Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-1_09-cv-02089/USCOURTS-caed-1_09-cv-02089-1/pdf.json

Nature of Suit Code: 140
Nature of Suit: Negotiable Instruments
Cause of Action: 15:1601 Truth in Lending

---

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF CALIFORNIA

GEORGE A. SALDATE, JR., CASE NO. CV F 09-2089 LJO SMS

Plaintiff, ORDER ON DEFENDANTS’ F.R.Civ.P. 12(b)(6)

MOTION TO DISMISS

vs. (Doc. 18.)

WILSHIRE CREDIT CORPORATION,

et al.,

Defendants.

 /

INTRODUCTION

DefendantsWilshire Credit Corporation (“Wilshire”),MortgageElectronicRegistrationSystems,

Inc. (“MERS”) and Wells Fargo Bank (“Wells Fargo”) seek to dismiss as meritless, conclusoryand time 1

barred plaintiff George A. Saldate, Jr.’s (“Mr. Saldate’s”) statutory and common law claims arising from

a “residential mortgage” for his Fresno property (“property”). Mr. Saldate filed no papers to oppose

dismissal of claims against defendants. This Court considered defendants’ F.R.Civ.P. 12(b)(6) motion

to dismiss on the record and VACATES the February 24, 2010 hearing, pursuant to Local Rule 230(c),

(g). For the reasons discussed below, this Court DISMISSES this action against defendants. 

Wilshire, MERS and Wells Fargo will be referred to collectively as “defendants.”

1

1

Case 1:09-cv-02089-LJO -SMS Document 27 Filed 02/12/10 Page 1 of 20
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

BACKGROUND

Mr. Saldate’s Property Loan

On November 4, 2005, Mr. Saldate completed a loan for the property. The loan terms were

memorialized in a promissory note which was secured by a deed of trust (“DOT”) on the property. The

DOT was recorded on November 22, 2005 and identifies defendant WMC Mortgage Corp. (“WMC”) 2

as lender, Westwood Associates as trustee, and MERS as beneficiary.

By a Corporate Assignment of Mortgage/Deed of Trust recorded on February 4, 2008, MERS

assigned the DOT to Wells Fargo. By a Substitution of Trustee recorded on April 1, 2008, defendant

Quality Loan Service Corporation (“Quality”) substituted as trustee for Westwood Associates. Quality

filed a Notice of Default and Election to Sell under Deed of Trust, which was recorded on March 6,

2009. The property has neither been sold nor advertised for sale.

Mr. Saldate’s Claims

On December 1, 2009, Mr. Saldate filed his complaint (“complaint”) to allege statutory and

common law claims (addressed in greater detail below) arising from moving and other defendants’

“negligent, fraudulent and unlawful conduct concerning a residential mortgage loan transaction with the

Plaintiff.” The complaint alleges that moving and other defendants “developed a scheme to rapidly

infuse capital into the home mortgage lending system by selling mortgages on the secondary market,

normally three to five times, to create a bankruptcy remote transaction.” According to the complaint,

“[n]o legal transfer of the Mortgage Note, Deed of Trust or any other interest in Plaintiff’s Property was

ever effected that gave any of the Defendants the right to be named a trustee, mortgagee, beneficiary or

an authorized agent of trustee, mortgagee or beneficiary of Plaintiff [sic] Mortgage Note, Deed of Trust

of any other interest in Plaintiff’s Property.” The complaint further alleges that moving and other

defendants “are not the real parties in interest because they are not the legal trustee, mortgagee or

beneficiary, nor are they authorized agents of the trustee, mortgagee or beneficiary, nor are they in

possession of the Note, or holders of the Note, or non-holders of the Note entitled to payment.”

The complaint seeks an injunction on “collecting on the subject Loan and from causing the

All documents pertaining to Mr. Saldate’s loans were recorded with the Fresno County Recorder.

2

2

Case 1:09-cv-02089-LJO -SMS Document 27 Filed 02/12/10 Page 2 of 20
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

Property to be sold” and compensatory, statutory and punitive damages.

DISCUSSION

F.R.Civ.P. 12(b)(6) Motion To Dismiss Standards

Defendants characterize the complaint as “nothingmore than conclusoryallegations and rejected

interpretations of law in a garbled pleading.”

A F.R.Civ.P. 12(b)(6) motion to dismiss is a challenge to the sufficiency of the pleadings set

forth in the complaint. “When a federal court reviews the sufficiency of a complaint, before the reception

of any evidence either by affidavit or admissions, its task is necessarily a limited one. The issue is not

whether a plaintiff will ultimately prevail but whether the claimant is entitled to offer evidence to

support the claims.” Scheurer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683 (1974); Gilligan v. Jamco

Development Corp., 108 F.3d 246, 249 (9 Cir. 1997). A F.R.Civ.P. 12(b)(6) dismissal is proper where

th

there is either a “lack of a cognizable legal theory” or “the absence of sufficient facts alleged under a

cognizable legal theory.” Balisteri v. Pacifica Police Dept., 901 F.2d 696, 699 (9 Cir. 1990); Graehling th

v. Village of Lombard, Ill., 58 F.3d 295, 297 (7 Cir. 1995). th

In resolving a F.R.Civ.P. 12(b)(6) motion, a court must: (1) construe the complaint in the light

most favorable to the plaintiff; (2) accept all well-pleaded factual allegations as true; and (3) determine

whether plaintiff can prove any set of facts to support a claim that would merit relief. Cahill v. Liberty

Mut. Ins. Co., 80 F.3d 336, 337-338 (9th Cir. 1996). Nonetheless, a court is not required “to accept as

true allegations that aremerelyconclusory, unwarranted deductions of fact, or unreasonable inferences.”

In re Gilead Sciences Securities Litig., 536 F.3d 1049, 1055 (9 Cir. 2008) (citation omitted). A court th

need not permit an attempt to amend a complaint if “it determines that the pleading could not possibly

be cured by allegation of other facts.” Cook, Perkiss and Liehe, Inc. v. N. Cal. Collection Serv. Inc., 911

F.2d 242, 247 (9 Cir. 1990). “While a complaint attacked by a Rule 12(b)(6) motion to dismiss does th

not need detailed factual allegations, a plaintiff’s obligation to provide the ‘grounds’ of his ‘entitlement

to relief’ requires more than labels and conclusions, and a formulaic recitation of the elements of a cause

of action will not do.” Bell Atl. Corp. v. Twombly, 550 U.S. 554,127 S. Ct. 1955, 1964-65 (2007)

(internal citations omitted). Moreover, a court “will dismiss any claim that, even when construed in the

light most favorable to plaintiff, fails to plead sufficiently all required elements of a cause of action.” 

