Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_15-cv-03356/USCOURTS-cand-4_15-cv-03356-2/pdf.json

Nature of Suit Code: 220
Nature of Suit: Foreclosure
Cause of Action: 15:1601 Truth in Lending

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United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

JON C AMEDEE,

Plaintiff,

v.

CITIMORTGAGE, INC., et al.,

Defendants.

Case No. 15-cv-03356-HSG 

ORDER GRANTING DEFENDANTS' 

MOTION TO DISMISS WITH 

PREJUDICE AND DENYING 

DEFENDANTS’ MOTION TO STRIKE

Re: Dkt. Nos. 9, 10, 11 & 27

Before the Court are Defendants’1 motion to dismiss, Dkt. No. 9 (“MTD”), and partial 

motion to strike, Dkt. No. 10 (“MTS”), Plaintiff Jon C. Amedee’s (“Plaintiff”) complaint, Dkt. 

No. 1 at 12 (“Compl.”). Defendants move to dismiss the complaint in its entirety under Federal 

Rule of Civil Procedure 12(b)(6) on the various grounds of res judicata, lack of standing, failure to 

state a claim, untimeliness, privilege, and preemption. Defendants also move to strike allegations 

in the complaint as improper under Federal Rule of Civil Procedure 12(f). Plaintiff has filed an 

opposition, Dkt. No. 24 (“Opp.”), and Defendants have filed a reply, Dkt. No. 26 (“Reply”).

Under Civil Local Rule 7-1(b) and Federal Rule of Civil Procedure 78(b), these motions

were deemed suitable for disposition without oral argument. The Court has carefully considered 

the parties’ arguments in their briefs. For the reasons set forth below, the Court GRANTS

Defendants’ motion to dismiss and DISMISSES WITH PREJUDICE this entire action. In light 

of that Order, the motion to strike is DENIED WITHOUT PREJUDICE as MOOT.

 

1

“Defendants,” as used herein, refers to Defendants CitiMortgage, Inc. (“CitiMortgage”), Five 

Star Service Corp. (“Five Star”), the Federal National Mortgage Association (“Fannie Mae”), and 

Mortgage Electronic Registration Systems, Inc. (“MERS”). MERS did not initially move with the 

other defendants, but subsequently filed a notice of joinder. Dkt. No. 27. 

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I. REQUEST FOR JUDICIAL NOTICE

The Court first addresses Defendants’ request for judicial notice because, if warranted, it 

would add helpful structure to the factual allegations set forth in the complaint. See Dkt. No. 11 

(“RJN”). Defendants seek to judicially notice several publicly-recorded financial instruments and 

notices involving the property at issue in this case, as well as court filings from a previous lawsuit

involving the parties. Although Defendants failed to cite any authority in support of their request, 

the Court considers the request in its discretion. Plaintiff did not file an opposition.

The Court may take judicial notice of documents “not subject to reasonable dispute.” Fed. 

R. Evid. 201(b). Publicly-recorded real estate instruments, including deeds of trust, assignments, 

and substitutions of trustee, as well as default and foreclosure notices, are the proper subject of

judicial notice, unless subject to reasonable dispute. Disabled Rights Action Comm. v. Las Vegas 

Events, Inc., 375 F.3d 861, 866 n.1 (9th Cir. 2004); Gamboa v. Tr. Corps & Cent. Mortg. Loan 

Servicing Co., No. 09-0007, 2009 WL 656285, at **2-3 (N.D. Cal. Mar. 12, 2009) (taking judicial 

notice of various publicly recorded real estate instruments and notices that directly related to the 

parties’ transactional history and claims). Proceedings, including orders and filings, in other 

courts, including state courts, are also the proper subject of judicial notice when directly related to 

the case. Tigueros v. Adams, 658 F.3d 983, 987 (9th Cir. 2011) (internal citations omitted).

Although Plaintiff alleges that Defendants generally engaged in mortgage practices that 

included forgery, Compl. ¶ 20(j), he does not specifically allege that the real estate instruments at 

issue in this case are fabricated or otherwise contain inaccurate terms. Accordingly, the Court 

takes judicial notice of them. With respect to the court orders and filings, to the extent that they 

contain allegations by one of the parties, the Court will decline to take notice of those facts for the 

truth of the matters they assert. See Lasar v. Ford Motor Co., 399 F.3d 1101, 1117, n.14 (9th Cir. 

