look look federal judge does not have time and tells us to contact senators boxer and feinstein--and...

7/28/2019 LOOK LOOK FEDERAL JUDGE DOES NOT HAVE TIME AND TELLS US TO CONTACT SENATORS BOXER AND FEINSTEIN--

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JUNE 3, 2013 NON-LEGAL LAYPERSONS OPINION ON THESE CASES:

A LETTER WRITTEN TO SENATOR BOXER AND FEINSTEIN:

I KNOW THAT SENATOR BOXER WORKED VERY HARD ON BEHALF OF

HOMEOWNER-BORROWERS FOR MORTGAGES IN PUSHING THROUGH

LEGISLATION FOR TILA TITLE 15 1641---SEE BELOW

HOWEVER, AS THE ATTACHED CASE DECISIONS SHOW, THE COURTS ARE NOT

ABIDING BY THE NEW LAWS AND THE BANK ATTORNEYS WIN EVERY SINGLE TIME.

MANY HOMEOWNER-BORROWER ATTORNEYS DO NOT UNDERSTAND NOR APPLY

THE TILA CORRECTLY.

HOMEOWNER-BORROWERS DO NOT HAVE A CHANCE IN COURT AND AS YOU

CAN CLEARLY READ ON THE RECORD FOR THE FIRST CASE---THE JUDGE SAYS HE

DOES NOT HAVE TIME AND HE SAYS TO CONTACT YOU ALL TO SAY THAT!!

JUDGES MUST ALLOW HOMEOWNER-BORROWERS THEIR DUE PROCESS AND

EQUAL ACCESS TO THE COURTS.

ADDITIONALLY, MANY HOMEOWNER-BORROWERS REALIZE THAT JUDGES

RETIREMENT PLANS ARE HEAVILY INVESTED IN THE MBS (SECURITIES OF

MORTGAGES) AND SO ARE ALL FEDERAL WORKERS RETIREMENT PLANS AS WELL

AS STATE JUDGES, DISTRICT ATTORNEYS ETC. ETC.

EVEN THE US JUSTICE DEPARTMENT RETIREMENT PLANS ARE HEAVILY INVESTED

IN THE MBS!

NO JUDGE HAS RECUSED HIMSELF OR HERSELF DUE TO THIS HORRIFIC CONFLICT

OF INTEREST.

THE HOMEOWNERS-BORROWERS AND MAIN STREET AMERICANS ARE STILL

SUFFERING OUT HERE.

WE WERE PUT INTO LOANS DOOMED TO FAILURE AND FORECLOSURE!


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AND WITH BOTH THE OCC IFR SETTLEMENT AND THE 49 STATE AG SETTLEMENT

THERE WAS NO INVESTIGATION INTO THE FACT THAT MOST OF THESE

MORTGAGE LOANS WERE NOT REFIS---IN THE TRADITIONAL SENSE---THEY WERE

MODIFICATIONS OF DEFAULT DEBT (FALSELY PLACED DEFAULT)----NO PRIOR

LOANS WERE EVER PAID OFF DURING THE SO CALLED REFI! THE PRIOR LOANS

WHICH LOOK LIKE A REFI---WERE ALREADY SECURITIZED AND PLACED INTO

FALSE DEFAULT! BORROWERS NEED TO GET ALL THE INFORMATION ABOUT

THEIR PRIOR LOAN TOO.

THE OCC MORTGAGE SETTLEMENT AND THE 49 STATE AG SETTLEMENT MERELY

DEALT WITH GETTING RID OF THE ROBO-SIGNING ISSUE.

CONGRESS STILL NEEDS TO CAUSE AN INVESTIGATION TO HAPPEN! FOCUS ON

THE FACT THAT THE PHONY REFIS WERE REALLY A BACK END MODIFICATION OF

A FALSE DEFAULT DEBTAND THE PRIOR LOAN WAS NEVER PAID OFF WITH THE

PHONY REFI.

FIRE ERIC HOLDER IF YOU NEED TO. YOU NEED TO HAVE AN INVESTIGATION

WHICH GOES DEEP.

AND ONE MORE THING----THE IRS SHOULD BE HEAVILY INVESTIGATING THE

REMIC FRAUD RELATED TO THE MBS. THE MBS TRUSTS WERE EMPTY! THE IRSCOULD SOLVE THE US BUDGET DEFICIT IF THEYD DO THEIR JOB AND INVESTIGATE

THE REMIC TAX EVASION SCHEME.

__________________________________

TITLE 15 CHAPTER 41 SUBCHAPTER I PART B 1641

TILA

Liability of assignees

(c) Right of rescission by consumer unaffected

Any consumer who has the right to rescind a transaction under section 1635 of

this title may rescind the transaction as against any assignee of the obligation.


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(f) Treatment of servicer

(1) In general

A servicer of a consumer obligation arising from a consumer credit transaction

shall not be treated as an assignee of such obligation for purposes of this

section unless the servicer is or was the owner of the obligation.

(2) Servicer not treated as owner on basis of assignment for administrative

convenience. A servicer of a consumer obligation arising from a consumer credit

transaction shall not be treated as the owner of the obligation for purposes of

this section on the basis of an assignment of the obligation from the creditor or

another assignee to the servicer solely for the administrative convenience of the

servicer in servicing the obligation. Upon written request by the obligor, the

servicer shall provide the obligor, to the best knowledge of the servicer, with

the name, address, and telephone number of the owner of the obligation or themaster servicer of the obligation.

SENATOR BOXER PROPOSED AND CONGRESS PASSED

Section 404 of Public Law 111-22 in the Helping Families Save Their Homes Act

(the Act) by amendeding Section 131 of the Truth in Lending Act (15 USC

1641)(TILA) to include a new provision (Section 131(g)) that requires the

assignee of a mortgage loan to notify a consumer borrower that his loan has

been transferred. This notice requirement became effective immediately upon

the Presidents signature on May 19, 2009.

A mortgage loan means any consumer credit transaction that is secured by

the principal dwelling of a consumer. 15 USC 1641(g)(2). Under TILA, a

dwelling is a one-to-four family residential structure, including a

manufactured home.

THE COURTS ARE DISMISSING THE BORROWERS RIGHT TO CHALLENGE THE PSA

(TRUSTEE OF MBS) AS THE CREDITOR, WHEN SENATOR BOXERS AMENDMENT

DEMANDS THAT THE CREDITOR IDENTIFY THEMSELVES TO THE BORROWERS

WITH PHONE NUMBER, AND ADDRESS CONTACT INFORMATION SO THAT THEY

MAY CONTACT DIRECTLY. THE ASSIGNMENTS WHICH REMOVE LOANS FROM THE

MBS TRUSTS (IRS REQUIRES THAT ALL FORECLOSURES BE REMOVED WITHIN 11

MONTHSAS REMIC REQUIRES CURRENT CASH FLOW PASS-THROUGH---ARE NOT


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BEING PROVIDED TO BORROWERS---MAKING IT VERY IMPOSSIBLE TO UTILZE

YOUR AMENDMENT.

IN EFFECT, SENATORS BOXER AND FEINSTEIN, THINGS HAVE GOTTEN WORSE FOR

THE HOMEOWNER-BORROWERS ESPECIALLY IN CALIFORNIA.

PLEASE EXAMINE THIS CLOSELY AND DO SOMETHING TO HELP US MAIN STREET

AMERICANS.

REGARDS,

nnnnnnnnnnn

REVIEW THESE CASE DECISIONS BELOW---ALWAYS CONSULT WITH A COMPETENT

ATTORNEY BEFORE TAKING ANY ACTION. THE ABOVE IS A LAYPERSON OPINION

AND NOT TO BE CONSTRUED AS LEGAL ADVICE.

__________________________________________________________________________________

ART MADLAING, Plaintiff, vs. JPMORGAN CHASE BANK, N.A., et al., Defendants.

CASE NO. CV F 12-2069 LJO SMS

UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OFCALIFORNIA

2013 U.S. Dist. LEXIS 76974

May 31, 2013, DecidedMay 31, 2013, Filed

CORE TERMS: foreclosure, notice, borrower, rescission, lender, default, deed of trust,beneficiary, mortgage, racketeering activity, substitution, discovery, recorded, cause ofaction, disclosure, nonjudicial, power of sale, obligor, unfair, beneficial interest, limitationsperiod, diligence, equitable tolling, foreclosure sale, statute of limitations, mortgagee,slander, indebtedness, conclusory, foreclose

COUNSEL: [*1] For Art G. Madlaing, Plaintiff: Megan Ann Dailey, Law Office of MeganDailey, Concord, CA; Michael James Yesk, Yesk Law, Legal Division, Pleasant Hill, CA.


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For JPMorgan Chase Bank, N.A., MERS, Wells Fargo Bank, N.A., as trustee for thecertificate holders of Structured Asset Mortgage Investments II Inc., Defendants: GolarehMahdavi, LEAD ATTORNEY, Bryan Cave LLP, San Francisco, CA; Hielam Chan, LEADATTORNEY, Bryan Cave, LLP, San Francisco, CA.

JUDGES: Lawrence J. O'Neill, UNITED STATES DISTRICT JUDGE.

OPINION BY: Lawrence J. O'Neill

OPINIONORDER ON DEFENDANTS' F.R.Civ.P. 12 MOTION TO DISMISS(Doc. 13.)PRELIMINARY STATEMENT TO PARTIES AND COUNSEL

Judges in the Eastern District of California carry the heaviest caseload in the nation, and this

Court is unable to devote inordinate time and resources to individual cases and matters. ThisCourt cannot address all arguments, evidence and matters raised by parties and addressesonly the arguments, evidence and matters necessary to reach the decision in this order giventhe shortage of district judges and staff. The parties and counsel are encouraged tocontact United States Senators Diane Feinstein and Barbara Boxer to address this

Court's inability to accommodate the parties [*2] and this action.

INTRODUCTION

Defendants JPMorgan Chase Bank, N.A. ("Chase"), Wells Fargo Bank, N.A. ("WellsFargo"), and Mortgage Electronic Registration Systems, Inc. ("MERS") seek to dismiss as

legally barred and insufficiently pled plaintiff Art G. Madlaing's ("Mr. Madlaing's") claimsarising from foreclosure of his Clovis property ("property"). Mr. Madlaing responds thatChase, Wells Fargo and MERS (collectively "defendants") lacked "legal power" to forecloseon the property to entitle Mr. Madlaing to pursue his claims. This Court considereddefendants' F.R.Civ.P. 12(b)(6) motion to dismiss on the record without a hearing. SeeLocal Rule 230(g). For the reasons discussed below, this Court DISMISSES this actionagainst defendants.

