Bank of New York Mellon v. Peggy Gomez et al

Filing 23

ORDER by Judge Otis D. Wright, II DENYING Defendants Motions to Dismiss 9 , 16 . Defendants shall have 14 days to file an answer. (jp)

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UNITED STATES DISTRICT COURT

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CENTRAL DISTRICT OF CALIFORNIA

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BANK OF NEW YORK MELLON, AS
INDENTURE TRUSTEE FOR ENCORE
CREDIT RECEIVABLES TRUST
2005-1,

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v.

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Case No. 2:12-cv-10622-ODW(JCx)
ORDER DENYING DEFENDANTS’
MOTIONS TO DISMISS [9], [16]

Plaintiff,

PEGGY GOMEZ; DAVID ALAN
BOUCHER; NORTH AMERICAN
TITLE; EXPEDIA LENDING GROUP;
ALL PARTIES WITH ANY RIGHT,
TITLE, OR INTEREST IN THE REAL
PROPERTY AT 16225 DOUBLEGROVE
STREET, LA PUENTE, CALIFORNIA;
and DOES 1 through 25,

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Defendants.

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I.

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INTRODUCTION

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Defendants Boucher and Expedia Lending Group filed almost identical motions

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to dismiss Plaintiff Bank of New York Mellon’s Complaint. (ECF Nos. 9, 16.) The

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Court finds that Defendants have not shown that Plaintiff failed to properly state a

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claim in its Complaint. The Court therefore DENIES the motions to dismiss.1

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Error! Main Document Only.Having carefully considered the papers filed in support of and in
opposition to the instant motions, the Court deems the matter appropriate for decision without oral
argument. Fed. R. Civ. P. 78; L.R. 7-15.

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II.

FACTUAL BACKGROUND

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On December 29, 2004, Joseph Cisneros and Defendant Peggy Gomez took out

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a $350,200 loan on the property located at 16225 Doublegrove Street, La Puente,

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California 91744. (Compl. ¶¶ 8, 11.) The loan was secured by a Deed of Trust, which

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was recorded in the Los Angeles County Recorder’s Office. (Id. ¶ 11.)

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Gomez and Cisneros fell behind on their payments. (Id. ¶ 12.) On August 8,

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2011, a Notice of Default was recorded against the property. (Id.) On May 30, 2012,

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the property was sold at a non-judicial foreclosure sale.

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successfully bid on the property and received a Trustee’s Deed Upon Sale. (Id.)

(Id. ¶ 14.)

Plaintiff

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Boucher claimed to be Plaintiff’s authorized agent and on August 22, 2012,

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executed an allegedly fraudulent Grant Deed, transferring all interest in the property

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from Plaintiff to Gomez. (Id. ¶ 19.) Along with the Grant Deed, Boucher executed a

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Notice for the Partial Cancellation of Debt by Set-Off, which states that Plaintiff

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transferred the property to Gomez in partial satisfaction of a $4.9 million debt owed to

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Gomez and Cisneros by Plaintiff. (Id. Ex. F.) Plaintiff vehemently denies having

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transferred any interest in the property back to Gomez. (Id. ¶ 21.)

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On August 24, 2012, Gomez executed a Short Form Deed of Trust and

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Assignment of Rents in favor of Expedia, with Defendant North American Title as

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trustee. (Id. ¶ 27; Ex. G.)

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On December 11, 2012, Plaintiff instituted this action, alleging causes of action

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for: (1) cancellation of the various instruments; (2) quiet title; (3) slander of title; and

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(4) declaratory relief. Boucher and Expedia now move to dismiss the Complaint.

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III.

LEGAL STANDARD

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Dismissal under Rule 12(b)(6) can be based on “the lack of a cognizable legal

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theory” or “the absence of sufficient facts alleged under a cognizable legal theory.”

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Balistreri v. Pacifica Police Dep’t, 901 F.2d 696, 699 (9th Cir. 1990). A complaint

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need only satisfy the minimal notice pleading requirements of Rule 8(a)(2)—a short

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and plain statement—to survive a motion to dismiss for failure to state a claim under

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Rule 12(b)(6). Porter v. Jones, 319 F.3d 483, 494 (9th Cir. 2003); Fed. R. Civ. P.

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8(a)(2).

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For a complaint to sufficiently state a claim, its “[f]actual allegations must be

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enough to raise a right to relief above the speculative level.” Bell Atl. Corp. v.

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Twombly, 550 U.S. 544, 555 (2007). While specific facts are not necessary so long as

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the complaint gives the defendant fair notice of the claim and the grounds upon which

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the claim rests, a complaint must nevertheless “contain sufficient factual matter,

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accepted as true, to state a claim to relief that is plausible on its face.” Ashcroft v.

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Iqbal, 556 U.S. 662, 678 (2009).

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Iqbal’s plausibility standard “asks for more than a sheer possibility that a

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defendant has acted unlawfully,” but does not go so far as to impose a “probability

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requirement.” Id. Rule 8 demands more than a complaint that is merely consistent

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with a defendant’s liability—labels and conclusions, or formulaic recitals of the

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elements of a cause of action do not suffice. Id. Instead, the complaint must allege

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sufficient underlying facts to provide fair notice and enable the defendant to defend

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itself effectively.

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determination whether a complaint satisfies the plausibility standard is a “context-

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specific task that requires the reviewing court to draw on its judicial experience and

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common sense.” Iqbal, 556 U.S. at 679.

Starr v. Baca, 652 F.3d 1202, 1216 (9th Cir. 2011).

