Zacharias v. U.S. Bank N.A. et al

Filing 39

ORDER by Judge Samuel Conti granting in part and denying in part 6 Motion to Dismiss; granting in part and denying in part 10 Motion to Dismiss. (sclc2, COURT STAFF) (Filed on 8/20/2014)

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1 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE NORTHERN DISTRICT OF CALIFORNIA 8 REYNA U. ZACHARIAS, ) ) Plaintiff, ) ) v. ) ) U.S. BANK N.A.; JP MORGAN CHASE ) BANK, N.A.; BANK OF AMERICA, N.A.; ) AND DOES 1-10, INCLUSIVE, ) ) Defendants. ) ) ) ) ) ) ) 10 For the Northern District of California United States District Court 9 11 12 13 14 15 16 17 18 Case No. 14-02186 SC ORDER GRANTING IN PART AND DENYING IN PART JP MORGAN CHASE BANK, N.A. AND U.S. BANK, N.A. AS TRUSTEE'S MOTIONS TO DISMISS PLAINTIFF'S COMPLAINT 19 20 I. 21 INTRODUCTION Now before the Court are two motions to dismiss Plaintiff 22 Reyna U. Zacharias' ("Plaintiff") complaint, ECF No. 1 ("Notice of 23 Removal") Ex. 1 ("Compl."). 24 Morgan Chase Bank, N.A. ("Chase"). 25 second was filed by Defendant U.S. Bank, N.A. ("U.S. Bank")1 (1) 26 joining in Chase's motion and (2) asserting alternate grounds for The first was filed by Defendant JP ECF No. 8 ("Chase MTD"). The 27 28 1 The Court refers to JP Morgan Chase Bank, N.A. and U.S. Bank, N.A. collectively as "Defendants." 1 dismissal. ECF No. 10 ("U.S. Bank MTD"). Plaintiff opposes both 2 motions. 3 motions are fully briefed, ECF Nos. 26 ("Chase Reply"), 28 ("U.S. 4 Bank Reply"), 34 ("U.S. Bank Surreply") and appropriate for 5 resolution without oral argument. 6 reasons set forth below, the motion is GRANTED in part and DENIED 7 in part. 8 II. ECF No. 21 ("Chase Opp'n"), 32 ("U.S. Bank Opp'n"). Civ. L.R. 7-1(b). The For the BACKGROUND In April 2007, Plaintiff obtained a loan from Washington 9 United States District Court For the Northern District of California 10 Mutual Bank, F.A. ("WaMu"), secured by a deed of trust (the "DOT") 11 encumbering her San Francisco home ("the Property"). 12 Judicial Notice, ECF No. 7 ("RJN") ¶ 1, Ex. 1 ("DOT").2 13 identifies WaMu as the beneficiary and indicates that WaMu lent 14 Plaintiff $947,500. 15 Reconveyance Company ("CRC") as the trustee. Request for The DOT The DOT also identifies California The federal government later closed WaMu and appointed the 16 17 Federal Deposit Insurance Corporation ("FDIC") as the bank's 18 receiver. 19 2008, Chase acquired certain assets and liabilities of WaMu through 20 an asset purchase agreement with the FDIC. 21 2 22 23 24 25 26 27 28 See RJN Ex. 2 ("Purchase Agreement"). Id. On September 25, On September 21, Plaintiff's objections to Defendants' RJN, ECF No. 22 ("RJN Opp'n"), are OVERRULED, and the Court takes judicial notice of the DOT and the other publicly filed documents attached to the RJN, 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." Accordingly, the Court "may properly take notice of public facts and public documents." Cactus Corner, LLC v. U.S. Dep't of Agric., 346 F. Supp. 2d 1075, 1098 (E.D. Cal. 2004). Additionally, Plaintiff references many of the documents attached to the RJN 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). 2 1 2009, an "Assignment of Deed of Trust" was recorded with the San 2 Francisco Assessor-Recorder. 3 Assignment"). 4 interest to WaMu, assigned its interest in the DOT to Bank of 5 America ("BofA"). Compl. ¶ 10; RJN Ex. 3 ("DOT The document states that Chase, as successor in DOT Assignment. A notice of default was also recorded on September 21, 2009, 6 7 indicating that Plaintiff was $13,873.88 in arrears on her loan 8 payments. 9 recorded on December 23, 2009, November 5, 2012, and January 29, RJN Ex. 4. Three notices of trustee's sale were later United States District Court For the Northern District of California 10 2014. 11 trustee's sale was scheduled for November 26, 2012, and the unpaid 12 balance and other charges on Plaintiff's loan totaled 13 $1,082,141.68. 14 occurred. 15 RJN Exs. 5, 6, 8. According to the second notice, a It is unclear whether any trustee's sale has yet On November 19, 2012, Plaintiff filed an action in California 16 Superior Court and the case was subsequently removed on diversity 17 and federal question grounds. 18 N.A., No. 12-06525 SC, 2013 WL 588757, at *1 (N.D. Cal. Feb. 13, 19 2013) ("Zacharias I"). 20 causes of action against Chase and BofA: (1) slander of title, (2) 21 wrongful foreclosure, and (3) violation of the RICO Act. 22 Chase and BofA moved to dismiss, and the Court granted the motion, 23 dismissing Plaintiff's RICO claims with prejudice, but granting 24 leave to amend the claims as to slander of title and wrongful 25 foreclosure. 