Quinto v. JPMorgan Chase Bank
| Decision Date | 30 November 2011 |
| Docket Number | Case No.: 11 -cv-02920-LHK |
| Parties | URSULA Q. QUINTO, an individual, Plaintiff, v. JPMORGAN CHASE BANK, a National Association F/K/A WASHINGTON MUTUAL BANK; CALIFORNIA RECONVEYANCE COMPANY, a California Corporation; and DOES 1 through 50, inclusive, Defendants. |
| Court | U.S. District Court — Northern District of California |
Plaintiff Ursula Quinto ("Plaintiff") brings this action based on a loan obtained in 2007 secured by a deed of trust encumbering certain real property, and on the subsequent foreclosure proceedings instituted against her. Defendants JPMorgan Chase Bank, N.A. ("JPMorgan Chase") and California Reconveyance Company ("California Reconveyance") (collectively "Defendants") move pursuant to Federal Rule of Civil Procedure 12(b)(6) to dismiss all twenty-six claims for relief in Plaintiff's Complaint on the grounds that the Complaint (1) is barred under res judicata; (2) fails to state a claim upon which relief can be granted; and (3) fails to allege the fraud-based claims with particularity as required by Federal Rule of Civil Procedure 9(b). See ECF No. 14. Plaintiff opposes this motion. See ECF No. 18. The Court finds this matter appropriate for resolution without oral argument pursuant to Civil Local Rule 7-1(b) and hereby VACATES thehearing and case management conference scheduled for December 1, 2011. Having considered the parties' submissions and the relevant law, the Court hereby GRANTS Defendants' motion to dismiss with prejudice.
On January 9, 2007, Plaintiff purchased her home at 1367 King Road, San Jose, CA (the "Subject Property") with a $545,600.00 loan from Washington Mutual Bank ("Washington Mutual"), secured by a deed of trust, with California Reconveyance Company ("California Reconveyance") serving as trustee. See Compl. ¶ 2; Compl. Ex. 1. The deed of trust was recorded in the Santa Clara County Recorder's Office on January 18, 2007. See Compl. Ex. 1. On July 18, 2008, Washington Mutual assigned the deed of trust and all beneficial interest thereunder to LaSalle Bank N.A. ("LaSalle Bank") as trustee for WaMu Mortgage Pass-Through Certificates Series 2007-HY3 ("WaMu Trust"). Compl. Ex. 3; Request for Judicial Notice ("RJN") Ex. 2. That same day, LaSalle Bank as trustee for the WaMu Trust substituted Quality Loan as trustee, see Compl. Ex. 6, who then promptly issued and recorded on July 21, 2008 a notice of default and election to sell under the deed of trust, indicating that Plaintiff was $12,125.95 in arrears, see RJN Ex. 1.
In September 2008, Washington Mutual was closed by the Office of Thrift Supervision ("OTS), and FDIC was appointed as receiver. RJN Ex. 6. On September 25, 2008, the FDIC allocated Washington Mutual's assets and liabilities in accordance with the purchase and assumption agreement entered into between the FDIC and JPMorgan Chase. See RJN Ex. 5. A notice of trustee's sale was recorded by Quality Loan on October 23, 2008, and sale was set for November 12, 2008. See Compl. Ex. 3; RJN Ex. 3. Plaintiff, however, subsequently entered into aloan modification agreement with JPMorgan Chase, the new beneficiary, on December 1, 2008, which was recorded May 18, 2009. See Compl. Ex. 4; RJN Ex. 7. The foreclosure sale therefore never took place, and a notice of rescission of the first notice of default was recorded on April 8, 2009. RJN Ex. 4.
The loan modification agreement provided that the loan would continue to be serviced under the name "Washington Mutual" with a modified principal balance of $578,690.59 to be reamortized over 458 months. See Compl. Ex. 4 at 3. The loan modification agreement also included a clause waiving any claims the borrower might have against JPMorgan Chase related to the loan origination or any foreclosure or power of sale proceedings conducted prior to the date of the agreement. See Compl. Ex. 4 at 4-5. Plaintiff again defaulted under the terms of the modified loan, and a second notice of default and election to sell under deed of trust, indicating arrears of $10,701.91, was recorded on June 18, 2009 by California Reconveyance as trustee. Compl. Ex. 5; RJN Ex. 8. A notice of trustee's sale was recorded by California Reconveyance on September 23, 2009, setting a public sale on October 13, 2009, and listing an estimated unpaid balance of $614,896.50. Compl. Ex. 8; RJN Ex. 9.