BACKGROUNDMr. Madlaing's Property Loan And Foreclosure

On September 11, 2006, Mr. Madlaing obtained a $515,000 loan from Preferred FinancialGroup, Inc. ("PFG") and which was secured by a Deed of Trust ("DOT") on the property.The DOT identifies PFG as lender, MERS as the lender's nominee, and First American TitleCompany ("First American") as trustee.

On September 8, 2009, Quality Loan Service Corp. ("QLS"), as agent for the loan'sbeneficiary, recorded a [*3] notice of default ("default notice").

1On October 20, 2009, QLS

recorded a Substitution of Trustee ("trustee substitution") to substitute as the new trustee


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under the DOT. Wells Fargo signed the trustee substitution. On October 28, 2009, anAssignment of Deed of Trust ("DOT assignment") was recorded to reflect assignment toWells Fargo of all beneficial interest under the DOT.

- - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - - -1 Documents pertaining to Mr. Madlaing's loan, default and foreclosure were recorded withthe Fresno County Recorder.

- - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - -

On October 1, 2010, QLS recorded a notice of trustee's sale, but the sale did not proceed. OnJanuary 20, 2011, QLS recorded a second notice of trustee's sale to set a February 14, 2011sale. The sale proceeded but was rescinded.

On April 5, 2011, QLS recorded another notice of trustee's sale but the sale has been

postponed.

Mr. Madlaing's Claims

Mr. Madlaing's operative complaint ("complaint") accuses defendants of "wrongful, illegal,and permanently damaging activities." The complaint alleges claims for breach of contract,slander of title and wrongful foreclosure. The complaint alleges violation of Californiastatutes, including California Civil Code section 2923.5 and the Unfair CompetitionLaw [*4] ("UCL"), Cal. Bus. & Prof. Code, 17200, et seq. The complaint further allegesclaims under federal statutes, including the Real Estate Settlement Procedures Act("RESPA"), 12 U.S.C. 2601, et seq., Truth in Lending Act ("TILA"), 15 U.S.C. 1601,

et seq., and the Racketeer and Corrupt Practices Act ("RICO"), 18 U.S.C. 1961, et seq.The complaint's claims will be discussed below.

DISCUSSIONF.R.Civ.P. 12(b)(6) Motion To Dismiss Standards

Defendants challenge the complaint's claims as legally barred and insufficiently plead.

A F.R.Civ.P. 12(b)(6) dismissal is proper where there is either a "lack of a cognizable legaltheory" or "the absence of sufficient facts alleged under a cognizable legal theory." Balisteriv. Pacifica Police Dept., 901 F.2d 696, 699 (9th Cir. 1990); Graehling v. Village of

Lombard, Ill., 58 F.3d 295, 297 (7th Cir. 1995). A F.R.Civ.P. 12(b)(6) motion "tests thelegal sufficiency of a claim." Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001).

In addressing dismissal, a court must: (1) construe the complaint in the light most favorableto the plaintiff; (2) accept all well-pleaded factual allegations as true; and (3) determinewhether plaintiff can prove any [*5] set of facts to support a claim that would merit relief.Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336, 337-338 (9th Cir. 1996). Nonetheless, a court isnot required "to accept as true allegations that are merely conclusory, unwarranted


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deductions of fact, or unreasonable inferences." In re Gilead Sciences Securities Litig., 536F.3d 1049, 1055 (9th Cir. 2008) (citation omitted). A court "need not assume the truth oflegal conclusions cast in the form of factual allegations," U.S. ex rel. Chunie v. Ringrose,788 F.2d 638, 643, n. 2 (9th Cir.1986), and must not "assume that the [plaintiff] can provefacts that it has not alleged or that the defendants have violated . . . laws in ways that have

not been alleged." Associated General Contractors of California, Inc. v. California StateCouncil of Carpenters, 459 U.S. 519, 526, 103 S.Ct. 897 (1983). A court need not permit anattempt to amend if "it is clear that the complaint could not be saved by an amendment."Livid Holdings Ltd. v. Salomon Smith Barney, Inc., 416 F.3d 940, 946 (9th Cir. 2005).

A plaintiff is obliged "to provide the 'grounds' of his 'entitlement to relief' [which] requiresmore than labels and conclusions, and a formulaic [*6] recitation of the elements of a causeof action will not do." Bell Atl. Corp. v. Twombly, 550 U.S. 554,127 S. Ct. 1955, 1964-65(2007) (internal citations omitted). Moreover, a court "will dismiss any claim that, evenwhen construed in the light most favorable to plaintiff, fails to plead sufficiently all requiredelements of a cause of action." Student Loan Marketing Ass'n v. Hanes, 181 F.R.D. 629,

634 (S.D. Cal. 1998). In practice, a complaint "must contain either direct or inferentialallegations respecting all the material elements necessary to sustain recovery under someviable legal theory." Twombly, 550 U.S. at 562, 127 S.Ct. at 1969 (quoting Car Carriers,Inc. v. Ford Motor Co., 745 F.2d 1101, 1106 (7th Cir. 1984)).

In Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 1949 (2009), the U.S. Supreme Courtexplained:

. . . a complaint must contain sufficient factual matter, accepted as true, to"state a claim to relief that is plausible on its face." . . . A claim has facialplausibility when the plaintiff pleads factual content that allows the court to

draw the reasonable inference that the defendant is liable for the misconductalleged. . . . The plausibility standard is not akin [*7] to a "probabilityrequirement," but it asks for more than a sheer possibility that a defendanthas acted unlawfully. (Citations omitted.)

After discussing Iqbal, the Ninth Circuit summarized: "In sum, for a complaint to survive[dismissal], the non-conclusory 'factual content,' and reasonable inferences from thatcontent, must be plausibly suggestive of a claim entitling the plaintiff to relief." Moss v.U.S. Secret Service, 572 F.3d 962, 989 (9th Cir. 2009) (quoting Iqbal, 556 U.S. 662, 129S.Ct. at 1949).

The U.S. Supreme Court applies a "two-prong approach" to address dismissal:

First, the tenet that a court must accept as true all of the allegations containedin a complaint is inapplicable to legal conclusions. Threadbare recitals of theelements of a cause of action, supported by mere conclusory statements, donot suffice. . . . Second, only a complaint that states a plausible claim forrelief survives a motion to dismiss. . . . Determining whether a complaintstates a plausible claim for relief will . . . be a context-specific task that


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requires the reviewing court to draw on its judicial experience and commonsense. . . . But where the well-pleaded facts do not permit the court [*8] toinfer more than the mere possibility of misconduct, the complaint has alleged but it has not "show[n]"-"that the pleader is entitled to relief." Fed. RuleCiv. Proc. 8(a)(2).

In keeping with these principles a court considering a motion to dismiss canchoose to begin by identifying pleadings that, because they are no more thanconclusions, are not entitled to the assumption of truth. While legalconclusions can provide the framework of a complaint, they must besupported by factual allegations. When there are well-pleaded factualallegations, a court should assume their veracity and then determine whetherthey plausibly give rise to an entitlement to relief.

Iqbal, 556 U.S. 662, 129 S.Ct. at 1949-1950.

Moreover, a court may consider exhibits submitted with the complaint. Durning v. FirstBoston Corp., 815 F.2d 1265, 1267 (9th Cir. 1987); Van Winkle v. Allstate Ins. Co., 290F.Supp.2d 1158, 1162, n. 2 (C.D. Cal. 2003). A "court may consider evidence on which thecomplaint 'necessarily relies' if: (1) the complaint refers to the document; (2) the documentis central to the plaintiff's claim; and (3) no party questions the authenticity of the copyattached to the 12(b)(6) motion." Marder v. Lopez, 450 F.3d 445, 448 (9th Cir.2006). [*9] A court may treat such a document as "part of the complaint, and thus mayassume that its contents are true for purposes of a motion to dismiss under Rule 12(b)(6)."United States v. Ritchie, 342 F.3d 903, 908 (9th Cir.2003). Such consideration prevents"plaintiffs from surviving a Rule 12(b)(6) motion by deliberately omitting reference todocuments upon which their claims are based." Parrino v. FHP, Inc., 146 F.3d 699, 706 (9th

Cir. 1998).

2

A "court may disregard allegations in the complaint if contradicted by factsestablished by exhibits attached to the complaint." Sumner Peck Ranch v. Bureau ofReclamation, 823 F.Supp. 715, 720 (E.D. Cal. 1993) (citing Durning v. First Boston Corp.,815 F.2d 1265, 1267 (9th Cir.1987)).

- - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - - -2 "We have extended the 'incorporation by reference' doctrine to situations in which theplaintiff's claim depends on the contents of a document, the defendant attaches the documentto its motion to dismiss, and the parties do not dispute the authenticity of the document,even though the plaintiff does not explicitly allege the contents of that document in thecomplaint." Knievel v. ESPN, 393 F.3d 1068, 1076 (9th Cir. 2005) (citing Parrino, 146 F.3dat 706).

- - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - -

Lastly, [*10] under F.R.Evid. 201, a court may take judicial notice of "matters of publicrecord." Lee v. City of Los Angeles, 250 F.3d 668, 688 (9th Cir. 2001); MGIC Indem. Corp.v. Weisman, 803 F.2d 500, 504 (9th Cir. 1986) ("On a motion to dismiss, we may take


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judicial notice of matters of public record outside the pleadings); Mack v. South Bay BeerDistrib., 798 F.2d 1279, 1282 (9th Cir.1986).

With these standards in mind, this Court turns defendants' challenges to the complaint'sclaims.

Failure To Tender Indebtedness

Defendants characterize as "fatal" the complaint's failure to allege Mr. Madlaing's tender ofhis indebtedness given that the complaint's claims challenge foreclosure proceedings or seekdamages related to the foreclosure proceedings.

Mr. Madlaing claims that he is not obligated to tender his indebtedness "because it would beinequitable to require tender" and "Defendants lacked the legal power to foreclose."

