Thompson v. Residential Credit Solutions et al

Filing 22

MEMORANDUM AND ORDER signed by Judge William B. Shubb on 1/25/12 GRANTING 17 Motion to Dismiss; IT IS FURTHER ORDERED that within 10 days of this Order, Gregory Harper shall either (1) pay sanctions of $100.00 to the Clerk of the Court, or (2) submit a statement of good cause explaining his failure to comply with Local Rule 230(c). Plaintiff has 20 days from the date of this Order to file an amended complaint, if she can do so consistent with this Order. (Meuleman, A)

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UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF CALIFORNIA

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LORNA DELORES THOMPSON,

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NO. CIV. 2:11-2261 WBS DAD

Plaintiff,
MEMORANDUM AND ORDER RE:
MOTION TO DISMISS SECOND
AMENDED COMPLAINT

v.

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RESIDENTIAL CREDIT SOLUTIONS,
INC., a Delaware Corporation;
AMERICAN BROKERS CONDUIT, A
DIVISION OF AMERICAN HOME
MORTGAGE INVESTMENT
CORPORATION, a Maryland
Corporation; MERSCORP, INC.
dba MORTGAGE ELECTRONIC
REGISTRATION SYSTEM, INC. AS
NOMINEE FOR AMERICAN BROKERS
CONDUIT, AMERICAN HOME
MORTGAGE SERVICING, INC., and
all person unknown, claiming
any legal or equitable right,
title, estate, lien, or
interest in the property,
described in the complaint
adverse to Plaintiff’s title,
and any cloud on Plaintiff’s
title thereto, and DOES 1-100,
inclusive,

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Defendants.

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/
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----oo0oo----

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Plaintiff Lorna Delores Thompson brings this action

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against defendants Residential Credit Solutions, Inc. (“RCS”),

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American Brokers Conduit (“ABC”), a division of American Home

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Mortgage Investment Corporation (“AHMIC”), Merscorp, Inc.

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(“Merscorp”), dba Mortgage Electronic Registration System, Inc.

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(“MERS”) as nominee for American Brokers Conduit, and American

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Home Mortgage Servicing, Inc. (“AHMSI”), arising from defendants’

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allegedly wrongful conduct related to a residential loan.

RCS

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and Merscorp now move to dismiss the Second Amended Complaint

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(“SAC”) for failure to state a claim upon which relief can be

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granted pursuant to Federal Rule of Civil Procedure 12(b)(6).

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(Docket No. 17.)

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I.

Factual and Procedural Background

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In July of 2007, plaintiff purchased her residence at

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2220 Cobblestone Avenue in Fairfield, California (“the

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property”), with a loan she obtained from American Brokers

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Conduit.

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filed against the property after plaintiff had accrued a total

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default of at least $17,654.25.

(Req. for Judicial Notice

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(“RJN”), Ex. 3 (Docket No. 18).)

Beginning in June 2010,

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plaintiff was placed on a modified monthly trial program by

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AHMIC.

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of Notice of Default was recorded.

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plaintiff’s delinquency increased to $62,437.88, a second and

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operative Notice of Default was recorded on April 4, 2011.

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Ex. 5.)

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that:

(SAC ¶ 1.)

(SAC ¶ 18.)

On June 8, 2009, a Notice of Default was

On October 18, 2010, a Notice of Rescission
(RJN Ex. 4.)

After

(Id.

The Notice of Default included a declaration stating

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The undersigned mortgagee, beneficiary or authorized
agent for the mortgagee or beneficiary pursuant to
California Civil Code § 2923.5(b) declares that the
mortgagee,
beneficiary
or
the
mortgagee’s
or
beneficiary’s authorized agent has either contacted the
borrower or tried with due diligence to contact the
borrower as required by California Civil Code 2923.5.

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(Id.)

On July 5, 2011, the National Default Servicing Corp.

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(“NDSC”) was substituted as trustee under the Deed of Trust.

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(Id. Ex. 7.)

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Sale setting the foreclosure sale for July 26, 2011.

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8.)

The same day, NDSC recorded a Notice of Trustee’s
(Id. Ex.

