Armendariz et al v. JPMorgan Chase Bank, NA et al, No. 3:2011cv00137 - Document 77 (S.D. Cal. 2012)
Court Description: ORDER granting Defendants' 73 Motion to Dismiss with prejudice. Signed by Judge Anthony J. Battaglia on 10/15/12. (All non-registered users served via U.S. Mail Service)(cge)
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Armendariz et al v. JPMorgan Chase Bank, NA et al Doc. 77 1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 BRIAN ANTHONY ARMENDARIZ and ALICIA ARMENDARIZ, 12 Plaintiffs, 13 v. 14 JP MORGAN CHASE BANK N.A., successor in interest to WASHINGTON MUTUAL BANK, FA, DEUTSCHE BANK NATIONAL TRUST COMPANY, and CALIFORNIA RECONVEYANCE COMPANY, 15 16 17 Defendants. 18 ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) Civil No. 11cv137 AJB (BGS) ORDER GRANTING DEFENDANTS’ MOTION TO DISMISS PLAINTIFFS’ THIRD AMENDED COMPLAINT (Doc. No. 73) 19 Presently before the Court is Defendants’ Motion to Dismiss Plaintiffs’ Third Amended 20 Complaint (“TAC”). (Doc. No. 73.) In accordance with Civil Local Rule 7.1.d.1, the Court finds this 21 motion suitable for determination on the papers and without oral argument. Accordingly, the motion 22 hearing scheduled for October 26, 2012 is hereby vacated. For the reasons set forth below, the Court 23 GRANTS Defendants’ motion and dismisses the case with prejudice. 24 25 FACTUAL BACKGROUND In October 2004, Plaintiffs obtained a $455,000 mortgage loan from Washington Mutual Bank 26 (“WaMu”). (Doc. No. 1, Ex. 3.) The mortgage note was secured by a Deed of Trust that identifies 27 WaMu as the lender and beneficiary, and California Reconveyance Company (“California Reconvey- 28 ance”) as the trustee. (Doc. No. 1, Ex. 4.) Plaintiffs subsequently defaulted on the mortgage loan. 1 11cv137 Dockets.Justia.com 1 (Doc. No. 1, Ex. 1.) California Reconveyance recorded a Notice of Default on February 3, 2010. (Id.) 2 The Notice of Default indicates that Plaintiffs had accumulated $13,563.09 in arrears. (Id.) 3 Plaintiffs filed this action pro se on January 24, 2011, and Defendants moved to dismiss 4 Plaintiffs’ Complaint on February 18, 2011. (Doc. No. 13.) On May 13, 2011, this Court dismissed 5 Plaintiffs’ Complaint with leave to amend. (Doc. No. 48.) Plaintiffs timely filed their First Amended 6 Complaint (“FAC”) on May 27, 2011. (Doc. No. 50.) Defendants moved to dismiss the FAC for failure 7 to state a claim, and on November 10, 2011, the Court granted Defendants’ motion and dismissed the 8 FAC, again with leave to amend. (Doc. No. 56.) Plaintiffs subsequently filed their Second Amended 9 Complaint (“SAC”) on December 9, 2011. (Doc. No. 59.) On December 27, 2011, Defendants moved 10 to dismiss the SAC for failure to state a claim. (Doc. No. 61.) On April 18, 2012, the Court granted 11 Defendants’ motion and dismissed the SAC with leave to amend. (Doc. No. 68.) On June 15, 2012, 12 Plaintiffs filed their Third Amended Complaint (“TAC”). (Doc. No. 72.) 13 In the TAC, Plaintiffs allege the following claims against all Defendants: (1) fraud and forgery; 14 (2) fraudulent misrepresentation and RESPA / TILA violations, 15 U.S.C. §§ 1601 et seq., 12 U.S.C. § 15 2602; (3) broken chain of title; and (4) quiet title to real property.1 On July 2, 2012, Defendants filed the 16 instant motion to dismiss the TAC. (Doc. No. 73.) LEGAL STANDARD 17 18 19 A. Motion to Dismiss A complaint must contain “a short and plain statement of the claim showing that the pleader is 20 entitled to relief.” Fed. R. Civ. P. 8(a). The court must accept all factual allegations pleaded in the 21 complaint as true, and must construe them and draw all reasonable inferences from them in favor of the 22 nonmoving party. Cahill v. Liberty Mutual Ins. Co., 80 F.3d 336, 337–38 (9th Cir.1996). A complaint 23 may survive a motion to dismiss only if, taking all well-pleaded factual allegations as true, it contains 24 enough facts to “state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 129 25 S. Ct. 1937, 1949 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). However, 26 because Plaintiffs are proceeding pro se, their Complaint “must be held to less stringent standards than 27 1 28 Plaintiffs TAC no longer includes the following claims previously alleged in the SAC: (1) theft and fraudulent conveyance; (2) negligence; (3) misrepresentation; (4) fraudulent pretenses; and (5) breach of contract and lack of proof of claim. ( Doc. No. 59 at 1.) 