General Principles

"When a debtor is in default of a home mortgage loan, and a foreclosure is either pending orhas taken place, the debtor must allege a credible tender of the amount of the secured debt tomaintain any cause of action for wrongful foreclosure." Alicea v. GE Money Bank, 2009WL 2136969, at *3 (N.D. Cal. 2009).

"A [*11] tender is an offer of performance made with the intent to extinguish theobligation." Arnolds Management Corp. v. Eischen, 158 Cal.App.3d 575, 580, 205 Cal.Rptr.15 (1984) (citing Cal. Civ. Code, 1485; Still v. Plaza Marina Commercial Corp., 21Cal.App.3d 378, 385, 98 Cal.Rptr. 414 (1971)). "A tender must be one of full performance .. . and must be unconditional to be valid." Arnolds Management, 158 Cal.App.3d at 580,

205 Cal.Rptr. 15. "Nothing short of the full amount due the creditor is sufficient toconstitute a valid tender, and the debtor must at his peril offer the full amount." Rauer's Lawetc. Co. v. S. Proctor Co., 40 Cal.App. 524, 525, 181 P. 71 (1919).

Foreclosure Irregularities

A defaulted borrower is "required to allege tender of the amount of [the lender's] securedindebtedness in order to maintain any cause of action for irregularity in the sale procedure."Abdallah v. United Savings Bank, 43 Cal.App.4th 1101, 1109, 51 Cal.Rptr.2d 286 (1996),cert. denied, 519 U.S. 1081, 117 S.Ct. 746 (1997). "A party may not without payment of thedebt, enjoin a sale by a trustee under a power conferred by a deed of trust, or have his title

quieted against the purchaser at such a sale, [*12] even though the statute of limitations hasrun against the indebtedness." Sipe v. McKenna, 88 Cal.App.2d 1001, 1006, 200 P.2d 61(1948).

In FPCI RE-HAB 01 v. E & G Investments, Ltd., 207 Cal.App.3d 1018, 1021, 255 Cal.Rptr.157 (1989), the California Court of Appeal explained:

. . . generally "an action to set aside a trustee's sale for irregularities in sale


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notice or procedure should be accompanied by an offer to pay the fullamount of the debt for which the property was security." . . . . This rule . . . isbased upon the equitable maxim that a court of equity will not order a uselessact performed. . . . "A valid and viable tender of payment of the indebtednessowing is essential to an action to cancel a voidable sale under a deed of

trust." . . . The rationale behind the rule is that if plaintiffs could not haveredeemed the property had the sale procedures been proper, any irregularitiesin the sale did not result in damages to the plaintiffs. (Citations omitted.)

An action to set aside a foreclosure sale, unaccompanied by an offer to redeem, does notstate a cause of action which a court of equity recognizes. Karlsen v. American Sav. & LoanAssn., 15 Cal.App.3d 112, 117, 92 Cal.Rptr. 851 (1971). [*13] The basic rule is that anoffer of performance is of no effect if the person making it is not able to perform. Karlsen,15 Cal.App.3d at118, 92 Cal.Rptr. 851 (citing Cal. Civ. Code, 1495). Simply put, if theofferor "is without the money necessary to make the offer good and knows it" the tender iswithout legal force or effect. Karlsen, 15 Cal.App.3d at118, 92 Cal.Rptr. 851 (citing several

cases). "It would be futile to set aside a foreclosure sale on the technical ground that noticewas improper, if the party making the challenge did not first make full tender and therebyestablish his ability to purchase the property." United States Cold Storage v. Great WesternSavings & Loan Assn., 165 Cal.App.3d 1214, 1224, 212 Cal.Rptr. 232 (1985). "A cause ofaction 'implicitly integrated' with the irregular sale fails unless the trustor can allege andestablish a valid tender." Arnolds Management, 158 Cal.App.3d at 579, 205 Cal.Rptr. 15.

"It is settled in California that a mortgagor cannot quiet his title against the mortgageewithout paying the debt secured." Shimpones v. Stickney, 219 Cal. 637, 649, 28 P.2d 673(1934); see Mix v. Sodd, 126 Cal.App.3d 386, 390, 178 Cal.Rptr. 736 (1981)("a [*14] mortgagor in possession may not maintain an action to quiet title, even though thedebt is unenforceable"); Aguilar v. Bocci, 39 Cal.App.3d 475, 477, 114 Cal.Rptr. 91 (1974)(trustor is unable to quiet title "without discharging his debt").

Moreover, to obtain "rescission or cancellation, the rule is that the complainant is required todo equity, as a condition to his obtaining relief, by restoring to the defendant everything ofvalue which the plaintiff has received in the transaction. . . . The rule applies although theplaintiff was induced to enter into the contract by the fraudulent representations of thedefendant." Fleming v. Kagan, 189 Cal.App.2d 791, 796, 11 Cal.Rptr. 737 (1961). "A validand viable tender of payment of the indebtedness owing is essential to an action to cancel avoidable sale under a deed of trust." Karlsen, 15 Cal.App.3d at 117, 92 Cal.Rptr. 851.Analyzing "trust deed nonjudicial foreclosure sales issues in the context of common lawcontract principles" is "unhelpful" given "the comprehensive statutory scheme regulatingnonjudicial foreclosure sales." Residential Capital v. Cal-Western Reconveyance Corp., 108Cal.App.4th 807, 820, 821, 134 Cal.Rptr.2d 162 (2003).

"The [*15] rules which govern tenders are strict and are strictly applied." Nguyen v.Calhoun, 105 Cal.App.4th 428, 439, 129 Cal.Rptr.2d 436 (2003). "The tenderer must do andoffer everything that is necessary on his part to complete the transaction, and must fairlymake known his purpose without ambiguity, and the act of tender must be such that it needs


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only acceptance by the one to whom it is made to complete the transaction." Gaffney v.Downey Savings & Loan Assn., 200 Cal.App.3d 1154, 1165, 246 Cal.Rptr. 421 (1988). Thedebtor bears "responsibility to make an unambiguous tender of the entire amount due or elsesuffer the consequence that the tender is of no effect." Gaffney, 200 Cal.App.3d at 1165,246 Cal.Rptr. 421.

TILA

Turning to TILA, the "voiding of a security interest may be judicially conditioned ondebtor's tender of amount due under the loan." American Mortgage Network, Inc. v.Shelton, 486 F.3d 815, 821 (4th Cir. 2007).

15 U.S.C. 1635(b) governs the return of money or property when a borrower has rescindedeffectively:

. . . Within 20 days after receipt of a notice of rescission, the creditor shall

return to the obligor any money or property given as earnest money,downpayment, or [*16] otherwise, and shall take any action necessary orappropriate to reflect the termination of any security interest created underthe transaction. If the creditor has delivered any property to the obligor, theobligor may retain possession of it. Upon the performance of the creditor'sobligations under this section, the obligor shall tender the property to thecreditor, except that if return of the property in kind would be impracticableor inequitable, the obligor shall tender its reasonable value. Tender shall bemade at the location of the property or at the residence of the obligor, at theoption of the obligor. If the creditor does not take possession of the propertywithin 20 days after tender by the obligor, ownership of the property vests in

the obligor without obligation on his part to pay for it. The proceduresprescribed by this subsection shall apply except when otherwise ordered by acourt.

12 C.F.R. 226.23(d) addresses rescission effects and provides:

(2) Within 20 calendar days after receipt of a notice of rescission, the creditorshall return any money or property that has been given to anyone inconnection with the transaction and shall take any action necessary toreflect [*17] the termination of the security interest.

(3) If the creditor has delivered any money or property, the consumer mayretain possession until the creditor has met its obligation under paragraph(d)(2) of this section. When the creditor has complied with that paragraph,the consumer shall tender the money or property to the creditor or, where thelatter would be impracticable or inequitable, tender its reasonable value. Atthe consumer's option, tender of property may be made at the location of theproperty or at the consumer's residence. Tender of money must be made atthe creditor's designated place of business. If the creditor does not take


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possession of the money or property within 20 calendar days after theconsumer's tender, the consumer may keep it without further obligation.(Bold added.)

Neither TILA nor its Regulation Z, 12 C.F.R. 226, et seq., "'establishes that a borrower's

mere assertion of the right of rescission has the automatic effect of voiding the contract.'"Yamamoto v. Bank of New York, 329 F.3d 1167, 1172 (9th Cir. 2003) (quoting Large v.Conseco Financing Servicing Corp., 292 F.3d 49, 54-55 (1st Cir. 2002)). The Ninth Circuit,relying on Large, explained:

Instead, [*18] the "natural reading" of the language of 1635(b) "is that thesecurity interest becomes void when the obligor exercises a right to rescindthat is available in the particular case, either because the creditoracknowledges that the right of rescission is available, or because theappropriate decision maker has so determined. . . . Until such decision ismade the [borrowers] have only advanced a claim seeking rescission."

Yamamoto, 329 F.3d at 1172 (quoting Large, 292 F.3d at 54-55)).

A rescission notice is not automatic "without regard to whether the law permits [borrower]to rescind on the grounds asserted." See Yamamoto, 329 F.3d at 1172. Entertainingrescission automatically "makes no sense . . . when the lender contests the ground uponwhich the borrower rescinds." Yamamoto, 329 F.3d at 1172. "In these circumstances, itcannot be that the security interest vanishes immediately upon the giving of notice.Otherwise, a borrower could get out from under a secured loan simply by claiming TILAviolations, whether or not the lender had actually committed any." Yamamoto, 329 F.3d at1172 (italics in original).

Moreover, although 15 U.S.C. 1635(b) "provides for immediate voiding ofthe [*19] security interest and return of the money within twenty days of the notice ofrescission, we believe this assumes that the notice of rescission was proper in the firstplace." In re Groat, 369 B.R. 413, 419 (Bankr. 8th Cir. 2007). A "court may imposeconditions on rescission that assure that the borrower meets her obligations once the creditorhas performed its obligations." Yamamoto, 329 F.3d at 1173. The Ninth Circuit hasexplained that prior to ordering rescission based on a lender's alleged TILA violations, acourt may require borrowers to prove ability to repay loan proceeds:

As rescission under 1635(b) is an on-going process consisting of a numberof steps, there is no reason why a court that may alter the sequence of

procedures after deciding that rescission is warranted, may not do so beforedeciding that rescission is warranted when it finds that, assuming grounds forrescission exist, rescission still could not be enforced because the borrowercannot comply with the borrower's rescission obligations no matter what.Such a decision lies within the court's equitable discretion, taking intoconsideration all the circumstances including the nature of the violations andthe borrower's [*20] ability to repay the proceeds. If, as was the case here, itis clear from the evidence that the borrower lacks capacity to pay back what


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she has received (less interest, finance charges, etc.), the court does not lackdiscretion to do before trial what it could do after.

