Armendariz et al v. JPMorgan Chase Bank, NA et al
Filing
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ORDER granting Defendants' 73 Motion to Dismiss with prejudice. Signed by Judge Anthony J. Battaglia on 10/15/12. (All non-registered users served via U.S. Mail Service)(cge)
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UNITED STATES DISTRICT COURT
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SOUTHERN DISTRICT OF CALIFORNIA
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BRIAN ANTHONY ARMENDARIZ and
ALICIA ARMENDARIZ,
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Plaintiffs,
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v.
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JP MORGAN CHASE BANK N.A.,
successor in interest to WASHINGTON
MUTUAL BANK, FA, DEUTSCHE BANK
NATIONAL TRUST COMPANY, and
CALIFORNIA RECONVEYANCE
COMPANY,
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Defendants.
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Civil No. 11cv137 AJB (BGS)
ORDER GRANTING DEFENDANTS’
MOTION TO DISMISS PLAINTIFFS’
THIRD AMENDED COMPLAINT
(Doc. No. 73)
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Presently before the Court is Defendants’ Motion to Dismiss Plaintiffs’ Third Amended
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Complaint (“TAC”). (Doc. No. 73.) In accordance with Civil Local Rule 7.1.d.1, the Court finds this
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motion suitable for determination on the papers and without oral argument. Accordingly, the motion
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hearing scheduled for October 26, 2012 is hereby vacated. For the reasons set forth below, the Court
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GRANTS Defendants’ motion and dismisses the case with prejudice.
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FACTUAL BACKGROUND
In October 2004, Plaintiffs obtained a $455,000 mortgage loan from Washington Mutual Bank
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(“WaMu”). (Doc. No. 1, Ex. 3.) The mortgage note was secured by a Deed of Trust that identifies
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WaMu as the lender and beneficiary, and California Reconveyance Company (“California Reconvey-
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ance”) as the trustee. (Doc. No. 1, Ex. 4.) Plaintiffs subsequently defaulted on the mortgage loan.
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(Doc. No. 1, Ex. 1.) California Reconveyance recorded a Notice of Default on February 3, 2010. (Id.)
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The Notice of Default indicates that Plaintiffs had accumulated $13,563.09 in arrears. (Id.)
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Plaintiffs filed this action pro se on January 24, 2011, and Defendants moved to dismiss
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Plaintiffs’ Complaint on February 18, 2011. (Doc. No. 13.) On May 13, 2011, this Court dismissed
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Plaintiffs’ Complaint with leave to amend. (Doc. No. 48.) Plaintiffs timely filed their First Amended
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Complaint (“FAC”) on May 27, 2011. (Doc. No. 50.) Defendants moved to dismiss the FAC for failure
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to state a claim, and on November 10, 2011, the Court granted Defendants’ motion and dismissed the
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FAC, again with leave to amend. (Doc. No. 56.) Plaintiffs subsequently filed their Second Amended
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Complaint (“SAC”) on December 9, 2011. (Doc. No. 59.) On December 27, 2011, Defendants moved
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to dismiss the SAC for failure to state a claim. (Doc. No. 61.) On April 18, 2012, the Court granted
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Defendants’ motion and dismissed the SAC with leave to amend. (Doc. No. 68.) On June 15, 2012,
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Plaintiffs filed their Third Amended Complaint (“TAC”). (Doc. No. 72.)
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In the TAC, Plaintiffs allege the following claims against all Defendants: (1) fraud and forgery;
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(2) fraudulent misrepresentation and RESPA / TILA violations, 15 U.S.C. §§ 1601 et seq., 12 U.S.C. §
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2602; (3) broken chain of title; and (4) quiet title to real property.1 On July 2, 2012, Defendants filed the
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instant motion to dismiss the TAC. (Doc. No. 73.)
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LEGAL STANDARD
A.
