Dondi Stevens v. Dess Richardson, Esquire et al

NOTICE OF MOTION AND MOTION to Dismiss Case for Failure to State a Claim Upon which Relief Can be Granted

C.D. Cal.May 3, 2017

1 NOTICE OF MOTION AND MOTION TO DISMISS COMPLAINT 885695.1 Case No. 8:17-cv-00427-JFW-JCGx 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 McGLINCHEY STAFFORD Brian A. Paino (SBN 251243) Allison Chua (SBN 284680) 18201 Von Karman Avenue, Suite 350 Irvine, California 92612 Telephone: (949) 381-5900 Facsimile: (949) 271-4040 Email: bpaino@mcglinchey.com achua@mcglinchey.com Attorneys for Defendant U.S. BANK, NATIONAL ASSOCIATION, AS TRUSTEE, SUCCESSOR IN INTEREST TO WACHOVIA BANK, NATIONAL ASSOCIATION, AS TRUSTEE FOR J.P. MORGAN MORTGAGE TRUST 2005-A4 (erroneously sued as “U.S. Bank, National Association”) UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA DONDI STEVENS, Plaintiff, v. DESS RICHARDSON, Esquire RUZICKA, WALLACE, & COUGHLIN, LLP, US BANK, NATIONAL ASSOCIATION, JOYCE E. DUDLEY, Defendants. Case No.: 8:17-cv-00427-JFW-JCGx Hon. John F. Walter DEFENDANT U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE’S NOTICE OF MOTION AND MOTION TO DISMISS COMPLAINT FOR FAILURE TO STATE A CLAIM UPON WHICH RELIEF CAN BE GRANTED; MEMORANDUM OF POINTS AND AUTHORITIES [Filed concurrently with Declaration of Allison O. Chua, Request for Judicial Notice, and [Proposed] Order] DATE: June 5, 2017 TIME: 1:30 p.m. CRTM: 7A Action Filed: March 10, 2017 Trial Date: Not Yet Set TO ALL PARTIES AND THEIR ATTORNEYS OF RECORD: PLEASE TAKE NOTICE that on June 5, 2017, at 1:30 p.m., or as soon thereafter as the matter may be heard before the Honorable John F. Walter in Courtroom 7A of the U.S. District Court for the Central District of California, Western Division, located at 350 W. 1st Street, Los Angeles, California 90012, Case 8:17-cv-00427-JFW-JCG Document 17 Filed 05/03/17 Page 1 of 20 Page ID #:364 2 NOTICE OF MOTION AND MOTION TO DISMISS COMPLAINT 885695.1 Case No. 8:17-cv-00427-JFW-JCGx 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Defendant U.S. BANK, NATIONAL ASSOCIATION, AS TRUSTEE, SUCCESSOR IN INTEREST TO WACHOVIA BANK, NATIONAL ASSOCIATION, AS TRUSTEE FOR J.P. MORGAN MORTGAGE TRUST 2005-A4 (erroneously sued as “U.S. Bank, National Association”) (“U.S. Bank”) will, and hereby does, move the Court to dismiss this action pursuant to Federal Rule of Civil Procedure Rule 12(b)(6). As set forth more fully in the accompanying Memorandum of Points and Authorities (the “Memorandum”), this motion is made on the ground that the Complaint (the “Complaint” or “Compl.”) of Plaintiff DONDI C. STEVENS (“Plaintiff”) fails to state a claim against U.S. Bank upon which relief can be granted. This motion is based on the attached Memorandum, the Declaration of Allison O. Chua and the Request for Judicial Notice concurrently filed herewith, the pleadings and papers on file herein, and upon such oral and documentary evidence as may be presented by the parties at the hearing. DATED: May 3, 2017 McGLINCHEY STAFFORD By:/s/ Allison Chua ALLISON CHUA BRIAN A. PAINO Attorneys for Defendant U.S. BANK, NATIONAL ASSOCIATION, AS TRUSTEE, SUCCESSOR IN INTEREST TO WACHOVIA BANK, NATIONAL ASSOCIATION, AS TRUSTEE FOR J.P. MORGAN MORTGAGE TRUST 2005-A4 (erroneously sued as “U.S. Bank, National Association”) LOCAL CIVIL RULE 7-3 CERTIFICATION This motion is made following attempts by counsel to confer with the pro se Plaintiff pursuant to L.R. 7-3. Counsel’s attempts are set forth in detail in the Declaration of Allison O. Chua Re L.R. 7-3 Conference filed concurrently with this motion. As of the date of this filing, the parties have not reached a resolution which eliminates the necessity for this motion. Case 8:17-cv-00427-JFW-JCG Document 17 Filed 05/03/17 Page 2 of 20 Page ID #:365 i TABLE OF CONTENTS 885695.1 Case No. 8:17-cv-00427-JFW-JCGx 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 TABLE OF CONTENTS I. INTRODUCTION ................................................................................................ 1 II. STATEMENT OF FACTS ................................................................................... 1 A. THE LOAN ................................................................................................ 1 B. THE FORECLOSURE PROCEEDINGS .................................................. 2 C. THE PRIOR LAWSUITS .......................................................................... 2 D. THE CURRENT LAWSUIT ..................................................................... 3 III. LEGAL AUTHORITY ......................................................................................... 3 IV. ANALYSIS .......................................................................................................... 4 A. PLAINTIFF’S CLAIMS ARE BARRED BY THE DOCTRINE OF ISSUE PRECLUSION ......................................................................... 4 1. Identity of Issues .............................................................................. 5 2. Actually Litigated and Decided in a Final Judgment ...................... 6 3. Privity Between the Parties .............................................................. 6 B. PLAINTIFF DOES NOT HAVE STANDING TO RAISE A POST-FORECLOSURE SALE CHALLENGE ........................................ 6 1. No Allegation of Tender .................................................................. 7 2. No Exceptions Apply ....................................................................... 7 C. PLAINTIFF FAILS TO STATE A CLAIM FOR VIOLATIONS OF THE FDCPA ........................................................................................ 