Mallari v. JP Morgan Chase Bank NA et al

Filing 20

ORDER GRANTING UNOPPOSED MOTION TO DISMISS (SI, COURT STAFF) (Filed on 4/14/2011)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE NORTHERN DISTRICT OF CALIFORNIA

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HONORIO R. MALLARI,

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United States District Court
For the Northern District of California

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No. C 11-295 SI

Plaintiff,

ORDER GRANTING UNOPPOSED
MOTION TO DISMISS

v.
JP MORGAN CHASE, et al.,
Defendants.

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Defendants’ motion to dismiss the complaint is scheduled for a hearing on April 22, 2011.

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Plaintiff has not filed an opposition to the motion. Pursuant to Civil Local Rule 7-1(b), the Court

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determines that the matter is appropriate for resolution without oral argument, and VACATES the

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hearing. For the reasons set forth below, the Court GRANTS the motion. If plaintiff wishes to file an

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amended complaint, an amended complaint must be filed by April 29, 2011.

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BACKGROUND

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On January 20, 2011, pro se plaintiff Honorio R. Mallari filed this lawsuit against defendants

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JP Morgan Chase Bank, Chase Home Finance LLC, and “John Does similarly situated.” The complaint

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alleges “[o]n information and belief, the mortgage Notes upon which the Plaintiff remit[s] monthly

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payments are not the properties of the Defendants, and that the Defendants have no standing to perform

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the foreclosure action on Plaintiff’s home and real estate properties which are encumbered by the

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Notes/Mortgages.” Compl. ¶ 1.1.

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The complaint alleges one claim for violation of the Racketeer Influenced and Corrupt

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Organizations Act (“RICO”), and one claim for “RICO Conspiracy.” The complaint alleges, inter alia,

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that defendants and their conspirators “formed an association-in-fact for the purpose of defrauding

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innocent and unsuspecting Borrowers into loans structured to fail.” Id. ¶ 4.4. The complaint also

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alleges that “[b]y initiating the foreclosure action to obtain money and continuing to demand payments

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from the Plaintiffs through the U.S. mails when, in fact, Defendants Morgan and/or Chase lacked

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standing to do what it threatened and continue to pursue its foreclosure action.” Id. ¶ 3.45.

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LEGAL STANDARD
Under Federal Rule of Civil Procedure 12(b)(6), a district court must dismiss a complaint if it

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fails to state a claim upon which relief can be granted. To survive a Rule 12(b)(6) motion to dismiss,

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United States District Court
For the Northern District of California

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the plaintiff must allege “enough facts to state a claim to relief that is plausible on its face.” Bell Atl.

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Corp. v. Twombly, 550 U.S. 544, 570 (2007). This “facial plausibility” standard requires the plaintiff

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to allege facts that add up to “more than a sheer possibility that a defendant has acted unlawfully.”

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Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009). While courts do not require “heightened fact pleading

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of specifics,” a plaintiff must allege facts sufficient to “raise a right to relief above the speculative

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level.” Twombly, 550 U.S. at 555, 570.

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In deciding whether the plaintiff has stated a claim upon which relief can be granted, the court

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must assume that the plaintiff’s allegations are true and must draw all reasonable inferences in the

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plaintiff’s favor. See Usher v. City of Los Angeles, 828 F.2d 556, 561 (9th Cir. 1987). However, the

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court is not required to accept as true “allegations that are merely conclusory, unwarranted deductions

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of fact, or unreasonable inferences.” In re Gilead Scis. Sec. Litig., 536 F.3d 1049, 1055 (9th Cir. 2008).

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If the Court dismisses the complaint, it must then decide whether to grant leave to amend. The Ninth

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Circuit has “repeatedly held that ‘a district court should grant leave to amend even if no request to

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amend the pleading was made, unless it determines that the pleading could not possibly be cured by the

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allegation of other facts.’” Lopez v. Smith, 203 F.3d 1122, 1130 (9th Cir. 2000) (quoting Doe v. United

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States, 58 F.3d 494, 497 (9th Cir. 1995)).