Yamamoto, 329 F.3d at 1173 (affirming summary judgment for lender in absence ofevidence that borrowers could refinance or sell property); see American Mortgage, 486 F.3dat 821 ("Once the trial judge in this case determined that the [plaintiffs] were unable to

tender the loan proceeds, the remedy of unconditional rescission was inappropriate.");LaGrone v. Johnson, 534 F.2d 1360, 1362 (9th Cir. 1974) (under the facts, loan rescissionshould be conditioned on the borrower's tender of advanced funds given the lender's non-egregious TILA violations and equities heavily favoring the lender).3

- - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - - -3 The Fourth Circuit Court of Appeals agrees with the Ninth Circuit that 15 U.S.C. 1635(b) does not compel a creditor to remove a mortgage lien in the absence of the debtor'stender of loan proceeds:Congress did not intend to require a lender to relinquish its security interest when it is nowknown that the borrowers did not intend [*21] and were not prepared to tender restitution of

the funds expended by the lender in discharging the prior obligations of the borrowers.Powers v. Sims & Levin, 542 F.2d 1216, 1221 (4th Cir. 1976).

- - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - -

Neither the complaint nor record references Mr. Madlaing's tender of indebtedness orcredible ability to do so. The record's silence on Mr. Madlaing's tender of or ability to tenderamounts outstanding is construed as his concession of inability to do so, especiallyconsidering his more than two years of remaining in default. Mr. Madlaing's failure to curehis default resulted in rightful acceleration of his loan's outstanding balance. Without Mr.Madlaing's meaningful tender, he seeks empty remedies, not capable of being granted.

Granting Mr. Madlaing relief without his credible tender would be an unjustified windfall.Mr. Madlaing's points as to a void, as compared to voidable, sale are unavailing since hefails to demonstrate that equity excuses him from the tender rule, as explained further belowin connection with his non-actionable claims.

In addition, the complaint does not address conditions precedent to permit rescission evenunder TILA. The complaint is not a timely, valid rescission [*22] notice but nonethelessclaims Mr. Madlaing is entitled to rescind his loan and requests to enjoin defendants toclaim "any estate, right or interest in the subject property." "Clearly it was not the intent ofCongress to reduce the mortgage company to an unsecured creditor or to simply permit thedebtor to indefinitely extend the loan without interest." American Mortgage, 486 F.3d at

820-821. Without Mr. Madlaing's meaningful tender, his purported claims are doomed.

Standing To Challenge Loan Securitization

The complaint accuses defendants of wrongs in connection with the Pooling and ServicingAgreement ("PSA") in connection with Mr. Madlaing's loan.

Defendants note that Mr. Madlaing lacks standing to enforce PSA terms in that he is neither


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a party to the PSA nor an intended third-party beneficiary. See Armeni v. America'sWholesale Lender, 2012 WL 253967, p. at *2 (C.D. Cal. 2012) ("Because Plaintiff lacksstanding to raise alleged breach of the Trust Agreement [PSA], to the extent his claims arebased on breach of this agreement, the claims fail."); Bascos v. Federal Home Loan Mortg.Corp., 2011 WL 3157063, at *6 (C.D. Cal. 2011) ("To the extent Plaintiff challenges the

securitization [*23] of his loan because Freddie Mac failed to comply with the terms of itssecuritization agreement, Plaintiff has no standing to challenge the validity of thesecuritization of the loan as he is not an investor of the loan trust."); see also In re Correia,452 B.R. 319, 324 (1st Cir. BAP 2011) (where debtors asked court to declare mortgageassignment invalid based upon breach of PSA, a contract to which debtors were neither aparty nor third-party beneficiaries, the court found that debtors lacked standing to object toany breaches of the PSA).

Defendants are correct that Mr. Madlaing lacks standing to assert PSA-based claims and thecomplaint's claims fail to the extent based on wrongs in connection with the PSA andincluding such claims alleged under the complaint's first and second claims. Claims that the

default notice "is false" based on wrongs in connection with the PSA are unavailing. ThisCourt construes Mr. Madlaing's failure to support PSA-based claims as his concession thathe lacks standing to pursue such claims.

Robosigning

Defendants further challenge as vague and conclusory allegations that several recordeddocuments were robosigned. See Cerecedes v. U.S. Bankcorp, 2011 WL 1666938, at *4(C.D. Cal. 2011) [*24] ("generic allegations of robo-signing and other unspecifiedirregularities are insufficient to place defendants on notice of how defendants violated thosestatutes"); see Chua v. IB Property Holdings, LLC, 2011 WL 3322884, at *2 (C.D. Cal.

2011) ("Plaintiffs produced no information supporting their theory that Lisa Markham [whosigned assignment and trustee substitution] is a 'robo signer'").

Defendants are correct that robosigning allegations fail to support actionable claims againstdefendants.

Breach Of Express Agreements

The complaint's (first) breach of express agreements claim accuses defendants of breachingthe DOT.

Elements

"The standard elements of a claim for breach of contract are: '(1) the contract, (2) plaintiff'sperformance or excuse for nonperformance, (3) defendant's breach, and (4) damage toplaintiff therefrom.'" Wall Street Network, Ltd. v. New York Times Co., 164 Cal.App.4th1171, 1178, 80 Cal.Rptr.3d 6 (2008). "To form a contract, an 'offer must be sufficientlydefinite . . . that the performance promised is reasonably certain.'" Alexander v.Codemasters Group Limited, 104 Cal.App.4th 129, 141. 127 Cal.Rptr.2d 145 (2002). "Facts


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alleging a breach, like all essential [*25] elements of a breach of contract cause of action,must be pleaded with specificity." Levy v. State Farm Mut. Auto. Ins. Co., 150 Cal.App.4th1, 5, 58 Cal.Rptr.3d 54 (2007); see Bentley v. Mountain, 51 Cal.App.2d 95, 98, 124 P.2d 91(1942) ("The allegations of the amended complaint to the effect that defendants 'violated'said contracts, or 'caused the violation' of said contracts by others, are mere conclusions of

law which cannot strengthen the pleading in the absence of allegations of fact showing suchviolations").

Defendants challenge the complaint's failure to allege facts to support breach of contractelements based on DOT breaches.

Foreclosure Compliance

The complaint's (first) breach of contract claim appears to take issue with the DOT trustee'sfailure to record the default notice. It specifically alleges failure "to execute a proper writtennotice of the occurrence of an event of default and of Lender's election to cause the property

to be sold by the true Lender or Trustee."

Defendants point out that no DOT or statutory requirement requires the DOT trustee toconduct foreclosure.

Under California law, a lender may pursue non-judicial foreclosure upon default with a deedof trust [*26] with a power of sale clause. "Financing or refinancing of real property isgenerally accomplished in California through a deed of trust. The borrower (trustor)executes a promissory note and deed of trust, thereby transferring an interest in the propertyto the lender (beneficiary) as security for repayment of the loan." Bartold v. GlendaleFederal Bank, 81 Cal.App.4th 816, 821, 97 Cal.Rptr.2d 226 (2000). A deed of trust "entitles

the lender to reach some asset of the debtor if the note is not paid." Alliance Mortgage Co.v. Rothwell, 10 Cal.4th 1226, 1235, 44 Cal.Rptr.2d 352 (1995).

If a borrower defaults on a loan and the deed of trust contains a power of sale clause, thelender may non-judicially foreclose. See McDonald v. Smoke Creek Live Stock Co., 209Cal. 231, 236-237, 286 P. 693 (1930). The California Court of Appeal has explained non-judicial foreclosure under the applicable California Civil Code sections:

The comprehensive statutory framework established to govern nonjudicialforeclosure sales is intended to be exhaustive. . . . It includes a myriad ofrules relating to notice and right to cure. It would be inconsistent with thecomprehensive and exhaustive statutory scheme [*27] regulating nonjudicialforeclosures to incorporate another unrelated cure provision into statutorynonjudicial foreclosure proceedings.

Moeller v. Lien, 25 Cal.App.4th 822, 834, 30 Cal.Rptr.2d 777 (1994); see I.E. Assoc. v.Safeco Title Ins. Co., 39 Cal.3d 281, 285, 216 Cal.Rptr. 438 (1985) ("These provisionscover every aspect of exercise of the power of sale contained in a deed of trust.")

Under California Civil Code section 2924(a)(1), a "trustee, mortgagee or beneficiary or any


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of their authorized agents" may conduct the foreclosure process which "is commenced bythe recording of a notice of default and election to sell by the trustee." Moeller, 25Cal.App.4th at 830, 30 Cal.Rptr.2d 77. Under California Civil Code section 2924b(4), a"person authorized to record the notice of default or the notice of sale" includes "an agentfor the mortgagee or beneficiary, an agent of the named trustee, any person designated in an

executed substitution of trustee, or an agent of that substituted trustee." "Upon default by thetrustor, the beneficiary may declare a default and proceed with a nonjudicial foreclosuresale." Moeller, 25 Cal.App.4th at 830, 30 Cal.Rptr.2d 777.

Defendants note that LSI [*28] Title on behalf of QLS, as agent for the DOT beneficiary,executed the default notice on September 4, 2009 and that QLS properly recorded thedefault notice on September 9, 2009. The complaint's conclusory claims of purported breachof the DOT offer nothing to support a discrepancy in the foreclosure process. The "statutoryprovisions, because they broadly authorize a 'trustee, mortgagee, or beneficiary, or any oftheir authorized agents' to initiate a nonjudicial foreclosure ( 2924, subd. (a)(1), italicsadded), do not require that the foreclosing party have an actual beneficial interest in both the

promissory note and deed of trust to commence and execute a nonjudicial foreclosure sale."Jenkins v. JP Morgan Chase Bank, N.A., Cal.Rptr.3d , 2013 WL 2145098, at *7 (2013).Claims that the default notice "is false" are unavailing.