7 1. The Claim Is Time-Barred ............................................................... 8 2. A Residential Loan Is Not A Debt ................................................... 8 3. Collecting On A Residential Loan Is Not Debt Collection ............. 8 4. Insufficient Facts Alleged ................................................................ 9 D. PLAINTIFF FAILS TO STATE A CLAIM FOR FORGERY AND FRAUD .................................................................................................... 10 1. Forgery ........................................................................................... 10 2. Fraud .............................................................................................. 11 V. CONCLUSION .................................................................................................. 12 Case 8:17-cv-00427-JFW-JCG Document 17 Filed 05/03/17 Page 3 of 20 Page ID #:366 ii TABLE OF AUTHORITIES 885695.1 Case No. 8:17-cv-00427-JFW-JCGx 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 TABLE OF AUTHORITIES Federal Cases Agbabiaka v. HSBC Bank USA Nat. Ass'n, 2010 WL 1609974 (N.D. Cal. Apr. 20, 2010) ............................................................ 9 Ashcroft v. Iqbal, 556 U.S. 662 (2009) .................................................................................................... 3 Balistreri v. Pacifica Police Dep’t, 901 F.2d 696 (9th Cir. 1990) ...................................................................................... 4 Bell Atlantic v. Twombly, 550 U.S. 544 (2007) ................................................................................................ 3, 4 Emrich v. Touche Ross & Company, 846 F.2d 1190 (9th Cir. 1988) .................................................................................... 4 Fuentes v. Duetsche Bank, 2009 WL 1971610 (S.D. Cal. July 8, 2009) ............................................................... 8 Hells Canyon Pres. Council v. U.S. Forest Serv., 403 F.3d 683 (9th Cir. 2005) ...................................................................................... 6 Lazy Y Ranch Ltd. v. Behrens, 546 F.3d 580 (9th Cir. 2008) ...................................................................................... 4 Leadsinger, Inc. v BMG Music Publ’g, 512 F.3d 522 (9th Cir. 2008) ...................................................................................... 4 Love v. United States, 915 F.2d 1242 (9th Cir. 1990) .................................................................................... 4 New Hampshire v. Maine, 532 U.S. 742 (2001) .................................................................................................... 4 Newsom v. Countrywide Home Loans, Inc., 714 F.Supp.2d 1000 (N.D. Cal. 2010) ...................................................................... 11 Nicosia v. Wells Fargo Bank, 2010 WL 2720946 (N.D. Cal. July 7, 2010) .............................................................. 9 Pittman v. Barclays Capital Real Estate, Inc., 2009 WL 1108889 (S.D. Cal. Apr. 24, 2009) ............................................................ 8 Stewart v. U.S. Bancorp, 297 F.3d 953 (2002) .................................................................................................... 6 Syverson v. IBM, 472 F.3d 1072 (9th Cir. 2007) .................................................................................... 5 Taylor v. Sturgell, 553 U.S. 880 (2008) .................................................................................................... 4 Case 8:17-cv-00427-JFW-JCG Document 17 Filed 05/03/17 Page 4 of 20 Page ID #:367 iii TABLE OF AUTHORITIES 885695.1 Case No. 8:17-cv-00427-JFW-JCGx 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097 (9th Cir. 2003) .................................................................................. 11 Walker v. Equity 1 Lenders Group, 2009 WL 1364430 (S.D. Cal. May 14, 2009) ...................................................... 9, 10 State Cases Arnolds Management Corp. v. Eischen, 158 Cal.App.3d 575 (1984) ........................................................................................ 6 Karlsen v. American Savings & Loan Association, 15 Cal.App.3d 112 (1971) .......................................................................................... 6 Lewis v. Superior Court, 217 Cal. App. 3d 379 (1990) .................................................................................... 10 Lona v. Citibank, N.A., 202 Cal.App.4th 89 (2011) ......................................................................................... 7 Multani v. Witkin & Neal, 215 Cal.App.4th 1428 (2013) ..................................................................................... 7 Robinson Helicopter Co., Inc. v. Dana Corp., 34 Cal.4th 979 (2004) ............................................................................................... 11 Wutzke v. Bill Reid Painting Serv., Inc., 151 Cal. App. 3d 36 (1984) ...................................................................................... 10 Federal Statutes 15 U.S.C. § 1692 ............................................................................................................. 1 15 U.S.C. § 1692d ........................................................................................................... 9 15 U.S.C. § 1692e(2)(A) ................................................................................................. 9 15 U.S.C. § 1692e(4) ...................................................................................................... 9 15 U.S.C. § 1692e(5) ...................................................................................................... 