26 dismiss Plaintiff's amended claims with the exception of those 27 under California Civil Code section 2923.5, and again granted leave 28 to amend the slander of title and wrongful foreclosure claims. Zacharias v. JP Morgan Chase Bank, In Zacharias I, Plaintiff asserted three Id. at *2-4. Id. The Court again granted a motion to 3 1 Zacharias v. JP Morgan Chase Bank, N.A., No. 12-06525 SC, 2013 WL 2 4647349, at *2-3 (N.D. Cal. Aug. 29, 2013) ("Zacharias II"). 3 Court did, however, dismiss with prejudice certain claims based on 4 the enforceability of the DOT and claims seeking recession under 5 the Truth in Lending Act ("TILA"). 6 parties stipulated to dismissal of the action, without prejudice. 7 RJN Ex. 14. On October 29, 2013 the The instant action was filed in California Superior Court on 8 9 Id. The February 19, 2014. Defendant removed the case to federal court on United States District Court For the Northern District of California 10 the bases of diversity and federal question jurisdiction. 11 1 ("Notice of Removal"). 12 underlying factual allegations as Plaintiff's earlier action and 13 again asserts three causes of action: (1) slander of title, (2) 14 wrongful foreclosure, and (3) violation of the RICO Act. 15 in addition to Chase and BofA, both of whom were defendants in the 16 prior action, the Complaint adds Defendant U.S. Bank in its role as 17 the successor in interest to BofA. 18 3. 19 the undersigned's prior decisions in Zacharias I and Zacharias II, 20 this action was deemed related pursuant to Civil Local Rule 3-12, 21 and reassigned. 22 ECF No. The Complaint addresses the same Notably, Compl. ¶ 4; U.S. Bank Opp'n at The case was initially assigned to Judge Tigar, but in light of ECF No. 29. Chase and U.S. Bank now move jointly and separately to dismiss 23 Plaintiff's complaint. 24 III. LEGAL STANDARD 25 26 27 28 A. Motions to Dismiss 1. Rule 12(b)(6) A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) "tests the legal sufficiency of a claim." 4 Navarro v. 1 Block, 250 F.3d 729, 732 (9th Cir. 2001). "Dismissal can be based 2 on the lack of a cognizable legal theory or the absence of 3 sufficient facts alleged under a cognizable legal theory." 4 Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 5 1988). 6 should assume their veracity and then determine whether they 7 plausibly give rise to an entitlement to relief." 8 Iqbal, 556 U.S. 662, 679 (2009). 9 must accept as true all of the allegations contained in a complaint "When there are well-pleaded factual allegations, a court Ashcroft v. However, "the tenet that a court United States District Court For the Northern District of California 10 is inapplicable to legal conclusions. 11 elements of a cause of action, supported by mere conclusory 12 statements, do not suffice." 13 Twombly, 550 U.S. 544, 555 (2007)). 14 generally "limited to the complaint, materials incorporated into 15 the complaint by reference, and matters of which the court may take 16 judicial notice." 17 540 F.3d 1049, 1061 (9th Cir. 2008) (citing Tellabs, Inc. v. Makor 18 Issues & Rights, Ltd., 551 U.S. 308, 322 (2007)). 19 20 2. Threadbare recitals of the Id. (citing Bell Atl. Corp. v. The court's review is Metzler Inv. GMBH v. Corinthian Colls., Inc., Rule 12(b)(7) A party may move to dismiss a case for "failure to join a 21 party under Rule 19." Fed. R. Civ. P. 12(b)(7). On such a motion 22 there is a three-step inquiry: (1) is the absent party required (or 23 "necessary") within the meaning of Rule 19(a)?, (2) is joinder of 24 the absent party "feasible," under Rule 19(a)? and (3) if joinder 25 is not feasible, is the absent party indispensable, such that the 26 action must be dismissed? 27 Power Dist. v. Lee, 672 F.3d 1176, 1179 (9th Cir. 2012). 28 Ninth Circuit has held that a court should grant a 12(b)(7) motion Salt River Project Agric. Improvement & 5 "The 1 to dismiss only if the court determines that joinder would destroy 2 jurisdiction and the nonjoined party is necessary and 3 indispensable." 4 Supp. 2d 1136, 1141 (E.D. Cal. 2001) (citing Shermoen v. United 5 States, 982 F.2d 1312, 1317-18 (9th Cir. 1992)). 6 the moving party to produce evidence in support of the motion. 7 Id.; see also Makah Indian Tribe v. Verity, 910 F.2d 555, 558 (9th 8 Cir. 1990). B. 9 United States District Court The burden is on Leave to Amend When a motion to dismiss is granted, a district court must 10 For the Northern District of California Biagro W. Sales Inc. v. Helena Chem. Co., 160 F. 11 decide whether to grant leave to amend. 12 Circuit has a liberal policy favoring amendments and, thus, leave 13 to amend should be freely granted. 