Cepeda et al v. Federal National Mortgage Association et al

Filing 23

ORDER DENYING AS MOOT DEFENDANTS' MOTION TO DISMISS by Judge Paul S. Grewal denying #8 Motion to Dismiss (psglc2, COURT STAFF) (Filed on 4/2/2013)

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United States District Court
For the Northern District of California

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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SAN JOSE DIVISION

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PEDRO D. CEPEDA,
HELGA R. CEPEDA,

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Plaintiffs,
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v.
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FEDERAL NATIONAL MORTGAGE
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ASSOCIATION; GREEN TREE SERVICING, )
LLC; BANK OF AMERICA, N.A.;
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NORTHWEST TRUSTEE SERVICES, INC.; )
and all persons unknown claiming any legal or )
equitable right, title, estate, lien or interest in the )
real property described in the complaint adverse )
to Plaintiff’s title, or interest in said property;
)
and DOES 1-100, inclusive,
)
)
Defendants.
)

Case No.: 5:13-cv-00388-PSG
ORDER DENYING DEFENDANTS’
MOTION TO DISMISS
(Re: Docket No. 8)

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Plaintiffs Pedro D. Cepeda and Helga R. Cepeda (“Plaintiffs”) allege that the foreclosure on

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their home was unlawful. They seek to quiet title and to rescind the Trustee’s Deed Upon Sale, and
to obtain a temporary restraining order (“TRO”). Plaintiffs also seek a preliminary injunction to
stop an unlawful detainer action filed in state court together with general damages and attorney’s
fees and costs. 1 Defendants FNMA and Green Tree Servicing (“Green Tree”) move to dismiss
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See Docket No. 20 at 5 (Compl.).

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Case No.: 13-388 PSG
ORDER GRANTING DEFENDANTS’ MOTION TO DISMISS

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pursuant to Fed. R. Civ. P. 12(b)(6). 2 The parties appeared for a hearing on March 12, 2013.

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Having considered the arguments and evidence presented, the court DENIES Defendants’ motion.

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I.

BACKGROUND

Plaintiffs reside at the property commonly known as 487 Albert Way, Marina, CA, which

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has been their home for many years. 3 After struggling with their payments, Plaintiffs sought a loan

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modification on their mortgage in 2011 through Defendant Green Tree. On July 13, 2012, Green

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Tree denied the loan modification on the grounds that the Plaintiffs submitted their documentation

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too late. 4 Because Plaintiffs were in default, on July 17, 2012, Green Tree held a trustee sale, and

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United States District Court
For the Northern District of California

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on August 3, 2012, it recorded an assignment of the Deed of Trust to Defendant FNMA as

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Instrument No. 2012045026. 5

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On September 5, 2012, FNMA filed an unlawful detainer action in the Monterey County

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Superior Court. Plaintiffs demurred, and asserted that FNMA was not the beneficiary of record at

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the time of the sale, and therefore lacked standing to pursue the action. The court set a trial date for

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November 26, 2012. 6 While the unlawful detainer action was pending, Plaintiffs filed this suit on

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November 21, 2012, also in state court, and requested a TRO to prevent the unlawful detainer

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action from proceeding. The state court granted the TRO on January 2, 2013. 7 As part of the TRO

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request, Plaintiffs filed a first amended complaint (“FAC”) on January 2, 2013. 8 Defendants then

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removed the case to federal court on January 28, 2013. 9

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See Docket No. 8 (Defs.’ Mot. To Dismiss Compl.).

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See Docket No. 20 at 5.

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See id. at 7.

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See id.

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See id. at 2.

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See id.

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See id. at 1.

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See Docket No. 1.

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Case No.: 13-388 PSG
ORDER GRANTING DEFENDANTS’ MOTION TO DISMISS

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After removal, Defendants filed a motion to dismiss on February 4, 2013, in which they

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primarily argue that Plaintiffs fail to allege that they provided tender. Defendants deny any

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wrongdoing during the loan and foreclosure process, and they seek judicial notice of certain

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documents. 10 The deadline for Plaintiffs to oppose was February 19, 2013 but they filed no

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opposition by that date. Defendants filed a statement of non-opposition on February 21, 2013. 11
Plaintiffs finally submitted an opposition to the court on March 8, 2013. 12 That opposition

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does not address the arguments made in Defendants’ motion to dismiss but rather states that the

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motion should be dismissed because Defendants never responded to Plaintiffs’ FAC, which was

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filed along with the TRO request in the state court. Plaintiffs contend that Defendants’ motion is

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United States District Court
For the Northern District of California

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moot because it addresses the original complaint, rather than the FAC, and points to the TRO

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request and emails between the parties’ counsel for support. 13

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Plaintiffs are correct that in the event an FAC is filed before removal to federal court, the

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new complaint, not the original complaint, is the operative pleading that the Defendants must

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address. 14 After filing their FAC with the TRO request in state court, Plaintiffs served the FAC to

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Defendants by mail and email on January 16, 2013. 15

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In their motion to dismiss, Defendants plainly refer to and respond to the original complaint
filed on November 21, 2012, 16 even though as noted, when a complaint is properly amended, it

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See Docket No. 8.

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See Docket No. 12.

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See Docket No. 20.

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See Docket No. 20 at 2. Although the court need not address the arguments in the opposition
because it was not filed in a timely manner, the belated opposition raises an important procedural
issue.
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“[I]t is well-established that an ‘amended complaint supersedes the original, the latter being
treated thereafter as non-existent.’” Valadez-Lopez v. Chertoff, 656 F.3d 851, 857 (9th Cir. 2011)
(quoting Forsyth v. Humana, Inc., 114 F.3d 1467, 1474 (9th Cir. 1997)).
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See Docket No. 20 at 2.

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See Docket No. 8 at 1.

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Case No.: 13-388 PSG
ORDER GRANTING DEFENDANTS’ MOTION TO DISMISS

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supersedes the original complaint. Thus, the complaint which Defendants seek to dismiss is not

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operative. Defendants’ motion to dismiss, therefore, is DENIED AS MOOT. Defendants are

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advised that, pursuant to Fed. R. Civ. P. 12(a)(4), the deadline to respond after a denial of a motion

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to dismiss is 14 days.

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IT IS SO ORDERED.

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Dated: April 2, 2013

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_________________________________
PAUL S. GREWAL
United States Magistrate Judge

United States District Court
For the Northern District of California

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Case No.: 13-388 PSG
ORDER GRANTING DEFENDANTS’ MOTION TO DISMISS