Compliance With California Civil Code Section 2923.5

Defendants challenge the breach of contract claim's allegations that the default notice wasrobosigned and that defendants failed to give proper notice prior to recording the defaultnotice. Defendants point to the default notice's statement of compliance with CaliforniaCivil Code section 2923.5 ("section 2923.5") [*29] that:

The Beneficiary or its designated agent declares that it has contacted theborrower, tried with due diligence to contact the borrower as required byCalifornia Civil Code 2923.5, or the borrower has surrendered the propertyto the beneficiary or authorized agent, or is otherwise exempt from therequirements of 2923.5.

Section 2923.5(a)(1) prohibits a mortgagee, trustee, beneficiary or authorized agent to "file anotice of default pursuant to Section 2924 until 30 days after initial contact is made asrequired by paragraph (2) or 30 days after satisfying the due diligence requirements asdescribed in subdivision (g)." Section 2923.5(a)(2) requires a "mortgagee, beneficiary orauthorized agent" to "contact the borrower in person or by telephone in order to assess theborrower's financial situation and explore options for the borrower to avoid foreclosure."Section 2923.5(b) requires a default notice to include a declaration "from the mortgagee,beneficiary, or authorized agent" of compliance with section 2923.5, including attempt"with due diligence to contact the borrower as required by this section."

Defendants are correct that section 2923.5 does not require actual contact [*30] if a diligentattempt to contact is made. The default notice includes the requisite declaration to attest toefforts to comply with section 2923.5. The declaration tracks with section 2923.5 to satisfy


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the statute. See Mabry v. Superior Court, 185 Cal.App.4th 208, 235, 110 Cal.Rptr.3d 201(2010).

Trustee Substitution

The complaint's breach of contract claim further takes issue with robosigning the trusteesubstitution and DOT assignment. The claim further challenges the validity of Wells Fargo'sSeptember 4, 2009 execution of the trustee substitution prior to the October 28, 2009recordation of the DOT assignment, which transferred beneficial interest under the DOT toWells Fargo.

Defendants note that on September 4, 2009, EMC Mortgage Corporation ("EMC"), asattorney in fact for Wells Fargo, executed the trustee substitution to substitute QLS as DOTtrustee in place of original DOT trustee First American Title Company. Defendants pointout that as attorney in fact for the DOT beneficiary, EMC was authorized to effectuate thetrustee substitution. See Kachlon v. Markowitz, 168 Cal.App.4th 316, 334, 85 Cal.Rptr.3d

532 (2008) ("The beneficiary may make a substitution of trustee . . . to [*31] conduct theforeclosure and sale").

Turning to the DOT assignment, defendants explain that its recording was not required toassign the beneficial interest under the DOT. Defendants fault a claim based on CaliforniaCivil Code section 2932.5 ("section 2932.5") in that section 2932.5 applies to mortgages,not a deed of trust such as that at issue here.

California adopted the "lien" theory of mortgages and the "title" theory in reference to deedsof trust. Bank of Italy Nat. Trust & Sav. Ass'n v. Bentley, 217 Cal. 644, 655, 20 P.2d 940(1933). Mortgages and deeds of trust "are fundamentally different in that in a mortgage only

a 'lien' [is] created, while in a deed of trust 'title' actually passe[s] to the trustee." Bentley,217 Cal. at 655, 20 P.2d 940. A "deed of trust differs from a mortgage in that title passes tothe trustee in case of a deed of trust, while, in the case of a mortgage, the mortgagor retainstitle." Bentley, 217 Cal. at 655, 20 P.2d 940.

A fellow district court has explained:

A deed of trust generally involves three parties, the borrower/trustor . . . whoconveys the right to sell the property to the trustee, for the benefit of thelender/beneficiary. . . . The practical [*32] effect is the creation of a lien onthe subject property. . . . Notwithstanding that the right of sale is formallywith the trustee, both the beneficiary and the trustee may commence the non-judicial foreclosure process.

Roque v. Suntrust Mortg., Inc., 2010 WL 546896, at *3 (N.D. Cal. 2010) (citation omitted).

Section 2932.5 addresses mortgages and provides:

Where a power to sell real property is given to a mortgagee, or otherencumbrancer, in an instrument intended to secure the payment of money,


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the power is part of the security and vests in any person who by assignmentbecomes entitled to payment of the money secured by the instrument. Thepower of sale may be exercised by the assignee if the assignment is dulyacknowledged and recorded.

Defendants are correct that section 2932.5 covers only mortgages in which the mortgageehas a power of sale. "Section 2932.5 applies to mortgages, not deeds of trust. It applies onlyto mortgages that give a power of sale to the creditor, not to deeds of trust which grant apower of sale to the trustee." Roque, 2010 WL 546896, at *3.

The complaint's reliance on section 2932.5 is unavailing in that section 2932.5 does notapply to the facts subject to [*33] the complaint. Moreover, California's non-judicialforeclosure statutes do not require a recording of assignments of interests in deeds of trustprior to foreclosure. See Parcay v. Shea Mortgage, U.S. Dist. Lexis 40377, at *31 (E.D. Cal.2010) ("There is no requirement under California law for an assignment to be recorded inorder for an assignee beneficiary to foreclose."); Caballero v. Bank of America, 2010 WL

4604031, at *3 (N.D. Cal. 2010) (" 2932.5 does not require the recordation of anassignment of a beneficial interest for a deed of trust, as opposed to a mortgage").

Defendants are correct that the trustee substitution and DOT assignment establish that thebeneficial interest in Mr. Madlaing's loan had been transferred to Wells Fargo prior toexecution of the trustee substitution in that the trustee substitution was executed on WellsFargo's behalf. In other words, when Wells Fargo executed the trustee substitution, it heldthe beneficial interest in Mr. Madlaing's loan. Delay to record the trustee substitution doesnot establish that Wells Fargo did not hold the loan's beneficial interest when the trustee wassubstituted. Under California Civil Code section 2934a(d), "[o]nce [*34] recorded, thesubstitution [of trustee] shall constitute conclusive evidence of the authority of the

substituted trustee or his or her agents to act pursuant to this section."

The complaint lacks a viable claim based on alleged DOT breach, especially considering theabsence of limitation on the power of sale. The complaint's (first) breach of expressagreements claim is subject to dismissal.

Breach Of Implied Agreements

The complaint's (second) breach of implied agreements claim alleges defendants invokedthe DOT's power of sale without notice required by the DOT.

"An implied contract is one, the existence and terms of which are manifested by conduct."Cal. Civ. Code, 1621. Like an express contract, an implied contract requires "a meeting ofthe minds or an agreement." Mulder v. Mendo Wood Products, Inc., 225 Cal.App.2d 619,632, 37 Cal.Rptr. 479 (1964). "As to the basic elements, there is no difference between anexpress and implied contract. While an express contract is defined as one, the terms ofwhich are stated in words (Civ. Code, 1620), an implied contract is an agreement, theexistence and terms of which are manifested by conduct (Civ. Code, 1621)." Division ofLabor Law Enforcement v. Transpacific Transportation Co., 69 Cal.App.3d 268, 275, 137


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Cal.Rptr. 855 (1977). [*35] "The true implied contract consists of obligations arising from amutual agreement and intent to promise where the agreement and promise have not beenexpressed in words." Mulder, 225 Cal.App.2d at 632, 37 Cal.Rptr. 479.

The breach of implied agreements claim is based on the same allegations as the breach of

express agreements claim. Despite the slightly different theory, the breach of impliedagreements claim fails for the same reasons as the breach of express agreements claim. Asdiscussed above, no actionable claims arise from the default notice or trustee substitution,including their contents or authority to enforce or record them. The breach of impliedagreements claim fails along side the breach of express agreements claim.

Slander Of Title

The complaint's (third) slander of title further takes issue with validity of foreclosuredocuments. Defendants fault the complaint's absence of facts to support slander of title.

Elements

"Slander of title occurs when there is an unprivileged publication of a false statement whichdisparages title to property and causes pecuniary loss."

...

[Message clipped] View entire message

DOUGLAS AND JULIE ALSOBROOK, Plaintiffs, vs. AMERICAN HOME MORTGAGE

et al., Defendants.

CASE NO. 12-cv-2151-GPC-WMC

UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OFCALIFORNIA


May 30, 2013, Decided

May 30, 2013, Filed

CORE TERMS: foreclosure, mortgage, promissory note, deed of trust, quiet, Deed,securitization, standing to challenge, assigned, declaratory relief, failed to state, notice,factual allegations, power of sale, recorded, judicial notice, fail to state, real property,transferred, nonjudicial, beneficial, foreclose, borrower, lender, default, legal theory,declaratory judgments, failed to properly, reasonable inference, adverse claims


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COUNSEL: [*1] Douglas Alsobrook, Plaintiff, Pro se, La Mesa, CA.

Julie Alsobrook, Plaintiff, Pro se, San Diego, CA.

For Saxon Mortgage, Defendant: Bradford E. Klein, LEAD ATTORNEY, Wright, Finlay &Zak, LLP, Newport Beach, CA.

For Ocwen Loan Servicing, Mortgage Electronic Registration Systems, Inc., (MERS),Defendants: Rachel Suzanne Opatik, LEAD ATTORNEY, Houser & Allison, APC,Carlsbad, CA.

JUDGES: HON. GONZALO P. CURIEL, United States District Judge.

OPINION BY: GONZALO P. CURIEL

OPINIONORDER GRANTING DEFENDANTS' MOTIONS TO DISMISS[DKT. NO. 22]I. INTRODUCTION

On March 15, 2013, Defendants Mortgage Electronic Registration Systems, Inc. ("MERS")and Ocwen Loan Servicing filed a motion to dismiss Plaintiffs' first amended complaintpursuant to Federal Rule of Civil Procedure 12(b)(6). (Dkt. No. 22.) On March 27, 2013Defendant Saxon Mortgage filed a notice joining aforementioned motion. (Dkt. No. 24.) Forthe reasons set out below, the Court hereby GRANTS Defendants' motion to dismisswithout prejudice.

