Barnes v. Homeward Residential, Inc. et al

Filing 45

ORDER by Judge Samuel Conti granting 31 Motion to Dismiss; granting 23 Motion to Dismiss (sclc1, COURT STAFF) (Filed on 9/17/2013)

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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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NUMA BARNES,

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Plaintiff,

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v.

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HOMEWARD RESIDENTIAL, INC.;
DEUTSCHE BANK NATIONAL TRUST
COMPANY; MORTGAGE ELECTRONIC
REGISTRATION SYSTEMS, INC.;
POWER DEFAULT SERVICES, INC.;
FIDELITY NATIONAL TITLE
COMPANY; and DOES 1 through
100, inclusive,

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Defendants.

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I.

) Case No. 13-3227 SC
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) ORDER GRANTING DEFENDANTS'
) MOTIONS TO DISMISS
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INTRODUCTION
This is a mortgage foreclosure dispute.

Plaintiff Numa Barnes

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("Plaintiff") brings this action against Defendants Homeward

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Residential, Inc. ("Homeward"); Deutsche Bank National Trust

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Company ("DBNTC"); Mortgage Electronic Registration Systems, Inc.

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("MERS"); Power Default Services, Inc. ("PDS"); and Fidelity

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National Title Company ("Fidelity").

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motions to dismiss, one brought by Homeward, DBNTC, MERS, and PDS

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(collectively, the "Homeward Defendants"), and the other brought by

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Fidelity.

Now before the Court are two

ECF Nos. 23 ("Homeward Defs.' MTD"), 31 ("Fidelity

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MTD").

Plaintiff has opposed both motions.

ECF Nos. 35 ("Opp'n to

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Homeward Defs.' MTD"), 38 ("Opp'n to Fidelity MTD").

The Homeward

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Defendants have filed a reply, but Fidelity has not.

ECF No. 37

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("Reply ISO Homeward Defs.' MTD").

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determination without oral argument per Civil Local Rule 7-1(b).

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For the reasons set forth below, the motions are granted.

This matter is appropriate for

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II.

BACKGROUND
In or around August 2006, Plaintiff obtained a $1.3 million

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United States District Court

For the Northern District of California

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loan from American Brokers Conduit, secured by a deed of trust

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("DOT") recorded against the real property located at 30 Vernal

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Court, Alamo, California (the "Property").

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Defs.' RJN Ex. A ("DOT").1

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trustee and MERS as the beneficiary.

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recorded, purportedly transferring the beneficial interest in the

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DOT to DBNTC.

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on November 9, 2011, and a notice of trustee sale on February 15,

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Compl. ¶ 15.

Compl. ¶ 13; Homeward

The DOT identifies Fidelity as the
An assignment of the DOT was

Fidelity recorded a notice of default

Both the Homeward Defendants and Fidelity filed requests for
judicial notice. ECF No. 24 ("Homeward Defs.' RJN"), 32 ("Fidelity
RJN"). Plaintiff has filed identical objections to both. ECF Nos.
36, 39. The objections are OVERRULED, and the Court takes judicial
notice of the DOT and the other publicly filed documents attached
to the RJNs, but not the truth of the matters asserted by those
documents. Pursuant to Federal Rule of Evidence 201, the Court may
take judicial notice of "a fact that is not subject to reasonable
dispute" because, among other things, it "can be accurately and
readily determined from sources whose accuracy cannot reasonably be
questioned." Under this rule, the Court "may properly take notice
of public facts and public documents." Cactus Corner, LLC v. U.S.
Dept. of Agric., 346 F. Supp. 2d 1075, 1098 (E.D. Cal. 2004).
Thus, the Court may also take judicial notice of legal documents
filed in related litigation, including pleadings, motions, and
judgments. In re Clorox Consumer Litig., 894 F. Supp. 2d 1224,
1230 (N.D. Cal. 2012). Additionally, Plaintiff references many of
the documents attached to the RJNs in her complaint and, under the
"incorporation by reference doctrine," a court may properly
consider such documents. See Knievel v. ESPN, 393 F.3d 1068, 1076
(9th Cir. 2005).

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2012.

Id. ¶¶ 16-17.

Also on February 15, 2012, a substitution of

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trustee was recorded, purportedly substituting PDS as the trustee

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on the DOT.

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trustee sale has yet occurred, though Defendants represent that one

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has not.

Id. ¶ 18.

It is unclear from the pleadings whether a

On April 5, 2012, Plaintiff filed an action against Homeward

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in connection with the foreclosure proceedings against the Property

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in California Superior Court.2

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Plaintiff asserted causes of action for (1) breach of oral

Homeward Defs.' RJN Ex. F.