3

Case 1:09-cv-02089-LJO -SMS Document 27 Filed 02/12/10 Page 3 of 20
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

Student Loan Marketing Ass'n v. Hanes, 181 F.R.D. 629, 634 (S.D. Cal. 1998). In practice, “a complaint

. . . must contain either direct or inferential allegations respecting all the material elements necessary to

sustain recovery under some viable legal theory.” Twombly, 550 U.S. at 562, 127 S.Ct. at 1969 (quoting

Car Carriers, Inc. v. Ford Motor Co., 745 F.2d 1101, 1106 (7 Cir. 1984)). th

In Ashcroft v. Iqbal, __ U.S. __, 129 S.Ct. 1937,1949 (2009), the U.S. Supreme Court recently

explained:

To survive a motion to dismiss, a complaint must contain sufficient factual

matter, accepted as true, to “state a claim to relief that is plausible on its face.” . . . A

claim has facial plausibilitywhen the plaintiff pleads factual content that allows the court

to draw the reasonable inference that the defendant is liable for the misconduct alleged. 

. . . Threadbare recitals of the elements of a cause of action, supported by mere

conclusory statements, do not suffice. (Citation omitted.)

Moreover, a limitations defense may be raised by a F.R.Civ.P. 12(b)(6) motion to dismiss. 

Jablon v. Dean Witter & Co., 614 F.2d 677, 682 (9 Cir. 1980); see Avco Corp. v. Precision Air Parts, th

Inc., 676 F.2d 494, 495 (11 Cir. 1982), cert. denied, 459 U.S. 1037, 103 S.Ct. 450 (1982). A

th

F.R.Civ.P. 12(b)(6) motion to dismiss may raise the limitations defense when the statute’s running is

apparent on the complaint’s face. Jablon, 614 F.2d at 682. If the limitations defense does not appear

on the complaint’s face and the trial court accepts matters outside the pleadings’ scope, the defense may

be raised by a motion to dismiss accompanied by affidavits. Jablon, 614 F.2d at 682; Rauch v. Day and

Night Mfg. Corp., 576 F.2d 697 (6 Cir. 1978). th

For a F.R.Civ.P. 12(b)(6) motion, a court generally cannot consider material outside the

complaint. Van Winkle v. Allstate Ins. Co., 290 F.Supp.2d 1158, 1162, n. 2 (C.D. Cal. 2003). 

Nonetheless, a court may consider exhibits submitted with the complaint. Van Winkle, 290 F.Supp.2d

at 1162, n. 2. In addition, a “court may consider evidence on which the complaint ‘necessarily relies’

if: (1) the complaint refers to the document; (2) the document is central to the plaintiff's claim; and (3)

no party questions the authenticity of the copy attached to the 12(b)(6) motion.” Marder v. Lopez, 450

F.3d 445, 448 (9 Cir. 2006). A court may treat such a document as “part of the complaint, and thus may th

assume that its contents are true for purposes of a motion to dismiss under Rule 12(b)(6).” United States

v. Ritchie, 342 F.3d 903, 908 (9th Cir.2003). Such consideration prevents “plaintiffs from surviving a

Rule 12(b)(6) motion by deliberately omitting reference to documents upon which their claims are

4

Case 1:09-cv-02089-LJO -SMS Document 27 Filed 02/12/10 Page 4 of 20
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

based.” Parrino v. FHP, Inc., 146 F.3d 699, 706 (9 Cir. 1998). A “court may disregard allegations th 3

in the complaint if contradicted by facts established by exhibits attached to the complaint.” Sumner Peck

Ranch v. Bureau of Reclamation, 823 F.Supp. 715, 720 (E.D. Cal. 1993) (citing Durning v. First Boston

Corp., 815 F.2d 1265, 1267 (9th Cir.1987)). Moreover, “judicial notice may be taken of a fact to show

that a complaint does not state a cause of action.” Sears, Roebuck & Co. v. Metropolitan Engravers,

Ltd., 245 F.2d 67, 70 (9 Cir. 1956); see Estate of Blue v. County of Los Angeles, 120 F.3d 982, 984 (9 th th

Cir. 1997). A court properlymay 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 (9 Cir. 1988) (citation omitted). th

As such, this Court is able to consider Mr. Saldate’s pertinent loan and related documents.

Rosenthal Fair Debt Collection Practices Act

The complaint’s second claim against Wilshire is entitled “Violation of California RosenthalAct

California Civil Code § 1788 et seq.” The claim alleges that Wilshire “used unfair and unconscionable

means to collect a debt not owed to Defendant Wilshire or its principal by sending deceptive letters and

making phone calls to Plaintiff demanding payment.” The claim further alleges that Wilshire “made

false reports to credit reporting agencies about Plaintiff’s credit standing.”

Wilshire faults the claim’s failure to allege that Wilshire is a debt collector under the Rosenthal

Fair Debt Collection Practices Act (“RFDCPA”), Cal. Civ. Code, §§ 1788, et seq., in that Wilshire, as

a loan servicer, is authorized to enforce the DOT beneficiary’s security interest. Wilshire notes that the

RFDCPA does not prevent a creditor to enforce its security interest under a deed of trust because

property foreclosure does not support a fair debt collection claim.

The RFDCPA’s purpose is “to prohibit debt collectors from engaging in unfair or deceptive

practices in the collection of consumer debts and to require debtors to act fairly in entering into and

honoring such debts.” Cal. Civ. Code, § 1788.1(b). The RFDCPA defines “debt collector” as “any

person who, in the ordinary course of business, regularly, on behalf of himself or herself or others,

“We have extended the ‘incorporation by reference’ doctrine to situations in which the plaintiff’s claim

3

depends on the contents of a document, the defendant attaches the document to its motion to dismiss, and the parties do not

dispute the authenticity of the document, even though the plaintiff does not explicitly allege the contents of that document

in the complaint.” Knievel v. ESPN, 393 F.3d 1068, 1076 (9 Cir. 2005) (citing Parrino, 146 F.3d at 706).

th

5

Case 1:09-cv-02089-LJO -SMS Document 27 Filed 02/12/10 Page 5 of 20
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

engages in debt collection.” Cal. Civ. Code, § 1788.2(c). “[F]oreclosure does not constitute debt

collection under the RFDCPA.” Izenberg v. ETS Services, LLC, 589 F.Supp.2d 1193, 1199 (C.D. Cal.