9 15 U.S.C. § 1692e(8) ...................................................................................................... 9 15 U.S.C. § 1692e(10) .................................................................................................... 9 15 U.S.C. § 1692e(11) .................................................................................................... 9 15 U.S.C. § 1692e(13) .................................................................................................. 10 15 U.S.C. § 1692f(1) ..................................................................................................... 10 15 U.S.C. § 1692j .......................................................................................................... 10 15 U.S.C. § 1692k(d) ...................................................................................................... 8 Case 8:17-cv-00427-JFW-JCG Document 17 Filed 05/03/17 Page 5 of 20 Page ID #:368 iv TABLE OF AUTHORITIES 885695.1 Case No. 8:17-cv-00427-JFW-JCGx 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 State Statutes Cal. Civ. Code § 338(d) ................................................................................................ 11 Cal. Civ. Code § 1788.2 .................................................................................................. 8 Cal. Pen. Code § 470 .................................................................................................... 10 Cal. Pen. Code § 470.1 ................................................................................................. 10 Federal Rules Fed. R. Civ. P. 8 .............................................................................................................. 3 Fed. R. Civ. P. 8(a)(2) ..................................................................................................... 3 Fed. R. Civ. P. 9(b) ....................................................................................................... 11 Fed. R. Civ. P. 12(b)(6) .............................................................................................. 2, 3 Case 8:17-cv-00427-JFW-JCG Document 17 Filed 05/03/17 Page 6 of 20 Page ID #:369 1 MEMORANDUM OF POINTS AND AUTHORITIES 885695.1 Case No. 8:17-cv-00427-JFW-JCGx 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 MEMORANDUM OF POINTS AND AUTHORITIES I. INTRODUCTION This action is the third lawsuit Plaintiff has filed against U.S. Bank in this Court. Like the prior lawsuits, this action deals with the foreclosure sale of Plaintiff’s residence in 2011. U.S. Bank moves to dismiss the Complaint on several grounds. To start, Plaintiff’s claims should be dismissed on the basis of res judicata because U.S. Bank obtained judgments against Plaintiff in two prior, similar lawsuits, and Plaintiff could have brought the claims asserted herein in the prior actions. Furthermore, the allegations in the Complaint are bereft of legal and factual support. As a threshold matter, Plaintiff has not tendered the outstanding balance due under the subject loan. Absent a valid tender, he cannot challenge any aspect of the foreclosure sale of his residence. He cannot otherwise state a cause of action for violations of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692, et seq. (“FDCPA”) because the purported violations occurred more than six years ago and, therefore, the claim is time-barred. His combined cause of action for forgery and fraud is similarly deficient because: (1) forgery is not an actionable tort under California law; and (2) the claim is not pled with the requisite specificity. For these reasons, as explained more fully herein, the Complaint should be dismissed. Since amendment would be futile, the dismissal should be with prejudice. II. STATEMENT OF FACTS A. THE LOAN On or about April 7, 2005, Plaintiff obtained a mortgage loan (the “Loan”) from Metrocities Mortgage, LLC (“Metrocities”) in the original principal sum of $520,000.00 which was reflected in a promissory note (the “Note”) secured by a deed of trust (the “Deed of Trust”) encumbering the real property located at 1248 North San Marcos Road, Santa Barbara 93111. (See Request for Judicial Notice (“RJN”), Exhibit 1). Thereafter, on July 30, 2009, an Assignment of Deed of Trust (the “Assignment”) was recorded against the Property which put interested parties on Case 8:17-cv-00427-JFW-JCG Document 17 Filed 05/03/17 Page 7 of 20 Page ID #:370 2 MEMORANDUM OF POINTS AND AUTHORITIES 885695.1 Case No. 8:17-cv-00427-JFW-JCGx 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 notice that Metrocities assigned its interests under the Deed of Trust to U.S. Bank, in its capacity as Trustee, Successor In Interest to Wachovia Bank, National Association, as Trustee for J.P. Morgan Mortgage Trust 2005-A4. (See RJN, Exhibit 2). B. THE FORECLOSURE PROCEEDINGS As a result of Plaintiff’s default under the Loan, on June 30, 2009, a Notice of Default and Election to Sell Under Deed of Trust (“Notice of Default”) was recorded against the Property. (See RJN, Exhibit 3). Subsequently, on October 5, 2009, January 31, 2011, February 8, 2011, and May 18, 2011, separate Notices of Trustee’s Sale were recorded against the Property. (See RJN, Exhibits 4-7). Following a non- judicial foreclosure sale, on September 29, 2011, a Trustee’s Deed Upon Sale (“TDUS”) was recorded whereby all right, title, and interest in the Property was transferred to U.S. Bank. (See RJN, Exhibit 8). C. THE PRIOR LAWSUITS On January 24, 2013, Plaintiff filed a complaint (the “First Lawsuit”) in this Court against U.S. Bank, Metrocities, Prospect Mortgage, LLC, Mortgage Electronic Registration Systems, Inc. (“MERS”), NDEx West, LLC (“NDEX”), and Chase Home Finance, LLC (“Chase”). (See RJN, Exhibit 9). U.S. Bank, Chase, and MERS filed a motion to dismiss the complaint (the “First Motion”) on March 3, 2013. (See RJN, Exhibit 10). Ultimately, on May 22, 2013, the Court issued an Order (the “First Order”) granting U.S. Bank, Chase, and MERS’s motion to dismiss the complaint. (See RJN, Exhibit 11). On August 12, 2016, Plaintiff filed a new complaint (the “Second Lawsuit”)1 in this Court against U.S. Bank, NDEX, Chase, Metrocities, Coldwell Banker, and Bruce Venturelli. (See RJN, Exhibit 12). U.S. Bank filed a motion to dismiss the complaint (the “Second Motion”)2 on November 28, 2016. (See RJN, Exhibit 13). Thereafter, 1 The First Lawsuit and the Second Lawsuit are collectively referred to herein as the “Prior Lawsuits.” 