The foreclosure sale took place on November 15, 2011, and a

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Trustee’s Deed Upon Sale was recorded on November 28, 2011.

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Ex. 9.)

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(Id.

On July 18, 2011, plaintiff filed her First Amended

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Complaint (“FAC”) in the Superior Court of California, County of

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Solano.

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court based on diversity of citizenship.

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the court granted RCS and Merscorp’s motion to dismiss the FAC.

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(Docket No. 12.)

Plaintiff filed her SAC on November 28, 2011.

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(Docket No. 13.)

The SAC alleges claims against defendants for:

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(1) wrongful foreclosure under California Civil Code section

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2923.5; (2) breach of contract; (3) breach of the implied

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covenant of good faith and fair dealing; (4) anticipatory breach

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of contract; (5) unfair business practices; (6) wrongful

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foreclosure under California Civil Code section 2932.6; (7)

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negligent infliction of emotional distress; (8) quiet title; and

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(9) violations of the Racketeer Influenced and Corrupt

On August 25, 2011, defendants removed the case to this

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On November 22, 1011,

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Organizations (“RICO”) Act.1

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II.

Judicial Notice

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A court may take judicial notice of facts “not subject

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to reasonable dispute” because they are either “(1) generally

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known within the territorial jurisdiction of the trial court or

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(2) capable of accurate and ready determination by resort to

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sources whose accuracy cannot reasonably be questioned.”

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Evid. 201.

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public record or of documents whose contents are alleged in the

Fed. R.

The court may take judicial notice of matters of

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complaint and whose authenticity is not questioned.

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of L.A., 250 F.3d 668, 688-89 (9th Cir. 2001).

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Lee v. City

Residential Credit Solutions and Merscorp have filed a

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request for judicial notice in support of their motion to dismiss

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which contains nine exhibits: (1) a copy of the Grant Deed,

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recorded in Solano County on July 10, 2007; (2) a copy of the

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Deed of Trust, recorded in Solano County on July 10, 2007; (3) a

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copy of the Notice of Default and Election to Sell Under Deed of

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Trust, recorded in Solano County on June 8, 2009; (4) a copy of

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the Notice of Rescission, recorded in Solano County on October

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18, 2010; (5) a copy of the Notice of Default and Election to

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Sell Under Deed of Trust, recorded in Solano County on April 4,

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2011; (6) a copy of the Corporation Assignment of Deed of Trust,

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recorded in Solano County on May 3, 2011; (7) a copy of the

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Substitution of Trustee, recorded in Solano County on July 5,

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2011; (8) a copy of the Notice of Trustee’s Sale, recorded in

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Solano County on July 5, 2011; and (9) a copy of the Trustee’s

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Plaintiff raises claims four through nine for the first
time in her SAC.
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Deed Upon Sale, recorded in Solano County on November 28, 2011.

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The court will take judicial notice of defendants’

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exhibits as they are matters of public record whose accuracy

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cannot be questioned.

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See Lee, 250 F.3d at 689.

Plaintiff asks the court to take judicial notice of the

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judicial opinion in Javaheri v. J.P. Morgan Chase Bank, N.A.,

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CV10-08185, 2011 WL 97684 (C.D. Cal. Jan. 11, 2011).

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does not need to judicially notice the opinion to consider it.

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III. Discussion

The court

On a motion to dismiss, the court must accept the

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allegations in the complaint as true and draw all reasonable

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inferences in favor of the plaintiff.

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U.S. 232, 236 (1974), overruled on other grounds by Davis v.

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Scherer, 468 U.S. 183 (1984); Cruz v. Beto, 405 U.S. 319, 322

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(1972).

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contain sufficient factual matter, accepted as true, to ‘state a

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claim to relief that is plausible on its face.’”

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Iqbal, 556 U.S. 662, ---, 129 S. Ct. 1937, 1949 (2009) (quoting

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Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)).

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“plausibility standard,” however, “asks for more than a sheer

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possibility that a defendant has acted unlawfully,” and “[w]here

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a complaint pleads facts that are ‘merely consistent with’ a

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defendant’s liability, it ‘stops short of the line between

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possibility and plausibility of entitlement to relief.’” Id.