2008). The “law is clear that foreclosing on a property pursuant to a deed of trust is not a debt collection

within the meaning of the RFDCPA or the FDCA [Fair Debt Collection Practices Act, 15 U.S.C. §§

1692, et seq.].” Gamboa v. Trustee Corps, 2009 WL 656285, * 4 (N.D. Cal. 2009). As this Court has

explained previously, “[l]ogic suggests that non-judicial foreclosure is not a debt collector’s act under

California Civil Code section 1788.2(c).” Swanson v. ECM Mortgage Corp., 2009 WL 3627925 (E.D.

Cal. 2009).

The RFDCPA claim is barred in that complaint points to only non-judicial foreclosure. 

Moreover, the claim is doomed with failure to allege specific RFDCPA violations or violated RFDCPA

sections. The RFDCPA claim is subject to dismissal.

Negligence

The complaint’s (third) negligence claim alleges that “Wilshire breached their [sic] duty of care

to the Plaintiff when they [sic] took payments to which they [sic] were not entitled, charged fees they

[sic] were not entitled to charge, and wrongfully made or otherwise authorized negative reporting of

Plaintiff’s creditworthiness to various credit bureaus.” The claim further alleges that “MERS and Wells

Fargo owed Plaintiff a duty to perform its administrative function recording, maintaining and

transferring documents as it relates to Plaintiff’s loan in a manner not to cause Plaintiff harm.”

Defendants fault the claim’s absence of a cognizable duty.

“The elements of a cause of action for negligence are (1) a legal duty to use reasonable care, (2)

breach of that duty, and (3) proximate [or legal] cause between the breach and (4) the plaintiff's injury.”

Mendoza v. City of Los Angeles, 66 Cal.App.4th 1333, 1339, 78 Cal.Rptr.2d 525 (1998) (citation

omitted). “The existence of a duty of care owed by a defendant to a plaintiff is a prerequisite to

establishing a claim for negligence.” Nymark v. Heart Fed. Savings & Loan Assn., 231 Cal.App.3d

1089, 1095, 283 Cal.Rptr. 53 (1991). “The existence of a legal duty to use reasonable care in a particular

factual situation is a question of law for the court to decide.” Vasquez v. Residential Investments, Inc.,

118 Cal.App.4th 269, 278, 12 Cal.Rptr.3d 846 (2004) (citation omitted).

“The 'legal duty' of care may be of two general types: (a) the duty of a person to use ordinary care

6

Case 1:09-cv-02089-LJO -SMS Document 27 Filed 02/12/10 Page 6 of 20
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

in activities from which harm might reasonably be anticipated [, or] (b) [a]n affirmative duty where the

person occupies a particular relationship to others. . . . In the first situation, he is not liable unless he is

actively careless; in the second, he may be liable for failure to act affirmatively to prevent harm.”

McGettigan v. Bay Area Rapid Transit Dist., 57 Cal.App.4th 1011, 1016-1017, 67 Cal.Rptr.2d 516

(1997).

There is no actionable duty between a lender and borrower in that loan transactions are armslength. A lender “owes no duty of care to the [borrowers] in approving their loan. Liability to a

borrower for negligence arises only when the lender ‘actively participates’ in the financed enterprise

‘beyond the domain of the usual money lender.’” Wagner v. Benson, 101 Cal.App.3d 27, 35, 161

Cal.Rptr. 516 (1980) (citing several cases). “[A]s a general rule, a financial institution owes no duty of

care to a borrower when the institution's involvement in the loan transaction does not exceed the scope

of its conventional role as a mere lender of money.” Nymark, 231 Cal.App.3d at 1096, 283 Cal.Rptr.

53; see Myers v. Gurantee Sav. & Loan Assn., 79 Cal.App.3d 307, 312, 144 Cal. Rptr. 616 (1978) (no

lender liability when lender did not engage “in any activity outside the scope of the normal activities of

a lender of construction monies”). 

“Public policy does not impose upon the Bank absolute liability for the hardships which may

befall the [borrower] it finances.” Wagner, 101 Cal.App.3d at 34, 161 Cal.Rptr. 516. The success of

a borrower’s investment “is not a benefit of the loan agreement which the Bank is under a duty to

protect.” Wagner, 101 Cal.App.3d at 34, 161 Cal.Rptr. 516 (lender lacked duty to disclose “any

information it may have had”).

Defendants note the complaint’s attempt to impose on defendants “the common law dutyof care”

based on vague and conclusory allegations. Defendants are correct that the negligence claim lacks facts

to support an actionable duty to impose on defendants. “No such duty exists” for a lender “to determine

the borrower's ability to repay the loan. . . . The lender's efforts to determine the creditworthiness and

ability to repay by a borrower are for the lender's protection, not the borrower's.” Renteria v. United

States, 452 F.Supp.2d 910, 922-923 (D. Ariz. 2006) (borrowers “had to rely on their own judgment and

risk assessment to determine whether or not to accept the loan”). Defendants are correct that they lack

an independent duty to “perform acts in such a manner as not to cause Plaintiff harm.” The complaint

7

Case 1:09-cv-02089-LJO -SMS Document 27 Filed 02/12/10 Page 7 of 20
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

lacks facts of special circumstances to impose duties on Wells Fargo in that the complaint depicts an

arms-length loan transaction, nothing more. The complaint fails to substantiate a special lending

relationship or an actionable breach of duty to substantiate a negligence claim. The negligence claim

fails.

Real Estate Settlement Procedures Act

The complaint’s fourth claim attempts to allege that Wilshire violated the Real Estate Settlement

Procedures Act, 12 U.S.C. §§ 2601, et seq. Defendants challenge the claim as time barred and for failure

to allege pecuniary loss.

No Private Right Of Action For Disclosure Violations

The RESPA claim accuses Wilshire of failure to provide RESPA disclosures. Defendants note

the absence of a private right of action to support such allegation.

RESPA’s purpose is to “curb abusive settlement practices in the real estate industry. Such

amorphous goals, however, do not translate into a legislative intent to create a private right of action.” 

