Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_16-cv-00649/USCOURTS-casd-3_16-cv-00649-0/pdf.json

Nature of Suit Code: 290
Nature of Suit: Other Real Property Actions
Cause of Action: 28:1332 Diversity Action

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

AMOR MEDINA DEL ROSARIO AND 

ELVIE CANLAS DEL ROSARIO,

Plaintiffs,

v.

WELLS FARGO BANK, NATIONAL 

ASSOCIATION, AS TRUSTEE FOR 

THE MERRILL LYNCH MORTGAGE 

INVESTORS TRUST, SERIES 2006-F1.; 

PNC MORTGAGE, INC., FKA 

NATIONAL CITY MORTGAGE 

COMPANY,

Defendants.

Case No.: 3:16-cv-00649-BEN-NLS

ORDER GRANTING DEFENDANTS’

MOTION TO DISMISS

PLAINTIFFS’ FIRST AMENDED 

COMPLAINT

Defendants Wells Fargo Bank, National Association, as Trustee for the Merrill 

Lynch Mortgage Investors Trust, Series 2006-F1, and PNC Bank, N.A. (erroneously sued 

as PNC Mortgage, Inc., FKA National City Mortgage Company) (“Defendants”) have 

filed a Motion to Dismiss Plaintiffs Amor Medina Del Rosario and Elvie Canlas Del 

Rosario’s (“Plaintiffs”) First Amended Complaint. (Mot., ECF No. 13.) For the reasons 

discussed below, the Motion is GRANTED.

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BACKGROUND1

Plaintiffs, proceeding pro se, have filed a complaint, seeking to avoid nonjudicial 

foreclosure on a piece of residential property at 10685 Brookhollow Court, San Diego, 

California (the “Subject Property”) that they own and occupy. On October 20, 2016, this 

Court granted Defendants’ motion to dismiss Plaintiffs’ original complaint on several 

grounds. Plaintiffs thereafter filed a First Amended Complaint. (FAC, ECF No. 12.) 

The First Amended Complaint repeats the allegations of the initial complaint.

On or about December 29, 2005, Plaintiffs executed a promissory note in the 

amount of $499,000 for the Subject Property, secured by a deed of trust. (FAC ¶ 14; 

Defs.’ Request for Judicial Notice (“RJN”) Ex. C.)2 The lender and beneficiary of the 

deed of trust was National City Mortgage, a division of National City Bank of Indiana, 

and now known as PNC Mortgage Inc. (Id. ¶¶ 15, 17; RJN Ex. C.) National City Bank 

of Indiana was the named trustee on the note and deed of trust. (Id. ¶ 16; RJN Ex. C.) 

Plaintiffs allege that there has been “no documented assignment of the Note.” (FAC ¶ 

24.) 

Plaintiffs fell behind on their payments. On August 6, 2009, Cal-Western 

Reconveyance Company (“Cal-Western”) recorded a Notice of Default. (Id. ¶ 76 & Ex. 

F.) The Notice states that Cal-Western is “either the original trustee, the duly appointed 

substituted trustee, or acting as agent for the trustee or beneficiary under [the] deed of 

 

1 The Court is not making any findings of fact, but rather, summarizing the relevant 

allegations of the Complaint for purposes of evaluating Defendants’ Motion to Dismiss.

2 Defendants ask this Court to take judicial notice of the following documents: (1) 

Complaint in San Diego Superior Court Case No. 37-2010-00089465; (2) Complaint in 

San Diego Superior Court Case No. 37-2013-00034612; (3) Deed of Trust, recorded in 

San Diego Recorder’s Office as Document No. 2006-0012709. Pursuant to Federal Rule 

of Evidence 201, the Court takes judicial notice of these documents as they are matters of 

public record. See, e.g., Valasquez v. Mortg. Elec. Registration Sys., Inc., No. C 08-3818 

PJH, 2008 WL 4938162, *2-3 (N.D. Cal. Nov. 17, 2008) (taking judicial notice of 

documents in county public record).

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trust.” (Id. Ex. F) Plaintiffs claim that Cal-Western acted ultra vires and was never 

substituted as trustee or authorized to act as an agent. (Id. ¶ 80.)

The Notice of Default further states that “the mortgagee, beneficiary or the 

mortgagee’s or beneficiary’s authorized agent has either contacted the borrower or tried 

with due diligence to contact the borrower as required by California Civil Code 2923.5.” 