14 Freight Sys., Inc., 957 F.2d 655, 658 (9th Cir. 1992). 15 court does not need to grant leave to amend in cases where the 16 court determines that permitting a plaintiff to amend would be an 17 exercise in futility. 18 Winery, 829 F.2d 729, 738 (9th Cir. 1987) ("Denial of leave to 19 amend is not an abuse of discretion where the pleadings before the 20 court demonstrate that further amendment would be futile."). 21 IV. 22 Generally, the Ninth See, e.g., DeSoto v. Yellow However, a See, e.g., Rutman Wine Co. v. E. & J. Gallo DISCUSSION In its motion, Chase raises two grounds for dismissing 23 Plaintiff's complaint. First, they contend that each of 24 Plaintiff's causes of action for slander of title, wrongful 25 foreclosure, and violations of the RICO Act, as well as certain 26 other claims under the California Homeowner's Bill of Rights 27 ("HBOR"), Dodd-Frank Act, and National Mortgage Settlement 28 Agreement are, inter alia, untimely, legally insufficient, or 6 1 barred by claim preclusion. Second, Chase argues that dismissal is 2 appropriate because Plaintiff has not joined an indispensable 3 party, her co-borrower under the DOT, Leo Danny Portal. 4 joins in Chase's arguments, and also raises several additional 5 issues specific to its own role as successor in interest to BofA. 6 The Court will address each of Plaintiff's substantive claims 7 before discussing the joinder issue. U.S. Bank 8 A. Slander of Title 9 To state a claim for slander of title, Plaintiff must show United States District Court For the Northern District of California 10 four elements: (1) a publication, (2) without privilege or 11 justification, (3) which is false, and (4) which causes direct and 12 immediate pecuniary loss. 13 4th 461, 472 (Cal. Ct. App. 2012). 14 Plaintiff's claims are time-barred and, in any event, Plaintiff has 15 not sufficiently pleaded the last three elements of her cause of 16 action. 17 Court need not analyze Chase's merits arguments. Chase argues that portions of Because the Court finds these claims are time-barred, the 1. 18 La Jolla Grp. II v. Bruce, 211 Cal. App. Timing Chase argues that because the Assignment and Notice of Default 19 20 ("NOD") were recorded in September 2009 and this action was not 21 filed until February 19, 2014, any slander of title claims based on 22 the DOT, Assignment, and NOD are barred by the applicable three- 23 year statute of limitations. 24 Chase notes that because the Court previously granted Plaintiff 25 leave to amend to show why the statute of limitations should tolled 26 and Plaintiff did not do so, no further leave to amend should be 27 granted. 28 *3). Cal. Code Civ. P. § 338(g). Further, Chase MTD at 5 (citing Zacharias II, 2013 WL 4647349, at 7 Plaintiff responds that her slander of title claim was 1 2 equitably tolled under the delayed discovery rule. Chase Opp'n at 3 4. 4 limitations is tolled until "plaintiff discovers or should have 5 discovered all facts essential to his cause of action." Leaf v. 6 City of San Mateo, 104 Cal. App. 3d 398, 406 (Cal. Ct. App. 1980). 7 Plaintiff argues that she did not discover the facts underlying the 8 slander of title claim on the assignment and foreclosure notices 9 "until she brought her state court action challenging foreclosure Under the delayed discovery rule, the applicable statute of United States District Court For the Northern District of California 10 proceedings on or around November 2012." 11 particular, Plaintiff suggests that because she had "no reason to 12 investigate the legitimacy of the recorded documents on the Subject 13 Property until she consulted with legal counsel about the 14 possibility of bringing legal action against Defendants," the 15 delayed discovery rule should apply. 16 Not so. Opp'n at 4. In Id. at 4-5. As Chase notes, Plaintiff must "'specifically plead 17 facts to show (1) the time and manner of discovery and (2) the 18 inability to have made earlier discovery despite reasonable 19 diligence.'" 20 3610745, at *2 (N.D. Cal. Aug. 17, 2011) (quoting E-Fab, Inc. v. 21 Accountants, Inc. Servs., 153 Cal. App. 4th 1308, 1324 (Cal. Ct. 22 App. 2007)) (emphasis added). 23 explanation as to each of these requirements in her opposition 24 brief, she has not pleaded any facts regarding the application of 25 the delayed discovery rule. 26 even if Plaintiff had pleaded the facts offered in her opposition, 27 her allegations would still be insufficient to establish the 28 application of the delayed discovery rule. Howl v. Bank of Am., N.A., No. C 11-0887 CW, 2011 WL While Plaintiff has asserted a basic This is insufficient. 