Bloom v. Martin, 865 F.Supp. 1377, 1385 (N.D. Cal. 1994), aff’d, 77 F.3d 318 (1996). “The structure

of RESPA’s various statutory provisions indicates that Congress did not intend to create a private right

of action for disclosure violations under 12 U.S.C. § 2603 . . . Congress did not intend to provide a

private remedy . . .” Bloom, 865 F.Supp. at 1384.

Defendants correctly point out the absence of a private right of action for RESPA disclosure

violations to doom the RESPA claim to the extent it is based on disclosure violations.

Absence Of Pecuniary Loss

The RESPA claim asserts that Wilshire failed to respond properly to Mr. Saldate’s qualified

written request (“QWR”).

Defendants fault the RESPA claim’s failure to support an actionable 12 U.S.C. § 2605 violation

in the absence of allegations of Mr. Saldate’s pecuniary loss.

Under RESPA, a QWR is a “written request from the borrower (or an agent of the borrower) for

information relating to the servicing of such loan.” 12 U.S.C. § 2605(e)(1)(A). Among other things,

a QWR must include a “statement of the reasons for the belief of the borrower, to the extent applicable,

that the account is in error or provides sufficient detail to the servicer regarding other information sought

8

Case 1:09-cv-02089-LJO -SMS Document 27 Filed 02/12/10 Page 8 of 20
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

by the borrower.” 12 U.S.C. § 2605(e)(1)(B)(ii).

Defendants note the RESPA claim’s conclusory allegation that Mr. Saldate “has suffered and

continues to suffer damages” fails to support an actionable violation under 12 U.S.C. 2605. "Whoever

fails to comply with this section shall be liable to the borrower . . . [for] any actual damages to the

borrower as a result of the failure . . ." 12 U.S.C. § 2605(f)(1)(A). "However, alleging a breach of

RESPA duties alone does not state a claim under RESPA. Plaintiffs must, at a minimum, also allege

that the breach resulted in actual damages." Hutchinson v. Delaware Sav. Bank FSB, 410 F.Supp.2d

374, 383 (D. N.J. 2006).

A purported RESPA claim fails to allege pecuniary loss from Wilshire’s failure to respond to a

QWR. Such omission is fatal to the claim’s mere reliance on a RESPA violation. The RESPA claim

is doomed in the absence of allegations of Mr. Saldate’s identifiable damages attributable to a RESPA

violation.

Limitations Period

Defendants challenge the RESPA claim as time barred under the three-year limitations period

of 12 U.S.C. § 2614 to seek damages for 12 U.S.C. § 2605 violations. Defendants note that more than

three years have passed since the November 2005 completion of Mr. Saldate’s loan. 

The complaint lacks allegations to avoid the three-year limitations period to further doom the

RESPA claim against Wilshire.

Fraud

The complaint’s (sixth) fraud claim alleges that Wilshire misrepresented “the right to collect

monies from Plaintiff on its behalf or on behalf of others when Defendant Wilshire had no legal right

to collect such monies.” The fraud claims further alleges that MERS misrepresented “on the Deed of

Trust that it is a qualified beneficiary with the ability to assign or transfer the Deed of Trust and/or the

Note and/or substitute trustees under the Deed of Trust” and that MERS “followed the applicable legal

requirements to transfer the Note and Deed of Trust to subsequent beneficiaries.”

Defendants fault the fraud claim’s absence of sufficient particularity to satisfy F.R.Civ.P.

12(b)(6).

The elements of a California fraud claim are: (1) misrepresentation (false representation,

9

Case 1:09-cv-02089-LJO -SMS Document 27 Filed 02/12/10 Page 9 of 20
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

concealment or nondisclosure); (2) knowledge of the falsity (or “scienter”); (3) intent to defraud, i.e.,

to induce reliance; (4) justifiable reliance; and (5) resulting damage. Lazar v. Superior Court, 12 Cal.4th

631, 638, 49 Cal.Rptr.2d 377 (1996). The same elements comprise a cause of action for negligent

misrepresentation, except there is no requirement of intent to induce reliance. Caldo v. Owens-Illinois,

Inc., 125 Cal.App.4th 513, 519, 23 Cal.Rtpr.3d 1 (2004).

“[T]o establish a cause of action for fraud a plaintiff must plead and prove in full, factually and

specifically, all of the elements of the cause of action.” Conrad v. Bank of America, 45 Cal.App.4th 133,

156, 53 Cal.Rptr.2d 336 (1996). Theremust be a showing “that the defendant therebyintended to induce

the plaintiff to act to his detriment in reliance upon the false representation” and “that the plaintiff

actually and justifiably relied upon the defendant’s misrepresentation in acting to his detriment.” 

Conrad, 45 Cal.App.4th at 157, 53 Cal.Rptr.2d 336. “The absence of any one of these required elements

will preclude recovery.” Wilhelm v. Pray, Price, Williams & Russell, 186 Cal.App.3d 1324, 1332, 231

Cal.Rptr. 355 (1986).

F.R.Civ.P. 9(b) requires a partyto “state with particularitythe circumstances constituting fraud.”4

In the Ninth Circuit, “claims for fraud and negligent misrepresentation must meet Rule 9(b)'s

particularityrequirements.” Neilson v. Union Bank of California, N.A., 290 F.Supp.2d 1101, 1141 (C.D.

Cal. 2003). A fraud claim must be pled “with a high degree of meticulousness.” Desaigoudar v.

Meyercord, 223 F.3d 1020, 1022 (9 Cir. 2000). A court may dismiss a claim grounded in fraud when th

its allegations fail to satisfyF.R.Civ.P. 9(b)’s heightened pleading requirements. Vess, 317 F.3d at 1107.

A motion to dismiss a claim “grounded in fraud” under F.R.Civ.P. 9(b) for failure to plead with

particularity is the “functional equivalent” of a F.R.Civ.P. 12(b)(6) motion to dismiss for failure to state

a claim. Vess, 317 F.3d at 1107. As a counter-balance, F.R.Civ.P. 8(a)(2) requires from a pleading “a

short and plain statement of the claim showing that the pleader is entitled to relief.”

