John Manos et al v. Mtc Financial Inc.

NOTICE OF MOTION AND MOTION to Dismiss Case /DEFENDANTS NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFFS COMPLAINT; MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF

C.D. Cal.September 1, 2016

BURKE, W ILLIAMS & SORENSEN , LLP AT T ORN E YS AT LA W LO S AN GE L E S 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 LA #4830-2269-7015 v1 06190-1346 - 1 - CASE NO. 8:16-CV-01142-CJC-KES NOTICE OF MOTION AND MOTION TO DISMISS MEMO OF POINTS & AUTHORITIES Richard J. Reynolds (SBN 89911) E-Mail: rreynolds@bwslaw.com Joseph P. Buchman (SBN 148983) E-mail: jbuchman@bwslaw.com BURKE, WILLIAMS & SORENSEN, LLP 444 South Flower Street, Suite 2400 Los Angeles, CA 90071-2953 Tel: 213.236.0600 Fax: 213.236.2700 Attorneys for Defendants MTC FINANCIAL INC. dba TRUSTEE CORPS and MALCOLM CISNEROS, ALC UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA JOHN MANOS, TARA BORRELLI, AND JESSIE MANOS, individually and on behalf of all similarly situated individuals, Plaintiffs, v. MTC FINANCIAL, INC.; MALCOLM CISNEROS, ALC; DITECH FINANCIAL LLC; CITIMORTGAGE, INC.; FEDERAL NATIONAL MORTGAGE ASSOCIATION, and DOES 1-5, Defendants. Case No. 8:16-cv-01142-CJC-KES Assigned to Hon. Cormac J. Carney DEFENDANTS’ NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFFS’ COMPLAINT; MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF [Fed. R. Civ. P. Rule 12 (b)(6)] Date: October 3, 2016 Time: 1:30 P.m. Place: Courtroom: 9B 411 West Fourth Street Santa Ana, CA 92701 Judge: Hon. Cormac J. Carney TO THE HONORABLE CORMAC J. CARNEY, UNITED STATES DISTRICT COURT JUDGE, TO PLAINTIFFS JOHN MANOS, TARA BORRELLI, AND JESSIE MANOS (“PLAINTIFFS”) AND TO ALL PARTIES AND THEIR ATTORNEYS OF RECORD: PLEASE TAKE NOTICE that on October 3, 2016, at 1:30 p.m., in Courtroom 9B, or as soon thereafter as the matter may be heard, in the above- Case 8:16-cv-01142-CJC-KES Document 28 Filed 09/01/16 Page 1 of 28 Page ID #:1078 BURKE, W ILLIAMS & SORENSEN , LLP AT T ORN E YS AT LA W LO S AN GE L E S 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 LA #4830-2269-7015 v1 06190-1346 - 2 - CASE NO. 8:16-CV-01142-CJC-KES NOTICE OF MOTION AND MOTION TO DISMISS MEMO OF POINTS & AUTHORITIES entitled Court located at 411 West Fourth Street, Santa Ana, California 92701, Defendants MTC FINANCIAL INC. dba TRUSTEE CORPS, erroneously sued herein as MTC FINANCIAL, INC. (“Trustee Corps”), and MALCOLM CISNEROS, ALC (“Malcolm Cisneros”)(collectively, the “Moving Defendants”) will and hereby do move this Court to dismiss the Complaint of Plaintiffs, for failure to state a claim upon which relief may be granted. This Motion is made and based upon Rule 12(b)(6) of the Federal Rules of Civil Procedure: Specifically and further, the Moving Defendants move to dismiss with prejudice the following claims without leave to amend: 1. Plaintiffs’ First Cause of Action-Violations of the Fair Debt Collection Practices Action, Count III: False or Misleading Representations against Trustee Corps on grounds of failure to state a claim upon which relief may be granted. 2. Plaintiffs’ First Cause of Action-Violations of the Fair Debt Collection Practices Action, Count IV: Unfair Practices against Trustee Corps and Malcolm Cisneros on grounds of failure to state a claim upon which relief may be granted. 3. Plaintiffs’ First Cause of Action-Violations of the Fair Debt Collection Practices Action, Count V: Validation of Debts against Trustee Corps and Malcolm Cisneros on grounds of failure to state a claim upon which relief may be granted. 4. Plaintiffs’ First Cause of Action-Violations of the Fair Debt Collection Practices Action, Count VI: Failure To Provide Notice of Debt against Trustee Corps on grounds of failure to state a claim upon which relief may be granted. 5. Plaintiffs’ Fourth Cause of Action-Violations of the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. §§1961-1968 against Trustee Corps and Malcolm Cisneros on grounds of failure to state a claim upon which Case 8:16-cv-01142-CJC-KES Document 28 Filed 09/01/16 Page 2 of 28 Page ID #:1079 BURKE, W ILLIAMS & SORENSEN , LLP AT T ORN E YS AT LA W LO S AN GE L E S 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 LA #4830-2269-7015 v1 06190-1346 - 3 - CASE NO. 8:16-CV-01142-CJC-KES NOTICE OF MOTION AND MOTION TO DISMISS MEMO OF POINTS & AUTHORITIES relief may be granted. 6. Plaintiffs’ Fifth Cause of Action-Unjust Enrichment against Trustee Corps and Malcolm Cisneros on grounds of failure to state a claim upon which relief may be granted. 7. Plaintiffs’ Eighth Cause of Action-Unfair Competition Under Section 17200 et seq. against Trustee Corps and Malcolm Cisneros on grounds of failure to state a claim upon which relief may be granted. 8. Plaintiffs’ Ninth Cause of Action-Declaratory Judgment Act against Trustee Corps and Malcolm Cisneros on grounds of failure to state a claim upon which relief may be granted. This Motion will be made and based upon this Notice, the Memorandum of Points and Authorities submitted herewith, and upon all pleadings, papers and documents on file herein, together with those matters of which judicial notice has been requested, and any oral argument which may be presented at the time of the hearing. This motion is made following the conference of counsel pursuant to L.R. 7- 3 which took place on August 19, 2016. Dated: September 1, 2016 Burke, Williams & Sorensen, LLP By: /s/ Joseph P. Buchman Richard J. Reynolds Fabio R. Cabezas Joseph P. Buchman Attorneys for Defendants MTC FINANCIAL INC. dba TRUSTEE CORPS and MALCOLM CISNEROS, ALC Case 8:16-cv-01142-CJC-KES Document 28 Filed 09/01/16 Page 3 of 28 Page ID #:1080 BURKE, W ILLIAMS & SORENSEN , LLP AT T ORN E YS AT LA W LO S AN GE L E S 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 Page - i - CASE NO. 8:16-CV-01142-CJC-KES NOTICE OF MOTION AND MOTION TO DISMISS MEMO OF POINTS & AUTHORITIES I. INTRODUCTION ........................................................................................1 II. BACKGROUND ..........................................................................................2 A. Summary of Plaintiffs’ Contentions....................................................2 III. STANDARDS APPLICABLE TO MOTIONS TO DISMISS ......................3 A. Pleading Requirements In General. .....................................................3 B. Pleading Requirements for Fraud/Intentional Misrepresentation.........4 C. Construction of Exhibits Referred to in the Complaint or Attached to a Rule 12(b)(6) Motion. ...................................................4 IV. PLAINTIFFS’ CLAIMS FOR VIOLATION OF THE FEDERAL FAIR DEBT COLLECTION PRACTICES REGULATIONS HAVE NO BASIS AGAINST THE MOVING DEFENDANTS..............................5 V. TRUSTEE CORPS’ ALLEGED ACTIONS WERE PRIVILEGED UNDER CALIFORNIA CIVIL CODE §47 AND CIVIL CODE §2924(D) ......................................................................................................7 VI. TRUSTEE CORPS OWES NO DUTIES TO PLAINTIFFS, OTHER THAN THOSE SPECIFICALLY STATED IN THE DEED OF TRUST AND APPLICABLE STATUTES...................................................9 VII. THE MOVING DEFENDANTS ARE ALLEGED TO BE AGENTS FOR A DISCLOSED PRINCIPAL.............................................................11 VIII. PLAINTIFFS’ FIRST CAUSE OF ACTION-VIOLATIONS OF THE FAIR DEBT COLLECTION PRACTICES ACTION, COUNT III: FALSE OR MISLEADING REPRESENTATIONS AGAINST TRUSTEE CORPS HAS NO BASIS..........................................................11 IX. PLAINTIFFS’ FOURTH CAUSE OF ACTION-VIOLATIONS OF THE RACKETEER INFLUENCED AND CORRUPT ORGANIZATIONS ACT, 18 U.S.C. §§1961-1968 AGAINST TRUSTEE CORPS AND MALCOLM CISNEROS (“RICO”) FAILS BECAUSE PLAINTIFFS CANNOT ALLEGE THE EXISTENCE OF AN ENTERPRISE OR PATTERN OF RACKETEERING ACTIVITY.....13 X. PLAINTIFFS’ CLAIM FOR UNJUST ENRICHMENT FAILS.................15 XI. PLAINTIFFS’ EIGHTH CAUSE OF ACTION-UNFAIR COMPETITION UNDER SECTION 17200 ET SEQ. AGAINST TRUSTEE CORPS AND MALCOLM CISNEROS FAILS .......................16 XII. PLAINTIFFS’ NINTH CAUSE OF ACTION-DECLARATORY JUDGMENT ACT