Victoria Urenia et al v. Public Storage et al

Filing 59

ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS BANK OF AMERICA, N.A., PUBLIC STORAGE, AND MICHAEL ANZS MOTION TO DISMISS PLAINTIFFS COMPLAINT. Plaintiffs may amend their complaint consistent with the deficiencies identified in this Order. Any amended complaint must be filed on or before June 6, 2014 by Judge Dean D. Pregerson . (lc) Modified on 5/22/2014. (lc).

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1 2 O 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA 10 11 12 VICTORIA URENIA, an individual; SOLEDAD CORONA, an individual, 13 Plaintiffs, 14 15 16 17 18 v. PUBLIC STORAGE, a real estate investment trust; CITY OF LOS ANGELES, a governmental entity; BANK OF AMERICA, N.A.; MICHAEL ANZ, Defendants. ___________________________ ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) Case No. CV 13-01934 DDP (AJWx) ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS BANK OF AMERICA, N.A., PUBLIC STORAGE, AND MICHAEL ANZ’S MOTION TO DISMISS PLAINTIFFS’ COMPLAINT [DKT. NO. 25] 19 20 Presently before the Court is Defendants Bank of America, 21 N.A., Public Storage, and Michael Anz’s motion to dismiss 22 Plaintiffs’ complaint (the “Motion”). (Docket No. 25.) For the 23 reasons stated in this Order, the Motion is GRANTED IN PART and 24 DENIED IN PART. 25 /// 26 /// 27 /// 28 /// 1 2 I. Background1 Plaintiffs Victoria Urenia and Soledad Corona (“Plaintiffs”) 3 bring this class action complaint against Bank of America, N.A., 4 Public Storage, Michael Anz, and the City of Los Angeles 5 (collectively, “Defendants”). Bank of America, Public Storage, and 6 Anz (collectively, “Private Defendants”) have filed this Motion, 7 while City of Los Angeles has filed an answer and has not sought 8 dismissal of this action. (Docket No. 28.) Plaintiffs failed to 9 timely file an opposition to the Motion, but later filed an ex 10 parte application to allow them to file a late opposition. (Docket 11 No. 41.) The Court granted the ex parte application (Docket No. 12 45), and now the Motion has been fully briefed by the parties. 13 Plaintiff Corona was the owner of the real property located at 14 2200 Daly Street, Los Angeles, California 90031 (the “Property”). 15 (Complaint, Docket No. 1, ¶ 3.) Plaintiff Urenia is the daughter of 16 Ms. Corona. (Id. ¶ 2.) In 2009, Plaintiffs allege that Bank of 17 America foreclosed on the Property while Ms. Corona was in the 18 middle of a loan modification, in violation of HUD regulations. 19 (Id. ¶¶ 24-25, 27.) A Notice of Trustee’s Sale was recorded on 20 October 29, 2009, and Bank of America obtained title to the 21 Property on December 14, 2009. (Id. ¶¶ 26, 28.) Bank of America 22 obtained a judgment for possession through an unlawful detainer 23 action against Ms. Corona in 2010. (Id. ¶ 30.) However, Plaintiffs 24 1 25 26 27 28 Defendants include a variety of factual statements in their Motion. To the extent that those facts are supported by judicially noticeable documents, the Court shall take those facts into account in ruling on the Motion. Otherwise, such facts shall not be considered in determining the sufficiency of Plaintiffs’ pleadings. Plaintiffs also include alleged facts in their opposition to the Motion that were not included in the Complaint. Such facts shall not be considered in ruling on the Motion. 2 1 allege that Bank of America did not obtain actual possession of the 2 Property at that time. (Id. ¶ 31.)2 3 In April 2012, Ms. Corona joined Occupy Fights Foreclosures 4 (“OFF”), an offshoot of the larger Occupy movement. (Id. ¶ 32.) On 5 December 6, 2012, Plaintiffs received a Notice to Vacate, which 6 required them to vacate the Property no later than December 11, 7 2012. (Id. ¶ 35.) On December 13, 2012, the Los Angeles County 8 Sheriffs locked Plaintiffs out of the Property. (Id. ¶ 37.) 