Saldate v. Wilshire Credit Corp.

• Decision Date: 18 February 2010
• Docket Number: Case No. CV F 09-2089 LJO SMS.
• Parties: George A. SALDATE, Jr., Plaintiff, v. WILSHIRE CREDIT CORPORATION, et al., Defendants.
• Court: U.S. District Court — Eastern District of California

686 F.Supp.2d 1051

George A. SALDATE, Jr., Plaintiff, v. WILSHIRE CREDIT CORPORATION, et al., Defendants.

Case No. CV F 09-2089 LJO SMS.

United States District Court, E.D. California.

February 18, 2010.

Sharon L. Lapin, Law Office of Sharon L. Lapin, Greenbrae, CA, for Plaintiff.

David Christopher Scott, Matthew Brian Duarte, McCarthy & Holthus, LLP, San Diego, CA, for Defendants.

ORDER ON DEFENDANT QUALITY LOAN SERVICE CORPORATION'S F.R.Civ.P. 12 MOTION TO DISMISS (Doc. 21.)

LAWRENCE J. O'NEILL, District Judge.

INTRODUCTION

Defendant deed of trust trustee Quality Loan Service Corporation ("Quality") seeks to dismiss as meritless and conclusory plaintiff George A. Saldate, Jr.'s ("Mr. Saldate's") California common law and statutory claims arising from foreclosure of a "residential mortgage" on his Fresno property ("property"). Mr. Saldate filed no papers to oppose Quality's dismissal. This Court considered Quality's F.R.Civ.P. 12(b)(6) motion to dismiss on the record and VACATES the March 2, 2010 hearing, pursuant to Local Rule 230(c), (g). For the reasons discussed below, this Court DISMISSES this action against Quality.

BACKGROUND

Mr. Saldate's Property Loan And Default

On November 4, 2005, Mr. Saldate obtained a $134,000 loan secured by a deed of trust on the property and which was recorded on November 22, 2005.¹

After Mr. Saldate failed to make payments on the loan, a notice of default and election to sell under deed of trust was recorded on March 6, 2009. Thereafter, Quality was substituted as the deed of trust trustee.

On June 10, 2009 with Mr. Saldate's continuing loan default, Quality recorded a notice of trustee's sale for the property, but the sale was postponed.

Mr. Saldate's Claims

On December 1, 2009, Mr. Saldate filed his complaint ("complaint") to allege statutory and common law claims (addressed in greater detail below) arising from Quality and other defendants' "negligent, fraudulent and unlawful conduct concerning a residential mortgage loan transaction with the Plaintiff." The complaint alleges that Quality and other defendants "developed a scheme to rapidly infuse capital into the home mortgage lending system by selling mortgages on the secondary market, normally three to five times, to create a bankruptcy remote transaction." According to the complaint, "no legal transfer of the Mortgage Note, Deed of Trust or any other interest in Plaintiff's Property was ever effected that gave any of the Defendants the right to be named a trustee, mortgagee, beneficiary or an authorized agent of trustee, mortgagee or beneficiary of Plaintiff sic Mortgage Note, Deed of Trust of any other interest in Plaintiff's Property." The complaint further alleges that moving and other defendants "are not the real parties in interest because they are not the legal trustee, mortgagee or beneficiary, nor are they authorized agents of the trustee, mortgagee or beneficiary, nor are they in possession of the Note, or holders of the Note, or non-holders of the Note entitled to payment."

The complaint seeks an injunction on "collecting on the subject Loan and from causing the Property to be sold" and compensatory, statutory and punitive damages.

DISCUSSION

F.R.Civ.P. 12(b)(6) Standards

Quality seeks to dismiss this action based on the complaint's "sweeping legal conclusions" without "concrete factual allegations" to demonstrate wrongful foreclosure of the property or that Mr. Saldate "is entitled to relief."

A F.R.Civ.P. 12(b)(6) motion to dismiss is a challenge to the sufficiency of the pleadings set forth in the complaint. "When a federal court reviews the sufficiency of a complaint, before the reception of any evidence either by affidavit or admissions, its task is necessarily a limited one. The issue is not whether a plaintiff will ultimately prevail but whether the claimant is entitled to offer evidence to support the claims." Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 40 L.Ed.2d 90 (1974); Gilligan v. Jamco Development Corp., 108 F.3d 246, 249 (9th Cir.1997). A F.R.Civ.P. 12(b)(6) dismissal is proper where there is either a "lack of a cognizable legal theory" or "the absence of sufficient facts alleged under a cognizable legal theory." Balistreri v. Pacifica Police Dept., 901 F.2d 696, 699 (9th Cir.1990); Graehling v. Village of Lombard, Ill., 58 F.3d 295, 297 (7th Cir.1995).