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(quoting Twombly, 550 U.S. at 556-57).

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A.

Scheuer v. Rhodes, 416

“To survive a motion to dismiss, a complaint must

Ashcroft v.

This

Wrongful Foreclosure Under California Civil Code

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Section 2923.5

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Plaintiff contends that defendants failed to comply
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with the communication requirements set forth in California Civil

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Code section 2923.5.

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beneficiary or authorized agent” to “contact the borrower in

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person or by telephone in order to assess the borrower’s

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financial situation and explore options for the borrower to avoid

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foreclosure.”

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include a declaration “from the mortgagee, beneficiary, or

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authorized agent” of compliance with section 2923.5, including

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attempt “with due diligence to contact the borrower as required

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Section 2923.5(a)(2) requires a “mortgagee,

Section 2923.5(b) requires a default notice to

by this section.”

Cal. Civ. Code § 2923.5.

“[T]he remedy for noncompliance [with section 2923.5]

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is a simple postponement of the foreclosure sale, nothing more.”

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Mabry v. Superior Court, 185 Cal. App. 4th 208, 214 (4th Dist.

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2010).

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alleged section 2923.5 violation fails to satisfy a claim for

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wrongful foreclosure.

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11-0938 LJO GSA, 2011 WL 3568913, at *9 (E.D. Cal. Aug. 12,

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2011).

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B.

Since the foreclosure sale has already occurred, the

See Geren v. Deutsche Bank Nat’l, No. CV F

Accordingly, the court will dismiss this claim.
Breach of Contract and Anticipatory Breach of Contract
To state a claim for breach of contract under

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California law, plaintiffs must allege (1) the existence of a

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contract; (2) plaintiffs’ performance or excuse for

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nonperformance of the contract; (3) defendants’ breach of the

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contract; and (4) resulting damages.

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v. Tri-Valley Oil & Gas Co., 116 Cal. App. 4th 1375, 1390 (2004).

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Plaintiff alleges that defendants were in breach of contract when

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Armstrong Petroleum Corp.

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they violated the notice requirements in section 2923.52 and the

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terms of the Modification Agreement.
Plaintiff continues to base her breach of contract

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claim on defendants’ alleged violation of section 2923.5.

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again, plaintiff fails to plead how she was damaged by

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defendants’ alleged breach other than being forced to incur

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“costs and attorney fees.”

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requires the lender to discuss options to prevent foreclosure, it

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does not require that any loan modification take place.

(SAC ¶ 66.)

Once

While section 2923.5

See Vega

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v. JPMorgan Chase Bank, N.A., 654 F. Supp. 2d 1104, 1113 (E.D.

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Cal. 2009).

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her options to prevent foreclosure.

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therefore received all the benefits that she was entitled to

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under section 2923.5 and suffered no damages as a result of

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defendants’ alleged violation of the notice requirements.3

Plaintiff stated that she and defendants discussed
(SAC ¶¶ 18-31.)

Plaintiff

In her SAC, plaintiff includes allegations for the

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first time that defendants’ breached the Modification Agreement.

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“The general rule is that if an ‘essential element’ of a promise

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is reserved for the future agreement of both parties, the promise

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gives rise to no legal obligation until such future agreement is

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made.”

City of L.A. v. Super. Ct. of L.A. Cnty., 51 Cal. 2d 423,

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The SAC also refers in passing to California Civil Code
section 2924. (SAC ¶ 62.) Section 2924 requires that a trustee
must notify an owner or borrower before a foreclosure sale may
proceeding. Plaintiff has not pled in her SAC that a trustee
failed to notify her before the foreclosure sale, thus plaintiff
has failed to state a claim for violation of section 2924.
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Given the obvious deficiencies in plaintiff’s claim, it
is unnecessary to reach the question of whether plaintiff
adequately pled that a violation of section 2923.5 had occurred
as a predicate to her breach of contract claim.
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433 (1959) (quoting Ablett v. Clauson, 43 Cal. 2d 280, 284

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(1954)).

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dismissed claims based on “agreements to agree.”

