Pierce v. CitiMortgage, Inc. et al

Filing 26

Order by Hon. Samuel Conti GRANTING 8 Motion to Dismiss and 11 Motion to Dismiss Without Leave to Amend, and DENYING AS MOOT 25 Motion for Order Shortening Time. (sclc2, COURT STAFF) (Filed on 11/30/2012)

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1 2 3 4 5 IN THE UNITED STATES DISTRICT COURT 6 FOR THE NORTHERN DISTRICT OF CALIFORNIA 7 JAMES PIERCE, 8 Plaintiff, v. 10 For the Northern District of California United States District Court 9 11 CITIMORTGAGE, INC.; ACQURA LOAN SERVICES; CASTLE PEAK 2010-1 LOAN TRUST, 12 13 Defendants. 14 15 ) Case No. 12-4795-SC ) ) ORDER GRANTING MOTIONS TO ) DISMISS AND DISMISSING CASE ) ) ) ) ) ) ) ) For the reasons set forth below, the instant case is hereby 16 DISMISSED. 17 the pending ex parte application for an order shortening time to be 18 heard, ECF No. 25 ("MOST"), is DENIED AS MOOT. 19 Because the Court decides this matter on the papers, On June 22, 2012, James Pierce initiated this case by filing a 20 complaint in California Superior Court. 21 removal ("NOR")) Ex. A ("Compl."). 22 forth six causes of action, articulated as follows: (1) General 23 Negligence, (2) Intentional Tort, (3) Set Aside Trustee's Sale, (4) 24 Violation of United States Code, Title 11, Bankruptcy Laws, (5) 25 Preliminary Injunction, and (6) Declaratory Relief. ECF No. 1 (notice of Plaintiff's complaint sets Compl. at 7.1 26 27 28 1 Plaintiff filed his complaint on pre-printed California Judicial Council forms. Because the forms lack page numbers, citations to the complaint use the page numbers assigned by this Court's electronic filing system. 1 On September 13, 2012, Defendant CitiMortgage, Inc. ("Citi") 2 removed the case to this Court.2 The defendants in this case have filed two motions to dismiss, 3 4 the first by Citi, ECF No. 8 ("Citi MTD"), and the other by co- 5 defendants Acqura Loan Services ("Acqura") and Castle Peak 2010-1 6 Loan Trust ("Castle Peak"), ECF No. 11 ("ACP MTD").3 Both motions tell the same story4: Following the foreclosure 7 8 of Plaintiff's residential mortgage, the property securing the 9 mortgage was sold at a trustee sale. The trustee sale occurred United States District Court For the Northern District of California 10 sometime after 2:00 p.m. on January 12, 2012. However, at 12:27 11 p.m. that day, no more than a few hours before the sale occurred, 12 Plaintiff had filed for Chapter 13 bankruptcy. 13 that his eleventh-hour bankruptcy filing resulted in an automatic Plaintiff contends 14 2 15 16 17 18 19 20 21 22 23 24 25 26 27 28 The Court notes that Citi's notice of removal is procedurally defective. Defendants have only thirty days to remove after receiving the complaint "through service or otherwise." 28 U.S.C. § 1446(b). Citi's notice of removal indicates that it "learned of this action through informal means and has not been served with process in this case." NOR ¶ 2. Citi does not indicate, however, when it learned of the action. See id. Accordingly, the Court cannot determine whether removal was timely. Nevertheless, the Court retains jurisdiction because the defect is not jurisdictional and Plaintiff waived his right to contest removal by failing to move for remand within thirty days of removal. See 28 U.S.C. § 1447(c) ("A motion to remand the case on the basis of any defect other than lack of subject matter jurisdiction must be made within 30 days after the filing of the notice of removal . . . ."). The Court has subject matter jurisdiction over this case because Plaintiff's complaint sets forth a claim under Title 11, i.e., under federal bankruptcy law. See 28 U.S.C. §§ 1334 (giving district courts original jurisdiction over "all cases under title 11"), 1441 (permitting removal of civil actions over which district courts have original jurisdiction). 3 Plaintiff filed an opposition addressing both motions, and Citi filed a reply. ECF Nos. 16 ("Opp'n"), 24 ("Reply"). 4 The Court relies on these accounts because Plaintiff's complaint, having been set out on Judicial Council forms which permit pleading by checkmark, does not contain factual allegations. Plaintiff does not contest either account of the facts. See Opp'n at 2-3. 2 1 stay of the trustee sale under 11 U.S.C. § 362(a). 2 alleges that the trustee sale violated the stay, and thus is void 3 and must be set aside. 4 flow from this incident. 5 violation of the bankruptcy stay amounted to an intentional tort. 6 Id. at 8. 7 alleging that Defendants breached a duty of care to Plaintiff by 8 negligently holding the trustee's sale, which caused him emotional 9 distress. Compl. at 7, 10. Plaintiff His other claims also Plaintiff claims that the alleged Plaintiff also asserts a general negligence claim, Id. at 9. Plaintiff also asserts a cause of action United States District Court For the Northern District of California 10 styled "Preliminary Injunction," the gravamen of which is that the 11 defendants might try to evict him from the allegedly wrongly 12 foreclosed property. 13 declaration that he is the rightful owner of the subject property 14 because the trustee sale, allegedly having violated a bankruptcy 15 stay, had no legal effect. 