2 The First Motion and the Second Motion are collectively referred to herein as the “Prior Motions.” Case 8:17-cv-00427-JFW-JCG Document 17 Filed 05/03/17 Page 8 of 20 Page ID #:371 3 MEMORANDUM OF POINTS AND AUTHORITIES 885695.1 Case No. 8:17-cv-00427-JFW-JCGx 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 on January 5, 2017, the Court issued an order (the “Second Order”)3 granting the Second Motion and dismissed U.S. Bank from the Second Lawsuit with prejudice. (See RJN, Exhibit 14). D. THE CURRENT LAWSUIT On March 10, 2017, Plaintiff initiated this action by filing a Complaint against U.S. Bank, Dess Richardson, Ruzicka, Wallace, & Coughlin, LLP, and Joyce E. Dudley. III. LEGAL AUTHORITY Pursuant to Federal Rule of Civil Procedure 8, a 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). While the Federal Rules adopt a flexible pleading policy, every complaint must, at a minimum, “give the defendant fair notice of what the…claim is and the grounds upon which it rests.” Bell Atlantic v. Twombly, 550 U.S. 544, 555 (2007) (citations omitted). Although a complaint does not need detailed factual allegations, “a plaintiff’s obligation to provide the ‘grounds’ for 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.” Id.at 555 (citation omitted). Indeed, a complaint must “contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly, 550 U.S. at 570). The Supreme Court has held that: 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. Where a complaint pleads facts that are “merely consistent with” a defendant’s liability, it “stops short of the line between possibility and plausibility of ‘entitlement to relief.’” Id. (citations omitted). Under Federal Rule of Civil Procedure 12(b)(6), a party may move to dismiss a complaint for “failure to state a claim upon which relief can be granted.” See Fed. R. Civ. P. 12(b)(6). A complaint may be dismissed as a matter of law for failure to state 3 The First Order and the Second Order are collectively referred to herein as the “Prior Orders.” Case 8:17-cv-00427-JFW-JCG Document 17 Filed 05/03/17 Page 9 of 20 Page ID #:372 4 MEMORANDUM OF POINTS AND AUTHORITIES 885695.1 Case No. 8:17-cv-00427-JFW-JCGx 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 a claim for two reasons: (1) lack of a cognizable legal theory; or (2) insufficient facts under a cognizable legal theory. Balistreri v. Pacifica Police Dep’t, 901 F.2d 696, 699 (9th Cir. 1990). In determining whether the complaint states a claim on which relief may be granted, its allegations of material fact must be taken as true and construed in the light most favorable to plaintiffs. See Love v. United States, 915 F.2d 1242, 1245 (9th Cir. 1990); see also Lazy Y Ranch Ltd. v. Behrens, 546 F.3d 580, 588 (9th Cir. 2008). The court may properly look beyond the complaint only to items in the record of the case or to matters of general public record. Emrich v. Touche Ross & Company, 846 F.2d 1190, 1198 (9th Cir. 1988). If the factual allegations in a complaint dot not raise the “right to relief above the speculative level,” the complaint may be dismissed for failure to state a claim under Rule 12(b)(6). Twombly, 550 U.S. at 555. Finally, where amendment would unduly prejudice the opposing party, cause undue delay, or be futile, or if the moving party has acted in bad faith, leave to amend should be denied. Leadsinger, Inc. v BMG Music Publ’g, 512 F.3d 522, 532 (9th Cir. 2008). IV. ANALYSIS A. PLAINTIFF’S CLAIMS ARE BARRED BY THE DOCTRINE OF ISSUE PRECLUSION A judgment may have preclusive effect under the doctrines of claim preclusion and issue preclusion, which are collectively known as res judicata. See Taylor v. Sturgell, 553 U.S. 880, 892 n.3 (2008) (citing New Hampshire v. Maine, 532 U.S. 742, 748 (2001)). Issue preclusion “bars ‘successive litigation of an issue of fact or law that was actually litigated and resolved in valid court determination essential to that prior judgment,’ even if the issue recurs in the context of a different claim.” Taylor, 553 U.S. at 892 (quoting New Hampshire, 532 U.S. at 748-49). In order for issue preclusion to apply, the following elements must be met: (1) there was a full and fair opportunity to litigate the identical issue in the prior action; (2) the issue was Case 8:17-cv-00427-JFW-JCG Document 17 Filed 05/03/17 Page 10 of 20 Page ID #:373 5 MEMORANDUM OF POINTS AND AUTHORITIES 885695.1 Case No. 8:17-cv-00427-JFW-JCGx 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 actually litigated in the prior action; (3) the issue was decided in a final judgment; and (4) the party against whom issue preclusion is asserted was a party or in privity with a party to the prior action. See Syverson v. IBM, 472 F.3d 1072 (9th Cir. 2007). As set forth below, each of the elements of the doctrine of claim preclusion are met in this case. 1. Identity of Issues Although Plaintiff’s causes of action in this lawsuit differ from those raised in the Prior Lawsuits, the underlying issues in the Prior Lawsuits and in this action are identical. Specifically, Plaintiff’s claims in the First Lawsuit were based on his contention that U.S. Bank did not have “any lawful rights, lien, interest, estate, estate or claim” to the Property and therefore lacked the authority to initiate foreclosure proceedings against the Property. (See RJN, Exhibit 9, ¶ 62). Plaintiff further alleged in the First Lawsuit that “there is not now, nor was there ever, a lawful binding agreement between Plaintiff and Defendants . . . U.S. Bank.” He concluded that U.S. Bank was “in effect perpetrating a fraud upon Plaintiff and a fraud upon this court in asserting any claims against Plaintiff’s [P]roperty.” (See id.) These contentions also served as the basis for every cause of action in the complaint filed in the Second Lawsuit. Indeed, each of the claims in that complaint were based on Plaintiff’s contention that U.S. Bank perpetrated a fraud against Plaintiff by initiating foreclosure proceedings against the Property even though it lacked a valid lien or interest in the Property. (See RJN, Exhibit 12, ¶¶ 18-29). Similarly here, Plaintiff attacks U.S. Bank’s authority to enforce the Loan. (See Compl., ¶¶ 52-59, 74, 77, 92-93, 95). He specifically contends that U.S. Bank is not in possession of the original Note and, therefore, lacks standing to initiate foreclosure proceedings against the Property. (See id., ¶ 74). Given the similarity between Plaintiff’s claims in this action and the Prior Lawsuits, there is indisputably an identity of issues between this action and the Prior Lawsuits. Case 8:17-cv-00427-JFW-JCG Document 17 Filed 05/03/17 Page 11 of 20 Page ID #:374 6 MEMORANDUM OF POINTS AND AUTHORITIES 885695.1 Case No. 8:17-cv-00427-JFW-JCGx 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 2. Actually Litigated and Decided in a Final Judgment A “final judgment on the merits” is synonymous with “dismissal with prejudice.” Hells Canyon Pres. Council v. U.S. Forest Serv., 403 F.3d 683, 686 (9th Cir. 2005). In granting the Prior Motions and dismissing U.S. Bank with prejudice from the Prior Lawsuits, the Court decided the issue of whether U.S. Bank had a valid lien and interest in the Property. (See RJN, Exhibits 10-11, 12-13). The Prior Orders therefore constitute final judgments which preclude Plaintiff from re-litigating the same issues in this action. 3. Privity Between the Parties Lastly, Plaintiff and U.S. Bank were parties to the Prior Lawsuits and are also parties to this action. Therefore, there is privity between the parties. Accordingly, the doctrine of issue preclusion applies in the present case and warrants dismissal of the Complaint.4 B. PLAINTIFF DOES NOT HAVE STANDING TO RAISE A POST- FORECLOSURE SALE CHALLENGE Under California law, the “tender rule” requires that an action to set aside a sale “for irregularities in sale notice or procedure” be “accompanied by an offer to pay the full amount of the debt for which the property was security.” Arnolds Management Corp. v. Eischen, 158 Cal.App.3d 575, 578 (1984) (citing Karlsen v. American Savings & Loan Association, 15 Cal.App.3d 112, 117 (1971)). Thus, any “cause of action ‘implicitly integrated’ with the irregular sale fails unless the trustor can allege and establish a valid tender.” Arnolds Management Corp., 158 Cal.App.3d at 579 (citing Karlsen, 15 Cal.App.3d at 121). “The rationale behind the rule is that if the borrower could not have redeemed the property had the sale procedures been proper, 4 Plaintiff’s claims are also barred by the doctrine of claim preclusion as each of the claims in the Complaint could have been raised in the Prior Lawsuits. See Stewart v. U.S. Bancorp, 297 F.3d 953, 956 (2002) (discussing elements of claim preclusion). Case 8:17-cv-00427-JFW-JCG Document 17 Filed 05/03/17 Page 12 of 20 Page ID #:375 7 MEMORANDUM OF POINTS AND AUTHORITIES 885695.1 Case No. 8:17-cv-00427-JFW-JCGx 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 any irregularities in the sale did not result in damages to the borrower.” Lona v. Citibank, N.A., 202 Cal.App.4th 89, 112 (2011) (citation omitted). 1. No Allegation of Tender Pursuant to the Complaint, Plaintiff challenges the validity of, among other things, the foreclosure sale of the Property. As a result, the tender requirement applies in this case. Notably, the Complaint fails to allege that Plaintiff attempted to tender, has tendered, or has the ability to tender the full amount due on the Loan. Absent a valid tender, Plaintiff lacks standing to challenge any aspect of the foreclosure sale. It follows that Plaintiff cannot state a viable claim to set aside the sale. 2. No Exceptions Apply Admittedly, California courts have recognized exceptions to the tender rule where: (1) the validity of the underlying debt is in dispute; (2) the plaintiff has a counter-claim or setoff against the foreclosing party; (3) it would be inequitable to apply the tender rule; or (4) the trustee’s deed is void on its face. See Multani v. Witkin & Neal, 215 Cal.App.4th 1428, 1454-55 (2013). None of these exceptions apply in this case. As set forth below, there are no valid grounds identified in the Complaint for concluding that the Loan is invalid or that the TDUS is void. Nor are there facts in the Complaint supporting the other recognized exceptions to the tender rule. C. PLAINTIFF FAILS TO STATE A CLAIM FOR VIOLATIONS OF THE FDCPA Although the basis for the claim is not entirely clear, Plaintiff alleges that U.S. Bank violated the FDCPA.5 He appears to base his claim on U.S. Bank’s act of enforcing the Note and Deed of Trust. (See Compl., ¶¶ 62-63, 85). As set forth below, Plaintiff’s claim under the FDCPA fails as a matter of law. 5 Plaintiff’s first and third causes of action (erroneously labeled as the “fourth cause of action”) are both based on violations of the FDCPA. Given the similarity in the claims, U.S. Bank addresses them as a single claim. Case 8:17-cv-00427-JFW-JCG Document 17 Filed 05/03/17 Page 13 of 20 Page ID #:376 8 MEMORANDUM OF POINTS AND AUTHORITIES 885695.1 Case No. 8:17-cv-00427-JFW-JCGx 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1. The Claim Is Time-Barred As an initial matter, a claim under the FDCPA must be brought “within one year from the date on which the violation occurs.” 