Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_12-cv-02743/USCOURTS-casd-3_12-cv-02743-0/pdf.json

Nature of Suit Code: 290
Nature of Suit: Other Real Property Actions
Cause of Action: 28:1331 Fed. Question

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

SHANNON L. ANDERSON;

JONATHAN C. ANDERSON,

Plaintiffs,

CASE NO. 12cv2743 - IEG (NLS)

ORDER:

(1) GRANTING IN PART

DEFENDANT’S MOTION TO

DISMISS [Doc. No. 3]; and

(2) REMANDING STATE LAW

CLAIMS.

v.

U.S. BANK, NATIONAL

ASSOCIATION, as Trustee for the

Lehman Mortgage Trust Mortgage

Pass Through Certificates, Series

2005-1; DOES 1 THROUGH 10,

inclusive,

Defendants.

Presently before the Court is the motion of Defendant U.S. Bank, National

Association (“Defendant”) to dismiss the complaint of Plaintiffs Shannon L.

Anderson and Jonathan C. Anderson (collectively “Plaintiffs”) for failure to state a

claim. [Doc. No. 3, Def.’s Mot.] For the following reasons, the Court GRANTS in

part Defendant’s motion to dismiss and REMANDS Plaintiffs’ state law claims.

BACKGROUND

This case concerns a July 7, 2005 mortgage loan to Plaintiffs. [Doc. No. 1,

Compl. ¶ 23.] On November 11, 2012, Plaintiffs filed a complaint against

Defendant asserting six causes of action: (1) declaratory relief under 28 U.S.C. §§

2201, 2202; (2) negligence; (3) quasi contract; (4) violation of 15 U.S.C. § 1692, et

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seq.; (5) violation of California Business and Professions Code § 17200, et seq.; and

(6) accounting. [Doc. No. 1, Compl.] Plaintiffs’ claims are based on their

allegations that Defendant has no right, title, or interest in the promissory note

(“Note”) or mortgage. [Id. ¶ 41.] Defendant subsequently filed the present motion

to dismiss. [Doc. No. 3, Def.’s Mot.]

DISCUSSION

I. Motion to Dismiss

A motion to dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil

Procedure tests the legal sufficiency of the claims asserted in the complaint. Fed. R.

Civ. P. 12(b)(6); Navarro v. Block, 250 F.3d 729, 731 (9th Cir. 2001). The court

must accept all factual allegations pleaded in the complaint as true, and must

construe them and draw all reasonable inferences from them in favor of the

nonmoving party. Cahill v. Liberty Mutual Ins. Co., 80 F.3d 336, 337-38 (9th

Cir.1996). To avoid a Rule 12(b)(6) dismissal, a complaint need not contain

detailed factual allegations, rather, it 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 has “facial plausibility 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) (citing

Twombly, 550 U.S. at 556).

However, “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.” Twombly, 550 U.S. at

555 (quoting Papasan v. Allain, 478 U.S. 265, 286 (1986)) (alteration in original). 

A court need not accept “legal conclusions” as true. Iqbal, 556 U.S. at 678. In spite

of the deference the court is bound to pay to the plaintiff’s allegations, it is not

proper for the court to assume that “the [plaintiff] can prove facts that [he or she]

has not alleged or that defendants have violated the . . . laws in ways that have not

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been alleged.” Associated Gen. Contractors of Cal., Inc. v. Cal. State Council of

Carpenters, 459 U.S. 519, 526 (1983). “Where a complaint pleads facts that are

‘merely consistent with’ a defendant’s liability, it stops short of the line between

possibility and plausibility of entitlement to relief.’” Iqbal, 556 U.S. at 1949

(quoting Twombly, 550 U.S. at 678).

In determining the propriety of a Rule 12(b)(6) dismissal, a court may not

look beyond the complaint for additional facts. United States v. Ritchie, 342 F.3d

903, 908 (9th Cir. 2003). Further, a court generally may not consider materials

beyond the pleadings when ruling on a Rule 12(b)(6) motion. However, a court

“may take judicial notice of matters of public record . . . as long as the facts noticed

are not subject to reasonable dispute.” Skilstaf, Inc. v. CVS Caremark Corp., 669

F.3d 1005, 1016 n.9 (9th Cir. 2012). The Court will first address Plaintiffs’ first

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cause of action for declaratory relief and fourth cause of action for violation of 15

U.S.C. § 1692, et seq., which supply federal question jurisdiction.

A. First Cause of Action: Declaratory Relief 

Plaintiffs seek declaratory relief to “determine the status of Defendant’s

claims.” [Doc. No. 1, Compl. at 23.] More specifically, “Plaintiffs requests [sic]

the Court make a finding and issue appropriate orders stating the named Defendant

an [sic] none of the Doe Defendants, have any right or interest in Plaintiffs’ Note,

Deed of Trust, or the Property which authorizes them, in fact or as a matter of law,

to collect Plaintiffs’ mortgage payments or enforce the terms of the Note or Deed of

Trust in any manner whatsoever.” [Id. ¶ 77.] 

