Soberanis v. Mortg. Elec. Registration Sys., Inc.

• Decision Date: 08 August 2013
• Docket Number: CASE NO. 13-CV-1296-H (KSC)
• Parties: GILBERTO SOBERANIS AND ALEJANDRO VARGAS, as individuals, Plaintiffs, v. MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., et al., Defendants.
• Court: U.S. District Court — Southern District of California

GILBERTO SOBERANIS AND ALEJANDRO VARGAS, as individuals, Plaintiffs, v. MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., et al., Defendants.

CASE NO. 13-CV-1296-H (KSC)

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF CALIFORNIA

DATED: August 8, 2013

ORDER GRANTING

DEFENDANTS' MOTION TO

DISMISS THE COMPLAINT

On July 11, 2013, Defendants Mortgage Electronic Registration Systems, Inc. ("MERS"), Mers Corp Holdings, Inc. ("MERSCORP"), Gwen Alden, and Angela Marie Williams (together with all defendants, "Defendants") filed a motion to dismiss the complaint. (Doc. No. 8.) On July 18, 2013, Plaintiffs Gilberto Soberanis and Alejandro Vargas ("Plaintiffs") filed their opposition to Defendants' motion. (Doc. No. 10.) On August 5, 2013, Defendants filed a reply in support of the motion. (Doc. No. 12.) On August 6, 2013, the Court submitted the matter on the papers pursuant to Local Civil Rule 7.1(d)(1). (Doc. No. 13.) For the following reasons, the Court grants Defendants' motion to dismiss.

Background

I. Request for Judicial Notice

The scope of review on a motion to dismiss for failure to state a claim is limited to "allegations contained in the pleadings, exhibits attached to the complaint, and matters properly subject to judicial notice." Swartz v. KPMG LLP, 476 F.3d 756, 763 (9th Cir. 2007). Federal Rule of Evidence 201 permits a court to take judicial notice of facts that are either "(1) generally known within the territorial jurisdiction of the trial court; or (2) capable of accurate and ready determination by resort to sources whose accuracy cannot reasonably be questioned." Fed. R. Evid. 201(b). Matters of public record are properly subject to judicial notice. Lee v. City of Los Angeles, 250 F.3d 668, 688-89 (9th Cir. 2001). In addition, under the "incorporation by reference" doctrine, a Court may take judicial notice if "the plaintiff's claim depends on the contents of a document, the defendant attaches the document to its motion to dismiss, and the parties do not dispute the authenticity of the document, even though plaintiff does not explicitly allege the contents of that document in the complaint." Knievel v. ESPN, 393 F.3d 1068, 1076 (9th Cir. 2005).

Defendants ask the Court to take judicial notice of the following documents under Rule 201:

(1) Deed of Trust dated May 1, 2006, and recorded with the San Diego County Recorder's Office on May 5, 2006 as Document No. 2006-0317913 (Doc. No. 9, Request for Judicial Notice ("RJN"), Ex. 1);

(2) Notice of Default dated September 4, 2008, and recorded with the San Diego County Recorder's Office on September 5, 2008 as Document No. 2008-0475071 (Id. Ex. 2);

(3) Notice of Trustee's Sale dated December 15, 2009, and recorded with the San Diego County Recorder's Office on December 21, 2009 as Document No. 2009-0701036 (Id. Ex. 3);

(4) Loan Modification Agreement dated May 17, 2010, and recorded with the San Diego County Recorder's Office on October 18, 2010 as Document No. 2010-0550987 (Id. Ex. 4);

(5) Notice of Rescission dated May 21, 2010, and recorded with the SanDiego County Recorder's Office on May 25, 2010 as Document No. 2010-0260520 (Id. Ex. 5);

(6) Assignment of Deed of Trust recorded with the Riverside County Recorder's Office on September 7, 2011 as Document No. 2011-0462398 (Id. Ex. 6);

(7) Substitution of Trustee dated September 2, 2011, and recorded with the San Diego County Recorder's Office on September 15, 2011 as Document No. 2011-0477929 (Id. Ex. 7);

(8) Notice of Default dated September 13, 2011, and recorded with the San Diego County Recorder's Office on September 15, 2011 as Document No. 2011-0477930 (Id. Ex. 8);

(9) Notice of Trustee's Sale dated December 16, 2011, and recorded with the San Diego County Recorder's Office on December 22, 2011 as Document No. 2011-0690113 (Id. Ex. 9);

(10) Chapter 7 Bankruptcy Petition filed in the United States Bankruptcy Court for the Southern District of California on January 30, 2012, as Case No. 12-01068-MM7 (Id. Ex. 10);

(11) Discharge of Debtor entered in the in the United States Bankruptcy Court for the Southern District of California on May 1, 2012, as Case No. 12-01068-MM7 (Id. Ex. 11);

(12) Notice of Trustee's Sale dated January 22, 2013, and recorded with the San Diego County Recorder's Office on January 31, 2013 as Document No. 2013-0066985 (Id. Ex. 12);

(13) Civil Complaint filed on June 20, 2012, in the Superior Court of San Diego, East Division, Case No. 37-2012-00067886-CU-OR-EC (Id. Ex. 13);

(14) First Amended Complaint filed on October 25, 2012, in the Superior Court of San Diego, East Division, Case No. 37-2012-00067886-CU-OR-EC (Id. Ex. 14);

(15) Opposition to Demurrer to First Amended Complaint filed on February 25, 2013, in the Superior Court of San Diego, East Division, Case No. 37-2012-00067886-CU-OR-EC (Id. Ex. 15); and

(16) Judgment of Dismissal entered on March 26, 2013, in the Superior Court of San Diego, East Division, Case No. 37-2012-00067886-CU-OR-EC (Id. Ex. 16).