(Id.) But Plaintiffs allege that they were never contacted prior to the recording of the 

Notice of Default. (Id. ¶ 79.) They claim that Defendants “did not review Plaintiffs’ 

financial situation and further did not advise them of all options available to avoid 

foreclosure.” (Id. ¶ 81, 83-84, 90-91.) Plaintiffs contend these and other failures violated 

California law, thereby nullifying Defendants’ authority to foreclose. (Id. ¶ 82.) 

In 2010, Plaintiffs sued PNC Bank, Cal-Western, and Pacific Data Mortgage in 

California state court to stop foreclosure on the home. (Id. ¶ 49 & Ex. C.) In that 

lawsuit, Plaintiffs alleged that the defendants fraudulently induced them to enter the loan 

agreement on inferior terms and wrongfully sought to foreclose on Plaintiffs when they 

were not in default. (See id. Ex. C.) Plaintiffs allege that “both parties agreed to settle 

the manner by PNC agreeing to provide Plaintiffs with an acceptable loan modification, 

in exchange for Plaintiffs’ agreement to voluntarily dismiss the lawsuit.” (Id. ¶ 52.) 

However, Plaintiffs contend that “PNC reneged on the agreement, and failed to provide 

Plaintiffs with the loan modification they were promised.” (Id. ¶ 54.) Plaintiffs claim 

that this conduct by PNC constitutes fraud. (See id. ¶¶ 55-61.)

On or about May 9, 2012, Cal-Western Reconveyance Company recorded a Notice 

of Trustee Sale, bearing instrument number 2012-0273037. (Id. ¶ 97 & Ex. G.) Plaintiffs

again contend that Cal-Western acted without authority (id. ¶ 99-100), and that 

Defendants did not review Plaintiffs’ financial situation or advise them of their options to 

avoid foreclosure (id. ¶¶ 101-02). Plaintiffs once more claim these failures nullify 

Defendants’ authority to foreclose. (Id. ¶ 101.)

At some point, “Plaintiffs’ loan was . . . sold into a securitized Trust, entitled the 

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Merrill Lynch Mortgage Investors Inc., 2006-F1.” (Id. ¶ 23.) The trust had a “cut-off 

date” of April 1, 2006, and a “closing date” of April 28, 2006. (Id. ¶¶ 23, 29, 38.) 

“Plaintiffs’ note and loan were not transferred to the Merrill Lynch Securitized Trust 

prior to its closing date.” (Id. ¶ 29.)

On September 25, 2015, PNC Bank recorded an Assignment of Deed of Trust to 

“Wells Fargo Bank, N.A., as Trustee, for Merrill Lynch Mortgage Investors Trust, Series 

MLMI 2006-F1” (“Wells Fargo”). (Id. ¶ 70, Ex. E.) The assignment made Wells Fargo 

the beneficiary of the deed of trust. (Id. Ex. E.) Plaintiffs allege that the assignment of 

the deed of trust was ineffective, invalid, and void because it occurred after the closing 

date of the Merrill Lynch securitized trust. (See id. ¶ 29-30, 34-35.) They also contend 

that because “there has been no documented assignment of the Note, . . . the [deed of 

trust] and note were not properly transferred together, which consequently has bifurcated 

the [deed of trust] and note, rendering them unenforceable.” (Id. ¶ 24.)

On November 25, 2015, Wells Fargo, as beneficiary under the deed of trust, 

recorded a Notice of Rescission of Notice of Default, bearing instrument number 2015-

0613850. (Id. ¶ 103 & Ex. H.) The Notice states that Wells Fargo “does hereby rescind, 

cancel and withdraw said Declaration of Default and Demand for Sale and said Notice of 

Breach and Election to Cause Sale.” (Id. Ex. H.) The Notice is signed by Bernis M. 

Gonyea of Clear Recon Corp. (Id.) Plaintiffs allege that Clear Recon Corp. is “the new 

foreclosing trustee” but there is no “evidence of a recorded Substitution of Trustee 

document authorizing Clear Recon. Corp. to be substituted as trustee.” (Id. ¶ 104.)

On April 29, 2016, PNC denied Plaintiffs hardship assistance on their loan. (Id. ¶ 

63 & Ex. D.) The letter from PNC states that Plaintiffs’ “loan on the related property has 

received the maximum number of foreclosure alternative options that are permitted by the 

assignee or mortgage owner of your loan.” (Id. Ex. D.) Challenging this decision, 

Plaintiffs contend that they made “the requisite 3 trial payments which should have 

resulted in a full and final modification.” (Id. ¶ 63.)