AGAINST TRUSTEE CORPS AND MALCOLM CISNEROS FAILS.....................................................................................17 XIII. CONCLUSION ..........................................................................................18 Case 8:16-cv-01142-CJC-KES Document 28 Filed 09/01/16 Page 4 of 28 Page ID #:1081 BURKE, W ILLIAMS & SORENSEN , LLP AT T ORN E YS AT LA W LO S AN GE L E S 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 LA #4830-2269-7015 v1 06190-1346 - ii - CASE NO. 8:16-CV-01142-CJC-KES NOTICE OF MOTION AND MOTION TO DISMISS MEMO OF POINTS & AUTHORITIES TABLE OF AUTHORITIES Page(s) Federal Cases Albrecht v. Lund, 845 F.2d 193 (9th Cir. 1988).............................................................................18 Allen v. City of Beverly Hills, 911 F.2d 367 (9th Cir. 1990).............................................................................18 Ashcroft v. Iqbal, 556 U.S. 662 (2008)............................................................................................3 Balistreri v. Pacifica Police Dept., 901 F.2d 696 (9th Cir. 1988).............................................................................15 Bascos v. Federal Home Loan Mortgage Corps., 2011 WL 3157063 (C.D. Cal. 2011) .................................................................18 Bell Atlantic v. Twombly, 550 U.S. 544 (2007)............................................................................................3 Cherian v. Countrywide Home Loans, Inc., 2012 WL 2865979 *4 (D. Ida.) ...........................................................................6 Cisneros v. Instant Capital Funding Group, 263 F.R.D. 595 (E.D. Cal. 2009).............................................................8, 16, 17 Clegg v. Cult Awareness Network, 18 F.3d 752 (9th Cir. 1994).................................................................................3 DeLeon v. Wells Fargo Bank, NA, 2011 WL 311376 (N.D. Cal. 2011).............................................................12, 16 Emrich v. Touche Ross & Co., 846 F.2d 1190 (9th Cir. 1988).............................................................................5 Fecht v. Price Co., 70 F.3d 1078 (9th Cir. 1995)...............................................................................4 Fleury v. Specialized Loan Servicing, LLC, 2011 WL 4851141 (Bankr. E.D. Cal. 2011)......................................................17 Case 8:16-cv-01142-CJC-KES Document 28 Filed 09/01/16 Page 5 of 28 Page ID #:1082 BURKE, W ILLIAMS & SORENSEN , LLP AT T ORN E YS AT LA W LO S AN GE L E S 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 LA #4830-2269-7015 v1 06190-1346 - iii - CASE NO. 8:16-CV-01142-CJC-KES NOTICE OF MOTION AND MOTION TO DISMISS MEMO OF POINTS & AUTHORITIES United States v. Gaubert, 499 U.S. 315 (1991)............................................................................................8 H.J. Inc. v. Northwestern Bell Tel. Co., 492 U.S. 229 (1989)..........................................................................................14 Howard v. Am. Online Inc., 208 F.3d 741 (9th Cir. 2000).............................................................................14 Hulse v. Ocwen Federal Bank, FSB, 195 F.Supp.2d 1188 (D. Or. 2002).............................................................7 Hydrick v. Hunter, 500 F.3d 978 (9th Cir. 2007)...............................................................................8 Jacobson v. Balboa Arms Drive Trust #5402, 2011 WL 2784126 (S.D.Cal. 2011)...............................................................8, 11 Mansour v. Cal-Western Reconveyance Corp., 618 F.Supp.2d 1178 (D. Ariz. 2009) ...................................................................7 Martinez v. Bank of America Natl. Assn., 2010 WL 4290921 (D. Nev.) ..............................................................................6 Mayer v. Mylod, 988 F.2d 635 (6th Cir. 1993)...............................................................................3 Miranda v. Ponce Fed. Bank, 948 F.2d 41 (1st Cir. 1991) .........................................................................14, 15 Natividad v. Wells Fargo Bank, 2013 WL 2299601 (N.D. Cal.)........................................................................6, 7 Parks School of Business, Inc. v. Symington, 51 F.3d 1480 (9th Cir. 1995)...............................................................................5 Rodriguez v. JP Morgan Chase & Co., 809 F.Supp.2d 1291 (S.D.Cal. 2011) ..................................................................8 Sanders v. Kennedy, 794 F.2d 478 (9th Cir. 1986)...............................................................................3 Schreiber Dist. Co. v. Serv-Well Furniture Co., 806 F.2d 1393 (9th Cir. 1986).............................................................................4 Case 8:16-cv-01142-CJC-KES Document 28 Filed 09/01/16 Page 6 of 28 Page ID #:1083 BURKE, W ILLIAMS & SORENSEN , LLP AT T ORN E YS AT LA W LO S AN GE L E S 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 LA #4830-2269-7015 v1 06190-1346 - iv - CASE NO. 8:16-CV-01142-CJC-KES NOTICE OF MOTION AND MOTION TO DISMISS MEMO OF POINTS & AUTHORITIES Shwarz v. United States, 234 F.3d 428 (9th Cir. 2000)...............................................................................4 Sipe v. Countrywide Bank, 690 F.Supp.2d 1141 (E.D.Cal. 2010) ................................................................12 Swartz v. KPMG LLP, 476 F.3d 756 (9th Cir. 2007)...............................................................................4 Thanh Nguyen v. Pennymac Loan Services, LLC, 2012 WL 6062742 (C.D. Cal.)............................................................................1 Wagh v. Metris Direct, Inc., 348 F.3d 1102 (9th Cir. 2003)...........................................................................15 Weahunt v. California Reconveyance Company, 2012 WL 1594212 (E.D. Cal.) ............................................................................6 State Cases Bank of America Leasing & Capital, LLC v. 3 Arch Trustee Services, Inc., 180 Cal.App.4th 1090 (2009)............................................................................10 Bartlett v. State of California, 145 Cal.App.2d 50..............................................................................................9 Black v. Bank of America, 30 Cal.App.4th (1995) ......................................................................................11 Cell-Tech Commons, Inc. v. L.A. Cellular Tel. Co., 20 Cal.4th 163 (1999) .......................................................................................17 Diediker v. Peelle Financial Corp., 60 Cal.App.4th 288 (1997)................................................................................10 Dinosaur Dev., Inc. v. White, 216 Cal.App. 3d 1310 (1989)............................................................................16 Garretson v. Post, 156 Cal.App. 4th 1508 (2007).............................................................................8 Hagberg v. California Federal Bank FSB, 32 Cal.4th 350 (2004) .........................................................................................8 Case 8:16-cv-01142-CJC-KES Document 28 Filed 09/01/16 Page 7 of 28 Page ID #:1084 BURKE, W ILLIAMS & SORENSEN , LLP AT T ORN E YS AT LA W LO S AN GE L E S 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 LA #4830-2269-7015 v1 06190-1346 - v - CASE NO. 8:16-CV-01142-CJC-KES NOTICE OF MOTION AND MOTION TO DISMISS MEMO OF POINTS & AUTHORITIES Heritage Oaks Partners v. First American Title Ins. Co., 155 Cal.App.4th 339 (2007)..............................................................................10 Jones v. Wells Fargo Bank, 112 Cal. App. 4th 1527 (2003)..........................................................................16 Kachlon v. Markowitz, 168 Cal.App.4th 316 (2008)................................................................................9 Melchior v. New Line Prods., Inc., 106 Cal. App. 4th 779 (2003)............................................................................16 