9 Plaintiffs allege that the Sheriffs Department allowed them to 10 return to the Property on December 23, 2012. (Id. ¶ 38.) During the 11 time period when Plaintiffs were locked out of the Property, OFF 12 members had set up tents in the front yard in protest. (Id. ¶ 39.) 13 Bank of America called the Los Angeles Police Department 14 (“LAPD”) on January 18, 2013 and demanded that the locks be changed 15 and all persons evicted from the Property. (Id. ¶ 41.) LAPD 16 allegedly went to the Property, forced Ms. Urenia out of the 17 Property, changed the locks, and erected a chicken-wire fence 18 around the Property. (Id. ¶¶ 94-95.) LAPD allegedly refused to 19 allow Plaintiffs to obtain their personal belongings from the 20 Property and threatened arrest if Plaintiffs returned. (Id. ¶¶ 42, 21 97.) Plaintiffs allege that on January 22, 2013, they returned to 22 the Property to find Michael Anz, a Bank of America representative, 23 loading their personal property onto a moving truck.3 (Id. ¶¶ 100- 24 2 25 26 27 Though Plaintiffs do not allege facts indicating as much, it appears that Plaintiffs filed an action in state court for breach of contract relating to alleged failures to properly conduct the loan modification process. That action was dismissed for failure to state a claim, and the dismissal was affirmed on appeal. 3 28 The alleged timeline of the events following LAPD locking (continued...) 3 1 02.) Plaintiffs allege that they were allowed only one hour to pack 2 as many of their belongings as they could because OFF was holding a 3 candlelight vigil at the Property that evening. (Id. ¶¶ 103-04.) 4 On February 28, 2013, Michael Anz allegedly took Plaintiffs’ 5 personal belongings from the Property. (Id. ¶ 43.) Ms. Corona asked 6 whether she could have her personal belongings, but various 7 Defendants refused. (Id. ¶¶ 44-46.) Plaintiffs later learned that 8 their belongings had been taken to a Public Storage facility 9 located at 4009 Mission Road, Los Angeles, California. (Id. ¶ 47.) 10 Public Storage allegedly refused to turn over their belongings, 11 saying that they belonged to Michael Anz. (Id. ¶¶ 48-49.) 12 Plaintiffs allege that Public Storage insisted that Ms. Corona sign 13 a release and rental lease agreement before they could return her 14 belongings. (Id. ¶ 54.) Ms. Corona refused to sign the document 15 because it contained untrue statements, including a statement that 16 none of the stored property contained important documents, personal 17 identification, perishables, or sentimental items. (Id. ¶¶ 55-56.) 18 Plaintiffs allege that Michael Anz contacted Plaintiffs’ 19 attorney and said that Plaintiffs could obtain their belongings 20 from him. (Id. ¶ 61.) As a result, Ms. Corona returned to Public 21 Storage on March 16, 2013 along with seven people to help her move 22 her belongings. (Id. ¶ 62.) However, Plaintiffs’ attorney was 23 allegedly presented with the same lease agreement document 24 containing untrue statements. (Id. ¶ 63.) Plaintiffs’ attorney 25 3 26 27 28 (...continued) Plaintiffs out of the Property is not entirely clear, especially with regard to how many times and on what dates Ms. Corona alleges that she spoke with Michael Anz and/or Public Storage to attempt to get her belongings returned to her. The exact dates on which these events happened do not appear to be significant. 4 1 wrote disclaimers on the document. (Id. ¶ 64.) As a result, Public 2 Storage refused to return Plaintiffs’ belongings, stating that it 3 was Public Storage policy not to release belongings from foreclosed 4 homes unless the lease agreement document was signed in unaltered 5 form. (Id. ¶ 65.) 