Oliver v. U.S. Bank, N.A.
| Decision Date | 22 June 2012 |
| Docket Number | Case No.: 11-CV-04300-LHK |
| Parties | FRANK OLIVER and ANDREA OLIVER, Plaintiffs, v. U.S. BANK, N.A.; DOWNEY SAVINGS AND LOAN ASSOCIATION, F.A.; and DSL SERVICE COMPANY, Defendants. |
| Court | U.S. District Court — Northern District of California |
TO DISMISS; GRANTING U.S. BANK'S
On October 3, 2011, Defendants U.S. Bank National Association ("U.S. Bank") as Successor in Interest to the Federal Deposit Insurance Corporation ("FDIC") as Receiver of Downey Savings and Loan Association, F.A. ("Downey"), and DSL Service Company ("DSL") (collectively, "Defendants"), filed a motion to dismiss Plaintiffs' complaint pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6) . ECF No. 6 ("U.S. Bank's Mot."). Pursuant to the Civil Local Rule 7-3, Plaintiffs' opposition was required to be filed by October 17, 2011. However, Plaintiff did not file an opposition until October 27, 2011. ECF No. 11. On November 3, 2011, Defendants filed a reply. ECF No. 14. On November 22, 2011, the case was reassigned from Magistrate Judge Grewal to the undersigned judge. ECF No. 18.
On December 22, 2011, the FDIC, as Receiver for Downey, filed a separate motion to dismiss Plaintiffs' complaint for lack of subject matter jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(1) or, in the alternative, for summary judgment pursuant to Federal Rule ofCivil Procedure 56. ECF No. 20. Plaintiffs did not oppose the FDIC's motion. See ECF No. 25. However, the FDIC is not a party to this action, and the FDIC has not moved to substitute itself as a party in interest for Downey pursuant to Federal Rule of Civil Procedure 25(c). Fed. R. Civ. P. 25(c) ( ) (emphasis added). Thus, as a non-party, the FDIC does not have standing to bring this motion. Accordingly, the FDIC's motion is DENIED without prejudice.
Pursuant to Civil Local Rule 7-1(b), the Court finds U.S. Bank's motion appropriate for determination without oral argument. Accordingly, the Defendants' motion to dismiss hearing and case management conference set for June 28, 2012, are hereby VACATED. Having considered the parties' briefing and the relevant law, the Court GRANTS U.S. Bank's motion to dismiss for the reasons explained below.
This action arises out of a residential mortgage transaction.1 In 1999, Plaintiffs obtained a loan from Downey (the "Loan"), and purchased their home located at 1101 McBain Avenue,Campbell, California (the "Property"). Compl. ¶ 34. On or about December 23, 2005, Plaintiffs refinanced their loan with Downey, obtaining a new loan in the amount of $637,500.00 (the "Refinanced Loan"). Compl. ¶ 38; M-S Decl. Ex. 1. The Refinanced Loan listed DSL as the "Trustee" and Downey as the "Lender." M-S Decl. Ex. 1, at1-2. The Refinanced Loan was secured by a deed of trust ("DoT") recorded in the Santa Clara County Recorder's Office on January 6, 2006. Id. at 1.
On November 21, 2008, the Office of Thrift Supervision ("OTS") closed Downey and appointed the FDIC as receiver for Downey. Compl. ¶ 43; see also Determination of Insufficient Assets To Satisfy Claims Against Financial Institution in Receivership ("FDIC Determination"), 75 Fed. Reg. 45,114, 45,114 (Aug. 2, 2010). On November 21, 2008, the FDIC facilitated a transaction whereby U.S. Bank acquired Downey's deposits and most of Downey's assets. Compl. ¶ 67; FDIC Determination, 75 Fed. Reg. at 45,114. According to the complaint, U.S. Bank acquired "servicing rights . . . regarding the pools of [Downey] assets." See Compl. ¶ 68. The FDIC determined that the assets of Downey were insufficient "to make any distribution to general unsecured claims," and therefore that "such claims will recover nothing and have no value." FDIC Determination, 75 Fed. Reg. at 45,114 (citing 12 U.S.C. § 1821(d)(11)(A)); see also Compl. ¶ 43.