Monterey S.P. Partnership v. W.L. Bangham, Inc., 49 Cal.3d 454 (1989) ........................................................................................10 Otworth v. S. Pac. Transp. Co., 166 Cal. App. 3d 452 (1985).............................................................................16 Pfeifer v. Countrywide Home Loans, Inc., 211 Cal.App.4th, 1250, 1264 (2012)...................................................................7 Pro Value Properties, Inc. v. Quality Loan Service Corp., 170 Cal.App.4th 579 (2009)..........................................................................9, 10 Silberg v. Anderson, 50 Cal.3d 205 (1990) ......................................................................................8, 9 Stevens v. Superior Court, 75 Cal.App.4th 594 (1999)................................................................................16 Tarmann v. State Farm Mut. Auto. Ins. Co., 2 Cal.App. 4th 153 (1991) ................................................................................12 Federal Statutes 15 U.S.C. § 1692.............................................................................................passim 15 U.S.C. § 1692(a) .................................................................................................6 15 U.S.C. § 1692(e) .................................................................................................5 18 U.S.C. § 1961....................................................................................................13 18 U.S.C. § 1961(1) ...............................................................................................14 Case 8:16-cv-01142-CJC-KES Document 28 Filed 09/01/16 Page 8 of 28 Page ID #:1085 BURKE, W ILLIAMS & SORENSEN , LLP AT T ORN E YS AT LA W LO S AN GE L E S 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 LA #4830-2269-7015 v1 06190-1346 - vi - CASE NO. 8:16-CV-01142-CJC-KES NOTICE OF MOTION AND MOTION TO DISMISS MEMO OF POINTS & AUTHORITIES 18 U.S.C. § 1961(5) ...............................................................................................14 18 U.S.C. §§ 1961-1968 ........................................................................ 2, 13, 14, 15 18 U.S.C. § 1962....................................................................................................13 18 U.S.C. § 1962(b)-(c) .........................................................................................14 18 U.S.C. § 1964(c) ...............................................................................................13 State Statutes Business and Professions Code § 17200 et seq. ...............................................16, 17 Civil Code § 47.......................................................................................................7, 8, 9, 17 § 47(c) ................................................................................................................9 §§ 2920-2944.5...................................................................................................8 § 2924(a).............................................................................................................9 § 2924(b) ............................................................................................................9 § 2924(d) ....................................................................................................7, 8, 9 § 2924(j) .............................................................................................................8 § 2924b(b) ..........................................................................................................8 § 2924h(c)...........................................................................................................8 Other Authorities Fed.R.Civ.P. Rule 8(a) .............................................................................................................4 Rule 9 .................................................................................................................4 Rule 9(b).................................................................................................4, 11, 12 Rule 11(b)...........................................................................................................1 Rule 12(b)(6) ..............................................................................................3, 4, 7 Case 8:16-cv-01142-CJC-KES Document 28 Filed 09/01/16 Page 9 of 28 Page ID #:1086 BURKE, W ILLIAMS & SORENSEN , LLP AT T ORN E YS AT LA W LO S AN GE L E S 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 LA #4830-2269-7015 v1 06190-1346 - 1 - CASE NO. 8:16-CV-01142-CJC-KES NOTICE OF MOTION AND MOTION TO DISMISS MEMO OF POINTS & AUTHORITIES MEMORANDUM OF POINTS AND AUTHORITIES I. INTRODUCTION The Complaint filed June 18, 2016 (the “Complaint”), by Plaintiffs JOHN MANOS, TARA BORRELLI, and JESSIE MANOS (“Plaintiffs”) pleads no viable claims for relief against Defendants MTC FINANCIAL INC. dba TRUSTEE CORPS, erroneously sued herein as MTC FINANCIAL, INC. (“Trustee Corps”), or MALCOLM CISNEROS, ALC (“Malcolm Cisneros”)(collectively, the “Moving Defendants”). Therefore, the Complaint should be dismissed as to the Moving Defendants without leave to amend. The Moving Defendants are named in the claims addressed in this Motion, however, nothing is pleaded to suggest the Moving Defendants have any liability or have violated any provisions of law. Trustee Corps is a foreclosure trustee, and therefore, by law its actions conducted in furtherance of a non-judicial foreclosure sale are not within the purview of the Fair Debt Collection Practices Act (the “FDCPA”). Similarly, Plaintiffs have alleged no actions whatsoever by Malcolm Cisneros, a law firm alleged to provide legal services to Defendant DiTech Financial LLC, that concern the Plaintiffs, let alone any activity that would not have been taken in the context of non-judicial foreclosure proceedings. Therefore Malcolm Cisneros’ inclusion in this action as a defendant is without basis and begs the question of how FRCP Rule 11(b) has not been violated thereby. The Plaintiffs’ allegations against the Moving Defendants all hinge on the contention, contrary to the law, that non-judicial foreclosure activities are subject to the provisions of the Fair Debt Collection Practices Act (“FDCPA”) 15 U.S.C. §1692. Consequently, all of Plaintiffs’ FDCPA-based claims against the Moving Defendants non-judicial foreclosure activities fail as a matter of law. See, e.g., Thanh Nguyen v. Pennymac Loan Services, LLC, 2012 WL 6062742 at *6 (C.D. Cal.)(“the FDCPA does not apply to mortgage servicers who are collecting on a mortgage debt”). Additionally, because all of the Plaintiffs other claims against the Case 8:16-cv-01142-CJC-KES Document 28 Filed 09/01/16 Page 10 of 28 Page ID #:1087 BURKE, W ILLIAMS & SORENSEN , LLP AT T ORN E YS AT LA W LO S AN GE L E S 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 LA #4830-2269-7015 v1 06190-1346 - 2 - CASE NO. 8:16-CV-01142-CJC-KES NOTICE OF MOTION AND MOTION TO DISMISS MEMO OF POINTS & AUTHORITIES Moving Defendants (RICO, Unjust Enrichment, Unfair Competition, and Declaratory Judgment) are based on the purported presence of FDCPA violations, all of Plaintiffs’ other claims fail as well. Consequently, as all of Plaintiffs’ claims against the Moving Defendants hinge on purported FDCPA violations, Plaintiffs have not and cannot allege any viable claims against them and the claims alleged against the Moving Defendants should be dismissed without leave to amend. II. BACKGROUND A. Summary of Plaintiffs’ Contentions Put succinctly, Plaintiffs contend that the Moving Defendants are debt collectors under the FDCPA (Complaint, ¶¶ 14, 54, 133, 137, and 164), and have violated the FDCPA in the process of conducting non-judicial foreclosure activities following a default on a 2003 loan made to John Manos and secured by the Subject Property pursuant to a duly recorded Deed of Trust (Compendium of Exhibits, Dkt No. 1-1 [“COE”], pp. 1-28). However, Moving Defendants establish in Section IV. of this Memorandum below