6 Plaintiffs bring a variety of claims arising out of these 7 events. Plaintiffs allege violations of the First Amendment, Fourth 8 Amendment, RICO, the Sherman Act, and Cal. Bus. & Prof. Code § 9 17200. Further, Plaintiffs seek to set aside the foreclosure sale. 10 Plaintiffs purportedly bring all of their claims on behalf of a 11 class of similarly situated individuals who have been subjected to 12 the same alleged acts that Plaintiffs experienced.4 13 II. Legal Standard 14 A complaint will survive a motion to dismiss when it contains 15 “sufficient factual matter, accepted as true, to state a claim to 16 relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 17 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 18 570 (2007)). When considering a Rule 12(b)(6) motion, a court must 19 “accept as true all allegations of material fact and must construe 20 those facts in the light most favorable to the plaintiff.” Resnick 21 v. Hayes, 213 F.3d 443, 447 (9th Cir. 2000). Although a complaint 22 need not include “detailed factual allegations,” it must offer 23 “more than an unadorned, the-defendant-unlawfully-harmed-me 24 accusation.” Iqbal, 556 U.S. at 678. Conclusory allegations or 25 allegations that are no more than a statement of a legal conclusion 26 4 27 28 Though the issue is not before the Court at this time, the Court expresses skepticism as to whether the causes of action and facts asserted by Plaintiffs may properly be adjudicated as a class action. 5 1 “are not entitled to the assumption of truth.” Id. at 679. In other 2 words, a pleading that merely offers “labels and conclusions,” a 3 “formulaic recitation of the elements,” or “naked assertions” will 4 not be sufficient to state a claim upon which relief can be 5 granted. Id. at 678 (citations and internal quotation marks 6 omitted). 7 “When there are well-pleaded factual allegations, a court 8 should assume their veracity and then determine whether they 9 plausibly give rise to an entitlement of relief.” Id. at 679. 10 Plaintiffs must allege “plausible grounds to infer” that their 11 claims rise “above the speculative level.” Twombly, 550 U.S. at 12 555. “Determining whether a complaint states a plausible claim for 13 relief” is a “context-specific task that requires the reviewing 14 court to draw on its judicial experience and common sense.” Iqbal, 15 556 U.S. at 679. 16 III. Discussion 17 A. Section 1983 Claims5 18 Plaintiffs’ § 1983 claims appear to be based on purported 19 violations of Plaintiffs’ First Amendment and Fourth Amendment 20 rights. (Complaint ¶¶ 88-142.) Private Defendants argue that 21 Plaintiffs’ Section 1983 claims should be dismissed as to them 22 because they are not state actors and did not act under color of 23 law. “To state a claim under § 1983, a plaintiff must allege two 24 essential elements: (1) that a right secured by the Constitution or 25 26 27 28 5 The existence of underlying constitutional violations by LAPD officers was not challenged in the Motion, although Private Defendants dispute that there were any such violations in their Reply. The Court does not decide here whether or not any viable § 1983 claims exist against the City of Los Angeles. 6 1 laws of the United States was violated, and (2) that the alleged 2 violation was committed by a person acting under the color of State 3 law.” Long v. County of Los Angeles, 442 F.3d 1178, 1185 (9th Cir. 4 2006). 5 Generally, private actors do not act under color of state law. 6 Price v. State of Hawaii, 939 F.2d 702, 707-08 (9th Cir. 1991). 7 Further, “it is generally not a constitutional violation for a 8 police officer to enforce a private entity’s rights.” Villegas v. 9 Gilroy Garlic Festival Ass’n, 541 F.3d 950, 957 (9th Cir. 2008). 10 Nor does a private party’s invocation of remedies provided by state 11 law constitute state action. See Harper v. Federal Land Bank of 12 Spokane, 878 F.2d 1172, 1178 (9th Cir. 1989) (“[T]he fact that a 13 state permits the use of foreclosure procedures and subsequent 14 sheriff sales as the execution of a judgment is not sufficient to 15 constitute state action.”). 16 However, there are situations where a private individual or 17 entity can be held liable under § 1983. Plaintiffs contend in their 18 opposition to the Motion that the Private Defendants acted in 19 concert with the LAPD such that the Private Defendants can be 20 deemed to have acted under color of state law. See Kirtley v. 21 Rainey, 326 F.3d 1088, 1093-95 (9th Cir. 2003); Tsao v. Desert 22 Palace, Inc., 698 F.3d 1128, 1140 (9th Cir. 2012). Joint action 23 exists where the state has “so far insinuated itself into a 24 position of interdependence with [the private entity] that it must 25 be recognized as a joint participant in the challenged activity.” 