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Grant v. Aurora Loan Servs., Inc., 736 F. Supp. 2d 1257, 1266

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(C.D. Cal. 2010).

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“agreements to negotiate” are enforceable.

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v. Baskin Robbins U.S.A., 96 Cal. App. 4th 1251, 1255-60 (2d

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Dist. 2002).

Based on this principle, a number of courts have
See, e.g.,

However, some courts have held that
See, e.g., Copeland

Plaintiff’s allegations that defendants breached their

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obligations under the Modification Agreement are deficient for

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two primary reasons.

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unenforceable “agreement to agree” to a loan modification.

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City of L.A., 51 Cal.2d at 433.

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construes plaintiff’s SAC as alleging an “agreement to negotiate”

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a loan modification and holds that such agreements are

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enforceable, plaintiff has only alleged in conclusory fashion

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that the parties entered into such an agreement.

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not provided nonconclusory factual content from which the court

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can plausibly infer that the parties entered into an agreement to

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negotiate.

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detailed a series of interactions with defendants involving

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plaintiff’s loan modification application, (see SAC ¶ 63), “such

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facts are only consistent with defendants’ liability and do not

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give rise to plausible entitlement to relief.”

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at 1949.

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contract and anticipatory breach of contract claims.

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C.

First, plaintiff may be alleging an
See

Second, even if the court

See Twombly, 550 U.S. at 570.

Plaintiff has

While plaintiff has

Iqbal, 129 S. Ct.

The court will therefore dismiss plaintiff’s breach of

Implied Covenant of Good Faith and Fair Dealing
“Every contract imposes upon each party a duty of good
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faith and fair dealing in its performance and its enforcement.”

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Marsu, B.V. v. Walt Disney Co., 185 F.3d 932, 937 (9th Cir. 1999)

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(quoting Carma Developers, Inc. v. Marathon Dev. Cal., Inc., 2

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Cal. 4th 342, 371 (1992)).

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imposed by the implied covenant of good faith and fair dealing is

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‘that neither party will do anything which will injure the right

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of the other to receive the benefits of the agreement.’”

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v. Mobile Aire Estates, 125 Cal. App. 4th 578, 589 (2005)

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(quoting Gruenberg v. Aetna Ins. Co., 9 Cal. 3d 566, 573 (1973)).

“A typical formulation of the burden

Andrews

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“The prerequisite for any action for breach of the implied

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covenant of good faith and fair dealing is the existence of a

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contractual relationship between the parties . . . .”

Smith v.

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City & Cnty. of S.F., 225 Cal. App. 3d 38, 49 (1990).

Plaintiff

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alleges that defendants violated the implied covenant of good

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faith and fair dealing by failing to offer plaintiff a feasible

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loan modification, failing to provide plaintiff with a response

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to the Qualified Written Request (“QWR”), refusing to disclose

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documents in violation of the Truth in Lending Act (“TILA”), and

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refusing to provide accounting pursuant to the Fair Debt

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Collection Practices Act.

(SAC ¶72.)

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Generally, “[a]bsent ‘special circumstances’ a loan

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transaction ‘is at arms-length’” and no duties arise from the

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loan transaction outside of those in the agreement.

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DHI Mortgage Co., Ltd., No. CV F 09-1035 LJO GSA, 2009 WL

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2190210, at *5 (E.D. Cal. July 21, 2009) (quoting Oaks Mgmt.

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Corp. v. Superior Court, 145 Cal. App. 4th 453, 466 (2006)).

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Absent contrary authority or the pleading of special

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circumstances, plaintiff cannot establish that RCS or Merscorp
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Rangel v.

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owed plaintiff a duty of care.

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Bank, 263 F.R.D. 586, 593 (E.D. Cal. 2009).

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to allege any facts constituting special circumstances that would

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suggest that the transaction was not at arms length.

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plaintiff has added to her claim is a conclusory sentence stating

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that defendants owed her a duty that they breached.

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Pleading a legal conclusion does not satisfy plaintiff’s

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obligation to plead special circumstances.