15 U.S.C. § 1692k(d). Plaintiff’s claim is premised on U.S. Bank’s conduct in connection with the foreclosure proceedings against the Property. The foreclosure proceedings were completed in 2011 when the Property was sold at a trustee’s sale. (See RJN, Exhibit 8). Therefore, the purported violations of the FDCPA would have occurred, if ever, in 2011, at the latest. However, Plaintiff did not file the Complaint until March of 2017, six years after the foreclosure sale. Consequently, Plaintiff’s claim for violations of the FDCPA is barred by the applicable statute of limitations. For this reason alone, this claim should be dismissed. 2. A Residential Loan Is Not A Debt Courts have regularly recognized that a residential loan is not a debt for the purposes of the FDCPA. See Fuentes v. Duetsche Bank, 2009 WL 1971610, at *3 (S.D. Cal. July 8, 2009). In Fuentes, the plaintiff alleged that defendants were in violation of the FDCPA due to their refusal to validate the debt at plaintiff’s request. The Fuentes court held that the FDCPA only applies to consumer debts or transactions and does not apply to residential mortgage loans. See id. More specifically, the Fuentes court held that “a residential mortgage is not a debt and a home foreclosure is not debt collection within the meaning of the statute…” Id.; see also Pittman v. Barclays Capital Real Estate, Inc., 2009 WL 1108889, at *3 (S.D. Cal. Apr. 24, 2009) (foreclosing on a deed of trust does not invoke the statutory protections of Cal. Civ. Code § 1788.2). Because the Loan is a residential mortgage loan, it is not a debt within the meaning of the FDCPA. Thus, Plaintiff’s causes of action for violation of the FDCPA fail as a matter of law. 3. Collecting On A Residential Loan Is Not Debt Collection Still further, a servicer’s actions in attempting to collect payments under a home loan do not constitute “debt collection.” On the contrary, “[a] claim cannot arise Case 8:17-cv-00427-JFW-JCG Document 17 Filed 05/03/17 Page 14 of 20 Page ID #:377 9 MEMORANDUM OF POINTS AND AUTHORITIES 885695.1 Case No. 8:17-cv-00427-JFW-JCGx 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 under the FDCPA based upon the lender enforcing its security interest under the subject deed of a trust because foreclosing on a mortgage does not constitute an attempt to collect a debt for purposes of the FDCPA.” Agbabiaka v. HSBC Bank USA Nat. Ass'n, 2010 WL 1609974, at *5 (N.D. Cal. Apr. 20, 2010) (citations omitted); see also Nicosia v. Wells Fargo Bank, 2010 WL 2720946, at *1 (N.D. Cal. July 7, 2010). Indeed, the activity of foreclosing on property pursuant to a deed of trust is not the collection of a debt within the meaning of the FDCPA. See Walker v. Equity 1 Lenders Group, 2009 WL 1364430, at *7 (S.D. Cal. May 14, 2009). Since the only alleged “debt collection” activity referenced in the Complaint is the foreclosure sale of the Property, Plaintiff’s FDCPA claim necessarily fails as a matter of law. 4. Insufficient Facts Alleged Even if he could be established that the FDCPA applies to U.S. Bank, Plaintiff has not demonstrated that the statute’s provisions have been violated. Plaintiff identifies several provisions under the FDCPA that prohibit: (1) engaging in harassment, oppression, or abuse in connection with the collection of a debt (15 U.S.C. § 1692d; Compl., ¶¶ 62, 80, 82); (2) falsely representing the “character, amount or legal status of any debt” (15 U.S.C. § 1692e(2)(A); Compl., ¶¶ 63-64, 79, 84, 86); (3) representing or implying “that nonpayment of any debt will result in the arrest or imprisonment of any person or the seizure, garnishment, attachment, or sale of any property or wages of any person unless such action is lawful” (15 U.S.C. § 1692e(4); Compl., ¶¶ 64, 80, 82, 86); (4) threating to “take any action that cannot legally be taken or that is not intended to be taken” (15 U.S.C. § 1692e(5) Compl., ¶¶ 62-64, 79, 80, 82, 86); (6) “[c]ommunicating or threatening to communicate to any person credit information which is known or which should be known to be false” (15 U.S.C. § 1692e(8); Compl., ¶¶ 79-80, 86); (6) false representations or deceptive means to “collect or attempt to collect any debt” (15 U.S.C. § 1692e(10); Compl., ¶¶ 62-64, 79, 80, 82); (7) the failure to disclose that the debt collector is attempting to collect a debt (15 U.S.C. § 1692e(11); Compl., ¶¶ 79); (8) falsely representing or Case 8:17-cv-00427-JFW-JCG Document 17 Filed 05/03/17 Page 15 of 20 Page ID #:378 10 MEMORANDUM OF POINTS AND AUTHORITIES 885695.1 Case No. 8:17-cv-00427-JFW-JCGx 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 implying that documents are legal process (15 U.S.C. § 1692e(13); Compl., ¶¶ 79-80, 82); (9) collecting any amount that is not “expressly authorized by the agreement creating the debt or permitted by law” (15 U.S.C. § 1692f(1)); Compl., ¶¶ 79-80, 82, 86; and (10) designing, compiling, and furnishing deceptive forms (15 U.S.C. § 1692j; Compl., ¶ 80). Notably, all of the provisions identified refer to the collection