The

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When considering a Rule 12(b)(6) motion, a court is generally limited to the

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pleadings and must construe “[a]ll factual allegations set forth in the complaint . . . as

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true and . . . in the light most favorable to [the plaintiff].” Lee v. City of L.A., 250 F.3d

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668, 688 (9th Cir. 2001). Conclusory allegations, unwarranted deductions of fact, and

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unreasonable inferences need not be blindly accepted as true by the court. Sprewell v.

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Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 2001). Yet, a complaint should be

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dismissed only if “it appears beyond doubt that the plaintiff can prove no set of facts”

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supporting plaintiff’s claim for relief. Morley v. Walker, 175 F.3d 756, 759 (9th Cir.

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1999).

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IV.

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DISCUSSION

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Defendants’ motions to dismiss are nearly identical—they are incoherent and

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do not state a grounds for dismissal. First, Defendants contend Plaintiff’s verification

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of the Complaint is improper, and therefore the Complaint should be dismissed. Next,

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Defendants appear to argue that without production of documents from Plaintiff, the

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Complaint is somehow insufficient and should be dismissed. The Court addresses

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these arguments in turn.

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A.

Verification of the Complaint

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Defendants argue that Diane Weinberger, the person who verified the

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Complaint on behalf of Plaintiff, “is not a competent fact based witness, nor is she the

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trespassed party in this instant action.” (ECF No. 4, at 3.) Defendants claim that

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Weinberger’s verification is therefore invalid, rendering the Complaint invalid.

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The general rule in federal court is that a party need not verify a complaint

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unless a federal rule or statute provides otherwise. Fed. R. Civ. P. 11(a). Plaintiff’s

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analysis starts with the premise that this case is a quiet title action and therefore, is a

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proceeding in rem. 40235 Wash. St. Corp. v. Lusardi, 976 F.2d 587, 589 (9th Cir.

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1992). Plaintiff then asserts that a complaint in an in rem action must be verified, and

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the Court must “look to the law of the state in which the district court is located to

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determine what constitutes proper verification” because the Federal Rules are silent on

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the correct form for a verification. Fed. R. Civ. P. Supplemental R. C(2)(a); United

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States v. $84,740.00 U.S. Currency, 900 F.2d 1402, 1404 (9th Cir. 1990), abrogated

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on other grounds by Republic Nat’l Bank of Miami v. United States, 506 U.S. 80, 89

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(1992).

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This analysis is incorrect. In United States v. $84,740.00 U.S. Currency, the

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Ninth Circuit cited to Federal Rules of Civil Procedure Supplemental Rule C(2) and

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noted that a “complaint in an in rem action must be verified.” 900 F.2d at 1404.

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Based on this holding, Plaintiff suggests that the Complaint needs to be verified

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because it is an in rem action. But this reading is too broad—that holding concerned a

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U.S. Government civil-forfeiture action against illicitly-derived currency. 900 F.2d at

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1403. The requirement of verifying a complaint does not apply in every in rem action

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brought in federal court. It is limited to actions described in the Supplemental Rules,

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and the Supplemental Rules only apply to admiralty and maritime claims or asset

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forfeiture actions. Fed. R. Civ. P. Supplemental R. A(1).
Notwithstanding Plaintiff’s incorrect analysis, it was under no obligation to

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verify the Complaint.

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ground.

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B.

Thus, the Court DENIES the motions to dismiss on this

Request for documents
Defendants also request a litany of documents in their motions—mostly

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originals of the documents referenced in the Complaint.

Defendants appear to

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contend that this is a basis for dismissal because the Complaint is somehow defective

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unless Plaintiff produces these documents.

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The Court DENIES Defendants’ document requests and the motions to dismiss

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on this ground. This contention is not a proper basis for a dismissal. A motion to

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dismiss attacks the sufficiency of a plaintiff’s pleadings.

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documents at this stage of litigation means nothing.

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commence until the parties have conducted their Rule 26(f) conference. Fed. R. Civ.

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P. (d)(1).

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C.

Failure to produce

Indeed, no discovery shall

Artificial entities cannot proceed pro se

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Plaintiff also argues that Nicholas Griego cannot represent Expedia Lending

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Group for the purposes of the motion because Griego is not a licensed attorney. A

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corporation may appear in the federal courts only through licensed counsel. Rowland

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v. Cal. Men’s Colony, 506 U.S. 194, 201–02 (1993).

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But it is unclear exactly what type of entity Expedia Lending Group is. If it is

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the case that Expedia Lending Group is an alias under which Griego does business,

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then Griego may represent himself pro se. Nevertheless, because the motions to

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dismiss are DENIED on other grounds, the Court needs not rule on this point.

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V.

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CONCLUSION

For the reasons discussed above, Defendants’ motions to dismiss are DENIED.
Defendants shall have 14 days to file an answer.

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Further, the Court advises Defendants that a Federal Pro Se Clinic is located in

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the United States Courthouse at 312 N. Spring Street, Room 525, Fifth Floor, Los

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Angeles, California 90012.

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Wednesdays, and Fridays from 9:30 a.m. to 12:00 p.m. and from 2:00 p.m. to

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4:00 p.m. The Federal Pro Se Clinic offers on-site information and guidance to

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individuals who are representing themselves in federal civil actions. Defendants are

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The clinic is open for appointments on Mondays,

strongly encouraged to visit the clinic prior to filing their answer.

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IT IS SO ORDERED.

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March 11, 2013

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____________________________________
OTIS D. WRIGHT, II
UNITED STATES DISTRICT JUDGE

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