Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_09-cv-01100/USCOURTS-casd-3_09-cv-01100-1/pdf.json

Nature of Suit Code: 140
Nature of Suit: Negotiable Instruments
Cause of Action: 15:1692 Fair Debt Collection Act

---

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

- 1 - 09cv1100 WQH (WMc)

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

SAMUEL and DANA KUOHA,

Plaintiffs,

CASE NO. 09cv1100 WQH (WMc)

ORDER

vs.

EQUIFIRST CORPORATION;

HOMECOMINGS FINANCIAL; ETS

SERVICES, LLC; and DOES 1-10,

Defendants.

HAYES, Judge:

The matters before the Court are the Motions to Dismiss filed by all Defendants. (Doc.

# 9, 10).

I. Background

On May 20, 2009, Plaintiffs, proceeding pro se, initiated this action by filing a

“Complaint and Request for Original Promissory Note of Real Property Located at 9739

Towne Lane, El Cajon, CA [92021], APN# 396-012-14; Violation of GAAP, RESPA, TILA

and UCC; The Fair Debt Collection Practices Act; Wrongful Eviction; Points and Authorities

in Support of Complaint Request with Fraud and Intent to Defraud” (“Complaint”). (Doc. #

1). The Complaint alleges that “[o]n or about 12/15/05, [Plaintffs] applied and were granted

a Mortgage for the property located at 9739 Towne Lane, El Cajon, CA ..., and signed a

‘Promissory Note’ ... for $671,500.00 from Equifirst Corporation; which was used to pay off

Case 3:09-cv-01100-WQH-WMC Document 21 Filed 10/07/09 Page 1 of 8
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

- 2 - 09cv1100 WQH (WMc)

and secure the ... ‘property’ in dispute.” (Compl., Doc. # 1, at 4). The Complaint alleges,

among other things, that “Defendants do not have proof of ownership of [the] property” (id.

at 2), “Plaintiff(s) was not sent a Declaration [p]ursuant to California Code section 2923.5(c)

by [Defendants]...” (id. at 4), and the loan is “null and void” because “[t]he transaction that

took place was merely a change of currency (without authorization),” and therefore, “[t]he

bank never made the loan” (id. at 10, 11). The Complaint further alleges: “This court has an

obligation to sign the order to stop the trustee sale on the subject property in the interest of

justice as the Plaintiff has attempted to resolve this with the alleged mortgage holder to no

avail and therefore is filing this suit to recover requested property under GAAP, TILA,

RESPA, and CUCC.” (Id. at 42).

On July 16, 2009, Defendant Equifirst Corporation filed a Motion to Dismiss Plaintiff’s

Complaint (Doc. # 9), and Defendants Homecomings Financial and ETS Services, LLC filed

a Motion to Dismiss Under Rule 12(b)(6) of the Federal Rules of Civil Procedure (Doc. # 10)

(collectively, “Motions to Dismiss”). On September 2, 2009, Plaintiffs filed an opposition to

the Motions to Dismiss (Doc. # 17), and on September 10 and 11, 2009, Defendants filed

replies (Doc. # 19, 20).

II. Standard of Review

Federal Rule of Civil Procedure 12(b)(6) permits dismissal for “failure to state a claim

upon which relief can be granted.” Fed. R. Civ. P. 12(b)(6). Dismissal under Rule 12(b)(6)

is appropriate where the complaint lacks a cognizable legal theory or sufficient facts to support

a cognizable legal theory. See Balistreri v. Pacifica Police Dep’t, 901 F.2d 696, 699 (9th Cir.

1990).

To sufficiently state a claim to relief and survive a Rule 12(b)(6) motion, a complaint

“does not need detailed factual allegations” but the “[f]actual allegations must be enough to

raise a right to relief above the speculative level.” Bell Atl. Corp. v. Twombly, 550 U.S. 544,

555 (2007). “[A] plaintiff’s obligation to provide the ‘grounds’ of his ‘entitle[ment] to relief’

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

of action will not do.” Id. (quoting Fed. R. Civ. P. 8(a)(2)). When considering a motion to

Case 3:09-cv-01100-WQH-WMC Document 21 Filed 10/07/09 Page 2 of 8
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

- 3 - 09cv1100 WQH (WMc)

dismiss, a court must accept as true all “well-pleaded factual allegations.” Ashcroft v. Iqbal,

--- U.S. ----, 129 S. Ct. 1937, 1950 (2009). However, a court is not “required to accept as true

allegations that are merely conclusory, unwarranted deductions of fact, or unreasonable

inferences.” Sprewell v. Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 2001); see also

Doe I v. Wal-Mart Stores, Inc., 572 F.3d 677, 683 (9th Cir. 2009) (“Plaintiffs’ general

statement that Wal-Mart exercised control over their day-to-day employment is a conclusion,

not a factual allegation stated with any specificity. We need not accept Plaintiffs’ unwarranted

conclusion in reviewing a motion to dismiss.”). “In sum, for 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) (quotations omitted).