II. BACKGROUND

On May 31, 2007, Plaintiffs Douglas and Julie Alsobrook completed a loan for the propertylocated at 4075 Bancroft Drive, La Mesa, California 91941 and the promissory note wassecured by a Deed of Trust.1 The Deed of [*2] Trust lists MERS as "the beneficiary underthis Security Instrument," American Home Mortgage as the lender, and Lawyer's Title as thetrustee. On February 12, 2010, a notice of default and election to sell under deed of trust wasfiled in San Diego County, which showed that Plaintiffs were in default on theaforementioned loan in the amount of $18,309.78. (Dkt. No. 23, Ex. 2 "Notice of Default.")On March 16, 2010, MERS assigned all of its rights, title and interest in the Deed of Trust toSaxon Mortgage Services, inc. (Dkt. No. 23, Ex. 3 "Assigned of Deed of Trust.") On June14, 2012, a notice of sale was recorded by the Trustee, setting a sale date for July 10, 2012and indicating an unpaid obligation of $335,426.42. (Dkt. No. 23, Ex. 6 "Notice of Sale.")The sale date has been postponed by oral proclamation. (Dkt. No. 23 at 2, "Statement ofFacts.")

- - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - - -


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1 Pursuant to Federal Rules of Evidence, Rule 201, Defendants have requested the Courttake judicial notice of legal documents underpinning Plaintiffs' entire action. As Plaintiffs'complaint fails to provide the relevant facts regarding the foreclosure of their property inquestion, the Court, having reviewed the exhibits, finds that [*3] the information can beaccurately and readily determined from reliable sources. Accordingly, the Court takes

judicial notice of Defendants MERS and Ocwen exhibits 1-6. See Dkt. No. 23.

- - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - -

On August 31, 2012, Plaintiffs brought this pro se action alleging wrongful foreclosure andfraud, seeking injunction and declaratory relief to prevent the foreclosure of their propertyand seeking to void the Deed of Trust and to quiet title. (Dkt. No. 1.) On February 12, 2013,this Court granted Defendant's motion to dismiss without prejudice and granted Plaintiffsleave to file an amended complaint. (Dkt. No. 20.) On February 26, 2013, Plaintiffs filed afirst amended complaint. (Dkt. No. 21, "FAC.") The FAC alleges wrongful foreclosure andseeks to quiet title and declaratory relief. (Id.)

Plaintiffs assert American Home Mortgage improperly transferred or assigned thepromissory note related to their property. (FAC 17-23.) Plaintiffs allege American HomeMortgage failed to properly transfer the deed of trust to the REMIC Trust resulted in aviolation of the Pooling and Servicing Agreement. (FAC 24-25.) According to Plaintiffs,American Home Mortgage failed to physically deliver the promissory [*4] note to anunnamed REMIC trust and therefore "the Deed of Trust is rendered a nullity [since] thePromissory Note itself is not also transferred." (FAC 32.) Moreover, Plaintiffs assert thatbecause American Mortgage failed to properly transfer the promissory note and asAmerican Mortgage is now out of business, neither REMIC Trust nor Ocwen LoanServicing have the legal right to collect mortgage payments from Plaintiffs. (FAC 43.)Plaintiff further alleges wrongful foreclosure based on the theory that Defendants do nothave standing to foreclose on the property because MERS improperly assigned the interestunder the Deed of Trust. (FAC 50-52.) Plaintiffs also assert Defendants have failed tocomply with California Civil Code 2932.5 because there was no recorded assignment ofdeed of trust. (FAC 53-56.)

Defendants Ocwen Loan Servicing and Mortgage Electronic Registration Systems, Inc.("MERS") move to dismiss Plaintiffs' first amended complaint. (Dkt. No. 22.) Defendantscontend Plaintiffs fail to state a claim for wrongful foreclosure as a matter of law. (Dkt. No.22 at 2.) Defendants further argue that Plaintiffs lack standing to challenge securitization oftheir loan [*5] and lack standing to challenge the wrongful foreclosure based on the MERSassignment. (Id. at 3-5.) Defendants also contend Plaintiff has failed to state a claim to quiettitle and declaratory relief. (Id. at 5-6.)

III. LEGAL STANDARD

A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) tests the sufficiency ofa complaint. Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). Dismissal is warrantedunder Rule12(b)(6) where the complaint lacks a cognizable legal theory. Robertson v. Dean


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Witter Reynolds, Inc., 749 F.2d 530, 534 (9th Cir. 1984); see Neitzke v. Williams, 490 U.S.319, 326, 109 S. Ct. 1827, 104 L. Ed. 2d 338 (1989) ("Rule12(b)(6) authorizes a court todismiss a claim on the basis of a dispositive issue of law."). Alternatively, a complaint maybe dismissed where it presents a cognizable legal theory yet fails to plead essential factsunder that theory. Robertson, 749 F.2d at 534. While a plaintiff need not give "detailed

factual allegations," a plaintiff must plead sufficient facts that, if true, "raise a right to reliefabove the speculative level." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 545, 127 S. Ct.1955, 167 L. Ed. 2d 929 (2007). "To survive a motion to dismiss, a complaint must containsufficient factual matter, accepted [*6] as true, to 'state a claim to relief that is plausible onits face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S. Ct. 1937, 173 L. Ed. 2d 868 (2009)(quoting Twombly, 550 U.S. at 547). A claim is facially plausible when the factualallegations permit "the court to draw the reasonable inference that the defendant is liable forthe misconduct alleged." Id. In other words, "the non-conclusory 'factual content,' andreasonable inferences from that content, must be plausibly suggestive of a claim entitling theplaintiff to relief." Moss v. U.S. Secret Service, 572 F.3d 962, 969 (9th Cir. 2009)."Determining whether a complaint states a plausible claim for relief will . . . be a context-

specific task that requires the reviewing court to draw on its judicial experience andcommon sense." Iqbal, 556 U.S. at 679.

In reviewing a motion to dismiss under Rule 12(b)(6), the court must assume the truth of allfactual allegations and must construe all inferences from them in the light most favorable tothe nonmoving party. Thompson v. Davis, 295 F.3d 890, 895 (9th Cir. 2002); Cahill v.Liberty Mut. Ins. Co., 80 F.3d 336, 337-38 (9th Cir. 1996). Legal conclusions, however,need not be taken as true merely because they are cast in the [*7] form of factualallegations. Ileto v. Glock, Inc., 349 F.3d 1191, 1200 (9th Cir. 2003); W. Mining Council v.Watt, 643 F.2d 618, 624 (9th Cir. 1981). When ruling on a motion to dismiss, a court mayconsider the facts alleged in the complaint, documents attached to the complaint, documentsrelied upon but not attached to the complaint when authenticity is not contested, and mattersof which the court takes judicial notice. Lee v. Los Angeles, 250 F.3d 668, 688-89 (9th Cir.2001).

IV. DISCUSSIONA. Quiet Title

Plaintiffs have failed to state a claim to quiet title. Under California Code of CivilProcedure, Plaintiffs are required to state: (a) a legal description of the real property and itsstreet address, (b) Title as to which a determination is sought and the basis of the title, (c)adverse claims to the title, (d) the date as to which the determination is sought, and (e) aprayer for the determination of the title of the Plaintiff against the adverse claims. Cal. Civ.Pro. Code 761.020. Moreover, to quiet title the debt must be discharged. Aguilar v. Bocci,39 Cal. App. 3d 475, 477, 114 Cal. Rptr. 91 (1979)("[A]ppellant can[not] quiet title withoutdischarging his debt . . . the cloud upon his title [*8] persists until the debt is paid")(internalcitations omitted). Here, Plaintiffs allege that because American Home Mortgage did notproperly sell or transfer the promissory note no party can enforce the terms of the loan andPlaintiffs have no further debt obligations on the loan. (FAC 38, 47.) This allegation failsto state a proper claim to quiet title. Plaintiffs allegations do not establish who has legal


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basis to the title nor do Plaintiffs show the discharge of loan debt. As such, Plaintiffs fail tostate a claim to quiet title.

B. Wrongful Foreclosure

Defendants assert Plaintiffs lack standing to challenge securitization of their loan, andtherefore cannot state a claim for wrongful disclosure. (Dkt. No. 22 at 3-4.) Plaintiffs do notchallenge these arguments in their response. (Dkt. No. 25.)

The Court finds Plaintiffs lack standing to challenge the securitization of their loan. As aninitial matter, Plaintiffs allege the Defendants do not have authority to foreclose on theirhome. Courts have rejected similar claims that corporations do not have the authority toforeclose because the original mortgage lender "improperly" packaged and sold the originalloan. Lane v. Vitek Real Estate Industries Group, 713 F.Supp. 2d 1092 (E.D. Cal.2010)("The [*9] argument that parties lose interest in a loan when it is assigned to a trustpool has also been rejected by numerous district courts."); Benham v. Aurora Loan Services,

2009 U.S. Dist. LEXIS 78384, 2009 WL 2880232 at *3 (N.D. Cal. Sept.1, 2009) ("Othercourts in this district have summarily rejected the argument that companies like MERS losetheir power of sale pursuant to the deed of trust when the original promissory note isassigned to a trust pool."). Here, Plaintiffs allege the "transfer of beneficial ownership in theDeed of Trust to any third party as result of the execution of said assignment by MERS orany agent of MERS is invalid." (FAC 52.) The Court finds the allegation is baseless andfails to properly state a wrongful foreclosure claim.

Moreover, Plaintiffs have not asserted that they are party to the loan securitizationagreement. Courts have also rejected claims challenging foreclosure when Plaintiffs are nota party to the securitization agreement. Bascos v. Fed. Home Loan Mortgage Corp., CV 11-

3968-JFW JCX, 2011 U.S. Dist. LEXIS 86248, 2011 WL 3157063 (C.D. Cal. July 22,2011)("Plaintiff has no standing to challenge the validity of the securitization of the loan ashe is not an investor of the loan trust"). Courts have [*10] also held that homeowner-plaintiff lacks standing when challenging the assignment of a deed of trust because "onlysomeone who suffered a concrete and particularized injury that is fairly traceable to thesubstitution can bring an action to declare the assignment . . . void." Carollo v. VericrestFin., Inc., 2012 U.S. Dist. LEXIS 137017, 2012 WL 4343816 (N.D. Cal. Sept. 21, 2012)(citing Javaheri v. JPMorgan Chase Bank, N.A., 2012 U.S. Dist. LEXIS 114510, 2012 WL3426278 at *6 (C.D. Cal. Aug. 13, 2012). Plaintiffs FAC does not allege that they wereparty to the loan securitization agreement nor have they asserted such a "concrete orparticularized injury" related to the transfer of the promissory note. As such, the Court findsPlaintiffs lack to standing to challenge the securitization of their loan.