F.R.Civ.P. 9(b)’s heightened pleading standard “is not an invitation to disregard Rule 8's

F.R.Civ.P. 9(b)’s particularity requirement applies to state law causes of action: “[W]hile a federal court

4

will examine state law to determine whether the elements of fraud have been pled sufficiently to state a cause of action, the

Rule 9(b) requirement that the circumstances of the fraud must be stated with particularity is a federally imposed rule.” Vess

v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1103 (9 Cir. 2003) (quoting Hayduk v. Lanna, 775 F.2d 441, 443 (1 Cir.

th st

1995)(italics in original)).

10

Case 1:09-cv-02089-LJO -SMS Document 27 Filed 02/12/10 Page 10 of 20
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

requirement of simplicity, directness, and clarity” and “has among its purposes the avoidance of

unnecessary discovery.” McHenry v. Renne, 84 F.3d 1172, 1178 (9 Cir. 1996). F.R.Cvi.P. 9(b) th

requires “specific” allegations of fraud “to give defendants notice of the particular misconduct which

is alleged to constitute the fraud charged so that they can defend against the charge and not just deny that

they have done anything wrong.” Semegen v. Weidner, 780 F.2d 727, 731 (9 Cir. 1985). “A pleading th

is sufficient under Rule 9(b) if it identifies the circumstances constituting fraud so that the defendant can

prepare an adequate answer from the allegations.” Neubronner v. Milken, 6 F.3d 666, 671-672 (9 Cir. th

1993) (internal quotations omitted; citing Gottreich v. San Francisco Investment Corp., 552 F.2d 866,

866 (9 Cir. 1997)). The Ninth Circuit has explained: th

Rule 9(b) requires particularized allegations of the circumstances constituting fraud. The

time, place and content of an alleged misrepresentation may identify the statement or the

omission complained of, but these circumstances do not “constitute” fraud. The

statement in question must be false to be fraudulent. Accordingly, our cases have

consistently required that circumstances indicating falseness be set forth. . . . [W]e [have]

observed that plaintiff must include statements regarding the time, place, and nature of

the alleged fraudulent activities, and that “mere conclusory allegations of fraud are

insufficient.” . . . The plaintiff must set forth what is false or misleading about a

statement, and why it is false. In other words, the plaintiff must set forth an explanation

as to why the statement or omission complained of was false or misleading. . . .

In certain cases, to be sure, the requisite particularitymight be supplied with great

simplicity.

In Re Glenfed, Inc. Securities Litigation, 42 F.3d 1541, 1547-1548 (9 Cir. 1994) (en banc) (italics in th

original) superseded by statute on other grounds as stated in Marksman Partners, L.P. v. Chantal

Pharm. Corp., 927 F.Supp. 1297 (C.D. Cal. 1996); see Cooper v. Pickett, 137 F.3d 616, 627 (9 Cir. th

1997) (fraud allegations must be accompanied by “the who, what, when, where, and how” of the

misconduct charged); Neubronner, 6 F.3d at 672 (“The complaint must specify facts as the times, dates,

places, benefits received and other details of the alleged fraudulent activity.”) 

As to multiple fraud defendants, a plaintiff “must provide each and every defendant with enough

information to enable them ‘to know what misrepresentations are attributable to them and what

fraudulent conduct they are charged with.’” Pegasus Holdings v. Veterinary Centers of America, Inc.,

38 F.Supp.2d 1158, 1163 (C.D. Ca. 1998) (quoting In re Worlds of Wonder Sec. Litig., 694 F.Supp.

1427, 1433 (N.D. Ca. 1988)). “Rule 9(b) does not allow a complaint to merelylump multiple defendants

together but ‘require[s] plaintiffs to differentiate their allegations when suing more than one defendant

11

Case 1:09-cv-02089-LJO -SMS Document 27 Filed 02/12/10 Page 11 of 20
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

. . . and inform each defendant separately of the allegations surrounding his alleged participation in the

fraud.’” Swartz v. KPMG LLP, 476 F.3d 756, 764-765 (9 Cir. 2007) (quoting Haskin v. R.J. Reynolds th

Tobacco Co., 995 F.Supp. 1437, 1439 (M.D. Fla. 1998)). “In the context of a fraud suit involving

multiple defendants, a plaintiff must, at a minimum, ‘identif[y] the role of [each] defendant[] in the

alleged fraudulent scheme.” Swartz, 476 F.3d at 765 (quoting Moore v. Kayport Package Express, Inc.,

885 F.2d 531, 541 (9 Cir. 1989)). th

Moreover, in a fraud action against a corporation, a plaintiff must “allege the names of the

persons who made the allegedlyfraudulent representations, their authorityto speak, to whom theyspoke,

what they said or wrote, and when it was said or written.” Tarmann v. State Farm Mut. Auto. Ins. Co.

2 Cal.App.4th 153, 157, 2 Cal.Rptr.2d 861 (1991).

The complaint is severely lacking and fails to satisfy F.R.Civ.P. 9(b) “who, what, when, where

and how” requirements as to defendants. The complaint makes no effort to allege names of the persons

who made the allegedly fraudulent representations, their authority to speak, to whom they spoke, what

they said or wrote, and when it was said or written. The complaint fails to substantiate the circumstances

alleging falseness attributable to defendants. The complaint lacks facts to support each fraud element. 

The fraud claim’s deficiencies are so severe to suggest no potential improvement from an attempt to

amend.

Defendants further take issue with the complaint’s allegation that MERS “has no beneficial

interest or right to enforce the terms of the Promissory Note, because it is not in possession of the

PromissoryNote, and has no authority to conduct a non-judicial foreclosure sale.” Defendants challenge

claims that MERS is not registered to do business in California.

Defendants provide a California Secretary of State listing that MERS is a current active

corporation in California. Defendants note that courts have recognized that MERS “is fully entitled to

exercise foreclosure rights or take other action consistent with rights granted to it under a deed of trust.” 

Defendants point out that MERS, as the lender’s nominee, acted as the DOT beneficiary and properly

assigned the DOT to Wells Fargo. If a borrower defaults on a loan and the deed of trust contains a

power of sale clause, the lender may non-judicially foreclose. See McDonald v. SmokeCreek Live Stock

Co., 209 Cal. 231, 236-237, 286 P. 693 (1930). The complaint’s conclusoryallegations as to MERS lack

12

Case 1:09-cv-02089-LJO -SMS Document 27 Filed 02/12/10 Page 12 of 20
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

sufficient factual support to render the allegations unworthy of consideration.