2 11cv137 1 formal pleadings drafted by lawyers,” as the Supreme Court has reaffirmed since Twombly. See 2 Erickson v. Pardus, 551 U.S. 89, 94 (2007) (per curiam). Iqbal incorporated the Twombly pleading 3 standard, and Twombly did not alter courts’ treatment of pro se filings; accordingly, the Court construes 4 pro se filings liberally when evaluating them under Iqbal. Hebbe v. Pliler, 627 F.3d 338, 342 (9th Cir. 5 2010); see also McGowan v. Hulick, 612 F.3d 636, 640-42 (7th Cir. 2010); Bustos v. Martini Club Inc., 6 599 F.3d 458, 461-62 (5th Cir. 2010); Casanova v. Ulibarri, 595 F.3d 1120, 1124 n. 2, 1125 (10th Cir. 7 2010); Capogrosso v. Sup. Ct. of N.J., 588 F.3d 180, 184 & n. 1 (3d Cir. 2009); Harris v. Mills, 572 8 F.3d 66, 71-72 (2d Cir. 2009) (noting that even following Twombly and Iqbal, “we remain obligated to 9 construe a pro se complaint liberally”). 10 11 B. Leave to Amend Under Rule 15(a) of the Federal Rules of Civil Procedure, leave to amend “shall be freely given 12 when justice so requires,” bearing in mind “the underlying purpose of Rule 15 to facilitate decision on 13 the merits, rather than on the pleadings or technicalities.” Lopez v. Smith, 203 F.3d 1122, 1127 (9th 14 Cir.2000) (en banc) (internal quotation marks and alterations omitted). When dismissing a complaint 15 for failure to state a claim, “‘a district court should grant leave to amend even if no request to amend the 16 pleading was made, unless it determines that the pleading could not possibly be cured by the allegation 17 of other facts.’” Id. at 1130 (quoting Doe v. United States, 58 F.3d 494, 497 (9th Cir.1995)). Generally, 18 leave to amend shall be denied only if allowing amendment would unduly prejudice the opposing party, 19 cause undue delay, or be futile, or if the moving party has acted in bad faith. Leadsinger, Inc. v. BMG 20 Music Publ'g, 512 F.3d 522, 532 (9th Cir.2008). 21 22 DISCUSSION In its previous orders dismissing the Complaint, the FAC, and the SAC, the Court commented on 23 the general insufficiency of Plaintiffs’ claims. (Doc. No. 48 at 3-4; Doc. No. 56 at 3; Doc. No. 68 at 3- 24 4.) Like the previous three complaints, the TAC consists of unclear, conclusory allegations about the 25 Defendants’ alleged wrongful conduct based on speculation, lacking properly pleaded facts, and alleging 26 various violations both statutory and constitutional without asserting the underlying basis. For the 27 reasons set forth below, the Court finds that each cause of action once again fails to state a claim upon 28 which relief may be granted. 3 11cv137 1 A. 2 Sufficiency of Plaintiffs’ Claims Generally Rule 8 requires “a short and plain statement of the grounds for the court’s jurisdiction,” “a short 3 and plain statement of the claim showing that the pleader is entitled to relief,” and “ a demand for the 4 relief sought.” Fed. R. Civ. P. 8. Courts enforce Rule 8 because “[a] clear statement of a plaintiff’s 5 claims gives the defendant a fair opportunity to respond and gives the Court the information it needs to 6 manage the litigation.” Tomas, 2011 U.S. Dist. LEXIS 8314, *7. In contrast, “[c]onfusing complaints . 7 . . impose unfair burdens on litigants and judges . . . to determine who is being sued for what.” Id. 8 (quoting McHenry v. Renne, 84 F.3d 1172, 1179 (9th Cir. 1996)). 9 Plaintiffs have had three opportunities to fulfill their basic obligations under the Federal rules. 