United States District Court, D. Arizona
S. Willett United States Magistrate Judge
before the Court is Defendant's fully briefed Motion to
Dismiss and Supporting Memorandum (Docs. 24, 33, 34).
Defendant seeks dismissal of Plaintiff's Verified
Complaint (Doc. 1-1 at 5-16), which alleges seven causes of
action arising from the completed foreclosure of
Plaintiff's home. The case was removed to the United
States District Court from the Maricopa County Superior Court
of Arizona by Notice of Removal filed on October 12, 2015
(Doc. 1). The Federal Court has original jurisdiction on the
basis of diversity of citizenship as well as federal question
pursuant to 28 U.S.C. § § 1441(a), 1441(b), and
1331. The parties have consented to proceeding before a
Magistrate Judge pursuant to Fed.R.Civ.P. 73 and 28 U.S.C.
§ 636(c) (Docs. 8, 17).
reviewing the parties' submissions, the Court finds that
Plaintiff has failed to set forth facts in his Verified
Complaint that, if true, set forth a cause of action in
Counts I-VII. Nor can the deficiency be cured by amendment.
Therefore, Defendant's Motion to Dismiss (Doc. 24) will
be granted. The Court will dismiss the Complaint (Doc. 1)
Civ. P. 12(b)(6) is designed to “test the legal
sufficiency of a claim.” Navarro v. Block, 250
F.3d 729, 732 (9th Cir. 2001). A Rule 12(b)(6) dismissal for
failure to state a claim can be based on either (i) the lack
of a cognizable legal theory or (ii) insufficient facts to
support a cognizable legal claim. Conservation Force
v. Salazar, 646 F.3d 1240, 1242 (9th Cir.
2011), cert. denied, Blasquez v. Salazar,
132 S.Ct. 1762 (2012). In deciding a Rule 12(b)(6) motion to
dismiss, courts must consider all well-pled factual
allegations in the Complaint as true and interpret them in a
light most favorable to the non-moving party. Schlegel v.
Wells Fargo Bank, NA, 720 F.3d 1204, 1207 (9th Cir.
2013). While “a complaint need not contain detailed
factual allegations . . . it must plead ‘enough facts
to state a claim to relief that is plausible on its
face.'” Clemens v. Daimler Chrysler Corp.,
534 F.3d 1017, 1022 (9th Cir. 2008) (quoting Bell Atl.
Corp. v. Twombly, 550 U.S. 544, 570 (2007). “[A]
well-pleaded complaint may proceed even if it strikes a savvy
judge that actual proof of those facts is improbable, and
‘that a recovery is very remote and
unlikely.'” Twombly, 550 U.S. at 556
(quoting Scheuer v. Rhodes, 416 U.S. 232, 236
(1974)). “[F]or a complaint to survive a motion to
dismiss, the non-conclusory ‘factual content, ' and
reasonable inferences from that content, must be plausibly
suggestive of a claim entitling the plaintiff to
relief.” Moss v. U.S. Secret Serv., 572 F.3d
962, 969 (9th Cir. 2009) (quoting Ashcroft v. Iqbal,
556 U.S. 662, 678 (2009)). In other words, the complaint must
contain enough factual content “to raise a reasonable
expectation that discovery will reveal evidence” of the
claim. Twombly, 550 U.S. at 556. Legal conclusions
couched as factual allegations are not given a presumption of
truthfulness, and “conclusory allegations of law and
unwarranted inferences are not sufficient to defeat a motion
to dismiss.” Pareto v. FDIC, 139 F.3d 696, 699
(9th Cir. 1998).
Factual Allegations Assumed to Be True
Court assumes as true all well-pled factual allegations
contained in Plaintiff's Verified Complaint and draws all
reasonable inferences therefrom. For purposes of this
Fed.R.Civ.P. 12(b)(6) Motion to Dismiss, the Court disregards
any of the Defendant's factual contentions to the
contrary. See, e.g., Lee v. City of L.A., 250 F.3d
668, 688 (9th Cir. 2001) (“[F]actual challenges to a
plaintiff's complaint have no bearing on the legal
sufficiency of the allegations under Rule 12(b)(6).”).
However, the Court may still consider any internal
discrepancies or factual conflicts it finds within the
Complaint that undermine its plausibility. See, e.g.,
Maloney v. Scottsdale Ins. Co., 256 F.App'x 29, 31-
32 (9th Cir. 2007) (finding that a complaint failed to state
a claim upon which relief could be granted based upon
factually inconsistent allegations in a complaint that were
not pleaded in the alternative, but incorporated into each
cause of action).
Court also takes judicial notice of the documents attached to
the Motion to Dismiss that were filed with the Maricopa
County Recorder as they (i) are not subject to reasonable
dispute, (ii) are generally known within the territorial
jurisdiction of this Court, and (iii) can be accurately and
readily determined from sources whose accuracy cannot
reasonably be questioned pursuant to Fed.R.Evid. 201(b). The
Court may consider matters of public record as well as
material properly submitted as part of a complaint when
deciding a motion to dismiss without converting the motion
into a motion for summary judgment. See Lee, 250
F.3d at 688-89 (noting that the court may take judicial
notice of undisputed “matters of public record”);
Barron v. Reich, 13 F.3d 1370, 1377 (9th Cir. 1994).