8 Furthermore, After all, Plaintiff 1 explicitly states that the documents upon which these claims are 2 based were publicly recorded with the San Francisco County 3 Recorder's Office. 4 reasonable diligence would not have revealed the facts underlying 5 Plaintiff's claims against the DOT, assignment, and NOD. 6 Accordingly these claims must be DISMISSED as time-barred. 7 Given that, the Court cannot conclude that Further, Chase argues that because Plaintiff failed to heed 8 the Court's instructions to cure these issues previously, the Court 9 should dismiss these allegations with prejudice. Contrary to United States District Court For the Northern District of California 10 Plaintiff's view, this argument is not "disingenuous." Opp'n at 5. 11 Simply because the parties stipulated to dismissal of the prior 12 action does not mean that in filing a new (and otherwise 13 significantly amended) complaint alleging the same basic facts, 14 Plaintiff need not heed the Court's warning to amend her pleadings 15 to explain why the statute of limitations should be tolled. 16 ignored the Court's prior instructions on this point, and finding 17 that Plaintiff's explanation would be insufficient even if the 18 Court were to grant leave to amend, these claims are DISMISSED WITH 19 PREJUDICE. 20 B. 21 Having Wrongful Foreclosure Chase raises similar issues with Plaintiff's wrongful 22 foreclosure claims. Specifically, Chase argues that because 23 Plaintiff has not alleged that a foreclosure sale has taken place, 24 her claim is premature. 25 C 13-3381 MMC, 2014 WL 1648619, at *3 (N.D. Cal. Apr. 24, 2014) 26 ("[A] cause of action for wrongful foreclosure is 'premature' where 27 no foreclosure sale has taken place."); Rosenfeld v. J.P. Morgan 28 Chase Bank, N.A., 732 F. Supp. 2d 952, 961 (N.D. Cal. 2010) ("A See, e.g., Rothman v. U.S. Bank N.A., No. 9 1 lender or foreclosure trustee may only be liable to the mortgagor 2 or trustor for wrongful foreclosure if the property was 3 fraudulently or illegally sold under a power of sale contained in a 4 mortgage or deed of trust."). Once again, Chase is right. 5 "Plaintiff . . . fails to state a 6 claim for wrongful foreclosure because [s]he does not allege a 7 foreclosure sale has taken place." 8 No. 11-2922 SC, 2011 WL 5573894, at *9 (N.D. Cal. Nov. 15, 2011) 9 (Conti, J.); see also Nissim v. Wells Fargo Bank, N.A., No. C 12- Pey v. Wachovia Mortg. Corp., United States District Court For the Northern District of California 10 1201 CW, 2013 WL 192903, at *9 (N.D. Cal. Jan. 17, 2013); 11 Chancellor v. OneWest Bank, NO. C 12-01068 LB, 2012 WL 1868750, at 12 *8 (N.D. Cal. May 22, 2012); Vega v. JPMorgan Chase Bank, N.A., 654 13 F. Supp. 2d 1104, 1113 (E.D. Cal. 2009). 14 Plaintiff's opposition are not to the contrary. 15 Plaintiff cites language from Castillo v. Skoba, No. 10cv1838 BTM, 16 2010 WL 3986953, at *2 (S.D. Cal. Oct. 8, 2010) stating that "[t]he 17 power of sale in a nonjudicial foreclosure may only be exercised 18 when a notice of default is recorded, . . . [and] any foreclosure 19 sale based on a void notice of default is also void." 20 at 8. 21 whether a wrongful foreclosure claim is cognizable prior to a 22 foreclosure sale. 23 one circumstance in which a foreclosure may be void, not whether a 24 plaintiff may bring a wrongful foreclosure claim prior to any 25 foreclosure sale. 26 C-11-2899 EMC, 2011 WL 6294472 (N.D. Cal. Dec. 15, 2011) (analyzing 27 a wrongful foreclosure claim prior to a foreclosure sale without 28 discussing whether a claim is appropriate prior to a foreclosure The three cases cited in For instance, Chase Opp'n This may well be true, but Castillo does not even discuss To the contrary, the quoted language explains See also Tamburri v. Sun Tr. Mortg., Inc., No. 10 1 sale); Sacchi v. Mortg. Elec. Registration Sys., Inc., No. CV 11- 2 1658 AHM (CWx), 2011 WL 2533029, at *7-8 (C.D. Cal. June 24, 2011) 3 (same). 4 Furthermore, as with Plaintiff's earlier slander of title 5 claim, the Court previously dismissed identical claims with leave 6 to amend "so that she may allege whether and when the foreclosure 7 sale occurred." 8 again failed to heed the Court's instruction, Plaintiff's wrongful 9 foreclosure claims are DISMISSED WITH PREJUDICE. Zacharias II, 2013 WL 4647349, at *3. Having United States District Court For the Northern District of California 10 C. California Civil Code Section 2923.5 11 Next, Chase argues that Plaintiff's allegations under 12 California Civil Code Section 2923.5 are also untimely. 13 previously denied a motion to dismiss similar claims, finding that 14 Plaintiff's allegations under Section 2923.5 were not preempted. 