Pro se complaints are held to a less stringent standard than formal pleadings by lawyers.

See Haines v. Kerner, 404 U.S. 519, 520 (1972). A pro se plaintiff’s complaint must be

construed liberally to determine whether a claim has been stated. See Zichko v. Idaho, 247

F.3d 1015, 1020 (9th Cir. 2001). “Although a pro se litigant ... may be entitled to great leeway

when the court construes his pleadings, those pleadings nonetheless must meet some minimum

threshold in providing a defendant with notice of what it is that it allegedly did wrong.” See

Brazil v. U.S. Dep’t of Navy, 66 F.3d 193, 199 (9th Cir. 1995). When dismissing a pro se

complaint for failure to state a claim, “the district court must give the plaintiff a statement of

the complaint’s deficiencies.” Karim-Panahi v. L.A. Police Dep’t, 839 F.2d 621, 623-24 (9th

Cir. 1988).

III. Discussion

A. Failure to Comply With the Rules of Pleading

“Although [courts] construe pleadings liberally in their favor, pro se litigants are bound

by the rules of procedure.” See Ghazali v. Moran, 46 F.3d 52, 54 (9th Cir. 1995). 

Federal Rule of Civil Procedure 8(a) provides:

A pleading that states a claim for relief must contain:

(1) a short and plain statement of the grounds for the court’s jurisdiction, unless

the court already has jurisdiction and the claim needs no new jurisdictional

support; 

Case 3:09-cv-01100-WQH-WMC Document 21 Filed 10/07/09 Page 3 of 8
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

- 4 - 09cv1100 WQH (WMc)

(2) a short and plain statement of the claim showing that the pleader is entitled

to relief; and 

(3) a demand for the relief sought, which may include relief in the alternative or

different types of relief.

Fed. R. Civ. P. 8(a). Rule 8(d) provides that “[e]ach allegation must be simple, concise, and

direct.” Fed. R. Civ. P. 8(d)(1). Rule 10(b) provides: “A party must state its claims or

defenses in numbered paragraphs, each limited as far as practicable to a single set of

circumstances.” Fed. R. Civ. P. 10(b). In order to comply with Rule 8(a)(2), “a pleading must

give fair notice and state the elements of the claim plainly and succinctly.” Jones v.

Community Redevelopment Agency, 733 F.2d 646, 649 (9th Cir. 1984) (quotation omitted).

“The propriety of dismissal for failure to comply with Rule 8 does not depend on whether the

complaint is wholly without merit.... Rule 8[(d)], requiring each averment of a pleading to be

‘simple, concise, and direct,’ applies to good claims as well as bad, and is a basis for dismissal

independent of Rule 12(b)(6).” McHenry v. Renne, 84 F.3d 1172, 1179 (9th Cir. 1996) (citing

Nevijel v. Northcoast Life Ins. Co., 651 F.2d 671, 673 (9th Cir. 1981); Von Poppenheim v.

Portland Boxing & Wrestling Comm’n, 442 F.2d 1047, 1053 n.4 (9th Cir. 1971)).

If the complaint alleges fraud, as Plaintiff’s Complaint does in this case, Federal Rule

of Civil Procedure 9(b) requires that the complaint “must state with particularity the

circumstances constituting fraud or mistake.” Fed. R. Civ. P. 9(b). Rule 9(b) “requires ... an

account of the time, place, and specific content of the false representations as well as the

identities of the parties to the misrepresentations.” Swartz v. KPMG LLP, 476 F.3d 756, 764

(9th Cir. 2007) (quotation omitted); see also Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097,

1106 (9th Cir. 2003) (averments of fraud must be accompanied by “the who, what, when,

where, and how of the misconduct charged”) (citation and quotation omitted). “[I]n order for

a complaint to allege fraud with the requisite particularity, a plaintiff must set forth more than

the neutral facts necessary to identify the transaction. 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.”

Yourish v. California Amplifier, 191 F.3d 983, 992-93 (9th Cir. 1999) (quotations omitted).

Even construing Plaintiff’s Complaint liberally, the Complaint fails to comply with the

Case 3:09-cv-01100-WQH-WMC Document 21 Filed 10/07/09 Page 4 of 8
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

- 5 - 09cv1100 WQH (WMc)

requirements of Rules 8, 9(b) and 10(b). The Complaint contains 45 pages of disorganized

legal theories and citations. Despite its length, the Complaint contains insufficient factual

allegations to give Defendants fair notice of Plaintiffs’ claims. For this reason, the Complaint

must be dismissed in its entirety.

