Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_09-cv-03443/USCOURTS-cand-4_09-cv-03443-2/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 28:1441 Petition for Removal

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United States District Court

For the Northern District of California

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1 Even though Resurgent has already answered Plaintiff’s FAC,

its joinder in Chase and MERS’s Motion is not procedurally

improper. A defendant may move to dismiss under Federal Rule of

Civil Procedure 12(b)(6) after filing an answer; a court will

consider such a motion as one for judgment on the pleadings. 

Aldabe v. Aldabe, 616 F.2d 1089, 1093 (9th Cir. 1980). 

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

VINCENTA MULATO,

Plaintiff,

 v.

WMC MORTGAGE CORP.; LITTON LOAN

SERVICING LP; JP MORGAN CHASE BANK,

N.A.; CHASE HOME FINANCE LLP;

CALIFORNIA COMBO MORTGAGE; DMW

REALTY; ENRIQUE ALVAREZ; RESURGENT

CAPITAL SERVICES; MORTGAGE ELECTRONIC

REGISTRATION SYSTEMS, INC.,

Defendants. /

No. C 09-03443 CW

ORDER GRANTING

DEFENDANTS JP MORGAN

CHASE BANK, N.A.;

CHASE HOME FINANCE

LLC; AND MORTGAGE

ELECTRONIC

REGISTRATION

SYSTEMS, INC.’S

MOTION TO DISMISS

AND DENYING

PLAINTIFF’S

COUNSEL’S MOTION TO

BE RELIEVED AS

COUNSEL OF RECORD

(Docket Nos. 19 and

29)

Defendants JP Morgan Chase Bank, N.A. and Chase Home Finance

LLC (collectively, Chase) and Mortgage Electronic Registration

Systems, Inc. (MERS) move to dismiss Plaintiff’s First Amended

Complaint (FAC). Defendant Resurgent Capital Services joins the

motion.1 Plaintiff opposes the motion. In addition, Plaintiff’s

counsel, Marc L. TerBeek, moves for leave to withdraw from this

case. The motions were taken under submission on the papers. 

Case 4:09-cv-03443-CW Document 31 Filed 04/16/10 Page 1 of 13
United States District Court

For the Northern District of California

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2 Hereinafter, the Court refers to Chase, MERS and Resurgent

as “Defendants.” 

2

Having considered the papers submitted by the parties, the Court

GRANTS Chase and MERS’s Motion and DISMISSES Plaintiff’s claims

against Chase, MERS and Resurgent2 with prejudice. (Docket No.

19.) The Court DENIES without prejudice Mr. TerBeek’s motion to

withdraw as counsel. (Docket No. 29.) 

BACKGROUND

Because the Court’s Order of October 27, 2009 (Docket No. 11)

explains the facts of this case in sufficient detail, Plaintiff’s

allegations will not be repeated here in their entirety. In sum,

Plaintiff alleges that Defendants engaged in unlawful conduct in

connection with loans she obtained, which were secured by property

at 487 Sunrise Way, San Francisco, California. Plaintiff maintains

that she was misled during the loan origination process and that

the alleged securitization of her loans deprived Chase and MERS of

standing to foreclose on her home. 

PROCEDURAL HISTORY

In its October 27 Order, the Court noted that its records did

not show that Defendants WMC, California Combo/DMW, Litton or

Enrique Alvarez had been served within 120 days of the filing of

Plaintiff’s original complaint. The Court therefore ordered

Plaintiff to serve her amended complaint on all Defendants within

ten days of filing it and warned that her failure to do so would

result in the dismissal of her claims with prejudice. Because

Plaintiff did not file proofs of service with the Court for the

abovementioned Defendants within the ten-day period, the Court

dismissed the claims against them with prejudice. (Docket No. 23.) 

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United States District Court

For the Northern District of California

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Thus, Chase, MERS and Resurgent are the remaining Defendants in

this case. 

LEGAL STANDARD

A complaint must contain a “short and plain statement of the

claim showing that the pleader is entitled to relief.” Fed. R.

