Justo v. Charter Capital Corp., Case No.: 5:11-CV-00670 EJD
| Decision Date | 02 February 2012 |
| Docket Number | Case No.: 5:11-CV-00670 EJD |
| Parties | REGGIE F. JUSTO, ET. AL. Plaintiffs, v. CHARTER CAPITAL CORPORATION, ET. AL. Defendants. |
| Court | U.S. District Court — Northern District of California |
Presently before the court are three motions filed by Aurora Loan Services, LLC ("Aurora"); Aurora Bank FSB f/k/a Lehman Brothers Bank, FSB ("Aurora Bank"); Mortgage Electronic Registration Systems, Inc. ("MERS"); Michelle Saito; and Charter Capital Corporation dba First Charter Capital Group, Inc. ("Charter Capital") (collectively, "Defendants") to dismiss pro se Plaintiffs Reggie F. Justo and Lorna G. Justo's ("Plaintiffs") First Amended Complaint ("FAC") after their original Complaint was dismissed with leave to amend. See Docket Item Nos. 36, 38, 39.
Having reviewed the parties' submissions, the court found this matter appropriate for decision without oral argument and previously vacated the associated hearing date. Civil L.R. 7- 1(b). For the reasons explained below, the court grants Defendants' motions to dismiss.1
In November 2005, Plaintiffs entered into a "loan repayment and security agreement" with Defendant Charter Capital, which required them to repay a loan of $547,000 secured by a mortgage on Plaintiffs' real property, located in Waianae, Hawaii.2 See Notice of Removal, at Ex. 2, Docket Item No. 1-2; see also Request of Judicial Notice in Support of Motion to Dismiss ("RJN"), at Ex. A-D, Docket Item No. 41-1. Plaintiffs allege that the contract to the loan agreement was executed and signed within the County of Santa Clara, California. See Docket Item No. 1-2 ¶ 18. However, the recorded Mortgage indicates Plaintiff Lorna Justo signed the document in Hawaii. See Docket Item No. 41-1 at 15.
Eventually, Plaintiffs defaulted on the loan and a "Notice of Mortgagee's Intention to Foreclose Under Power of Sale" was recorded on August 17, 2009. See Docket Item No. 41-1 at 30. On October 16, 2009, the property was sold at foreclosure to Aurora and a "Mortgagee's Affidavit of Foreclosure Sale Under Power of Sale" was recorded on November 12, 2009. Id. at 34-35. On December 18, 2009, a "Mortgagee's Grant Deed Pursuant to Power of Sale" was recorded. Id. at 61.
In December 2010, Plaintiffs filed a pro se complaint ("Complaint") in Santa Clara County Superior Court, purporting to set forth twenty-nine causes of action against Aurora, Aurora Bank, MERS, Michelle Saito, and Charter Capital. See Docket Item No. 1-2. In the Complaint, Plaintiffs assert federal causes of action under the Truth in Lending Act ("TILA"), the Code of Federal Regulations, the Fair and Accurate Credit Transactions Act ("FACTA"), and the Real EstateSettlement Procedures Act ("RESPA"), as well as numerous California statutory and common law causes of action. Id. On February 14, 2011, Defendants Aurora, Aurora Bank, and MERS removed the action to this District pursuant to 28 U.S.C. § 1331 and 28 U.S.C. § 1441(b). See Docket Item No. 1.
On January 22, 2011, Defendants Aurora, Aurora Bank, and MERS filed a motion to dismiss the Complaint for improper venue or, alternatively, for failure to state a claim. See Docket Item No. 6. On March 1, 2011, Defendant Michelle Saito filed a motion to dismiss the Complaint for lack of personal jurisdiction. See Docket Item No. 10. On March 15, 2011, Defendant Charter Capital filed a motion to dismiss the Complaint on the grounds of improper venue and failure to state a claim. See Docket Item No. 11.
Pursuant to Civ. L.R. 7-3(a), Plaintiffs' opposition or statement of non-opposition to the motion to dismiss was due no later than April 21, 2011, but was not filed by that date.3 On June 28, 2011 this court granted Defendants' three motions to dismiss based on Plaintiffs' failure to file a timely opposition. See Docket Item No. 29. The court dismissed the action while affording Plaintiffs an opportunity to amend the Complaint. On June 28, 2011 Plaintiffs filed three opposition briefs. See Docket Items Nos. 30, 31, 32.
On July 19, 2011, Plaintiffs filed their First Amended Complaint ("FAC"), purporting to set forth nine causes of action, all of which are California statutory and common law causes of action. See Docket Item No. 35. In the FAC, Plaintiffs mention federal causes of action under TILA and RESPA, but they are not set forth as separate causes of action. Plaintiffs' FAC did not remedy any of the deficiencies of their original Complaint.