After reviewing these documents, the Court concludes that all are subject to judicial notice under Rule 201(b). Marques v. Fed. Home Loan Mortg. Corp., No. 12-1873, 2012 U.S. Dist. LEXIS 173988, at *4 n.1 (S.D. Cal. Dec. 6, 2012) (taking judicial notice of publicly recorded documents, including a deed of trust and a notice of lis pendens, pursuant to Rule 201(b)); Stimac v. Wieking, 785 F. Supp. 2d 847, 849-50 (N.D. Cal. 2011) (taking judicial notice of records of the Southern District of California and the Ninth Circuit pursuant to Rule 201(b)); Nova Info. Sys. v. Premier Operations, Ltd., No. 02-6997, 2003 U.S. Dist. LEXIS 10518, at *3 n.4 (S.D.N.Y. June 20, 2003) (taking judicial notice of an order issued by the Middle District of Florida pursuant to Rule 201(b)). Accordingly, the Court takes judicial notice of exhibits 1 through 16 to Defendants' request for judicial notice.

II. Factual Background

This action concerns Plaintiffs' mortgage. Plaintiffs purchased the real property located at 3575 Trophy Dr., La Mesa, CA 91941 (the "subject property"), by borrowing $342,400 (the "subject loan") from First Franklin, a division of National City Bank of Indiana ("First Franklin"). (Doc. No. 1. ("Compl.") ¶ 35; RJN Ex. 1.) The deed of trust lists MERS as the nominee beneficiary of the subject loan. (RJN Ex. 1.) The subject loan is secured by the subject property via a recorded deed of trust. (Id.)

On June 1, 2008, Plaintiffs stopped making their loan payments. (See RJN Ex. 2.) On September 5, 2008 a Notice of Default was recorded. (Id.) On December 21, 2009, a notice of trustee's sale was recorded. (Id. Ex. 3.) In May of 2010, Plaintiffs and Wells Fargo Bank, N.A. ("Wells Fargo") entered into a loan modification agreement. (Id. Ex. 4.) On May 25, 2010, a notice of rescission of notice of default was recorded. (Id. Ex. 5.) On September 7, 2011, an assignment of deed of trust wasrecorded, referencing the assignment of the subject loan and deed of trust to "Deutsche Bank National Trust Company, as Trustee for First Franklin Mortgage Loan Trust 2006-FF11, Mortgage Pass-Through Certificates, Series 2006-FF11." ("Deutsche Bank"). (Id. Ex. 6.) The assignment lists MERS as nominee beneficiary for First Franklin and its successors and assigns. (Id.) On September 15, 2011, a substitution of trustee was recorded, substituting Quality Loan Services ("QLS") as trustee under the deed of trust. (Id. Ex. 7.)

On April 1, 2011, Plaintiffs stopped making their modified loan payments. (Id. Ex. 8.) On September 15, 2011, when Plaintiffs' arrears reached $9,662.45, a second notice of default was recorded. (Id.) On December 22, 2011, a notice of trustee's sale was recorded. (Id. Ex. 9.) The sale was postponed. On January 30, 2012, in response to the pending foreclosure, Plaintiff Soberanis filed for bankruptcy in the U.S. Bankruptcy Court, Southern District of California. (Id. Ex. 10.) The bankruptcy court issued a discharge on May 1, 2012. (Id. Ex. 11.) On January 31, 2013, another notice of trustee's sale was recorded, setting a sale date of February 21, 2013. (Id. Ex. 12.) The sale was postponed and has not taken place.

On June 20, 2012, Plaintiff Soberanis filed a civil action against First Franklin, Wells Fargo, QLS, and Deutsche Bank in the Superior Court of San Diego, East Division, Case No. 37-2012-00067886-CU-OR-EC (the "state court action"). (Id. Ex. 13.) Following the demurrers of Wells Fargo, QLS, and Deutsche Bank, Plaintiff Vargas attempted to join in Soberanis' action. (See id. Exs. 14, 15.) On March 26, 2013, the state court entered a judgment of dismissal with prejudice after sustaining the demurrers. (Id. Ex. 16.)

On June 4, 2013, Plaintiffs filed the case before this Court against Defendants MERS, MERSCORP, Alden, and Williams, alleging causes of action for: (1) violation of California's Unfair Competition Law, California Business and Professions Code §§ 17200, et. seq. ("UCL"); (2) violation of 12 U.S.C. § 1818(b); (3) violation of 12 U.S.C. § 18167(c)-(d); (4) violation of 12 U.S.C. § 4631; (5) cancellation ofinstruments; and (6) declaratory relief. (Compl.) Defendants move to dismiss Plaintiffs' complaint. (Doc. No. 8.)

Discussion

I. Legal Standard on a 12(b)(6) Motion to Dismiss

A motion to dismiss a complaint under Federal Rule of Civil Procedure 12(b)(6) tests the legal sufficiency of the claims asserted in the complaint. Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). A complaint generally must satisfy only the minimal notice pleading requirements of Federal Rule of Civil Procedure 8(a)(2) to evade dismissal under a Rule 12(b)(6) motion. Porter v. Jones, 319 F.3d 483, 494 (9th Cir. 2003). Rule 8(a)(2) requires that a pleading stating a claim for relief contain "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed R. Civ. P. 8(a)(2). "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...