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Gena Almaden v. Peninsula Mortgage

December 28, 2012

GENA ALMADEN,
PLAINTIFF,
v.
PENINSULA MORTGAGE, INC.; FLAGSTAR BANK, FSB; MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC.; FEDERAL HOME LOAN MORTGAGE CORPORATION; JOHN DOES 1- 20; JANE DOES 1-10; DOE PARTNERSHIPS 1-10; DOE CORPORATIONS 1-10; DOE ENTITIES 1-10 AND DOE GOVERNMENTAL UNITS 1-10.
DEFENDANTS.



The opinion of the court was delivered by: Helen Gillmor United States District Judge

ORDER GRANTING DEFENDANTS' MOTIONS TO DISMISS

THE COMPLAINT (DOC. 4, DOC. 9)

On February 16, 2012, Plaintiff Gena Almaden filed a Complaint asserting various claims in connection with a mortgage loan transaction. Plaintiff challenges the non-judicial foreclosure of the mortgage and requests a variety of other relief. Defendants seek dismissal of the Complaint for failure to state a claim.

Defendants Flagstar Bank, FSB, Mortgage Electronic Registration Systems, Inc., and Federal Home Loan Mortgage Corporation 's Motion to Dismiss (Doc. 4) is GRANTED WITH LEAVE TO FILE A MOTION TO AMEND.

Defendant Peninsula Mortgage, Inc.'s Motion to Dismiss (Doc. 9) is GRANTED WITH LEAVE TO FILE A MOTION TO AMEND.

PROCEDURAL HISTORY

On February 16, 2012, Plaintiff Gena Almaden ("Plaintiff" or "Almaden") filed a four-count Complaint in the Circuit Court for the Third Circuit, State of Hawaii.

Defendants Flagstar Bank FSB ("Flagstar Bank"), Mortgage Electronic Registration Systems, Inc. ("MERS"), and Federal Home Loan Mortgage Corporation ("Freddie Mac") removed the action to this Court on July 11, 2012.

On July 18, 2012, Defendants Flagstar Bank, MERS, and Freddie Mac filed a Motion to Dismiss ("Flagstar, MERS, and Freddie Mac's Motion to Dismiss"). (Doc. 4.)

On July 20, 2012 Defendant Peninsula Mortgage, Inc. ("Peninsula Mortgage") filed a Motion to Dismiss ("Peninsula Mortgage's Motion to Dismiss"). (Doc. 9.)

On July 23, 2012 Defendant Peninsula Mortgage filed a motion to join Defendants Flagstar Bank, MERS, and Freddie Mac's Motion to Dismiss. (Doc. 11.)

On September 19, 2012 the Court granted Peninsula Mortgage's Motion for Joinder (Doc. 24).

On September 21, 2012 the Court held a hearing on the Motions to Dismiss.

BACKGROUND

On August 9, 2007 Plaintiff Almaden entered into a mortgage agreement to finance the purchase of real property located at 43-2030 Pohakea Mauka Road, Paauilo, Hawaii 96776 ("Property") (Flagstar, MERS, and Freddie Mac's Motion to Dismiss Ex. B, Mortgage*fn1 ; Complaint at ¶¶ 15-16.) Defendant Peninsula Mortgage is listed as the lender on the Mortgage and Defendant MERS is listed as the mortgagee "acting solely as nominee for Lender and Lender's successors and assigns." (Id.) Defendant Flagstar Bank acted as servicer for the Mortgage. (Complaint at ¶ 31.)

On March 6, 2010, Flagstar Bank notified Plaintiff her Mortgage was in default. (Id. at ¶ 32.) On May 19, 2010, MERS, as nominee for Peninsula Mortgage, assigned the Mortgage and Note to Flagstar Bank ("First Assignment"). (Id. at ¶ 33.) The First Assignment was recorded in the State of Hawaii Bureau of Conveyances on June 1, 2010 as Document Number 2010-075091. (Flagstar, MERS, and Freddie Mac's Motion to Dismiss Ex. D, Assignment.)

On July 6, 2010, Flagstar Bank recorded a Notice of Mortgagee's Non-Judicial Foreclosure Under Power of Sale, which advised of Flagstar Bank's intention to sell the Property. (Flagstar, MERS, and Freddie Mac's Motion to Dismiss Ex. E, Non-Judicial Foreclosure Notice.) On February 24, 2011, the Property was sold at a non-judicial foreclosure sale to Flagstar Bank. (Id. Ex. F, Mortgagee's Affidavit of Foreclosure Under Power of Sale.)

