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Hermosillo v. Caliber Home Loans Inc.

United States District Court, D. Arizona

June 20, 2017

Hector Hermosillo, Plaintiff,
v.
Caliber Home Loans Incorporated, et al., Defendants.

          ORDER

          Eileen S. Willett United States Magistrate Judge

         Pending 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).

         After 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) with prejudice.

         I. DISCUSSION

         A. Fed.R.Civ.P. 12(b)(6)

         Fed. R. 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).

         B. Factual Allegations Assumed to Be True

         The 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).

         The 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).

         On 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.[1] Plaintiff submitted a loan modification application under the Home Affordable Modification Program (“HAMP”) to Defendant in June 2014.

         The 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 2).

         The 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.

         C. Analysis

         1. The Complaint Fails to Satisfy the Pleading Requirements Set Forth in Fed.R.Civ.P. 8

         Plaintiff's 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.

         2. The Claims in the Complaint are Waived Pursuant to A.R.S. § 33-811(C)

         The 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 . . . .

         Pursuant 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 ...


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