Unfair Competition Law

The complaint’s seventh claim alleges that “Wilshire’s violation of the Rosenthal Act, RESPA,

their [sic] negligence, fraud and illegal foreclosure activities, as alleged herein, constitute unlawful,

unfair, and/or fraudulent business practices,” as defined in California Business and Professions Code,

§§ 17200, et seq. (Unfair Competition Law (“UCL”)). The claim further alleges that “MERS’

negligence, fraud and illegal foreclosure activities, alleged herein, constitute unlawful, unfair, and/or

fraudulent business practices” as defined by the UCL.

Standing

Defendants challenge Mr. Saldate’s standing to pursue a UCL claim in absence of allegations

of “facts as to the money or property Plaintiff allegedly lost as a result of any purported violation” of the

UCL.

California Business and Professions Code section 17204 limits standing to bring a UCL claim

to specified public officials and a private person “who has suffered injury in fact and has lost money or

property as a result of the unfair competition.”

Business and Professions Code section 17203 addresses UCL relief and provides in pertinent

part:

Any person who engages, has engaged, or proposes to engage in unfair competition may be

enjoined in any court of competent jurisdiction. The court may make such orders or judgments . . . as

may be necessary to restore to any person in interest any money or property, real or personal, which

may have been acquired by means of such unfair competition. (Bold added.)

Defendants correctly note the complaint’s absence of facts of Mrs Saldate’s money or property

allegedly lost due to a UCL violation. The UCL claim offers an insufficient, bare allegation that

“Plaintiff has suffered various damages and injuries according to proof at trial.” The complaint lacks

sufficient allegations of Mr. Saldate’s standing to warrant dismissal of the UCL claim.

Unfair, Fraudulent Or Deceptive Business Practices

Defendants challenge the complaint’s absence of allegations of wrongdoing to support a UCL

claim.

“Unfair competition is defined to include 'unlawful, unfair or fraudulent business practice and

13

Case 1:09-cv-02089-LJO -SMS Document 27 Filed 02/12/10 Page 13 of 20
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

unfair, deceptive, untrue or misleading advertising.'” Blank v. Kirwan, 39 Cal.3d 311, 329, 216 Cal.Rptr.

718 (1985) (quoting Cal. Bus. & Prof. Code, § 17200). The UCL establishes three varieties of unfair

competition – “acts or practices which are unlawful, or unfair, or fraudulent.” Shvarts v. Budget Group,

Inc., 81 Cal.App.4th 1153, 1157, 97 Cal.Rptr.2d 722 (2000). An “unlawful business activity” includes

anything that can properly be called a business practice and that at the same time is forbidden by law.

Blank, 39 Cal.3d at 329, 216 Cal.Rptr. 718 (citing People v. McKale, 25 Cal.3d 626, 631-632, 159

Cal.Rptr. 811, 602 P.2d 731 (1979)).

The UCL prohibits “unlawful” practices “forbidden by law, be it civil or criminal, federal, state,

or municipal, statutory, regulatory, or court-made.” Saunders v. Superior Court, 27 Cal.App.4th 832,

838, 33 Cal.Rptr.2d 548 (1999). According to the California Supreme Court, the UCL “borrows”

violations of other laws and treats them as unlawful practices independently actionable under the UCL. 

Farmers Ins. Exchange v. Superior Court, 2 Cal.4th 377, 383, 6 Cal.Rptr.2d 487 (1992).

“Unfair” under the UCL “means conduct that threatens an incipient violation of an antitrust law,

or violates the policy or spirit of one of those laws because its effects are comparable to or the same as

a violation of the law, or otherwise significantly threatens or harms competition.” Cal-Tech

Communications, Inc. v. Los Angeles Cellular Tel. Co., 20 Cal.4th 163, 187, 83 Cal.Rptr.2d 548 (1999).

The “fraudulent” prong under the UCLrequires a plaintiff to “show deception to some members

of the public, or harm to the public interest,” Watson Laboratories, Inc. v. Rhone-Poulenc Rorer, Inc.,

178 F.Supp.2d 1099, 1121 (C.D. Ca. 2001), or to allege that “members of the public are likely to be

deceived.” Medical Instrument Development Laboratories v. Alcon Laboratories, 2005 WL 1926673,

at *5 (N.D. Cal. 2005).

“A plaintiff alleging unfair business practices under these statutes [UCL] must state with

reasonable particularity the facts supporting the statutory elements of the violation.” Khoury v. Maly's

of California, Inc., 14 Cal.App.4th 612, 619, 17 Cal.Rptr.2d 708 (1993). 

A fellow district court has explained the borrowing of a violation of law other than the UCL:

To state a claim for an “unlawful” business practice under the UCL, a plaintiff

must assert the violation of any other law. Cel-Tech Commc'ns, Inc. v. Los Angeles

Cellular Telephone Co., 20 Cal.4th 163, 180, 83 Cal.Rptr.2d 548, 973 P.2d 527 (1999)

(stating, “By proscribing ‘any unlawful’ business practice, section 17200 ‘borrows'

violations of other law and treats them as unlawful practices that the unfair competition

14

Case 1:09-cv-02089-LJO -SMS Document 27 Filed 02/12/10 Page 14 of 20
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

law makes independently actionable.”) (citation omitted). Where a plaintiff cannot state

a claim under the “borrowed” law, she cannot state a UCL claim either. See, e.g., Smith

v. State Farm Mutual Automobile Ins. Co., 93 Cal.App.4th 700, 718, 113 Cal.Rptr.2d

399 (2001). Here, Plaintiff has predicated her “unlawful” business practices claim on her

TILA claim. However, as discussed above, Plaintiff's attempt to state a claim under TILA

has failed. Accordingly, Plaintiff has stated no “unlawful” UCL claim.

Rubio v. Capital One Bank (USA), N.A., 572 F.Supp.2d 1157, 1168 (C.D. Cal. 2008).

Defendants are correct that the complaint is “insufficient to establish that Defendants engaged

in any ‘unfair’ business practices within the meaning of Section 17200.” In the absence of violation of

TILA, RESPA or other borrowed law, a UCL claim fails in that it cannot rest, as defendants note, on

“alleged irregularities in the loan transaction.” The complaint points to no predicate violation of law. 

