Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_16-cv-00513/USCOURTS-casd-3_16-cv-00513-2/pdf.json

Nature of Suit Code: 220
Nature of Suit: Foreclosure
Cause of Action: 28:1441nr Notice of Removal

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

CHARLOTTE C. WATSON, an

individual, and CHARLOTTE C.

WATSON, as Trustee of the

CHARLOTTE WATSON TRUST

dated November 5, 2003,

Plaintiff,

CASE NO. 16cv513-GPC(MDD)

ORDER GRANTING DEFENDANT

U.S. BANK’S MOTION FOR

JUDGMENT ON THE PLEADINGS

[Dkt. No. 38.]

v.

BANK OF AMERICA, N.A., a

business entity form unknown;

CALIBER HOME LOANS, INC, a

business entity form unknown; MTC

FINANCIAL, INC. a business entity

form unknown; and U.S. BANK

TRUST, N.A., AS TRUSTEE FOR

LSF9 MASTER PARTICIPATION

TRUST, a business entity form

unknown; U.S. BANK NATIONAL

ASSOCIATION, AS INDENTURE

TRUSTEE OF THE GMACM HOME

EQUITY LOAN TRUST 2006-HE4, a

business entity form unknown; and

DOES 1-100, inclusive,

Defendant.

Before the Court is Defendant U.S. Bank National Association, as Indenture

Trustee of the GMACM Home Equity Loan Trust 2006-HE4's (“U.S. Bank”) motion

for judgment on the pleadings. (Dkt. No. 38.) An opposition was filed on January 5,

2017. (Dkt. Nos. 42, 43.) A reply was filed January 13, 2017. (Dkt. No. 44.) Based

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on the reasoning below, the Court GRANTS Defendant U.S. Bank’s motion for

judgment on the pleadings. 

Background

On February 29, 2016, the case was removed to this Court from the San Diego

Superior Court. (Dkt. No. 1.) A first amended complaint wasfiled on March 21, 2016. 

(Dkt. No. 8, FAC.) On June 30, 2016, the Court granted in part and denied in part

Defendants’ motions to dismiss. (Dkt. No. 23.) On July 29, 2016, Plaintiffs Charlotte

C. Watson, and Charlotte C. Watson, as Trustee of the Charlotte C. Watson Trust dated

November 5, 2003 (“Plaintiffs”) filed a second amended complaint (“SAC”) against

Bank of America, N.A. (“BANA”), U.S. Bank, Caliber Home Loans, Inc. (“Caliber”),

U.S. Bank Trust, N.A. as Trustee for LSF9 Master Participation Trust (“U.S. Bank

Trust as Trustee of LSF9”) and MTC Financial, Inc. (Dkt. No. 25.) The SAC alleges

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the following causes of action:

First Cause of Action: violations of Regulation X under Real Estate

Settlement Procedures Act (“RESPA”) and Regulation

Z under the Truth in Lending Act (“TILA”) as to

Defendants BANA and Caliber;

Second Cause of Action: negligence as to BANA and Caliber;

Third Cause of Action: violations of California Business & Professions 

Code section 17200 et seq. as to all Defendants;

Fourth Cause of Action: quiet title as to U.S. Bank and U.S. Bank Trust as

Trustee of LSF9; 

Fifth Cause of Action: cancellation of instruments as to all Defendants;

Sixth Cause of Action: declaratory relief as to all Defendants; and 

Seventh Cause of Action: slander of title as to all Defendants. 

(Id.) 

Defendants U.S. Bank Trust, N.A. as Trustee for LSF9 Master Participation

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Trust (“U.S. Bank Trust as Trustee of LSF9”) and MTC Financial, Inc. have been

served, (Dkt. No. 1 at 46), but have not appeared in the case. 

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On November 7, 2016, the Court granted in part and denied in part Defendants

BANA, U.S. Bank and Caliber’s motions to dismiss. (Dkt. No. 34.) In particular, the

Court granted in part and denied in part Defendants’ motions to dismiss the first and

third causes of action. (Id.) On the first cause of action, the Court granted Defendants’

motions to dismiss the allegations under Regulation Z with prejudice, (id. at 9), and

granted in part and denied their motions to dismiss as to Regulation X. (Id. at 8-22.) 

On the third cause of action, the Court denied the motions to dismiss the unlawful

prong of the UCL based on the violations of Regulation X and granted the motions to

dismiss the unlawful prong of the UCL based on allegations of Regulation Z and 12

C.F.R. § 1024.41(c). (Id. at 44.) The Court also granted Defendants’ motions to

dismiss the unfair and fraudulent prongs of the UCL with prejudice. (Id. at 45-47.) 

Lastly, the Court granted with prejudice Defendants’ motions to dismiss the fourth,

fifth, sixth and seventh cause of action. (Id. at 22-41.) Defendants did not move to

dismiss the second cause of action for negligence. (Id.) Defendant Caliber filed its

answer on November 21, 2016 and Defendants BANA and U.S. Bank filed their answer

on November 28, 2016. (Dkt. Nos. 35, 36.) 

On December 7, 2016, Defendant U.S. Bank moved for judgment on the

pleadings. (Dkt. No. 38.) An opposition and a reply were filed. (Dkt. Nos. 42, 43, 44.)

Discussion

A. Legal Standard on Federal Rule of Civil Procedure 12(c)

U.S. Bank movesfor judgment on the pleadings because the Court dismissed all

causes of action alleged against it except for the alleged violations of the “unlawful”

prong of the UCL based on violations of Regulation X which has not been alleged

against it. (Dkt. No. 34.) Plaintiff opposes arguing that the motion should be denied.

