Mejia v. EMC Mortg. Corp.
| Decision Date | 02 February 2012 |
| Docket Number | Case No. CV 09-4701 CAS (CFEx) |
| Court | U.S. District Court — Central District of California |
| Parties | ALBERTO MEJIA; ET AL. v. EMC MORTGAGE CORPORATION; ET AL. |
Present: The Honorable CHRISTINA A. SNYDER
Catherine M. Jeang
Deputy Clerk
Not Present
Court Reporter / Recorder
N/A
Tape No.
Attorneys Present for Plaintiffs:
Not Present
Attorneys Present for Defendants:
(filed 08/29/11)
On June 30, 2009, plaintiffs Alberto Mejia and Blanca Mejia filed the instant action against defendants EMC Mortgage Corporation ("EMC"), Escrow Spectrum Inc. ("Escrow Spectrum"), GreenPoint Mortgage ("GreenPoint"), JPMorgan Chase Bank, N.A. and Does 1 through 50.
EMC and JPMorgan Chase filed a motion to dismiss on August 4, 2009. On October 19, 2009, the Court granted defendants' motion to dismiss plaintiffs' complaint against EMC and JPMorgan Chase with leave to amend.
Plaintiffs filed a first amended complaint ("FAC") on November 25, 2009, alleging claims for: (1) violation of the Fair Housing Act ("FHA"), 42 U.S.C §§ 3601-3619; (2) violation of the Civil Rights Act ("CRA"), 42 U.S.C § 1981 and § 1982; (3) violation of the Equal Credit Opportunity Act ("ECOA"), 15 U.S.C § 1691; (4) violation of the Truth in Lending Act ("TILA"), 15 U.S.C § 1605 et seq.; (5) breach of contract; (6) breach of the implied covenant of good faith and fair dealing; and (7) fraud.
On February 22, 2010, the Court granted in part and denied in part defendants EMC and JPMorgan Chase's motion to dismiss plaintiff's FAC. Specifically, the Court dismissed plaintiffs' complaint against JPMorgan Chase in its entirety with prejudice. As to the claims against defendant EMC, the Court dismissed with prejudice plaintiffs' fourth, fifth and sixth claims for violations of TILA, breach of contract, and breach of the implied covenant of good faith and fair dealing. The Court dismissed plaintiffs' seventh claim for fraud against EMC with leave to amend. The Court denied defendants' motion to dismiss plaintiffs' first, second and third claims against EMC for violations of the FHA, CRA, and ECOA, respectively.
On March 9, 2010, plaintiffs filed a second amended complaint ("SAC") against existing defendants GreenPoint, EMC, and Escrow Spectrum, and added new defendants Capital One Financial Group ("Capital One"); Mortgage Electronic Registration Systems, Inc. ("MERS"), as nominee for GreenPoint and EMC in the county land of record; and Marin Conveyancing Corp. ("Marin Conveyancing"). In their SAC, plaintiffs realleged the existing seven claims. On March 26, 2010, EMC filed a motion to dismiss plaintiff's seventh claim for fraud. On April 9, 2010, Capital One, GreenPoint, Marin Conveyancing, and MERS filed a motion to dismiss plaintiffs' SAC in its entirety. On June 16, 2011, the Court granted EMC's motion to dismiss plaintiff's seventh claim for fraud with prejudice. The Court granted in part and denied in part defendants' Capital One, GreenPoint, Marin Conveyancing, and MERS' motion to dismiss. Specifically, the Court granted defendants' motion to dismiss all claims against Capital One, MERS, and Marin Conveyancing with prejudice. As to the first and third claims, for violations of FHA and ECOA, the Court denied defendants' motion to dismiss only as to GreenPoint. All other claims in the SAC were dismissed as to GreenPoint with prejudice.
On June 27, 2011, plaintiffs filed their motion for leave to file a third amended complaint ("TAC"), which the Court granted on August 10, 2011. Plaintiffs' filed their TAC against GreenPoint, MERS, Marin Conveyancing, EMC, JPMorgan Chase and Does 1-10. The TAC realleges the first, second, and third claims for violations of the FHA, CRA and ECOA, respectively. The TAC also alleges the following claims: fourth claim for violation of the Consumer Legal Remedies Act ("CLRA"), Cal. Civ. Code § 1750; fifth claim for violation of California's Unfair Competition Law ("UCL"), Cal. Bus. & Prof. Code § 17200, et seq.; sixth claim for violation of California's Rosenthal Fair Debt Collection Practices Act ("RFDCPA"); seventh claim for Civil Conspiracy; andeighth claim for violation of Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. § 1961.1
The real property that is the subject of this dispute is located at 243 Sunburst Lane, Corona, California 92879 (the "Property"). TAC ¶ 4. A Grant Deed was recorded on December 10, 2004, with the Riverside County Recorder's Office wherein plaintiffs were granted legal title to the Subject Property. Def. EMC's Request for Judicial Notice ("RJN"), Exh. 1. Plaintiffs allege that they applied for a mortgage loan from Greenpoint on November 10, 2005, which was approved in December 2005. TAC ¶¶ 13, 14.