United States District Court

For the Northern District of California

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contract, (2) breach of written contract, (3) unfair business

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practices, and (4) declaratory relief.

Id.

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demurrer to the complaint.

The state court sustained

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the demurrer on December 11, 2012, but granted Plaintiff leave to

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amend.

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the deadline set by the state court, and Homeward moved ex parte to

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dismiss the action with prejudice.

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state court granted the ex parte motion and dismissed the action

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with prejudice as to Homeward.

RJN Ex. H.

RJN Ex. G.

Homeward filed a

Plaintiff did not file an amended pleading by

Id.

On February 15, 2013, the

RJN Ex. I.

Though Fidelity is not named as a defendant in Plaintiff's

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state court complaint, judicially noticeable documents show that

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Fidelity also demurred to Plaintiff's state court action.

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RJN Ex. H.

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but granted Plaintiff leave to amend.

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failed to file an amended pleading, and the state court dismissed

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Plaintiff's action as to Fidelity and entered judgment in favor of

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Fidelity on May 7, 2013.

Fidelity

The state court sustained the demurrer as unopposed,
Id.

Plaintiff once again

Fidelity RJN Ex. I.

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Homeward was formerly known as American Home Mortgage Corp., and
was sued under that name in state court.

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On July 12, 2013, Plaintiff filed the instant action in

breach of express agreement; (2) breach of implied agreement; (3)

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slander of title, (4) wrongful foreclosure; (5) violation of

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California Civil Code § 2923.5; (6) violation of the Truth in

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Lending Act ("TILA"), 15 U.S.C. § 1601; (7) violation of the

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Racketeering Influenced and Corrupt Organizations Act ("RICO"), 18

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U.S.C. § 1962; (8) violation of the Fair Debt Collection Practices

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Act ("FDCPA"), 15 U.S.C. § 1692, et seq.; and (9) violation of the

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United States District Court

federal court.

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For the Northern District of California

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Her Complaint asserts causes of action for (1)

California Unfair Competition Law ("UCL"), Cal. Bus. & Prof. Code §

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17200, et seq.

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challenges the foreclosure proceedings brought against the

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Property.

Like the state court action, the instant action

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III. LEGAL STANDARD
A motion to dismiss under Federal Rule of Civil Procedure

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12(b)(6) "tests the legal sufficiency of a claim."

Navarro v.

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Block, 250 F.3d 729, 732 (9th Cir. 2001).

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on the lack of a cognizable legal theory or the absence of

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sufficient facts alleged under a cognizable legal theory."

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Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir.

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1988).

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should assume their veracity and then determine whether they

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plausibly give rise to an entitlement to relief."

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Iqbal, 556 U.S. 662, 664 (2009).

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must accept as true all of the allegations contained in a complaint

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is inapplicable to legal conclusions.

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elements of a cause of action, supported by mere conclusory

"Dismissal can be based

"When there are well-pleaded factual allegations, a court

Ashcroft v.

However, "the tenet that a court

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Threadbare recitals of the

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statements, do not suffice."

Id. at 663. (citing Bell Atl. Corp.

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v. Twombly, 550 U.S. 544, 555 (2007)).

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complaint must be both "sufficiently detailed to give fair notice

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to the opposing party of the nature of the claim so that the party

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may effectively defend against it" and "sufficiently plausible"

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such that "it is not unfair to require the opposing party to be

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subjected to the expense of discovery."

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1191, 1204 (9th Cir. 2011).

The allegations made in a

Starr v. Baca, 633 F.3d

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United States District Court

For the Northern District of California

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IV.

DISCUSSION
Both the Homeward Defendants and Fidelity move to dismiss on

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the ground that Plaintiff's action is barred by res judicata.

The

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elements of res judicata are: (1) an identity of claims, (2)

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identity or privity between parties, and (3) a final judgment on

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the merits.

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708, 713 (9th Cir. 2001).

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bars Plaintiff's claims.

Owens v. Kaiser Found. Health Plan, Inc., 244 F.3d
The Court concludes that res judicata

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To determine whether successive actions involve the same

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claims, courts consider, among other things, "whether the two suits

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arise out of the same transactional nucleus of facts."

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Jacobs, 621 F.2d 341, 343 (9th Cir. 1980).

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claims based on the same nucleus of facts may still be subject to a

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res judicata finding if the claims could have been brought in the

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earlier action."

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Planning Agency, 322 F.3d 1064, 1078 (9th Cir. 2003).

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action arises out of the same nucleus of facts as the state court

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action, because both action challenge the pending foreclosure sale

Harris v.