10 Plaintiffs’ TAC provides a new variation on a previous faulty theory of fraud concerning an alleged 11 missing “Receivers Deed.” (TAC ¶ 28.) Rule 8 does not allow for the unintelligible pleadings that have 12 been offered four times by Plaintiffs. See United States ex rel. Garst v. Lockheed-Martin Corp., 328 13 F.3d 374, 378 (7th Cir. 2003) (incomprehensible complaint dismissed with prejudice). Accordingly, 14 Plaintiffs’ TAC fails to meet the Rule 8 requirements. 15 B. 16 Plaintiffs’ Fraud-Based Causes of Action Fail for Lack of Particularity Plaintiffs’ first, second, and third causes of action all contain references to fraud-based claims, 17 which were previously dismissed by the Court for failing to comply with the particularity requirements 18 of Rule 9(b). The Court’s prior order dismissing the FAC clearly articulated the requirements for 19 pleading fraud and explained why Plaintiffs’ claims failed. (Doc. No. 56 at 3-6.) The Court does not 20 wish to repeat itself here. 21 As detailed below, Plaintiffs’ fraud-based claims once again lack the particularity required by 22 Rule 9(b) because their TAC still fails to allege the elements of fraud with respect to each Defendant. 23 Despite repeated instructions from the Court, Plaintiffs suggest that Rule 9(b) might not even apply to 24 their fraud-based claims. (Pl’s. Op., Doc. No. 75 at 9.) 25 1. The First Cause of Action for Fraud and Forgery Fails 26 First, Plaintiffs recapitulate their assertions that Defendants do not have standing to foreclose on 27 the property because they do not own the promissory note. (TAC ¶¶ 1, 4, 5, 33.) The Court has rejected 28 this theory of fraud in both the FAC and the SAC. (Doc. No. 56 at 5; Doc. No. 68 at 4-5.) Plaintiffs 4 11cv137 1 now argue that “[f]ailure to file and record the Receivers Deed and other transfer, sales or assigns is to 2 knowingly commit fraud and the lack of filing those transactions make the mortgage contract null and 3 void in regards to Plaintiffs’ property.” (TAC ¶ 28.) Plaintiffs assert that Defendants lack standing to 4 foreclose upon the subject property because the Receivers Deed cannot be found in the San Diego 5 County Recorder’s Office. (TAC ¶¶ 21, 28-9, 33.) However, in its first order dismissing Plaintiffs’ 6 Complaint, the Court took judicial notice of the Purchase and Assumption Agreement whereby Chase 7 acquired certain interests from WaMu, and stated that the Purchase and Assumption Agreement will 8 determine the status of Chase as a successor. (Doc. No. 48 at 5-7.) Plaintiffs ignore the Court’s prior 9 determinations and continue to insist that Chase’s status as a successor depends on whether the 10 Receivers Deed can be found in the San Diego County Recorder’s Office. (TAC ¶¶ 28, 33.) Therefore, 11 this theory fails for the same reasons articulated in the order granting Defendants’ motion to dismiss 12 Plaintiffs’ SAC. (Doc. No. 68.) 13 Second, as in the FAC and SAC, Plaintiffs still fail to plead with particularity the elements of 14 fraud. Plaintiffs mention a few names in the TAC, including “Tasha Alexander,” “Deborah Brignac,” 15 and “Wanda Chapman,” referring to each individual as a “Robo-Signer.” (TAC ¶ 28.) However, 16 Plaintiffs fail to plead with particularity the alleged misrepresentations made by these individuals, their 17 alleged knowledge of the falsity of their representations, their intent to defraud Plaintiffs, Plaintiffs’ 18 justifiable reliance, causation, and resulting damages. (TAC ¶¶ 25-36.) Regarding damages, Plaintiffs 19 suggest that their “credit has been destroyed” because they were allegedly “required to default on their 20 home loan to qualify” for a loan modification. (TAC ¶ 35.) However, Plaintiffs fail to plead that they 21 would not have defaulted at all if this was not a requirement for the loan modification, and therefore do 22 not have a proper claim that their credit was destroyed. (TAC ¶¶ 25-36.) Plaintiffs’ elements for 23 scienter, intent to defraud, and justifiable reliance all rely on a faulty theory of fraud that this Court has 24 rejected, focusing only on Defendants’ alleged failure to record the Receivers Deed.2 (TAC ¶ 35.) 