Jackson v. Clear Recon Corp.
| Decision Date | 26 August 2016 |
| Docket Number | No. 2:15-cv-00968 TLN AC,2:15-cv-00968 TLN AC |
| Parties | STEPHEN JACKSON, Plaintiff, v. CLEAR RECON CORP., BANK OF AMERICA, N.A., STEWART TITLE, Defendants. |
| Court | U.S. District Court — Eastern District of California |
Plaintiff is proceeding in this action in pro per and in forma pauperis. This matter was referred to the undersigned by E.D. Cal. R. 302(c)(21), and now proceeds on the Second Amended Complaint. Presently before the court is defendant Bank of America's motion to dismiss, ECF No. 42, in which defendant Clear Recon Corp. has joined, ECF No. 43. Plaintiff opposes the motion. ECF No. 46.
Plaintiff initiated this action in pro se on April 30, 2015, by filing a twenty-four page Complaint against Clear Recon Corp. ("Clear Recon"); Bank of America, N.A. ("Bank of America"), as successor to preceding mortgage holders; and Stewart Title. ECF No. 1. The complaint asserted seven causes of action related to the foreclosure and pending trustee sale of
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////residential property in Fairfield, California.1 On August 24, 2015, before any party had responded to the complaint, plaintiff filed a twenty-three page First Amended Complaint ("FAC"). ECF No. 6. This Complaint contained four claims: (1) breach of contract; (2) wrongful foreclosure; (3) quiet title; and (4) declaratory relief. On October 27, 2015, because plaintiff had failed to file proof of service upon defendants, the court ordered plaintiff to show cause why the action should not be dismissed for failure to prosecute. ECF No. 8. Plaintiff responded with a request for an extension of time to serve defendants, which was granted and the Order to Show Cause was discharged. ECF Nos. 9, 11.
Defendants Clear Recon and Bank of America each moved to dismiss the FAC. ECF Nos. 13-18 (Clear Recon's motion), 19 (Bank of America's motion). Both motions were calendared for hearing on February 10, 2016 before the undersigned Magistrate Judge. ECF Nos. 18, 23. Plaintiff filed an Opposition to Bank of America's motion, which merely stated as to each cause of action, "Plaintiff denies Defendant BOFA's claims and their Motion to Dismiss should be denied."2 ECF No. 25 at 3-4. Plaintiff also opposed Bank of America's request for judicial notice of documents related to the home loan, disputing the validity of the submitted documents. ECF No. 26. He did not file an Opposition or Statement of Non-Opposition in relation to Clear Recon's motion. See ECF No. 28.
Plaintiff failed to appear at the hearing on the motions to dismiss, and the matter was submitted for decision. ECF No. 29. On February 11, 2016, the court issued Findings and Recommendations recommending the motions to dismiss be granted and that plaintiff be granted leave to amend. ECF No. 30. The Findings and Recommendations explained the applicable pleading standards and specifically identified the legal and factual defects in plaintiff's claims. Id.
On April 1, 2016, the district court adopted the Findings and Recommendations and granted plaintiff thirty days to file an amended complaint. ECF No. 33. When no amended complaint was filed within the time prescribed, Bank of America moved to dismiss for failure to prosecute. ECF No. 34. Clear Recon joined the motion, ECF No. 35, which had been noticed for hearing on June 22, 2016.
On May 23, 2016, plaintiff filed a motion to vacate the district court order adopting the Findings and Recommendations. ECF No. 36. A Second Amended Complaint was attached as an exhibit to that motion. Id. On June 2, 2016, plaintiff filed an Opposition to the pending motion to dismiss for failure to prosecute. ECF No. 37. On June 21, 2016, the undersigned issued an order construing plaintiff's motion to vacate as a motion to file and deem timely the Second Amended Complaint ("SAC"). ECF No. 40. As such, the motion was granted, ECF No. 40, and the Clerk accordingly filed the SAC at ECF No. 41. Defendants' motion to dismiss for lack of prosecution was denied as moot, and defendants were ordered to respond to the SAC. Defendants timely responded by filing the instant motion to dismiss. ECF No. 42.