26 Gorenc v. Salt River Project Agric. Improvement & Power Dist., 869 27 F.2d 503, 507 (9th Cir. 1989) (quoting Burton v. Wilmington Parking 28 Auth., 365 U.S. 715, 725 (1961)). 7 1 As to Plaintiffs’ First Amendment claim, the Court finds that 2 Plaintiffs have not pled sufficient facts to support a claim that 3 their rights of “free speech, freedom of association and to 4 petition for redress of grievances” (Complaint ¶ 90) were violated 5 by Private Defendants. The only allegation that clearly pertains to 6 their First Amendment claim is a single, isolated statement that 7 defendants would “arriv[e] on the scene at [Ms. Corona’s] home each 8 time she tried to associate with Occupy Fights Foreclosures and 9 then demand[] identification of all individuals present 10 intimidating any assertion of rights.” (Id. ¶ 125.) However, this 11 pleading does not establish any connection between the purported 12 acts of the LAPD officers, presumably the party that arrived at the 13 Property demanding identification, and any acts by Private 14 Defendants.6 There is no allegation that the LAPD officers went to 15 the Property to demand identification of present OFF members at the 16 direction of or in coordination with Private Defendants. Therefore, 17 Plaintiffs have not stated a claim against the Private Defendants 18 for violation of the First Amendment, and the Court GRANTS the 19 Motion with leave to amend as to Plaintiffs’ First Amendment claim 20 against Private Defendants. 21 With regard to Plaintiffs’ Fourth Amendment claim, Plaintiffs 22 have pled sufficient facts to give rise to a plausible claim 23 against Bank of America. Plaintiffs allege that “Bank of America 24 called the Los Angeles Police Department on a Friday late morning 25 26 27 28 6 Plaintiffs’ Complaint is unclear in this regard. Further, the Complaint is unclear as to which acts by which defendants purportedly violated Plaintiffs’ First Amendment rights. Should Plaintiffs choose to amend, any amended complaint should clarify the predicate acts upon which Plaintiffs seek to base this claim. 8 1 to early afternoon and demanded that the locks be changed and all 2 persons immediately evicted from the [Property] on or about January 3 18, 2013.” (Complaint ¶ 41.) Further, Plaintiffs allege that “LAPD 4 officer Gonzalez ... allowed Bank of America’s agent, a locksmith, 5 to change the locks on the [Property] and erect a 15 to 20 feet 6 chicken-wire fence around the [Property].” (Id. ¶ 95.) Further, 7 Plaintiffs allege that on January 22, 2013, Bank of America’s 8 representative Michael Anz, as well as LAPD officers, were present 9 when Plaintiffs were forced from the Property, with some of their 10 11 belongings already loaded into a moving truck. (Id. ¶¶ 100-04.) These facts give rise to a plausible claim that LAPD and Bank 12 of America, through Michael Anz, were engaged in “joint action” 13 such that Anz and Bank of America could have been acting “under 14 color of law” when they seized Plaintiffs’ personal property from 15 the home and forced Ms. Urenia from the Property. Where police 16 officers do more than merely “stand by” in case of trouble, but 17 instead affirmatively participate in assisting private actors in 18 effectuating an eviction or repossession of property, the private 19 actors may be said to be acting under color of law. Howerton v. 20 Gabica, 708 F.2d 380, 383-84 (9th Cir. 1983) (“This case involves 21 more than a single incident of police consent to ‘stand by’ in case 22 of trouble. Police were on the scene at each step of the 23 eviction... The actions of [the officer] created an appearance that 24 the police sanctioned the eviction.” ); see also Harris v. City of 25 Roseburg, 664 F.2d 1121, 1127 (9th Cir. 1981) (“[T]here may be a 26 deprivation within the meaning of § 1983 ... when the officer 27 assists in effectuating a repossession over the objection of the 28 debtor.”). Here, Plaintiffs’ alleged facts indicate that the LAPD 9 1 officers did more than merely “stand by” when Bank of America 2 locked Plaintiffs out of the Property, evicted Plaintiffs from the 3 Property, and took possession of Plaintiffs’ personal belongings. 