Nguyen et al v. Saxon Mortgage Servicing, Inc. et al
Filing
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ORDER GRANTING Defendant's Motion to Dismiss 7 , signed by Chief Judge Anthony W. Ishii on 7/1/11: Saxon's motion to dismiss is GRANTED. Any amended complaint must be filed within twenty-one (21) days of the filing of this order. (Hellings, J)
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IN THE UNITED STATES DISTRICT COURT FOR THE
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EASTERN DISTRICT OF CALIFORNIA
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THUYDUONG NGUYEN, et al.,
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Plaintiffs,
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v.
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SAXON MORTGAGE SERVICING,
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INC., et al.,
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Defendants.
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____________________________________)
1:11-CV-00755 AWI SMS
ORDER GRANTING
DEFENDANT’S MOTION TO
DISMISS
[Doc. #7]
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INTRODUCTION1
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Plaintiffs Thuyduong Nguyen and Jason Palarca obtained a residential home loan from
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Defendant Decision One Mortgage Company, LLC (“Decision One”) in order to finance the real
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property located at 2968 Trigger Lane, Livingston, CA 95334.2 On January 10, 2007, a deed of
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trust was recorded against Plaintiffs’ real property in the amount of $299,814.00. The real
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property has not been sold at a foreclosure sale.
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The Introduction is provided for background only and does not form the basis of
the Court’s decision; the assertions contained therein are not necessarily taken as adjudged to be
true. The legally relevant facts relied upon by the Court are discussed within the analysis.
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It appears that Decision One has not been properly served by Plaintiffs. To date,
Decision One has not answered or appeared in this matter.
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On February 4, 2011, Plaintiffs filed a Complaint against Defendants Decision One and
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Saxon Mortgage Services, Inc. (“Saxon”) in Merced County Superior Court.3 On May 10, 2011,
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Saxon removed the case to this Court based on federal question and diversity jurisdiction.
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Subsequently, on May 17, 2011, Saxon filed (1) a motion to dismiss or in the alternative motion
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for more definite statement; and (2) a motion to strike portions of Plaintiffs’ Complaint.
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Plaintiffs failed to file an opposition to either of Saxon’s motions. For the reasons that follow,
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Saxon’s motion to dismiss is granted.
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LEGAL STANDARD
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Under Federal Rule of Civil Procedure 12(b)(6), a claim may be dismissed because of the
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plaintiff’s “failure to state a claim upon which relief can be granted.” Fed. R. Civ. P. 12(b)(6). A
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dismissal under Rule 12(b)(6) may be based on the lack of a cognizable legal theory or on the
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absence of sufficient facts alleged under a cognizable legal theory. Johnson v. Riverside
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Healthcare Sys., 534 F.3d 1116, 1121 (9th Cir. 2008); Navarro v. Block, 250 F.3d 729, 732 (9th
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Cir. 2001). In reviewing a complaint under Rule 12(b)(6), all allegations of material fact are
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taken as true and construed in the light most favorable to the non-moving party. Marceau v.
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Blackfeet Hous. Auth., 540 F.3d 916, 919 (9th Cir. 2008); Vignolo v. Miller, 120 F.3d 1075,
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1077 (9th Cir. 1999). The Court is not required “to accept as true allegations that are merely
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conclusory, unwarranted deductions of fact, or unreasonable inferences.” In re Gilead Scis. Sec.
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Litig., 536 F.3d 1049, 1056-57 (9th Cir. 2008); Sprewell v. Golden State Warriors, 266 F.3d 979,
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988 (9th Cir. 2001). As the Supreme Court has explained:
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While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need
detailed factual allegations, a plaintiff’s obligation to provide the ‘grounds’ of his
‘entitlement to relief’ requires more than labels and conclusions, and a formulaic
recitation of the elements of a cause of action will not do. Factual allegations must
be enough to raise a right to relief above the speculative level, on the assumption
that all the allegations in the complaint are true (even if doubtful in fact).
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Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007).
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Saxon was erroneously sued in the Complaint as Saxon Mortgage Servicing, Inc.
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To avoid a Rule 12(b)(6) dismissal, “a complaint must contain sufficient factual matter,
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accepted as true, to state a claim to relief that is plausible on its face[.]” Telesaurus VPC, LLC v.
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Power, 623 F.3d 998, 1003 (9th Cir. 2010) (citations omitted). “In sum, for a complaint to
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survive a motion to dismiss, the non-conclusory ‘factual content,’ and reasonable inferences from
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that content, must be plausibly suggestive of a claim entitling the plaintiff to relief.” Moss v.
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United States Secret Serv., 572 F.3d 962, 969 (9th Cir. 2009).