2005) (declining to take judicial notice of findings made in a state court proceeding “because 

[defendants were] offering the factual findings contained in the order for the purpose of proving 

the truth of the factual findings contained therein[ ]”). But to the extent that these court documents 

explain the procedural posture of the current case, including the nature of the orders entered by 

other courts in the underlying decisions, the Court takes judicial notice. See Tigueros, 658 F.3d at 

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987 (taking judicial notice of court documents because they were “directly related” to the case).

II. BACKGROUND

A. Factual Allegations and Facts Subject to Judicial Notice

Plaintiff purchased a house in Oakland, California (“Property”), on September 22, 2003. 

Compl. ¶ 1; RJN, Ex. A. To finance the purchase, Plaintiff borrowed $219,000 in principal from 

Wausau Mortgage Financial Corporation (“Wausau”), the predecessor-in-interest to CitiMortgage. 

Id. In the publicly-recorded deed of trust that secured the loan, Wausau named Financial Title 

Company as its trustee and MERS as its nominee and beneficiary. RJN, Ex. A. The day after the 

purchase, MERS assigned its interest to CitiMortgage. Id., Ex. B; see also Compl. ¶ 9.

On July 20, 2006, Five Star, acting on behalf of CitiMortgage, sent Plaintiff a notice of 

default and non-judicial foreclosure regarding overdue payments on the loan. RJN, Ex. C. That 

notice of default was rescinded on November 7, 2006. Id., Ex. D. Between November 2006 and 

August 2008, this pattern repeated itself three more times, id., Exs. E-L, until May 6, 2009, when 

Plaintiff and CitiMortgage entered into an agreement to modify the terms of the loan, id., Ex. M.

CitiMortgage sent Plaintiff a notice of default and non-judicial foreclosure with respect to 

the modified agreement on August 17, 2010. Id., Ex. N. That same day, CitiMortgage substituted 

CR Title Services, Inc. (“CR Title”) for MERS as trustee for the deed. Id., Ex. O. On November 

22, 2010, CR Title sent Plaintiff a notice that it intended to auction the Property. Id., Ex. P. The 

Property was sold on December 13, 2010, and the deed assigned to Fannie Mae. Id., Exs. Q & R.

Plaintiff broadly alleges that Defendants “engaged in egregiously unfair and deceptive 

lending tactics” to coerce him into acquiring a “complicated, risky, and expensive loan” that was 

“destined to fail from inception.” Id. ¶ 14. Defendants “misrepresented and/or concealed” that his 

mortgage was an adjustable rate mortgage, which Plaintiff alleges was engineered to dramatically 

increase his monthly payments. Id. ¶ 18. Specifically, Defendants emphasized a very low “teaser 

rate,” while misrepresenting the steep monthly payments, increased interest rates, and risk of 

negative amortization, id. ¶ 20(c), induced Plaintiff to accept a loan with a principal balance that 

was far greater than the Property’s current fair market value, id. ¶ 20(d), failed to disclose that the 

monthly payment would increase by 60 to 90% with a prepayment penalty provision of up to 

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115% id. ¶ 20(f), did not explain “technically intricate and mechanically complex elements of the 

contract,” id. ¶ 20(g), engineered a systematic scheme whereby knowledgeable loan officers were 

removed from contact with Plaintiff that would allow him to make informed decisions, id. ¶ 20(h), 

charged excessive fees and prepared false financial statements, id. ¶ 20(i), fabricated, back-dated, 

and forged documents in bulk in “robo-signing” schemes, id. ¶ 20(j), coerced Plaintiff to sign 

documents without adequate time to review them, “mentally digest and weigh out the ramification 

and economic consequences of the contract,” id. ¶ 20(l), concealed prepayment penalties, id. ¶

20(m), and concealed monthly payment obligations and proposed interest payments, id. ¶ 20(n).

Plaintiff seeks an injunction restraining Defendants from engaging in systematic mortgage 

fraud, compensatory and punitive damages, penalties, and attorneys’ fees and costs. Id., Prayer.

B. The Prior Action

Plaintiff first filed a lawsuit against CitiMortgage on May 31, 2013, in California state 

court, alleging that it fraudulently failed to disclose that the loan modification agreement required

greater monthly payments than indicated. RJN, Ex. S (“Amedee I”). Plaintiff asserted claims for 

fraudulent inducement of breach of contract, violations of the Truth in Lending Act, 15 U.S.C. §

1601, et seq. (“TILA”), fraud, conspiracy, violations of California’s Homeowners Bill of Rights 

(“HBOR”), Cal. Civ. Code § 2923.5, et seq., and violations of California’s unfair competition law, 

Cal. Bus. & Prof. Code § 17200, et seq. (“UCL”). Id., Ex. S. ¶¶ 15-56.