Federal Rule of Civil Procedure (“Rule”) 12(c) allows parties to move for

judgment on the pleadings after the pleadings have been closed but prior to trial, and

“within such time as not to delay the trial.” Fed. R. Civ. P. 12(c). The standard for

determining a Rule 12(c) motion for judgment on the pleadings is the same as the

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standard for a Rule 12(b)(6) motion to dismiss. Cafasso, U.S. ex rel. v. Gen. Dynamics

C4 Sys., Inc., 637 F.3d 1047, 1053 & n.4 (9th Cir. 2011) (the same standard of review

applies to motions brought under Rule 12(c) as motions brought under Rule 12(b)(6)). 

“Judgment on the pleadings is proper when the moving party clearly establishes on the

face of the pleadings that no material issue of fact remains to be resolved and that it is

entitled to judgment as a matter of law.” Hal Roach Studios, Inc. v. Richard Feiner and

Co., Inc., 896 F.2d 1542, 1550 (9th Cir. 1989). A court must not consider matters

beyond the pleadings as such a proceeding must be treated as a motion for summary

judgment. Id. 

In the Court’s prior order on Defendants’ motions to dismiss, the Court

dismissed all causes of action alleged against U.S. Bank with prejudice with the

exception of an allegation under the “unlawful” prong of the UCL claim for violations

of Regulation X. (Dkt. No. 34 at 44.) 

The UCL prohibits “any unlawful, unfair or fraudulent business act or practice.”

Cal. Bus. & Prof. Code § 17200. “Each of these three adjectives captures a separate

and distinct theory of liability.” Rubio v. Capital One Bank, 613 F.3d 1195, 1203 (9th

Cir. 2010) (quotation marks omitted). The unlawful prong of the UCL incorporates

“violations of other laws and treats them as unlawful practices.” Cel-Tech Comms.,

Inc. v. Los Angeles Cellular Tel. Co., 20 Cal. 4th 163, 180 (1999). This prong creates

an “independent action when a business practice violates some other law.” Walker v.

Countrywide Home Loans, Inc., 98 Cal. App. 4th 1158, 1169 (2002). A UCL claim

“stands or falls depending on the fate of antecedent substantive causes of action.”

Krantz v. BT Visual Images, 89 Cal. App. 4th 164, 178 (2001). 

In the order, the Court concluded that Plaintiffs alleged a claim under the

“unlawful” prong asto Regulation X and denied all Defendants’ motionsto dismiss the

unlawful prong of the UCL claim based on these alleged violations. (Dkt. No. 34 at

44.) The Court further concluded that Plaintiff failed to state a claim under the

fraudulent and unfair prong of the UCL, and dismissed those claims with prejudice. 

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(Id. at 44-47.) 

The crux of the claims against U.S. Bank was based on the alleged fraudulent

recordation of Assignment 3. (Dkt. No. 25, SAC ¶¶ 48, 154.) The Court granted

Defendant U.S. Bank’s motion to dismiss the UCL claimon the fraudulent prong of the

UCL with prejudice concerning the recordation of Assignment 3. (Dkt. No. 34 at 45-

46.) 

The violation of Regulation X, the first cause of action, is only alleged against

Defendants BANA and Caliber and the only statute that the Court concluded supported

a cause of action under the UCL. Based on the Court’s ruling, no liability would attach

to U.S. Bank as there are no remaining predicate violations of law to support a cause

of action under the unlawful prong of the UCL. Plaintiffs oppose arguing that the UCL

claim against U.S. Bank should not be dismissed because their contention is that U.S.

Bank encumbered the subject property based on fraudulent representations that it isthe

current beneficiary of the second deed of trust when it recorded Assignment 3 which

is a violation of California Civil Code section 2924.17(b). (Dkt. No. 42 at 3.) 

Plaintiffs also present facts developed since the Court’s order was filed on November

7, 2016, and reiterate arguments that the recordation of Assignment 3 constitutes a

fraudulent business practice under the UCL. 

First, the SAC does not allege an underlying violation of California Civil Code

section 2724.17(b). TheCourt noted that Plaintiffs only alleged violations of 12 C.F.R.

§ 1024.41(c) and Regulation X under the unlawful prong of the UCL. (Dkt. No. 34 at

44.) Therefore, Plaintiffs’ argument is without merit. Second, in reviewing a motion

for judgment on the pleadings, the Court does not consider facts outside the pleadings

especially facts that arise after the SAC has been filed. Therefore, facts alleged since

the filing of the Court’s prior order cannot be considered. Lastly, the Court dismissed

with prejudice the fraudulent prong of the UCL based on U.S. Bank’s recordation of

Assignment 3 for lack of standing and failing to state a claim. (Id. at 45-46.) 

Plaintiff’s attempt to reargue that issue is not proper. Thus, the Court GRANTS

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Defendant U.S. Bank’s motion for judgment on the pleadings.

B. Request for Judicial Notice

Defendant filed a request for judicial notice. (Dkt. No. 38-2.) Plaintiffs filed an

opposition. (Dkt. No. 43.) Because the Court did not consider the documents on ruling

on the motion, the Court DENIES Defendant U.S. Bank’s request for judicial notice. 

Conclusion

Based on the above, the Court GRANTS Defendant’s motion for judgment on

the pleadings and DISMISSES the remaining claim against it. The hearing set on

January 27, 2017 shall be vacated.

IT IS SO ORDERED. 

DATED: January 19, 2017

HON. GONZALO P. CURIEL

United States District Judge

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