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If a Rule 12(b)(6) motion to dismiss is granted, “[the] district court should grant leave to
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amend even if no request to amend the pleading was made, unless it determines that the pleading
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could not possibly be cured by the allegation of other facts.” Doe v. United States, 58 F.3d 494,
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497 (9th Cir. 1995). In other words, leave to amend need not be granted when amendment would
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be futile. Gompper v. VISX, Inc., 298 F.3d 893, 898 (9th Cir. 2002).
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DISCUSSION
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Wrongful Foreclosure
In the first cause of action, Plaintiffs bring a wrongful foreclosure claim. “Wrongful
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foreclosure is an action in equity, where a plaintiff seeks to set aside a foreclosure sale that has
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already occurred.” Manzano v. Metlife Bank, N.A., No. CIV. 2:11–651 WBS DAD, 2011 WL
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2080249, at *6 (E.D. Cal. May 25, 2011). In the Complaint, Plaintiffs allege that the real
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property at issue has not been sold at a foreclosure sale. Complaint at ¶ 5. Since Plaintiffs’
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house has not yet been sold, a claim for wrongful foreclosure is not yet ripe. Accordingly,
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Saxon’s motion to dismiss Plaintiffs’ first cause of action for wrongful foreclosure is
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GRANTED.
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Within the wrongful foreclosure claim, Plaintiffs allege that all Defendants should be
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restrained from bringing a foreclosure sale against the Plaintiffs’ real property. Complaint at ¶
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13. It appears that Plaintiffs are seeking an injunction against Defendants in order to prevent a
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foreclosure sale. To the extent that Plaintiffs are seeking an injunction, Plaintiffs are granted
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leave to amend.
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Declaratory Relief
In the third cause of action, Plaintiffs request declaratory relief. Plaintiffs seek “the
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remedy of cancellation of the improper foreclosure sale and restitution of the real property to the
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Plaintiffs.” Complaint at ¶ 17.
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“The existence of an actual controversy relating to the legal rights and duties of the
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respective parties, suffices to maintain an action for declaratory relief.” McClain v. Octagon
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Plaza, LLC, 159 Cal. App. 4th 784, 800 (2008). Declaratory relief is improper in this case
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because Plaintiffs allege that no foreclosure sale has occurred. Complaint at ¶ 5. Thus, there is
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no actual controversy relating to the legal rights and duties of the respective parties.
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Accordingly, Saxon’s motion to dismiss Plaintiffs’ third cause of action for declaratory relief is
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GRANTED.
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3.
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Fraud, Intentional Misrepresentation and Negligent Misrepresentation
In the fourth, fifth and sixth causes of action, Plaintiffs bring claims for fraud, intentional
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misrepresentation and negligent misrepresentation. In California, the elements of fraud are (1)
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misrepresentation (false representation, concealment, or nondisclosure); (2) knowledge of falsity
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(or scienter); (3) intent to defraud, i.e., to induce reliance; (d) justifiable reliance; and (5)
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resulting damage. Lazar v. Superior Court, 12 Cal. 4th 631, 638 (1996). “The same elements
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comprise a cause of action for negligent misrepresentation, except there is no requirement of
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intent to induce reliance.” Cadlo v. Owens-Illinois, Inc., 125 Cal. App. 4th 513, 519 (2004).
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Under California law, the elements of a cause of action for intentional misrepresentation
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are: (1) a promise made regarding a material fact without any intention of performing it; (2) the
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existence of the intent at the time of making the promise; (3) the promise was made with intent to
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deceive or with intent to induce the party to whom it was made to enter into the transaction; (4)
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the promise was relied on by the party to whom it was made; (5) the party making the promise
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did not perform; and (6) the party to whom the promise was made was injured. Henein v. Saudi
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Arabian Parsons Ltd., 818 F.2d 1508, 1514 (9th Cir. 1987).
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The heightened pleading standard of Rule 9(b) of the Federal Rules of Civil Procedure
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applies to claims for fraud, intentional misrepresentation and negligent misrepresentation.
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See Fed. R. Civ. P. 9(b); Robinson v. Wachovia Mortg., No. CIV. 2:10-3014 WBS GGH, 2011
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WL 338502, at *3 (E.D. Cal. Jan. 31, 2011). Under Rule 9(b), “a party must state with
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particularity the circumstances constituting the fraud.” A plaintiff must include the “who, what,
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when, where, and how” of the fraud. Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1106 (9th
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Cir. 2003).
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Plaintiffs fail to allege any misrepresentation by Saxon in the Complaint. Therefore,
Plaintiffs have not stated a claim for fraud, intentional misrepresentation or negligent
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misrepresentation against Saxon. Accordingly, Saxon’s motion to dismiss Plaintiffs’ fourth, fifth
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and sixth causes of action for fraud, intentional misrepresentation and negligent
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misrepresentation is GRANTED without prejudice and with leave to amend.
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Quiet Title
In the ninth cause of action, Plaintiffs bring a quiet title claim. The purpose of a quiet
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title action is to determine “all conflicting claims to the property in controversy and to decree to
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each such interest or estate therein as he may be entitled to.” Newman v. Cornelius, 3 Cal. App.
