Select Portfolio Servicing, Inc. v. Valentino et al

Filing 37

ORDER DISMISSING COMPLAINT WITH LEAVE TO AMEND 35 5 18 19 23 (Illston, Susan) (Filed on 4/20/2012)

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IN THE UNITED STATES DISTRICT COURT
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FOR THE NORTHERN DISTRICT OF CALIFORNIA
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United States District Court
For the Northern District of California

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ORDER DISMISSING COMPLAINT
WITH LEAVE TO AMEND

Plaintiffs,

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No. C 12-0334 SI

SELECT PORTFOLIO SERVICING,

v.
ABRAHAM VALENTINO; JOHN CHU;
CORPORATE COUNSEL LAW GROUP LLP;
NESZHAO CONSULTING COMPANY, LLC;
KEVIN NESBITT
Defendants.

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This matter concerns a dispute between loan servicing company Select Portfolio Servicing, Inc.

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(“SPS”) and the owners, and several other affiliated parties, of a residential property. Defendants

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Neszhao Consulting Co. (“Neszhao”) and Kevin Nesbitt (“Nesbitt”), prospective short sale purchasers

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of the property, have filed motions to dismiss pursuant to both Fed. R. Civ. P. 12(b)(6) and 12(b)(7) as

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well as a Rule 12(e) motion for a more definite statement in the alternative. Defendants John Chu

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(“Chu”) and Corporate Counsel Law Group LLP (“CCLG”) have filed a separate motion to dismiss

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pursuant to Rule 12(b)(6) and a special motion to strike the Complaint pursuant to Cal. Civ. Code

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§ 425.16. Defendant Valentino has moved to join defendants Chu and CCLG’s motion to dismiss.

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A hearing was held on the matter on April 20, 2012. As discussed at that hearing, the Court

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GRANTS defendants Neszhao and Nesbitt’s motion to dismiss plaintiff’s Complaint WITH LEAVE

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TO AMEND, because plaintiff has not pled the allegations of fraud with sufficient particularity as

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required by Fed. R. Civ. P 9(b). Upon amendment, plaintiff should identify with particularity the

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circumstances surrounding the two sets of purported short sale documents, which defendants engaged

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in what conduct, and how, considering the fact that the anticipated short sale was never consummated,

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SPS has been injured by defendants’ alleged conduct. Plaintiff’s amended complaint must be filed

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no later than April 30, 2012.

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Defendants Neszhao and Nesbitt’s motion to dismiss pursuant to Fed. R. Civ. P. 12(b)(7) for

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failure to join U.S. Bank as a necessary is DENIED, as the Court finds that U.S. Bank is not a necessary

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party pursuant to Fed. R. Civ. P. 19(a).
All other motions brought by defendants, including defendants Neszhao and Nesbitt’s motion

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for a more definite statement and defendants Chu and CCLG’s motion to dismiss and special motion

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United States District Court
For the Northern District of California

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to strike the Complaint, are DENIED as moot and without prejudice. Defendant Valentino’s motion to

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join Chu and CCLG’s motions is GRANTED. If, after amendment, defendants Chu, CCLG, and

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Valentino believe the amended complaint to be subject to the same attacks currently leveled against the

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complaint, they may raise their arguments again in a subsequent motion to dismiss.

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IT IS SO ORDERED.

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Dated: April 20, 2012
SUSAN ILLSTON
United States District Judge

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