Civ. P. 8(a). Dismissal under Rule 12(b)(6) for failure to state a

claim is appropriate only when the complaint does not give the

defendant fair notice of a legally cognizable claim and the grounds

on which it rests. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555

(2007). In considering whether the complaint is sufficient to

state a claim, the court will take all material allegations as true

and construe them in the light most favorable to the plaintiff. NL

Indus., Inc. v. Kaplan, 792 F.2d 896, 898 (9th Cir. 1986). 

However, this principle is inapplicable to legal conclusions;

“threadbare recitals of the elements of a cause of action,

supported by mere conclusory statements,” are not taken as true. 

Ashcroft v. Iqbal, ___ U.S. ___, 129 S. Ct. 1937, 1949-50 (2009)

(citing Twombly, 550 U.S. at 555). 

DISCUSSION

I. Motion to Dismiss

The Court already has dismissed with prejudice Plaintiff’s

claims against Chase for alleged violations of California Civil

Code section 1916.7; the federal Truth-in-Lending Act (TILA) and

Regulation Z promulgated thereunder; the federal Home Ownership and

Equity Protection Act (HOEPA); 12 U.S.C. § 2605 and Regulation X,

which both arise under the federal Real Estate Settlement

Procedures Act (RESPA); and the federal Deceptive Practices Act,

and her claims for injunctive relief and rescission because they

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are not causes of action. Plaintiff nevertheless asserts these

claims in her FAC. Because they have already been dismissed, the

Court does not consider them below. 

Plaintiff did not substantively respond to Chase and MERS’

motion. In her opposition, she simply states, “All the Court need

do is review the allegations of the FAC to determine if the

requisite allegations meet the requirements set forth in its prior

order.” Opp’n at 2. As discussed in further detail below, many of

the allegations contained in the FAC appear nearly identical to

those that the Court found deficient in Plaintiff’s original

complaint. 

A. Negligence/Negligence Per Se

1. Negligence

A cause of action for negligence must allege (1) the

defendant’s legal duty of care to the plaintiff; (2) the

defendant’s breach of duty; (3) injury to the plaintiff as a result

of the breach; and (4) damage to the plaintiff. Hoyem v. Manhattan

Beach City Sch. Dist., 22 Cal. 3d 508, 513 (1978). “The legal duty

of care may be of two general types: (a) the duty of a person to

use ordinary care in activities from which harm might reasonably be

anticipated, or (b) an affirmative duty where the person occupies a

particular relationship to others.” McGettigan v. Bay Area Rapid

Transit Dist., 57 Cal. App. 4th 1011, 1016-17 (1997). 

Plaintiff alleges that Chase and MERS “owed a general duty of

care with respect to Plaintiff concerning their duty to properly

carry out non-judicial foreclosure proceedings only in strict

conformity with the law, only if they had standing/authority to do

so.” FAC ¶ 80. However, she does not allege facts or cite

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3 The Court grants Chase and MERS’s Request for Judicial

Notice of various documents. These documents contain facts which

are not subject to reasonable dispute. Fed. R. Evid. 201. 

5

statutes to explain the nature of this duty. “[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 v. Heart Fed. Savings & Loan Ass’n, 231 Cal. App. 3d 1089,

1095 (1991); see also Kinner v. World Savings & Loan Ass’n, 57 Cal.

App. 3d 724, 732 (1976) (holding no duty of care owed by lender to

borrower to ensure adequacy of construction loan); Wagner v.

Benson, 101 Cal. App. 3d 27, 35 (1980) (finding no duty owed by

lender to borrower where lender is not involved extensively in

borrower’s business). Plaintiff has not plead facts to show that

Chase or MERS exceeded their traditional roles. 

Further, to the extent that Chase and MERS owed Plaintiff a

duty to comply with the law, her pleadings do not support her

claims that they breached it. She asserts that they breached their

duty because they should have known that they “lacked standing

and/or authority to carry out non-judicial foreclosure proceedings

against the Trust Property.” FAC ¶ 82. Plaintiff maintains that

they lacked standing to foreclose because of the alleged

securitization of her mortgage note. However, Chase and MERS

provide documents to show that the non-judicial foreclosure

proceeded in accordance with state law. Request for Judicial

Notice (RJN),3

 Exs. 4-7. In California, there is no requirement

that a trustee produce the original promissory note prior to a nonjudicial foreclosure sale. See, e.g., Pantoja v. Countrywide Home

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United States District Court

For the Northern District of California

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Loans, Inc., 640 F. Supp. 2d 1177, 1186 (N.D. Cal. 2009); Smith v.