4 However, the alleged facts do not demonstrate that Public Storage 5 performed any acts jointly with LAPD officers, such that any acts 6 performed by Public Storage were not performed “under color of 7 law.” Therefore, the Court DENIES the Motion as to Plaintiffs’ 8 Fourth Amendment claim against Bank of America and Michael Anz and 9 GRANTS the Motion with leave to amend as to Plaintiffs’ claim 10 against Public Storage.7 11 B. RICO Claims 12 The elements of a civil RICO claim are “(1) conduct (2) of an 13 enterprise (3) through a pattern (4) of racketeering activity.” 14 Rezner v. Bayerische Hypo-Und Vereinsbank AG, 630 F.3d 866, 873 15 (9th Cir. 2010). Private Defendants argue that Plaintiffs’ RICO 16 claim should be dismissed because (a) Plaintiffs fail to allege 17 facts showing the existence of an enterprise and (b) Plaintiffs 18 fail to allege facts showing the existence of a pattern of 19 racketeering activity. (Docket No. 25-1, pp. 11-14.) Further, 20 Private Defendants argue that Plaintiffs’ RICO conspiracy claim 21 fails because the underlying RICO claim fails. (Id. at 14-15.) 22 Finally, Private Defendants argue that there is no cognizable claim 23 for aiding and abetting a civil RICO claim. (Id. at 15.) 24 7 25 26 27 28 The Court expresses some doubt as to whether the facts in this case will establish that any underlying Fourth Amendment violation occurred in the eviction and repossession process. However, as Private Defendants offered no substantial or convincing argument as to why Plaintiffs’ facts do not establish a violation of their right to be free from unreasonable searches and seizures, either in their Motion or upon reply, the Court declines to dismiss the claim on that basis. 10 1 An “enterprise” is a “group of persons associated together for 2 a common purpose of engaging in a course of conduct.” United States 3 v. Turkett, 452 U.S. 576, 583 (1981). To plead the existence of an 4 enterprise, a plaintiff must allege “an ongoing organization, 5 formal or informal, and by evidence that the various associates 6 function as a continuing unit.” Id.; see also Odom v. Microsoft 7 Corp., 486 F.3d 541, 552 (9th Cir. 2007). 8 9 The Court finds that Plaintiffs have failed to plead the existence of an ongoing enterprise between Defendants. Plaintiffs 10 conclusorily plead that Defendants engage in an ongoing enterprise 11 by which Defendants routinely conduct post-foreclosure activities 12 exactly the way they happened to Plaintiffs in this case: 13 Defendants change the locks on foreclosed properties, lock up 14 personal property inside the foreclosed residence, refuse to 15 coordinate a way to return the personal property to its owner, haul 16 the property to Public Storage, and force the owner to sign a 17 release and lease agreement in order for him or her to obtain the 18 personal property. (Complaint ¶ 162.) However, Plaintiffs allege no 19 facts that would suggest the existence of an ongoing enterprise; 20 instead, Plaintiffs’ only factual allegations relate to these 21 actions being performed once, to their personal property. See 22 Gamboa v. Trustee Corps, 2009 WL 656285, at *5-6 (N.D. Cal. 2009) 23 (finding that plaintiffs failed to plead a RICO claim where the 24 complaint is “focused on one foreclosure sale” and does “not 25 describe any other attempted foreclosure or loan collection 26 activities” but makes only “the conclusory allegation” of a pattern 27 or practice); Martinez v. Quality Loan Service Corp., 2009 WL 28 586725, at *8 (C.D. Cal. 2009) (same). Therefore, Plaintiffs have 11 1 not alleged sufficient facts to support the existence of an ongoing 2 enterprise.8 Therefore, their RICO claim fails.9 3 Plaintiffs also bring a RICO conspiracy claim. (Complaint ¶¶ 4 193-98.) As their underlying RICO claim is insufficiently pled, the 5 conspiracy claim fails as well. See Howard v. America Online, Inc., 6 208 F.3d 741, 751 (9th Cir. 2000) (“Plaintiffs cannot claim that a 7 conspiracy to violate RICO existed if they do not adequately plead 8 a substantive violation of RICO.”). 