On April 14, 2011 Flagstar Bank conveyed the Property to Freddie Mac by quitclaim deed ("Second Assignment"). (Id. Ex. E, Quitclaim Deed.) The Second Assignment was recorded in the State of Hawaii Bureau of Conveyances on May 3, 2011 as Document Number 2011-072046. (Id.)

Plaintiff challenges the loan origination, the assignments of the mortgage, and the non-judicial foreclosure on the property. (Complaint at ¶¶ 21-29, 33-37, 39-45.) Plaintiff also claims she was entitled to a loan modification. (Complaint at ¶¶ 46-59.)

Defendants move to dismiss the Complaint for failure to state a claim upon which relief can be granted pursuant to Fed. R. Civ. P. 12(b)(6).

STANDARD OF REVIEW

The Court must dismiss a complaint as a matter of law pursuant to Federal Rule of Civil Procedure 12(b)(6) where it fails "to state a claim upon which relief can be granted." Factual allegations asserted in the Complaint are considered true for the purposes of Defendants' Motion to Dismiss. See Savage v. Glendale Union High Sch., 343 F.3d 1036, 1039 n.1 (9th Cir. 2003). Rule 8(a)(2) of the Federal Rules of Civil Procedure requires "a short and plain statement of the claim showing that the pleader is entitled to relief." When considering a Rule 12(b)(6) motion to dismiss, the Court must presume all allegations of material fact to be true and draw all reasonable inferences in favor of the non-moving party. Pareto v. F.D.I.C., 139 F.3d 696, 699 (9th Cir. 1998). Conclusory allegations of law and unwarranted inferences are insufficient to defeat a motion to dismiss. Id. at 699. The Court need not accept as true allegations that contradict matters properly subject to judicial notice or allegations contradicting the exhibits attached to the complaint. Sprewell v. Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 2001).

In Bell Atl. Corp. V. Twombly, the United States Supreme Court addressed the pleading standards under the Federal Rules of Civil Procedure in the anti-trust context. 550 U.S. 544 (2007). The Supreme Court stated that Rule 8 of the Federal Rules of Civil Procedure "requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action," and that "[f]actual allegations must be enough to raise a right to relief above the speculative level." Id. at 555.

Most recently, in Ashcroft v. Iqbal, the Supreme Court clarified that the principles announced in Twombly are applicable in all civil cases. 556 U.S. 662 (2009). The Court stated that "the pleading standard Rule 8 announces does not require 'detailed factual allegations,' but it demands more than an unadorned, the-defendant-unlawfully-harmed-me-accusation." Id. at 678 (citing Twombly, 550 U.S. at 555). To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face. Id. (quoting Twombly, 550 U.S. at 570). A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. Id. (citing Twombly, 550 U.S. at 556). The plausibility standard is not akin to a "probability requirement," but it asks for more than a sheer possibility that a defendant has acted unlawfully. Id. (quoting Twombly, 550 U.S. at 556). Where a complaint pleads facts that are "merely consistent with" a defendant's liability, it "stops short of the line between possibility and plausibility of 'entitlement to relief.'" Id. (quoting Twombly, 550 U.S. at 557).

Rule 9(b) Heightened Pleading Standard for Fraud Claims

When pled in federal court, fraud claims must meet the heightened pleading standard of Federal Rule of Civil Procedure 9(b). See, e.g., Kapahu v. BAC Home Loans Servicing, LP, 2010 WL 2734774, at *3 (D. Haw. 2010).*fn2 Rule 9(b) requires a party asserting a fraud or mistake claim to "state with particularity the circumstances constituting fraud or mistake." Fed. R. Civ. P. 9(b). The claim must "be accompanied by the 'who, what, when, where, and how' of the misconduct charged." Kearns v. Ford Motor Co., 567 F.3d 1120 (9th Cir. 2009) (internal citation and quotation marks omitted). A plaintiff "must state the time, place and specific content of the false representations as well as the identities of the parties to the misrepresentation." Alan Neuman Productions, Inc. v. Albright, 862 F.2d 1388, 1393 (9th Cir. 1988). The circumstances constituting fraud must be "specific enough to give defendants notice of the particular misconduct . . . so that they can defend against the charge and not just deny that they have done anything wrong." Vess v. Ciba-Geigy Corp. USA, 371 F.3d 1097, 1106 (9th Cir. 2003) (quoting Neubronner v. Milken, 6 F.3d 666, 672 (9th Cir. 1993)).

ANALYSIS

The Complaint lists four counts:

Count I: Fraud Count II: Quiet Title Count III: Unfair and Deceptive Acts or Practices Count V [sic]*fn3 Intentional Infliction of Emotional Distress Defendants move to dismiss all counts for ...


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