Rajesh Varma, et al v. Bank of America,N.A., et al

NOTICE OF MOTION AND MOTION to Dismiss Case

C.D. Cal.February 13, 2017

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 B R Y A N C A V E L L P T H R E E E M B A R C A D E R O C E N T E R , 7 T H F L O O R S A N F R A N C IS C O , C A 9 4 1 1 1 -4 0 7 0 1809777.1\C086264\0551910 DEFENDANT BANK OF AMERICA, N.A.’S NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFFS’ FIRST AMENDED COMPLAINT – CASE NO. 16-CV-02653- CJC-DTB BRYAN CAVE LLP Andrea M. Hicks, California Bar No. 219836 1700 Lincoln Street, Suite 4100 Denver, Colorado 80203 Telephone: (415) 675-3400 Facsimile: (415) 675-3434 Email: andrea.hicks@bryancave.com Attorneys for Defendant BANK OF AMERICA, N.A. (erroneously sued as “BANK OFAMERICA, N.A. as successor in interest to AMERICA’S WHOLESALE LENDER, its successor and assigns”) UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA, EASTERN DIVISION RAJESH VARMA and MAHIMA VARMA; Plaintiffs, v. BANK OF AMERICA, N.A. as successor in interest to AMERICA’S WHOLESALE LENDER its successors and assigns; the BANK OF NEW YORK as successor in interest to JPMORGAN CHASE BANK, N.A. as trustee for STRUCTURED ASSET MORTGAGE INVESTMENTS II TRUST 2006-AR6 MORTGAGE PASS-THROUGH CERTIFICATES SERIES 2006-AR6; NATIONSTAR MORTGAGE LLC; and DOES 1 through 50, inclusive, Defendants. Case No. 5:16-cv-02653-DOC-DTB Honorable David O. Carter DEFENDANT BANK OF AMERICA, N.A.’S NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFFS’ FIRST AMENDED COMPLAINT [Fed. R. Civ. P. 12(b)(6)] [FILED CONCURRENTLY WITH REQUEST FOR JUDICIAL NOTICE AND [PROPOSED] ORDER] Date: March 20, 2017 Time: 8:30 a.m. Location: Courtroom 9D Date Action Filed: December 28, 2016 Trial Date: Not Set Case 5:16-cv-02653-DOC-DTB Document 23 Filed 02/13/17 Page 1 of 39 Page ID #:362 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 B R Y A N C A V E L L P T H R E E E M B A R C A D E R O C E N T E R , 7 T H F L O O R S A N F R A N C IS C O , C A 9 4 1 1 1 -4 0 7 0 1809777.1\C086264\0551910 1 DEFENDANT BANK OF AMERICA, N.A.’S NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFFS’ FIRST AMENDED COMPLAINT – CASE NO. 16-CV-02653- CJC-DTB TO PLAINTIFFS AND THEIR ATTORNEYS OF RECORD: PLEASE TAKE NOTICE that on March 20, 2017, at 8:30 a.m. in Courtroom 9D of the above-captioned Court, located at 411 W. Fourth Street, Santa Ana, California, the Honorable David O. Carter presiding, Defendant Bank of America, N.A. (“BANA”) (erroneously sued as “Bank of America, N.A. as successor in interest to America’s Wholesale Lender, its successor and assigns”) will, and hereby does, move this Court pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure for an Order dismissing the First Amended Complaint of Plaintiffs Rajesh and Mahima Varma (“Plaintiffs”), without leave to amend, for failure to state a claim upon which relief can be granted. This Motion is based on this Notice of Motion and Motion, the attached Memorandum of Points and Authorities, the concurrently-filed Request for Judicial Notice, all pleadings and papers on file in this action, the oral argument of the parties, and such other and further matters as the Court may consider. Pursuant to Local Rule 7-3, Counsel for BANA attempted to contact Plaintiffs in order to meet and confirm. However the Parties were unable to meet and confer prior to the filing of this Motion. Dated: February 13, 2017 Respectfully submitted, BRYAN CAVE LLP Andrea M. Hicks By: /s/ Andrea M. Hicks Andrea M. Hicks Attorneys for Defendant BANK OF AMERICA, N.A. (erroneously sued as “BANK of AMERICA, N.A., as successor in interest to AMERICA’S WHOLESALE LENDER, its successor and assigns”) Case 5:16-cv-02653-DOC-DTB Document 23 Filed 02/13/17 Page 2 of 39 Page ID #:363 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 B R Y A N C A V E L L P T H R E E E M B A R C A D E R O C E N T E R , 7 T H F L O O R S A N F R A N C IS C O , C A 9 4 1 1 1 -4 0 7 0 1809777.1\C086264\0551910 i DEFENDANT BANK OF AMERICA, N.A.’S NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFFS’ FIRST AMENDED COMPLAINT – CASE NO. 16-CV-02653- CJC-DTB TABLE OF CONTENTS Page I. INTRODUCTION.............................................................................................1 II. FACTUAL BACKGROUND AND PLAINTIFFS’ ALLEGATIONS............1 III. RELATED PROCEEDING AND PROCEDURAL HISTORY ......................3 IV. STANDARD FOR RULE 12(B)(6) MOTION TO DISMISS..........................3 V. PLAINTIFFS’ ENTIRE FAC IS BARRED BY RES JUDICATA..................4 1. Identity of Claims. ........................................................................4 2. A Final Judgment on the Merits. ..................................................6 3. Identity of Privity Between the Parties.........................................6 VI. PLAINTIFFS’ THEORIES CONCERNING COUNTRYWIDE ARE MERITLESS .....................................................................................................6 VII. PLAINTIFFS LACK STANDING TO CHALLENGE THE FORECLOSURE PROCEEDINGS BECAUSE THEY HAVE NOT ALLEGED TENDER OF THE INDEBTEDNESS..........................................9 VIII. PLAINTIFFS’ CAUSES OF ACTION ALSO FAIL BECAUSE PLAINTIFFS DO NOT ALLEGE THEY HAVE BEEN PREJUDICED BY ANY ALLEGED DEFECTS IN THE FORECLOSURE PROCESS. .........................................................................10 IX. PLAINTIFFS LACK STANDING TO CHALLENGE THE SECURITIZATION PROCESS AND THEIR NOTE-SPLITTING THEORY FAILS.............................................................................................12 X. PLAINTIFFS’ CLAIMS FAIL INDIVIDUALLY. ........................................14 A. Plaintiffs’ First Claim for Fraud, Second Claim for Fraud in the Execution of the Deeds of Trust and Promissory Notes, and Fourth Claim to Void and/or Cancel Ab Initio Deeds of Trust & Promissory Notes Fail. ..........................................................................14 B. Plaintiffs’ Third Claim for Breach of Good Faith and Fair Dealing Fails. ......................................................................................................16 C. Plaintiffs’ Fifth Claim for Cancellation of a Voidable Contract and Sixth Claim for Violation of California Corporations Code § 191(C)(7) Fails. .....................................................................................18 D. Plaintiffs’ Seventh Claim for Breach of Fiduciary Duty Fails. ............19 E. Plaintiffs’ Eighth Claim for Unfair Competition under California Business and Professions Code § 17200 Fails......................................20 Case 5:16-cv-02653-DOC-DTB Document 23 Filed 02/13/17 Page 3 of 39 Page ID #:364 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 B R Y A N C A V E L L P T H R E E E M B A R C A D E R O C E N T E R , 7 T H F L O O R S A N F R A N C IS C O , C A 9 4 1 1 1 -4 0 7 0 1809777.1\C086264\0551910 ii DEFENDANT BANK OF AMERICA, N.A.’S NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFFS’ FIRST AMENDED COMPLAINT – CASE NO. 16-CV-02653- CJC-DTB F. Plaintiffs’ Ninth Claim for Violation of Homeowners’ Bill of Rights Fails as a Matter of Law. ...........................................................22 G. Plaintiffs’ Tenth Claim For Declaratory Relief Fails. ..........................24 H. Plaintiffs’ Eleventh Claim For Rescission of Mortgage Pursuant to the Federal Trust in Lending Act (“TILA”), 15 U.S.C. §§ 1601, et. seq. Fails................................................................................................24 I. Plaintiffs’ Twelfth Cause of Action For Quasi Contract Fails. ............26 J. Plaintiffs’ Thirteenth Claim For Accounting Fails. ..............................26 XI. CONCLUSION ...............................................................................................27 Case 5:16-cv-02653-DOC-DTB Document 23 Filed 02/13/17 Page 4 of 39 Page ID #:365 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 B R Y A N C A V E L L P T H R E E E M B A R C A D E R O C E N T E R , 7 T H F L O O R S A N F R A N C IS C O , C A 9 4 1 1 1 -4 0 7 0 1809777.1\C086264\0551910 iii DEFENDANT BANK OF AMERICA, N.A.’S NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFFS’ FIRST AMENDED COMPLAINT – CASE NO. 16-CV-02653- CJC-DTB TABLE OF AUTHORITIES Cases Abdullah v. United Savs. Bank, 43 Cal.App.4th 1101 (1996) ...................................................................................10 Aguilar v. Bocci, 39 Cal.App.3d 475 (1974) ........................................................................................9 Alameda County Land Use Assn. v. City of Hayward, 38 Cal. App. 4th 1716 (1995).................................................................................24 Alch v. Super. Ct., 122 Cal. App. 4th 339 (2004)...................................................................................6 Alicea v. GE Money Bank, 2009 WL 2136969 (N.D. Cal. July 16, 2009) ..........................................................9 American States Ins. Co. v. Kearns, 15 F.3d 142 (9th Cir. 1994) ....................................................................................24 Angell v. Superior Court, 73 Cal. App. 4th 691 (1999) ...................................................................................23 Animal Legal Defense Fund v. Mendes, 160 Cal. App. 4th 136 (2008).................................................................................21 Arnolds Mgmt. Corp. v. Eischen, 158 Cal. App. 3d 575 (1984) ..................................................................................10 Ashcroft v. Iqbal, 129 S. Ct. 1937 (2009)..............................................................................................3 Assoc’d Gen. Contractors of Cal., Inc. v. Cal. State Council of Carpenters, Inc., 459 U.S. 519 (1983) .................................................................................................4 Avila v. Wells Fargo Bank, N.A., No. C16-05904 WHA (N.D. Cal. Dec. 23, 2016) ..................................................11 Balistreri v. Pacifica Police Dep’t, 901 F.2d 696 (9th Cir. 1990) ....................................................................................3 Barajas v. Countrywide Home Loans, Inc., 2012 WL 628007 (C.D. Cal. Feb. 24, 2012.) .........................................................27 Case 5:16-cv-02653-DOC-DTB Document 23 Filed 02/13/17 Page 5 of 39 Page ID #:366 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 B R Y A N C A V E L L P T H R E E E M B A R C A D E R O C E N T E R , 7 T H F L O O R S A N F R A N C IS C O , C A 9 4 1 1 1 -4 0 7 0 1809777.1\C086264\0551910 iv DEFENDANT BANK OF AMERICA, N.A.’S NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFFS’ FIRST AMENDED COMPLAINT – CASE NO. 16-CV-02653- CJC-DTB Batt v. City and County of San Francisco, 155 Cal. App. 4th 65 (2007) ...................................................................................26 Beall v. Quality Loan Serv. Corp., 2011 U.S. Dist. LEXIS 29184 (S.D. Cal. Mar. 21, 2011)......................................25 Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) .................................................................................................3 Berger v. Home Depot U.S.A., Inc., 476 F. Supp. 2d 1174 (C.D. Cal. 2007)..................................................................16 Berryman v. Merit Prop. Mgmt., Inc., 152 Cal. App. 4th 1544 (2007)...............................................................................21 Bucy v. Aurora Loan Servs., LLC, 2011 WL 1044045 (S.D. Ohio 2011) .....................................................................23 C&R Forestry, Inc. v. Consol. Human Res., AZ, Inc., 2007 WL 914198 (D. Idaho 2007) ...........................................................................6 C.J.L. Constr., Inc. v. Universal Plumbing, 18 Cal. App. 4th 376 (1993) ...................................................................................24 Cal. Med. Ass’n, Inc. v. Aetna U.S. Healthcare of Cal., 94 Cal. App. 4th 151 (2001) ...................................................................................26 Carpenter v. Longan, 83 U.S. 271 (1873) .................................................................................................14 Cerecedes v. U.S. Bankcorp, 2011 WL 2711071 (C.D. Cal. 2011) ......................................................................23 Chua v. IB Property Holdings, LLC, 2011 WL 3322884 (C.D. Cal. Aug. 1, 2011) .........................................................23 Civic W. Corp. v. Zila, 66 Cal App. 3d 1 (1977) .........................................................................................27 Classic Auto Refinishing, Inc. v. Marino (In re Marino), 181 F. 3d 1142 (9th Cir. 1999) .................................................................................6 Cleveland v. Johnson, 209 Cal. App. 4th 1315 (2012).................................................................................9 Case 5:16-cv-02653-DOC-DTB Document 23 Filed 02/13/17 Page 6 of 39 Page ID #:367 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 B R Y A N C A V E L L P T H R E E E M B A R C A D E R O C E N T E R , 7 T H F L O O R S A N F R A N C IS C O , C A 9 4 1 1 1 -4 0 7 0 1809777.1\C086264\0551910 v DEFENDANT BANK OF AMERICA, N.A.’S NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFFS’ FIRST AMENDED COMPLAINT – CASE NO. 16-CV-02653- CJC-DTB Comm. on Children’s Television, Inc. v. Gen. Foods Corp., 35 Cal. 3d 197 (1983) .............................................................................................20 Conroy v. Regents of Univ. of Cal., 45 Cal. 4th 1244 (2009)..........................................................................................15 David Welch Co. v. Eskine Tulley, 203 Cal. App. 3d 884 (1988) ..................................................................................20 Debrunner v. Deutsche Bank Nat’l Trust Co., 204 Cal. App. 4th 433 (2012)...........................................................................10, 14 Delino v. Platinum Community Bank, 2009 WL 2366513 (S.D. Cal. July 30, 2009).........................................................26 Derakshan v. Mortgage Electronic Registration Systems, Inc., 2009 U.S. Dist. LEXIS 63176 (C.D. Cal. Jun. 29, 2009) ......................................19 Fleming v. Kagan, 189 Cal. App. 2d 791 (1961) ....................................................................................9 Foley v. Interactive Data Corporation, 47 Cal. 3d 654, fn.39 (1988)...................................................................................16 Fontenot v. Wells Fargo Bank, N.A., 198 Cal. App. 4th 256 (2011)...........................................................................10, 11 Ghuman v. Wells Fargo Bank, N.A., 989 F. Supp. 2d 994 (E.D. Cal. 2013) ....................................................................11 Glaski v. Bank of America, N.A., 218 Cal. App. 4th 1079 (2013)...............................................................................12 Hafiz v. Green point Mortg. Funding, Inc., 652 F. Supp. 2d 1039 (N.D. Cal. 2009)..................................................................26 Hall v. Time, Inc., 158 Cal. App. 4th 847 (2008).................................................................................21 Herrera v. Fed. Nat’l Mortg. Ass’n, 205 Cal. App. 4th 1495 (2012).........................................................................10, 11 Hosseini v. Wells Fargo Bank, N.A., 2013 WL 4279632 (N.D. Cal. 2013)......................................................................21 Case 5:16-cv-02653-DOC-DTB Document 23 Filed 02/13/17 Page 7 of 39 Page ID #:368 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 B R Y A N C A V E L L P T H R E E E M B A R C A D E R O C E N T E R , 7 T H F L O O R S A N F R A N C IS C O , C A 9 4 1 1 1 -4 0 7 0 1809777.1\C086264\0551910 vi DEFENDANT BANK OF AMERICA, N.A.’S NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFFS’ FIRST AMENDED COMPLAINT – CASE NO. 16-CV-02653- CJC-DTB In re Sandri, 501 B.R. 369 (Bankr. N.D. Cal. 2013) ...................................................................13 Int’l Union of Operating Eng’rs-Employers Constr. Indus. Pension, Welfare & Training Trust Funds v. Karr, 994 F. 2d 1426 (9th Cir. 1993) .................................................................................5 Jenkins v. JP Morgan Chase Bank, N.A., 216 Cal. App. 4th 497 (2013)...........................................................................12, 13 Jensen v. Quality Loan Serv. Corp, 702 F. Supp. 2d 1183 (E.D. Cal. 2010)...................................................................21 Johnson v. Nationstar Mortgage, LLC, 470 S.W.3d 754 (2015).............................................................................................9 Karlsen v. Am. Sav. & Loan Ass’n., 15 Cal.App.3d 112 (1971) ......................................................................................10 Knapp v. Doherty, 123 Cal. App. 4th 76 (2004) .............................................................................10, 23 Krantz v. BT Visual Images, 89 Cal. App. 4th 164 (2001) ...................................................................................21 Kruse v. Bank of America, 202 Cal. App. 3d 38 (1988) ....................................................................................20 Lane v. Vitek Real Estate Indus., 713 F. Supp. 2d 1092 (E.D. Cal. 2010) ..................................................................12 Lawlor v. Nat’l Screen Service Corp., 349 U.S. 322 (1955) .................................................................................................6 Lectrodryer v. Seoulbank, 77 Cal. App. 4th 723 (2000) ...................................................................................26 Lomboy v. SCME Mortgage Bankers, 2009 WL 1457738 (N.D. Cal. May 26, 2009) .......................................................19 McClain v. Octagon Plaza, LLC, 159 Cal. App. 4th 784 (2008).................................................................................16 Case 5:16-cv-02653-DOC-DTB Document 23 Filed 02/13/17 Page 8 of 39 Page ID #:369 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 B R Y A N C A V E L L P T H R E E E M B A R C A D E R O C E N T E R , 7 T H F L O O R S A N F R A N C IS C O , C A 9 4 1 1 1 -4 0 7 0 1809777.1\C086264\0551910 vii DEFENDANT BANK OF AMERICA, N.A.’S NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFFS’ FIRST AMENDED COMPLAINT – CASE NO. 16-CV-02653- CJC-DTB Meyer v. Ameriquest Mortg. Co. 342 F.3d 899 (9th Cir. 2003) ..................................................................................25 Miguel v. Country Funding Corp., 309 F.3d 1161 (9th Cir. 2002), cert. denied, 539 U.S. 927, 123 S. Ct. 2577 (2003) ...............................................25 Navarro v. Block, 250 F.3d 729 (9th Cir. 2001) .....................................................................................4 North Star Int’l v. Ariz. Corp. Comm’n, 720 F.2d 578 (9th Cir. 1983) .....................................................................................4 Nymark v. Heart Fed. Sav. & Loan Ass’n, 231 Cal. App. 3d 1089, 1092 n.1 (1991) ................................................................20 Orzoff v. Bank of America, N.A., 2011 WL 1539897 (D. Nev. 2011).........................................................................23 Owens v. Kaiser Foundation Health Plan, Inc., 244 F. 3d 708 (9th Cir. 2001) ...................................................................................4 Pasadena Live v. City of Pasadena, 114 Cal. App. 4th 1089 (2004)...............................................................................17 People v. McKale, 25 Cal. 3d 626 (1979) .............................................................................................22 Perez-Encinas v. AmerUs Life Ins. Co., 468 F. Supp. 2d 1127 (N.D. Cal. 2006)..................................................................16 Pierce v. Lyman, 1 Cal. App. 4th 1093 (1991) ...................................................................................19 Pinkerton’s Inc. v. Superior Ct. of Orange Cnty., 49 Cal. App. 4th 1342 (Cal. Dist. Ct. App. 1996)....................................................7 Pinkerton's, Inc. v. Super. Ct., 49 Cal. App. 4th 1342 (1996)...................................................................................9 Providence Washington Ins. Co. v. Valley Forge Ins. Co., 42 Cal. App. 4th 1194, (Cal. Dist. Ct. App. 1996)...................................................7 Case 5:16-cv-02653-DOC-DTB Document 23 Filed 02/13/17 Page 9 of 39 Page ID #:370 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 B R Y A N C A V E L L P T H R E E E M B A R C A D E R O C E N T E R , 7 T H F L O O R S A N F R A N C IS C O , C A 9 4 1 1 1 -4 0 7 0 1809777.1\C086264\0551910 viii DEFENDANT BANK OF AMERICA, N.A.’S NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFFS’ FIRST AMENDED COMPLAINT – CASE NO. 16-CV-02653- CJC-DTB Rajamin v. Fannie Mae Bank Nat’l Trust Co., 757 F.3d 79 (2d Cir. 2014) .....................................................................................12 Reyes v. GMAC Mortgage LLC, No. 2:11-CV-100 JCM (RJJ), 2011 WL 1322775 (D. Nev. Apr. 5, 2011)............12 Roberts v. Lomanto, 112 Cal. App. 4th 1553 (2004)...............................................................................19 Rodenhurst v. Bank of Am., 773 F. Supp. 2d 886 (D. Haw. Feb. 23, 2011) .......................................................12 Saterbak v. JPMorgan Chase Bank, N.A., 245 Cal. App. 4th 808 (2016).................................................................................13 Schereiber Distrib. Co. v. Serv-Well Furniture Co., 806 F.2d 1393 (9th Cir. 1986) ...................................................................................4 Seidell v. Tuxedo Land Co., 216 Cal. 165 (1932) ................................................................................................14 Siegel v. Federal Home Loan Mortg. Corp., 143 F.3d 525 (9th Cir. 1998) ....................................................................................5 Sohal v. Fed. Home Loan Mortg. Corp., 2011 WL 3842195 (N.D. Cal. Aug. 30, 2011).......................................................23 Sparks v. The Bank of New York Mellon, No. H–14–813, 2015 WL 4093944 (S.D. Texas July 7, 2015)................................9 Sprewell v. Golden State Warriors, 266 F.3d 979 (9th Cir. 2001) .....................................................................................4 Supervalu, Inc. v. Wexford Underwriting Managers, Inc., 175 Cal.App.4th 64 (2009) .....................................................................................26 Tamayo v. World Sav. Bank, No. 08-2287, 2009 U.S. Dist. LEXIS 73298 (S.D. Cal. July 23, 2009) ..................9 Tarmann v. State Farm Mut. Auto Ins. Co., 2 Cal. App. 4th 153 (1991) .....................................................................................15 Teselle v. McLoughlin, 173 Cal. App. 4th 156 (2009).................................................................................27 Case 5:16-cv-02653-DOC-DTB Document 23 Filed 02/13/17 Page 10 of 39 Page ID #:371 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 B R Y A N C A V E L L P T H R E E E M B A R C A D E R O C E N T E R , 7 T H F L O O R S A N F R A N C IS C O , C A 9 4 1 1 1 -4 0 7 0 1809777.1\C086264\0551910 ix DEFENDANT BANK OF AMERICA, N.A.’S NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFFS’ FIRST AMENDED COMPLAINT – CASE NO. 16-CV-02653- CJC-DTB Third Story Music v. Waits, 41 Cal. App. 4th 798 (1996) ...................................................................................17 Tyshkevich v. Wells Fargo Bank, N.A., No. 2:15-cv-2010 JAM AC (PS), 2016 WL 193666 (E.D.Cal., Jan. 15, 2016).......8 Vildosola v. Countrywide Home Loans, Inc., 2015 WL 5258687, 2015 Cal. App. Unpub. LEXIS 6448 (Cal. App., 4th Dist. Sept. 10, 2015) ....................................................................8, 9 Western Radio Servs. Co. v. Glickman, 123 F. 3d 1189 (9th Cir. 1997) .................................................................................4 Whann v. Doell, 192 Cal. 680 (1923) ................................................................................................27 Wilson v. Transit Authority, 199 Cal. App. 2d 716 (1962) ..................................................................................24 Wolf v. Walt Disney Pictures and Television, 162 Cal. App. 4th 1107 (2008).........................................................................17, 20 Yhudai v. Impac Funding Corp., 1 Cal. App. 5th 1252 (2016) ...................................................................................13 Yvanova v. New Century Mortgage Corp., 62 Cal. 4th 919 (2016) .......................................................................................11, 13 Statutes 15 U.S.C. § 1601........................................................................................................24 15 U.S.C. § 1635........................................................................................................24 15 U.S.C. § 1635(f)....................................................................................................25 15 U.S.C. § 1640(a)(1) ..............................................................................................25 15 U.S.C. § 1640(a)(2)(A)(i) .....................................................................................25 15 U.S.C. § 1640(a)(2)(A)(iv) ...................................................................................25 15 U.S.C. § 1640(e) ...................................................................................................25 15 U.S.C. § 1641........................................................................................................25 Case 5:16-cv-02653-DOC-DTB Document 23 Filed 02/13/17 Page 11 of 39 Page ID #:372 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 B R Y A N C A V E L L P T H R E E E M B A R C A D E R O C E N T E R , 7 T H F L O O R S A N F R A N C IS C O , C A 9 4 1 1 1 -4 0 7 0 1809777.1\C086264\0551910 x DEFENDANT BANK OF AMERICA, N.A.’S NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFFS’ FIRST AMENDED COMPLAINT – CASE NO. 16-CV-02653- CJC-DTB 15 U.S.C. § 1641(g).......................................................................................24, 25, 26 15 U.S.C. § 1641(g)(1) ..............................................................................................25 Cal. Bus. Prof. Code § 17200 ........................................................................21, 22, 23 Cal. Bus. Prof. Code § 17204 ....................................................................................21 Cal. Bus. Prof. Code § 17208 ....................................................................................21 Cal. Civ. Code § 2924.17.....................................................................................22, 23 Cal. Civ. Code § 2936..........................................................................................12, 14 Cal. Code Civ. Proc. § 337(1) ...................................................................................16 Cal. Code Civ. Proc. § 338(d) ...................................................................................15 Cal. Code Civ. Proc. § 341 ..................................................................................15, 18 Cal. Code Civ. Proc. § 343 ............................................................................15, 18, 20 Cal. Corp. Code § 191(c)(7) ................................................................................18, 19 Cal. Corp. Code § 191(d)(3) ......................................................................................19 Cal. Rev. Tax. Code § 23301.....................................................................................18 Cal. Rev. Tax. Code § 23301.5..................................................................................18 Cal. Rev. Tax. Code § 23304.1..................................................................................18 Cal. Rev. Tax. Code § 23304.1(a) .............................................................................18 Cal. Rev. Tax. Code § 23304.1(b).............................................................................18 Cal. Rev. Tax. Code § 23304.5............................................................................18, 19 Cal. Rev. Tax. Code § 23305(a) ................................................................................18 Cal. Rev. Tax. Code § 23775.....................................................................................18 Reg. Z § 226.15..........................................................................................................24 Other Authorities 5 Witkin, Cal. Procedure, § 819, p. 236 (5th ed. 2008).............................................27 Case 5:16-cv-02653-DOC-DTB Document 23 Filed 02/13/17 Page 12 of 39 Page ID #:373 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 B R Y A N C A V E L L P T H R E E E M B A R C A D E R O C E N T E R , 7 T H F L O O R S A N F R A N C IS C O , C A 9 4 1 1 1 -4 0 7 0 1809777.1\C086264\0551910 1 DEFENDANT BANK OF AMERICA, N.A.’S NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFFS’ FIRST AMENDED COMPLAINT – CASE NO. 16-CV-02653- CJC-DTB MEMORANDUM OF POINTS AND AUTHORITIES I. INTRODUCTION In their First Amended Complaint (“FAC”), Rajesh and Mahima Varma (“Plaintiffs”) have replaced their “Wrongful Foreclosure” cause of action with a cause of action titled “Violation of California HBOR”. Plaintiffs have also added causes of action labeled “Quasi Contract” and “Accounting”. However, Plaintiffs’ claims are still based on several baseless theories suggesting their two Deeds of Trusts are unenforceable, such as: the loan originator America’s Wholesale Lender (“AWL”) did not exist and was not registered to do business; improper assignment of the Deeds of Trust; Securitization; and “Note-Splitting”. Although they do not assert that the loans have been satisfied, Plaintiffs claim their loans are not enforceable, and in an effort to delay foreclosure proceedings, now bring their FAC. Plaintiffs previously filed a similar Complaint in the United States District Court for the Central District of California in December 2015 (the “December 15 Action”). On November 21, 2016 Plaintiffs filed their Complaint in the instant action against, inter alia, Bank of America, N.A. (“BANA”). The Complaint and FAC are mostly duplicative of the December 2015 Action. Plaintiffs’ claims are barred as a matter of law for reasons previously found by the Central District of California, barred by res judicata, time-barred, and entirely fail to state any claim for relief against BANA. For the reasons set forth below and previously found by the Central District of California, the applicable law does not support a viable cause of action under any of Plaintiffs’ theories. BANA urges the Court to dismiss the FAC, with prejudice. II. FACTUAL BACKGROUND AND PLAINTIFFS’ ALLEGATIONS On June 23, 2006 Plaintiffs executed two Deeds of Trust in favor of AWL. (FAC pp. 7.) Plaintiffs now sue BANA (erroneously sued as “Bank of America, N.A. as successor in interest to America’s Wholesale Lender, its successor and assigns”) because they defaulted on their notes and deeds of trust. Case 5:16-cv-02653-DOC-DTB Document 23 Filed 02/13/17 Page 13 of 39 Page ID #:374 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 B R Y A N C A V E L L P T H R E E E M B A R C A D E R O C E N T E R , 7 T H F L O O R S A N F R A N C IS C O , C A 9 4 1 1 1 -4 0 7 0 1809777.1\C086264\0551910 2 DEFENDANT BANK OF AMERICA, N.A.’S NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFFS’ FIRST AMENDED COMPLAINT – CASE NO. 16-CV-02653- CJC-DTB Plaintiffs claim AWL was never registered in New York or California. (FAC pp. 7, 8.) Plaintiffs further explain “Countrywide may have trademarked the name but they never incorporated AWL as a LLC or a corporation.” (FAC pp. 8.) As a result, Plaintiffs seek to cancel the Deeds of Trust and Notes. (FAC pp. 8, 9.) Countrywide Funding Corporation (“CFC”) was incorporated in New York on or about March 17, 1969. (RJN, Ex. A.) On February 14, 1996, CFC changed its name to Countrywide Home Loans, Inc. (“CHL”). (RJN, Ex. B.) On or about January 28, 1993, CHL was registered in to do business and New York and California; and began registering AWL as a fictitious business name in 49 of 50 states including New York and California, so that it could conduct its wholesale lending business under that name. (RJN, Exs. B, C.) At the time the Notes and Deeds of Trust were executed, CHL was registered to do business in Riverside County under the fictitious name “America’s Wholesale Lender.” (RJN, Ex. C.) There is a history of litigation regarding this loan. Plaintiffs made similar claims to the ones herein in the adversary proceeding discussed supra – the December 2015 Action. (RJN, Ex. D.) Defendants do not even attempt to explain why they delayed bringing the December 2015 Action, let alone the instant action, as it relates to loan origination in 2006, but should the Court examine this claim further, it is evident that the Deeds of Trust granted to AWL and signed by Plaintiffs, on their face state that after recording they should be returned to Countrywide Home Loans, Inc. (FAC Exs. A, B.) There are no allegations in the complaint denying the authenticity of Plaintiffs’ signatures on the Deeds of Trust, which were, in any event, witnessed and notarized. Id. A Corporate Assignment of Deed of Trust was recorded on February 18, 2016 and a subsequent Corrective Assignment of Deed of Trust was recorded in May 2016 as evidence of the transfer of the beneficial interest in the deed of and trust recorded as document number 2006-0467719 in the Official Records County of Riverside. (FAC Exs. F, G.) Plaintiffs’ FAC continues to claim among other things, that their loans are Case 5:16-cv-02653-DOC-DTB Document 23 Filed 02/13/17 Page 14 of 39 Page ID #:375 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 B R Y A N C A V E L L P T H R E E E M B A R C A D E R O C E N T E R , 7 T H F L O O R S A N F R A N C IS C O , C A 9 4 1 1 1 -4 0 7 0 1809777.1\C086264\0551910 3 DEFENDANT BANK OF AMERICA, N.A.’S NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFFS’ FIRST AMENDED COMPLAINT – CASE NO. 16-CV-02653- CJC-DTB “void ab initio” because the purported lender, AWL, was non-existent in 2006 at loan origination. (FAC pp. 7.) III. RELATED PROCEEDING AND PROCEDURAL HISTORY Previously, Defendants filed the December 2015 Action in United States District Court Central District of California, as case number, EDCV 15-2608-JGB, against AWL alleging almost identical claims and allegations as those in the FAC. (RJN, Ex. D.) Via Order dated September 1, 2016 Plaintiffs’ December 2015 Action was dismissed, with prejudice, for failure to state a claim. (RJN, Ex. E.) Plaintiffs subsequently filed an appeal with the California Court of Appeal on September 29. 2016 and their opening brief and excerpts of record are currently due by March 7, 2017. (RJN, Ex. F.) On November 21, 2016, Plaintiffs filed the Initial Complaint in this action. Defendants moved to dismiss that Complaint on January 4, 2017. After Plaintiffs failed to file a timely oppose that motion, Defendants filed a notice of non- opposition. On January 25, 2017, Plaintiffs filed their FAC. Plaintiff’s FAC is a replica of the Complaint other than replacing the Complaint’s ninth cause of action for “Wrongful Foreclosure” with a cause of action for “Violation of California HBOR”; adding a twelfth cause of action for “quasi contact”; and a thirteenth cause of action for “accounting”. Plaintiffs also add footnotes about Credit Default Swaps and an additional paragraph about securitization. (FAC pp 10, 12.) IV. STANDARD FOR RULE 12(B)(6) MOTION TO DISMISS “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009 (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)); see also Balistreri v. Pacifica Police Dep’t, 901 F.2d 696, 699 (9th Cir. 1990). “Factual allegations must be enough to raise a right to relief above the speculative level . . . .” Twombly, 550 U.S. at 1955. “A plaintiff’s obligation to provide the “grounds” of his “entitle[ment] to relief” requires more Case 5:16-cv-02653-DOC-DTB Document 23 Filed 02/13/17 Page 15 of 39 Page ID #:376 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 B R Y A N C A V E L L P T H R E E E M B A R C A D E R O C E N T E R , 7 T H F L O O R S A N F R A N C IS C O , C A 9 4 1 1 1 -4 0 7 0 1809777.1\C086264\0551910 4 DEFENDANT BANK OF AMERICA, N.A.’S NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFFS’ FIRST AMENDED COMPLAINT – CASE NO. 16-CV-02653- CJC-DTB than labels and conclusions, and 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.” Id. at 1964-65. Dismissal is proper where, as here, there is an absence of sufficient facts alleged to support a cognizable legal theory and where a complaint is vague, conclusory, or fails to set forth any material facts in support of the allegation. Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001); North Star Int’l v. Ariz. Corp. Comm’n, 720 F.2d 578, 583 (9th Cir. 1983). The court is not required to accept as true allegations that are merely conclusory, unwarranted deductions of fact, or unreasonable inferences. Sprewell v. Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 2001). Nor do courts assume the legal conclusions merely because they are couched as factual allegations. Ashcroft v. Iqbal, 556 U.S. 662, 678-79 (2009); Assoc’d Gen. Contractors of Cal., Inc. v. Cal. State Council of Carpenters, Inc., 459 U.S. 519, 526 (1983). Finally, where “the court determines that the allegation of other facts consistent with the challenged pleading could not possibly cure the deficienc[ies]” in a complaint, leave to amend may properly be denied. Schereiber Distrib. Co. v. Serv-Well Furniture Co., 806 F.2d 1393, 1401 (9th Cir. 1986). V. PLAINTIFFS’ ENTIRE FAC IS BARRED BY RES JUDICATA “Res judicata, also known as claim preclusion, bars litigation in a subsequent action of any claims that were raised or could have been raised in the prior action.” See Owens v. Kaiser Foundation Health Plan, Inc., 244 F. 3d 708, 713 (9th Cir. 2001) (citing Western Radio Servs. Co. v. Glickman, 123 F. 3d 1189, 1192 (9th Cir. 1997)). The doctrine of res judicata is applicable when there is: (1) an identity of claims; (2) a final judgment on the merits; and (3) identity or privity between the parties. Id. All three elements are met here. 1. Identity of Claims. The Ninth Circuit employs a four-factor test to determine whether successive Case 5:16-cv-02653-DOC-DTB Document 23 Filed 02/13/17 Page 16 of 39 Page ID #:377 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 B R Y A N C A V E L L P T H R E E E M B A R C A D E R O C E N T E R , 7 T H F L O O R S A N F R A N C IS C O , C A 9 4 1 1 1 -4 0 7 0 1809777.1\C086264\0551910 5 DEFENDANT BANK OF AMERICA, N.A.’S NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFFS’ FIRST AMENDED COMPLAINT – CASE NO. 16-CV-02653- CJC-DTB actions involve the same claims: (1) whether rights or interests established in the prior judgment would be destroyed or impaired by prosecution of the second action; (2) whether substantially the same evidence is presented in the two actions; (3) whether the two suits involve infringement of the same right; and (4) whether the two suits arise out of the same transactional nucleus of facts. Siegel v. Federal Home Loan Mortg. Corp., 143 F.3d 525, 529 (9th Cir. 1998). In Int’l Union of Operating Eng’rs-Employers Constr. Indus. Pension, Welfare & Training Trust Funds v. Karr, 994 F. 2d 1426, 1429 (9th Cir. 1993), the Ninth Circuit explained that the “last of these criteria is the most important.” The Karr court held that if both claims in the different actions arose from the same “transactional nucleus of facts” and the claims in the second action could have been brought in the first, that alone would be sufficient to find that the second action is barred by the first. Id. at 1430. There can be no doubt that Plaintiffs’ current lawsuit arises from the same “transactional nucleus of facts” as the December 2015 Action. (Compare FAC; RJN, Ex. D.) The December 2015 Action asserted the same securitization, “split note”, and AWL based arguments as the instant action. (RJN, Ex. D at pgs. 5-13.) Plaintiffs also request their loans be rescinded and/or void ab initio in both Actions. Id. at pgs. 8, 12, 13. In the instant action Plaintiffs have added additional claims and Defendants but the December 2015 Action’s claims remain in the FAC and continue to be based on the same allegations - centered on AWL and origination. (See, e.g., RJN, Ex. D – first cause of action for violation of the federal truth in lending act (Rescission and Damages), second cause of action for quiet title, third cause of action for cancellation of instrument, and fourth cause of action for declaratory relief.) The alleged harm suffered is the same. Thus, Plaintiffs assert the same primary right in both actions, and their causes of action are nearly identical. Adjudication of Plaintiffs’ “new” action would impair the rights and interests Case 5:16-cv-02653-DOC-DTB Document 23 Filed 02/13/17 Page 17 of 39 Page ID #:378 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 B R Y A N C A V E L L P T H R E E E M B A R C A D E R O C E N T E R , 7 T H F L O O R S A N F R A N C IS C O , C A 9 4 1 1 1 -4 0 7 0 1809777.1\C086264\0551910 6 DEFENDANT BANK OF AMERICA, N.A.’S NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFFS’ FIRST AMENDED COMPLAINT – CASE NO. 16-CV-02653- CJC-DTB established in the dismissal of Plaintiffs’ December 2015 Action, with prejudice. (RJN, Ex. F.) By filing the FAC, Plaintiffs ignore the Central District’s prior sound ruling and improperly seeks to undo the federal court’s dismissal with prejudice of the December 2015 Action. 2. A Final Judgment on the Merits. A dismissal with prejudice is a dismissal on the merits. See Lawlor v. Nat’l Screen Service Corp., 349 U.S. 322, 327 (1955). The phrase “final judgment on the merits” is often used interchangeably with “dismissal with prejudice.” Classic Auto Refinishing, Inc. v. Marino (In re Marino), 181 F. 3d 1142, 1144 (9th Cir. 1999). See also Alch v. Super. Ct., 122 Cal. App. 4th 339, 366 (2004). On September 1, 2016, the Court dismissed the December 2015 Action, with prejudice. (RJN, Ex. E.) The dismissal with prejudice of these claims in the December 2015 Action was a final judgment on the merits. 3. Identity of Privity Between the Parties. The final element for a determination of res judicata is identity or privity between the parties. All that is required to find identity of parties is a finding that the present plaintiff was a plaintiff in the first suit and the present defendant was a defendant in the first suit. C&R Forestry, Inc. v. Consol. Human Res., AZ, Inc., 2007 WL 914198, at *6 (D. Idaho 2007). That is the case here. Plaintiffs previously filed the 2015 Action in federal court, and named AWL as a Defendant.1 (See FAC; RJN, Ex. D.) Because all three res judicata elements are satisfied, this Court should dismiss the current action with prejudice. VI. PLAINTIFFS’ THEORIES CONCERNING COUNTRYWIDE ARE MERITLESS One of Plaintiffs’ theories in the FAC is that the Deeds of Trust are void 1Here, BANA is erroneously sued as “Bank of America, N.A. as successor in interest to America’s Wholesale Lender, its successor and assigns” Case 5:16-cv-02653-DOC-DTB Document 23 Filed 02/13/17 Page 18 of 39 Page ID #:379 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 B R Y A N C A V E L L P T H R E E E M B A R C A D E R O C E N T E R , 7 T H F L O O R S A N F R A N C IS C O , C A 9 4 1 1 1 -4 0 7 0 1809777.1\C086264\0551910 7 DEFENDANT BANK OF AMERICA, N.A.’S NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFFS’ FIRST AMENDED COMPLAINT – CASE NO. 16-CV-02653- CJC-DTB because AWL was not a registered New York or California corporation in 2006, and thus lacked capacity to contract. CHL has used the “America’s Wholesale Lender” fictitious business name and AMERICA’S WHOLESALE LENDER® mark in connection with its mortgage banking business for over eighteen years in California and throughout the United States. “America’s Wholesale Lender” is registered by CHL as a fictitious business name in 49 states, including New York and California. CHL extensively marketed, advertised, promoted and sold its services as a wholesale lender through various marketing channels throughout California and the United States using the “America’s Wholesale Lender” fictitious business name and mark. CHL originated millions of loans in California and throughout the United States using the “America’s Wholesale Lender” fictitious business name and AMERICA’S WHOLESALE LENDER® mark. Consequently, CHL and its fictitious business name “America’s Wholesale Lender” and AMERICA’S WHOLESALE LENDER® mark are well known to consumers, the real estate and mortgage industry and the public at large. AMERICA’S WHOLESALE LENDER® is also a federally registered trademark, Reg. No. 1872784, which was registered on January 10, 1995. AWL is merely a fictitious name under which Countrywide Home Loans, Inc. once did business, and it does not exist outside its relationship with Countrywide Home Loans, Inc., a New York corporation. “Doing business under another name does not create an entity distinct from the person operating the business.” Pinkerton’s Inc. v. Superior Ct. of Orange Cnty., 49 Cal. App. 4th 1342, 1348 (Cal. Dist. Ct. App. 1996), quoting Providence Washington Ins. Co. v. Valley Forge Ins. Co., 42 Cal. App. 4th 1194, 1200 (Cal. Dist. Ct. App. 1996). Plaintiffs’ attempt to avoid the effect of undisputed documents in this case must fail. Recognizing this, California courts have recently rejected identical theories brought by borrowers claiming that their purported lender, AWL, was not in existence at the time their loan was entered into. In Tyshkevich v. Wells Fargo Case 5:16-cv-02653-DOC-DTB Document 23 Filed 02/13/17 Page 19 of 39 Page ID #:380 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 B R Y A N C A V E L L P T H R E E E M B A R C A D E R O C E N T E R , 7 T H F L O O R S A N F R A N C IS C O , C A 9 4 1 1 1 -4 0 7 0 1809777.1\C086264\0551910 8 DEFENDANT BANK OF AMERICA, N.A.’S NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFFS’ FIRST AMENDED COMPLAINT – CASE NO. 16-CV-02653- CJC-DTB Bank, N.A., the court found that “plaintiff is alleging that AWL simply did not exist, and that a made-up business name was simply added as the lender, on her loan contract….plaintiff pressed the possibility that AWL was actually non-existent, rather than simply a fictional name, by asserting that the Deeds of Trust identify AWL as a New York corporation, when in fact, she alleges, it was not a New York corporation.” Tyshkevich v. Wells Fargo Bank, N.A., No. 2:15-cv-2010 JAM AC (PS), 2016 WL 193666 at *9 (E.D.Cal., Jan. 15, 2016). The Court further held that “[t]his argument misreads the Deeds of Trust. They do not state that “AWL” is a corporation. Rather, they state that the “Lender” is a corporation organized under the laws of New York. While the wording could be clearer, this [sic] plain meaning of this is that the “Lender” … is a New York Corporation. It does not assert that AWL – the fictitious name itself – is a New York Corporation.” (Id.) A cursory review of Plaintiffs’ Deeds of Trust reaches the same conclusion – they do not state AWL is a New York corporation. Rather, they state that “Lender” is a corporation organized under the laws of New York. The Tyshkevich Court relied on a decision from the California Court of Appeal holding: Thus, in using the fictitious name America's Wholesale Lender in the loan documents, Countrywide acted properly and did not create or purport to create any new juridical entity....Countrywide, doing business as America's Wholesale Lender, is and was a New York corporation and, like a multitude of other businesses, is permitted to operate under its fictitious name.” Id. at fn. 10, (citing Vildosola v. Countrywide Home Loans, Inc., 2015 WL 5258687 at *2, 2015 Cal. App. Unpub. LEXIS 6448 at *5 (Cal. App., 4th Dist. Sept. 10, 2015).) The Vildosola court reached its conclusion after finding that “Use of a fictitious business name does not create a separate legal entity….