L.Ed.2d 90 (1974); Gilligan v. Jamco Development Corp., 108 F.3d 246, 249 (9th Cir.1997). 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.1988); Graehling v. Village of Lombard, Ill., 58 F.3d 295, 297 (7th Cir.1995).

In resolving a F.R.Civ.P. 12(b)(6) motion, 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 a court 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).

“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 ‘entitlement to relief’ 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, ––– U.S. ––––, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009), the U.S. Supreme Court recently explained:

To survive a motion to dismiss, 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 Court of Appeals summarized: “In sum, for a complaint to survive a motion to dismiss, 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, –––U.S. ––––, 129 S.Ct. at 1949).

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

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, ––– U.S. ––––, 129 S.Ct. at 1949–1950.

Moreover, a limitations defense may be raised by a F.R.Civ.P. 12(b)(6) motion to dismiss. Jablon v. Dean Witter & Co., 614 F.2d 677, 682 (9th Cir.1980); see Avco Corp. v. Precision Air Parts, Inc., 676 F.2d 494, 495 (11th Cir.1982), cert. denied, 459 U.S. 1037, 103 S.Ct. 450, 74 L.Ed.2d 604 (1982). A F.R.Civ.P. 12(b)(6) motion to dismiss may raise the limitations defense when the statute's running is apparent on the complaint's face. Jablon, 614 F.2d at 682. If the limitations defense does not appear on the complaint's face and the trial court accepts matters outside the pleadings' scope, the defense may be raised by a motion to dismiss accompanied by affidavits. Jablon, 614 F.2d at 682; Rauch v. Day and Night Mfg. Corp., 576 F.2d 697 (6th Cir.1978).

For a F.R.Civ.P. 12(b)(6) motion, a court generally cannot consider material outside the complaint. Van Winkle v. Allstate Ins. Co., 290 F.Supp.2d 1158, 1162, n. 2 (C.D.Cal.2003...