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to plead that RCS and Merscorp owed a duty to not cause plaintiff

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harm in their capacities as loan servicer and nominal beneficiary

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of the loan.

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failed to allege nonconclusory factual content from which the

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court could infer the existence of a modification agreement that

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could provide the basis for additional duties owed by each party.

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Accordingly, the court will dismiss this claim.

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D.

See Hardy v. Indymac Federal
Plaintiff has failed

All that

(SAC ¶ 76.)

Plaintiff thus fails

Additionally, as discussed above, plaintiff has

Unfair Business Practices
California’s UCL prohibits “any unlawful, unfair or

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fraudulent business act or practice . . . .”

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Code § 17200.

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some other illegal conduct or fraud committed by a defendant.

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Khoury v. Maly’s of Cal., Inc., 14 Cal. App. 4th 612, 619 (2d

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Dist. 1993).

Cal. Bus. & Prof.

This cause of action is generally derivative of

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“Under its ‘unlawful’ prong, ‘the UCL borrows

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violations of other laws . . . and makes those unlawful practices

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actionable under the UCL.’”

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152 Cal. App. 4th 1544, 1554 (4th Dist. 2007) (quoting Lazar v.

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Hertz Corp., 69 Cal. App. 4th 1494, 1505 (1st Dist. 1999)).

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“Thus, a violation of another law is a predicate for stating a

Berryman v. Merit Prop. Mgmt., Inc.,

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cause of action under the UCL’s unlawful prong.”

Id.

A

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“fraudulent” business act or practice is one in which members of

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the public are likely to be deceived.

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Cal. App. 4th 608, 618 (3d Dist. 1996).

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“unfair” when it “violates established public policy or if it is

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immoral, unethical, oppressive or unscrupulous and causes injury

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to consumers which outweighs its benefits.”

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Mut., Inc., 142 Cal. App. 4th 1457, 1473 (2d Dist. 2006).

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Plaintiff’s UCL claim is based on defendants’ violation of

Olsen v. Breeze, Inc., 48
A business practice is

McKell v. Wash.

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California Civil Code section 2923.5.

As discussed above, the

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court does not reach the question of whether defendants violated

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section 2923.5 because there is no longer a remedy available to

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plaintiff.

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Even if plaintiff has sufficiently alleged a violation

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of the UCL, standing to bring a UCL claim requires “a person who

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has suffered injury in fact and has lost money or property as a

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result of the unfair competition.”

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§ 17204 (emphasis added).

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sufficiently allege that (1) he has “lost ‘money or property’

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sufficient to constitute an ‘injury in fact’ under Article III of

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the Constitution,” Rubio v. Capital One Bank, 613 F.3d 1195,

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1203-04 (9th Cir. 2010), and (2) there is a “causal connection”

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between the defendant’s alleged UCL violation and the plaintiff's

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injury in fact.

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App. 4th 847, 855 (4th Dist. 2008)).

Cal. Bus. & Prof. Code

To have standing, a plaintiff must

Id. at 1204 (quoting Hall v. Time Inc., 158 Cal.

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Here, with respect to injury and causation, plaintiff’s

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UCL claims allege: “As a result of breach by Defendants, and each

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of them, Plaintiff has suffered damages including costs and
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1

attorney fees in an amount to be proven at trial.”

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Plaintiff fails to cite any authority establishing that

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attorney’s fees and costs incurred in bringing a UCL claim are

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sufficient to confer standing.

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private plaintiff bringing a UCL claim automatically would have

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standing merely by filing suit.”

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F. Supp. 2d 1029, 1039 (N.D. Cal. 2011).

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9

(SAC ¶ 102.)

“Under Plaintiff’s reasoning, a

Cordon v. Wachovia Mortg., 776

If the court were to interpret plaintiff’s alleged
injury as being the loss of her property, plaintiff would still

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be faced with the possible loss of the property if defendants had

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fully complied with California Civil Code section 2923.5.