‘“[t]he designation [DBA] means ‘doing business as' but is merely descriptive of the person or corporation who does business under some other name. Doing business under Case 5:16-cv-02653-DOC-DTB Document 23 Filed 02/13/17 Page 20 of 39 Page ID #:381 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 B R Y A N C A V E L L P T H R E E E M B A R C A D E R O C E N T E R , 7 T H F L O O R S A N F R A N C IS C O , C A 9 4 1 1 1 -4 0 7 0 1809777.1\C086264\0551910 9 DEFENDANT BANK OF AMERICA, N.A.’S NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFFS’ FIRST AMENDED COMPLAINT – CASE NO. 16-CV-02653- CJC-DTB another name does not create an entity distinct from the person operating the business.” The business name is a fiction, and so too is any implication that the business is a legal entity separate from its owner.’” Vildosola at *2 (citing Pinkerton's, Inc. v. Super. Ct., 49 Cal. App. 4th 1342, 1348 (1996); Cleveland v. Johnson, 209 Cal. App. 4th 1315, 1330 (2012).) 2 VII. PLAINTIFFS LACK STANDING TO CHALLENGE THE FORECLOSURE PROCEEDINGS BECAUSE THEY HAVE NOT ALLEGED TENDER OF THE INDEBTEDNESS “When a debtor is in default of a home mortgage loan, and a foreclosure is either pending or has taken place, the debtor must allege a credible tender of the amount of the secured debt to maintain any cause of action for wrongful foreclosure.” Alicea v. GE Money Bank, 2009 WL 2136969, at *3 (N.D. Cal. July 16, 2009) citing California case law); see also Aguilar v. Bocci, 39 Cal. App. 3d 475, 477 (1974) (A trustor cannot “quiet title without discharging his debt. The cloud upon his title persists until the debt is paid.”). Furthermore, to request “rescission or cancellation, the rule is that the complainant is required to do equity, as a condition to his obtaining relief, by restoring to the defendant everything of value which the plaintiff has received in the transaction.” Fleming v. Kagan, 189 Cal. App. 2d 791, 796 (1961); see also Tamayo v. World Sav. Bank, No. 08-2287, 2009 U.S. Dist. LEXIS 73298, at **18-19 (S.D. Cal. July 23, 2009) (dismissal proper where pleadings reveal plaintiff’s inability or unwillingness to pay and do not contain any allegations of tender). The tender requirement extends to any claim “implicitly integrated” with the foreclosure sale. See Abdullah v. United Savs. Bank, 43 Cal. App. 4th 1101, 1109 2 See also, Sparks v. The Bank of New York Mellon, No. H–14–813, 2015 WL 4093944 at *3 (S.D. Texas July 7, 2015) (Rejecting borrower’s argument that “because ‘America's Wholesale Lender, a New York Corporation never existed, it could not have been competent to enter into an agreement’” and finding that “this ‘non-existent’ lender advanced to [plaintiff] $119,000 to help purchase the real property that is the subject of the mortgage.”); Johnson v. Nationstar Mortgage, LLC, 470 S.W.3d 754, 761 (2015) (Rejecting borrower’s contention that “the inclusion of the lender's legal status (“a Corporation organized and existing under the laws of New York”) converts “America's Wholesale Lender” into “America's Wholesale Lender, Inc.”) Case 5:16-cv-02653-DOC-DTB Document 23 Filed 02/13/17 Page 21 of 39 Page ID #:382 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 B R Y A N C A V E L L P T H R E E E M B A R C A D E R O C E N T E R , 7 T H F L O O R S A N F R A N C IS C O , C A 9 4 1 1 1 -4 0 7 0 1809777.1\C086264\0551910 10 DEFENDANT BANK OF AMERICA, N.A.’S NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFFS’ FIRST AMENDED COMPLAINT – CASE NO. 16-CV-02653- CJC-DTB (1996). A cause of action is “implicitly integrated” with the foreclosure sale if it challenges and/or seeks damages relating to any aspect of the foreclosure process. Id.; see also Arnolds Mgmt. Corp. v. Eischen, 158 Cal. App. 3d 575, 580 (1984) (affirming the sustaining of a demurrer without leave to amend on claims of wrongful foreclosure, fraud and negligence relating to the foreclosure sale.); Karlsen v. Am. Sav. & Loan Ass’n., 15 Cal. App. 3d 112, 121 (1971) (holding plaintiff’s claims for breach of oral agreement, accounting, and constructive trust fail because plaintiff never made a valid tender). Here, Plaintiffs allege the foreclosure proceedings are “illegal and fraudulent”, yet, Plaintiffs do not allege tender of the amount of the debt owed, or their ability to tender. VIII. PLAINTIFFS’ CAUSES OF ACTION ALSO FAIL BECAUSE PLAINTIFFS DO NOT ALLEGE THEY HAVE BEEN PREJUDICED BY ANY ALLEGED DEFECTS IN THE FORECLOSURE PROCESS. “[A] plaintiff in a suit for wrongful foreclosure has generally been required to demonstrate [that] the alleged imperfection in the foreclosure process was prejudicial to the plaintiff’s interests.” Debrunner v. Deutsche Bank Nat’l Trust Co., 204 Cal. App. 4th 433, 443 (2012) ); Knapp v. Doherty, 123 Cal. App. 4th 76, 93 (2004). “Prejudice is not presumed from ‘mere irregularities’ in the process.” Herrera v. Fed. Nat’l Mortg. Ass’n, 205 Cal. App. 4th 1495, 1507 (2012). Indeed, “[a] nonjudicial foreclosure sale is presumed to have been conducted regularly and fairly; one attacking the sale must overcome this common law presumption by pleading and proving an improper procedure and the resulting prejudice.” Fontenot v. Wells Fargo Bank, N.A., 198 Cal. App. 4th 256, 272 (2011). Just as Plaintiffs attempt to do here, the plaintiffs in Herrera and Fontenot challenged the foreclosure. However, both courts held that those plaintiffs could not demonstrate any prejudice. As the Fontenot court explained: Case 5:16-cv-02653-DOC-DTB Document 23 Filed 02/13/17 Page 22 of 39 Page ID #:383 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 B R Y A N C A V E L L P T H R E E E M B A R C A D E R O C E N T E R , 7 T H F L O O R S A N F R A N C IS C O , C A 9 4 1 1 1 -4 0 7 0 1809777.1\C086264\0551910 11 DEFENDANT BANK OF AMERICA, N.A.’S NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFFS’ FIRST AMENDED COMPLAINT – CASE NO. 16-CV-02653- CJC-DTB Because a promissory note is a negotiable instrument, a borrower must anticipate it can and might be transferred to another creditor. … If MERS indeed lacked authority to make the assignment, the true victim was not Plaintiffs but the original lender, which would have suffered the unauthorized loss of a $1 million promissory note. Id. (emphasis added). Following Fontenot, the Herrera court held that borrower plaintiffs could not show they suffered any prejudice from an alleged improper assignment and substitution of trustee because plaintiffs agreed in the deed of trust that the lender’s successors and assignees could exercise rights of the original lender, including foreclosing and substituting the trustee, and plaintiffs defaulted on their loan and did not tender payment or cure their default. Even if the defendants lacked authority to assign the deed of trust and note, “the true victims were not plaintiffs but the lender.” Herrera, 205 Cal. App. 4th at 1508. Moreover, to the extent that Plaintiff argues that the assignment is invalid because AWL is not a MERS member, the authority for MERS to act is derived from the deed of trust, and not from the rules pertaining to MERS membership. See Avila v. Wells Fargo Bank, N.A., No. C16-05904 WHA (N.D. Cal. Dec. 23, 2016) (citing Herrera, 205 Cal. App. 4th at 1506 and Yvanova v. New Century Mortgage Corp., 62 Cal. 4th 919, 924 (2016) (“Herrera did not specify that MERS’ authority persisted only following assignments to its memberships. Rather, it applied to the extent described in the applicable deed of trust.”); see also Ghuman v. Wells Fargo Bank, N.A., 989 F. Supp. 2d 994, 1001 (E.D. Cal. 2013) (specifically recognizing MERS’ broad authority to act under title as nominee with or without original lender’s participation or consent, particularly when original lender has ceased doing business.) Just as in the above cases, Plaintiffs here cannot show that they were prejudiced by any alleged defect in the foreclosure because their obligation to make payments on the note was not affected. Fontenot, 198 Cal. App. 4th at 272. Case 5:16-cv-02653-DOC-DTB Document 23 Filed 02/13/17 Page 23 of 39 Page ID #:384 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 B R Y A N C A V E L L P T H R E E E M B A R C A D E R O C E N T E R , 7 T H F L O O R S A N F R A N C IS C O , C A 9 4 1 1 1 -4 0 7 0 1809777.1\C086264\0551910 12 DEFENDANT BANK OF AMERICA, N.A.’S NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFFS’ FIRST AMENDED COMPLAINT – CASE NO. 16-CV-02653- CJC-DTB IX. PLAINTIFFS LACK STANDING TO CHALLENGE THE SECURITIZATION PROCESS AND THEIR NOTE-SPLITTING THEORY FAILS. Plaintiffs also contend that proper procedures were not followed in the securitization of their loan. (FAC pp. 9-14.) As a result, Plaintiffs allege that Defendants do not have a legal interest in the Notes or Deeds of Trust. (Id.) Courts, however, have uniformly rejected the argument that securitization of a mortgage loan provides the mortgagor with a cause of action. A secured promissory note traded on the secondary market remains secured because the right to enforce the mortgage follows the note. Cal. Civ. Code § 2936 (“The assignment of a debt secured by mortgage carries with it the security.”). Not surprisingly then, “[t]he argument that parties lose interest in a loan when it is assigned to a trust pool has also been rejected by numerous district courts.” Lane v. Vitek Real Estate Indus., 713 F. Supp. 2d 1092, 1099 (E.D. Cal. 2010); accord Rodenhurst v. Bank of Am., 773 F. Supp. 2d 886, 899-90 (D. Haw. Feb. 23, 2011) (“[C]ourts have uniformly rejected the argument that securitization of a mortgage loan provides the mortgagor a cause of action.”); Reyes v. GMAC Mortgage LLC, No. 2:11-CV-100 JCM (RJJ), 2011 WL 1322775, at *2 (D. Nev. Apr. 5, 2011) (“[T]he securitization of the loan does not in fact alter or affect the legal beneficiary’s standing to enforce the deed of trust” (citing cases).); Jenkins v. JPMorgan Chase Bank, N.A., 216 Cal. App. 4th 497, 515 (2013) (plaintiffs lack standing to challenge the securitization of their loan based on allegations of non- compliance with a Pooling and Servicing Agreement (PSA) for the securitized trust because they are not a party to or third-party beneficiary of the PSA); Rajamin v. Fannie Mae Bank Nat’l Trust Co., 757 F.3d 79, 90 (2d Cir. 2014) (alleged failure to comply with PSA does not render ADOT void as matter of law).3 3 While a recent California case strayed from this majority rule, Glaski v. Bank of America, N.A., 218 Cal. App. 4th 1079 (2013), Glaski has been criticized as a flawed outlier and has been rejected by nearly every court that has considered it, including the Ninth Circuit. See, e.g., Saterbak v. JPMorgan Chase Bank, N.A., Case 5:16-cv-02653-DOC-DTB Document 23 Filed 02/13/17 Page 24 of 39 Page ID #:385 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 B R Y A N C A V E L L P T H R E E E M B A R C A D E R O C E N T E R , 7 T H F L O O R S A N F R A N C IS C O , C A 9 4 1 1 1 -4 0 7 0 1809777.1\C086264\0551910 13 DEFENDANT BANK OF AMERICA, N.A.’S NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFFS’ FIRST AMENDED COMPLAINT – CASE NO. 16-CV-02653- CJC-DTB Moreover, California law requires a party challenging the foreclosure based on an improper assignment to allege that the assignment is void, and not merely voidable. Yvanova v. New Century Mortgage Copr., 62 Cal. 4th 919 (2016) (in order to challenge assignment of deed of trust based on alleged violation of PSA, borrower must show actual injury resulting from defective securitization); Yhudai v. Impac Funding Corp., 1 Cal. App. 5th 1252, 1257 (2016) (“When an assignment is merely voidable, the power to ratify or avoid the transaction lies solely with the parties to the assignment; the transaction is not void unless and until one of the parties takes steps to make it so.”); Saterbak v. JPMorgan Chase Bank, N.A., 245 Cal. App. 4th 808, 815 (2016) (“Yvanova expressly offers no opinion as to whether . . . an untimely assignment to a securitized made after the trust’s closing date is void or merely voidable. We conclude such as assignment is merely voidable.”). Here, Plaintiffs