that the FDCPA does not apply to non-judicial foreclosure proceedings as a matter of law. Building on the false premise that the Moving Defendants’ non-judicial foreclosure activities are subject to and have violated the FDCPA, Plaintiffs proceed in the Complaint to construct a house of cards including claims based in RICO (Complaint, ¶¶ 194-234), Unjust Enrichment (Complaint, ¶¶ 235-238), Unfair Competition (Complaint, ¶¶ 254-271), and Declaratory Judgment (Complaint, ¶¶ 272-276). However, all of these additional claims are fatally defective because they depend on a conclusion that cannot be made as a matter of law, i.e., that the FDCPA applies to non-judicial foreclosure proceedings (See, Complaint ¶¶ 116, 133, 142, 157, 161, 163, 165, 194, 235, 254, 267, and 274. The Moving Defendants have engaged in no wrongdoing in connection with the exercise of a contractual right to foreclose based on the default of the Loan. As Case 8:16-cv-01142-CJC-KES Document 28 Filed 09/01/16 Page 11 of 28 Page ID #:1088 BURKE, W ILLIAMS & SORENSEN , LLP AT T ORN E YS AT LA W LO S AN GE L E S 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 LA #4830-2269-7015 v1 06190-1346 - 3 - CASE NO. 8:16-CV-01142-CJC-KES NOTICE OF MOTION AND MOTION TO DISMISS MEMO OF POINTS & AUTHORITIES a result, the Complaint should be dismissed with prejudice in its entirety as against the Moving Defendants as no amendment is possible to state a valid claim. III. STANDARDS APPLICABLE TO MOTIONS TO DISMISS A. Pleading Requirements In General. A motion to dismiss is proper under Fed.R.Civ.P.Rule 12(b)(6) where the pleadings fail to state a claim upon which relief can be granted. Rule 12(b)(6) allows a defendant “to test whether, as a matter of law, the plaintiff is entitled to legal relief even if everything in the alleged complaint is true.” Mayer v. Mylod, 988 F.2d 635, 638 (6th Cir. 1993). In ruling on a Rule 12(b)(6) motion, the complaint is construed in the light most favorable to the non-moving party, and all material allegations in the complaint are taken to be true. Sanders v. Kennedy, 794 F.2d 478, 481 (9th Cir. 1986). The court, however, is not required to accept legal conclusions cast in the form of factual allegations if those conclusions cannot reasonably be drawn from the facts alleged. Clegg v. Cult Awareness Network, 18 F.3d 752, 754-755 (9th Cir. 1994). Dismissal under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim is proper only if the pleadings fail to allege enough facts so as to demonstrate a ‘plausible entitlement to relief.’ Bell Atlantic v. Twombly, 550 U.S. 544, 553-558 (2007). 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 her “entitle[ment] to relief” requires more than labels and conclusions; a formulaic recitation of the elements of a cause of action will not do. Factual allegations must be enough to raise a right to relief above the speculative level on the assumption that all the allegations in the complaint are true (even if doubtful in fact). Id. Only a complaint that states a plausible claim for relief survives a motion to dismiss. Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 1950 (2008) citing Bell Atlantic v. Twombly, 550 U.S. 544, 556 (2007). Case 8:16-cv-01142-CJC-KES Document 28 Filed 09/01/16 Page 12 of 28 Page ID #:1089 BURKE, W ILLIAMS & SORENSEN , LLP AT T ORN E YS AT LA W LO S AN GE L E S 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 LA #4830-2269-7015 v1 06190-1346 - 4 - CASE NO. 8:16-CV-01142-CJC-KES NOTICE OF MOTION AND MOTION TO DISMISS MEMO OF POINTS & AUTHORITIES B. Pleading Requirements for Fraud/Intentional Misrepresentation. Federal Rule of Civil Procedure 8(a) generally provides that a pleading that sets forth a claim must contain “a short and plain statement of the claim showing the pleader is entitled to relief.” However, Federal Rule of Civil Procedure 9(b) requires all allegations of fraud to be stated “with particularity.” To satisfy the additional burdens imposed by Rule 9(b), the plaintiff must allege “the time, place and nature of the alleged fraudulent activities.” Fecht v. Price Co., 70 F.3d 1078, 1082 (9th Cir. 1995). In addition, Rule 9(b) “does not allow a complaint to merely lump multiple defendants together but require[s] plaintiffs to differentiate their allegations when suing more than one defendant ... and inform each defendant separately of the allegations surrounding her alleged participation in the fraud.” Swartz v. KPMG LLP, 476 F.3d 756, 764-765 (9th Cir. 2007) (quotation omitted). “In the context of a fraud suit involving multiple defendants, a plaintiff must, at a minimum, ‘identif[y] the role of [each] defendant[ ] in the alleged fraudulent scheme.’ “Id., at 765 (quoting Moore v. Kayport Package Express, Inc., 885 F.2d 531, 541 (9th Cir. 1989)). See also, Schreiber Dist. Co. v. Serv-Well Furniture Co., 806 F.2d 1393, 1401 (9th Cir. 1986) (the pleader must allege the “time, place, and specific content of the false representations as well as the identities of the parties to the misrepresentation”). Plaintiffs here have made no attempt to comply with these FRCP Rule 9 requirements in the Complaint as to the Moving Defendants. Conclusory allegations of fraud or misrepresentation are insufficient. C. Construction of Exhibits Referred to in the Complaint or Attached to a Rule 12(b)(6) Motion. “The court need not accept as true... allegations that contradict facts that may be judicially noticed by the court, and may consider documents that are in the complaint whose authenticity no party questions.” Shwarz v. United States, 234 F.3d 428, 435 (9th Cir. 2000) (citations omitted). Case 8:16-cv-01142-CJC-KES Document 28 Filed 09/01/16 Page 13 of 28 Page ID #:1090 BURKE, W ILLIAMS & SORENSEN , LLP AT T ORN E YS AT LA W LO S AN GE L E S 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 LA #4830-2269-7015 v1 06190-1346 - 5 - CASE NO. 8:16-CV-01142-CJC-KES NOTICE OF MOTION AND MOTION TO DISMISS MEMO OF POINTS & AUTHORITIES “[E]xhibits attached to the complaint, as well as matters of public record may be considered in determining whether dismissal was proper without converting the motion to one for summary judgment. Parks School of Business, Inc. v. Symington, 51 F.3d 1480, 1484 (9th Cir. 1995).1 IV. PLAINTIFFS’ CLAIMS FOR VIOLATION OF THE FEDERAL FAIR DEBT COLLECTION PRACTICES REGULATIONS HAVE NO BASIS AGAINST THE MOVING DEFENDANTS Plaintiffs have alleged the following claims against the Moving Defendants based on alleged violations of the FDCPA:  Plaintiffs’ First Cause of Action-Violations of the Fair Debt Collection Practices Action, Count III: False or Misleading Representations against Trustee Corps (Complaint, ¶¶ 132-140);  Plaintiffs’ First Cause of Action-Violations of the Fair Debt Collection Practices Action, Count IV: Unfair Practices against Trustee Corps and Malcolm Cisneros (Complaint, ¶¶ 141-155);  Plaintiffs’ First Cause of Action-Violations of the Fair Debt Collection Practices Action, Count V: Validation of Debts against Trustee Corps and Malcolm Cisneros (Complaint, ¶¶ 156-161); and  Plaintiffs’ First Cause of Action-Violations of the Fair Debt Collection Practices Action, Count VI: Failure To Provide Notice of Debt against Trustee Corps (Complaint, ¶¶ 162-165). The purpose of the FDCPA is to “eliminate abusive debt collection practices by debt collectors, to insure that those debt collectors who refrain from using abusive debt collection practices are not competitively disadvantaged, and to promote consistent State action to protect consumers against debt collection abuses.” 