By 2008, Compl. ¶ 45. Sometime in early 2010, Plaintiffs defaulted on the Refinanced Loan. Compl. ¶ 36; M-S Decl. Ex. 2. In March 2009, Plaintiffs contacted U.S. Bank in an attempt to obtain a modification of their Refinanced Loan. Compl. ¶¶ 46-49. On or about April 23, 2010, Plaintiffs received a notice of default, which was recorded in the Santa Clara County Recorder's Office on April 26, 2010. Compl. ¶ 77; M-S Decl. Ex. 2. On or about July 27,2010, Plaintiffs received a notice of trustee's sale, which was recorded in the Santa Clara County Recorder's Office on July 28, 2010. Compl. ¶¶ 47-48; see also M-S Decl. Ex. 3.
On August 30, 2011, Plaintiffs, proceeding pro se, filed the instant complaint. ECF No. 1.2 The complaint alleges fifteen claims,3 seven of which arise under federal law. Id. The first six claims allege that various California statutes violate the United States Constitution. Compl. 3, 20, 108. Claim 9 alleges unfair debt collection practices and predatory lending under, inter alia, the Federal Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. §§ 1692, et seq.; the Real Estate Settlement Procedures Act ("RESPA"), 12 U.S.C. §§ 2601-2617, and the Truth in Lending Act ("TILA"), 15 U.S.C. §§ 1601, et seq.4 Compl. ¶¶ 169, 187.
Plaintiffs also allege the following state law claims: (7) injunctive relief under Cal. Bus. & Prof. Code § 17203; (8) accounting; (9) unfair debt collection practices and predatory lending under California's Rosenthal Fair Debt Collection Act, Cal. Civ. Code §§ 1788, et seq. and Cal. Fin. Code §§ 22340, 33560(c); (10) declaration that no valid contract exists; (11) slander of title; (12) fraud or negligent misrepresentation; (13) quiet title; (15) breach of contract;5 and (16) negligence.
Rule 8 states that a civil complaint "must contain . . . a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). The Supreme Court has interpreted the "short and plain statement" requirement to mean that the complaint must provide "the defendant [with] fair notice of what the . . . claim is and the grounds upon which it rests." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957).
A motion to dismiss for failure to state a claim under Rule 12(b)(6) tests the legal sufficiency of a complaint. Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). In considering whether the complaint is sufficient to state a claim, the Court must accept as true all of the factual allegations contained in the complaint. Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009). In addition, pro se pleadings are liberally construed. See Haines v. Kerner, 404 U.S. 519, 520-21, 92 S. Ct. 594, 595-96 (1972); Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1988). However, the Court need not accept as true "allegations that contradict matters properly subject to judicial notice or by exhibit" or "allegations that are merely conclusory, unwarranted deductions of fact, or unreasonable inferences." In re Gilead Scis. Secs. Litig., 536 F.3d 1049, 1055 (9th Cir. 2008) (citation omitted). While a complaint need not allege detailed factual allegations, it "must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Iqbal, 129 S. Ct. at 1949 (quoting Bell Atl. Corp., 550 U.S. at 570). A claim is facially plausible when it "allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id.
As the Ninth Circuit has stated, "[a] claim may be dismissed under Rule 12(b)(6) on the ground that it is barred by the applicable statute of limitations only when "the running of the statuteis apparent on the face of the complaint." Von Saher v. Norton Simon Museum of Art at Pasadena, 592 F.3d 954, 969 (9th Cir. 2010) (en banc) (citing Huynh v. Chase Manhattan Bank, 465 F.3d 992, 997 (9th Cir. 2006)), cert. denied, 131 S. Ct. 3055 (2011). A "complaint cannot be dismissed unless it appears beyond doubt that the plaintiff can prove no set of facts that would establish the timeliness of the claim." Id. (internal citations and quotations omitted).
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). A court "may exercise its discretion to deny leave to amend due to 'undue delay, bad faith or dilatory motive on part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party . . . , [and] futility of amendment.'" Carvalho v. Equifax Info. Servs., LLC, 629 F.3d 876, 892-93 (9th Cir. 2010) (quoting Foman v. Davis, 371 U.S. 178, 182 (1962)); see also Abagninin v. AMVAC Chem. Corp., 545 F.3d 733, 742 (9th Cir. 2008) ().
As discussed below, the Court dismisses Plaintiffs' federal claims under the U.S. Constitution, FDCPA, RESPA, and TILA without prejudice. The Court addresses each of these claims in turn. The Court declines to exercise supplemental jurisdiction over Plaintiffs' state law claims.
As stated above, Plaintiffs' first six claims allege that various California statutes violate the United States Constitution. Compl. ¶¶ 3, 20, 108. Specifically, Claims 1, 5, and 6...
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