The opinion of the court was delivered by: David Alan Ezra United States District Judge
ORDER: (1) GRANTING DEFENDANTS' MOTION TO DISMISS;
(2) GRANTING LEAVE TO AMEND; AND
Pursuant to Local Rule 7.2(d), the Court finds this matter suitable for disposition without a hearing. After reviewing Defendants' Motion and the supporting and opposing memoranda, the Court GRANTS Defendants' Motion to Dismiss with leave to amend (Doc. # 7).
On September 23, 2011, Plaintiffs Mark J. Conley and Susan B. Conley (collectively, "Plaintiffs") filed a Complaint against Defendants The Bank of New York Mellon Corporation ("BONY") and Bank of America N.A. ("BANA") (collectively, "Defendants"), as well as John Does 1--10, Jane Does 1--10, Doe Partnerships 1--10, Doe Corporations 1--10, and Doe Entities 1--10. ("Compl.," Doc # 1.) The Complaint alleges the following claims: Count I -- Violation of the Truth in Lending Act (Compl. ¶¶ 14--22); Count II -- Unconscionability (id. ¶¶ 23--26).
According to the Complaint, Plaintiffs obtained two loans from Countrywide Home Loans Inc. that were secured by real property located at 72 Kahana Ridge Dr., Lahaina, Hawaii 96761. (Id. ¶ 8.) The mortgages were recorded on January 14, 2005. (Id. ¶ 15.) Plaintiffs assert that BANA is the servicer of the first and second mortgages. (Id. ¶ 9.) According to the Complaint, BONY became the new lender for the first mortgage "between the establishment with Countrywide Home Loans, Inc. in 2005 and September 8, 2010." (Id. ¶ 16.) BONY became the new lender for the second mortgage "between the establishment with Countrywide Home Loans, Inc. in 2005 and September 23, 2010." (Id. ¶ 17.) The Complaint alleges that Plaintiffs were never notified of BONY's assignment of the mortgages. (Id. ¶ 18.) The Complaint also alleges that BANA would "preempt [Plaintiffs'] right to buy property insurance for the Property by setting up an escrow account and charging far in excess over the market value for said insurance." (Id. ¶ 24.)
On November 8, 2011, Defendants filed the instant Motion to Dismiss. (Doc. # 7.) On January 19, 2012, Plaintiffs filed a Memorandum in Opposition to Defendants' Motion to Dismiss ("Opposition"). ("Opp'n," Doc. # 14.) On January 27, 2012, Defendants filed a Reply. ("Reply," Doc. # 15.)
I. Federal Rule of Civil Procedure 12(b)(6)
Pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure ("Rule"), a motion to dismiss will be granted where the plaintiff fails to state a claim upon which relief can be granted. Review is limited to the contents of the complaint and matters properly subject to judicial notice. See Colony Cove Properties, LLC v. City of Carson, 640 F.3d 948, 955 (9th Cir. 2011). A complaint may be dismissed as a matter of law for one of two reasons: "(1) lack of a cognizable legal theory, or (2) insufficient facts under a cognizable legal claim." Robertson v. Dean Witter Reynolds, Inc., 749 F.2d 530, 534 (9th Cir. 1984) (citation omitted). Allegations of fact in the complaint must be taken as true and construed in the light most favorable to the plaintiff. See Livid Holdings Ltd. v. Salomon Smith Barney, Inc., 416 F.3d 940, 946 (9th Cir. 2005).
A complaint need not include detailed facts to survive a Rule 12(b)(6) motion to dismiss. See Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555--56 (2007). In providing grounds for relief, however, a plaintiff must do more than recite the formulaic elements of a cause of action. See id. at 556--57; see also McGlinchy v. Shell Chem. Co., 845 F.2d 802, 810 (9th Cir. 1988) ( "[C]onclusory allegations without more are insufficient to defeat a motion to dismiss for failure to state a claim.") (citation omitted). "The tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions," and courts "are not bound to accept as true a legal conclusion couched as a factual allegation." Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009) (internal quotations and citations omitted). Thus, "bare assertions amounting to nothing more than a formulaic recitation of the elements" of a claim "are not entitled to an assumption of truth." Moss v. U.S. Secret Service, 572 F.3d 962, 969 (9th Cir. 2009) ("[T]he non-conclusory 'factual content,' and reasonable inferences from that content, must be plausibly suggestive of a claim entitling the plaintiff to relief.") (internal quotations and citations omitted).
A court looks at whether the facts in the complaint sufficiently state a "plausible" ground for relief. See Twombly, 550 U.S. at 570. A plaintiff must include enough facts to raise a reasonable expectation that discovery will reveal evidence and may not just provide a speculation of a right to relief. Id. at 586. When a complaint fails to adequately state a claim, such deficiency should be "exposed at the point of minimum expenditure of time and money by the parties and the court." Id. at 558 (citation omitted). If a court dismisses the complaint or portions thereof, it must consider whether to grant leave to amend. Lopez v. Smith, 203 F .3d 1122, 1130 (9th Cir. ...