Wachovia, 2009 WL 1948829, at *3 (N.D. Cal.); Neal v. Juarez, 2007

WL 2140640, *8 (S.D. Cal.) (citing R.G. Hamilton Corp. v. Corum,

218 Cal. 92, 94, 97 (1933); Cal. Trust Co. v. Smead Inv. Co., 6

Cal. App. 2d 432, 435 (1935)). 

These pleading defects are similar to those in Plaintiff’s

original complaint. Accordingly, the Court dismisses with

prejudice Plaintiff’s claims for negligence against Chase and MERS.

2. Negligence Per Se

Plaintiff also alleges a cause of action for “negligence per

se” against Chase and MERS. “Negligence per se,” however, is not a

cause of action, but rather an evidentiary presumption that a party

failed to exercise due care if 

(1) He violated a statute, ordinance, or

regulation of a public entity;

(2) The violation proximately caused death or

injury to person or property;

(3) The death or injury resulted from an

occurrence of the nature which the statute,

ordinance, or regulation was designed to

prevent; and

(4) The person suffering the death or the

injury to his person or property was one of the

class of persons for whose protection the

statute, ordinance, or regulation was adopted.

Cal. Evid. Code § 669. As in her first complaint, Plaintiff has

not plead facts to show that she is entitled to this presumption. 

Accordingly, the Court dismisses with prejudice her “negligence per

se” claim against Chase and MERS. 

B. Breach of Contract

Plaintiff alleges that her loan documents, deeds of trust and

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“related documents” constitute written contracts. FAC ¶ 85. She

alleges that Chase and Resurgent breached these contracts by, among

other things, “seeking and collecting on an interest rate not

agreed to by Plaintiff; by imposing fees and charges that were in

conflict with the terms stated in the governing loan documents,

related disclosures and governing law;” and “by failing to notify

Plaintiff of the assignment, if any there was, of its rights and

interests in the loans to other parties.” FAC ¶ 85. As to MERS,

Plaintiff pleads that it failed “to timely notify Plaintiff of the

assignment, if any there was, of its rights and interest in the

loans to other parties, and by causing or facilitating the

foreclosure of the Trust Property in violation of Plaintiff’s

rights.” FAC ¶ 85. She also alleges that Defendants had a “duty

of good faith,” requiring them “to refrain from conduct that would

take advantage of gaps in the contract . . . in order to frustrate

the reasonable expectations of Plaintiff . . . .” Compl. ¶ 88. 

To assert a cause of action for breach of contract, a

plaintiff must plead: (1) existence of a contract; (2) the

plaintiff’s performance or excuse for non-performance; (3) the

defendant’s breach; and (4) damages to the plaintiff as a result of

the breach. Armstrong Petrol. Corp. v. Tri-Valley Oil & Gas Co.,

116 Cal. App. 4th 1375, 1391 n.6 (2004).

Plaintiff has not plead facts to show that she entered into

contracts with Defendants. She makes conclusory allegations that

her “loan documents, Deeds of Trust and related documents”

constitute written contracts with them. This is not sufficient to

survive a motion to dismiss. 

Even if her loan documents constituted contracts between

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Plaintiff and Defendants, she has not shown that they committed a

breach. She does not identify which provisions of these contracts

were breached or plead facts to support her vague allegations. 

Moreover, both Plaintiff and Chase and MERS have provided documents

that suggest that she was adequately notified of assignments of

rights to other parties and that the foreclosure process progressed

lawfully. FAC, Exs. 9-18; RJN, Exs. 4-7. 

Accordingly, the Court dismisses with prejudice Plaintiff’s

breach of contract claims against Defendants. 