12

DeLeon v. Wells Fargo Bank, N.A., No. 10-CV-01390, 2011 WL

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311376, at *7 (N.D. Cal. Jan. 28, 2011) (“Without some factual

14

basis suggesting that Plaintiffs could have cured the default in

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the fall of 2009, the Court cannot reasonably infer that Wells

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Fargo’s alleged misrepresentations [that it would complete a loan

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modification agreement and that no foreclosure sale would occur

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while the loan modification was pending] resulted in the loss of

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Plaintiffs’ home.

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Plaintiffs lost their home because they became unable to keep up

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with monthly payments and lacked the financial resources to cure

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the default.

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frustrations with Wells Fargo’s seemingly contradictory

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statements and actions, it does not appear that this conduct

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resulted in a loss of money or property.”); Justo v. Indymac

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Bancorp, No. SACV 09-1116, 2010 WL 623715, at *4 (C.D. Cal. Feb.

27

19, 2010) (“[P]laintiffs make no attempt to show a causal

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connection between the alleged misrepresentation -- the promise

See

Rather, the facts alleged suggest that

Although the Court understands Plaintiffs’

12

1

to modify loans -- and the alleged injury -- the sale of their

2

homes.”).

3

2010 WL 2354199, at *5 (N.D. Cal. June 9, 2010) (allowing a

4

violation of section 2923.5 to serve as a basis for plaintiff’s

5

UCL claim, but not directly addressing causation).

6

because plaintiff lacks standing under the UCL, the court will

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grant defendants’ motion to dismiss the UCL claims.

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D.

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Accordingly,

California Civil Code section 2932.54
California Civil Code section 2932.5 provides that:

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10

But see Zivanic v. Wash. Mut. Bank, F.A., No. 10-737,

Where a power to sell real property is given to a
mortgagee, or other encumbrancer, in an instrument
intended to secure the payment of money, the power is
part of the security and vests in any person who by
assignment becomes entitled to payment of the money
secured by the instrument.
The power of sale may be
exercised by the assignee if the assignment is duly
acknowledged and recorded.

14
15

Cal. Civ. Code § 2932.5.

Plaintiff alleges that RCS lacked

16

standing to pursue foreclosure because the assignment of the deed

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of trust from MERS to RCS was not recorded pursuant to section

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2932.5.

(SAC ¶¶ 108-09.)
Section 2932.5 “applies only to mortgages that give a

19
20

power of sale to the creditor, not to deeds of trust which grant

21

a power of sale to the trustee.”

22

No. C-09-0040, 2010 WL 546896, at *3 (N.D. Cal. Feb. 10, 2010).

23

The distinction between trusts and mortgages has been clearly

24

established under California law since 1908, when the court in

Roque v. Suntrust Mortg., Inc.,

25
4

26
27
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Plaintiff cites a violation of California Civil Code
section 2932.6 in her Complaint. This section governs the right
of financial institutions to repair property acquired through
foreclosure. See Cal. Civ. Code § 2932.6. It appears that
plaintiff intended to reference section 2932.5, which governs the
power of sale for an assignee, id. § 2932.5.
13

1

Stockwell v. Barnum, 7 Cal. App. 413 (2d Dist. 1908), held that

2

the precursor to section 2932.5 did not apply to deeds of trust

3

because “a mortgage creates only a lien, with title to the real

4

property remaining in the borrower/mortgagee, whereas a deed of

5

trust passes title to the trustee with the power to transfer

6

marketable title to the purchaser.”

7

N.A., 199 Cal. App. 4th 118, 122 (2d Dist. 2011) (citing

8

Stockwell, 7 Cal. App. at 416).

9

have largely replaced mortgages, “[t]hus, section 2932.5 . . .

Calvo v. HSBC Bank USA,

In California, deeds of trust

10

became practically obsolute and [is] generally ignored by

11

borrowers, creditors, and the California courts.”

12

Id. at 125.

Here, plaintiff’s loan is secured by a Deed of Trust

13

conveying power of sale to the trustee, (RJN Ex. 2), not a

14

mortgage whereby the power of sale rests with the creditor.

15

Accordingly, section 2932.5 is inapplicable and the court will

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grant defendants’ motion to dismiss this claim.

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F.

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Negligent Infliction of Emotional Distress
Negligent infliction of emotional distress (“NIED”) is

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a form of negligence to which the standard elements of duty,

20

breach, causation, and damages apply.