15 U.S.C. §1692(e). Trustee Corps is a substituted foreclosure trustee, not a creditor of Plaintiffs, 1 The court may also take judicial notice of documents that are “a matter of general public record.” Emrich v. Touche Ross & Co., 846 F.2d 1190, 1198 (9th Cir. 1988). Case 8:16-cv-01142-CJC-KES Document 28 Filed 09/01/16 Page 14 of 28 Page ID #:1091 BURKE, W ILLIAMS & SORENSEN , LLP AT T ORN E YS AT LA W LO S AN GE L E S 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 LA #4830-2269-7015 v1 06190-1346 - 6 - CASE NO. 8:16-CV-01142-CJC-KES NOTICE OF MOTION AND MOTION TO DISMISS MEMO OF POINTS & AUTHORITIES nor a debt collector for the beneficiary or lender (COE, pp. 69-71). Thus, any claims against Trustee Corps for alleged violation of the FDCPA are absolutely barred. The Federal Fair Debt Collection Practices Act, 15 U.S.C. §1692a [Definitions] provides in part that: As used in this subchapter- (5) The term “debt” means any obligation or alleged obligation of a consumer to pay money arising out of a transaction in which the money, property, insurance, or services which are the subject of the transaction are primarily for personal, family, or household purposes, whether or not such obligation has been reduced to judgment. (6) The term “debt collector” means any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another. The District Courts have rejected the assertion that the FDCPA is applicable to foreclosure trustees who conduct non-judicial foreclosures. For example, in Natividad v. Wells Fargo Bank, 2013 WL 2299601 (N.D. Cal.), the court held: “Foreclosing on a trust deed is distinct from the collection of the obligation to pay money. The FDCPA is intended to curtail objectionable acts occurring in the process of collecting funds from a debtor. But, foreclosing on a trust deed is an entirely different path. Payment of funds is not the object of the foreclosure action. Rather, the lender is foreclosing its interest in the property.” Id. *5. As such, according to the District Courts in the Ninth Circuit, engaging in non-judicial foreclosure activities does not fall within the FDCPA. See, Weahunt v. California Reconveyance Company, 2012 WL 1594212 *6, 7 (E.D. Cal.) (liability cannot attach unless defendant is a debt collector trying to collect a debt, and foreclosure on a property pursuant to a deed of trust is not debt collection under FDCPA); Cherian v. Countrywide Home Loans, Inc., 2012 WL 2865979 *4 (D. Ida.) (“the activity of foreclosing on a property pursuant to a deed of trust is not the collection of a debt within the meaning of the FDCPA, and no claim can be stated against ReconTrust, as the successor trustee under the FDCPA.”); Martinez v. Bank of America Natl. Assn., 2010 WL 4290921 at *8-*9 (D. Nev.) (in wrongful Case 8:16-cv-01142-CJC-KES Document 28 Filed 09/01/16 Page 15 of 28 Page ID #:1092 BURKE, W ILLIAMS & SORENSEN , LLP AT T ORN E YS AT LA W LO S AN GE L E S 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 LA #4830-2269-7015 v1 06190-1346 - 7 - CASE NO. 8:16-CV-01142-CJC-KES NOTICE OF MOTION AND MOTION TO DISMISS MEMO OF POINTS & AUTHORITIES foreclosure case alleging improper notice of default and alleging trustee was not a licensed debt collector, finding that foreclosure trustee was not “debt collector” for purposes of FDCPA); Mansour v. Cal-Western Reconveyance Corp., 618 F.Supp.2d 1178, 1182 (D. Ariz. 2009) (“The [c]ourt…finds that the non-judicial foreclosure proceeding…is not an attempt to collect a debt for FPCPA purposes.”); and Hulse v. Ocwen Federal Bank, FSB, 195 F.Supp.2d 1188, 1204 (D. Or. 2002). State Courts in California also concur with the District Courts that a foreclosure trustee is not a debt collector under the FDCPA when recording and mailing foreclosure notices. See, Pfeifer v. Countrywide Home Loans, Inc., 211 Cal.App.4th, 1250, 1264 (2012) (“We agree with those courts that have held that giving notice of a foreclosure sale to a consumer as required by the Civil Code does not constitute debt collection activity under the FDCPA.”). Here, it is clear that Trustee Corps is a foreclosure trustee. Therefore, Trustee Corps does not qualify as a “debt collector” under the FDCPA definition. Further, Plaintiffs have not pleaded factually in the Complaint that Trustee Corps or Malcolm Cisneros acted beyond or outside what it was mandated to do under the statutory scheme governing non-judicial foreclosures. See, Natividad v. Wells Fargo Bank, 2013 WL 2299601 (N.D. Cal.) at *9 (“Because the Court concludes that legally-mandated actions required for mortgage foreclosure are not necessarily debt collection, and that Plaintiffs have not adequately alleged that any defendant engaged in any action beyond statutorily mandated actions for non- judicial foreclosure, the Court concludes that Plaintiffs have not sufficiently pled a FDCPA claim.”). Accordingly, Plaintiffs’ FDCPA claims against the Moving Defendants must be dismissed without leave to amend. V. TRUSTEE CORPS’ ALLEGED ACTIONS WERE PRIVILEGED UNDER CALIFORNIA CIVIL CODE §47 AND CIVIL CODE §2924(d) Dismissal under Rule 12(b)(6) is appropriate where defendants have statutory Case 8:16-cv-01142-CJC-KES Document 28 Filed 09/01/16 Page 16 of 28 Page ID #:1093 BURKE, W ILLIAMS & SORENSEN , LLP AT T ORN E YS AT LA W LO S AN GE L E S 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 LA #4830-2269-7015 v1 06190-1346 - 8 - CASE NO. 8:16-CV-01142-CJC-KES NOTICE OF MOTION AND MOTION TO DISMISS MEMO OF POINTS & AUTHORITIES or common law immunities. Hydrick v. Hunter, 500 F.3d 978, 985 (9th Cir. 2007) (qualified immunity of government officials); United States v. Gaubert, 499 U.S. 315, 324-325 (1991) (Federal Tort Claims Act discretionary function exception). Here, dismissal of the entire Complaint is appropriate, as foreclosure trustees have statutory immunity from damages claims. Civil Code §2924(d), which is at the beginning of the statutes governing foreclosures, specifically provides that the mailing, publication, and delivery of notices as required therein, and the performance of the procedures set forth in the Article,2 shall constitute privileged communications within Civil Code §47. This encompasses the entire foreclosure process, including the sale. Although the statute originally was understood as applicable to the tort of defamation, the courts have extended the privilege it provides to other tort claims. Hagberg v. California Federal Bank FSB, 32 Cal.4th 350, 361 (2004). Where a privileged publication forms the basis for the tort, Section 47 may defeat claims for abuse of process, intentional infliction of emotional distress, inducing breach of contract, interference with prospective advantage, negligent misrepresentation, invasion of privacy, and negligence. The only exception is for malicious prosecution actions. Silberg v. Anderson, 50 Cal.3d 205, 213-15 (1990). A number of Courts have held that the litigation privilege to be applied to foreclosure trustees is the absolute standard. Cisneros v. Instant Capital Funding Group, 263 F.R.D. 595, 609-610 (E.D. Cal. 2009); Garretson v. Post, 156 Cal.App. 4th 1508, 1517-1518 (2007) (4th Appellate District); Jacobson v. Balboa Arms Drive Trust #5402, 2011 WL 2784126 at *9 (S.D.Cal. 2011); Rodriguez v. JP Morgan Chase & Co., 809 F.Supp.2d 1291, 1299 (S.D.Cal. 2011). However, other courts held that trustee’s actions are considered to be to be privileged commun- 2 The “Article” encompasses the entire sale process. It covers Sections 2920 through 2944.5, includes provisions for the issuance and recording of notices of default (Civil Code §2924b(b)), notices of sale (Id.), and trustee’s deeds upon sale (Civil Code §§2924h(c) and 2924j). Case 8:16-cv-01142-CJC-KES Document 28 Filed 09/01/16 Page 17 of 28 Page ID #:1094 BURKE, W ILLIAMS & SORENSEN , LLP AT T ORN E YS AT LA W LO S AN GE L E S 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 LA #4830-2269-7015 v1 06190-1346 - 9 - CASE NO. 8:16-CV-01142-CJC-KES NOTICE OF MOTION AND MOTION TO DISMISS MEMO OF POINTS & AUTHORITIES ications under the less protective standard of a qualified common interest privilege. Kachlon v. Markowitz, 168 Cal.App.4th 316, 333 (2008).3 This standard still requires that Plaintiffs factually plead that the trustee acted with malice in order to overcome the immunity protections of Civil Code §47. Id. Plaintiffs have not alleged factually any malice by Trustee Corps. Therefore, Trustee Corps’ actions are privileged under either standard.4 Therefore, under Civil Code §§2924(d) and 47, Trustee Corps’ actions in performance of its duties during the foreclosure process were privileged. As Silberg, clearly details, the privilege