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3d 279, 284 (1970). California law requires a plaintiff seeking to quiet title in the face of a
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foreclosure to allege tender or an offer of tender of the amount borrowed. Kozhayev v.
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America’s Wholesale Lender, No. CIV S-09-2841 FCD DAD PS, 2010 WL 3036001, at *5 (E.D.
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Cal. Aug. 2, 2010); see also Shimpones v. Stickney, 219 Cal. 637, 649 (1934). Thus, a “quiet
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title action is doomed in the absence of Plaintiffs’ tender of the full amount owed.” Gjurovich v.
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Cal., No. 1:10-cv-01871-LJO-SMS, 2010 WL 4321604, at *8 (E.D. Cal. Oct. 26, 2010).
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Plaintiffs’ Complaint does not allege tender or an offer of tender of the amount borrowed.
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Therefore, Plaintiffs cannot sustain a quiet title action. Accordingly, Saxon’s motion to dismiss
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Plaintiffs’ ninth cause of action for quiet title is GRANTED without prejudice and with leave to
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amend.
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Breach of Contract
In the tenth cause of action, Plaintiffs bring a breach of contract claim. In California, “[a]
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cause of action for breach of contract requires proof of the following elements: (1) existence of
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the contract; (2) plaintiff’s performance or excuse for nonperformance; (3) defendant’s breach;
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and (4) damages to plaintiff as a result of the breach.” Williams v. Bank of Am., No.
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2:09-CV-3060-JAM-KJM, 2010 WL 3034197, at *4 (E.D. Cal. Jul. 30, 2010) (quoting CDF
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Firefighters v. Maldonado, 158 Cal. App. 4th 1226, 1239 (2008)). Plaintiffs’ Complaint does not
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identify the existence of any contract entered into between them and Saxon. Therefore, Plaintiffs
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have not stated a claim for breach of contract against Saxon. Accordingly, Saxon’s motion to
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dismiss Plaintiffs’ tenth cause of action for breach of contract is GRANTED without prejudice
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and with leave to amend.
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Accounting
In the eleventh cause of action, Plaintiffs bring a claim for an accounting. A cause of
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action for an accounting requires a showing that a relationship exists between the plaintiff and
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defendant that requires an accounting, and that some balance is due to the plaintiff that can only
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be ascertained by an accounting. Teselle v. McLoughlin, 173 Cal. App. 4th 156, 179 (2009).
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Plaintiffs have not alleged any facts indicating the existence of a fiduciary relationship between
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them and Saxon that requires an accounting and additionally have not alleged that some balance
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is due to them that can only be ascertained by an accounting. Therefore, Plaintiffs have failed to
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state a claim for an accounting against Saxon. Accordingly, Saxon’s motion to dismiss
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Plaintiffs’ eleventh cause of action for an accounting is GRANTED without prejudice and with
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leave to amend.
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7.
Cancellation of Trustee’s Deed, Rescission and Restitution, and Constructive Trust
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In the second, seventh and eighth causes of action, Plaintiffs bring claims for cancellation
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of trustee’s deed, rescission and restitution, and constructive trust respectively. These claims are
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not independent causes of action. First, a request to cancel the trustee’s deed is “dependent upon
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a substantive basis for liability, [and it has] no separate viability.” Glue-Fold, Inc. v.
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Slautterback Corp., 82 Cal. App. 4th 1018, 1023 (2000). Second, “[r]escission is not a cause of
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action; it is a remedy.” Nakash v. Superior Court, 196 Cal. App. 3d 59, 70 (1987). Third,
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restitution is synonymous with unjust enrichment. McBride v. Boughton, 123 Cal. App. 4th 379,
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387 (2004). Unjust enrichment is “not a cause of action . . . or even a remedy, but rather a
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principle, underlying various legal doctrines and remedies.” Id. Finally, constructive trust is a
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remedy and not a cause of action. Embarcadero Mun. Improvement Dist. v. Cnty. of Santa
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Barbara, 88 Cal. App. 4th 781, 793 (2001).
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As discussed above, since Plaintiffs have failed to succeed on any independently viable
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claim, Plaintiffs’ second, seventh and eighth causes of action also fail. Accordingly, Saxon’s
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motion to dismiss Plaintiffs’ second, seventh and eighth causes of action is GRANTED.
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CONCLUSION
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IT IS HEREBY ORDERED that Saxon’s motion to dismiss Plaintiffs’ Complaint is
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GRANTED consistent with this order.4 Any amended complaint must be filed within twenty-one
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(21) days of the filing of this order.
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IT IS SO ORDERED.
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Dated:
0m8i78
July 1, 2011
CHIEF UNITED STATES DISTRICT JUDGE
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In light of the Court dismissing Plaintiffs’ Complaint, Saxon’s motion to strike is
rendered moot.
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