Motion to Dismiss
A complaint must contain “a short and plain statement of the claim showing that the pleader is
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entitled to relief.” Fed. R. Civ. P. 8(a). The court must accept all factual allegations pleaded in the
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complaint as true, and must construe them and draw all reasonable inferences from them in favor of the
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nonmoving party. Cahill v. Liberty Mutual Ins. Co., 80 F.3d 336, 337–38 (9th Cir.1996). A complaint
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may survive a motion to dismiss only if, taking all well-pleaded factual allegations as true, it contains
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enough facts to “state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 129
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S. Ct. 1937, 1949 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). However,
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because Plaintiffs are proceeding pro se, their Complaint “must be held to less stringent standards than
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Plaintiffs TAC no longer includes the following claims previously alleged in the SAC: (1) theft
and fraudulent conveyance; (2) negligence; (3) misrepresentation; (4) fraudulent pretenses; and (5)
breach of contract and lack of proof of claim. ( Doc. No. 59 at 1.)
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formal pleadings drafted by lawyers,” as the Supreme Court has reaffirmed since Twombly. See
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Erickson v. Pardus, 551 U.S. 89, 94 (2007) (per curiam). Iqbal incorporated the Twombly pleading
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standard, and Twombly did not alter courts’ treatment of pro se filings; accordingly, the Court construes
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pro se filings liberally when evaluating them under Iqbal. Hebbe v. Pliler, 627 F.3d 338, 342 (9th Cir.
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2010); see also McGowan v. Hulick, 612 F.3d 636, 640-42 (7th Cir. 2010); Bustos v. Martini Club Inc.,
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599 F.3d 458, 461-62 (5th Cir. 2010); Casanova v. Ulibarri, 595 F.3d 1120, 1124 n. 2, 1125 (10th Cir.
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2010); Capogrosso v. Sup. Ct. of N.J., 588 F.3d 180, 184 & n. 1 (3d Cir. 2009); Harris v. Mills, 572
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F.3d 66, 71-72 (2d Cir. 2009) (noting that even following Twombly and Iqbal, “we remain obligated to
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construe a pro se complaint liberally”).
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B.
Leave to Amend
Under Rule 15(a) of the Federal Rules of Civil Procedure, leave to amend “shall be freely given
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when justice so requires,” bearing in mind “the underlying purpose of Rule 15 to facilitate decision on
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the merits, rather than on the pleadings or technicalities.” Lopez v. Smith, 203 F.3d 1122, 1127 (9th
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Cir.2000) (en banc) (internal quotation marks and alterations omitted). When dismissing a complaint
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for failure to state a claim, “‘a district court should grant leave to amend even if no request to amend the
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pleading was made, unless it determines that the pleading could not possibly be cured by the allegation
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of other facts.’” Id. at 1130 (quoting Doe v. United States, 58 F.3d 494, 497 (9th Cir.1995)). Generally,
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leave to amend shall be denied only if allowing amendment would unduly prejudice the opposing party,
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cause undue delay, or be futile, or if the moving party has acted in bad faith. Leadsinger, Inc. v. BMG
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Music Publ'g, 512 F.3d 522, 532 (9th Cir.2008).
DISCUSSION
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In its previous orders dismissing the Complaint, the FAC, and the SAC, the Court commented on
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the general insufficiency of Plaintiffs’ claims. (Doc. No. 48 at 3-4; Doc. No. 56 at 3; Doc. No. 68 at 3-
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4.) Like the previous three complaints, the TAC consists of unclear, conclusory allegations about the
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Defendants’ alleged wrongful conduct based on speculation, lacking properly pleaded facts, and alleging
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various violations both statutory and constitutional without asserting the underlying basis. For the
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reasons set forth below, the Court finds that each cause of action once again fails to state a claim upon
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which relief may be granted.
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A.
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Sufficiency of Plaintiffs’ Claims Generally
Rule 8 requires “a short and plain statement of the grounds for the court’s jurisdiction,” “a short
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and plain statement of the claim showing that the pleader is entitled to relief,” and “ a demand for the
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relief sought.” Fed. R. Civ. P. 8. Courts enforce Rule 8 because “[a] clear statement of a plaintiff’s
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claims gives the defendant a fair opportunity to respond and gives the Court the information it needs to
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manage the litigation.” Tomas, 2011 U.S. Dist. LEXIS 8314, *7. In contrast, “[c]onfusing complaints .
