Schneider v. Bank of America, N.A.
| Decision Date | 05 March 2012 |
| Docket Number | Case No. 2:11-cv-2953 LKK DAD PS |
| Court | U.S. District Court — Eastern District of California |
| Parties | CHRISTOPHER D. SCHNEIDER, Plaintiff, v. BANK OF AMERICA N.A., et al., Defendants. |
This matter came before the court on March 2, 2012, for hearing of defendants' motions to dismiss plaintiff's amended complaint pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure and plaintiff's motions for a preliminary injunction and imposition of sanctions. Plaintiff Christopher Schneider, who is proceeding pro se in this action, appeared on his own behalf. Attorney Ashley Hennessee appeared on behalf of defendant Quality Loan Service Corporation. Attorney Tracy Moyer appeared telephonically on behalf of defendants Bank of America, N.A., BAC Home Loan Servicing, LP, and Balboa Insurance Company. Oral argument was heard, and the parties' motions were taken under submission.
Upon consideration of the briefing on file, the parties' arguments at the hearing, and the entire file, defendants' motions to dismiss will be granted, as to plaintiff's federal causes of action. In this regard, the court finds that plaintiff's amended complaint fails to allege acognizable claim giving rise to federal jurisdiction. Without a cognizable federal claim for relief, the court would recommend that the assigned District Judge decline to exercise jurisdiction over plaintiff's remaining state law claims. Accordingly, the instant order addresses plaintiff's federal causes of action and identifies the deficiencies as those causes of action are alleged in the amended complaint. However, plaintiff will be given the opportunity to file a second amended complaint in an effort to state a cognizable claim giving rise to federal jurisdiction.1
Plaintiff commenced this action on November 7, 2011, by paying the required filing fee and filing his original complaint. (Doc. No. 1.) On November 14, 2011, plaintiff filed a motion for a temporary restraining order. (Doc. No. 9.) On November 17, 2011, the assigned District Judge granted plaintiff's motion for a temporary restraining order and enjoined defendants from foreclosing on plaintiff's property. (Doc. No. 12.)
On November 28, 2011, before a responsive pleading had been filed, plaintiff filed an amended complaint. On November 29, 2011, plaintiff filed a request for an extension of the temporary restraining order and an order to show cause as to why a preliminary injunction should not issue. (Doc. No. 16.) On December 1, 2011, the assigned District Judge set a hearing on plaintiff's request for a preliminary injunction for January 17, 2012, and extended the temporary restraining order through the date of that hearing. (Doc. No. 17.) On December 19, 2011, plaintiff filed a motion for a preliminary injunction, (Doc. No. 24), and on December 22, 2011, defendants Bank of America, N.A., BAC Home Loan Servicing, LP, and Balboa Insurance Company (collectively "BOA, N.A.") filed a motion to dismiss. (Doc. No. 26.) On January 3, 2012, defendant BOA, N.A., filed an opposition to plaintiff's motion for a preliminary injunction, (Doc. No. 30), and that same day plaintiff filed an opposition to defendant BOA, N.A.'s, motion to dismiss. (Doc. No. 32.) However, on January12, 2012, the assigned District Judge vacated the January 17, 2012 hearing, and ordered the parties to re-notice their motions before the undersigned. (Doc. No. 42.) The assigned District Judge also ordered that the temporary restraining order remain in effect until the hearing before the undersigned on plaintiff's motion for a preliminary injunction.
On January 18, 2012, defendant Quality Loan Service Corporation ("Quality Loan") filed a motion to dismiss noticed for hearing before the assigned District Judge, (Doc. No. 46), and then filed an amended motion to dismiss, noticed for hearing before the undersigned. (Doc. No. 47.) On January 19, 2012, defendant BOA, N.A., re-noticed their December 22, 2011 motion to dismiss for hearing before the undersigned, (Doc. No. 48), and on January 20, 2012, plaintiff re-noticed his December 19, 2011 motion for a preliminary injunction also for hearing before the undersigned. (Doc. No. 49.) That same day, plaintiff filed a motion seeking imposition of sanctions against defendant Quality Loan. (Doc. No. 51.) On February 7, 2012, defendant Quality Loan filed an opposition to plaintiff's motion for sanctions. (Doc. No. 54.) On March 2, 2012, the parties came before the undersigned for hearing of their motions.