fail to plead facts to sufficient to show that the Assignment is void, rather than merely voidable. A bald allegation that the assignment of a note or deed of trust is “void” or “defective” is insufficient; California courts do not accept contentions or conclusions of law as true. See, e.g., Jenkins v. JP Morgan Chase Bank, N.A., 216 Cal. App. 4th 497, 510-515 (2013) (“information and belief” allegations that a post-closing transfer of a loan into a securitized trust rendered the transfer void were insufficient to state a claim). The FAC baldly claims Plaintiff has standing to challenge an allegedly void assignment without any underlying facts in support. (See generally FAC). Accordingly, Plaintiff's conclusory allegations regarding the validity of the subject assignment of a deed of trust and ensuing foreclosure proceedings, are insufficient and Plaintiffs therefore lack standing to challenge the process for securitization of the loan. Plaintiffs also claim their notes were “split” from the Deeds of Trust and are 245 Cal. App. 4th 808, 815 (2016); Yhudai v. Impac Funding Corp., 1 Cal. App. 5th 1252, 1257 (2016); Zeppeiro v. GMAC Mortgage, LLC, No. 13-55420 (9th Cir. Oct. 5, 2016); In re Sandri, 501 B.R. 369, 373- 377 (Bankr. N.D. Cal. 2013) (collecting California federal and state court cases and rejecting Glaski). Case 5:16-cv-02653-DOC-DTB Document 23 Filed 02/13/17 Page 25 of 39 Page ID #:386 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 B R Y A N C A V E L L P T H R E E E M B A R C A D E R O C E N T E R , 7 T H F L O O R S A N F R A N C IS C O , C A 9 4 1 1 1 -4 0 7 0 1809777.1\C086264\0551910 14 DEFENDANT BANK OF AMERICA, N.A.’S NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFFS’ FIRST AMENDED COMPLAINT – CASE NO. 16-CV-02653- CJC-DTB now unenforceable. (FAC pp. 20-23.) Plaintiffs’ conclusory allegations offer no facts but instead claim securitization somehow voided the loans. Id. at ¶ 23. Although the claim enjoys wild popularity on the internet, it is not cognizable and does not render the assignment of deed of trust void. Debrunner v. Deutsche Bank Nat'l Trust Co., 204 Cal. App. 4th 433, 437, 442 (2012); see also Seidell v. Tuxedo Land Co., 216 Cal. 165, 170 (1932). A secured promissory note traded on the secondary market remains secured because the right to enforce the deed of trust follows the note. Civ. Code § 2936. This is not only the law of California; it has long been the law of the United States. Carpenter v. Longan, 83 U.S. 271, 274 (1873). Additionally, the express terms of the deeds of trust, which Plaintiffs signed, permit the notes to change hands. (FAC Ex. A at ¶ 20; Ex. B.) X. PLAINTIFFS’ CLAIMS FAIL INDIVIDUALLY. A. Plaintiffs’ First Claim for Fraud, Second Claim for Fraud in the Execution of the Deeds of Trust and Promissory Notes, and Fourth Claim to Void and/or Cancel Ab Initio Deeds of Trust & Promissory Notes Fail. In their first claim for Fraud, second claim for Fraud in the Execution of the Deeds of Trust and Promissory Notes, and fourth claim to Void and/or Cancel Ab Initio Deeds of Trust & Promissory Notes, Plaintiffs assert that BANA, “failed to disclose to Plaintiffs that AWL was not the true creditor and was not licensed, registered or authorized to make loans/and/or conduct business in California.” (FAC, ¶ 14.) Plaintiffs contend the Deeds of Trust are void because they listed “AWL, a non-existent New York entity, as Lender” and that AWL was not authorized to do business in New York or California and that they were never informed that AWL was not authorized to conduct business in California. (Id., ¶¶ 3, 15, 28, 32.) Plaintiffs’ claims fail because they do not plead sufficient facts to support a fraud claim and their theories concerning fail as a matter of law. For a fraud claim, a plaintiff must plead: (1) a misrepresentation of material Case 5:16-cv-02653-DOC-DTB Document 23 Filed 02/13/17 Page 26 of 39 Page ID #:387 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 B R Y A N C A V E L L P T H R E E E M B A R C A D E R O C E N T E R , 7 T H F L O O R S A N F R A N C IS C O , C A 9 4 1 1 1 -4 0 7 0 1809777.1\C086264\0551910 15 DEFENDANT BANK OF AMERICA, N.A.’S NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFFS’ FIRST AMENDED COMPLAINT – CASE NO. 16-CV-02653- CJC-DTB fact, (2) with knowledge of its falsity, (3) with the intent to induce another’s reliance on the misrepresentation, (4) justifiable reliance, and (5) resulting damage. Conroy v. Regents of Univ. of Cal., 45 Cal. 4th 1244, 1254 (2009). Furthermore, when asserting a fraud claim against a corporate defendant, as in this case, a plaintiff must “allege the names of the person 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). Plaintiffs’ various theories, upon which they base their fraud claim, fail as a matter of law. First, there was no misrepresentation made to Plaintiffs at loan origination regarding their lender – instead, Plaintiffs’ claim is based on a misreading of the loan documents. (FAC ¶ 28 and Exs. A, B.) Additionally, Countrywide was authorized to do business as AWL in New York and California. (RJN Exs. B, C.) Accordingly, Defendants are authorized under the loan documents to institute foreclosure proceedings and collect on the loan and Plaintiffs are unable to demonstrate any “misrepresentation” by Defendants. Similarly, Plaintiffs fail to allege any reliance at loan origination on any purported representation by Defendants, let alone that they did not receive the loan proceeds or that they would not have entered into the loans. Furthermore, Plaintiffs’ claims are time-barred under the three-year statute of limitations as it relates to the purported fraud at loan origination in 2006, and the FAC does not allege facts that support a theory of delayed discovery. Cal. Code Civ. Proc. § 338(d); Cal Code Civ. Proc. § 343 (four-year statute of limitations for an action to cancel an instrument under Cal. Code Civ. Proc. 341.) Plaintiffs fail to allege any facts demonstrating their inability to discover the purported facts surrounding the fraud earlier and thus their claim must be dismissed for this additional, independent reason. Accordingly, the first, second, and fourth causes of action necessarily fail and should be dismissed without leave to amend. Case 5:16-cv-02653-DOC-DTB Document 23 Filed 02/13/17 Page 27 of 39 Page ID #:388 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 B R Y A N C A V E L L P T H R E E E M B A R C A D E R O C E N T E R , 7 T H F L O O R S A N F R A N C IS C O , C A 9 4 1 1 1 -4 0 7 0 1809777.1\C086264\0551910 16 DEFENDANT BANK OF AMERICA, N.A.’S NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFFS’ FIRST AMENDED COMPLAINT – CASE NO. 16-CV-02653- CJC-DTB B. Plaintiffs’ Third Claim for Breach of Good Faith and Fair Dealing Fails. Causes of action for breach of the covenant of good faith and fair dealing are subject to a four-year statute of limitations under California Code of Civil Procedure Section 337(1). See Perez-Encinas v. AmerUs Life Ins. Co., 468 F. Supp. 2d 1127, 1133-34 (N.D. Cal. 2006) (“The statute of limitations on a claim for breach . . . of the implied covenant of good faith and fair dealing is four years.”) Plaintiffs’ third claim is based on facts surrounding the origination of the Plaintiffs’ loans in June 2006, and is time-barred. (FAC ¶¶ 25, 28.) This claim also fails on substantive grounds. The implied covenant of good faith and fair dealing does not impose pre-contractual obligations. The implied covenant serves only as “a supplement to an existing contract, and thus it does not require parties to negotiate in good faith prior to any agreement.” McClain v. Octagon Plaza, LLC, 159 Cal. App. 4th 784, 799 (2008). Plaintiffs allege that Defendants breached the implied covenant when the DOTs were created and listing AWL as lender. (FAC ¶ 28.) Because this cause of action is premised upon alleged errors and omissions that occurred at loan origination, it is conduct during the formation of this loan contract, rather than conduct related to the performance or enforcement of the contract, and thus cannot form the basis for a claim for breach of the implied covenant of good faith and fair dealing. See McClain, 159 Cal. App. 4th at 799. Additionally, “The implied covenant of good faith and fair dealing protects only the parties’ right to receive the benefit of their agreement.” Foley v. Interactive Data Corporation, 47 Cal. 3d 654, 698, fn.39 (1988) (emphasis added); see also Berger v. Home Depot U.S.A., Inc., 476 F. Supp. 2d 1174, 1177 (C.D. Cal. 2007) (The implied covenant will not apply where “no express term exists on which to hinge an implied duty, and where there has been compliance with the contract’s express terms.”). Case 5:16-cv-02653-DOC-DTB Document 23 Filed 02/13/17 Page 28 of 39 Page ID #:389 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 B R Y A N C A V E L L P T H R E E E M B A R C A D E R O C E N T E R , 7 T H F L O O R S A N F R A N C IS C O , C A 9 4 1 1 1 -4 0 7 0 1809777.1\C086264\0551910 17 DEFENDANT BANK OF AMERICA, N.A.’S NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFFS’ FIRST AMENDED COMPLAINT – CASE NO. 16-CV-02653- CJC-DTB It appears Plaintiffs also allege that Defendants acted in bad faith and without standing or authority by proceeding with foreclosure. (FAC ¶ 27.) However, Plaintiffs’ claim further fails, as the Court may not find a breach of the implied covenant based upon conduct permitted by the parties’ express agreement. See Wolf v. Walt Disney Pictures and Television, 162 Cal. App. 4th 1107, 1120 (2008) (“[T]he implied covenant will only be recognized to further the contract’s purpose; it will not be read into a contract to prohibit a party from doing that which is expressly permitted by the agreement itself.”). Here, Defendants’ conduct in initiating foreclosure upon default was permitted under the notes and Deeds of Trust, (FAC Exs. A, B.), and cannot serve as the factual predicate for a claim under the implied covenant. See Third Story Music v. Waits, 41 Cal. App. 4th 798 (1996) (“Courts are not at liberty to imply a covenant directly at odds with a contract’s express grant of discretionary power except in those relatively rare instances when reading the provision literally would, contrary to the parties’ clear intention, result in an unenforceable, illusory agreement.”). Plaintiffs defaulted in September 2015, and as a result, Defendants initiated foreclosure proceedings pursuant to the Deed of Trust. (FAC Exs. A, I.) Lastly, the implied covenant may not be used to create a duty where none exists. Pasadena Live v. City of Pasadena, 114 Cal. App. 4th 1089, 1094 (2004) (The implied covenant “is limited to assuring compliance with the express terms of the contract, and cannot be extended to create obligations not contemplated by the contract.”). Thus, Plaintiffs cannot invoke the implied covenant by alleging fraud at loan origination after Plaintiffs made payments for almost ten years — the only contracts between the parties. (FAC Exs. A, B, I.) Because Defendants acted pursuant to the agreement between the parties, this claim fails. Plaintiffs’ claim fails as a matter of law and the motion to dismiss to this cause of action should be granted without leave to amend. Case 5:16-cv-02653-DOC-DTB Document 23 Filed 02/13/17 Page 29 of 39 Page ID #:390 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 B R Y A N C A V E L L P T H R E E E M B A R C A D E R O C E N T E R , 7 T H F L O O R S A N F R A N C IS C O , C A 9 4 1 1 1 -4 0 7 0 1809777.1\C086264\0551910 18 DEFENDANT BANK OF AMERICA, N.A.’S NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFFS’ FIRST AMENDED COMPLAINT – CASE NO. 16-CV-02653- CJC-DTB C. Plaintiffs’ Fifth Claim for Cancellation of a Voidable Contract and Sixth Claim for Violation of California Corporations Code § 191(C)(7) Fails. Plaintiffs seek to void the Deeds of Trust under California Revenue and Taxation Code sections 23304.1, 23304.1(b), and 23305(a), and California Corporations Code § 191(c)(7), claiming that BANA, as successor in interest to AWL, did not register to do business with the Franchise Tax