B. Claims in the Complaint

1. Federal Statutes

The Complaint makes conclusory references to a number of federal statutes, including:

the Fair Debt Collection Practices Act, 15 U.S.C. §§ 1692, et seq. (“FDCPA”), the Real Estate

Settlement Procedures Act, 12 U.S.C. §§ 2601, et seq. (“RESPA”), and the Truth in Lending

Act, 15 U.S.C. §§ 1601, et seq. (“TILA”). (Compl., Doc. # 1, at 1-3, 12, 42).

a. FDCPA

The Complaint appears to allege that non-judicial foreclosure of the property violates

the FDCPA. “The FDCPA makes it unlawful for debt collectors to use abusive tactics while

collecting debts for others.” Gentsch v. Ownit Mortg. Solutions Inc., No. CV F 09-649, 2009

U.S. Dist. LEXIS 45163, 2009 WL 1390843, at *7 (E.D. Cal., May 14, 2009) (citation

omitted). The FDCPA defines a debt collector as “any person ... who regularly collects or

attempts to collect ... debts owed or due or asserted to be owed or due another.” 15 U.S.C. §

1692a(6). A “debt collector” does not include a person who collects or attempts to collect a

debt “to the extent such activity ... concerns a debt which was not in default at the time it was

obtained by such person.” 15 U.S.C.1962a(6)(F). “The legislative history of section 1692a(6)

indicates conclusively that a debt collector does not include the consumer’s creditors, a

mortgage servicing company, or an assignee of a debt, as long as the debt was not in default

at the time it was assigned.” Perry v. Stewart Title Co., 756 F.2d 1197, 1208 (5th Cir. 1985);

see also Gentsch, 2009 WL 1390843, at *7 (same). Additionally, “foreclosing on the property

pursuant to a deed of trust is not the collection of a debt within the meaning of the FDCPA.”

Hulse v. Ocwen Fed. Bank, FSB, 195 F. Supp. 2d 1188, 1204 (D. Or. 2002); see also Gentsch,

2009 WL 1390843, at *7 (same). 

The Complaint does not contain sufficient factual allegations to show that any

Case 3:09-cv-01100-WQH-WMC Document 21 Filed 10/07/09 Page 5 of 8
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

- 6 - 09cv1100 WQH (WMc)

Defendant is a “debt collector” or has engaged in the “collection of a debt” within the meaning

of the FDCPA. The Complaint fails to state a FDCPA claim.

b. RESPA and TILA

The limitations period for a RESPA claim and a TILA claim is either one year or three

years from the closing of the loan, depending upon the specific provision alleged to have been

violated. See 12 U.S.C. § 2614 (RESPA); 15 U.S.C. § 1640(e) (TILA); see also King v.

California, 784 F.2d 910, 915 (9th Cir. 1986). The Complaint alleges that the loan at issue

closed “[o]n or about” December 15, 2005. (Compl., Doc. # 1, at 4). The Complaint was filed

on May 20, 2009, over three years after the loan closed. (Doc. # 1). The Complaint does not

allege sufficient facts indicating that the doctrine of equitable tolling should suspend the

limitations period. Cf. King, 784 F.2d at 915. Based upon the allegations of the Complaint,

any RESPA and TILA claims would be barred by the applicable statute of limitations.

2. “Proof of Ownership”

The Complaint alleges that “Defendants do not have proof of ownership of [the]

property,” and “Plaintiff(s) is requesting as to who has the original signed, and sealed

Promissory Note executed by Plaintiff in reference to the ‘property’ and this must be

answered.” (Compl., Doc. # 1, at 2, 6). Plaintiffs’ apparent claim is that foreclosure is

unavailable in absence of possession of the original promissory note. See id., at 7; see also

Gentsch, 2009 WL 1390843, at *5 (summarizing the same allegations). 

Non-judicial foreclosure is governed by California Civil Code §§ 2924-2924l. See

Nguyen v. Calhoun, 105 Cal. App. 4th 428, 440 (2003). “Under Civil Code section 2924, no

party needs to physically possess the promissory note.” Sicairos v. NDEX West, LLC, No.

08cv2014, 2009 WL 385855, *3 (S.D. Cal., Feb. 13, 2009) (citing Cal. Civ. Code, §

2924(a)(1)); see also Bouyer v. Countrywide Bank, FSB, No. C 08-5583, 2009 U.S. Dist.