of a debt. However, Plaintiff’s allegations center around the foreclosure proceedings against the Property. (See Compl., ¶¶ 62,78, 82, 84-85). As previously stated, under the FDCPA, foreclosure proceedings conducted pursuant to a deed of trust is not the collection of a debt. See Walker, 2009 WL 1364430, at *7. Plaintiff does not otherwise plausibly establish that U.S. Bank engaged in any conduct proscribed by the FDCPA. In fact, he does little more than recite the elements of a possible claim for violation of the FDCPA. For all the foregoing reasons, Plaintiff fails to state a claim for relief under the FDCPA. The claim should therefore be dismissed. D. PLAINTIFF FAILS TO STATE A CLAIM FOR FORGERY AND FRAUD 1. Forgery Plaintiff’s combined cause of action for forgery and fraud fails because forgery is not an actionable tort under California law. While originating in the common law of the state, what was common law forgery is now exclusively codified as a crime in California Penal Code section 470.1. See Wutzke v. Bill Reid Painting Serv., Inc., 151 Cal. App. 3d 36, 41 (1984) (“[T]he act of forgery is not defined in the Commercial Code or otherwise for purposes of civil actions.”); Lewis v. Superior Court, 217 Cal. App. 3d 379, 387-392 (1990) (Crime of forgery under Penal Code, § 470 derives from common law definition of forgery). Although forgery has been codified in the California Penal Code, and case law and treatises recognize it as a criminal claim, Case 8:17-cv-00427-JFW-JCG Document 17 Filed 05/03/17 Page 16 of 20 Page ID #:379 11 MEMORANDUM OF POINTS AND AUTHORITIES 885695.1 Case No. 8:17-cv-00427-JFW-JCGx 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 U.S. Bank is unaware of any decisions in California recognizing it as an independent civil cause of action. For this reason, Plaintiff’s forgery claim should be dismissed. 2. Fraud As for Plaintiff’s claim for fraud, the Complaint does not allege facts sufficient to meet the heightened pleading standards for this cause of action. Under California law, the elements of fraud or intentional misrepresentation, are: “(1) a misrepresentation (false representation, concealment, or nondisclosure); (2) knowledge of falsity (or scienter); (3) intent to defraud, i.e., to induce reliance; (4) justifiable reliance; and (5) resulting damage.” Robinson Helicopter Co., Inc. v. Dana Corp., 34 Cal.4th 979, 990 (2004) (internal quotation omitted). Importantly, a party alleging fraud must plead “with particularity the circumstances constituting fraud or mistake.” Fed. R. Civ. P. 9(b). “Averments of fraud must be accompanied by ‘the who, what, when, where, and how’ of the misconduct charged.” Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1106 (9th Cir. 2003). Moreover, under California law, the statute of limitations for fraud is three years. See Newsom v. Countrywide Home Loans, Inc., 714 F.Supp.2d 1000, 1014 (N.D. Cal. 2010); Cal. Civ. Proc. Code § 338(d). Although not entirely clear, Plaintiff’s claim for fraud appears to be premised on his contention that the Note and Deed of Trust “did not contain [his] original executed signature thus proving that the foreclosing Deed of Trust was a forgery and fraudulently created in order to take possession of the [P]roperty…” (See Compl., ¶ 77). As a threshold matter, Plaintiff’s claim is time barred as more than three years have passed since the origination of the Loan and the foreclosure sale of the Property. See Newsom, 714 F.Supp.2d at 1014; Cal. Civ. Proc. Code § 338(d); RJN, Exhibits 1, 8. Furthermore, the Complaint contains insufficient allegations to establish that U.S. Bank (who did not originate the Loan) had knowledge of the falsity of the alleged representation and that U.S. Bank intended to defraud Plaintiff. Plaintiff also fails to identify with specificity how he has justifiably relied on U.S. Bank’s alleged Case 8:17-cv-00427-JFW-JCG Document 17 Filed 05/03/17 Page 17 of 20 Page ID #:380 12 MEMORANDUM OF POINTS AND AUTHORITIES 885695.1 Case No. 8:17-cv-00427-JFW-JCGx 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 misrepresentations to his detriment. Any claimed damages relating to Plaintiff’s loss of the Property are otherwise the result of his own failure to make his Loan payments, not any conduct by U.S. Bank. Plainly stated, the Complaint falls well short of establishing with the requisite particularity the necessary elements of a claim for fraud. Accordingly, Plaintiff’s combined cause of action for forgery and fraud should be dismissed. V. CONCLUSION For the reasons set forth herein, Plaintiff’s Complaint should be dismissed without leave to amend. DATED: May 3, 2017 McGLINCHEY STAFFORD By: /s/ Allison Chua ALLISON CHUA BRIAN A. PAINO Attorneys for Defendant U.S. BANK, NATIONAL ASSOCIATION, AS TRUSTEE, SUCCESSOR IN INTEREST TO WACHOVIA BANK, NATIONAL ASSOCIATION, AS TRUSTEE FOR J.P. MORGAN MORTGAGE TRUST 2005-A4 (erroneously sued as “U.S. Bank, National Association”) Case 8:17-cv-00427-JFW-JCG Document 17 Filed 05/03/17 Page 18 of 20 Page ID #:381 879374.1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 PROOF OF SERVICE STATE OF CALIFORNIA ) ) ss. COUNTY OF ORANGE ) I, Stephanie Elizondo, declare: I am employed in the County of Orange, State of California. I am over the age of 18 and not a party to the within action. My business address is 18201 Von Karman Ave., Suite 350, Irvine, California 92612. On May 3, 2017, I served the document(s) described as DEFENDANT U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE’S NOTICE OF MOTION AND MOTION TO DISMISS COMPLAINT FOR FAILURE TO STATE A CLAIM UPON WHICH RELIEF CAN BE GRANTED; MEMORANDUM OF POINTS AND AUTHORITIES as follows: BY MAIL: As