16 then, rely on the wrongfulness of the trustee sale, which, 17 Plaintiff avers, was wrongful because it violated the automatic 18 bankruptcy stay that ensued after his January bankruptcy filing. Id. at 11. Lastly, Plaintiff seeks a Id. at 12. All of Plaintiff's claims, The problem is that no bankruptcy stay ensued after 19 20 Plaintiff's January bankruptcy filing. As Plaintiff acknowledges, 21 his January 2012 filing was his third in as many months. 22 2. 23 14, 2011 and on December 12, 2011. 24 both petitions were dismissed for failure to file the required 25 schedules. 26 filing was Plaintiff's third in under one year, it did not give 27 rise to an automatic stay and therefore there was no bankruptcy 28 stay for the trustee sale to violate. Opp'n at He also filed for Chapter 13 bankruptcy protection on November Id. Plaintiff acknowledges that Defendants contend that, because the January 2012 3 Defendants are correct. 1 The bankruptcy code provides for an 2 automatic stay upon the filing of a bankruptcy petition, subject to 3 certain limited exceptions, none of which apply here. 4 U.S.C. §§ 362(a) (automatic stay), 362(b) (exceptions). 5 this stay continues until the bankruptcy case is dismissed or 6 closed, or a discharge is granted or denied. 7 However, the automatic stay of § 362(a) lasts only thirty days when 8 the debtor had another bankruptcy case dismissed within the 9 preceding year. Id. § 362(c)(3)(A). See 11 Generally, Id. § 362(c)(2). If the debtor had two other United States District Court For the Northern District of California 10 bankruptcy cases dismissed within the preceding year, then no stay 11 arises at all. 12 filed for Chapter 13 bankruptcy protection for the third time in 13 three months, no stay ensued. 14 challenging the trustee sale is fatally flawed.6 Id. § 362(c)(4)(A)(i).5 Hence, when Plaintiff Plaintiff's only ground for Moreover, because all of Plaintiff's other claims are premised 15 16 on the unlawfulness of the trustee sale, Plaintiff's other claims 17 also fail. 18 could lie for conducting a foreclosure sale in violation of a 19 bankruptcy stay, but it is sure that no tort claim lies for 20 5 21 22 23 24 25 26 27 28 The Court harbors a measure of doubt that a tort claim Sections 362(c)(3)(A) and 362(c)(4)(A)(i) both contain an exception, but the exception is inapplicable here. The exception applies only when the last-filed case is "refiled under a chapter other than chapter 7" and the earlier case or cases were dismissed "under section 707(b)." 11 U.S.C. §§ 362(c)(3), 362(c)(4)(A)(i). Section 707(b) provides bankruptcy courts with a mechanism for dismissing a bankruptcy case arising primarily from consumer debts if the court "finds that the granting of relief would be an abuse of the provisions of this chapter." Here, all parties agree that Plaintiff's earlier cases were not dismissed under § 707(b). 6 Plaintiff argues that § 362(c)(4)(A)(1)'s third-filed exception to the automatic stay only applies to cases filed under Chapter 7. That is a serious misreading of the statute. The third-filed exception applies to any bankruptcy case and the limited "exception to the exception" it contains applies to any bankruptcy case except some filed under Chapter 7. See supra note 5. 4 1 conducting a lawful trustee sale. 2 preliminary injunction also fails, because it assumed that an 3 unlawful detainer action against Plaintiff would be wrongful, due 4 to the allegedly void sale -- but the Court sees no ground for 5 declaring the sale void. 6 declaration that he is the lawful owner of the subject property 7 because the trustee sale is void obviously fails. 8 9 Plaintiff's request for a Lastly, Plaintiff's request for a Plaintiff seeks leave to amend his complaint to add a cause of action for breach of contract. Opp'n at 3. This request appears United States District Court For the Northern District of California 10 to be a response to Acqura and Castle Peak's argument that 11 Plaintiff has attempted to "tortify" a cause of action actually 12 premised on contractual obligations, insofar as the authority to 13 conduct a trustee sale under California's nonjudicial foreclosure 14 processes is ultimately authorized by the contract between trustor 15 and trustee. 16 v. La Jolla Group II, 129 Cal. App. 4th 706, 712 (Cal. Ct. App. 17 2005)). 18 Plaintiff does not propose to add new facts and, in any event, 19 would be estopped from doing so, having already agreed to the 20 account of facts presented by Defendants. 21 a different cause of action based on the same facts. 22 presents no authority for the proposition that a breach of contract 23 could arise from a trustee sale that did not violate a bankruptcy 24 stay and otherwise complied with California's nonjudicial 25 foreclosure process. 26 ACP MTD at 6-8 (citing, inter alia, Bank of Am., N.A. Such amendment, however, clearly would be futile. Plaintiff only suggests But Plaintiff In the absence of any bankruptcy stay for the trustee sale to 27 violate or any allegations of other irregularities, the Court 28 declines to declare the sale invalid. 5 All of Plaintiff's claims 1 thus fail as a matter of law. 2 are futile. 3 GRANTED. Moreover, his proposed amendments Accordingly, the pending motions to dismiss are Plaintiff's case is DISMISSED WITH PREJUDICE. 4 5 IT IS SO ORDERED. 6 7 8 Dated: November 30, 2012 UNITED STATES DISTRICT JUDGE 9 United States District Court For the Northern District of California 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 6

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