15 Zacharias II, 2013 WL 4647349, at *3 (citing Pey, 2011 WL 5573894, 16 at *8-9; Shaterian v. Wells Fargo Bank, N.A., C-11-0920 SC, 2011 WL 17 2314151, at *4 n.8 (N.D. Cal. June 10, 2011)). 18 that because the events underlying any claim for violations of 19 Section 2923.5 would have to have taken place prior to September 20 21, 2009 when the NOD was recorded, and this action was filed 21 February 19, 2014, these claims are barred by the applicable three 22 year statute of limitations. 23 The Court Now, Chase contends Cal. Code Civ. P. § 338(a). Plaintiff completely failed to respond to Chase's argument. 24 Furthermore, neither party cites any case law in support or defense 25 of their claims. 26 that Plaintiff may have inadvertently time-barred her own claim by 27 voluntarily dismissing the earlier action. 28 Valley Hosp. Med. Ctr., 67 Cal. App. 4th 978, 984-85 (Cal. Ct. App. Nonetheless, the Court's initial review suggests 11 See Martell v. Antelope 1 1998) (noting that equitable tolling does not apply where a 2 plaintiff voluntarily dismisses a timely claim and then pursues a 3 successive claim in the same forum); see also Prettyman v. City of 4 San Diego Police Dep't, No. 11-cv-00195-MMA (RBB), 2012 WL 959472, 5 at *5 (S.D. Cal. Mar. 21, 2012) ("Accordingly, if a plaintiff 6 voluntarily dismisses a timely filed action, equitable tolling 7 cannot save a second action filed after the limitations period has 8 expired.") (collecting cases). 9 Plaintiff's claims under Section 2923.5. Accordingly, the Court DISMISSES Without a more developed United States District Court For the Northern District of California 10 record, the Court cannot say with certainty whether amendment would 11 be futile, and accordingly the dismissal is WITHOUT PREJUDICE. 12 Plaintiff is granted leave to amend to explain how, if at all, the 13 statute of limitations should be tolled. 14 notes that the leave granted here is solely leave to amend the 15 Section 2923.5 claims, and not blanket leave to add new causes of 16 action or legal theories. 17 n.2 (noting unauthorized amendments to Plaintiff's previous 18 complaint). Nevertheless, the Court See Zacharias II, 2013 WL 4647349, at *2 19 D. RICO Act 20 Next, Chase points out that in Zacharias I, the Court 21 dismissed Plaintiff's claims under the RICO Act, 18 U.S.C. Section 22 1962(c) with prejudice. 23 Chase argues this cause of action is barred by claim preclusion. 24 Claim preclusion applies when there is "1) an identity of claims, 25 2) a final judgment on the merits, and 3) identity or privity 26 between the parties." 27 F.3d 1189, 1192 (9th Cir. 1997). 28 2013 WL 588757, at *3-4. As a result, W. Radio Servs. Co., Inc. v. Glickman, 123 Here, the elements of claim preclusion are satisfied. 12 First, 1 Plaintiff's claims are not just identical in their underlying facts 2 and legal theory, rather Plaintiff's third cause of action is 3 worded identically to her complaint in Zacharias I. 4 pp. 9-15,3 with RJN Ex. 9 ("Zacharias I Compl.") at ¶¶ 31-58. 5 Second, the Court's dismissal with prejudice in Zacharias I 6 operates as a final judgment on the merits for the purpose of claim 7 preclusion. 8 Cir. 2002) ("The phrase 'final judgment on the merits' is often 9 used interchangeably with 'dismissal with prejudice.'"). Compare Compl. See Stewart v. U.S. Bancorp, 297 F.3d 953, 956 (9th Finally, United States District Court For the Northern District of California 10 the third element, identity or privity between the parties, is also 11 satisfied here. 12 brought against Chase and BofA as trustee for the WaMu Mortgage 13 Pass-Through Certificates. 14 Plaintiff brings her RICO claims against U.S. Bank, which was the 15 subject of a substitution of trustee recorded on January 22, 2014. 16 See RJN Ex. 7 ("SOT"). 17 that U.S. Bank is the successor in interest to BofA, and therefore 18 is in direct privity with the parties to Zacharias I. 19 also Headwaters Inc. v. United States Forest Serv., 399 F.3d 1047, 20 1053 (9th Cir. 2005) (stating that privity extends to successors in 21 interest). Plaintiff's RICO claims in Zacharias I were See Zacharias I Compl. ¶ 5. Here, The substitution of trustee establishes Id.; see Accordingly the three elements of claim preclusion are 22 23 satisfied in this case, and therefore Plaintiff's claims under the 24 RICO Act are DISMISSED WITH PREJUDICE. 25 26 27 28 3 In fact, the only difference between the RICO count in the instant complaint and the RICO claims in Zacharias I is the use of bullet points rather than paragraph numbers. Accordingly, the Court cites to page numbers rather than paragraph numbers for this portion of the complaint. 