As an additional matter, California courts have rejected the "holder of note" theory thatPlaintiffs rely upon. In essence, Plaintiffs argue that American Home Mortgage improperlysold and transferred the promissory note, and therefore there is no ability to determine theactual holder of the note. California's nonjudicial foreclosure scheme is set forth inCalifornia Civil Code sections 2924 through 2924k, which "provide a comprehensiveframework [*11] for the regulation of a nonjudicial foreclosure sale pursuant to a power of


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sale contained in a deed of trust." Moeller v. Lien, 25 Cal.App. 4th 822, 830, 30 Cal. Rptr.2d 777 (1994). California appellate courts have "refused to read any additional requirementsinto the non-judicial foreclosure statute." Id. at 830. The California Superior court recentlyaffirmed this approach in Gomes v. Countrywide Home Loans, Inc., stating "the recognitionof the right to bring a lawsuit to determine a nominee's authorization to proceed with

foreclosure on behalf of the noteholder would fundamentally undermine the nonjudicialnature of the process and introduce the possibility of lawsuits filed solely for the purpose ofdelaying valid foreclosures." Gomes, 192 Cal. App. 4th 1149, 1155, 121 Cal. Rptr. 3d 819(2011), review denied (May 18, 2011). To the extent that Plaintiffs rely upon this theory, thewrongful foreclosure claim also fails.

C. Failure to Comply with California Civil Code 2932.5

Plaintiff has not sufficiently alleged Defendants have violated California Civil Code 2932.5. This section provides: "Where a power to sell real property is given to a mortgagee,or other encumbrancer, in an instrument intended to secure the payment [*12] of money,

the power is part of the security and vests in any person who by assignment becomesentitled to payment of the money secured by the instrument. The power of sale may beexercised by the assignee if the assignment is duly acknowledged and recorded." Cal. Civ.Code 2932.5. Lenders must contact the borrower by phone or in person to "assess theborrower's financial situation and explore options for the borrower to avoid foreclosure."Here, Plaintiffs allege Defendants have not complied with Cal. Civ. C. 2932.5 for failureto record a document in the "public chain of title reflecting from whom it acquired thebeneficial interest in Plaintiffs' Deed of Trust." (FAC 56.) Defendants argue that 2932.5is inapplicable to deeds of trust. (Dkt. No. 22 at 5.)

Plaintiffs fail to allege violation ofCal. Civ. Code 2932.5. "It has been established since

1908 that this statutory requirement that an assignment of the beneficial interest in a debtsecured by real property must be recorded in order for the assignee to exercise the power ofsale applies only to a mortgage and not to a deed of trust. Calvo v. HSBC Bank USA, N.A.,199 Cal. App. 4th 118, 122, 130 Cal. Rptr. 3d 815 (2011), review denied (Jan. [*13] 4,2012). Here, Plaintiffs allegations are entirely based on the improper transfer of the deed oftrust, on the underlying mortgage that created the lien. As such, the Court finds Plaintiff hasfailed to state a violation ofCal. Civ. Code 2932.5.

D. Declaratory Relief

The Declaratory Judgment Act, 28 U.S.C. 2201, provides that federal courts may issuedeclaratory judgments only in cases of an "actual controversy." 28 U.S.C. 2201. Forsimilar reasons as previously discussed, Plaintiffs have failed to state an "actualcontroversy" exists for purposes of28 U.S.C. 2201 (a). As such, the Court finds Plaintiffshave failed to state a claim for declaratory relief.

IV. CONCLUSION

For the foregoing reasons, Defendants motion to dismiss is GRANTED WITHOUT


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PREJUDICE. Plaintiffs are granted LEAVE TO AMEND the complaint thirty (30) daysfrom the date of this order to address deficiencies noted herein. Defendants are grantedtwenty (20) days from the date of service of plaintiff's second amended complaint to file aresponse thereto. Accordingly, the Court hereby VACATES the hearing date scheduled forFriday, May 31, 2013.

IT IS SO ORDERED.

DATED: May 30, 2013

/s/ Gonzalo P. Curiel

HON. GONZALO [*14] P. CURIEL

United States District Judge

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BRUCE A. MULLINS & WORLANDA F. MULLINS, Plaintiffs, v. WELLS FARGOBANK, N.A., Defendant.

No. 2:13-cv-0453 JAM KJN PS

UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OFCALIFORNIA


May 24, 2013, Decided


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May 28, 2013, Filed

CORE TERMS: notice, judicial notice, equitable tolling, savings bank, deed of trust,limitations period, fraud claims, time barred, mortgage, misrepresentation, rescission,discover, leave to amend, statute of limitations, disclosures, securitization, modification,

consummation, fraudulent, recorded, loan transaction, specific facts, origination,misconduct, preemption, preempted, default, savings, loan documents, public records

COUNSEL: [*1] Bruce A. Mullins, Plaintiff, Pro se, Vallejo, CA.

Worlanda F. Mullins, Plaintiff, Pro se, Vallejo, CA.

For Wells Fargo Bank, N.A., Defendant: David Michael Newman, AFRCT, LLP, Pasadena,CA.

JUDGES: KENDALL J. NEWMAN, UNITED STATES MAGISTRATE JUDGE.

OPINION BY: KENDALL J. NEWMAN

OPINIONORDER

Plaintiffs Bruce A. Mullins and Worlanda F. Mullins, proceeding without counsel, initiallycommenced this action in the Solano County Superior Court on January 30, 2013, assertingseveral federal and state law claims related to their residential home loan against defendant

Wells Fargo Bank, N.A., successor by merger with Wells Fargo Bank Southwest,N.A., formerly known as Wachovia Mortgage, FSB, formerly known as World Savings

Bank, FSB ("Wells Fargo "). (See Complaint, Ex. A to Notice of Removal, ECF

No. 1 at 18-36, ["Compl."].) 1 Thereafter, on March 6, 2013, Wells Fargo removed theaction to this court, invoking the court's federal question and diversity of citizenshipjurisdiction. (ECF No. 1.)

2

- - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - - -1 This case proceeds before the undersigned pursuant to E.D. Cal. L.R. 302(c)(21) and 28

U.S.C. 636(b)(1).2 Given that plaintiffs' complaint raises several federal claims, it clearlyconfers the court with federal question jurisdiction [*2] upon removal. Thus, at least at thisjuncture, the court need not determine whether it also has diversity jurisdiction over theaction.

- - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - -


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Subsequently, on March 20, 2013, Wells Fargo filed the instant motion to dismissplaintiffs' complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). (ECF No. 7.) Themotion was initially noticed for hearing on May 2, 2013, but the hearing was later continued

to May 23, 2013, on the court's own motion. (ECF Nos. 7, 9.) On May 8, 2013, plaintiffs

filed an opposition to the motion, and Wells Fargo filed a reply brief on May 9, 2013.(ECF. Nos. 10, 11.)

At the hearing on May 23, 2013, plaintiff Bruce A. Mullins appeared on behalf of himselfand his wife, plaintiff Worlanda F. Mullins, who was absent for medical reasons. Attorney

David Newman appeared telephonically on behalf ofWells Fargo. After consideringthe parties' briefs, the parties' oral arguments, and the applicable law, the court grants Wells

Fargo's motion to dismiss with leave to amend.

BACKGROUND

The background facts are taken from plaintiffs' operative complaint and certain public

records and government documents offered by Wells Fargo that are subject to judicialnotice. 3 According [*3] to a deed of trust dated October 6, 2006, and recorded on October

13, 2006, plaintiffs borrowed $446,000.00 from World Savings Bank, FSB,4

pursuantto a written promissory note and secured by a deed of trust on real property located at 3017Overlook Drive, Vallejo, California (the "Property"), where plaintiffs currently reside. (See

Compl. 1; Wells Fargo's Request for Judicial Notice, ECF No. 8 ["RJN"], Ex. A.)5

Plaintiffs allege that, although they met the credit criteria for a prime fixed rate mortgage

loan, World Savings (now Wells Fargo ), in events leading up to the origination of theloan, recommended that plaintiffs instead opt for a "Pick-A-Pay" adjustable rate mortgageloan, suggesting that after plaintiffs' credit rating increased over a couple of years, plaintiffscould refinance for an exceptional prime rate. (Compl. 3-4.)

- - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - - -

3 The court's analysis with respect to Wells Fargo's request for judicial notice insupport of its motion to dismiss (ECF No. 8) is set forth in the "Discussion" section below.4

World Savings Bank, FSB later changed its name to Wachovia Mortgage, FSB, and

then underwent a second name change to Wells Fargo Bank Southwest, N.A. before


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merging with Wells [*4] Fargo Bank, N.A. (Wells Fargo's Request for Judicial Notice,ECF No. 8, Ex. B.)5 By contrast, plaintiffs' complaint alleges that they borrowed$350,000.00 from World Savings, with a cash down payment of $100,000, and that a deedof trust was issued around April 4, 2003, and recorded around April 11, 2003. (Compl. 3.)

Neither Wells Fargo nor plaintiffs addressed the discrepancies with respect to the datesand amounts in their briefing. However, at the hearing, plaintiff Bruce Mullins clarified thata new deed of trust was issued in 2006 based on a loan modification. As such, it appears that

the 2006 deed of trust, of which Wells Fargo requested judicial notice, supplanted the2003 deed of trust. In any amended complaint, although plaintiffs may set forth factsconcerning the history of their loan since 2003 to the extent that they are relevant to thiscase, plaintiffs shall also include facts regarding issuance of the operative 2006 deed of truston which their claims are based.

- - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - -

According to plaintiffs, they subsequently began to experience difficulties in affording theirmonthly payments when the mortgage interest rate increased on a cyclical basis, and thevalue of the Property also [*5] significantly diminished. (Compl. 4.) Plaintiffs wereapparently at one point offered a one-year trial modification of the loan, and were thereafterpresented with two (2) Loan Modification Options with incremental payment adjustmentsand optional balloon payments. (Id.) Plaintiffs assert that the proposed modified principalbalances under these options provided them with no credit for monthly payments made overseveral past years, and that they would never realize any equity value in their home. (Id.)