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. . impose unfair burdens on litigants and judges . . . to determine who is being sued for what.” Id.
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(quoting McHenry v. Renne, 84 F.3d 1172, 1179 (9th Cir. 1996)).
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Plaintiffs have had three opportunities to fulfill their basic obligations under the Federal rules.
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Plaintiffs’ TAC provides a new variation on a previous faulty theory of fraud concerning an alleged
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missing “Receivers Deed.” (TAC ¶ 28.) Rule 8 does not allow for the unintelligible pleadings that have
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been offered four times by Plaintiffs. See United States ex rel. Garst v. Lockheed-Martin Corp., 328
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F.3d 374, 378 (7th Cir. 2003) (incomprehensible complaint dismissed with prejudice). Accordingly,
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Plaintiffs’ TAC fails to meet the Rule 8 requirements.
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B.
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Plaintiffs’ Fraud-Based Causes of Action Fail for Lack of Particularity
Plaintiffs’ first, second, and third causes of action all contain references to fraud-based claims,
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which were previously dismissed by the Court for failing to comply with the particularity requirements
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of Rule 9(b). The Court’s prior order dismissing the FAC clearly articulated the requirements for
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pleading fraud and explained why Plaintiffs’ claims failed. (Doc. No. 56 at 3-6.) The Court does not
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wish to repeat itself here.
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As detailed below, Plaintiffs’ fraud-based claims once again lack the particularity required by
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Rule 9(b) because their TAC still fails to allege the elements of fraud with respect to each Defendant.
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Despite repeated instructions from the Court, Plaintiffs suggest that Rule 9(b) might not even apply to
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their fraud-based claims. (Pl’s. Op., Doc. No. 75 at 9.)
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1.
The First Cause of Action for Fraud and Forgery Fails
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First, Plaintiffs recapitulate their assertions that Defendants do not have standing to foreclose on
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the property because they do not own the promissory note. (TAC ¶¶ 1, 4, 5, 33.) The Court has rejected
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this theory of fraud in both the FAC and the SAC. (Doc. No. 56 at 5; Doc. No. 68 at 4-5.) Plaintiffs
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now argue that “[f]ailure to file and record the Receivers Deed and other transfer, sales or assigns is to
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knowingly commit fraud and the lack of filing those transactions make the mortgage contract null and
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void in regards to Plaintiffs’ property.” (TAC ¶ 28.) Plaintiffs assert that Defendants lack standing to
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foreclose upon the subject property because the Receivers Deed cannot be found in the San Diego
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County Recorder’s Office. (TAC ¶¶ 21, 28-9, 33.) However, in its first order dismissing Plaintiffs’
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Complaint, the Court took judicial notice of the Purchase and Assumption Agreement whereby Chase
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acquired certain interests from WaMu, and stated that the Purchase and Assumption Agreement will
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determine the status of Chase as a successor. (Doc. No. 48 at 5-7.) Plaintiffs ignore the Court’s prior
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determinations and continue to insist that Chase’s status as a successor depends on whether the
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Receivers Deed can be found in the San Diego County Recorder’s Office. (TAC ¶¶ 28, 33.) Therefore,
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this theory fails for the same reasons articulated in the order granting Defendants’ motion to dismiss
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Plaintiffs’ SAC. (Doc. No. 68.)
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Second, as in the FAC and SAC, Plaintiffs still fail to plead with particularity the elements of
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fraud. Plaintiffs mention a few names in the TAC, including “Tasha Alexander,” “Deborah Brignac,”
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and “Wanda Chapman,” referring to each individual as a “Robo-Signer.” (TAC ¶ 28.) However,
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Plaintiffs fail to plead with particularity the alleged misrepresentations made by these individuals, their
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alleged knowledge of the falsity of their representations, their intent to defraud Plaintiffs, Plaintiffs’
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justifiable reliance, causation, and resulting damages. (TAC ¶¶ 25-36.) Regarding damages, Plaintiffs
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suggest that their “credit has been destroyed” because they were allegedly “required to default on their
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home loan to qualify” for a loan modification. (TAC ¶ 35.) However, Plaintiffs fail to plead that they
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would not have defaulted at all if this was not a requirement for the loan modification, and therefore do
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not have a proper claim that their credit was destroyed. (TAC ¶¶ 25-36.) Plaintiffs’ elements for
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scienter, intent to defraud, and justifiable reliance all rely on a faulty theory of fraud that this Court has
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rejected, focusing only on Defendants’ alleged failure to record the Receivers Deed.2 (TAC ¶ 35.)