In resolving a F.R.Civ.P. 12(b)(6) motion, a court must: (1) construe the complaint in the light most favorable to the plaintiff; (2) accept all well-pleaded factual allegations as true; and (3) determine whether plaintiff can prove any set of facts to support a claim that would merit relief. Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336, 337-338 (9th Cir.1996). Nonetheless, a court is not required "to accept as true allegations that are merely conclusory, unwarranted deductions of fact, or unreasonable inferences." In re Gilead Sciences Securities Litig., 536 F.3d 1049, 1055 (9th Cir.2008) (citation omitted). A court need not permit an attempt to amend if "it is clear that the complaint could not be saved by an amendment." Livid Holdings Ltd. v. Salomon Smith Barney, Inc., 416 F.3d 940, 946 (9th Cir.2005). "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 Atl. Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 1964-65, 167 L.Ed.2d 929 (2007) (internal citations omitted). Moreover, a court "will dismiss any claim that even when construed in the light most favorable to plaintiff, fails to plead sufficiently all required elements of a cause of action." Student Loan Marketing Ass'n v. Hanes, 181 F.R.D. 629, 634 (S.D.Cal.1998). In practice, "a complaint . . . must contain either direct or inferential allegations respecting all the material elements necessary to sustain recovery under some viable legal theory." Twombly, 550 U.S. at 562, 127 S.Ct. at 1969 (quoting Car Carriers, Inc. v. Ford Motor Co., 745 F.2d 1101, 1106 (7th Cir.1984)).

In Ashcroft v. Iqbal, ___ U.S. ___, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009), the U.S. Supreme Court recently explained:

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." . . . 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. . . . 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. (Citations omitted.)

The U.S. Supreme Court applies a "twoprong approach" to address a motion to dismiss:

First, the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions. Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice. . . . Second, only a complaint that states a plausible claim for relief survives a motion to dismiss.... Determining 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. . . . But where the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged—but it has not "shown"-"that the pleader is entitled to relief." Fed. Rule Civ. Proc. 8(a)(2).

In keeping with these principles a court considering a motion to dismiss can choose to begin by identifying pleadings that, because they are no more than conclusions, are not entitled to the assumption of truth. While legal conclusions can provide the framework of a complaint, they must be supported by factual allegations. When there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief.

Ashcroft, ___ U.S. ___, 129 S.Ct. at 1949-1950.

For a F.R.Civ.P. 12(b)(6) motion, a court generally cannot consider material outside the complaint. Van Winkle v. Allstate Ins. Co., 290 F.Supp.2d 1158, 1162, n. 2 (C.D.Cal.2003). Nonetheless, a court may consider exhibits submitted with the complaint. Van Winkle, 290 F.Supp.2d at 1162, n. 2. In addition, a "court may consider evidence on which the complaint `necessarily relies' if: (1) the complaint refers to the document; (2) the document is central to the plaintiff's claim; and (3) no party questions the authenticity of the copy attached to the 12(b)(6) motion." Marder v. Lopez, 450 F.3d 445, 448 (9th Cir.2006). A court may treat such a document as "part of the complaint, and thus may assume that its contents are true for purposes of a motion to dismiss under Rule 12(b)(6)." United States v. Ritchie, 342 F.3d 903, 908 (9th Cir.2003). Such consideration prevents "plaintiffs from surviving a Rule 12(b)(6) motion by deliberately omitting reference to documents upon which their claims are based." Parrino v. FHP, Inc., 146 F.3d 699, 706 (9th Cir.1998).² A "court may disregard allegations in the complaint if contradicted by facts established by exhibits attached to the complaint." Sumner Peck Ranch v. Bureau of Reclamation, 823 F.Supp. 715, 720 (E.D.Cal.1993) (citing Durning v. First Boston Corp., 815 F.2d 1265, 1267 (9th Cir.1987)). Moreover, "judicial notice may be taken of a fact to show that a complaint does not state a cause of action." Sears, Roebuck & Co. v. Metropolitan Engravers, Ltd., 245 F.2d 67, 70 (9th Cir.1956); see Estate of Blue v. County of Los Angeles, 120 F.3d 982, 984 (9th Cir.1997). A court properly may take judicial notice of matters of public record outside the...