completely defeats Plaintiffs’ claims alleged against Trustee Corps. Silberg, supra, 50 Cal.3d 205 at 215. Plaintiffs cannot show Trustee Corps has any liability. Trustee Corps’ Motion should be granted without leave to amend. VI. TRUSTEE CORPS OWES NO DUTIES TO PLAINTIFFS, OTHER THAN THOSE SPECIFICALLY STATED IN THE DEED OF TRUST AND APPLICABLE STATUTES Before any liability for failure to act may exist, there must have been a duty to act under the circumstances. Bartlett v. State of California, 145 Cal.App.2d 50, 56-57(1945). However, the trustee performs only ministerial acts that result in the transfer of title. Pro Value Properties, Inc. v. Quality Loan Service Corp., 170 3 The concept of “fraud” and Civil Code §47(c) (qualified privilege) intellectually does not make sense as discussed in Kachlon. If there was a qualified privilege, it could be overcome by the showing of “malice,” not fraud. Kachlon extrapolates from the defamation cases and the concept of malice to come up with the fraud exception. It is essentially impossible for a foreclosure trustee to commit fraud, as it has no common law duty to disclose. Its duties are set forth in the Civil Code, and the foreclosure procedures are statutorily prescribed, even to the point of mandating what must be in a Notice of Default and Notice of Trustee’s Sale. See: Civil Code §2924(a). Only if a trustee committed an act outside of the scope of its duties and causing prejudice thereby (for example, deliberately notifying the Trustor that the sale had been continued to an incorrect date), could a fraud allegation withstand a challenge to the pleading. 4 Trustee Corps also has immunity under Cal. Civ. Code §2924(b) which states: “In performing acts required by this article, the trustee shall incur no liability for any good faith error resulting from reliance on information provided in good faith by the beneficiary regarding the nature and the amount of the default under the secured obligation, deed of trust, or mortgage.” In the instant case, there is nothing pleaded factually to show Trustee Corps committed an error not in good faith. Case 8:16-cv-01142-CJC-KES Document 28 Filed 09/01/16 Page 18 of 28 Page ID #:1095 BURKE, W ILLIAMS & SORENSEN , LLP AT T ORN E YS AT LA W LO S AN GE L E S 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 LA #4830-2269-7015 v1 06190-1346 - 10 - CASE NO. 8:16-CV-01142-CJC-KES NOTICE OF MOTION AND MOTION TO DISMISS MEMO OF POINTS & AUTHORITIES Cal.App.4th 579, 583 (2009). Common law does not impose any additional obligations on the foreclosure trustee other those specifically stated in the deed of trust or the governing statutes. Diediker v. Peelle Financial Corp., 60 Cal.App.4th 288, 295 (1997). Thus, the scope and nature of the trustee’s duties are exclusively defined by the deed of trust and the governing statutes. Bank of America Leasing & Capital, LLC v. 3 Arch Trustee Services, Inc., 180 Cal.App.4th 1090, 1097-1098, 1104 (2009) (trustee’s rights, powers, and duties regarding notice of default and sale strictly defined and limited by statutory scheme; Legislature intended to protect trustees from costly litigation). No other common law duties exist. Pro Value Properties, Inc. v. Quality Loan Service Corp., supra, 170 Cal.App.4th at 583. A trustee under a deed of trust does not have a true trustee’s interest in, and control over, the trust property. Nor it is bound by the fiduciary duties that characterize a true trustee. Monterey S.P. Partnership v. W.L. Bangham, Inc., 49 Cal.3d 454, 462-463 (1989). Here, Trustee Corps merely acted as a common agent for the trustor and beneficiary of the deed of trust. Pro Value Properties, Inc. v. Quality Loan Service Corp., supra, 170 Cal.App.4th at 583. As such, the only duties of a trustee under a deed of trust are: (1) upon default, to undertake the steps necessary to foreclose the deed of trust; or (2) upon satisfaction of the secured debt, to reconvey the deed of trust. Heritage Oaks Partners v. First American Title Ins. Co., 155 Cal.App.4th 339, 345 (2007). There are no facts pleaded revealing that Trustee Corps acted outside its role as a foreclosure trustee. There are no facts pleaded to show Trustee Corps committed or participated in any act of fraud or other illegal conduct. Thus, because Trustee Corps’ foreclosure sale duties are defined and limited by statute, and because of the statutory protection afforded to trustees providing immunity from suit, no claim herein against Trustee Corps arising from its actions taken Case 8:16-cv-01142-CJC-KES Document 28 Filed 09/01/16 Page 19 of 28 Page ID #:1096 BURKE, W ILLIAMS & SORENSEN , LLP AT T ORN E YS AT LA W LO S AN GE L E S 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 LA #4830-2269-7015 v1 06190-1346 - 11 - CASE NO. 8:16-CV-01142-CJC-KES NOTICE OF MOTION AND MOTION TO DISMISS MEMO OF POINTS & AUTHORITIES during the foreclosure process can be stated. VII. THE MOVING DEFENDANTS ARE ALLEGED TO BE AGENTS FOR A DISCLOSED PRINCIPAL The Complaint alleges that both Trustee Corps and Malcolm Cisneros acted as agents for a disclosed principal in their alleged actions connected to the non- judicial foreclosure process. Thus, under the Agent’s Immunity Rule, they cannot be sued. See, Black v. Bank of America, 30 Cal.App.4th (1995). Black cited the “agent’s immunity rule” which holds agents immune from liability if they are acting on the part of a disclosed principal. Id., at 4-5. Under the agent’s immunity rule “an agent is [also] not liable for conspiring with the principal when the agent is acting in an official capacity on behalf of the principal.” Jacobson v. Balboa Arms Drive Trust #5402, 2011 WL 2784126 at *10 (S.D.Cal. 2011) citing Panoutsopoulos v. Chambliss, 157 Cal.App.4th 297, 304 (2007). The Jacobson court found that as Trustee Corps was acting solely as the agent of the beneficiary, Trustee Corps was immune from the plaintiff’s entire action. In the instant case, the Plaintiffs’ pleading does not assert factually that Trustee Corps ever departed from its agency role. Similarly, the allegations against Malcolm Cisneros, which are conclusory only and include absolutely no factual contentions of actions actually taken by Malcolm Cisneros, are insufficient to support any of the asserted claims against Malcolm Cisneros. Therefore, the Moving Defendants should be dismissed from this Action. VIII. PLAINTIFFS’ FIRST CAUSE OF ACTION-VIOLATIONS OF THE FAIR DEBT COLLECTION PRACTICES ACTION, COUNT III: FALSE OR MISLEADING REPRESENTATIONS AGAINST TRUSTEE CORPS HAS NO BASIS Federal Rules of Civil Procedure, Rule 9(b) requires all allegations of fraud to be stated “with particularity.” See, Section III.B., supra, as to the detail required. In California, to state a claim for intentional misrepresentation, a plaintiff must plead: (1) a misrepresentation, (2) defendant’s knowledge of the falsity; (3) a Case 8:16-cv-01142-CJC-KES Document 28 Filed 09/01/16 Page 20 of 28 Page ID #:1097 BURKE, W ILLIAMS & SORENSEN , LLP AT T ORN E YS AT LA W LO S AN GE L E S 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 LA #4830-2269-7015 v1 06190-1346 - 12 - CASE NO. 8:16-CV-01142-CJC-KES NOTICE OF MOTION AND MOTION TO DISMISS MEMO OF POINTS & AUTHORITIES defendant’s intent to defraud, (4) plaintiff’s justifiable reliance, and (5) resulting damages. Id. See also, Sipe v. Countrywide Bank, 690 F.Supp.2d 1141, 1156 (E.D.Cal. 2010). Plaintiffs have not met these mandatory pleading requirements. First, there is no allegation of a specific misrepresentation by a specific person at Trustee Corps. Second, lacking an actual, specific misrepresentation by a person at Trustee Corps, Plaintiffs have no basis for any alleged justifiable reliance on Trustee Corps. Third, Plaintiffs have alleged no facts showing a specific person at Trustee Corps’ intended to defraud Plaintiffs. Fourth, there cannot have been any proximately caused damages because Plaintiffs have not detrimentally relied on any allegedly false representations. See also, DeLeon v. Wells Fargo Bank, supra, 2011 WL 311376 at *8-9 (misrepresentations did not cause loss of home at foreclosure