9 Finally, Plaintiffs attempt to assert a cause of action for 10 “aiding and abetting” RICO violations. (Complaint ¶¶ 199-206.) The 11 Third Circuit has found that no private right of action exists for 12 aiding and abetting a RICO violation. Rolo v. City Investing Co. 13 Liquidating Trust, 155 F.3d 644, 657 (3d Cir. 1998) (adopting the 14 reasoning of Central Bank of Denver, N.A. v. First Interstate Bank 15 of Denver, N.A., 511 U.S. 164 (1994), which held that there was no 16 private right of action for aiding and abetting a violation of 17 Section 10(b) of the Securities and Exchange Act). At least one 18 19 20 21 22 23 24 25 26 27 28 8 Plaintiffs also argue that they have pled facts regarding a statistical increase in short-term tenancies at Public Storage facilities and that this increase implies that Defendants’ actions toward Plaintiffs have been repeated many times. (Opp. to Mtn., Docket No. 46, p. 7; see Complaint ¶¶ 70-75.) However, a mere increase in short-term rentals at Public Storage, without more, is insufficient to support Plaintiffs’ allegation of an ongoing enterprise between the Private Defendants and the City of Los Angeles. There are many possible explanations for such a statistical trend. Without facts suggesting any sort of link between the trend and repeated acts similar to those alleged in this action, these statistics are insufficient to support a plausible RICO claim. 9 The Court does not reach the additional issues of whether Plaintiffs have properly alleged a “pattern” of racketeering activity, nor whether Plaintiffs have pled sufficient facts to support the predicate acts of mail fraud and wire fraud for their RICO claims. 12 1 district court in the Ninth Circuit has adopted the Third Circuit 2 approach. In re Countrywide Financial Corp. Mortgage Marketing and 3 Sales Practice Litigation, 601 F.Supp.2d 1201, 1219 (S.D. Cal. 4 2009). The Court agrees with this approach and concludes that there 5 is no private right of action for aiding and abetting a RICO 6 violation. Further, in the absence of a sufficiently pled predicate 7 RICO violation, Plaintiffs’ derivative claim for aiding and 8 abetting would fail even if they could, in theory, bring such a 9 claim. See Westways World Travel, Inc. v. AMR Corp., 265 F. App’x. 10 472, 474 (9th Cir. 2008) (“Because the [plaintiffs] cannot maintain 11 a substantive RICO claim, their derivative RICO claim[] for aiding 12 and abetting ... also fail[s].”). Therefore, the Court GRANTS the 13 Motion as to all of Plaintiffs’ RICO claims with leave to amend. 14 Any amendment must correct the deficiencies identified in this 15 Order. 16 C. Sherman Act Claims 17 A claim under Section 2 of the Sherman Act requires “(1) the 18 defendant possessed monopoly power in the relevant market; (2) the 19 defendant willfully acquired or maintained that power through 20 exclusionary conduct; and (3) the defendant’s conduct caused 21 antitrust injury.” InfoStream Group, Inc. v. PayPal, Inc., 2012 WL 22 3731517, at *4 (N.D. Cal. 2012). Private Defendants argue that 23 Plaintiffs have not stated a claim under Section 2 of the Sherman 24 Act because (a) they have not suffered an antitrust injury and (b) 25 they have not alleged facts showing Public Storage’s market 26 power.10 (Docket No. 25-1, pp. 15-17.) 27 10 28 Plaintiffs’ antitrust claims appear to be asserted only (continued...) 