C. Intentional Infliction of Emotional Distress

For this claim, Plaintiff’s FAC provides pleadings nearly

identical to those in her original complaint. Plaintiff’s

allegations merely recite the elements of a claim for intentional

infliction of emotional distress. Although she avers that

Defendants engaged in “extreme and outrageous” conduct, FAC ¶ 111,

Plaintiff does not allege facts to show such conduct. Accordingly,

the Court dismisses with prejudice Plaintiff’s claims for

intentional infliction of emotional distress against Defendants. 

D. Violations of Federal and State Lending Laws

As noted above, the Court dismissed with prejudice Plaintiff’s

claims against Chase for violations of California Civil Code

section 1916.7; TILA and Regulation Z promulgated thereunder;

HOEPA; and 12 U.S.C. § 2605 and Regulation X, which both arise

under RESPA. The Court dismissed with leave to amend Plaintiff’s

RESPA claim against Chase under 12 U.S.C. § 2607, which prohibits

persons from giving or accepting kickbacks and unearned fees. 

However, Plaintiff has not alleged facts to show that Chase gave or

accepted such unearned fees as a result of her loan. Accordingly,

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the Court dismisses with prejudice Plaintiff’s claim under 12

U.S.C. § 2607 against Chase.

Resurgent did not join Chase and MERS’s first motion to

dismiss. As a result, the Court did not consider the sufficiency

of Plaintiff’s pleadings concerning her federal and state lending

law claims against Resurgent, which are identical to those asserted

against Chase. However, Resurgent appears to be a loan servicing

company that was neither Plaintiff’s original lender nor an owner

of her mortgage notes. Resurgent is therefore in a position

similar to that of Chase. Thus, the Court’s reasons for dismissing

Plaintiff’s claims against Chase apply with equal force to

Resurgent. See Abagninin v. AMVAC Chem. Corp., 545 F.3d 733, 742-

43 (9th Cir. 2008); Silverton v. Dep’t of the Treasury, 644 F.2d

1341, 1345 (9th Cir. 1981) (providing that a court may sua sponte

dismiss action as to defendants who have not moved to dismiss,

where such defendants are in a position similar to that of moving

defendants). Although she had ample notice and opportunity to

offer a substantive opposition to Resurgent’s joinder to Chase and

MERS’ motion for dismissal of these claims, Plaintiff did not do

so. Accordingly, the Court dismisses with prejudice Plaintiff’s

claims against Resurgent for alleged violations of California Civil

Code section 1916.7, TILA and Regulation Z promulgated thereunder,

HOEPA, and RESPA and Regulation X promulgated thereunder. 

E. Deceptive Advertising and Other Unfair Business Practices

Plaintiff’s FAC appears to recite the same allegations of

these causes of action contained in her original complaint, which

the Court found deficient. Because Plaintiff has not alleged facts

to support her claim that Defendants violated California’s Unfair

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Competition Law, the Court dismisses this claim with prejudice. 

F. Declaratory Relief

Plaintiff’s declaratory judgment claim fails because her

complaint does not allege facts to show that there is an actual

case or controversy between her and Defendants. The complaint

merely contends that the “Trustee’s Sale is invalid, and that the

Promissory Note secured by the Deed of Trust on which it is based

was procured by fraud and other unlawful means,” FAC ¶ 126, which

was the same conclusory allegation made in her original complaint. 

Accordingly, her declaratory judgment claim is dismissed with

prejudice. 

G. Quiet Title

To state a claim for quiet title, a plaintiff’s complaint must

contain: (1) a description of the property; (2) the title of the

plaintiff and its basis; (3) the adverse claims to that title;

(4) the date as of which the determination is sought; and (5) a

prayer for relief of quiet title. Cal. Civ. Proc. Code § 761.020.

The quiet title claim in Plaintiff’s FAC appears identical to

the one contained in her original complaint. The Court dismissed

that claim because she failed to allege that Chase or MERS have an

adverse claim to the property. In her FAC, she still does not show

that Defendants have an adverse claim based on the First Deed of

Trust, on which the pending foreclosure sale is based. The First

DOT names U.S. Bank as beneficiary and NDEx West, LLC as trustee,

RJN, Exs. 4-6, neither of which is a party to this action. Because

Plaintiff’s claim does not show that Defendants have an adverse

claim based on the First DOT, the Court dismisses with prejudice

the claim for quiet title against them. 