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Plaintiffs confuse the law by insisting that their property was “illegally foreclose[d].” However,
California law does not require possession of the promissory note in order to initiate a foreclosure. See
Lane v. Vitek Real Estate Indust. Gp. (2010) 713 F.Supp.2d 1092, 1098.
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Accordingly, because Plaintiffs’ first cause of action suffers from the same deficiencies as the
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SAC, in that the TAC fails to plead with particularity the elements of fraud and continues to rely on a
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faulty theory, the Court GRANTS Defendants’ motion to dismiss this claim without leave to amend.
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2.
The Second Cause of Action for Fraudulent Misrepresentation and RESPA/TILA
Violations Fails
Plaintiffs’ second cause of action fails for the same reasons it did in the FAC and the SAC.
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Specifically, Plaintiffs fail to allege the requisite elements of fraud showing their justifiable reliance
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with respect to the allegedly fraudulent “Mortgage Allonge,” or how they were damaged as a result of
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Chase creating the fraudulent document. (TAC ¶ 39.) Plaintiffs also continue to ignore the Court’s
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previous determinations that Chase cannot be held liable for RESPA/TILA violations. (Compare Doc.
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No. 56, p. 6 with TAC ¶ 42; see also Doc. No. 75, p. 14:24-27.) Plaintiffs provide no further details
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with respect to the circumstances of the alleged fraud and therefore fail to meet the heightened Rule 9(b)
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pleading standard. Accordingly, Plaintiffs’ second cause fails for lack of particularity and the Court
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GRANTS Defendants’ motion to dismiss this claim without leave to amend.
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3.
The Third Cause of Action for Broken Chain of Title Fails
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Plaintiffs’ third cause of action for “Broken Chain of Title” is not a cause of action under
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California or federal law, as acknowledged by Plaintiffs. (See Pl. Op. at 3.) Plaintiffs merely restate
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their faulty theory of fraud that Defendants have no standing to foreclose upon the property because they
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did not record a Receivers Deed with the San Diego County Recorder’s Office. ( TAC ¶ 47; Ex. 8.)
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This theory is inconsistent with the Court’s prior determinations and contrary to California law.
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Accordingly, the Court GRANTS Defendants’ motion to dismiss Plaintiffs’ third cause of action
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without leave to amend.
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C.
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Plaintiffs’ Fourth Cause of Action for Quiet Title Fails for Lack of Tender
Plaintiffs’ fourth cause of action remains largely unchanged from the SAC. Plaintiffs argue that
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their debt is in dispute; however, the Court has previously determined that the foreclosure was not
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unlawful, and therefore, the debt is not disputed. (Pl. Op. at 15.) Plaintiffs’ quiet title claim fails to
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allege a full and unconditional tender of the entire amount due on the loan. Furthermore, Plaintiffs fail
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to allege any fact indicating their ability to tender the amount owed on their Loan even if they were
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willing to do so. Accordingly, the Court GRANTS Defendants’ motion to dismiss Plaintiffs’ fourth
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cause of action without leave to amend.
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CONCLUSION
For the foregoing reasons, Defendants’ motion to dismiss Plaintiffs’ Third Amended Complaint
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is GRANTED. Plaintiffs have been given three opportunities to amend their Complaint to properly
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state a claim and have failed to do so. Therefore, the Court dismisses this case with prejudice. The
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Clerk of the Court is instructed to close the case and enter judgment accordingly.
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IT IS SO ORDERED.
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DATED: October 15, 2012
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Hon. Anthony J. Battaglia
U.S. District Judge
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