21

Fresno, 539 F. Supp. 2d 1192, 1209 (E.D. Cal. 2008) (citing

22

Huggins v. Longs Drug Stores Cal., Inc., 6 Cal. 4th 124, 129

23

(1993)).

24

“serious” emotional distress.

25

Annuity Co., No. 07-3637, 2007 WL 2790359, at *3 (N.D. Cal. Sept.

26

20, 2007) (citing Burgess v. Superior Court, 43 Cal. App. 4th

27

1064, 1073 (5th Dist. 1992)).

28

Hillblom v. County of

To assert an NIED claim, a plaintiff must suffer
Tuttle v. Chase Ins. Life &

Under California law, NIED claims may be categorized as

14

1

“bystander” or “direct victim” claims based on the source of the

2

duty owed by the defendant.

3

based on a duty owed to the public in general, while “[d]irect

4

victim” claims “arise[] from the breach of a duty that is assumed

5

by the defendant or imposed on the defendant as a matter of law,

6

or that arises out of the defendant’s preexisting relationship

7

with the plaintiff.”

8

omitted); see Fluharty v. Fluharty, 59 Cal. App. 4th 484, 493 (3d

9

Dist. 1997) (“As a direct victim, a party may recover strictly

“Bystander” claims are typically

Huggins, 6 Cal. 4th at 129 (citations

10

emotional distress damages, i.e., absent physical injury or

11

impact, where a duty arising from a preexisting relationship is

12

negligently breached.” (citing Burgess, 43 Cal. App. 4th at

13

1074)).

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As discussed above, plaintiff fails to plead that defendants

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negligently breached a duty arising from their preexisting

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relationship.

17

motion to dismiss plaintiff’s claim for negligent infliction of

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emotional distress.

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G.

Plaintiff appears to be bringing a direct victim claim.

Accordingly, the court will grant defendants’

Quiet Title
The purpose of a quiet title action is to establish

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one’s title against adverse claims to real property.

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Code of Civil Procedure section 761.020 states that a claim to

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quiet title requires: (1) a verified complaint, (2) a description

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of the property, (3) the title for which a determination is

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sought, (4) the adverse claims to the title against which a

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determination is sought, (5) the date as of which the

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determination is sought, and (6) a prayer for the determination

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of the title.

Cal. Civ. Proc. Code § 761.020.

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California

1

The tender rule applies to a quiet title action.

2

Kozhayev v. America’s Wholesale Lender, No. CIV S-09-2841, 2010

3

WL 3036001, at *5 (E.D. Cal. Aug. 2, 2010); see also Shimpones v.

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Stickney, 219 Cal. 637, 649 (1934).

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doomed in the absence of Plaintiffs’ tender of the full amount

6

owed.”

7

4321604, at *8 (E.D. Cal. Oct. 26, 2010).

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plaintiff has not alleged tender or the ability to tender in her

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SAC.5

10
11

A “quiet title action is

Gjurovich v. California, No. 1:10-cv-01871, 2010 WL
As with her FAC,

Accordingly, the court will grant defendants’ motion to

dismiss the quiet title claim.
H.

RICO Violations

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Plaintiff’s ninth cause of action asserts that

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defendants have violated RICO by committing violations of federal

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law involving mortgage and mail fraud.

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Liability under the civil RICO statutes requires the conduct of

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an enterprise through a pattern of racketeering activity.

17

v. Yokohama Tire Corp., 358 F.3d 616, 620 (9th Cir. 2004).

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Racketeering activity includes any act which is indictable under

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certain provisions of Title 18 of the United States Code.

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U.S.C. § 1961(1)(b).

(SAC ¶¶ 130-39.)

Miller

See 18

21

To properly plead a RICO violation for civil damages, a

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plaintiff must show that the defendants, through two or more acts

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constituting a pattern, participated in an activity affecting

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interstate commerce.

Sanford v. MemberWorks, Inc., 625 F.3d 550,

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557 (9th Cir. 2010).