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Plaintiffs bring three claims for relief. The first claim for relief alleges wrongful 

foreclosure. The second claim for relief alleges negligence. The third claim for relief 

alleges fraud.

LEGAL STANDARD

“[A] complaint must contain sufficient factual matter, accepted as true, to state a 

claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 677-78 

(2009). “A claim is facially plausible ‘when the plaintiff pleads factual content that 

allows the court to draw the reasonable inference that the defendant is liable for the 

misconduct alleged.’” Zixiang Li v. Kerry, 710 F.3d 995, 999 (9th Cir. 2013) (quoting 

Iqbal, 556 U.S. at 678). When considering a Rule 12(b)(6) motion, the court must 

“accept as true facts alleged and draw inferences from them in the light most favorable to 

the plaintiff.” Stacy v. Rederite Otto Danielsen, 609 F.3d 1033, 1035 (9th Cir. 2010) 

(citing Barker v. Riverside Cnty. Office of Educ., 584 F.3d 821, 824 (9th Cir. 2009)). 

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

statements, do not suffice.” Iqbal, 556 U.S. at 678. 

DISCUSSION

Like Plaintiffs’ original complaint, their First Amended Complaint fails to plead 

sufficient facts to state plausible claims.

1. Wrongful Foreclosure Claim 

Plaintiffs allege wrongful foreclosure “due to the void [deed of trust] assignment, 

and the promissory fraud committed [by PNC], pursuant to the voluntary dismissal of the 

2010 action resulting in the acceleration of the Note.” (FAC ¶ 115.) A wrongful 

foreclosure is a common law tort claim to set aside a foreclosure sale, or an action for 

damages resulting from the sale, on the basis that the foreclosure was improper. 

Sciarratta v. U.S. Bank Nat’l Ass’n, 247 Cal. App. 4th 552, 561 (2016). As an initial 

matter, Plaintiffs’ claim fails because they have not alleged that a foreclosure sale has 

occurred. 

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Furthermore, as explained in the Court’s order granting Defendants’ motion to 

dismiss Plaintiffs’ original complaint, Plaintiffs lack standing to challenge the assignment 

under Saterbak v. JPMorgan Chase Bank, N.A., 245 Cal. App. 4th 808 (2016). Saterbak 

explained that plaintiffs who bring pre-foreclosure lawsuits challenging defendants’ 

authority to foreclose lack standing to bring such preemptive suits. Id. at 814. Likewise 

here, to the extent Plaintiffs challenge Defendants’ authority to foreclose, such claims fail 

because Plaintiffs lack standing. See Tjaden v. HSBC Bank USA, __ F. App’x __, 2017 

WL 943943, at *1 (9th Cir. Mar. 10, 2017) (holding that plaintiffs’ pre-foreclosure action 

to challenge the foreclosing entity’s right to initiate a nonjudicial foreclosure fails under 

Saterbak).

To the extent that Plaintiffs bring a wrongful foreclosure claim based on alleged 

fraud that occurred in 2010, Federal Rule of Civil Procedure 9(b) requires Plaintiffs to 

“state with particularity the circumstances constituting fraud.” Fed. R. Civ. P. 9(b). 

Plaintiffs fail to meet this standard. Rather, they rely on conclusory allegations that PNC 

reneged on an agreement to offer Plaintiffs a loan modification. Plaintiffs further fail to 

explain how PNC’s actions in 2010 led to Plaintiffs’ apparent present inability to pay.

The wrongful foreclosure claim is DISMISSED.

2. Negligence 

Plaintiffs allege that “PNC, acting as Plaintiffs’ alleged lender and/or servicer, had 

a duty to exercise reasonable care and skill to maintain proper and accurate loan records 

and to discharge and fulfill the other incidents attendant to the maintenance, accounting, 

and servicing of loan records.” (FAC ¶ 122.) “PNC further had a duty to Plaintiffs to 

disclose its true interest in the Subject Property and communicate with and provide 

Plaintiffs with proof of who owned or had any liens on the Subject Property, refraining 

from taking any action against Plaintiffs outside its legal authority, not charging any 

improper fees and/or charges on Plaintiffs’ account, accurately crediting payments made 

by Plaintiffs and providing all relevant and accurate information regarding Plaintiffs’ 

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loan accounts to Plaintiffs.” (Id. ¶ 123.)