25 26 27 2 28 Plaintiffs confuse the law by insisting that their property was “illegally foreclose[d].” However, California law does not require possession of the promissory note in order to initiate a foreclosure. See Lane v. Vitek Real Estate Indust. Gp. (2010) 713 F.Supp.2d 1092, 1098. 5 11cv137 1 Accordingly, because Plaintiffs’ first cause of action suffers from the same deficiencies as the 2 SAC, in that the TAC fails to plead with particularity the elements of fraud and continues to rely on a 3 faulty theory, the Court GRANTS Defendants’ motion to dismiss this claim without leave to amend. 4 2. The Second Cause of Action for Fraudulent Misrepresentation and RESPA/TILA Violations Fails Plaintiffs’ second cause of action fails for the same reasons it did in the FAC and the SAC. 5 6 Specifically, Plaintiffs fail to allege the requisite elements of fraud showing their justifiable reliance 7 with respect to the allegedly fraudulent “Mortgage Allonge,” or how they were damaged as a result of 8 Chase creating the fraudulent document. (TAC ¶ 39.) Plaintiffs also continue to ignore the Court’s 9 previous determinations that Chase cannot be held liable for RESPA/TILA violations. (Compare Doc. 10 No. 56, p. 6 with TAC ¶ 42; see also Doc. No. 75, p. 14:24-27.) Plaintiffs provide no further details 11 with respect to the circumstances of the alleged fraud and therefore fail to meet the heightened Rule 9(b) 12 pleading standard. Accordingly, Plaintiffs’ second cause fails for lack of particularity and the Court 13 GRANTS Defendants’ motion to dismiss this claim without leave to amend. 14 3. The Third Cause of Action for Broken Chain of Title Fails 15 Plaintiffs’ third cause of action for “Broken Chain of Title” is not a cause of action under 16 California or federal law, as acknowledged by Plaintiffs. (See Pl. Op. at 3.) Plaintiffs merely restate 17 their faulty theory of fraud that Defendants have no standing to foreclose upon the property because they 18 did not record a Receivers Deed with the San Diego County Recorder’s Office. ( TAC ¶ 47; Ex. 8.) 19 This theory is inconsistent with the Court’s prior determinations and contrary to California law. 20 Accordingly, the Court GRANTS Defendants’ motion to dismiss Plaintiffs’ third cause of action 21 without leave to amend. 22 C. 23 Plaintiffs’ Fourth Cause of Action for Quiet Title Fails for Lack of Tender Plaintiffs’ fourth cause of action remains largely unchanged from the SAC. Plaintiffs argue that 24 their debt is in dispute; however, the Court has previously determined that the foreclosure was not 25 unlawful, and therefore, the debt is not disputed. (Pl. Op. at 15.) Plaintiffs’ quiet title claim fails to 26 allege a full and unconditional tender of the entire amount due on the loan. Furthermore, Plaintiffs fail 27 to allege any fact indicating their ability to tender the amount owed on their Loan even if they were 28 6 11cv137 1 willing to do so. Accordingly, the Court GRANTS Defendants’ motion to dismiss Plaintiffs’ fourth 2 cause of action without leave to amend. 3 4 CONCLUSION For the foregoing reasons, Defendants’ motion to dismiss Plaintiffs’ Third Amended Complaint 5 is GRANTED. Plaintiffs have been given three opportunities to amend their Complaint to properly 6 state a claim and have failed to do so. Therefore, the Court dismisses this case with prejudice. The 7 Clerk of the Court is instructed to close the case and enter judgment accordingly. 8 9 10 IT IS SO ORDERED. 11 DATED: October 15, 2012 12 13 Hon. Anthony J. Battaglia U.S. District Judge 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 7 11cv137
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