Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_10-cv-00260/USCOURTS-casd-3_10-cv-00260-0/pdf.json

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

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10cv260

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

AURELIO S. FARIAS,

Plaintiff,

v.

FCM CORPORATION, et al.,

Defendants.

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Civil No. 10cv260 L(CAB)

ORDER GRANTING MOTIONS TO

DISMISS AND TO EXPUNGE LIS

PENDENS [doc. nos. 16, 17];

DENYING MOTION TO

WITHDRAW AS ATTORNEY [doc.

#27]

Litton Loan Servicing moves to dismiss plaintiff’s complaint and to expunge lis pendens,

and Kent Wilson moves to withdraw as counsel of record for plaintiff Aurelio S. Farias. The

motions have been fully briefed. The Court considers these motions on the papers submitted and

without oral argument pursuant to Civil Local Rule 7.1(d)(1). 

A. Motion to Dismiss

1. Legal Standard

A Rule 12(b)(6) motion to dismiss tests the sufficiency of the complaint. Navarro v.

Block, 250 F.3d 729, 732 (9th Cir. 2001). Federal Rule of Civil Procedure 8(a) requires a

complaint to contain "a short and plain statement of the claim showing that the pleader is entitled

to relief . . . ." FED. R. CIV. P. 8(a). "While a complaint attacked by a Rule 12(b)(6) motion to

dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the grounds

of his entitlement to relief requires more than labels and conclusions, and a formulaic recitation

of the elements of a cause of action will not do. Factual allegations must be enough to raise a

Case 3:10-cv-00260-L-CAB Document 29 Filed 11/18/10 Page 1 of 7
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1 On August 9, 2010, defendant FCM Corporation was dismissed without prejudice

for plaintiff’s failure to serve within the 120-day period found in Federal Rule of Civil Procedure

4(m). Defendant Quality Loan Service Corporation filed a declaration of nonmonetary status

under California Civil Code § 29241 as the trustee under the Deed of Trust. 

2 10cv260

right to relief above the speculative level." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555

(2007) (internal quotation marks, brackets and citations omitted). 

In reviewing a motion to dismiss under Rule 12(b)(6), the court must assume the truth of

all factual allegations and must construe them in the light most favorable to the nonmoving

party. Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336, 337-38 (9th Cir. 1996). Legal conclusions

need not be taken as true merely because they are cast in the form of factual allegations. Roberts

v. Corrothers, 812 F.2d 1173, 1177 (9th Cir. 1987); W. Mining Council v. Watt, 643 F.2d 618,

624 (9th Cir. 1981). Similarly, "conclusory allegations of law and unwarranted inferences are

not sufficient to defeat a motion to dismiss." Pareto v. Fed. Deposit Ins. Corp., 139 F.3d 696,

699 (9th Cir. 1998). A pro se plaintiff’s pleadings are read liberally. Hebbe v. Pliler, 2010 WL

2947323 *3 (9th Cir. July 29, 2010) 

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

the complaint for additional facts, e.g., facts presented in plaintiff’s memorandum in opposition

to a defendant’s motion to dismiss or other submissions. United States v. Ritchie, 342 F.3d 903,

908 (9th Cir. 2003); Parrino v. FHP, Inc., 146 F.3d 699, 705-06 (9th Cir. 1998); see also 2

MOORE’S FEDERAL PRACTICE, § 12.34[2] (Matthew Bender 3d ed.) ("The court may not . . . take

into account additional facts asserted in a memorandum opposing the motion to dismiss, because

such memoranda do not constitute pleadings under Rule 7(a).").

2. Background

Plaintiff brought this action on February 2, 2010, against defendants FCM Corporation,

Quality Loan Service Corp., and Litton Loan Servicing1

 alleging a variety of causes of action

related to a home mortgage loan. FCM was the lender on the loan transaction; Litton was the

servicing company on the loan; and Quality was the trustee under the Deed of Trust. 

The complaint sets forth that plaintiff executed a promissory note to defendant FCM on

September 1, 2006, that was secured by a deed of trust. In time plaintiff failed to make

Case 3:10-cv-00260-L-CAB Document 29 Filed 11/18/10 Page 2 of 7
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3 10cv260

payments under the terms of the note and as a result of his defaults, foreclosure was initiated on

the property. A Notice of Trustee’s Sale was recorded on September 25, 2009 and on December

7, 2009, the foreclosure sale of the property occurred. On February 2, 2010, plaintiff recorded a

Notice of Pendency of Action. 

Litton’s pending motion to dismiss is directed to the two causes of action brought against

it: plaintiff’s fourth cause of action for quiet title and fifth cause of action for accounting and

violation of 12 U.S.C. § 2605(e) and 24 C.F.R. § 3500. 