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DISCUSSION
Defendants move to dismiss the complaint for failure to state a claim. Defendants contend that
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the complaint should be dismissed because it fails to meet Federal Rule of Civil Procedure 9(b) pleading

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requirements, and because the complaint does not adequately allege the elements of a RICO claim.
To state a claim under 18 U.S.C. § 1962(c), plaintiff must allege “(1) conduct (2) of an enterprise

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(3) through a pattern (4) of racketeering activity (known as ‘predicate acts’) (5) causing injury to

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plaintiff’s business or property.” Grimmett v. Brown, 75 F.3d 506, 510 (9th Cir. 1996) (citing 18 U.S.C.

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§§ 1964(c), 1962(c)). “Racketeering activity” is any act indictable under several provisions of Title 18

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of the United States Code. A RICO claim requires a showing that “a pattern of racketeering activity”

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occurred. 18 U.S.C. § 1961; see Rothman v. Vetter Park Management, 912 F.2d 315, 316 (9th Cir.

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1990). “In alleging fraud or mistake, a party must state with particularity the circumstances constituting

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United States District Court
For the Northern District of California

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fraud or mistake. Malice, intent, knowledge, and other conditions of a person’s mind may be alleged

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generally.” Fed. R. Civ. P. 9(b). The Ninth Circuit has interpreted this rule to require pleadings to

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specify “the time, place, and nature of the alleged fraudulent activities.” Moore v. Kayport Package

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Exp., Inc., 885 F.2d 531, 540 (9th Cir. 1989). This heightened pleading standard applies to RICO claims

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alleging fraud. See id. (dismissing the RICO claim for failure to specify the time, place, and content of

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the alleged mail and securities fraud).

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The Court concludes that the complaint should be dismissed. The complaint does not adequately

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plead the existence of an enterprise, nor does it allege a pattern of racketeering activity. With regard

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to a RICO enterprise, the complaint simply alleges that “Defendants, and the Conspirators formed an

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association-in-fact for the purpose of defrauding innocent and unsuspecting Borrowers.” Compl. ¶ 4.4.

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The complaint does not contain any specific allegations about the nature of the alleged enterprise, or

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each defendant’s role in the enterprise. Similarly, the complaint does not specifically identify the

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predicate acts that form the basis of the pattern of racketeering activity. Instead, the complaint simply

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alleges that defendants “defrauded” plaintiff and other borrowers, and that they did so by seeking to

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foreclose without standing to do so. The complaint does not contain any specific information about

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plaintiff’s loans and the foreclosure. Instead, the complaint contains general allegations about, inter

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alia, mortgage securitization, and contains lengthy quotations from court decisions in other foreclosure

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cases.

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Plaintiff did not oppose defendants’ motion, and has not filed anything with the Court indicating
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that plaintiff wishes to amend the complaint. In light of plaintiff’s pro se status, the Court will grant

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plaintiff leave to file an amended complaint. If plaintiff wishes to file an amended complaint, the

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complaint shall (1) provide information about why each defendant is being sued; (2) specifically identify

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the claims that plaintiff is asserting (for example, if plaintiff is suing under a federal or state statute, the

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complaint shall identify that statute); (3) state, as clearly as possible, the facts giving rise to the

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complaint, including the dates upon which the events occurred; and (4) state the relief that plaintiff

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seeks. If plaintiff alleges a claim based in fraud, such as RICO, plaintiff must allege those claims with

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particularity as required by Rule 9(b). The Court cautions plaintiff that it is skeptical that plaintiff can

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allege a civil RICO claim against defendants arising out of the foreclosure of plaintiff’s property.

United States District Court
For the Northern District of California

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CONCLUSION

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For the foregoing reasons, the Court GRANTS defendants’ motion to dismiss the complaint and

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GRANTS plaintiff leave to amend. (Docket No. 5). If plaintiff wishes to amend the complaint, an

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amended complaint must be filed no later than April 29, 2011.

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IT IS SO ORDERED.

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Dated: April 14, 2011
SUSAN ILLSTON
United States District Judge

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