March 7, 2013, Plaintiff signed a promissory note secured by
a recorded Deed of Trust for the purchase of a home in
Avondale, Arizona. Defendant is the named beneficiary on the
Deed of Trust. Plaintiff failed to make payments due on his
note. Plaintiff submitted a loan modification
application under the Home Affordable Modification Program
(“HAMP”) to Defendant in June 2014.
trustee under the Deed of Trust commenced a non-judicial
foreclosure against the property. A Notice of Trustee's
Sale was executed on September 30, 2014 and sent to Plaintiff
at the address of the property which was Plaintiff's
address of record at the time. On December 27, 2014,
Defendant also sent Plaintiff a letter notifying Plaintiff
that it could not complete a review of his account for a loan
modification because “[o]ur records indicate there are
less than 15 days before the scheduled foreclosure sale of
the above-referenced property.” (Doc. 33 at 23).
Plaintiff received the December 27, 2014 letter,
acknowledging that it gave Plaintiff “his FIRST real
indication of an impending Trustee Sale.” (Doc. 33 at
property was sold at a public foreclosure auction on January
9, 2015. Plaintiff did not seek an injunction prior to the
sale. Defendant, as the foreclosing beneficiary under the
Deed of Trust, purchased the property and recorded a
Trustee's Deed Upon Sale with the Maricopa County
Recorder on January 21, 2015. Plaintiff filed a Verified
Complaint in Maricopa County Superior Court on September 8,
2015 contesting the sale of his home. The case was removed to
U.S. District Court on October 12, 2015. Plaintiff requests
that the Court: (i) void the trustee's sale of his home
and transfer title of the home to Plaintiff free and clear of
any liens; (ii) declare the promissory note paid in full and
all amounts due under the note null and void; (iii) award
Plaintiff compensatory damages in the amount of $150, 000 or
a greater amount proven at trial; (iv) award Plaintiff
punitive damages; and (v) award Plaintiff reasonable
attorney's fees and costs of suit.
The Complaint Fails to Satisfy the Pleading Requirements Set
Forth in Fed.R.Civ.P. 8
Complaint alleges the following causes of action: (1)
declaratory relief and quiet title; (2) promissory estoppel;
(3) fraud; (4) wrongful foreclosure; (5) breach of covenant
of good faith and fair dealing; (6) unjust enrichment; and
(7) a violation of the Real Estate Settlement Procedures Act
of 1974 (“RESPA”), 12 U.S.C. § 2601 et
seq. Specifically, Plaintiff claims that he made a loan
modification application with the Defendant but “never
got a response from Caliber as to said modification.”
(Doc. 1-1 at 6-7). However, Plaintiff also asserts that he
met the qualifications for a loan modification and was
induced to act by false, deceptive, misleading promises made
by the Defendant. Plaintiff states that Defendant assured
Plaintiff that if he made an application and
“successfully completed his trial payment plan his
mortgage would be modified and he would not be foreclosed
on.” (Id. at 11). Plaintiff alleges that
Defendant breached its duty of care to Plaintiff and the
implied covenant of good faith and fair dealing by exercising
its foreclosure power despite Plaintiff's “making
application and providing Defendant with everything they
asked of him including timely fulfillment of his payments
under the plan.” (Id.). Plaintiff finally
claims that the foreclosure should not have gone forward with
“an active and timely loss mitigation application
pending.” (Id. at 12). The Court finds that
Plaintiff's conclusory allegations regarding
Defendant's response to Plaintiff's mitigation loss
application are internally inconsistent, not pled in the
alternative, and negatively impact the plausibility of
Plaintiff's Verified Complaint. The Court further finds
that the Complaint fails to comply with the pleading
standards set forth in Fed.R.Civ.P. 8. See Nevijel v. N.
Coast Life Ins. Co., 651 F.2d 671, 673-74 (9th Cir.
1981) (affirming dismissal of complaint that was
“verbose, confusing and almost entirely
conclusory”). The Court will not provide Plaintiff
leave to amend the Complaint as amendment would be a futile
act for the reasons discussed below.
The Claims in the Complaint are Waived Pursuant to A.R.S.
Arizona Supreme Court has unequivocally held that a trustor
“who has defenses or objections to a properly noticed
trustee's sale has one avenue for challenging the sale:
filing for injunctive relief.” BT Capital, LLC v.
TD Serv. Co. of Arizona, 275 P.3d 598, 600 (2012). Ariz.
Rev. Stat. § 33-811(C) provides in relevant part:
The trustor, its successors or assigns, and all persons to
whom the trustee mails a notice of a sale under a trust deed
pursuant to § 33-809 shall waive all defenses and
objections to the sale not raised in an action that results
in the issuance of a court order granting relief pursuant to
rule 65, Arizona rules of civil procedure, entered before
5:00 p.m. Mountain standard time on the last business day
before the scheduled date of the sale . . . .
to Ariz. Rev. Stat. § 33-811(C), if the trustor fails to
obtain an injunction prior to the trustee's sale of the
property, the trustor has waived all pre-sale defenses and
objections to the sale. Id.; see also Tapper v.
Deutsche Bank National Trust Company, No.
CV-11-00088-PHX-ROS, 2012 WL 12501082, at *2 (D. Ariz. June
20, 2012) (“If a trustee's sale is completed,
A.R.S. § 33-811(C) means ‘a person…cannot