13 1 Though not made explicit, it appears that Plaintiff’s Sherman 2 Act claims are based on an alleged agreement between Public Storage 3 and Bank of America that all personal property recovered from homes 4 upon which Bank of America has foreclosed will be taken to a Public 5 Storage facility. Plaintiffs have not alleged, however, that as a 6 result of that purported agreement, they have suffered a cognizable 7 antitrust injury. An antitrust injury “means harm to the process of 8 competition and consumer welfare.” LiveUniverse, Inc. v. MySpace, 9 Inc., 304 F. App’x. 554, 557 (9th Cir. 2008). Even taking 10 Plaintiffs’ allegations as true and accepting that there was some 11 sort of agreement between Public Storage and Bank of America, 12 Plaintiffs still plead no facts indicating that they were charged 13 higher prices or otherwise harmed by any purported lack of 14 competition between Public Storage and other self-storage entities. 15 Plaintiffs do not allege any facts suggesting that the alleged 16 harms to Plaintiffs flow from the fact that Public Storage controls 17 a large market share of the self-storage industry. Plaintiffs could 18 have suffered the same alleged harmed in the same manner had their 19 personal belongings been removed from the Property and taken to any 20 storage facility. Therefore, Plaintiffs have not sufficiently pled 21 the existence of an antitrust injury. As a result, their Sherman 22 Act claims fail, and the Court GRANTS the Motion as to these 23 claims.11 24 10 25 26 27 28 (...continued) against Public Storage. 11 The Court does not reach the question of whether Plaintiffs have alleged sufficient facts demonstrating that Public Storage has monopoly power, though the Court expresses doubt that the facts, as currently alleged, are sufficient to support such a finding. (continued...) 14 1 D. UCL Claims 2 Plaintiffs allege their UCL claim only against Bank of 3 America.12 Plaintiffs premise their claim on Bank of America’s 4 alleged practice of “evict[ing] homeowners and search[ing] and 5 seiz[ing] their personal property, when there is no valid search 6 warrant and no arrest ... made.” (Complaint ¶ 223.) Further, 7 Plaintiffs allege that Bank of America threatens “to arrest and 8 take property without due process as a bargaining tool in order to 9 coerce those to stop associating with the OFF movement to chill 10 11 free speech.” (Id. ¶ 225.) To the extent that Plaintiffs’ underlying claims survive, or 12 are amended to state a claim, the Court finds that the UCL claim 13 survives under the “unlawful” prong of Cal. Bus. & Prof. Code § 14 17200. To the extent that the underlying claims are insufficient, 15 Plaintiffs have failed to state a claim. To the extent that 16 Plaintiffs seek to base their § 17200 claim on predicate acts that 17 are not unlawful, but nevertheless are “unfair” or violate public 18 policy, Plaintiffs must amend their complaint to state with 19 sufficient specificity which acts allegedly fall into these 20 categories. 21 E. Claim to Set Aside Foreclosure 22 23 24 25 26 27 28 11 (...continued) Moreover, there are no facts in the complaint demonstrating Public Storage’s willful acquisition and maintenance of monopoly power. 12 Some of the allegations appear to indicate that Plaintiffs wish to assert this cause of action against other defendants. However, Plaintiffs specify in their section heading that they wish to assert this claim against only Bank of America. (See Complaint, pg. 36.) 15 1 Plaintiffs base this claim for relief on their allegation that 2 the Deed of Trust on the Property contained a provision requiring 3 Bank of America to follow HUD guidelines, including counseling, to 4 attempt to avoid foreclosure and that Bank of America failed to 5 follow those requirements. (See Complaint ¶¶ 238-42.) Private 6 Defendants advance four arguments as to why Plaintiffs’ claim to 7 set aside the foreclosure sale should be dismissed: (1) the alleged 8 failure to follow HUD guidelines cannot provide a basis for setting 9 aside a foreclosure; (2) res judicata bars Plaintiffs’ claim; (3) 10 Plaintiffs have failed to allege tender; and (4) Plaintiffs’ claim 11 is barred by the statute of limitations. 