In his amended complaint plaintiff alleges that in 2001, he purchased his home with a mortgage obtained from defendant BOA, N.A. Because plaintiff did not make an initial down payment of 20% or greater, he was required to pay a monthly mortgage insurance premium into an escrow account opened by BOA, N.A., in addition to his regular mortgage payment. However, in November of 2004, plaintiff had his home re-appraised and, as a result, was able to eliminate the mortgage insurance requirement so that he was obligated only for his monthly mortgage payment of $968.57. Defendant BOA, N.A., closed the escrow account associated with plaintiff's mortgage insurance premium. (Am. Compl. (Doc. No. 15) at 8.)2
In May of 2010, plaintiff, for the first time received a notice from defendant BOA, N.A., notifying him that he had failed to provide defendant with a copy of his required homeowner's insurance policy. (Id. at 9.) Defendant BOA, N.A., purchased homeowner's insurance on plaintiff's behalf.3 On August 17, 2010, plaintiff sent defendant BOA, N.A., a letter requesting a copy of the insurance policy "he was being asked to pay for, so that he could see exactly what was covered and other significant details of it." (Id. at 10.) Plaintiff "wished to verify" that the policy purchased by defendant provided the same coverage as the policy plaintiff was being required to purchase, so that there was "no double standards of terms and conditions." (Id.) Defendant BOA, N.A., did not respond to plaintiff's letter.
After receiving defendant's May 2010 letter plaintiff contacted several insurers in an attempt to purchase his own homeowners policy but, for various reasons, was denied coverage. Finally in December of 2010, plaintiff was able to purchase coverage through the CA Fair Plan, California's insurer of last resort. Though plaintiff obtained coverage in December of 2010, and the insurance purchased by the defendant lender was supposedly canceled that same month, plaintiff received a statement indicating that he continued to be billed for the lender purchased policy until March of 2011. As a result of these circumstances, plaintiff alleges there is a large credit balance in an escrow account that has not been returned to him. (Id. at 9-10.)
On April 14, 2011, after defendant BOA, N.A., refused to accept plaintiff's mortgage payment, plaintiff opened a disputed escrow account purportedly pursuant to California Civil Code §1500, and deposited his monthly mortgage payment of $968.57 into that account. Plaintiff has since deposited each monthly mortgage payment into this account and has notified defendant BOA of each deposit and the account balance. (Id. at 11.)
Defendants did not contact plaintiff regarding the disputed escrow account, but instead alleged that plaintiff had defaulted on his mortgage and sought to foreclose on his home. On November 9, 2011, plaintiff contacted defendant Quality Loan and BOA, N.A., to obtain the amount he allegedly owed, so that he could stop the foreclosure sale scheduled for November 18, 2011. Both defendants told plaintiff that he would have to contact the other defendant to obtain the total amount owed and to stop the foreclosure sale. (Id. at 12-13.)
Based on this conduct, plaintiff alleges federal causes of actions against defendants for violation of the Real Estate Settlement Procedures Act ("RESPA"), 12 U.S.C. § 2607 et seq., Interpleader, 28 U.S.C. § 1335, the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. § 1961 et seq., Bank Fraud, 18 U.S.C. § 1344(2), Wire and Mail Fraud, 18 U.S.C. §§ 1341, 1343, and violation of the Fair Credit Reporting Act ("FCRA"), 15 U.S.C. § 1681 et seq., as well as several state law causes of action. (Id. at 3.)
A motion to dismiss pursuant to Rule 12(b)(6) tests the sufficiency of the complaint. North Star Int'l v. Arizona Corp. Comm'n, 720 F.2d 578, 581 (9th Cir. 1983). Dismissal of the complaint, or any claim within it, "can be based on the lack of a cognizable legal theory or the absence of sufficient facts alleged under a cognizable legal theory." Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1990). See also Robertson v. Dean Witter Reynolds, Inc., 749 F.2d 530, 534 (9th Cir. 1984). Thus, the court may dismiss a complaint or any claim within it as frivolous where the claim is based on an indisputably meritless legal theory or where the factual contentions are clearly baseless. Neitzke v. Williams, 490 U.S. 319, 327 (1989). The critical inquiry is whether a claim, even if inartfully pleaded, has an arguable legal and factual basis. Jackson v. Arizona, 885 F.2d 639, 640 (9th Cir. 1989); Franklin v. Murphy, 745 F.2d 1221, 1227 (9th Cir. 1984). As the Supreme Court has explained, in order to state a claim on which relief may be granted, the plaintiff must allege "enough facts to state a claim to relief that is plausible on its face." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007).
In determining whether a complaint states a claim, the court accepts as true the material allegations in the complaint and construes those allegations, as well as the reasonable inferences that may be drawn from them, in the light most favorable to the plaintiff. Erickson v. Pardus, 551 U.S. 89, 94 (2007); Hishon v. King & Spalding, 467 U.S. 69, 73 (1984); Hosp. Bldg. Co. v....
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