Sometime thereafter, CitiMortgage removed that action to this court, where Plaintiff filed 

an amended complaint naming MERS and Morgan Stanley as additional defendants. Id., Ex. T. 

Plaintiff also added claims for slander of title, alter ego liability, breach of contract, unjust 

enrichment, defamation, false light, and improper assignment, and sought to cancel the deed. Id.

The court dismissed the complaint in its entirety. Id., Ex. U. It found that Plaintiff failed 

to allege facts sufficient to state UCL, bad faith, slander of title, breach of contract, defamation, 

false light, and cancellation claims, but gave leave to amend. Id. But it found that Plaintiff could 

never state a claim for alter ego liability, unjust enrichment, or violation of HBOR, and dismissed 

those claims with prejudice. Id. Plaintiff filed a second amended complaint on March 26, 2014, 

but this time omitted MERS and Morgan Stanley as defendants. Id., Ex. V. The court again 

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dismissed the complaint, this time with prejudice as to all claims. Id., Ex. W. Judgment was 

entered in favor of CitiMortgage and against Plaintiff on August 13, 2014. Id., Ex. X.

C. The Present Action

Plaintiff filed the present action in California state court on April 20, 2015. Dkt. No. 1 ¶ 1. 

CitiMortgage, Five Star, and Fannie Mae again removed the case to this court. See generally id. 

Morgan Stanley and MERS were apparently never served with process in the underlying state 

action, id. ¶¶ 3-4, but MERS later appeared. Defendants move to dismiss and strike the complaint.

III. LEGAL STANDARD

Federal Rule of Civil Procedure 12(b)(6) permits a party to move to dismiss a complaint 

for failure to state a claim upon which relief can be granted. To survive a Rule 12(b)(6) motion to 

dismiss, the plaintiff must plead “enough facts to state a claim to relief that is plausible on its 

face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). A claim is 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.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). 

For the purposes of this analysis, a court “accept[s] factual allegations in the complaint as 

true and construe[s] the pleadings in the light most favorable to the nonmoving party.” Manzarek 

v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008). Moreover, a court 

“presume[s] that general allegations embrace those specific facts that are necessary to support the 

claim.” Nat'l Org. for Women v. Scheidler, 510 U.S. 249, 256 (1994). A court is not required, 

however, to “assume the truth of legal conclusions merely because they are cast in the form of 

factual allegations.” Fayer v. Vaughn, 649 F.3d 1061, 1064 (9th Cir. 2011) (per curiam) (internal 

quotation omitted). “[C]onclusory allegations of law and unwarranted inferences are insufficient 

to defeat a motion to dismiss.” Adams v. Johnson, 355 F.3d 1179, 1183 (9th Cir. 2004).

IV. DISCUSSION

Defendants move to dismiss Plaintiff’s complaint on various grounds, but the Court need 

only address one―that this action is barred by the affirmative defense of res judicata. Defendants 

contend that, under California law, this district’s dismissal with prejudice of the previous federal 

action, Amedee I, bars any further litigation of the claims in this matter. Mot. at 7. According to 

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them, apart from several new pages of allegations regarding fraud in the subprime mortgage 

industry generally, Amedee I involved the same legal and factual allegations about the same loan 

origination, modification, default, and foreclosure. Id. at 8. And Defendants argue that although 

Five Star and Fannie Mae were not parties to Amedee I, the claims against them are still barred.

Contrary to Defendants’ assertion, federal, not California, law controls the inquiry because 

a federal court dismissed the previous action. Alcarmen v. J.P. Morgan Chase Bank, No. 13-CV1575, 2014 WL 3368647, at *6 (N.D. Cal. Jul. 8, 2014) (citing Wright & Miller, 18B Fed. Prac. & 

Proc. Juris. §§ 4466, 4469 (2d ed. 2015))); see also Tahoe-Sierra Pres. Council, Inc. v. Tahoe 

Reg’l Planning Agency, 322 F.3d 1064, 1077 (9th Cir. 2003) (applying federal law of res judicata

without note). Federal law applies a transactional theory of claim preclusion that present three 

elements: (1) identity of claims; (2) a final judgment on the merits of the earlier claims, and (3) 

privity between the parties to the earlier and later proceedings. Tahoe-Sierra, 322 F.3d at 1077. 

The Court finds that all three elements are satisfied in this case. First, claims are identical 

when they derive from the same transactional nucleus of facts, notwithstanding any “different 

legal labels” attached to the claims asserted. Id. at 1077–78. This includes any claims that “could 

have been brought” in the action, regardless of whether they “were actually pursued.” U.S. ex rel. 

