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Das v. WMC Mortgage Mortgage MTD

Das v. WMC Mortgage Mortgage MTD

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Published by: Northern District of California Blog on Nov 21, 2010
Copyright:Public Domain

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07/29/2013

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RDER 
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 page 1
UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIASAN JOSE DIVISIONMADHVAMUNI K. DAS, et al.,Plaintiff,v.WMC MORTGAGE CORP., et al.,Defendants. __________________________________ ))))))))))Case No. C10-0650 PVT
ORDER G
RANTING IN
P
ART AND
D
ENYING IN
P
ART
C
ENTRAL
M
ORTGAGE
C
OMPANY
S AND
M
ORTGAGE
E
LECTRONIC
EGISTRATION
S
YSTEMS
,
 
I
NC
.’
S
M
OTIONTO
D
ISMISS FOR 
F
AILURE TO
S
TATE A
C
LAIM UPON
W
HICH
ELIEF
M
AY
B
E
G
RANTED
M
OTION TO
E
XPUNGE
N
OTICEOF
P
ENDENCY OF
A
CTION
Presently pending before the court is the motion to dismiss brought by Defendants CentralMortgage Company (“Central”) and Mortgage Electronic Registration Systems, Inc. (“MERS”).Based on all the briefs and arguments presented,IT IS HEREBY ORDERED that these Defendants’ Motion to Dismiss is GRANTED INPART and DENIED IN PART, with leave for Plaintiffs to file an amended complaint as discussedherein. Plaintiffs shall file the amended complaint within 30 days after entry of this order.Defendants shall have 30 days after Plaintiffs file their amended complaint to file their response.IT IS FURTHER ORDERED that the motion to expunge the notice of pendency of action isGRANTED.
Case5:10-cv-00650-PVT Document80 Filed10/29/10 Page1 of 13
 
12345678910111213141516171819202122232425262728The prior motion to dismiss filed by Central and MERS is deemed withdrawn.
1
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RDER 
,
 page 2
I. INTRODUCTION
Plaintiffs allege they are immigrants, minorities, and reside at 5978 Allen Ave, San Jose,California (“the Subject Property”). They further allege that in 2006 Defendants induced them totake out a home loan in the amount of $945,000 (the “Loan”). They claim Defendants knew theyhad limited income and did not qualify for the Loan. They filed a complaint on February, 16, 2010in which they asserted numerous causes of action arising from events connected with the Loan andthe subsequent commencement of foreclosure proceedings. Defendants Central and MERS movedto dismiss for failure to state a claim. Plaintiffs filed a First Amended Complaint (“FAC”) and thenan opposition to the motion to dismiss in which they argued that the motion was mooted by the FAC.Defendants Central and MERS responded by filing the present motion to dismiss the FAC. In their 
1
new motion, Defendants Central and MERS argue that Plaintiffs’ FAC should be dismissed becauseit fails to state plausible claims against them. In their opposition, Plaintiffs concede that Firstthrough Tenth and Fifteenth through Nineteenth are not asserted against Defendants Central andMERS. And Defendants’ motion does not address the Twenty-First cause of action. Thus, the onlycauses of action at issue for the purposes of this motion are the Eleventh through Fourteenth, theTwentieth, Twenty-Second and Twenty-Third.
II. LEGAL STANDARDSA.D
ISMISSAL FOR 
F
AILURE TO
S
TATE A
C
LAIM UPON
W
HICH
ELIEF
C
AN
B
E
G
RANTED
A motion to dismiss under Rule 12(b)(6) of the Federal Rules of Civil Procedure tests thesufficiency of the complaint. Dismissal is warranted where the complaint lacks a cognizable legaltheory.
See Robertson v. Dean Witter Reynolds, Inc
., 749 F.2d 530, 534 (9 Cir. 1984);
 see also
th
 Neitzke v. Williams
, 490 U.S. 319, 326 (1989) (“Rule 12(b)(6) authorizes a court to dismiss a claimon the basis of a dispositive issue of law”).A complaint may also be dismissed where it presents a cognizable legal theory, but fails to plead facts essential to the statement of a claim under that theory.
 Robertson
, 749 F.2d at 534. The
Case5:10-cv-00650-PVT Document80 Filed10/29/10 Page2 of 13
 
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RDER 
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 page 3
Supreme Court has held that, while a complaint does not need detailed factual allegations:“[a] plaintiff’s obligation to provide ‘grounds’ of his ‘entitle(ment) to relief’ requires morethan labels and conclusions . . . . Factual allegations must be enough to raise a right to relief above the speculative level . . . .”
See Bell Atlantic Corp. v. Twombly,
550 U.S. 544, 555 (2007), quoting
Conley v. Gibson
, 355 U.S.41, 47 (1957).On a Rule 12(b)(6) motion, all facts are assumed to be true and construed in the light mostfavorable to the nonmoving party.
See
 
Cervantes v. United States
, 330 F.3d 1186, 1187 (9 Cir.
th
2003).
B.L
EAVE TO
A
MEND
Leave to amend must “be freely given when justice so requires.”
See
F
ED
.R.C
IV
.P.
 
15(a).This policy is applied with “extraordinary liberality.”
See Morongo Band of Mission Indians v. Rose,
893 F.2d 1074, 1079 (9 Cir. 1990). “[L]eave to amend should be granted unless amendment
th
would cause prejudice to the opposing party, is sought in bad faith, is futile, or creates undue delay.”
See Johnson v. Mammoth Recreations, Inc.,
975 F.2d 604, 607 (9 Cir. 1992). “[T]here exists a
th
 presumption under Rule 15(a) in favor of granting leave to amend.”
See Eminence Capital, LLC v. Aspeon, Inc.,
316 F.3d 1048, 1052 (9 Cir. 2003). However, leave to amend need not be granted
th
when amendment would be futile.
See Steckman v. Hart Brewing, Inc.
, 143 F.3d 1293, 1298 (9 Cir.
th
1998).
III. DISCUSSIONA.D
ISMISSAL IS
N
OT
W
ARRANTED AS TO
P
LAINTIFFS
 
E
LEVENTH
C
AUSE OF
A
CTIONFOR 
V
IOLATION OF
C
ALIFORNIA
C
IVIL
C
ODE
S
ECTION
2923.5.
In the FAC, Plaintiffs allege that the Defendants violated California Civil Code section2923.5 because they did not contact the borrower, and because the notice of default did not include arequired declaration. Defendants argue that this cause of action fails because (1) the Notice of Default did include the required declaration that Central contacted the borrower to discuss the borrower’s financial situation, (2) Plaintiffs did not explain how they were prejudiced by the allegedfailure to contact them, (3) California Civil Code section 2923.5 does not afford a private right of action, and (4) Plaintiffs have not tendered the amount of the secured indebtedness.
Case5:10-cv-00650-PVT Document80 Filed10/29/10 Page3 of 13

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