follows: FEDERAL - I deposited such envelope in the U.S. mail at Irvine, California, with postage thereon fully prepaid, BY CM/ECF NOTICE OF ELECTRONIC FILING: I caused said document(s) to be served by means of this Court’s Electronic transmission of the Notice of Electronic Filing through the Court’s transmission facilities, to the parties and/or counsel who are registered CM/ECF users set forth in the service list obtained from this Court. Pursuant to Electronic Filing Court Order, I hereby certify that the above documents(s) was uploaded to the website and will be posted on the website by the close of the next business day and the webmaster will give e-mail notification to all parties. FEDERAL: I declare that I employed in the office of a member of the State Bar of this Court at whose direction the service was made. Executed on May 3, 2017, at Irvine, California. Stephanie Elizondo Stephanie Elizondo Case 8:17-cv-00427-JFW-JCG Document 17 Filed 05/03/17 Page 19 of 20 Page ID #:382 879374.1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 SERVICE LIST USDC, Central District Case No. 8:17-cv-00427-JFW-JCGx DONDI STEVENS V. DESS RICHARDSON, et al. File # 104823.0292 Dondi Stevens 1248 N. San Marcos Road Santa Barbara, CA 93111 Plaintiff, In Pro Per Tel: (805) 452-9641 Case 8:17-cv-00427-JFW-JCG Document 17 Filed 05/03/17 Page 20 of 20 Page ID #:383 1 [PROPOSED] ORDER GRANTING MOTION TO DISMISS 895319.1 CASE NO. 8:17-CV-00427-JFW-JCGX 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 McGLINCHEY STAFFORD Brian A. Paino (SBN 251243) Allison Chua (SBN 284680) 18201 Von Karman Avenue, Suite 350 Irvine, California 92612 Telephone: (949) 381-5900 Facsimile: (949) 271-4040 Email: bpaino@mcglinchey.com achua@mcglinchey.com Attorneys for Defendant U.S. BANK, NATIONAL ASSOCIATION UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA DONDI STEVENS, Plaintiff, v. DESS RICHARDSON, Esquire RUZICKA, WALLACE, & COUGHLIN, LLP, US BANK, NATIONAL ASSOCIATION, JOYCE E. DUDLEY, Defendants. Case No.: 8:17-cv-00427-JFW-JCGx Hon. John F. Walter [PROPOSED] ORDER GRANTING DEFENDANT U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE’S NOTICE OF MOTION AND MOTION TO DISMISS COMPLAINT FOR FAILURE TO STATE A CLAIM UPON WHICH RELIEF CAN BE GRANTED DATE: June 5, 2017 TIME: 1:30 p.m. CRTM: 7A Action Filed: March 10, 2017 Trial Date: Not Yet Set The motion of Defendant U.S. BANK, NATIONAL ASSOCIATION, AS TRUSTEE, SUCCESSOR IN INTEREST TO WACHOVIA BANK, NATIONAL ASSOCIATION, AS TRUSTEE FOR J.P. MORGAN MORTGAGE TRUST 2005- A4 (erroneously sued as “U.S. Bank, National Association”) (“U.S. Bank”) to dismiss the Complaint for Plaintiff DONDI STEVENS’s (“Plaintiff”) failure to state a claim against U.S. Bank upon which relief can be granted (the “Motion”) came on regularly for hearing before the Honorable John F. Walter at the date and time set forth above. Case 8:17-cv-00427-JFW-JCG Document 17-1 Filed 05/03/17 Page 1 of 4 Page ID #:384 2 [PROPOSED] ORDER GRANTING MOTION TO DISMISS 895319.1 CASE NO. 8:17-CV-00427-JFW-JCGX 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 After having considered the moving papers, opposition papers, reply papers, and oral argument, if any, and GOOD CAUSE APPEARING THEREFOR, IT IS ORDERED THAT the Motion is GRANTED. IT IS FURTHER ORDERED THAT U.S. Bank is hereby dismissed from this action with prejudice. IT IS FURTHER ORDERED THAT all of Plaintiff’s claims against U.S. Bank are hereby dismissed with prejudice. IT IS SO ORDERED. Dated: _________________________ _________________________________ HON. JOHN F. WALTER UNITED STATES DISTRICT JUDGE Case 8:17-cv-00427-JFW-JCG Document 17-1 Filed 05/03/17 Page 2 of 4 Page ID #:385 879374.1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 PROOF OF SERVICE STATE OF CALIFORNIA ) ) ss. COUNTY OF ORANGE ) I, Stephanie Elizondo, declare: I am employed in the County of Orange, State of California. I am over the age of 18 and not a party to the within action. My business address is 18201 Von Karman Ave., Suite 350, Irvine, California 92612. On May 3, 2017, I served the document(s) described as [PROPOSED] ORDER GRANTING DEFENDANT U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE’S NOTICE OF MOTION AND MOTION TO DISMISS COMPLAINT FOR FAILURE TO STATE A CLAIM UPON WHICH RELIEF CAN BE GRANTED as follows: BY MAIL: As follows: FEDERAL - I deposited such envelope in the U.S. mail at Irvine, California, with postage thereon fully prepaid, BY CM/ECF NOTICE OF ELECTRONIC FILING: I caused said document(s) to be served by means of this Court’s Electronic transmission of the Notice of Electronic Filing through the Court’s transmission facilities, to the parties and/or counsel who are registered CM/ECF users set forth in the service list obtained from this Court. Pursuant to Electronic Filing Court Order, I hereby certify that the above documents(s) was uploaded to the website and will be posted on the website by the close of the next business day and the webmaster will give e-mail notification to all parties. FEDERAL: I declare that I employed in the office of a member of the State Bar of this Court at whose direction the service was made. Executed on May 3, 2017, at Irvine, California. Stephanie Elizondo Stephanie Elizondo Case 8:17-cv-00427-JFW-JCG Document 17-1 Filed 05/03/17 Page 3 of 4 Page ID #:386 879374.1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 SERVICE LIST USDC, Central District Case No. 8:17-cv-00427-JFW-JCGx DONDI STEVENS V. DESS RICHARDSON, et al. File # 104823.0292 Dondi Stevens 1248 N. San Marcos Road Santa Barbara, CA 93111 Plaintiff, In Pro Per Tel: (805) 452-9641 Case 8:17-cv-00427-JFW-JCG Document 17-1 Filed 05/03/17 Page 4 of 4 Page ID #:387