On July 28, 2011, Defendant Michelle Saito filed a motion to dismiss the FAC for lack of personal jurisdiction. See Docket Item No. 36. On August 2, 2011, Defendant Charter Capital filed a motion to dismiss the FAC for failure to state a claim. See Docket Item No. 38. On August 4, 2011, Defendants Aurora, Aurora Bank, and MERS filed a motion to dismiss the FAC forimproper venue, or alternatively, for failure to state a claim, and a motion to dismiss claims for failure to allege the circumstances with particularity. See Docket Item No. 39.
Pursuant to Civ. L.R. 7-3(a), Plaintiffs' opposition or statement of non-opposition to the motion to dismiss was due no later than August 18, 2011, however, Plaintiffs did not file oppositions until January 3, 2012.4 See Docket Item Nos. 46, 47, 48. Defendant Michelle Saito filed a reply to Plaintiffs' opposition on January 6, 2012. See Docket Item No. 49. Defendants Aurora and Charter Capital filed replies to Plaintiffs' opposition on January 10, 2011. See Docket Item Nos. 50, 51.
A party may bring a motion asking the court to dismiss the action for improper venue pursuant to Federal Rule of Civil Procedure 12(b)(3). It is the plaintiff's burden to show that venue is proper. See Piedmont Label Co. v. Sun Garden Packing Co., 598 F.2d 491, 496 (9th Cir. 1979). When venue is improper, the court "shall dismiss, or if it be in the interest of justice, transfer such case to any district or division in which it could have been brought." 28 U.S.C. § 1406(a). Dismissal, rather than transfer, may be appropriate where the transfer would not be "in the interest of justice." See King v. Russell, 963 F.2d 1301, 1304 (9th Cir. 1992).
On a motion to dismiss pursuant to Rule 12(b)(3), "the pleadings need not be accepted as true, and the court may consider facts outside of the pleadings." Murphy v. Schneider National, Inc., 362 F.3d 1133, 1137 (9th Cir. 2004) (citations omitted). Nonetheless, the court must draw all reasonable inferences in favor of the non-moving party. Id. at 1138. The court may properly take judicial notice of facts which are "not subject to reasonable dispute" because they are generally known within the jurisdiction of the court or capable of verification by reliable sources. Fed. R. Evid. 201(b).
Furthermore, Federal Rule of Civil Procedure 8(a) requires a plaintiff to plead each claim with sufficient specificity to "give the defendant fair notice of what the . . . claim is and thegrounds upon which it rests." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007) (internal quotations omitted). Moreover, the factual allegations "must be enough to raise a right to relief above the speculative level" such that the claim "is plausible on its face." Id. at 555, 570. A complaint may be dismissed if it fails to state a claim upon which relief can be granted. Fed. R. Civ. P. 12(b)(6). "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.'" Ashcroft v. Iqbal, 556 U.S. 662, 129 S. Ct. 1937, 1949 (2009) (internal citations omitted). "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." Id. Recitals of the elements of a cause of action and conclusory allegations are insufficient. Id.
In considering the sufficiency of a claim, the court must accept as true all of the factual allegations contained in the complaint. Id. However, the court is not required to accept as true legal conclusions cast in the form of factual allegations. Twombly, 550 U.S. at 555.
If a court grants a motion to dismiss, leave to amend should be granted unless the pleading could not possibly be cured by the allegation of other facts. Lopez v. Smith, 203 F.3d 1122, 1130 (9th Cir. 2000). If amendment would be futile, however, a dismissal may be ordered with prejudice. Dumas v. Kipp, 90 F.3d 386, 393 (9th Cir.1996) (quotation omitted). As the Supreme Court has held, repeated failure to cure deficiencies in a complaint is reason enough to deny leave to amend. See Foman v. Davis, 371 U.S. 178, 182 (1962); see also Abagninin v. AMVAC Chem. Corp., 545 F.3d 733, 742 (9th Cir. 2008).
Defendants argue that venue is improper and ask the Court to dismiss the FAC in its entirety pursuant to Rule 12(b)(3), or in the alternative to transfer this case to the District of Hawaii. See Docket Item Nos. 36, 38, 39. Defendants argue that the "local action doctrine" controls because real property is involved. The local action doctrine requires actions involving realproperty to be brought in the state where the property is located.5 See Prawoto v. PrimeLending , 720 F.Supp.2d 1149, 1157 (C.D. Cal. 2010); United States v. Byrne, 291 F.3d 1056, 1060 (9th Cir. 2002) (). A "plaintiff seeking rescission of her mortgage in order to avoid foreclosure [is] subject to the local action doctrine." Fowler v. Wells Fargo Bank, N.A., 2011 WL 175506, at *3 (N.D. Cal. Jan. 18, 2011). That a complaint "seeks money damages does not undermine the conclusion that the action is local." Prawoto, 720 F.Supp.2d at 1158.
In the instant case, the real property at...
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