13 1 E. Violations of the California Homeowner's Bill of Rights, 2 Dodd-Frank Act, and National Mortgage Settlement 3 Agreement 4 In addition to her three specific causes of action, 5 Plaintiff's complaint and briefing also include allegations that 6 Defendants have violated various subsections of the California 7 Homeowner's Bill of Rights ("HBOR"), the Dodd-Frank Act, and the 8 National Mortgage Settlement Agreement. 9 The Complaint does not seem to treat these as standalone causes of Compl. ¶¶ 30-31, 33-37. United States District Court For the Northern District of California 10 action, instead citing them as support for Plaintiff's premature 11 wrongful foreclosure claims. 12 allegations as stating any cause of action independent of those 13 dismissed above, even if Plaintiff were seeking to assert 14 independent causes of action on this basis, their allegations are 15 entirely conclusory. 16 recitals of the elements of a cause of action, supported by mere 17 conclusory statements, do not suffice."). Accordingly these claims 18 are DISMISSED. 19 While the Court does not read these See Iqbal, 556 U.S. at 679 ("Threadbare Recognizing the insufficiency of these claims, Plaintiff 20 requests leave to amend "to state claims for new causes of action 21 arising out of Defendants' breach of the California HBOR, both in 22 the loan modification and foreclosure process." 23 As her opposition brief points out, Plaintiff filed the operative 24 complaint pro se, and as a result she believes granting leave to 25 amend would be in the interest of justice. 26 opposition to U.S. Bank's motion to dismiss, Plaintiff mentions for 27 the first time her intention to seek leave to amend to allege a 28 violation of the HBOR's prohibition on 'dual tracking,' or 14 Id. Chase Opp'n at 11. Similarly, in her 1 attempting to foreclose while a loan modification remains pending. 2 See Cal. Civ. Code § 2923.6; U.S. Bank Opp'n at 5. 3 The Court has previously granted Plaintiff two opportunities 4 to amend various portions of her complaint to cure specifically 5 defined deficiencies. 6 prior action, Plaintiff again seeks leave to amend deficiencies in 7 her complaint. 8 pronouncement in Foman v. Davis, 371 U.S. 178, 182 (1962), that 9 leave to amend should be freely granted. Now, following voluntary dismissal of the The Court is mindful of the Supreme Court's Nevertheless where, as United States District Court For the Northern District of California 10 here, Plaintiff has "repeatedly fail[ed] to cure deficiencies by 11 amendments previously allowed," dismissal with prejudice may be 12 appropriate. 13 limited leave to amend granted by the Court to drastically expand 14 her claims and plead entirely new causes of action, see Zacharias 15 II, 2013 WL 4647349, at *2 n.2 (noting unauthorized amendments to 16 Plaintiff's previous complaint), and also asserted claims in her 17 briefing that were not pleaded. 18 ECF No. 45 ("Zacharias II Opp'n") at 17 (raising unpleaded 19 violations of the Fair Debt Collection Practices Act for the first 20 time in an opposition brief). 21 themselves sufficient to find that Plaintiff and her counsel have 22 acted in "bad faith" or with a "dilatory motive," as discussed in 23 Foman, when coupled with Plaintiff's repeated failure to cure 24 defects, they weigh against granting leave to amend. 25 to the extent Plaintiff asserts further violations of the 26 California HBOR, Dodd-Frank Act, and National Mortgage Settlement 27 Agreement, these claims are DISMISSED WITH PREJUDICE. 28 Plaintiff's request for leave to amend to allege further violations Id. Furthermore, Plaintiff has previously used See Zacharias II, No. 12-06525, While these actions are not 15 Accordingly, Further, 1 of the California HBOR is DENIED. 2 F. Failure to Join Plaintiff's Co-Borrower 3 Finally, both Chase and U.S. Bank argue that joinder of 4 Plaintiff's co-borrower under the DOT, Leo Danny Portal, is 5 required under Federal Rule of Civil Procedure 19. 6 grounds for this conclusion. 7 states there is a "substantial risk" they may "'incur[] double, 8 multiple, or otherwise inconsistent obligations . . . .'" 9 MTD at 15 (citing Fed. R. Civ. P. 19(a)(1); Mottale v. Kimball They assert two First, in Portal's absence, Chase Chase United States District Court For the Northern District of California 10 Tirey & St. John, LLP, No. 13cv1160-GPC-JMA, 2013 WL 5570193, at *7 11 (S.D. Cal. Oct. 9, 2013)). 