United States District Court, D. Arizona
Rosemary Marquez, United States District Judge
before the Court is Defendant's Motion to Dismiss for
Failure to State a Claim, or In the Alternative, Motion for
More Definite Statement (Doc. 10). Also pending is
Plaintiff's Motion to Disregard Defendant's Late
Reply (Doc. 22), as well as the Plaintiff's Notice to the
Court to Take Notice of Numerous False Statements (Doc.
The Court will grant the Motion to Dismiss, deny the Motion
to Disregard, and decline to impose sanctions on either
pro se Complaint brings seven claims against Defendant Bank of
New York Mellon asserting that Defendant committed statutory
and regulatory violations in addition to causes of action
based in contract and tort in its capacity as a
lender. (See Doc. 1.) In the Complaint,
Plaintiff alleges that he executed a $378, 750 promissory
note (“the Note”) in July 2006, which was secured
by his home located at 6655 North Donna Beatrix Circle,
Tucson, Arizona 85718 (“the Property”). (Doc. 1
at 6; see also Doc. 1-1 at 18-21.) He further
alleges that beginning in July 2008 some of his loan
repayments were returned, mostly without explanation.
(Id.) Defendant became a trustee on the deed in
April 2011. (Doc. 1 at 6.) Plaintiff seeks compensatory and
punitive damages and a stay of a writ of restitution. (Doc. 1
Plaintiff's Motion to Disregard & Notice Re: False
asks the Court to disregard Defendant's Reply in support
of its Motion to Dismiss because it was untimely filed. (Doc.
22.) Defendant responded to the Motion providing an apology
to the Court as well as an explanation as to why the Reply
was untimely filed. (Doc. 23 at 2-3.) The Response asks that
the Court strike the Motion to Disregard for failure to
comply with LRCiv 7.1(a) and seeks a Court order requiring
Plaintiff to update his contact information. (Id.)
Notice of Defendant's False Statements lists three
instances in which James Ugalde, counsel for Defendant, made
statements that Plaintiff asserts constitute perjury and
subornation of perjury under 18 U.S.C. §§ 1621 and
1622, respectively. (See Doc. 27). Plaintiff
requests “that the Court take appropriate action to
sanction James Ugalde.” (Doc. 27 at 4.) Defendant
responded to the Notice asserting that none of Mr.
Ugalde's conduct is sanctionable, addressing the
particulars of Plaintiff's allegations of perjury, and
suggesting that the Court “should consider sanctioning
or reprimanding Ornstein.” (See Doc. 31.)
time the Court will deny Plaintiff's Motion to Disregard
despite Defendant's untimely Reply, see LRCiv
83.6, and will decline to impose any sanctions based on the
conduct described in the Motion and Notice. The Court is
concerned that the parties have taken to pursuing this
litigation in a needlessly contentious manner; going forward,
the parties are encouraged to file motions only if they have
merit and if they are for the primary purpose of
assisting the Court in justly and expeditiously resolving
Defendant's Motion to Dismiss
seven claims in Plaintiff's Complaint are: (1) three
consumer protection-related federal regulatory and statutory
violations, (2) breach of contract, (3) violation of A.R.S.
§ 12-1622(C), (4) violation of a Pima County Superior
Court order, (5) “false documents, ” (6)
defamation, and (7) intentional infliction of emotional
distress. Defendant seeks to have all of these claims
dismissed on the grounds that they fail to state a claim upon
which relief may be granted, are insufficiently pled and
indefinite, or are unsupported by factual allegations. (Doc.
10 at 1-2); Fed.R.Civ.P. 12(b)(6). Defendant states that
Plaintiff has failed to make any allegations entitling him to
compensatory damages, let alone punitive
damages. (Doc. 10 at 15-16.) Defendant
alternatively asks that Plaintiff be required to provide a
more definite statement. (Doc. 10 at 1); Fed.R.Civ.P. 12(e).
responds in opposition to the motion and asks that “the
Court take judicial notice of Defendant's Numerous False
Statements, of which only thirteen [are] addressed in [the]
Response.” (Doc. 18 at 1.) He claims that these false
statements violate 31 U.S.C. § 3730(b). (Id.)