3. Quiet Title

A plaintiff may bring an action to quiet title “to establish title against adverse claims to

real or personal property or any interest therein.” CAL. CODE CIV. P. § 760.020(a). The Code

defines a “‘Claim’ [as] includ[ing] a legal or equitable right, title, estate, lien, or interest in

property or cloud upon title.” CAL. CODE. CIV. P. § 760.010(a). To state a claim to quiet title, a

complaint must be verified and include (1) a legal description of the property and its street

address or common designation; (2) the title of the plaintiff and the basis of the title; (3) the

adverse claims to the title of the plaintiff; (4) the date as of which the determination is sought;

and (5) a prayer for the determination of the title of the plaintiff against the adverse claims. CAL.

CIV. PRO. § 761.020. 

Plaintiff states that he has alleged fraud in his complaint and as a result, has properly

pleaded the basis of his quiet title cause of action. Although unclear, it appears plaintiff is

suggesting that the fraud allegations, which the Court notes have not been pleaded with

particularity, would support rescission and therefore, would sustain a claim to quiet title. 

The complaint contains no allegations with respect to the interest claimed by Litton in the

property likely because Litton was the loan servicer and had no ownership interest in the

property. Also, the complaint does not set forth facts sufficient to show that Litton has asserted

an adverse claim to plaintiff's title. Furthermore, the complaint is not verified. The Court

concludes that the complaint fails to state a claim against Litton for quiet title.

Because Litton did not have an ownership interest in the Property, plaintiff cannot cure

the pleading deficiencies of the complaint and this claim against Litton is dismissed with

Case 3:10-cv-00260-L-CAB Document 29 Filed 11/18/10 Page 3 of 7
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4 10cv260

prejudice.

4. Accounting based on violation of RESPA 

Plaintiff’s fifth cause of action alleges that Litton violated RESPA by failing to respond to

his Qualified Written Request (“QWR”) and therefore, plaintiff seeks an accounting based on

this alleged violation. 

RESPA requires “any servicer of a federally related mortgage loan” to respond in writing

within a specified period to a QWR “from the borrower (or an agent of the borrower) for

information relating to the servicing of such loan. . . .” 12 U.S.C. § 2605(e) (1)(A). RESPA

defines a QWR as follows:

[A] qualified written request shall be a written correspondence, other than notice

on a payment coupon or other payment medium supplied by the servicer, that-

(i) includes, or otherwise enables the servicer to identify, the name and

account of the borrower; and

(ii) includes a statement of the reasons for the belief of the borrower, to the

extent applicable, that the account is in error or provides sufficient detail to

the servicer regarding other information sought by the borrower.

12 U.S.C. § 2605(e)(1)(B).

Plaintiff has not provided a copy of the letter he states he sent to Litton and the complaint

fails to provide factual allegations demonstrating that the QWR included information that would

enable Litton to identify the borrowers' names and account, as well as a statement of the reasons

the borrowers believed the account was in error. 

Under section 2605(f)(1), plaintiff must, at a minimum, allege the “actual damages” he

suffered as a result of Litton's failure to respond to his QWR. See Sanchez v. Bear Stearns

Residential Mortgage Corp., 2010 U.S. Dist. LEXIS 46043 *11-12 (S.D. Cal.) (citing Garcia v.

Wachovia Mortgage Corp., 676 F. Supp.2d 895, 909 (C.D. Cal. 2009)); Garibay v. American

Home Mortgage Corp., 2010 U.S. Dist. LEXIS 29071 *6-9 (S.D. Cal.). In the present complaint

there are no allegations that plaintiff suffered "actual damages ... as a result of [Litton’s] failure"

to respond to his QWR. 12 U.S.C. § 2605(f)(1)(A). Nor are there factual allegations suggesting

a "a pattern or practice of noncompliance" with RESPA. 12 U.S.C. § 2605(f)(1)(B). Without

factual allegations of actual damages or a pattern or practice of noncompliance, plaintiff cannot

state a claim under RESPA. See Garcia v. Wachovia Mortgage Corp., 676 F. Supp.2d 895,

Case 3:10-cv-00260-L-CAB Document 29 Filed 11/18/10 Page 4 of 7
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909-10 (C.D. Cal. 2009). But even if plaintiff stated a claim under RESPA, he seeks an

accounting and actual and statutory damages based on RESPA. But there is no statutory basis

for an accounting under RESPA. See Orozco v. DHI Mortgage, Co. Ltd, LP, 2010 WL 2757283,

*6 (S.D. Cal. 2010) (citing Gaitan v. Mortgage Elec. Registration Sys., 2009 WL 3244729, *13

(C.D. Cal.2009)). 

Even if the Court construes plaintiff’s complaint as seeking an accounting independent of

RESPA, the claim fails. “An accounting cause of action is equitable in nature, and may be

sought ‘where . . . the accounts are so complicated that an ordinary legal action demanding a

fixed sum is impracticable.’” Civic W. Corp. v. Zilla Indus. Inc., 135 Cal. Rptr. 915, 923 (Cal.