12 directly tie its argument to the specific subsection of Rule 19, it 13 seems to contend that because Plaintiff is seeking monetary and 14 declaratory relief with regard to the Property, and Portal "remains 15 a Borrower and Trustor on the Loan and DOT," adjudicating the case 16 in Portal's absence would "impair or impede [Portal's] ability to 17 protect [his] interest . . . ." 18 19(a)(1)(B)(i); U.S. Bank MTD at 4.4 19 Bank contend that Portal is required5 to be joined under Rule 20 4 21 22 23 24 25 26 27 28 Second, while U.S. Bank does not See Fed. R. Civ. P. As a result, Chase and U.S. Plaintiff did not respond to Chase or U.S. Bank's arguments on the joinder issue in her first responsive brief (addressing Chase's motion to dismiss), but did discuss at least U.S. Bank's arguments in her opposition to U.S. Bank's motion to dismiss. While U.S. Bank complains that the brief was untimely, in light of the convoluted procedural history of these motions, and the fact that the most recent minute entry for the motion specifies that responses were to be due on June 30, 2014, See ECF No. 31, the date on which Plaintiff filed her opposition, the Court will consider the arguments presented. Furthermore, given that U.S. Bank took the opportunity to respond, ECF No. 34 ("U.S. Bank Surreply"), the Court does not believe there is any prejudice in considering the arguments offered in either brief. 5 The term "required party" supplanted the longstanding term "necessary party" in the 2007 amendments to the Federal Rules of Civil Procedure. Compare Shields v. Barrow, 58 U.S. (17 How.) 130, 16 1 19(a), is indispensable to the action, and as a result, the action 2 should be dismissed under Federal Rule of Civil Procedure 12(b)(7). 3 Unfortunately both sides misunderstand the nature of the offered some reasons why Portal might be considered a required 6 party under Rule 19, neither Plaintiff nor Defendants have offered 7 any analysis of the remaining two steps of the Rule 19 inquiry. 8 Without any explanation as to whether (1) it is feasible to join 9 Portal, or, (2) if joinder is infeasible, whether the action can 10 United States District Court inquiry under Rule 19 and Rule 12(b)(7). 5 For the Northern District of California 4 proceed without him, the Court cannot conclude that dismissal is 11 appropriate. 12 three-step inquiry under Rule 19). 13 moving parties, they have the burden of persuasion as to each of 14 these elements. 15 the burden of persuasion in arguing for dismissal.") (citing Sierra 16 Club v. Watt, 608 F. Supp. 305, 312 (E.D. Cal. 1985)); Brum v. 17 Cnty. of Merced, No 1:12-cv-01636-AWI-KSO, 2013 WL 2404844, at *3-4 18 (E.D. Cal. May 31, 2013) (discussing the allocation of burdens of 19 proof on a motion under Rule 19 and noting the consensus that the 20 moving party bears the burden of persuasion). 21 Defendants' Rule 12(b)(7) motion to dismiss is DENIED. 22 While Defendants have See Salt River, 672 F.3d at 1179 (laying out the Because the Defendants are the See Makah, 910 F.2d at 558 ("The moving party has Accordingly, Nonetheless, the Court still must go through the first step of 23 the Rule 19 inquiry, and determine whether Portal is a required 24 party. 25 joined as required, the court must order that the person be made a 26 27 28 See Fed. R. Civ. P. 19(a)(2) ("If a person has not been 139 (1854) (defining "necessary" and "indispensable" parties), with 4 Moore's Fed. Prac. § 19.02[2][c] (3d ed.). While the parties use the old terminology, the Court will use the new term "required party." In any event, the terms "necessary party" and "required party" are synonymous. 17 1 party."). Defendants argue that the two prongs of Rule 19(a)(1)(B) 2 apply, and adjudicating the case in Portal's absence would (1) 3 would "impair or impede" Portal's ability to protect his interests 4 or (2) expose Defendants to "a substantial risk of incurring 5 double, multiple, or otherwise inconsistent obligations . . . ." 6 Ultimately, the Court concludes Portal is not a required party. 7 As a threshold matter, Plaintiff argues that Portal has not 8 claimed an "interest relating to the subject of the action," and 9 therefore he is not a required party. Specifically, Plaintiff United States District Court For the Northern District of California 10 argues, seizing on language from United States v. Bowen, 172 F.3d 11 682, 689 (9th Cir. 1999) that "[j]oinder is 'contingent . . . upon 12 an initial requirement that the absent party claim a legally 13 protected interest relating to the subject matter of the action.'" 14 (quoting Northrop Corp. v. McDonnell Douglas Corp., 705 F.2d 1030, 15 1043 (9th Cir. 1983)) (emphasis in original); see also Thomas, Head 16 & Griesen Emps. Tr. v. Buster, 95 F.3d 1449, 1460 n.18 (9th Cir. 17 1996); United States ex rel. Morongo Band of Mission Indians v. 18 Rose, 34 F.3d 901, 908 (9th Cir. 1994); Lopez v. Fed. Nat'l Mortg. 