In addition, Plaintiff asserts that he has not received
Defendant's filings at his address on North Beatrix
Circle in violation of the Federal Rules; however he also
informs the Court that he was required to vacate that
property on May 21, 2018. (Id. at 3.) Plaintiff has
an obligation to file a notice of address change 14 days
before the effective date of the change. LRCiv 83.3(d). Thus,
the Court will require Plaintiff to file a notice of address
change within 7 days of this Order and will decline to
address any issues regarding service under Fed.R.Civ.P. 5
until Plaintiff's mailing address is corrected.
Plaintiff contests the assertion that any of his claims have
been previously litigated and argues that they are not barred
by res judicata and alternatively that “res judicata is
rejected when its application would result in manifest
injustice.”(Doc. 18 at 3-4, 10 (quoting Tipler v.
E.I. DuPont de Mours and Co., 443 F.2d 125, 128 (6th
Cir. 1971).) He also rejects Defendant's arguments that
his various claims are insufficiently pled or vague; he cites
to the statutes and regulations upon which he bases his
claims in support of this argument. (Id. at 5-6.)
Plaintiff states that he never defaulted on his loan, so any
of Defendant's assertions to the contrary are false.
(Id. at 6.) He also makes an argument appearing to
contest Defendant's right to foreclose on his property.
(Doc. 18 at 12.) Finally, Plaintiff repeats comparisons in
his Complaint of his case to Holms v. Wells Fargo Home
Mortgage, Inc., 514 S.W.3d 590 (Mo. 2017) (en banc).
(Id. at 15-17.)
replied in support of its Motion to Dismiss (Doc. 21).
Primarily, the Reply argues that Plaintiff's Response to
the Motion to Dismiss is nonresponsive and that, as a result,
the Court should grant the Motion as uncontested.
(Id. at 1-3.) Defendant concludes its Reply by
asking that the Court dismiss the Complaint with prejudice.
Plaintiff's Claim 1, Defendant asserts that the
regulations are “inapplicable to Plaintiff, barred by
res judicata, and untimely” and for those reasons must
be dismissed. (Doc. 10 at 7.) Defendant asserts that 24
C.F.R. § 201.50 does not apply to Plaintiff's loan
because the value of the loan was too high to fall within the
Department of Housing and Urban Development's
(“HUD”) purview, and that Plaintiff made no
allegation in the Complaint that Defendant was subject to the
regulation. (Id. at 7-8.) In support of the
contention that these claims are barred by res judicata,
Defendant points to a 2015 case filed by Plaintiff in the
Maricopa County Superior Court (No. CV2015-052615)
(“Wrongful Foreclosure Case”),  which was
dismissed because Plaintiff failed to obtain an injunction of
the trustee's sale as required by A.R.S. §
33-811(C). (Id. at 8-9.) In addition, Defendant
argues the Wrongful Foreclosure Case addresses why the
instant case should be barred under A.R.S. § 33-811(C).
(Id. at 9.) Finally, Defendant argues that claims
under 15 U.S.C. § 1639c(h) and 12 U.S.C. §
2605(e)(2) are barred by three-year statutes of limitations
because all of the conduct described in the Complaint
necessarily took place before the April 7, 2015 trustee's
sale. (Id. at 9-10.) In any event, Defendant
explains that under Arizona law, lenders do not owe their
borrowers a fiduciary duty. (Id. at 11.)
responds that Defendant does owe him a fiduciary duty and
that the case Defendant cited for the rule that lenders do
not owe borrowers a fiduciary duty is not controlling. (Doc.
18 at 9-10 (quoting as contrary law Silving v. Wells
Fargo Bank, NA, 800 F.Supp.2d 1055 (D. Ariz. 2011)).
asserts that Claims 2 and 3 also fail based on res judicata.
(Doc. 10 at 10-11.) Both Claims, according to Defendant, are
further barred by A.R.S. § 33-811(C) (Id. at
11), and Claim 3's reliance on A.R.S. § 12-1622(C)
is misplaced because that section is inapplicable to the sale
at issue here. (Id. at 11.) Specifically, this sale
was instead subject to the requirements of A.R.S. §
33-801 et seq., and since Defendant was not a
“seller” within the meaning of the statute, it is
also inapplicable. (Id.)
argues that the Court must dismiss Claim 4 both because it
fails to state a claim upon which relief may be granted and
because Plaintiff is currently litigating an action based on
the same facts, so the Court should refrain from exercising
jurisdiction based on the Colorado River abstention
doctrine. (Doc. 10 at 13 (citing Colorado River Water
Conservation District v. United States, 424 U.S. 800
Plaintiff's Claim 5, Defendant asserts that the
one-sentence claim does not satisfy the pleading requirements
and therefore must be dismissed. (Doc. 10 at 11-12.)