"Newly articulated

Tahoe-Sierra Pres. Council, Inc. v. Tahoe Reg'l

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The instant

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of the Property and assert that the foreclosing entities breached

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the terms of the DOT.
Plaintiff cites to an Oregon case, Rennie v. Freeway

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Transport, 294 Or. 319 (1982), apparently for the proposition that

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Defendants "implicitly consented to the splitting of claim [sic]

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under state and federal laws."

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Plaintiff asserts state law claims in the instant action,

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Plaintiff's argument is unavailing.

Opp'n to Homeward Defs.' MTD at 4-

Setting aside that Oregon law does not control here and that

Under Rennie, "[w]here the

United States District Court

For the Northern District of California

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parties have agreed to the separate litigation of plaintiff's claim

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and the first judgment expressly withholds any decision as to the

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other aspects of the claim . . . a subsequent action by plaintiff

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based on those parts of the claim reserved is not precluded by res

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judicata."

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of the defendants agreed to separate litigation or that the state

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court reserved any aspects of Plaintiff's claims for later

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litigation.

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Defendants moved to dismiss on res judicata grounds.

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294 Or. at 328.

Here, there is no indication that any

Soon after Plaintiff filed the instant action,

The second element of res judicata is satisfied as to Homeward

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and Fidelity because they were defendants in both actions.

The

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remaining defendants, DBNTC, PDS, and MERS, are in privity with

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Homeward.

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parties, that is, when there is sufficient commonality of

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interest."

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Thus, Courts have found privity "where the interests of the

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nonparty and party are so closely aligned as to be virtually

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representative."

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finds such commonality of interests exists here.

Privity exists if "there is substantial identity between

Tahoe-Sierra, 322 F.3d at 1081 (quotations omitted).

Id. at 1082 (quotations omitted).

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The Court

Plaintiff is

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suing defendants in connection with their attempt to foreclose on

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the Property.

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Property, MERS and DBNTC are the former and current holders of the

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beneficial interest of the DOT securing the mortgage, and PDS is

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the substitute trustee on the DOT.

Homeward is the servicer of the mortgage on the

Plaintiff argues that her claims are not barred by res

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judicata because the state court did not render a final judgment on

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the merits.

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sustained Homeward and Fidelity's demurrers, the court also granted

Plaintiff reasons that, while the state court

United States District Court

For the Northern District of California

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Plaintiff leave to amend.

However, Plaintiff neglects to point out

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that she failed to file an amended complaint as to either Homeward

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or Fidelity.

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parte for judgment against Plaintiff.

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ex parte motions and dismissed Plaintiff's claims against Homeward

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with prejudice.

As a result, both Homeward and Fidelity moved ex
The state court granted both

Plaintiff did not appeal either judgment.

Under California law, "it is the rule that when a plaintiff is

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given the opportunity to amend his complaint and elects not to do

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so, strict construction of the complaint is required and it must be

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presumed that the plaintiff has stated as strong a case as he can."

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Gonzales v. State of California, 68 Cal. App. 3d 621, 635 (Cal. Ct.

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App. 1977).

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the fatal defects in her state court complaint.

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purposes of applying the doctrine of res judicata, . . . a

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dismissal with prejudice is the equivalent of a final judgment on

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the merits, barring the entire cause of action."3

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Morris USA, Inc., 48 Cal. 4th 788, 793 (Cal. Ct. App. 2010).

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Thus, the Court presumes that Plaintiff could not cure
Moreover, "for

Boeken v. Philip

Though the state court did not indicate that Plaintiff's claims
against Fidelity were dismissed with prejudice, the court did
render judgment in favor of Fidelity. Moreover, the state court

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Accordingly, the Court finds that res judicata bars Plaintiff

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from bringing the instant action because she brought similar claims

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against Homeward and Fidelity in state court.

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relitigate those claims against Homeward, Fidelity, or their

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privies, since Plaintiff's action against Homeward was dismissed

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with prejudice, and the state court entered judgment in favor of

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Fidelity after Plaintiff failed to amend her pleadings.

Plaintiff cannot now

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United States District Court

For the Northern District of California

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V.

CONCLUSION
For the foregoing reasons, Defendants Homeward Residential,

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Inc., Deutsche Bank National Trust Company, Mortgage Electronic

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Registration Systems, Inc., Power Default Services, Inc., and

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Fidelity National Title Company's motions to dismiss are GRANTED.

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Plaintiff Numa Barnes' action is DISMISSED WITH PREJUDICE.

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IT IS SO ORDERED.

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Dated: September 17, 2013
UNITED STATES DISTRICT JUDGE

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entered a final judgment on the merits as to Homeward, Fidelity's
privy, when it dismissed Plaintiff's claims against Homeward with
prejudice.

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