19 Ass'n, No. CV 13-04782 MMM (AGRx), 2013 WL 7098634, at *6 (C.D. 20 Cal. Oct. 8, 2013); In re Wells Fargo Residential Mortg. Lending 21 Discrimination Litig., No. M:08-CV-1930 MMC, 2009 WL 2473684, at *2 22 (N.D. Cal. Aug. 11, 2009). 23 claim an interest in the action, Plaintiff reasons that he is not a 24 required party. 25 reading of Rule 19,6 but for better or worse it appears to be the 26 6 27 28 Because Portal has not come forward to The Court is skeptical that this is the best As other courts have noted, the Ninth Circuit's requirement that an absent party affirmatively claim an interest in the subject of the action is often in conflict with the underlying purposes of Rule 19. See Ins. Co. of Pa. v. LNC Cmtys. II, LLC, No. 11-cv00649-MSK-KMT, 2011 WL 5548955, at *7 (D. Colo. Aug. 23, 2011). 18 1 law of the Ninth Circuit. 2 because Portal has not claimed an interest in the action he is not 3 a required party, and therefore Portal need not be joined. 4 V. CONCLUSION For the reasons set forth above, the Court GRANTS Chase's and 5 6 7 U.S. Bank's motions to dismiss and ORDERS as follows:   United States District Court For the Northern District of California Plaintiff's wrongful foreclosure claims are premature and accordingly DISMISSED WITH PREJUDICE. 10 11 Plaintiff's slander of title claims are DISMISSED WITH PREJUDICE. 8 9 Accordingly, the Court finds that  Plaintiff's RICO Act claims are precluded and accordingly 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Specifically, "it would be strange to require that an absent party affirmatively claim their interest in the subject of the action. This approach would seemingly offer Rule 19(a)(1)(B)(i)'s protections only to those absent parties who actually know of the litigation where they were not named as a party." Id. (emphasis in original). Furthermore, the affirmative claim requirement can also give rise to some puzzling interactions with Rule 24(a)'s provisions for intervention as of right. For instance, by requiring an absent party to assert a claim that their interests may be impaired or impeded by a pending action to benefit from compulsory joinder under Rule 19(a)(1)(B)(i) when such a party "would always satisfy the prerequisites for intervention as of right . . . ," Navajo Tribe of Indians v. New Mexico, 809 F.2d 1455, 1472 (10th Cir. 1987), the affirmative claim rule becomes almost duplicative of Rule 24(a). But "[t]he purpose of Rule 19, however is not to exhort an interested party to exercise its Rule 24 rights." Id. Instead, the purpose of the rule is served by a flexible analysis that recognizes that absent parties will not always be able to assert a claim in the subject matter of the action because they will not always know of a pending action that may impair or impede their rights. Stranger still, the Court sees no reason on the face of these Ninth Circuit precedents suggesting that an affirmative claim by the absent party would not also be required in cases under Rule 19(a)(1)(B)(ii), which protects a defendant who may be subject to inconsistent obligations if an absent party is not joined. This seems even further afield from the intended purpose of the Rule, which focuses on potential prejudice to the present defendants, not the interests of the absent party. 4 Moore's Fed. Prac. § 19.03[4][a] (3d ed.) (noting that this clause of the rule "is primarily concerned with the threat posed to defendants by the nonjoinder of the absentee") (emphasis in original). 19 DISMISSED WITH PREJUDICE. 1 2  Plaintiff's claims under California Civil Code Section 2923.5 3 are DISMISSED as time-barred. 4 to enable Plaintiff to plead why, if at all, the statute of 5 limitations should be tolled. 6  Defendants' motion to dismiss for failure to join Plaintiff's co-borrower, Leo Danny Portal, is DENIED. 7 8 Leave to amend is GRANTED only  Plaintiff's claims for violations of the California Homeowner's Bill of Rights, the Dodd-Frank Act, and the 9 United States District Court For the Northern District of California 10 National Mortgage Settlement Agreement are DISMISSED WITH 11 PREJUDICE. 12 additional claims under the California Homeowner's Bill of 13 Rights is DENIED. 14 15  Plaintiff's request for leave to amend to bring Plaintiff shall file her amended complaint within thirty (30) days of the signature date of this order. 16 17 IT IS SO ORDERED. 18 19 20 Dated: August 20, 2014 UNITED STATES DISTRICT JUDGE 21 22 23 24 25 26 27 28 20

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