“Declaratory relief is appropriate: (1) when the judgment will serve a useful

purpose in clarifying and settling the legal relations in issue, and (2) when it will

terminate and afford relief from the uncertainty, insecurity, and controversy giving

rise to the proceeding.” Guerra v. Sutton, 783 F.2d 1371, 1376 (9th Cir. 1986). 

Because the Court resolves this motion to dismiss without consulting the documents for

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which judicial notice is sought, the Court declines to address the request for judicial notice. [Doc. No.

3-2, Request for Judicial Notice.]

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“While the existence of another adequate remedy does not preclude a declaratory

judgment that is otherwise appropriate, the availability of other adequate remedies

may make declaratory relief inappropriate.” Fimbres v. Chapel Mortg. Corp., 2009

WL 4163332, at *5 (S.D. Cal. Nov. 20, 2009) (internal quotations and citations

omitted). A federal court may decline to address a declaratory relief claim “[w]here

the substantive suit would resolve the issues raised by the declaratory judgment

action, . . . because the controversy has ‘ripened’ and the uncertainty and

anticipation of litigation are alleviated.” Tina v. Countrywide Home Loans, Inc.,

2008 WL 4790906, at *2 (S.D. Cal. Oct. 30, 2008) (quoting Tempco Elec. Heater

Corp. v. Omega Eng’g, Inc., 819 F.2d 746, 749 (7th Cir. 1987)).

In the present case, the Complaint does not suggest that declaratory relief

would entitle Plaintiffs to relief beyond what is requested in their substantive

claims. Furthermore, the Complaint does not suggest that the substantive suit

would not resolve the issues raised by the claim for declaratory relief. For example,

Plaintiffs’ fifth cause of action for violation of Business and Professions Code §

17200, et seq. requests that Defendant be enjoined from undertaking certain actions,

including accepting payments. [Doc. No. 1, Compl. ¶¶ 104, 110.] Plaintiffs also

request an order that any Defendants claiming an interest in the Property “take any

and all actions necessary to remove the cloud they have placed upon [the] title and

an order enjoining such Defendants from taking such action in the future.” [Id. ¶

112.] Plaintiffs’ third and sixth causes of action for quasi contract and an

accounting, respectively, request that any money paid to Defendant be returned

because no money was owed to Defendant. [Id. ¶¶ 91, 94, 116.] These claims

necessarily require a determination whether Defendant has any rights or interest

related to the Note, Deed of Trust, and subject property. [Id. ¶¶ 90-92, 115-116.] 

Accordingly, declaratory relief is inappropriate, and the Court GRANTS

Defendant’s motion to dismiss with prejudice as to Plaintiff’s claim for declaratory

relief. 

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B. Fourth Cause of Action: Violation of 15 U.S.C. § 1692, et seq.

Plaintiffs contend that Defendant violated 15 U.S.C. § 1692, the Fair Debt

Collection Practices Act (FDCPA) by, inter alia, “[f]alsely represent[ing] the status

of the debt, in particular, that it was due and owing to Defendant [U.S. Bank] at the

time the suit was filed” and “[f]alsely representing or implied [sic] that the debt was

owing to Defendant [U.S. Bank] as an innocent purchaser for value, when in fact,

such an assignment had not been accomplished” in their attempts to collect on the

Note. [Doc. No. 1, Compl. ¶ 97.] Plaintiffs allege that Defendant is the “purported

assignee” of the debt. [Id.]

The FDCPA “generally prohibits ‘debt collectors’ from making false or

misleading representations and from engaging in various abusive and unfair

practices in collecting debts.’” Klohs v. Wells Fargo Bank, N.A., 2012 WL

4758126 (D. Haw. Oct. 4, 2012) (citing Heintz v. Jenkins, 514 U.S. 291, 292

(1995)). Thus, a defendant must be a “debt collector” within the meaning of the

FDCPA to be liable for its violation. Heintz, 514 U.S. at 294. The term “debt

collector” is defined as: “any person who uses any instrumentality of interstate

commerce or the mails in any business the principal purpose of which is the

collection of any debts, or who regularly collects or attempts to collect, directly or

indirectly, debts owed or due or asserted to be owed or due another.” 15 U.S.C. §

1692a(6). 

Courts have found that a defendant is not a “debt collector” within the

meaning of the FDCPA when the plaintiff does not adequately allege that the

defendant was “(1) a person whose principal business is the collection of debts

(whether on behalf of himself or others); or (2) a person who regularly collects

debts on behalf of others (whether or not it is the principal purpose of his

business).” Derusseau v. Bank of America, N.A., 2011 WL 5975821, at *6 (S.D.