The complaint is deficient to allege that defendants engaged in unfair practices subject to the UCL. The

complaint lacks reasonable particularityof facts to support a UCLclaim. The complaint’s bare reference

to TILA, RESPA and common law claims provides not the slightest inference that Mr. Saldate has a

viable UCL claim. Similar to the fraud claim, the UCL claim lacks particularity of fraudulent

circumstances, such as a misrepresentation, for a UCL claim. The complaint lacks allegations of

ongoing wrongful business conduct or a pattern of such conduct. The complaint lacks facts to hint at

a wrong subject to the UCL to warrant the UCL claim’s dismissal against WMC.

Wrongful Foreclosure

The complaint’s (tenth) wrongful foreclosure claim alleges that defendants are not entitled to

utilize non-judicial foreclosure “to wrongfully convert Plaintiff’s Property” in the absence of their

possession of Mr. Saldate’s promissory note. The claim also accuses defendants of failure “to give

proper notice of the Notice of Default.”

Defendants fault the wrongful foreclosure claim as “premature” in the absence of a foreclosure

sale. Defendants further challenge the claim based on Mr. Saldate’s failure to tender amounts owed.

“Financing or refinancing of real propertyis generallyaccomplished in California through a deed

of trust. The borrower (trustor) executes a promissory note and deed of trust, thereby transferring an

interest in the property to the lender (beneficiary) as security for repayment of the loan.” Bartold v.

Glendale Federal Bank, 81 Cal.App.4th 816, 821, 97 Cal.Rptr.2d 226 (2000). A deed of trust “entitles

the lender to reach some asset of the debtor if the note is not paid.” Alliance Mortgage Co. v. Rothwell,

15

Case 1:09-cv-02089-LJO -SMS Document 27 Filed 02/12/10 Page 15 of 20
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

10 Cal.4th 1226, 1235, 44 Cal.Rptr.2d 352 (1995).

If a borrower defaults on a loan and the deed of trust contains a power of sale clause, the lender

may non-judicially foreclose. See McDonald v. Smoke Creek Live Stock Co., 209 Cal. 231, 236-237,

286 P. 693 (1930). The California Court of Appeal has explained non-judicial foreclosure under

California’s statutory scheme:

The comprehensive statutory framework established to govern nonjudicial

foreclosure sales is intended to be exhaustive. . . . It includes a myriad of rules relating

to notice and right to cure. It would be inconsistent with the comprehensive and

exhaustive statutory scheme regulating nonjudicial foreclosures to incorporate another

unrelated cure provision into statutory nonjudicial foreclosure proceedings.

Moeller v. Lien, 25 Cal.App.4th 822, 834, 30 Cal.Rptr.2d 777 (1994); see I.E. Assoc. v. Safeco Title Ins.

Co., 39 Cal.3d 281, 285, 216 Cal.Rptr. 438 (1985) (“These provisions cover every aspect of exercise of

the power of sale contained in a deed of trust.”)

Under California Civil Code section 2924(a)(1), a “trustee, mortgagee or beneficiary or any of

their authorized agents” may conduct the foreclosure process. Under California Civil Code section

2924b(4), a “person authorized to record the notice of default or the notice of sale” includes “an agent

for the mortgagee or beneficiary, an agent of the named trustee, any person designated in an executed

substitution of trustee, or an agent of that substituted trustee.” “Upon default by the trustor, the

beneficiary may declare a default and proceed with a nonjudicial foreclosure sale.” Moeller, 25

Cal.App.4th at 830, 30 Cal.Rptr.2d 777. 

A “trustee or mortgagee may be liable to the trustor or mortgagor for damages sustained where

there has been an illegal, fraudulent or wilfully oppressive sale of property under a power of sale

contained in a mortgage or deed of trust.” Munger v. Moore, 11 Cal.App.3d 1, 7, 89 Cal.Rptr. 323

(1970).

“Under Civil Code section 2924, no party needs to physically possess the promissory note.”

Sicairos v. NDEX West, LLC, 2009 WL 385855, *3 (S.D. Cal. 2009) (citing Cal. Civ. Code, §

2924(a)(1)). Rather, “[t]he foreclosure process is commenced by the recording of a notice of default and

election to sell by the trustee.” Moeller, 25 Cal.App.4th at 830, 30 Cal.Rptr.2d 777. An “allegation that

the trustee did not have the original note or had not received it is insufficient to render the foreclosure

proceeding invalid.” Neal v. Juarez, 2007 WL 2140640, *8 (S.D. Cal. 2007).

16

Case 1:09-cv-02089-LJO -SMS Document 27 Filed 02/12/10 Page 16 of 20
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

Mr. Saldate’s challenge to produce his original note is unsupported. The complaint alleges no

facts of failure to comply with the statutory scheme for non-judicial foreclosure. A purported unlawful

foreclosure claim fails as a matter of law.

In addition, Mr. Saldate’s default suggests an inability to tender amounts owed.

“A tender is an offer of performance made with the intent to extinguish the obligation.” Arnolds

Management Corp. v. Eischen, 158 Cal.App.3d 575, 580, 205 Cal.Rptr. 15 (1984) (citing Cal. Civ.

Code, § 1485); Still v. Plaza Marina Commercial Corp., 21 Cal.App.3d 378, 385, 98 Cal.Rptr. 414

(1971). “A tender must be one of full performance . . . and must be unconditional to be valid.” Arnolds

Management, 158 Cal.App.3d at 580, 205 Cal.Rptr. 15.

A defaulted borrower is “required to allege tender of the amount of [the lender's] secured

indebtedness in order to maintain any cause of action for irregularity in the sale procedure.” Abdallah

v. United Savings Bank, 43 Cal.App.4th 1101, 1109, 51 Cal.Rptr.2d 286 (1996), cert. denied, 519 U.S.

1081, 117 S.Ct. 746 (1997). In FPCI RE-HAB 01 v. E & G Investments, Ltd., 207 Cal.App.3d 1018,

1021, 255 Cal.Rptr. 157 (1989), the California Court of Appeal has explained:

. . . generally “an action to set aside a trustee's sale for irregularities in sale notice or

procedure should be accompanied by an offer to pay the full amount of the debt for

which the property was security.” . . . . This rule . . . is based upon the equitable maxim

that a court of equity will not order a useless act performed. . . . “A valid and viable

tender of payment of the indebtedness owing is essential to an action to cancel a voidable

sale under a deed of trust.” . . . The rationale behind the rule is that if plaintiffs could not

have redeemed the property had the sale procedures been proper, any irregularities in the

sale did not result in damages to the plaintiffs. (Citations omitted.)