LEXIS 53940, at *24 (N.D. Cal., June 25, 2009) (“[P]ossession of the original note is not a

prerequisite to foreclosure.”); Gentsch, 2009 WL 1390843, at *6 (same); Gamboa v. Trustee

Corps., 2009 U.S. Dist. LEXIS 19613, 2009 WL 656285 at *4 (N.D. Cal., Mar. 12, 2009)

(same). Based upon the allegations in the Complaint, this “proof of ownership” claim “fails

Case 3:09-cv-01100-WQH-WMC Document 21 Filed 10/07/09 Page 6 of 8
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

1

 The Court takes judicial notice of documents which were filed with the San Diego

County Recorder’s Office. See Mack v. South Bay Beer Distribs., Inc., 798 F.2d 1279, 1282

(9th Cir. 1986) (“[O]n a motion to dismiss, a court may properly look beyond the complaint

to matters of public record and doing so does not convert a Rule 12(b)(6) motion to one for

summary judgment.”).

- 7 - 09cv1100 WQH (WMc)

as meritless.” Gentsch, 2009 WL 1390843, at *6.

3. California Civil Code § 2923.5

Section 2923.5(a) requires a “mortgagee, beneficiary or authorized agent” to “contact

the borrower in person or by telephone in order to assess the borrower’s financial situation and

explore options for the borrower to avoid foreclosure.” Cal. Civ. Code § 2923.5(a)(2). Section

2923.5(b) requires a default notice to include a declaration “from the mortgagee, beneficiary,

or authorized agent” of compliance with section 2923.5, including attempt “with due diligence

to contact the borrower as required by this section.” Cal. Civ. Code § 2923.5(b).

The Complaint alleges that “Plaintiff(s) was not sent a Declaration Pursuant to

California Code section 2923.5 ... by [Defendants]....” (Compl., Doc. # 1, at 4). However, the

Complaint also alleges, “The Defendant(s)’ by sending to Plaintiff(s) various papers and the

alleged contacts made by specific entities stating that there would be a possible solution....”

(Id., at 5). Defendant Equifirst submits a copy of a notice of default and declaration, which

references Plaintiffs’ deed of trust, and which was filed with the San Diego County Recorder’s

Office on January 2, 2009. (Def. Equifirst Corporation’s Request for Judicial Notice, Ex B,

Doc. 9-6).1

 The declaration states: “The undersigned declares that the beneficiary ... has

declared that they have complied with California Civil Code Section 2923.5 by making contact

with the borrower or tried with due diligence to contact the borrower as required by California

Civil Code Section 2923.5.” (Id., at 2). 

Moreover, “[s]ection 2923.5 requires only contacts or attempted contacts to ‘assess the

borrower’s financial situation and explore options for the borrower to avoid foreclosure.’”

Gentsch, 2009 WL 1390843, at *6 (quoting Cal. Civ. Code, § 2923.5(a)(2)). The Complaint

can state “no cognizable claim that [any Defendant] was required to modify [Plainitffs]’ loans

in that Section 2923.5 imposes no such mandate.” Id.; see also Anaya v. Advisors Lending

Group, No. CV F 09-1191, 2009 WL 2424037, at *8 (E.D. Cal., Aug. 5, 2009) (“[T]he

Case 3:09-cv-01100-WQH-WMC Document 21 Filed 10/07/09 Page 7 of 8
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

- 8 - 09cv1100 WQH (WMc)

statutory language [of § 2923.5] does not require an offer or an acceptance of a modification

of a loan. The statute does not require a lender to accept a loan modification. Further, there

is no private right of action.”) (citation omitted).

4. “The bank never made the loan”

The Complaint appears to allege that “[t]he bank never made the loan” because Plaintiff

did not receive the loan amount in “legal tender.” (Compl., Doc. # 1, at 11; see also id., at 10-

11, 23). The Court finds that these allegations fail to state a claim upon which relief can be

granted. See Gentsch, 2009 WL 1390843, at *5 (citing Rene v. Citibank NA, 32 F. Supp. 2d

539, 544 (E.D.N.Y. 1999) (“[T]here is no requirement that a loan must be made with legal

tender before a court will deem it valid.”); Thiel v. First Fed. Sav. & Loan Ass’n of Marion,

646 F. Supp. 592, 595 (N.D. Ind. 1986) (“Reasoning on the most fundamental level, a level

which requires more common sense than legal acumen, plaintiffs’ theory is absurd. A check

issued by a mortgagee need not be ‘legal tender’ for the loan to be valid.”)).

IV. Conclusion

IT IS HEREBY ORDERED that the Motions to Dismiss are GRANTED. (Doc. # 9,

10). The Complaint is DISMISSED without prejudice.

DATED: October 7, 2009

WILLIAM Q. HAYES

United States District Judge

Case 3:09-cv-01100-WQH-WMC Document 21 Filed 10/07/09 Page 8 of 8