To state a cause of action for negligence, a plaintiff must allege: (1) the defendant 

owed the plaintiff a duty of care; (2) the defendant breached that duty, and (3) the breach 

proximately caused the plaintiff’s damages or injuries. Lueras v. BAC Home Loans 

Servicing, LP, 221 Cal. App. 4th 49, 62 (2013). Under California law, “as 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 v. Heart Fed. Savings & Loan Ass’n, 231 Cal. App. 3d 

1089, 1096 (1991). “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.’” Id. (internal citation omitted). Here, Plaintiffs make only conclusory 

allegations that Defendants exceeded the scope of a traditional lender’s responsibility. 

See Barcarse v. Central Mortg. Co., 661 F. App’x 905, 907 (9th Cir. 2016) (affirming 

dismissal where plaintiffs failed to plead facts showing that defendants exceeded the 

scope of a lender’s conventional role). 

The negligence claim is DISMISSED.

3. Fraud

Plaintiffs allege that “PNC fraudulently misrepresented to Plaintiffs the nature of 

its scheme to sell bearer notes into securitization, submitted fraudulent documents in the 

record, in an attempt to commit fraud upon the Court, in its attempt to commit wrongful 

foreclosure, and committed promissory fraud when it failed to honor an agreement to 

provide Plaintiffs’ [sic] with an acceptable loan modification in lieu of the voluntary 

dismissal of the 2010 lawsuit, and induced Plaintiffs’ [sic] to rely on Defendant PNC’s 

prior reputation as a traditional ‘loan to hold’ lender, and Plaintiffs justifiably relied on 

said misrepresentation.” (FAC ¶ 131.) 

Allegations of fraud must be stated with particularity. Fed. R. Civ. P. 9(b). “In 

order to plead fraud with particularity, the complaint must allege the time, place, and 

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content of the fraudulent representation; conclusory allegations, do not suffice.” Shroyer 

v. New Cingular Wireless Serv., Inc., 622 F.3d 1035, 1042 (9th Cir. 2010) (citing Moore 

v. Kayport Package Express, Inc., 885 F.2d 531, 540 (9th Cir. 1989)); Kearns v. Ford 

Motor Co., 567 F.3d 1120, 1124 (9th Cir. 2009) (requiring plaintiffs plead who, what, 

when, where, and how). “Rule 9(b) does not allow a complaint to merely lump multiple 

defendants together, but ‘requires plaintiffs to differentiate their allegations when suing 

more than one defendant . . . and to inform each defendant separately of the allegations 

surrounding his alleged participation in the fraud.” Swartz v. KPMG LLP, 476 F.3d 759, 

765 (9th Cir. 2007) (quoting Haskin v. R.J. Reynolds Tobacco Co., 995 F. Supp. 1437, 

1439 (M.D. Fla. 1998)). “[G]eneral allegations that the ‘defendants’ engaged in 

fraudulent conduct,” with only specific allegations as to some, “patently fail[s] to comply 

with Rule 9(b).” Id. at 765. 

Here, Plaintiffs do not meet these heightened pleading requirements. The First 

Amended Complaint fails to include the specific details of the alleged misrepresentations 

and, instead, relies on conclusory assertions. Moreover, Plaintiffs’ allegations only speak 

to Defendant PNC, but they seek to hold each Defendant liable for fraud. (See FAC ¶ 

135.)

The fraud claim is DISMISSED.

CONCLUSION 

For the above reasons, the Court GRANTS the Motion to Dismiss. 

The Court will grant Plaintiffs leave to file a second amended complaint that 

corrects the deficiencies noted by the Court and Defendants. See Fed. R. Civ. P. 15 

(“The court should freely give leave [to amend] when justice so requires.”) Plaintiffs 

may file a second amended complaint no later than fourteen (14) days after the signature 

date of this Order. An amended complaint must clearly set out the facts, Plaintiffs’ 

theory of the case, and what claims are asserted. Plaintiffs must attempt to address the

pleading deficiencies identified in this Order and the Court’s previous order granting 

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Defendants’ motion to dismiss Plaintiffs’ original complaint. 

IT IS SO ORDERED.

Dated: April 5, 2017

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