United States District Court, D. Arizona
G. CAMPBELL, SENIOR UNITED STATES DISTRICT JUDGE
Edward Novotny and Lorna Schilling filed this action against
LSF10 Master Participation Trust (“LSF10”),
Caliber Home Loans, Inc. (“Caliber”), Citibank,
N.A. (“Citibank”), JP Morgan Chase Bank, N.A.
(“Chase”), and Mortgage Electronic Registration
Systems (“MERS”), asserting state and federal
claims. See Doc. 1-1. Defendants LSF10, Caliber,
Citibank, and MERS move to dismiss. Docs. 7, 10, 14. For the
following reasons, the Court will dismiss the complaint
against LSF10, Caliber, Citibank, and MERS.
Court takes the factual allegations of Plaintiff's
complaint as true for purposes of the motions to dismiss.
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). In
March 2007, Byron Elliot borrowed $195, 000 from Citibank to
purchase the residence at 1531 E. Mahoney Avenue in Mesa,
Arizona (“the property”). Doc. 1-1 at 3, 5.
Elliot's loan was secured by a Deed of Trust against the
property, which identified Citibank as the lender, MERS as
the beneficiary, and Elliot as the borrower. Id. at
5; Doc. 7-1 at 2. Elliot passed away in May 2014, and his
loan went into default. Doc. 1-1 at 6. In March 2018, Caliber
sent a payoff quote and instructions for curing the default
to a title agency, which was working to help Plaintiffs
purchase the property. Id. Plaintiffs were also
working with a mortgage company to get a loan, and with a
Caliber employee to complete the purchase. Id. The
property was eventually sold at a foreclosure sale, but not
to Plaintiffs. Id. Plaintiffs assert claims for
wrongful foreclosure, fraud, unjust enrichment, breach of the
duty of good faith and fair dealing, and violations of the
Real Estate Settlement Procedures Act (“RESPA”).
Id. at 6-12.
Rule 12(b)(6) Standard.
successful motion to dismiss under Rule 12(b)(6) must show
either that the complaint lacks a cognizable legal theory or
fails to allege facts sufficient to support its theory.
Balistreri v. Pacifica Police Dep't, 901 F.2d
696, 699 (9th Cir. 1990). A complaint that sets forth a
cognizable legal theory will survive a motion to dismiss as
long as it contains “sufficient factual matter,
accepted as true, to ‘state a claim to relief that is
plausible on its face.'” Iqbal, 556 U.S.
at 678 (citing Bell Atl. Corp. v. Twombly, 550 U.S.
544, 570 (2007)). 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., 556
U.S. at 678 (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. (citing Twombly, 550
U.S. at 556).
moving Defendants assert common and unique arguments,
including that Plaintiffs lack standing, have waived their
claims, and have failed to state a claim. Docs. 7 (Caliber
and LSF10); 14 (joining Caliber and LSF10 motion); 10
(Citibank). Plaintiffs failed to respond to MERS
(see Doc. 28), and their three-page response to
Caliber and LSF10, and four-page response to Citibank, fail
entirely to engage Defendants' arguments (see
Docs. 22, 23). Plaintiffs assert generally that Defendants
improperly conducted the foreclosure sale and offered
misleading information, allege numerous facts not included in
their complaint, refer to no portion of their complaint, and
cite only a single case. Id.
Failure to State Claims under Arizona Law.
allege wrongful foreclosure. Doc. 1-1 at 6. Arizona
recognizes no such cause of action. Zubia v.
Shapiro, 408 F.3d 1248, 1253-54 (Ariz. 2018);
Bermudez v. DHI Mortg. Co. Ltd., No.
CV-17-02040-PHX-SPL, 2018 WL 2008998, at *2 (D. Ariz. Apr.
30, 2018). The Court will dismiss this claim with
allege fraud in the concealment (Count 2) and
“fraudulent scheme - RICO” (Count 6). Doc. 1-1 at
8, 13. A plaintiff alleging fraud “must state with
particularity the circumstances constituting fraud.”
Fed. R. Civ. P 9(b). “To satisfy Rule 9(b), a pleading
must identify ‘the who, what, when, where, and how of
the misconduct charged,' as well as ‘what is false
or misleading about [the purportedly fraudulent] statement,
and why it is false.'” Cafasso, U.S. ex rel. v.
Gen. Dynamics C4 Sys., Inc., 637 F.3d 1047, 1055 (9th
Cir. 2011) (brackets in original).
only specific allegation in Count 2 asserts that Defendants
“concealed the fact that the property was not properly
transferred including (1) Financial Incentives paid; (2)
existence of Credit Enhancement Agreements; and (3) existence
of Acquisition Provisions.” Doc. 1-1 at 8. Caliber and
MERS assert, and Plaintiffs do not rebut, that this
allegation is “simply a random list of things that
might conceivably accompany a transfer of real
property.” Doc. 7 at 8-9. This unexplained list is
insufficient to state a claim that is plausible on ...