Jara v. Aurora Loan Servs. LLC
| Decision Date | 14 December 2011 |
| Docket Number | No. C 11-00419 LB,C 11-00419 LB |
| Court | U.S. District Court — Northern District of California |
| Parties | JOSE A. JARA, Plaintiff, v. AURORA LOAN SERVICES, LLC, et al. Defendants. |
[Re: ECF Nos. 50, 51]
Plaintiff Jose Jara sued Defendants Aurora Loan Services, LLC ("Aurora"), Mortgage Electronic Registration Systems ("MERS"), and California Western Reconveyance ("Cal Western") (collectively, "Defendants") for violation of federal and state law in connection with the foreclosure and sale of his property in South San Francisco, California. Third Amended Complaint ("TAC"), ECF No. 49.1
Before the court are Defendants' two motions to dismiss Mr. Jara's Third Amended Complaint. Motion (Aurora and MERS), ECF No. 50; Joinder and Motion (Cal Western), ECF No. 51. The court previously found, pursuant to Civil Local Rule 7-1(b), that these matters are suitable for determination without oral argument and vacated the December 15, 2011 hearing. 12/13/2011 Order, ECF No. 67. For the reasons explained below, the court GRANTS Defendants' motions.
On January 18, 2006, Mr. Jara purchased property at 330 Arbor Drive in South San Francisco, California. TAC, ECF No. 49 at ¶¶ 1, 5; Request for Judicial Notice ("RJN"), ECF No. 62, Ex. 3. To fund the purchase, he borrowed $865,000 from Pacific Community Mortgage, Inc. ("Pacific"), which packaged the loan as two separate notes. TAC, ECF No. 49 at ¶¶ 5, 6; RJN, ECF No. 62, Exs. 1, 2.2 Pacific subsequently transferred its servicing rights on the loans to Aurora. TAC, ECFNo. 49 at ¶¶ 2, 5, 20; RJN, ECF No. 62, Ex. 4.
In 2008, Mr. Jara "sustained substantial personal problems that qualified as a hardship under the [Home Affordable Modification Program] requiring modification of the terms of the subject obligation and security instruments." TAC, ECF No. 49 at ¶ 8; see also RJN, ECF No. 62, Ex. 10 (notice of default). Thereafter, Mr. Jara entered into agreements to modify the terms of his loan, which he accepted. TAC, ECF No. 49 at ¶ 15.3 Mr. Jara alleges that he was current on his obligations under the plan when Cal Western recorded a notice of default on the property. TAC, ECF No. 49 at ¶ 12; RJN, Ex. 10 (notice of default). He further alleges that Defendants did not attempt to contact him prior to recording the notice of default and Cal Western did not provide him with a debt validation notice prior to recording the default. TAC, ECF No. 49 at ¶¶ 9, 10, 16.
On August 25, 2010, Cal Western conducted a trustee's sale at which Aurora purchased the property. RJN, ECF No. 62, Ex. 13 ().
Mr. Jara filed the present lawsuit against Defendants in San Mateo County Superior Court on November 10, 2010. Notice of Removal, ECF No. 1, Ex. 1 at 5-36 ("Complaint"). Thirteen days later, on November 23, 2010, he filed a First Amended Complaint as a matter of right. Notice of Removal, ECF No. 1, Ex. 2 at 40-49 ("FAC"). The First Amended Complaint added attorneys' fees and costs to the relief previously sought in the original complaint. Compare Notice of Removal, ECF No. 1, Ex. 1 at 13 with Notice of Removal, ECF No. 1, Ex. 2 at 48. On January 28, 2011, Aurora and MERS removed the case to this court. Notice of Removal, ECF No. 1 at 1-4. The court denied Mr. Jara's motion to remand on June 6, 2011. 6/6/11 Order, ECF No. 30.