12 The Court notes at the outset that it appears that Ms. Urenia 13 lacks standing to pursue this claim, as she is not named on the 14 Deed of Trust. (See RJN, Docket No. 25-2, Exh. A.) Therefore, the 15 Court’s analysis will focus solely on whether Ms. Corona has stated 16 a claim to set aside the foreclosure. 17 As to Private Defendants’ first argument, the sole case cited 18 in support of their contention that the failure to follow HUD 19 guidelines is insufficient grounds to set aside a foreclosure does 20 not support that conclusion. See Pfeifer v. Countrywide Home Loans, 21 Inc., 211 Cal.App.4th 1250, 1269-79 (2012). The court in that case 22 found that the mortgagors could assert a cause of action to prevent 23 the foreclosure sale based on violations of HUD regulations, as 24 incorporated into the deed of trust. Id. at 1279. The quotation 25 offered by Private Defendants does not capture the holding of the 26 case. Therefore, the Court does not dismiss Plaintiffs’ claim on 27 this basis. 28 16 1 As to Private Defendants’ statute of limitations argument, the 2 sole case cited in support of their contention that the claim is 3 time-barred expressly limits the three-year statute of limitations 4 to claims to set aside a foreclosure “based on fraud, a fraudulent 5 conspiracy or breach of statutory duty.” Susilo v. Wells Fargo 6 Bank, N.A., 796 F.Supp.2d 1177, 1195 (C.D. Cal. 2011). In this 7 case, Plaintiffs have a plausible claim to set aside the 8 foreclosure arising from their contractual rights in the Deed of 9 Trust, which requires the lender to follow HUD guidelines prior to 10 instituting foreclosure proceedings, rather than a claim based on 11 fraud or on breach of a statutory duty. The statute of limitations 12 for contract claims is four years under California law. Cal. Code 13 Civ. Proc. § 337(1). Therefore, the Court does not dismiss 14 Plaintiffs’ claim on this basis. 15 With regard to Private Defendants’ other two arguments, the 16 Court finds that Plaintiffs’ pleading is insufficient for the Court 17 to determine at this juncture whether the tender requirement should 18 be excused because the foreclosure sale was void or whether the 19 issues adjudicated in the state court proceeding should bar 20 Plaintiffs’ pursuit of their current claims under the doctrine of 21 res judicata, as both determinations depend upon the exact nature 22 of Plaintiffs’ claims. Plaintiffs have failed to plead sufficient 23 facts to identify which purported acts or failures to act 24 constituted violations of HUD regulations, as incorporated into the 25 Deed of Trust. Plaintiffs merely allege that the HUD regulations 26 were incorporated into the Deed of Trust (Complaint ¶ 25) and that 27 the foreclosure occurred “[w]ithout following HUD regulations” (Id. 28 ¶ 26). Plaintiffs reiterate that “Bank of America never followed 17 1 the HUD guidelines outlined in the Deed of Trust ..., such as 2 providing a counseling session to avoid foreclosure.” (Id. ¶ 239.) 3 These allegations fail to identify with particularity the course of 4 events that Plaintiffs allege were wrongful, nor the specific HUD 5 provisions that made them wrongful. Therefore, the Court GRANTS the 6 Motion to dismiss this claim without prejudice. Any amended 7 complaint must plead facts in support of this claim and the HUD 8 provisions allegedly violated with specificity. 9 IV. Conclusion 10 For the foregoing reasons, the Court GRANTS the Motion IN PART 11 and DENIES the Motion IN PART. Plaintiffs may amend their complaint 12 consistent with the deficiencies identified in this Order. Any 13 amended complaint must be filed on or before June 6, 2014. 14 15 IT IS SO ORDERED. 16 17 18 Dated: May 22, 2014 DEAN D. PREGERSON United States District Judge 19 20 21 22 23 24 25 26 27 28 18

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