Board. (FAC ¶¶ 35- 51.) To the extent Plaintiffs meant to refer to Sections 23304.1(a) and (b), they provide: (a) Every contract made in this state by a taxpayer during the time that the taxpayer's corporate powers, rights, and privileges are suspended or forfeited pursuant to Sections 23301, 23301.5, or 23775 shall, subject to Section 23304.5, be voidable at the instance of any party to the contract other than the taxpayer. (b) If a foreign taxpayer that neither is qualified to do business nor has a corporate account number from the Franchise Tax Board, fails to file a tax return required under this part, any contract made in this state by that taxpayer during the applicable period specified in subdivision (c) shall, subject to Section 23304.5, be voidable at the instance of any party to the contract other than the taxpayer. Section 23305(a) provides for reinstatement of, and cure by, a taxpayer prior to a contract being voided. Plaintiffs’ allegations are without merit. First, these claims are barred by the applicable statute of limitations. Cal. Code Civ. Proc. § 343. (four-year statute of limitations for an action to cancel an instrument under Cal. Code Civ. Proc. 341.) Second, the FAC fails to allege facts giving rise to a claim under § 23304.1(b), because it alleges no fact to show AWL failed “to file a tax return required under this part”. There is no allegation that AWL engaged in any taxable transaction with respect to Plaintiffs’ loan that would require it to file a tax return under the franchise tax law. Case 5:16-cv-02653-DOC-DTB Document 23 Filed 02/13/17 Page 30 of 39 Page ID #:391 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 B R Y A N C A V E L L P T H R E E E M B A R C A D E R O C E N T E R , 7 T H F L O O R S A N F R A N C IS C O , C A 9 4 1 1 1 -4 0 7 0 1809777.1\C086264\0551910 19 DEFENDANT BANK OF AMERICA, N.A.’S NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFFS’ FIRST AMENDED COMPLAINT – CASE NO. 16-CV-02653- CJC-DTB Additionally, AWL was not required to be qualified to do business in the State of California, as it falls under statutory exemptions for certification with the Secretary of State. See Lomboy v. SCME Mortgage Bankers, 2009 WL 1457738, *3 (N.D. Cal. May 26, 2009) (citing Corp. Code §§ 191(c)(7) exception for creating evidence of debt or mortgages, liens or security interest on real or personal property), 191(d)(3) (registration not required for “enforcement of any loans by trustee’s sale)); see also Derakshan v. Mortgage Electronic Registration Systems, Inc., 2009 U.S. Dist. LEXIS 63176, at *17-*20 (C.D. Cal. Jun. 29, 2009) confirms: But the creation of “evidences of debt or mortgages, liens or security interests on real or personal property” and the “enforcement of any loans by trustee’s sale, judicial process, or deed in lieu of foreclosure or otherwise” do not constitute the transaction of intrastate business. Cal. Corp. Code §§ 191(c)(7), 191(d)(3). Both activities are exempted by statute. See id. Accordingly, AWL was exempt from such requirements and its purported lack of registration is no obstacle to foreclosure. Finally, § 23304.5 specifically provides that “in no event shall the court order rescission” without full restitution. Cal. Rev. & Tax Code § 23304.5 (emphasis added). Even if the Notes and Deeds of Trust were voidable, which they are not, Plaintiffs would have to pay back the full amount they borrowed from AWL. Plaintiffs do not allege that they have tendered, or can tender the amount due. Plaintiffs’ Fifth and Sixth Claims should be dismissed with prejudice. D. Plaintiffs’ Seventh Claim for Breach of Fiduciary Duty Fails. Plaintiffs’ claim for breach of fiduciary duty also fails. To state a cause of action for breach of fiduciary duty, a plaintiff must allege facts that, if proven, would establish “the existence of a fiduciary relationship, its breach, and damage proximately caused by that breach.” Roberts v. Lomanto, 112 Cal. App. 4th 1553, 1562 (2004) (quoting Pierce v. Lyman, 1 Cal. App. 4th 1093, 1101 (1991)). Plaintiffs fail to allege such facts. Rather, Plaintiffs merely allege that AWL was Case 5:16-cv-02653-DOC-DTB Document 23 Filed 02/13/17 Page 31 of 39 Page ID #:392 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 B R Y A N C A V E L L P T H R E E E M B A R C A D E R O C E N T E R , 7 T H F L O O R S A N F R A N C IS C O , C A 9 4 1 1 1 -4 0 7 0 1809777.1\C086264\0551910 20 DEFENDANT BANK OF AMERICA, N.A.’S NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFFS’ FIRST AMENDED COMPLAINT – CASE NO. 16-CV-02653- CJC-DTB not authorized to do business in California and as a result Plaintiffs owe nothing on their loans. (FAC ¶¶ 52 – 58.) Plaintiffs are attempting to allege a fiduciary relationship with their initial lender, AWL, and such an allegation is untenable and inconsistent with their underlying theory that AWL did not exist at origination. A contractual relationship amounting to a “debtor/creditor relationship” does not create a fiduciary duty. Wolf v. Superior Court, 107 Cal. App. 4th 25, 32-33 (2003). More specifically, in the context of a mortgage transaction, a lender has no fiduciary duty to a borrower when a borrower obtains a loan through the course of an ordinary lender-borrower relationship. See, e.g., Nymark v. Heart Fed. Sav. & Loan Ass’n, 231 Cal. App. 3d 1089, 1092 n.1 (1991) (“The relationship between a lending institution and its borrower-client is not fiduciary in nature.”); see also Kruse v. Bank of America, 202 Cal. App. 3d 38, 67 (1988). This is “inconsistent with the obligations of a fiduciary which require that the fiduciary knowingly agree to subordinate its interests to act on behalf of and for the benefit of another.” Nymark, 231 Cal. App. 3d at 1092; Comm. on Children’s Television, Inc. v. Gen. Foods Corp., 35 Cal. 3d 197, 221 (1983). Additionally, claims for breach of fiduciary duty are subject to a four-year statute of limitations. See David Welch Co. v. Eskine Tulley, 203 Cal. App. 3d 884, 893 (1988) (four-year catch-all statute in Cal. Civ. Proc. Code § 343 applicable to breach of fiduciary duty claims). The FAC was filed in 2017 over ten years after the loans were originated in June 2006. (RJN, Exs. A, B.) This claim is time-barred. For this reason, Plaintiffs’ claim for breach of fiduciary duty fails as a matter of law and ought to be dismissed with prejudice. E. Plaintiffs’ Eighth Claim for Unfair Competition under California Business and Professions Code § 17200 Fails. Plaintiffs’ eighth claim is premised on BANA’s alleged conduct in connection with the other causes of action in the FAC. (FAC ¶¶ 60-68.) Section 17200 (the “UCL”) prohibits unfair, unlawful and fraudulent business practices. Cal. Bus. & Case 5:16-cv-02653-DOC-DTB Document 23 Filed 02/13/17 Page 32 of 39 Page ID #:393 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 B R Y A N C A V E L L P T H R E E E M B A R C A D E R O C E N T E R , 7 T H F L O O R S A N F R A N C IS C O , C A 9 4 1 1 1 -4 0 7 0 1809777.1\C086264\0551910 21 DEFENDANT BANK OF AMERICA, N.A.’S NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFFS’ FIRST AMENDED COMPLAINT – CASE NO. 16-CV-02653- CJC-DTB Prof. Code § 17200. As an initial matter, Plaintiffs’ § 17200 claim fails because the claims are time-barred because they relate to origination of their loans, which occurred in 2006. (FAC ¶ 66; Exs. A, B.) (See, e.g. Cal. Bus. & Prof. Code § 17208 (four year statute of limitations for claims brought under Cal. Bus. & Prof. Code § 17200 et seq.) Additionally, as discussed throughout this Motion, Plaintiffs’ UCL claim is unable to find support in their other deficient claims and must be dismissed. “A violation of another law is a predicate for stating a cause of action under the UCL’s unlawful prong.” Berryman v. Merit Prop. Mgmt., Inc., 152 Cal. App. 4th 1544, 1554 (2007). Thus, a claim for a UCL violation stands or falls depending on the fate of antecedent substantive causes of action. Krantz v. BT Visual Images, 89 Cal. App. 4th 164, 178 (2001). Since the passage of Proposition 64, a private plaintiff must have suffered injury in fact and lost money or property as a result of the defendant’s conduct in order to have standing. Bus. & Prof. Code § 17204. “An injury in fact is [a]n actual or imminent invasion of a legally protected interest, in contrast to an invasion that is conjectural or hypothetical.” Hall v. Time, Inc., 158 Cal. App. 4th 847, 853 (2008). “[I]njury must be economic, at least in part, for a plaintiff to have standing under Business and Professions Code section 17204.” Animal Legal Defense Fund v. Mendes, 160 Cal. App. 4th 136, 147 (2008). Allegations of “moral injury” are insufficient, and an alleged injury “suffered upon learning ‘the truth’” is not economic. Id. In Hosseini v. Wells Fargo Bank, N.A., 2013 WL 4279632, *8 (N.D. Cal. 2013), plaintiffs brought a cause of action for violation of the UCL which was dismissed after the Court found that “[p]laintiffs lack standing to bring the UCL claim because they have not alleged that they suffered damages and cannot do so as no foreclosure sale has taken place.” Id. See also Jensen v. Quality Loan Serv. Corp, 702 F. Supp. 2d 1183, 1199 (E.D. Cal. 2010) (holding an injury in fact or loss of Case 5:16-cv-02653-DOC-DTB Document 23 Filed 02/13/17 Page 33 of 39 Page ID #:394 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 B R Y A N C A V E L L P T H R E E E M B A R C A D E R O C E N T E R , 7 T H F L O O R S A N F R A N C IS C O , C A 9 4 1 1 1 -4 0 7 0 1809777.1\C086264\0551910 22 DEFENDANT BANK OF AMERICA, N.A.’S NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFFS’ FIRST AMENDED COMPLAINT – CASE NO. 16-CV-02653- CJC-DTB money or property does not exist where the subject property has not been foreclosed on). The court further held that plaintiffs’ “conclusory allegation that they were injured in fact and lost money or property as a result of Defendant’s practices” was insufficient to establish standing. Here, Plaintiffs fail to plead any injury in fact or loss of money. Instead, Plaintiffs provide a laundry list of allegations against AWL – due to its alleged status “as a non-existent/unauthorized/unregistered corporation.” (FAC ¶ 62.) Plaintiffs, however, do not allege any facts demonstrating what money or property they have lost, nor that such loss was caused by BANA’s alleged unfair competition as opposed to their own conduct. In this regard, conclusory allegations that Plaintiff suffered damages and “will continue to suffer damages in the form of unfair and unwarranted late fees and other improper fees and charges” are insufficient to show monetary or property loss. People v. McKale, 25 Cal. 3d 626, 635 (1979)(“purely conclusionary” allegations of 17200 violations are “insufficient to withstand demurrer.”) No foreclosure sale has occurred so there has not been any actual loss of property. Finally, the “threat of foreclosure” was not precipitated by BANA’s conduct but rather Plaintiffs’ own default on the loan. Accordingly, because Plaintiffs lack standing and fail to allege any underlying basis for relief under § 17200, Plaintiffs’ eighth cause of action should be dismissed, with prejudice. F. Plaintiffs’ Ninth Claim for Violation of Homeowners’ Bill of Rights Fails as a Matter of Law. Plaintiffs’ claim that the foreclosure proceedings are improper under California Civil Code Section 2924.17 due to securitization and the alleged recording of “robodocs” – including the Assignments, Substitution of Trustee, Notice of Default, and Notice of Trustee’s Sale. (FAC ¶¶ 71, 72.) This claim fails. As an initial matter, Plaintiffs cannot state this claim based solely on information and belief as Plaintiffs do in the FAC. In order to state a valid claim Plaintiffs must state the facts that lead them to believe that the allegation is true. Case 5:16-cv-02653-DOC-DTB Document 23 Filed 02/13/17 Page 34 of 39 Page ID #:395 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 B R Y A N C A V E L L P T H R E E E M B A R C A D E R O C E N T E R , 7 T H F L O O R S A N F R A N C IS C O , C A 9 4 1 1 1 -4 0 7 0 1809777.1\C086264\0551910 23 DEFENDANT BANK OF