The SAC presents, in abbreviated form, the same four claims that were set forth in greater detail in the FAC: (1) Breach of Contract; (2) Wrongful Foreclosure; (3) Quiet Title; and (4) Declaratory Relief. The breach of contract claim alleges in general terms that a loan modification review between plaintiff and the Bank was never resolved and remains an open application. ECF No. 41 at 2-3. The wrongful foreclosure claim rests on the conclusory allegation that, with the loan application remaining open, the Bank could not legally foreclose on the property. Id. at 3. The quiet title claim rests on the allegation that the loan upon which foreclosure is predicated was rescinded in 2009 without any action by the Bank to contest it. Plaintiff contends that all actions taken by the Bank thereafter, including the December 11, 2015 substitution of defendant Clear Recon as Trustee, have no force and effect both by virtue of the rescission and the failure to
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////timely serve him with a Notice of Substitution.3 Id. at 3-4. The declaratory relief consists of citation to the Declaratory Judgment Act, 28 U.S.C. § 2201. Id. at 4.
The entire Second Amended Complaint contains four pages of text.
A motion to dismiss under Fed. R. Civ. P. 12(b)(6) tests the sufficiency of a complaint. Ileto v. Glock, Inc., 349 F.3d 1191, 1199-1200 (9th Cir. 2003). A complaint may be dismissed as a matter of law for two reasons: (1) lack of a cognizable legal theory, or (2) insufficient facts under a cognizable theory. See Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001).
In reviewing a Rule 12(b)(6) motion, the Court will only ascertain whether the nonmoving party has sufficiently alleged claims that would entitle him or her to relief. Jackson v. Carey, 353 F.3d 750, 756 (9th Cir. 2003). In doing so, the Court assumes the truth of all factual allegations and construes factual allegations in the light most favorable to the nonmoving party. See Gompper v. VISX. Inc., 298 F.3d 893, 895 (9th Cir. 2002). However, the court is not bound to accept as true a legal conclusion couched as a factual allegation. "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." Ashcroft v. Iqbal, 556 U.S. 662, 664 (2009). However, the conclusions contained in the pleading "are not entitled to the assumption of truth." Id.
"Dismissal 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 order to survive dismissal for failure to state a claim, a complaint must contain more than a "formulaic recitation of the elements of a cause of action;" it must contain factual allegations sufficient to "raise a right to relief above the speculative level." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). It is insufficient for the pleading to contain a statement of facts that "merely creates a suspicion" that the pleader might have a legallycognizable right of action. 5 C. Wright & A. Miller, Federal Practice and Procedure§ 1216, pp. 235-36 (3d ed. 2004) (citing Twombly, 550 U.S. at 570). "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." Iqbal, 556 U.S. at 678.
In reviewing a complaint under this standard, the court "must accept as true all of the factual allegations contained in the complaint," Erickson v. Pardus, 551 U.S. 89, 94 (2007), construe those allegations in the light most favorable to the plaintiff, Von Saher v. Norton Simon Museum of Art at Pasadena, 592 F.3d 954, 960 (9th Cir. 2010), and resolve all doubts in the plaintiffs' favor. Hebbe v. Pliler, 627 F.3d 338, 340 (9th Cir. 2010). However, the court need not accept as true legal conclusions "cast in the form of factual allegations." Western Mining Council v. Watt, 643 F.2d 618, 624 (9th Cir. 1981).
Moreover, pro se pleadings are held to a less stringent standard than those drafted by lawyers. Haines v. Kerner, 404 U.S. 519, 520 (1972). "Pro se complaints are construed 'liberally' and may only be dismissed 'if it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.'" Nordstrom v. Ryan, 762 F.3d 903, 908 (9th Cir. 2014) (quoting Wilhelm v. Rotman, 680 F.3d 1113, 1121 (9th Cir. 2012)). However, the conclusions contained in the pleading "are not entitled to the assumption of truth." Id. The plaintiff must plead sufficient facts "to state a claim for relief that is plausible on its face." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007); see also Weber v. VA, 512 F.3d 1178, 1181 (9th Cir. 2008). In other words, plaintiff must, under general pleading standards and specifically Federal Rule of Civil Procedure 8(a), provide more than a conclusory recitation of the elements of a claim; that Rule "requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Twombly, 550 U.S. at 555.
Plaintiff's complaint clearly does not meet the threshold requirement for pleading laid out in Twombly and Weber, supra. Plaintiff's claim for breach of contract refers in general terms to a "negotiation [for] a loan modification," which plaintiff alleges "has not been closed." ECF No.41 at 2:23-26. California law of contracts is applied in cases brought in the federal courts. Swenson v. Amtrak, 2015 WL 6447493 (E.D. Cal. Oct. 23, 2015). Under California law, in order to plead a cognizable breach of contract a...
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