Although the Deed of Trust ("DOT") indicates that the Subject Loan is subject to an adjustable rate rider, plaintiffs allege it was their belief that the loan was in the amount of $750,000 with a 2% fixed interest rate on a 30-year term. TAC ¶¶ 14-15. According to plaintiffs, sometime in 2006 EMC notified them that it had acquired the Subject Loan, and that sometime in October or November 2008, EMC asked plaintiffs for an increase in mortgage payments. Id. ¶ 14. After they received this notice, plaintiffs allegedly requested copies of the loan documents which went unanswered. Id. Instead, they received three different copies of the Truth in Lending Disclosure statements. Id. ¶ 16; Exhs. 5-7. Finally, plaintiffs allege that they are Hispanic, and therefore qualify as minority homeowners. Id. ¶ 4.
On August 24, 2011, defendants Capital One, GreenPoint, Marin Conveyancing and MERS (collectively, "Capital One Defendants") filed their motion to dismiss the TAC. On September 7, 2011, defendant JPMorgan Chase, on behalf of itself and as successor-in-interest to EMC, (collectively, "Chase") filed its motion to dismiss the TAC.
After hearing oral arguments on October 24, 2011, the Court granted plaintiffs seven days to file a supplement to the opposition to their TAC, which plaintiffs filed on October 28, 2011. The supplement contained four exhibits. Exhibits 14, 15 and 16 are written declarations by people who previously worked for defendants CHASE/EMC,filed in relation to an unrelated, ongoing class action suit. Exhibit 17 is a copy of a Loan Modification Agreement. On November 17, 2011, defendants Chase and Capital One Defendants filed responses to plaintiffs' supplement. These documents have now been reviewed and considered by the Court. After carefully considering the arguments set forth by both parties, the Court finds and concludes as follows.
A Rule 12(b)(6) motion tests the legal sufficiency of the claims asserted in a complaint. "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 Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). "[F]actual allegations must be enough to raise a right to relief above the speculative level." Id.
In considering a motion pursuant to Rule 12(b)(6), a court must accept as true all material allegations in the complaint, as well as all reasonable inferences to be drawn from them. Pareto v. F.D.I.C., 139 F.3d 696, 699 (9th Cir. 1998). The complaint must be read in the light most favorable to the nonmoving party. Sprewell v. Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 2001); Parks Sch. of Bus., Inc. v. Symington, 51 F.3d 1480, 1484 (9th Cir. 1995). However, Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 1950 (2009); Moss v. United States Secret Service, 572 F.3d 962, 969 (9th Cir. 2009) () (citing Twombly and Iqbal); Sprewell, 266 F.3d at 988; W. Mining Council v. Watt, 643 F.2d 618, 624 (9th Cir. 1981). Ultimately, "[d]etermining 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." Iqbal, 129 S.Ct. at 1950.
Furthermore, unless a court converts a Rule 12(b)(6) motion into a motion for summary judgment, a court cannot consider material outside of the complaint (e.g., facts presented in briefs, affidavits, or discovery materials). In re American Cont'l Corp./Lincoln Sav. & Loan Sec. Litig., 102 F.3d 1524, 1537 (9th Cir. 1996), rev'd on other grounds sub nom Lexecon, Inc. v. Milberg Weiss Bershad Hynes & Lerach, 523 U.S. 26 (1998). A court may, however, consider exhibits submitted with or alleged in the complaint and matters that may be judicially noticed pursuant to Federal Rule of Evidence 201. In re Silicon Graphics Inc. Sec. Litig., 183 F.3d 970, 986 (9th Cir. 1999); Lee v. City of Los Angeles, 250 F.3d 668, 689 (9th Cir. 2001).
For all of these reasons, it is only under extraordinary circumstances that dismissal is proper under Rule 12(b)(6). United States v. City of Redwood City, 640 F.2d 963, 966 (9th Cir. 1981).
As a general rule, leave to amend a complaint which has been dismissed should be freely...
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