Plaintiff, proceeding pro se, filed a complaint in Santa Clara County Superior Court on October 28, 2010, bringing twenty-four claims against defendants JPMorgan Chase and California Reconveyance. Plaintiff alleged violations of the Truth in Lending Act, 15 U.S.C. § 1601 et seq. ("TILA"), the Real Estate Settlement Procedures Act, 12 U.S.C. §§ 2601, et seq., and related state-law claims, including wrongful foreclosure under California Civil Code §§ 2924, et seq. See RJN Ex. 10. Defendants removed the case to federal court on December 22, 2010 based upon federal question jurisdiction, and moved to dismiss. See RJN Exs. 11, 12. The district court granted the motion to dismiss for failure to state a claim, but granted leave to amend. See Quinto v. JPMorgan Chase Bank, Case No. 10-cv-05845-JF, 2011 WL 809314 (N.D. Cal. Mar. 2, 2011) ("Quinto I"); RJN Ex. 13. Plaintiff did not file an amended complaint by the March 22, 2011 deadline, and after a hearing on March 25, 2011, at which Plaintiff failed to appear, the district court dismissed the case for failure to prosecute, and closed the file on March 31, 2011. See RJN Exs. 14, 15.
Plaintiff untimely attempted to file a first amended complaint (FAC) on April 8, 2011. The district court issued an order on April 27, 2011 noting that, because the case was closed on March 31, 2011, Plaintiff's purported FAC had no legal effect. The order further advised Plaintiff that her only recourse to seek relief from dismissal of her action was to file a motion under Federal Rule of Civil Procedure 60(b). See RJN Ex. 15; Fed. R. Civ. P. 60(b) (). Plaintiff failed to file a Rule 60(b) motion.
Instead, Plaintiff filed a copy of her FAC with the Santa Clara County Superior Court on May 3, 2011, initiating the instant suit. See ECF No. 1. The first 181 paragraphs of the operative Complaint are nearly a word-for-word copy of the original complaint filed in the previously dismissed first action, alleging the same twenty-four claims against the same Defendants. Compare Compl. with RJN Ex. 10. The operative Complaint, however, also includes two additional claims not previously raised. The twenty-fifth claim, brought under California Civil Code § 2932.5, alleges wrongful foreclosure resulting from the September 23, 2009 Notice of Trustee's Sale, wherein JPMorgan is named as beneficiary, because notice of assignment of the deed of trust to JPMorgan was never recorded. Compl. ¶¶ 186-90. The twenty-sixth cause of action, brought under California Civil Code § 2934a, alleges that by virtue of the August 25, 2008 substitution of trustee, Quality Loan, not California Reconveyance, was the proper trustee at the time California Reconveyance filed the second Notice of Trustee's Sale on September 23, 2009, resulting in wrongful foreclosure. Id. ¶¶ 193-99.
On June 14, 2011, Defendants removed the case on the basis of federal question jurisdiction, and on August 17, 2011, Defendants brought the motion to dismiss now before the Court. See ECF No. 14. On August 31, 2011, Plaintiff filed the same opposition she had filed in the prior suit, with only minor formatting changes, see ECF No. 18, and Defendant filed a reply on September 8, 2011, see ECF No. 19.
Pursuant to Federal Rule of Civil Procedure 12(b)(6), a defendant may move to dismiss an action for failure to allege "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). Ashcroft v. Iqbal, 556 U.S. 662, 129 S. Ct. 1937, 1949 (2009) (internal citations omitted). For purposes of ruling on a Rule 12(b)(6) motion, the Court "accept[s] factual allegations in the complaint as true and construe[s] the pleadings in the light most favorable to the non-moving party." Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008). Moreover, pro se pleadings are to be construed liberally. Boag v. MacDougall, 454 U.S. 364, 365 (1982) (per curiam); Hughes v. Rowe, 449 U.S. 5, 9 (1980); Resnick v. Hayes, 213 F.3d 443, 447 (9th Cir. 2000).
Nonetheless, the Court need not accept as true allegations contradicted by judicially noticeable facts, and the "[C]ourt may look beyond the plaintiff's complaint to matters of public record" without converting the Rule 12(b)(6) motion into one for summary judgment. Shaw v. Hahn, 56 F.3d 1128, 1129 n.1 (9th Cir.), cert. denied, 516 U.S. 964 (1995); see Van Buskirk v. Cable News Network, Inc., 284 F.3d 977, 980 (9th Cir. 2002). Nor is the Court required to "'assume the truth of legal conclusions merely because they are cast in the form of factual allegations.'" Fayer v. Vaughn, 649 F.3d 1061, 1064 (9th Cir. 2011) (quoting W. Mining Council v. Watt, 643 F.2d 618, 624 (9th Cir. 1981)). Mere "conclusory allegations of law and unwarranted inferences are insufficient to defeat a motion to dismiss." Adams v. Johnson, 355 F.3d 1179, 1183 (9th Cir. 2004) (internal quotation marks and citations omitted); accord Iqbal, 129 S. Ct. at 1950.
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