Dela Cruz et al v. JPMorgan Chase Bank, N.A. et al

Filing 15

ORDER TO SHOW CAUSE why Bank of America should not be dismissed for res judicata. Order to Show Cause Hearing set for 1/17/2014 09:00 AM. Response due by 1/6/2014. Signed by Judge Whyte on 12/2/2013. (rmwlc2, COURT STAFF) (Filed on 12/2/2013)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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United States District Court
For the Northern District of California

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SAN JOSE DIVISION

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EFREN DELA CRUZ, an Individual;
EVELYN DELA CRUZ, an Individual,
Plaintiff,

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Case No. C-13-04136-RMW
ORDER TO SHOW CAUSE WHY
BANK OF AMERICA SHOULD NOT
BE DISMISSED FOR RES JUDICATA

v.
WASHINGTON MUTUAL BANK, FA;
WAMU ACCEPTANCE CORP.; BANK OF
AMERICA, N.A., as Trustee for WaMu AssetBacked Certificates, WaMu Series 2007-OA6;
CALIFORNIA RECONVEYANCE
COMPANY; and DOES 1 through 50,
Inclusive,
Defendant.

The court dismissed defendants JP Morgan Chase Bank and California Reconveyance

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Company for res judicata. See Order, Dkt. No. 14. Now the court issues this order to show cause

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why Bank of America should not also be dismissed for res judicata.

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“The doctrine of res judicata is applicable whenever there is (1) an identity of claims, (2) a

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final judgment on the merits, and (3) identity or privity between the parties.” Owens v. Kaiser

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Foundation Health Plan, Inc., 244 F.3d 708 (9th Cir. 2001) (citing Western Radio Servs. Co., 123

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F.3d at 1192). In its prior order, the court determined that there was an identity of claims and final

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judgment on the merits in two previous cases involving the same claims against JP Morgan and the

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California Reconveyance Company and therefore dismissed JP Morgan and the California
ORDER
Case No. C-13-04136-RMW
FMP / SW

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Reconveyance Company. See Order, Dkt. No. 14. Bank of America should also be dismissed if it

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was in privity with the other defendants.

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Parties are in privity for the purposes of res judicata when “there is ‘substantial identity’

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between the parties, that is, when there is sufficient commonality of interest.” Tahoe-Sierra

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Preservation Council, Inc. v. Tahoe Regional Planning Agency, 322 F.3d 1064, 1081 (9th Cir. 2003)

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(quoting In re Gottheiner, 703 F.2d 1136, 1140 (9th Cir. 1983) (citation omitted)). Federal courts

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have deemed a relationship in which “a non-party [] has succeeded to a party's interest in property

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bound by any prior judgment against the party” and therefore sufficiently close for the purposes of

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res judicata’s privity requirement. In re Schimmels, 127 F.3d 875, 881 (9th Cir. 1997).

United States District Court
For the Northern District of California

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Here, Bank of American appears to be in privity with both JP Morgan and the California

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Reconveyance Company. Bank of America shares an interest with JP Morgan in the promissory

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note connected to the subject property, Dela Cruz’s residence. JP Morgan acquired the note from

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Washington Mutual when it defaulted and later sold it to a securitization trust for which Bank of

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America served as the trustee. Because JP Morgan and Bank of America were in the same chain of

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title with respect to the promissory note they share common interests. The California Reconveyance

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Company is allegedly the original trustee on the Dela Cruz’s original loan and therefore also shares

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a common interest with Bank of America. This appears to be a sufficient commonality of interest

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among the three parties for them to be in privity. See Chavez v. Washington Mut. Bank, No. 12–

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CV–04393–LHK, 2013 WL 2450128, at *5-6 (N.D. Cal. June 5, 2013).

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Because it appears to this court that it should dismiss Bank of America for res judicata, Dela

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Cruz must appear before this court on January 17, 2014, at 9:00 a.m. to explain why Bank of

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America should not be dismissed. Dela Cruz must file a written response to this order no later than

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January 6, 2013, addressing why the case should not be dismissed for res judicata. If Dela Cruz

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fails to file a response or appear, Bank of America will be dismissed and the case will be terminated

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with prejudice.

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Dated: December 2, 2013

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RONALD M. WHYTE
United States District Judge

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ORDER
Case No. C-13-04136-RMW
FMP / SW

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