sale; Plaintiff’s failure to tender amount due caused loss of home). Trustee Corps is a corporation. The requirement of specificity in a fraud action against a corporation requires the plaintiff to “allege the names of the persons who made the allegedly fraudulent representations, their authority to speak, to whom they spoke, what they said or wrote, and when it was said or written.” Tarmann v. State Farm Mut. Auto. Ins. Co., 2 Cal.App. 4th 153, 157 (1991) (fraud against insurer). The Complaint makes none of these required allegations as to Trustee Corps. Additionally, the allegedly false or misleading representation made by Trustee Corps involved sending a reinstatement demand to Plaintiff Jessie Manos when the request had come from John Manos. (Complaint, ¶¶134-136, COE pp. 48-52). However, Jessie Manos is alleged to be an owner of the property that is the subject of the non-judicial foreclosure proceedings (Complaint, ¶¶ 7-8) and the demand was sent to the address indicated on the Quitclaim Deed by which she acquired her alleged interest (COE pp. 29-31). Consequently, Plaintiffs have not alleged any reason why sending of the reinstatement demand to Jessie Manos was Case 8:16-cv-01142-CJC-KES Document 28 Filed 09/01/16 Page 21 of 28 Page ID #:1098 BURKE, W ILLIAMS & SORENSEN , LLP AT T ORN E YS AT LA W LO S AN GE L E S 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 LA #4830-2269-7015 v1 06190-1346 - 13 - CASE NO. 8:16-CV-01142-CJC-KES NOTICE OF MOTION AND MOTION TO DISMISS MEMO OF POINTS & AUTHORITIES in any way misleading or false. For all the foregoing reasons, Plaintiffs’ First Cause of Action-Violations of the Fair Debt Collection Practices Action, Count III: False or Misleading Representations against Trustee Corps should be dismissed with prejudice. IX. PLAINTIFFS’ FOURTH CAUSE OF ACTION-VIOLATIONS OF THE RACKETEER INFLUENCED AND CORRUPT ORGANIZATIONS ACT, 18 U.S.C. §§1961-1968 AGAINST TRUSTEE CORPS AND MALCOLM CISNEROS (“RICO”) FAILS BECAUSE PLAINTIFFS CANNOT ALLEGE THE EXISTENCE OF AN ENTERPRISE OR PATTERN OF RACKETEERING ACTIVITY Plaintiffs’ Fourth Cause of Action-Violations of the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. §§1961-1968 against Trustee Corps and Malcolm Cisneros (“RICO”) fails because Plaintiffs cannot allege the existence of an enterprise, nor a pattern of racketeering activity. RICO grants a private right of action to “[a]ny person injured in his business or property by reason of a violation of section 1962 of this chapter.” 18 U.S.C. § 1964(c). In turn, 18 U.S.C. § 1962 contains four subsections which make it unlawful to: (a) invest income derived from a pattern of racketeering activity in an “enterprise,” as defined by section 1961; (b) acquire or maintain an interest in an enterprise through a pattern of racketeering activity; (c) conduct the affairs of an enterprise through a pattern of racketeering activity; or (d) conspire to commit any of the above acts. 18 U.S.C. § 1962. Thus, to state a claim for a civil RICO violation, a private plaintiff must allege facts showing (1) an injury to business or property; and (2) a substantive violation of one or more subsections of section 1962. In this matter, Plaintiffs have simply alleged no facts which defined the Moving Defendants status as a RICO “enterprise.” Under the Ninth Circuit’s interpretation of [RICO’s] enterprise element: “the predicate acts of racketeering activity, by themselves, do not satisfy the RICO enterprise element. A RICO plaintiff must allege a structure for the making of decisions separate and apart from the alleged racketeering activities, because ‘the existence of an enterprise at all times remains a separate element which must be proved.’” Case 8:16-cv-01142-CJC-KES Document 28 Filed 09/01/16 Page 22 of 28 Page ID #:1099 BURKE, W ILLIAMS & SORENSEN , LLP AT T ORN E YS AT LA W LO S AN GE L E S 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 LA #4830-2269-7015 v1 06190-1346 - 14 - CASE NO. 8:16-CV-01142-CJC-KES NOTICE OF MOTION AND MOTION TO DISMISS MEMO OF POINTS & AUTHORITIES Wagh v. Metris Direct, Inc., 348 F.3d 1102, 1112 (9th Cir. 2003) (overruled on different grounds); see also United States v. Masters, 924 F.2d 1362, 1367 (7th Cir. 1991) (“If the enterprise’ is just a name for the crimes the defendants committed, or for their agreement to commit these crimes . . ., then it would not be an enterprise within the meaning of the statute.”). In Wagh, the plaintiff failed to allege such “a structure for the making of [racketeering] decisions,” id., and the court affirmed a district court’s dismissal of RICO claims, where they were based on what amounted to his assertion that his credit card was improperly billed for credit protection services he did not order. Similarly, because Plaintiffs here fail to allege any “structure for the making of [racketeering] decisions” whatsoever, Moving Defendants’ motion must be granted. In addition to the above, Plaintiffs fail to allege sufficient facts regarding how Defendants violated RICO. A RICO plaintiff must plead and prove the existence of a “pattern” of racketeering activity. See 18 U.S.C. § 1962(b)-(c). “Racketeering activity” is defined as any of a wide number of criminal actions. 18 U.S.C. § 1961(1). A “pattern of racketeering activity” is defined as “at least two acts of racketeering activity” within ten years of each other. 18 U.S.C. § 1961(5) and see Howard v. Am. Online Inc., 208 F.3d 741 (9th Cir. 2000). “[T]o prove a pattern of racketeering activity a plaintiff or prosecutor must show that the racketeering predicates are related, and that they amount to or pose a threat of continued criminal activity.” H.J. Inc. v. Northwestern Bell Tel. Co., 492 U.S. 229, 239, 109 S.Ct. 2893 (1989) (abrogated on different grounds). “Predicate acts extending over a few weeks or months and threatening no future criminal conduct do not satisfy this requirement.” Id. at 242. Here, Plaintiffs have clearly failed to allege a sufficient pattern of racketeering activity meeting these criteria. In addition, it has been observed that “in cases alleging civil RICO violations, particular care is required to balance the liberality of the Civil Rules with the necessity of preventing abusive or vexatious treatment of defendants.” Miranda v. Ponce Fed. Bank, 948 F.2d 41, 44 (1st Cir. 1991). The Miranda court Case 8:16-cv-01142-CJC-KES Document 28 Filed 09/01/16 Page 23 of 28 Page ID #:1100 BURKE, W ILLIAMS & SORENSEN , LLP AT T ORN E YS AT LA W LO S AN GE L E S 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 LA #4830-2269-7015 v1 06190-1346 - 15 - CASE NO. 8:16-CV-01142-CJC-KES NOTICE OF MOTION AND MOTION TO DISMISS MEMO OF POINTS & AUTHORITIES affirmed a trial court’s dismissal, pursuant to defendants’ motion to dismiss, of a plaintiffs RICO claims where “[t]he pleadings, though copious, [were] vague and inexplicit.” Id. at 45. The court remarked that “[c]ivil RICO is an unusually potent weapon -- the litigation equivalent of a thermonuclear device. The very pendency of a RICO suit can be stigmatizing and its consummation can be costly; a prevailing plaintiff, for example, stands to receive treble damages and attorneys’ fees. . . . For these reasons, it would be unjust if a RICO plaintiff could defeat a motion to dismiss simply by asserting an inequity attributable to a defendant’s conduct and tacking on the self-serving conclusion that the conduct amounted to racketeering. Hence, to avert dismissal under Rule 12(b)(6), a civil RICO complaint must, at a bare minimum, state facts sufficient to portray (i) specific instances of racketeering activity within the reach of the RICO statute; and (ii) a causal nexus between that activity and the harm alleged.” Id. at 44. Similarly, in Wagh, the Ninth Circuit quoted the First Circuit for the proposition that the “need for expeditious and orderly progress of . . . litigation” is particularly pronounced in a civil RICO suit because of its “quasi-criminal” nature and consequent “stigmatizing effect on those named as defendants.” . . . Courts should therefore “strive to flush out frivolous RICO allegations