Plaintiffs generally assert that Wells Fargo had no intent of actually providing plaintiffs

with a meaningful loan modification. (Id. 33.) Additionally, plaintiffs claim that despite

Wells Fargo reassuring them that they were getting a loan modification, Wells Fargo

was also actively foreclosing on the Property. (Id. 34.) In that regard, plaintiffs

further allege that Wells Fargo issued a Notice of Default around July 2009, withoutfirst contacting plaintiffs to explore options to avoid foreclosure in accordance withCalifornia Civil Code section 2923.5. (Id. 43-46.)

Plaintiffs also state that a mortgage loan forensic analysis and audits have revealed a number

of procedural improprieties [*6] with respect to the loan origination process, including withrespect to certain statements, notices, disclosures, and booklets that were either not in theloan file, not provided to plaintiffs, or were not dated and signed properly. (Compl. 7-15,17.) Plaintiffs state that they did not understand the loan documents they were signing andthat they were not encouraged to read them. (Id. 16.) Plaintiffs further include vagueallegations regarding "Improper Securitization" of the loan/note and "Improper Assignment"of the mortgage or deed of trust. (Id. 18.)


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Based on these allegations, plaintiffs assert the following seven causes of action for: (1)fraudulent inducement to breach of contract; (2) violation of the federal Truth in LendingAct, 15 U.S.C. 1601 et seq. ("TILA"); (3) fraud and conspiracy to commit fraud; (4)violation ofCalifornia Civil Code section 2923.5; (5) predatory lending in violation ofTILA; (6) unlawful business practices in violation ofCalifornia Business and Professions

Code section 17200, predicated on violation ofCalifornia Civil Code section 2923.5; and(7) fraudulent business practices in violation ofCalifornia Business and Professions Codesection 17200, [*7] predicated on violation ofCalifornia Civil Code section 2923.5.(Compl. 19-66.) Liberally construed, plaintiffs' complaint, in addition to these explicitlystated causes of action, also purports to assert claims for violation of the Real EstateSettlement Procedures Act, 12 U.S.C. 2601 et seq. ("RESPA") and the Equal CreditOpportunity Act, 15 U.S.C. 1691 et seq. ("ECOA"). (See, e.g., Compl. 7-15.)

As noted above, after removing the action to federal court, Wells Fargo filed the instantmotion to dismiss.

DISCUSSIONLegal Standard

A motion to dismiss brought pursuant to Federal Rule of Civil Procedure 12(b)(6)challenges the sufficiency of the pleadings set forth in the complaint. Vega v. JPMorganChase Bank, N.A., 654 F. Supp. 2d 1104, 1109 (E.D. Cal. 2009). Under the "noticepleading" standard of the Federal Rules of Civil Procedure, a plaintiff's complaint mustprovide, in part, a "short and plain statement" of plaintiff's claims showing entitlement torelief. Fed. R. Civ. P. 8(a)(2); see also Paulsen v. CNF, Inc., 559 F.3d 1061, 1071 (9th Cir.2009). "To survive a motion to dismiss, a complaint must contain sufficient factual matter,accepted as true, to 'state a claim [*8] to relief that is plausible on its face.'" Ashcroft v.Iqbal, 556 U.S. 662, 678, 129 S. Ct. 1937, 173 L. Ed. 2d 868 (2009) (citing Bell Atl. Corp.v. Twombly, 550 U.S. 544, 570, 127 S. Ct. 1955, 167 L. Ed. 2d 929 (2007)) . "A claim hasfacial plausibility when the plaintiff pleads factual content that allows the court to draw thereasonable inference that the defendant is liable for the misconduct alleged." Id.

In considering a motion to dismiss for failure to state a claim, the court accepts all of thefacts alleged in the complaint as true and construes them in the light most favorable to theplaintiff. Corrie v. Caterpillar, Inc., 503 F.3d 974, 977 (9th Cir. 2007). The court is "not,however, required to accept as true conclusory allegations that are contradicted bydocuments referred to in the complaint, and [the court does] not necessarily assume the truthof legal conclusions merely because they are cast in the form of factual allegations."Paulsen, 559 F.3d at 1071. The court must construe a pro se pleading liberally to determineif it states a claim and, prior to dismissal, tell a plaintiff of deficiencies in his complaint andgive plaintiff an opportunity to cure them if it appears at all possible that the plaintiff cancorrect the defect. See Lopez v. Smith, 203 F.3d 1122, 1130-31 (9th Cir. 2000) [*9] (enbanc); accord Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1990) (statingthat "pro se pleadings are liberally construed, particularly where civil rights claims areinvolved"); see also Hebbe v. Pliler, 627 F.3d 338, 342 & n.7 (9th Cir. 2010) (stating that


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courts continue to construe pro se filings liberally even when evaluating them under thestandard announced in Iqbal).

In ruling on a motion to dismiss filed pursuant to Rule 12(b)(6), the court "may generallyconsider only allegations contained in the pleadings, exhibits attached to the complaint, and

matters properly subject to judicial notice." Outdoor Media Group, Inc. v. City ofBeaumont, 506 F.3d 895, 899 (9th Cir. 2007) (citation and quotation marks omitted).Although the court may not consider a memorandum in opposition to a defendant's motionto dismiss to determine the propriety of a Rule 12(b)(6) motion, see Schneider v. Cal. Dep'tof Corrections, 151 F.3d 1194, 1197 n.1 (9th Cir. 1998), it may consider allegations raisedin opposition papers in deciding whether to grant leave to amend, see, e.g., Broam v. Bogan,320 F.3d 1023, 1026 n.2 (9th Cir. 2003).

With these principles in mind, the court now [*10] turns to Wells Fargo's motion todismiss.

Wells Fargo's Request for Judicial Notice

After reviewing Wells Fargo's request for judicial notice in support of its motion todismiss, the court grants it in part and denies it in part. "The court may judicially notice afact that is not subject to reasonable dispute because it: (1) is generally known within thetrial court's territorial jurisdiction; or (2) can be accurately and readily determined fromsources whose accuracy cannot reasonably be questioned." Fed. R. Evid. 201(b). A courtmay take judicial notice of "matters of public record." Lee v. City of Los Angeles, 250 F.3d668, 688-89 (9th Cir. 2001).

The court takes judicial notice of Exhibit A to the request for judicial notice, a deed of trustdated October 6, 2006, because it was recorded in the official records of the Solano CountyRecorder's office and is thus a public record whose accuracy cannot reasonably bequestioned. For the same reasons, the court also takes judicial notice of Exhibit B to therequest for judicial notice, which consists of various certificates, letters, and other officialdocuments from government agencies and government websites, including the Officeof [*11] Thrift Supervision in the Department of Treasury, the Office of the Comptroller ofthe Currency, and the Federal Deposit Insurance Corporation. However, the court declinesto take judicial notice of Exhibit C, which is a Property Profile Report from Chicago TitleCompany, purportedly showing that no Notice of Default has been recorded against the

Property. Although Wells Fargo contends that this document is a "document reflectingofficial acts of the executive branch of the County of Alameda," whose authenticity is notsubject to reasonable dispute, (ECF No. 8 at 3), the document itself is neither an officialgovernment document nor a recorded public record, but instead a record from a privatecompany. As such, it is not the proper subject of judicial notice.

TILA Claims (Causes of Action Two and Five)


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In support of their TILA claims, plaintiffs allege that Wells Fargo violated TILA byfailing to provide plaintiffs with certain required disclosures and/or notices at the time of the

loan's origination. (Compl. 8-10, 27.) Wells Fargo argues that any TILA claim istime barred.

Any action for damages under TILA must generally be brought within one year of theconsummation of the loan transaction. [*12] See 15 U.S.C. 1640(e); Meyer v. AmeriquestMortgage Co., 342 F.3d 899, 902 (9th Cir. 2003); King v. California, 784 F.2d 910, 913 (9thCir. 1986). Any action for rescission under TILA must be brought within three years of theconsummation of the loan transaction. See 15 U.S.C. 1635(f)("An obligor's right ofrescission shall expire three years after the date of consummation of the transaction...."); 12C.F.R. 226.2(a)(13) ("Consummation means the time that a consumer becomescontractually obligated on a credit transaction"); see also King, 784 F.2d at 913.

In this case, the transaction was consummated in October 2006 (RJN, Ex. A), and plaintiffsonly commenced this action in 2013. As such, plaintiffs' TILA claims are time barred absentthe proper invocation of equitable tolling.

Wells Fargo correctly notes that the three-year limitations period for a rescission claimunder TILA is absolute and not subject to equitable tolling. See Beach v. Ocwen FederalBank, 523 U.S. 410, 412, 118 S. Ct. 1408, 140 L. Ed. 2d 566 (1998) (" 1635(f) completelyextinguishes the right of rescission at the end of the 3-year period."); Miguel v. CountryFunding Corp., 309 F.3d 1161, 1164 (9th Cir. 2002) (holding that " 1635(f) is astatute [*13] of repose, depriving the courts of subject matter jurisdiction when a 1635claim is brought outside the three-year limitation period."); King, 784 F.2d at 913 (holdingthat TILA claim for rescission of home loan was barred by the "three-year absolutelimitation on rescission actions" set out in 15 U.S.C. 1635(f)). Therefore, any claim forrescission under TILA should be dismissed and cannot be cured by further amendment.

By contrast, the one-year limitations period for damages claims under TILA is not absolute.In King, the Ninth Circuit Court of Appeals held as follows:

[W]e hold that the limitations period in Section 1640(e) runs from the date ofconsummation of the transaction but that the doctrine of equitable tollingmay, in the appropriate circumstances, suspend the limitations period until

the borrower discovers or had reasonable opportunity to discover the fraud ornondisclosures that form the basis of the TILA action. Therefore, as a generalrule the limitations period starts at the consummation of the transaction. Thedistrict courts, however, can evaluate specific claims of fraudulentconcealment and equitable tolling to determine if the general rule would beunjust or [*14] frustrate the purposes of the Act and adjust the limitationsperiod accordingly.


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King, 784 F.2d at 915.

"Equitable tolling is generally applied in situations where the claimant has actively pursuedhis judicial remedies by filing a defective pleading during the statutory period, or where thecomplainant has been induced or tricked by his adversary's misconduct into allowing the

filing deadline to pass." O'Donnell v. Vencor, Inc., 465 F.3d 1063, 1068 (9th Cir. 2006)(citation and quotation marks omitted). "Equitable tolling may be applied if, despite all duedi