Similarly, Defendant contends, Claim 6 fails to state a claim
because it does not satisfy the pleading requirements of the
Federal Rules, nor does it bring any factual allegations as
to the elements of an Arizona defamation claim. (Id.
Claim 7, Defendant points out that the primary case Plaintiff
cites in support of his claim is not binding on this Court.
(Doc. 10 at 14.) Further, Plaintiff failed to plead any of
the elements of an emotional distress claim. (Id.)
Defendant additionally argues that Plaintiff cannot claim
emotional distress from wrongful foreclosure because
foreclosure on the property was not wrongful. (Id.;
see Doc. 10-7.)
Standard of Review on a Motion to Dismiss
complaint must include a “short and plain statement . .
. showing that the pleader is entitled to relief.”
Fed.R.Civ.P. 8(a)(2). While Rule 8 does not require in-depth
factual allegations, it does require more than
“labels[, ] conclusions, [or] a formulaic recitation of
the elements of a cause of action.” Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009). There must be
sufficient “factual content [to] allow the court to
draw the reasonable inference that the defendant is liable
for the misconduct alleged.” Id.
under Rule 12(b)(6) may be “based on the lack of a
cognizable legal theory or the absence of sufficient facts
alleged under a cognizable legal theory.”
Balistreri v. Pacifica Police Dep't, 901 F.2d
696, 699 (9th Cir. 1990). When reviewing a motion to dismiss
pursuant to Rule 12(b)(6), a court takes “all factual
allegations set forth in the complaint . . . as true and
construed in the light most favorable to plaintiffs.”
Lee v. City of L.A., 250 F.3d 668, 679 (9th Cir.
2001). However, only well-pleaded facts are given a
presumption of truth. Iqbal, 556 U.S. at 679.
Conclusory allegations-that is, allegations that
“simply recite the elements of a cause of action”
without supplying underlying facts to support those
elements-are not “entitled to the presumption of
truth.” Starr v. Baca, 652 F.3d 1202, 1216
(9th Cir. 2011).
Court may “consider certain materials-documents
attached to the complaint, documents incorporated by
reference in the complaint, or matters of judicial notice-
without converting [a] motion to dismiss into a motion for
summary judgment.” United States v. Ritchie,
342 F.3d 903, 908 (9th Cir. 2003). “[I]t is proper for
the district court to ‘take judicial notice of matters
of public record outside the pleadings' and consider them
for purposes of the motion to dismiss.” Mir v.
Little Co. of Mary Hosp., 844 F.2d 646, 649 (9th Cir.
1988) (quoting MGIC Indem. Corp. v. Weisman, 803
F.2d 500, 504 (9th Cir. 1986)). Further, the Court is not
required to “accept as true allegations that contradict
matters properly subject to judicial notice . . . .”
Sprewell v. Golden State Warriors, 266 F.3d 979, 988
(9th Cir. 2001).
United States Court of Appeals for the Ninth Circuit has
instructed, courts must “continue to construe pro
se filings liberally.” Hebbe v. Pliler,
627 F.3d 338, 342 (9th Cir. 2010). A pro se
“complaint ‘must be held to less stringent
standards than formal pleadings drafted by
lawyers.'” Id. (quoting Erickson v.
Pardus, 551 U.S. 89, 94 (2007) (per curiam)).
complaint falls short of meeting the necessary pleading
standards, a district court should dismiss with leave to
amend unless the deficiencies of a pleading “could not
possibly be cured by the allegation of other facts.”
Lacey v. Maricopa Cnty., 693 F.3d 896, 926 (9th Cir.
2012) (“We have adopted a generous standard for
granting leave to amend from a dismissal for failure to state
a claim . . . .”). Failing to give leave to amend when
a plaintiff could include additional facts to cure a
complaint's deficiencies is an abuse of discretion.
AE ex rel. Hernandez v. Cnty. of Tulare, 666 F.3d
631, 637-38 (9th Cir. 2012).