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H. Accounting

An action for accounting, which is equitable in nature, "may

be brought to require a defendant to account to a plaintiff for

money or property, (1) where a fiduciary relationship exists

between the parties, or (2) where, though no fiduciary relationship

exists, the accounts are so complicated that an ordinary legal

action demanding a fixed sum is impracticable." Witkin, California

Procedure, Pleading § 775 (4th ed.); Civic W. Corp. v. Zila Indus.,

66 Cal. App. 3d 1, 14 (1977).

The Court dismissed Plaintiff’s original claim for an

accounting because she did not allege the existence of a fiduciary

relationship or sufficiently complicated accounts to make a legal

action impracticable. She did not cure these deficiencies in her

FAC. The Court accordingly dismisses with prejudice Plaintiff’s

claim for an accounting. 

II. Motion to Withdraw as Counsel

Rule 3-700(C) of the California Rules of Professional Conduct

provides:

[A] member may not request permission to withdraw in

matters pending before a tribunal, and may not withdraw

in other matters, unless such request or such withdrawal

is because:

(1) The client

(a) insists upon presenting a claim or defense

that is not warranted under existing law and

cannot be supported by good faith argument for

an extension, modification, or reversal of

existing law, or

(b) seeks to pursue an illegal course of

conduct, or

(c) insists that the member pursue a course of

conduct that is illegal or that is prohibited

under these rules or the State Bar Act, or

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(d) by other conduct renders it unreasonably

difficult for the member to carry out the

employment effectively, or

(e) insists, in a matter not pending before a

tribunal, that the member engage in conduct

that is contrary to the judgment and advice of

the member but not prohibited under these rules

or the State Bar Act, or

(f) breaches an agreement or obligation to the

member as to expenses or fees.

(2) The continued employment is likely to result in

a violation of these rules or of the State Bar Act;

or

(3) The inability to work with co-counsel indicates

that the best interests of the client likely will be

served by withdrawal; or

(4) The member’s mental or physical condition

renders it difficult for the member to carry out the

employment effectively; or

(5) The client knowingly and freely assents to

termination of the employment; or

(6) The member believes in good faith, in a

proceeding pending before a tribunal, that the

tribunal will find the existence of other good cause

for withdrawal.

Cal. R. Prof. Conduct 3-700(C). 

Mr. TerBeek moves for leave to withdraw from this action,

asserting that Plaintiff is now represented by another attorney. 

He maintains that Plaintiff refuses to communicate with him and

that it has become difficult for him to carry out his duties. 

However, neither her purported new attorney nor Plaintiff has

appeared to notify the Court of a change in representation. 

Furthermore, Mr. TerBeek does not provide evidence to demonstrate

his inability to communicate with Plaintiff. He merely states, “By

December, it had become evident that there had been a complete

breakdown in the attorney-client relationship.” TerBeek Decl. ¶ 4. 

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Without more, the Court declines to allow Mr. TerBeek to withdraw. 

CONCLUSION

For the foregoing reasons, the Court GRANTS Chase and MERS’

Motion, in which Resurgent joined, and dismisses with prejudice all

of Plaintiff’s claims against Chase, MERS and Resurgent. (Docket

No. 19.) Because her claims against WMC, Litton, California

Combo/DMW and Enrique Alvarez were previously dismissed, this Order

terminates Plaintiff’s action. 

The Court DENIES without prejudice Mr. TerBeek’s motion to

withdraw as counsel. (Docket No. 29.) If Plaintiff or her

purported new counsel file a notice of substitution of counsel, or

Mr. TerBeek makes a further factual showing, he may renew his

motion. 

The Clerk shall enter judgment and close the file. Each party

shall bear its own costs. 

IT IS SO ORDERED.

Dated: April 16, 2010 

CLAUDIA WILKEN

United States District Judge

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