Barajas v. Northrop Corp., 147 F.3d 905, 909 (9th Cir. 1998). The same transactional nucleus of 

facts exists in this case as it did in the previous federal action. In both cases, Plaintiff alleges that 

Defendants committed fraud and otherwise acted improperly with respect to his loan origination, 

loan modification, default, and foreclosure on the same Property. The legal claims are identical.

Accordingly, the Court finds that the claims between this and the earlier action are identical.

Second, a final judgment on the merits includes a dismissal with prejudice for failure to 

state a claim upon which relief can be granted. See Alcarmen, 2014 WL 3368647, at *8; see also 

In re Schimmels, 127 F.3d 875, 884 (9th Cir. 1997) (“An involuntary dismissal generally acts as a 

judgment on the merits for the purposes of res judicata[.]”). Because Amedee I was resolved by a

judgment in favor of CitiMortgage, following two sets of dismissals with prejudice for failure to 

state a claim upon which relief can be granted, RJN, Exs. U-X, this element is also satisfied.

Third, for purposes of res judicata, privity exists not only where the parties are identical, 

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but also where there is “substantial commonality of interest” between them. Tahoe-Sierra, 322 

F.3d at 1081. Substantial commonality of interest exists where there is a “pre-existing substantive 

legal relationship,” such as an assignment of interest, Taylor v. Sturgell, 553 U.S. 880, 894 (2008), 

or where “a non-party succeed[s] to a party’s interest in property,” In re Schimmels, 127 F.3d at 

881 (9th Cir. 1997). “In the context of home foreclosures . . . subsequent trustees, assignees, or 

assignors of a mortgage are in privity with one another.” Sepehry-Fard v. Nationstar Mortg. LLC, 

No. 14-CV-03218, 2015 WL 332202, at *13 (N.D. Cal. Jan. 26, 2015); see also Lee v. Thornburg 

Mortg. Home Loans Inc., No. 14-CV-00602, 2014 WL 4953966, at *6 (N.D. Cal. Sept. 29, 2014) 

(finding substituted trustee and servicers of mortgage loan in privity with original lender, nominee, 

and trustee sued in prior lawsuit); Apostol v. CitiMortgage, Inc., No. 13-CV-01983, 2013 WL 

6328256, at *5 (N.D. Cal. Nov. 21, 2013) (assignee of deed of trust in privity with its assignor).

Privity exists between Defendants and the defendants in Amedee I. CitiMortgage and

MERS were named in both cases and are “quite obviously in privity.” See Tahoe-Sierra, 322 F.3d 

at 1081. And although Five Star was not a defendant in Amedee I, that is no obstacle to a finding 

of privity with CitiMortgage under the facts presented. Given that Five Star was CitiMortgage’s 

mortgage servicing agent, they share a “substantial commonality of interest.” See Lee, 2014 WL 

4953966, at *6 (privity exists between mortgage servicer and former holder of beneficial interest 

in a deed of trust); RJN, Exs. C-L (notices of default and rescission served by Five Star on behalf

of CitiMortgage); Compl. ¶ 14 (alleging that Five Star was CitiMortgage’s “affiliate”). Similarly, 

because Fannie Mae succeeded to CitiMortgage’s interest in the deed of trust for the Property, and 

is sued on that basis alone, Fannie Mae is also in privity with CitiMortgage. See Apostol, 2013 

WL 6328256, at *5 (assignee of deed of trust in privity with its assignor); RJN, Exs. Q & R; see 

also In re Schimmels, 127 F.3d at 881 (assignee of property interest in privity with its assignor). 

Accordingly, the Court finds that Defendants are in privity with the defendants in Amedee I.

Having found each element of claim preclusion satisfied, the Court concludes that this 

entire action is barred by the doctrine of res judicata. Because there is no set of facts that could 

alter that finding, the Court is compelled to dismiss this entire action with prejudice.

///

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V. CONCLUSION

For the foregoing reasons, the Court hereby GRANTS Defendants’ motion to dismiss and 

DISMISSES WITH PREJUDICE this entire action. Defendants’ motion to strike is DENIED 

WITHOUT PREJUDICE as MOOT. Judgment shall be entered in Defendants’ favor and 

against Plaintiff. The Clerk of the Court is instructed to close the file.

IT IS SO ORDERED.

Dated:

HAYWOOD S. GILLIAM, JR.

United States District Judge

3/18/2016

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