at an early stage of the litigation.” Wagh, 348 F.3d at 1108. To put it plainly, Plaintiffs’ Complaint is marked by a marked “absence of sufficient facts alleged under a cognizable legal theory.” Balistreri v. Pacifica Police Dept., 901 F.2d 696, 699 (9th Cir. 1988). Thus, Plaintiffs have failed to adequately plead that the Moving Defendants are guilty of “racketeering” or of a “pattern of racketeering activity,” and this claim should therefore be dismissed with prejudice. Further, given that Trustee Corps’ conduct was privileged, that can be the only result. X. PLAINTIFFS’ CLAIM FOR UNJUST ENRICHMENT FAILS Plaintiffs’ Fifth Cause of Action-Unjust Enrichment against Trustee Corps and Malcolm Cisneros incorporates and is based on Plaintiffs’ defective claims under the FDCPA and RICO. Complaint, ¶¶235-237. Case 8:16-cv-01142-CJC-KES Document 28 Filed 09/01/16 Page 24 of 28 Page ID #:1101 BURKE, W ILLIAMS & SORENSEN , LLP AT T ORN E YS AT LA W LO S AN GE L E S 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 LA #4830-2269-7015 v1 06190-1346 - 16 - CASE NO. 8:16-CV-01142-CJC-KES NOTICE OF MOTION AND MOTION TO DISMISS MEMO OF POINTS & AUTHORITIES Unjust enrichment is “the result of a failure to make restitution under circumstances where it is equitable to do so.” Melchior v. New Line Prods., Inc., 106 Cal. App. 4th 779, 793 (2003); Dinosaur Dev., Inc. v. White, 216 Cal.App. 3d 1310, 1314 (1989) (“Unjust enrichment . . . is synonymous with restitution”). Under the theory of unjust enrichment, “one who acquires a benefit which may not justly be retained [is required] to return either the thing or its equivalent to the aggrieved party so as not to be unjustly enriched.” Otworth v. S. Pac. Transp. Co., 166 Cal. App. 3d 452, 460 (1985). Unjust enrichment is inapplicable where a defendant has merely obtained that to which it was entitled pursuant to a contract between the parties. See, e.g., Jones v. Wells Fargo Bank, 112 Cal. App. 4th 1527, 1541 (2003) (holding that where plaintiff alleged no facts to show unjust enrichment except for a note and forbearance agreement between the parties, defendants would not be unjustly enriched “by receiving contingent interest to which they are legally entitled.”) (emphasis added). Because the predicate claims supporting Plaintiffs’ claim for unjust enrichment fail, their claim for unjust enrichment likewise fails as a matter of law. XI. PLAINTIFFS’ EIGHTH CAUSE OF ACTION-UNFAIR COMPETITION UNDER SECTION 17200 ET SEQ. AGAINST TRUSTEE CORPS AND MALCOLM CISNEROS FAILS To state a claim for unlawful business practices under Cal. Business and Professions Code §17200 et seq., Plaintiffs must allege a business practice that is unlawful, unfair or fraudulent. DeLeon v. Wells Fargo Bank NA, 2011 WL 311376 at *4 (N.D. Cal. 2011). An action based on unfair competition (UCL claim) may not be maintained if the defendant’s conduct is privileged or is immunized by another statute, or unless the underlying statute expressly bars its enforcement under the unfair competition law. See, Cisneros v. Instant Capital Funding Group, Case 8:16-cv-01142-CJC-KES Document 28 Filed 09/01/16 Page 25 of 28 Page ID #:1102 BURKE, W ILLIAMS & SORENSEN , LLP AT T ORN E YS AT LA W LO S AN GE L E S 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 LA #4830-2269-7015 v1 06190-1346 - 17 - CASE NO. 8:16-CV-01142-CJC-KES NOTICE OF MOTION AND MOTION TO DISMISS MEMO OF POINTS & AUTHORITIES supra, 263 F.R.D. at 610; and Stevens v. Superior Court, 75 Cal.App.4th 594, 603- 604 (1999). See, Section IV, supra. The Moving Defendants’ actions were privileged under Civil Code §§47 and 2924(d). See, Cisneros v. Instant Capital Funding Group, supra, 263 F.R.D. at 610 (“The California Civil Code §47 privilege shields Trustee Corps from a UCL claim”). Here, Plaintiffs are attempting to subvert the fact that the Moving Defendants’ actions were privileged by asserting a violation of Business and Professions Code §17200. However, this effort fails. “The California Supreme Court recognized that a plaintiff may not make an end run around the privilege created by California Civil Code §47 by recasting [a] claim under §17200.” Fleury v. Specialized Loan Servicing, LLC, 2011 WL 4851141 *8 (Bankr. E.D. Cal. 2011), citing Rubin v. Green, 4 Cal.4th 1187, 1201 (1993) and Cell-Tech Commons, Inc. v. L.A. Cellular Tel. Co., 20 Cal.4th 163, 182 (1999). Trustee Corps’ conduct alleged in the Complaint is privileged and the Complaint contains no allegations of any actions by Malcolm Cisneros of any kind. Consequently, Plaintiffs’ Eighth Cause of Action-Unfair Competition Under Section 17200 et seq. against Trustee Corps and Malcolm Cisneros should be dismissed without leave to amend. XII. PLAINTIFFS’ NINTH CAUSE OF ACTION-DECLARATORY JUDGMENT ACT AGAINST TRUSTEE CORPS AND MALCOLM CISNEROS FAILS Declaratory relief is a remedy and not an independent claim. “...declaratory relief is not an independent claim, but rather a form of relief... Where declaratory relief is “entirely commensurate with the relief sought through their other causes of action,” the court may dismiss the claim for declaratory relief...” Baidoobonso-Iam v. Bank of America Home Loans, 2011 WL 5870065 *8 (C.D.Cal. 2011). Plaintiffs’ Ninth Cause of Action-Declaratory Judgment Act against Trustee Corps and Malcolm Cisneros is essentially a repetition of the preceding claims, and therefore, is duplicative. Case 8:16-cv-01142-CJC-KES Document 28 Filed 09/01/16 Page 26 of 28 Page ID #:1103 BURKE, W ILLIAMS & SORENSEN , LLP AT T ORN E YS AT LA W LO S AN GE L E S 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 LA #4830-2269-7015 v1 06190-1346 - 18 - CASE NO. 8:16-CV-01142-CJC-KES NOTICE OF MOTION AND MOTION TO DISMISS MEMO OF POINTS & AUTHORITIES To obtain declaratory relief, there must be an actual controversy between the parties (between the Defendants and Plaintiffs). See, Bascos v. Federal Home Loan Mortgage Corps., 2011 WL 3157063 *4 (C.D. Cal. 2011) [“Plaintiff has failed to state a claim for declaratory relief because plaintiff has not set forth facts ‘showing the existence of an actual controversy between the parties relating to their respective legal rights and duties.’...”]. No facts support Plaintiffs’ Ninth Cause of Action-Declaratory Judgment Act against Trustee Corps and Malcolm Cisneros. Nothing in the allegations made by Plaintiffs in the Complaint raise any basis for declaratory relief. Trustee Corps is only a foreclosure trustee, and there are no facts alleged in the Complaint regarding any conduct by Malcolm Cisneros on which declaratory relief could have any impact. Plaintiffs have not set forth facts showing an actual controversy between themselves and the Moving Defendants, and consequently, the motion to dismiss this claim should be sustained without leave to amend. XIII. CONCLUSION In order to survive a motion to dismiss for failure to state a claim, a complaint must set forth enough facts to state a claim for relief that is plausible on its face. A Court need not permit an attempt to amend a complaint if, as here, it determines that the pleading could not possibly be cured by allegations of other facts. Albrecht v. Lund, 845 F.2d 193, 195-196 (9th Cir. 1988) (no liability as a matter of law); Allen v. City of Beverly Hills, 911 F.2d 367, 373 (9th Cir. 1990) /// /// /// /// /// /// Case 8:16-cv-01142-CJC-KES Document 28 Filed 09/01/16 Page 27 of 28 Page ID #:1104 BURKE, W ILLIAMS & SORENSEN , LLP AT T ORN E YS AT LA W LO S AN GE L E S 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 LA #4830-2269-7015 v1 06190-1346 - 19 - CASE NO. 8:16-CV-01142-CJC-KES NOTICE OF MOTION AND MOTION TO DISMISS MEMO OF POINTS & AUTHORITIES (amendment futile). Accordingly, the Complaint as to the Moving Defendants should be dismissed without leave to amend. Dated: September 1, 2016 Burke, Williams & Sorensen, LLP By: /s/ Joseph P. Buchman Richard J. Reynolds Fabio R. Cabezas Joseph P. Buchman Attorneys for Defendants MTC FINANCIAL INC. dba TRUSTEE CORPS and MALCOLM CISNEROS, ALC Case 8:16-cv-01142-CJC-KES Document 28 Filed 09/01/16 Page 28 of 28 Page ID #:1105