Ct. App. 1977). The party seeking an accounting must be a “wronged fiduciary.” See

Glue-Fold, Inc. v. Slautterback Corp., 98 Cal. Rptr.2d 611, 663 n. 3 (Cal. Ct. App. 2000). “‘A

suit for an accounting will not lie where it appears from the complaint that none is necessary or

that there is an adequate remedy at law. An accounting will not be accorded with respect to a

sum that a plaintiff seeks to recover and alleges in his complaint to be a sum certain.’” Id.

(citation omitted).

The facts alleged in the complaint do not demonstrate any sort of fiduciary relationship

between plaintiff and Litton. See Nymark, 231 Cal. App. 3d at 1096. Moreover, there are no

allegations that these accounts are particularly complicated or that there is no adequate remedy at

law. Civic W., 135 Cal. Rptr. at 923. As such, plaintiff has failed to state a claim for an

accounting.

B. Motion to Expunge Lis Pendens

Plaintiff recorded a lis pendens on the property at issue under California Civil Code §§

405.31 and 405.32. A lis pendens effectively prevents a sale or encumbrance of the property

until litigation is resolved or the lis pendens is expunged. See Kirkeby v. Superior Court, 33 Cal.

4th 642. 651 (2004). 

A court "shall order the notice [of pendency] expunged if . . . the pleading on which the

notice is based does not contain a real property claim." CAL. CIV. CODE § 405.31. A "real

property claim" is defined, inter alia, as a cause of action "which would, if meritorious, affect . .

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2 In general, attorneys must electronically file their pleadings in this District. See

Civ. Local Rule 5.4. In the process they create docket entries in the court’s file and are able to

designate their filings as, for example, a motion or a notice.

6 10cv260

. title to, or the right to possession of, specific real property. . . ." CAL. CIV. CODE § 405.4. A

plaintiff bears the burden of establishing, by a preponderance of the evidence, the probable

validity of the claims. 

The complaint has been dismissed as to defendant FCM Corporation for failure to serve

the complaint. The two claims asserted against defendant Litton have been dismissed and the

sole real property claim for quiet title has been dismissed with prejudice. Quality Loan Service

Corporation, as the trustee under the Deed of Trust, has no interest in the real property. As a

result of the dismissals, plaintiff has alleged no "real property claim" and the lis pendens is

properly expunged.

C. Motion to Withdraw as Attorney

On October 18, 2010, Kent Wilson, Esq., counsel for plaintiff, filed a pleading styled as a

“Notice of Withdraw of Counsel,” which he docketed as a motion to withdraw.2

An attorney representing a client before a tribunal may not withdraw except by leave of

court. Darby v. City of Torrance, 810 F. Supp. 275, 276 (C.D. Cal. 1992); CAL. R. PROF.

CONDUCT 3-700(A)(1). Accordingly, a notice alone is insufficient to accomplish withdrawal. 

Because Mr. Wilson’s filing is styled as a “notice,” this is insufficient, and the notice is rejected.

Without an explanation, Mr. Wilson represents that he is withdrawing based on California

Rule of Professional Conduct 3-700(B)(3). Rule 3-700(B)(3) applies when an attorney’s

“mental or physical condition renders it unreasonably difficult to carry out the employment

effectively.” This is at odds with Mr. Wilson’s representations to the Court. At the hearing held

on September 22, 2010, he represented that he had already resigned from the Bar and was no

longer an attorney. The Court is therefore not inclined to grant leave to withdraw under Rule 3-

700(B)(3).

Finally, this court requires counsel to “comply with the standards of professional conduct

required of members of the State Bar of California, and decisions of any court applicable

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thereto.” Civ. Loc. R. 83.4(b). Pursuant to California Rule of Professional Conduct 3-

700(A)(2), an attorney may not withdraw until he “has taken reasonable steps to avoid

reasonably foreseeable prejudice to the right of the client.” Mr. Wilson has not indicated if, or

how, he has protected his clients from reasonably foreseeable prejudice occasioned by his

withdrawal. Mr. Wilson’s motion to withdraw is therefore denied on this alternative ground.

For the foregoing reasons, Mr. Wilson’s notice of withdrawal will be rejected and, to the

extent the notice can be construed as a motion for leave to withdraw, it will be denied. 

D. Conclusion

Based on the foregoing, IT IS ORDERED:

a. Defendant’s motion to dismiss causes of action 4 and 5 asserted against defendant

Litton is GRANTED;

b. Defendant’s motion to expunge lis pendens is GRANTED. The Lis Pendens

recorded on February 4, 2010, as Instrument No. 2010-0056909 in the official records of San

Diego County shall be expunged from the official records, and a copy of this Order may be

recorded in the official records;

c. Directing the Clerk of the Court to close this case; and 

d. Counsel Kent Wilson’s motion to withdraw as counsel of record is DENIED. 

IT IS SO ORDERED. 

DATED: November 18, 2010

M. James Lorenz

United States District Court Judge

COPY TO: 

HON. CATHY ANN BENCIVENGO

UNITED STATES MAGISTRATE JUDGE

ALL PARTIES/COUNSEL

Case 3:10-cv-00260-L-CAB Document 29 Filed 11/18/10 Page 7 of 7