Defendants filed motions to dismiss the First Amended Complaint on June 28, 2011. Motion toDismiss (Aurora and MERS), ECF No. 33; Joinder and Motion (Cal Western), ECF No. 34. Mr. Jara did not file an opposition to either motion. Instead, on August 16, 2011, he filed a Second Amended Complaint (titled as a "First Amended Complaint in Federal Court"), which the court struck from the record because he had neither Defendants' consent nor the court's permission to file it. SAC, ECF No. 41; Order Striking Second Amended Complaint, ECF No. 43. The court's order did, though, allow Mr. Jara to file a motion for leave to file another amended complaint, and he did so on August 29, 2011. Order Striking Second Amended Complaint, ECF No. 43 at 3; Motion for Permission to File Amended Complaint, ECF No. 44. On September 30, 2011, the court granted Mr. Jara's motion for leave to file another amended complaint. 9/30/2011 Order, ECF No. 48. Mr. Jara then timely filed his Third Amended Complaint, which, as of now, is the operative complaint in this action. TAC, ECF No. 49.
Defendants now move to dismiss Mr. Jara's Third Amended Complaint. Motion (Aurora and MERS), ECF No. 50; Joinder and Motion (Cal Western), ECF No. 51. Mr. Jara opposes their motions. Aurora and MERS, but not Cal Western, filed a reply brief. Reply, ECF No. 64.
A court may dismiss a complaint under Federal Rule of Civil Procedure 12(b)(6) when it does not contain enough facts to state a claim to relief that is plausible on its face. See Bell Atlantic 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." Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (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.). Twombly, 550 U.S. at 555 ().
In considering a motion to dismiss, a court must accept all of the plaintiff's allegations as trueand construe them in the light most favorable to the plaintiff. See id. at 550; Erickson v. Pardus, 551 U.S. 89, 93-94 (2007); Vasquez v. Los Angeles County, 487 F.3d 1246, 1249 (9th Cir. 2007).
If the court dismisses the complaint, it should grant leave to amend even if no request to amend is 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) (quoting Cook, Perkiss and Liehe, Inc. v. Northern California Collection Serv. Inc., 911 F.2d 242, 247 (9th Cir. 1990)). But when a party repeatedly fails to cure deficiencies, the court may order dismissal without leave to amend. See Ferdik v. Bonzelet, 963 F.2d 1258, 1261 (9th Cir. 1992) ().
Mr. Jara's complaint contains six enumerated claims, but upon further review, it actually contains ten. His federal claims, and then his state claims, are addressed below.
In his first claim, Mr. Jara alleges that Cal Western violated the Federal Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692, when it "recorded a notice of default against the subject property without providing [him] the Debt Validation Notice required" by the statute and "demanded more money from [him] [than] was required by him by the modified note." TAC, ECF No. 49 at ¶ 16; see id. ¶¶ 13-18.4 Although he does not specify it, this allegation suggests a violation of 15 U.S.C. § 1692g(a), which provides that within five days of making initial contact with a debtor "in connection with the collection of any debt," a debt collector must send the debtor a written notice containing the amount of the debt, the name of the creditor, the time period in which the validity of the debt may be challenged, and instructions explaining how the debtor may obtain further evidenceof the debt and information about the creditor.
To state a claim under the FDCPA, "a plaintiff must allege facts that establish the following: (1) the plaintiff has been the object of collection activity arising from a consumer debt; (2) the defendant attempting to collect the debt qualifies as a 'debt collector' under the FDCPA; and (3) the defendant has engaged in a prohibited act or has failed to perform a requirement imposed by the FDCPA." Adesokan v. U.S. Bank, N.A., No. 11-cv-01236-LJO-SKO, 2011 WL 5341178, at *4 (E.D. Cal. Oct. 31, 2011) (citing Frazier v. Absolute Collection Serv., Inc., 767 F. Supp. 2d 1354, 1363 (N.D. Ga. 2011)).
Cal Western challenges Mr. Jara's claim on two grounds: (1) Cal Western is not a "debt collector" under the FDCPA; and (2) a non-judicial foreclosure does not qualify as a debt collection under the FDCPA.
First, Cal Western argues that Mr. Jara has not sufficiently alleged that it is a "debt collector" under the statute. The court agrees. A "debt collector" is defined, in relevant part, as:
any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another. . . . [T]he term includes any creditor who, in the process of collecting his own debts, uses any name other than his own which would indicate that a third person is collecting or attempting to collect such debts. For the purpose of section 1692f(6) of this title, such term also includes any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the enforcement of security interests.
15 U.S.C. § 1692a(6).5 In his Third Amended Complaint, Mr. Jara simply alleges that Cal Western "was retained as" and "was acting as" a debt collector within meaning of the FDCPA. TAC,...
To continue reading
Request your trial