Cal. Nov. 29, 2011) (quoting Izenburg v. ETS Servs., 589 F.Supp.2d 1193, 1999

(C.D. Cal. 2008) (internal quotation marks removed)). 

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Further, many courts have found that mortgagees, their beneficiaries, and

their assignees are not “debt collectors” under the FDCPA. See, e.g., Perry v.

Stewart Title Co., 756 F.2d 1197, 1208 (5th Cir. 1985) (“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.”); Wise v. Wells

Fargo Bank, N.A., 850 F.Supp.2d 1047, 1053 (C.D. Cal. 2012) (excluding creditors

collecting their own consumer debts, mortgage loan beneficiaries, and servicing

companies from definition of “debt collector”); Karl v. Quality Loan Serv. Corp.,

759 F.Supp.2d 1240, 1247-48 (D. Nev. 2010) (stating that mortgagees and their

beneficiaries, including mortgage servicing companies, are not “debt collectors”

within the meaning of the FDCPA); Diessner v. Mortg. Elec. Registration Sys., 618

F.Supp.2d 1184, 1188 (D. Ariz. 2009) (finding that mortgagees and their assignees

are not “debt collectors” under the FDCPA).

Here, the Court finds that Plaintiffs have not alleged facts sufficient to show

that Defendant is a debt collector within the meaning of the FDCPA. Plaintiff even

states that Defendant is a purported assignee of the debt [Doc. No. 1, ¶ 97], which

does not fall under the FDCPA’s definition of “debt collector.” See, e.g., Perry, 756

F.2d at 1208; Diessner, 618 F.Supp.2d at 1188. Further, both Plaintiffs and

Defendant agree that the loan is not in default. See Perry, 756 F.2d at 1208. [Doc.

No. 4, Pl.’s Opp. at 11-12; Doc. No. 3-1, Def.’s Mot. at 22.] Therefore, the Court

GRANTS Defendant’s motion as to Plaintiffs’ fourth cause of action and

DISMISSES it with prejudice.

/ / /

/ / /

/ / /

/ / /

/ / /

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C. Supplemental Jurisdiction over State Law Claims

With Plaintiffs’ claims supplying federal jurisdiction dismissed, only state

law claims remain. The Court has supplemental jurisdiction over these claims. 

Under 28 U.S.C. § 1367(c)(3), however, the Court “may decline to exercise

supplemental jurisdiction over a claim . . . if . . . [it] has dismissed all claims over

which it has original jurisdiction.” A district court’s decision whether to exercise

supplemental jurisdiction after dismissing every claim over which it had original

jurisdiction is “purely discretionary.” Carlsbad Tech., Inc. v. HIF Bio, Inc., 556

U.S. 636, 639 (2009); accord Lacey v. Maricopa Cnty., 649 F.3d 1118, 1137 (9th

Cir. 2011). In exercising its discretion, the court may look to a host of factors,

“including the circumstances of the particular case, the nature of the state law

claims, the character of the governing state law, and the relationship between the

state and federal claims.” City of Chicago v. Int’l College of Surgeons, 522 U.S.

156, 173 (1997); see also United Mine Workers of Am. v. Gibbs, 383 U.S. 715, 726

(1966). In the usual case, where federal claims are dismissed before trial, “the

balance of factors ... will point toward declining to exercise jurisdiction over the

remaining state law claims.” Gini v. Las Vegas Metro. Police Dep’t, 40 F.3d 1041,

1046 (9th Cir. 1994) (internal quotation omitted); accord Religious Tech. Ctr. v.

Wollersheim, 971 F.2d 364, 367-68 (9th Cir. 1992) (per curiam); Scholar v. Pacific

Bell, 963 F.2d 264, 268 n.4 (9th Cir. 1992).

In this case, looking at the balance of factors—including the fact that this

case is still in its infancy and that the present motions are the only motions that have

been filed to date—the Court believes it is more appropriate to decline to exercise

supplemental jurisdiction over the remaining state law claims and to remand those

claims to state court. See Lacey, 649 F.3d at 1137; Gini, 40 F.3d at 1064. 

Accordingly, the Court REMANDS Plaintiffs’ remaining state law claims.

CONCLUSION

For the reasons above, the Court GRANTS in part Defendants’ motion to

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dismiss and DISMISSES WITH PREJUDICE Plaintiffs’ first cause of action for

declaratory relief and fourth cause of action for violation of 15 U.S.C. § 1692 et seq.

The Court REMANDS to the San Diego Superior Court Plaintiffs’ second, third,

fifth, and sixth causes of action.

IT IS SO ORDERED.

DATED: April 15, 2013 ___________________________

IRMA E. GONZALEZ

United States District Judge

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