The heightened pleading requirements of

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27
28

5
Plaintiff argues that it is premature to consider
whether she has the ability to tender because tender is not
required to plead a rescission claim under TILA. While plaintiff
has mentioned TILA in passing, she has not pled any claims
arising under TILA, nor has she pled a claim for rescission.

16

1

Rule 9(b) apply to civil RICO fraud claims.

Mostowfi v. i2

2

Telecom Int’l, Inc., 269 F. App’x 621, 623 (9th Cir. 2008)

3

(citing Edwards v. Marin Park, Inc., 356 F.3d 1058, 1066 (9th

4

Cir. 2004)).

5

although lacking fraud as an element -- are ‘grounded’ or ‘sound’

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in fraud.”

7

1103–04 (9th Cir. 2003)).

8

alleges a unified course of fraudulent conduct.

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Rule 9(b) requires that when “alleging fraud or mistake, a party

In addition, Rule 9(b) “may apply to claims -- that

Id. (quoting Vess v. Ciba–Geigy Corp., 317 F.3d 1097,
A claim is “grounded in fraud” when it
Id. at 624.

10

must state with particularity the circumstances constituting

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fraud or mistake.”

12

held that “to avoid dismissal for inadequacy under Rule 9(b),

13

[the] complaint would need to ‘state the time, place, and

14

specific content of the false representations as well as the

15

identities of the parties to the misrepresentation.’”

16

356 F.3d at 1066 (quoting Alan Neuman Prods., Inc. v. Albright,

17

862 F.2d 1388, 1393 (9th Cir. 1989)).

18

Fed. R. Civ. P. 9(b).

The Ninth Circuit has

Edwards,

Plaintiff’s claim is grounded in fraud, as plaintiff

19

alleges that defendants engaged in a pattern of racketeering

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activity with the objective of perpetrating fraud.

21

In her SAC, plaintiff makes only vague statements referring to

22

laws allegedly broken by defendants without actually explaining

23

how those laws were broken or pleading the “time, place, and

24

specific content of the false representations as well as the

25

identities of the parties to the misrepresentation[s].”

26

356 F.3d at 1066.

27

constituting fraud with particularity and has therefore failed to

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meet the heightened pleading requirements of Rule 9(b).

(SAC ¶ 133.)

Edwards,

Plaintiff fails to state the circumstances

17

1

Accordingly, the court will dismiss this claim.

2

III. Sanctions

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Plaintiff filed her papers in opposition to the

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defendants’ motion to dismiss on January 20, 2012.

According to

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Local Rule 230(c), opposition to the granting of a motion must be

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filed and served not less than fourteen days preceding the

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noticed hearing date.

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January 30, 2012, plaintiff filed her papers three days late.6

As the hearing for this matter was set for

Local Rule 110 authorizes the court to impose sanctions

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10

for “[f]ailure of counsel or of a party to comply with these

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Rules.”

12

Gregory Harper, $100.00 payable to the Clerk of the Court within

13

ten days from the date of this Order, unless he shows good cause

14

for his failure to comply with the Local Rules.
IT IS THEREFORE ORDERED that defendants’ motion to

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16

Therefore, the court will sanction plaintiffs’ counsel,

dismiss be, and the same hereby is, GRANTED.
IT IS FURTHER ORDERED that within ten days of this

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18

Order Gregory Harper shall either (1) pay sanctions of $100.00 to

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the Clerk of the Court, or (2) submit a statement of good cause

20

explaining his failure to comply with Local Rule 230(c).
Plaintiff has twenty days from the date of this Order

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22

to file an amended complaint, if she can do so consistent with

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25
26
27
28

6

This is not the first time that counsel for the
plaintiff in this action has filed his opposition late. During
the briefing schedule for the previous motion to dismiss, counsel
failed to timely file opposition papers. After the clerk emailed
counsel to inquire as to whether he intended to oppose the
motion, he emailed the court a copy of the opposition the day
after the filing deadline. The clerk informed counsel that he
would still need to file opposition papers with the court, but
counsel never did so. In that instance, the clerk docketed the
opposition to ensure a complete judicial record.
18

1

this Order.

2

DATED:

January 25, 2012

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