AMERICA, N.A.’S NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFFS’ FIRST AMENDED COMPLAINT – CASE NO. 16-CV-02653- CJC-DTB Sohal v. Fed. Home Loan Mortg. Corp., 2011 WL 3842195, at *5, 8 (N.D. Cal. Aug. 30, 2011) (dismissing claims for wrongful foreclosure and negligent misrepresentation because plaintiffs had not alleged facts setting forth basis on which they were informed and believed allegations concerning robo-signing were true); Chua v. IB Property Holdings, LLC, 2011 WL 3322884, at *2 (C.D. Cal. Aug. 1, 2011) (denying request for injunctive relief where plaintiffs produced no information supporting their theory that the individual who signed assignment and substitution of trustee is “robo-signer”). Nothing in the HBOR changes this well- established rule and line of authorities. Plaintiffs’ claim fails because Plaintiffs do not allege any facts to support the conclusory “robodocs” allegation. Moreover, “[i]n order to challenge the [foreclosure] sale successfully there must be evidence of a failure to comply with the procedural requirements for the foreclosure sale that caused prejudice to the person attacking the sale.” Angell v. Superior Court, 73 Cal. App. 4th 691, 700 (1999); Knapp v. Dougherty, 123 Cal. App. 4th 76 (2004). Here, Plaintiffs do not allege how any alleged “robodocs” caused them prejudice given their status as already in default. Nor can they because Plaintiffs do not allege that the foreclosure documents are false or deny that they are in default. See Cerecedes v. U.S. Bankcorp, 2011 WL 2711071, *5 (C.D. Cal. 2011) (plaintiff cannot state a claim under section 17200 based on robo-signing because plaintiff did not dispute that he defaulted on his mortgage or that he received required notices); see also, e.g. Orzoff v. Bank of America, N.A., 2011 WL 1539897, at *2–3 (D. Nev. 2011) (plaintiff failed to state a fraud claim based on “robosigning” loan documents where plaintiff did not dispute that she defaulted on mortgage or received required notices); Bucy v. Aurora Loan Servs., LLC, 2011 WL 1044045, at *6 (S.D. Ohio 2011) (same). Further, no sale has taken place and has yet to be rescheduled. Thus, Plaintiffs cannot base a claim on allegations of a “robodocs” Finally, to the extent Plaintiffs challenge the ability of Defendants to foreclose due to securitization – this claim also fails. First, Plaintiffs’ Section 2924.17 Case 5:16-cv-02653-DOC-DTB Document 23 Filed 02/13/17 Page 35 of 39 Page ID #:396 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 B R Y A N C A V E L L P T H R E E E M B A R C A D E R O C E N T E R , 7 T H F L O O R S A N F R A N C IS C O , C A 9 4 1 1 1 -4 0 7 0 1809777.1\C086264\0551910 24 DEFENDANT BANK OF AMERICA, N.A.’S NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFFS’ FIRST AMENDED COMPLAINT – CASE NO. 16-CV-02653- CJC-DTB allegations apply only to pre-2013 activity and thus the code section is inapplicable. Second, any allegations relating to theories of “securitization” fail as a matter of law as thoroughly discussed supra Section (IX). Therefore, this claim also fails and should be dismissed with prejudice. G. Plaintiffs’ Tenth Claim For Declaratory Relief Fails. A party seeking declaratory relief must plead facts, not conclusions of law, and must show a controversy of concrete actuality as opposed to one which is merely academic or hypothetical. See Wilson v. Transit Authority, 199 Cal. App. 2d 716, 722-24 (1962); see also American States Ins. Co. v. Kearns, 15 F.3d 142, 143- 144 (9th Cir. 1994). A “real and substantial controversy” must exist to plead declaratory relief. Alameda County Land Use Assn. v. City of Hayward, 38 Cal. App. 4th 1716, 1722 (1995). Where the issues raised in a claim for declaratory relief will be resolved by other claims for relief, the claim for declaratory relief is unnecessary and serves no useful purpose. C.J.L. Constr., Inc. v. Universal Plumbing, 18 Cal. App. 4th 376, 290 (1993) (finding that the availability of another form of adequate relief justifies denial of declaratory relief). Here, the issues raised in Plaintiffs’ claim for declaratory relief is identical to their other claims and will be resolved by Plaintiffs’ other claims for relief. (FAC ¶ 76.) Plaintiffs’ claim for declaratory relief is unnecessary and should be dismissed. H. Plaintiffs’ Eleventh Claim For Rescission of Mortgage Pursuant to the Federal Trust in Lending Act (“TILA”), 15 U.S.C. §§ 1601, et. seq. Fails. Plaintiffs’ eleventh claim for Violation of 15 U.S.C. § 1601 alleges the Loans were subject to 15 U.S.C. §§ 1635, 1641(g) and Reg. Z § 226.15 and that Plaintiffs elected to rescind Loans via letters to Nationstar in 2015. (FAC ¶ 81.) Plaintiffs claim Defendants violated the statutes by failing to rescind Plaintiffs’ loans within twenty calendar days of Plaintiffs mailing their Notices to Rescind to Nationstar in Case 5:16-cv-02653-DOC-DTB Document 23 Filed 02/13/17 Page 36 of 39 Page ID #:397 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 B R Y A N C A V E L L P T H R E E E M B A R C A D E R O C E N T E R , 7 T H F L O O R S A N F R A N C IS C O , C A 9 4 1 1 1 -4 0 7 0 1809777.1\C086264\0551910 25 DEFENDANT BANK OF AMERICA, N.A.’S NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFFS’ FIRST AMENDED COMPLAINT – CASE NO. 16-CV-02653- CJC-DTB 2015. (FAC ¶¶ 78 - 90.) First, claims for rescission under 15 U.S.C. §1641, the Truth in Lending Act (“TILA”) must be brought within three years of the claimed violation. 15 U.S.C. §1635(f). Further, claims for damages under TILA are subject to a one year statute of limitations, also running from the date of the violation. 15 U.S.C. §§ 1635(f); 1640(e); see also Miguel v. Country Funding Corp., 309 F.3d 1161, 1164 (9th Cir. 2002), cert. denied, 539 U.S. 927, 123 S. Ct. 2577 (2003). The date of the violation refers to the date “the loan documents were signed.” Meyer v. Ameriquest Mortg. Co. 342 F.3d 899, 902 (9th Cir. 2003). Here, the Deeds of Trust were signed on June 23, 2006. (FAC Exs. A, B.) Accordingly the limitations period for rescission claims lapsed on June 23, 2009, and the limitations period for damages lapsed on June 23, 2007. Plaintiffs, however, did not file their initial Federal suit until December 22, 2015 4 after the limitations periods for rescission and damages had already lapsed. Accordingly, Plaintiffs’ claim fails as a matter of law. Furthermore, to assert a claim for violation of 15 U.S.C. §1641(g), a plaintiff must allege actual damages or the payment of unnecessary finance charges to state a valid claim. Beall v. Quality Loan Serv. Corp., 2011 U.S. Dist. LEXIS 29184, at *18-19 (S.D. Cal. Mar. 21, 2011) (“A creditor that fails to comply with any requirement imposed under §1641(g)(1) only faces liability for any actual damage sustained by such person as a result of the failure. Moreover, in the case of an individual action, damages are limited to twice the amount of any finance charge in connection with the transaction and, in cases involving real property, not less than $400 or greater than $4,000.”) (citing 15 U.S.C. §1640(a)(1) and 1640(a)(2)(A)(i),(iv)). Here, Plaintiffs request rescission of their loans, however, do not allege that they attempted to make any loan payments that were rejected or that they paid any unnecessary finance charges. See FAC. Accordingly they cannot 4 Here, Plaintiffs filed the Complaint on November 21, 2016 and their FAC on January 25, 2017. Case 5:16-cv-02653-DOC-DTB Document 23 Filed 02/13/17 Page 37 of 39 Page ID #:398 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 B R Y A N C A V E L L P T H R E E E M B A R C A D E R O C E N T E R , 7 T H F L O O R S A N F R A N C IS C O , C A 9 4 1 1 1 -4 0 7 0 1809777.1\C086264\0551910 26 DEFENDANT BANK OF AMERICA, N.A.’S NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFFS’ FIRST AMENDED COMPLAINT – CASE NO. 16-CV-02653- CJC-DTB show any damages stemming from purported violation of 15 U.S.C. §1641(g) and thus cannot state a claim upon which relief may be granted. I. Plaintiffs’ Twelfth Cause of Action For Quasi Contract Fails. Plaintiffs’ Twelfth claim is labeled “quasi-contract” but is actually a claim for unjust enrichment. (FAC ¶¶ 93-95.) Delino v. Platinum Community Bank, 2009 WL 2366513, at *8 (S.D. Cal. July 30, 2009) (dismissing nearly identical quasi contract claim), citing Supervalu, Inc. v. Wexford Underwriting Managers, Inc., 175 Cal. App. 4th 64, 96 (2009). “A claim for unjust enrichment requires pleading ‘the receipt of a benefit and the unjust retention of the benefit at the expense of another.’” Delino, 2009 WL 2366513, at *8, quoting Lectrodryer v. Seoulbank, 77 Cal. App. 4th 723, 726 (2000). Plaintiffs allege BANA “received the balance due on the Note as proceeds of the invalid sale” and as a result it would be inequitable for BONY and Nationstar to retain the payments they received from Plaintiffs. (FAC ¶¶ 93, 94.) However, “[A]s a matter of law, a quasi-contract action for unjust enrichment does not lie where ‘express binding agreements exist and define the parties’ rights.’” Cal. Med. Ass’n, Inc. v. Aetna U.S. Healthcare of Cal., 94 Cal. App. 4th 151, 172 (2001). Because there are express binding agreements – the Deeds of Trusts and the Notes – which define the parties’ rights, Plaintiffs’ claim for unjust enrichment fails and should be dismissed with prejudice. J. Plaintiffs’ Thirteenth Claim For Accounting Fails. Plaintiffs incorrectly state that “Defendants have a fiduciary duty to Plaintiffs to properly account for payments made by plaintiffs.” (FAC ¶ 97.) The right to an accounting is not a cause of action, but an equitable remedy. Batt v. City and County of San Francisco, 155 Cal. App. 4th 65, 82 (2007) ; Hafiz v. Green point Mortg. Funding, Inc., 652 F. Supp. 2d 1039, 1043 (N.D. Cal. 2009). Because Plaintiffs’ underlying claims fail, the claim should be dismissed on this alone. Even if Plaintiffs could bring a cause of action for an “accounting” they Case 5:16-cv-02653-DOC-DTB Document 23 Filed 02/13/17 Page 38 of 39 Page ID #:399 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 B R Y A N C A V E L L P T H R E E E M B A R C A D E R O C E N T E R , 7 T H F L O O R S A N F R A N C IS C O , C A 9 4 1 1 1 -4 0 7 0 1809777.1\C086264\0551910 27 DEFENDANT BANK OF AMERICA, N.A.’S NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFFS’ FIRST AMENDED COMPLAINT – CASE NO. 16-CV-02653- CJC-DTB cannot allege an amount due from Defendants. A plaintiff must allege for the remedy of accounting that “some balance is due plaintiff.” Whann v. Doell, 192 Cal. 680, 684 (1923); Teselle v. McLoughlin, 173 Cal. App. 4th 156, 179 (2009); 5 Witkin, Cal. Procedure, § 819, p. 236 (5th ed. 2008). Moreover, “an action for accounting is not available where the plaintiff alleges the right to recover a sum certain or a sum that can be made certain by calculation. Barajas v. Countrywide Home Loans, Inc., 2012 WL 628007, at *2 (C.D. Cal. Feb. 24, 2012.) Finally, a claim for accounting is appropriate only when a plaintiff sufficiently alleges there was a breach of a fiduciary duty. See e.g. Civic W. Corp. v. Zila, 66 Cal App. 3d 1, 14 (1977); 5 Witkin, Cal Procedure, § 819. As discussed above, Defendants owed no duty to Plaintiffs and thus the claim should be dismissed, with prejudice. XI. CONCLUSION Plaintiffs do not allege a single viable claim against BANA. Moreover, the allegations in the FAC reveal that further amendment would be futile. For these reasons, and all the reasons set forth above, BANA respectfully requests that this Court grant its Motion to Dismiss, and dismiss this action with prejudice. Dated: February 13, 2017 Respectfully submitted, BRYAN CAVE LLP Andrea M. Hicks By: /s/ Andrea M. Hicks Andrea M. Hicks Attorneys for Defendant BANK OF AMERICA, N.A. (erroneously sued as “BANK OF AMERICA, N.A., as successor in interest to AMERICA’S WHOLESALE LENDER, its successor and assigns”) Case 5:16-cv-02653-DOC-DTB Document 23 Filed 02/13/17 Page 39 of 39 Page ID #:400 Case 5:16-cv-02653-DOC-DTB Document 23-1 Filed 02/13/17 Page 1 of 2 Page ID #:401 Case 5:16-cv-02653-DOC-DTB Document 23-1 Filed 02/13/17 Page 2 of 2 Page ID #:402