An action to set aside a foreclosure sale, unaccompanied by an offer to redeem, does not state

a cause of action which a court of equity recognizes. Karlsen v. American Sav. & Loan Assn., 15

Cal.App.3d 112, 117, 92 Cal.Rptr. 851 (1971). The basic rule is that an offer of performance is of no

effect if the person making it is not able to perform. Karlsen, 15 Cal.App.3d at118, 92 Cal.Rptr. 851 

(citing Cal. Civ. Code, § 1495.) Simply put, if the offeror “is without the money necessary to make the

offer good and knows it” the tender is without legal force or effect. Karlsen, 15 Cal.App.3d at118, 92

Cal.Rptr. 851 (citing several cases). “It would be futile to set aside a foreclosure sale on the technical

ground that notice was improper, if the party making the challenge did not first make full tender and

thereby establish his ability to purchase the property.” United States Cold Storage v. Great Western

17

Case 1:09-cv-02089-LJO -SMS Document 27 Filed 02/12/10 Page 17 of 20
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

Savings & Loan Assn., 165 Cal.App.3d 1214, 1224, 212 Cal.Rptr. 232 (1985); see Abdallah, 43

Cal.App.3d at 1109, 51 Cal.Rptr.2d 286 (the tender rule applies to “any cause of action for irregularity

in the sale procedure”).

Moreover, to obtain “rescission or cancellation, the rule is that the complainant is required to do

equity, as a condition to his obtaining relief, by restoring to the defendant everything of value which the

plaintiff has received in the transaction. . . . The rule applies although the plaintiff was induced to enter

into the contract bythe fraudulent representations of the defendant.” Fleming v. Kagan, 189 Cal.App.2d

791, 796, 11 Cal.Rptr. 737 (1961). “A valid and viable tender of payment of the indebtedness owing

is essential to an action to cancel a voidable sale under a deed of trust.” Karlsen, 15 Cal.App.3d at 117, 

92 Cal.Rptr. 851.

“The rules which govern tenders are strict and are strictly applied.” Nguyen v. Calhoun, 105

Cal.App.4th 428, 439, 129 Cal.Rptr.2d 436 (2003). “The tenderer must do and offer everything that is

necessary on his part to complete the transaction, and must fairly make known his purpose without

ambiguity, and the act of tender must be such that it needs only acceptance by the one to whom it is

made to complete the transaction.” Gaffney v. Downey Savings & Loan Assn., 200 Cal.App.3d 1154,

1165, 246 Cal.Rptr. 421 (1988). The debtor bears “responsibility to make an unambiguous tender of

the entire amount due or else suffer the consequence that the tender is of no effect.” Gaffney, 200

Cal.App.3d at 1165, 246 Cal.Rptr. 421.

Defendants are correct that the complaint does not allege that Mr. Saldate “tendered the full

amount that is owed under the loan.” The absence of an allegation of ability to tender amounts owed

dooms a purported wrongful foreclosure claim. Mr. Saldate’s inability to make monthly payments

reflects inability to tender amounts owed to bar a claim to challenge foreclosure.

Alternative F.R.Civ.P. 12(e) Motion For More Definite Statement

With dismissal of Mr. Saldate’s claims, this Court need not address defendant’s alternative

F.R.Civ.P. 12(e) motion for a more definite statement.

Attempt At Amendment And Malice

Mr. Saldate’s claims against defendants are insufficiently pled and barred as a matter of law. Mr.

Saldate is unable to cure his claims by allegation of other facts and thus is not granted an attempt to

18

Case 1:09-cv-02089-LJO -SMS Document 27 Filed 02/12/10 Page 18 of 20
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

amend.

Moreover, this Court is concerned that Mr. Saldate has brought this action in absence of good

faith and that Mr. Saldate exploits the court system solely for delay or to vex defendants. The test for

maliciousness is a subjective one and requires the court to “determine the . . . good faith of the

applicant.” Kinney v. Plymouth Rock Squab Co., 236 U.S. 43, 46 (1915); see Wright v. Newsome, 795

F.2d 964, 968, n. 1 (11 Cir. 1986); cf. Glick v. Gutbrod, 782 F.2d 754, 757 (7 Cir. 1986) (court has th th

inherent power to dismiss case demonstrating “clear pattern of abuse of judicial process”). A lack of

good faith or malice also can be inferred from a complaint containing untrue material allegations of fact

or false statements made with intent to deceive the court. See Horsey v. Asher, 741 F.2d 209, 212 (8th

Cir. 1984). An attempt to vex or delay provides further grounds to dismiss this action against

defendants.

CONCLUSION AND ORDER

For the reasons discussed above, this Court:

1. DISMISSES with prejudice this action against defendants; 

2. DIRECTS the clerk to enterjudgment against plaintiff George A. Saldate, Jr. and in favor

of defendants Wilshire Credit Corporation, Mortgage Electronic Registration Systems,

Inc. and Wells Fargo Bank and in that there is no just reason to delay to enter such

judgment given that Mr. Saldate’s claims against Wilshire, MERS and Wells Fargo are

clear and distinct from claims against the other defendants. See F.R.Civ.P. 54(b); and

3. ORDERS Mr. Saldate’s counsel, no later than February 22, 2010 to file papers to show

cause why this Court should not dismiss this action against defendants Valley Wide

Home Loans, Craig H. Barton and Norfilia Garza.

This Court ADMONISHES Mr. Saldate and his counsel that this Court will dismiss this

action against defendants Valley Wide Home Loans, Craig H. Barton and Norfilia Garza if Mr.

Saldate’s counsel fails to comply with this order and fails to file timely papers to show cause why

this Court should not dismiss this action against defendants Valley Wide Home Loans, Craig H.

/ / /

/ / /

19

Case 1:09-cv-02089-LJO -SMS Document 27 Filed 02/12/10 Page 19 of 20
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

 Barton and Norfilia Garza. 

IT IS SO ORDERED.

Dated: February 11, 2010 /s/ Lawrence J. O'Neill 

66h44d UNITED STATES DISTRICT JUDGE

20

Case 1:09-cv-02089-LJO -SMS Document 27 Filed 02/12/10 Page 20 of 20