Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_10-cv-00031/USCOURTS-casd-3_10-cv-00031-0/pdf.json

Nature of Suit Code: 290
Nature of Suit: Other Real Property Actions
Cause of Action: 15:1692 Fair Debt Collection Act

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- 1 - 10-CV-0031W

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

CARLOS and GLORIA ROSALES,

Plaintiffs,

CASE NO: 10-CV-0031W (WVG)

 

ORDER GRANTING

DEFENDANT’S MOTION TO

DISMISS [DOC. 5]

v.

THE MORTGAGE STORE

FINANCIAL INC., et al.,

Defendant.

On January 6, 2009, Plaintiffs Carlos and Gloria Rosales, filed this lawsuit against

Defendants Mortgage Store Financial Inc., Indymac Bank, Athome Funding, Quality

Loan Service Corporation, F.S.B., and One West Bank. On January 15, 2010,

Defendant One West Bank, as successor in interest to certain assets and liabilities of

IndyMac Bank, FSB, moved to dismiss the complaint pursuant to Federal Rule of Civil

Procedure 12(b)(6). Plaintiffs have opposed the motion.

The Court decides the matter on the papers submitted and without oral argument

pursuant to Civil Local Rule 7.1(d)(1). For the following reasons, the Court GRANTS

Defendant’s motion to dismiss. (Doc. 5.)

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Case 3:10-cv-00031-W-WVG Document 10 Filed 07/02/10 Page 1 of 5
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1

Unless otherwise indicated, all docket references are to Case No. 10-cv-0031.

2

On March 11, 2010, Plaintiffs filed an amended complaint. Based on that filing,

Plaintiffs assert that the amended complaint supersedes the original Complaint and thereby

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I. BACKGROUND

On October 31, 2006, Plaintiffs obtained two “piggybacked” mortgage loans from

Defendants to finance the purchase of real property located at 1681 Thompson Ave.,

Chula Vista, California. (Compl. [Doc. 11

], 2:26; see also Mt. to Dismiss (MTD) [Doc. 5-

1], 2:10.) By December 2008, Plaintiffs had failed to make payments on their loans,

and on December 12, 2008, Defendants served Plaintiffs with a “Notice of Default And

Election to Sell Under Deed of Trust.” (MTD Exhibit List [Doc. 5-3], Ex. B.)

On October 09, 2008, Plaintiffs filed a civil action in the San Diego Superior

Court (Case No. 37-2008-00073696-CU-BT-SC) asserting ten claims involving the two

mortgages. The ten claims were for: (1) Slander of Title; (2) Quiet Title; (3) Injunctive

Relief; (4) Fraud; (5) Negligent Infliction of Emotional Distress; (6) Negligence; 

(7) RICO; (8) TILA; (9) RESPA; and (10) Cancellation Based on Fraud and

Impossibility of Performance. (See also MTD at 1:7.) 

On February 9, 2009, Plaintiffs’ civil action was removed to the Southern District

of California and assigned civil case no. 09-CV-00235 IEG (“Rosales I”). On October

16, 2009, after Plaintiffs had filed two amended complaints, Chief Judge Irma E.

Gonzalez granted an unopposed motion to dismiss and ordered the entire case dismissed

with prejudice. (See Rosales I, Doc.44.)

On January 6, 2010, Plaintiffs filed the current action involving the same two

mortgages at issue in Rosales I. The Complaint alleges the following claims:

(1) Intentional Misrepresentation; (2) Quiet Title; (3) Violations of TILA;

(4) Violations of RESPA; (5) Violation of CA Bus & Prof Code § 17200; (6) Violation

of California Civil Code § 1632. (Compl. at 1.) On January 27, 2010, Defendant One

West Bank moved to dismiss the lawsuit.2

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renders Defendant’s motion to dismiss moot. However, Federal Rule of Civil Procedure 15(a)

states that a party may amend its pleading as a matter of course within “21 days after service

of a responsive pleading or 21 days after service of a motion under Rule 12(b), (e), or (f),

whichever is earlier.” Because Plaintiffs did not file their amended complaint until a full 42

days after Defendant served its 12(b) motion, Plaintiffs could not file the amended complaint

without first obtaining a court order. Thus, the filing of the amended complaint does not moot

Defendant’s motion.

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II. LEGAL STANDARD

The court must dismiss a cause of action for failure to state a claim upon which

relief can be granted. Fed.R.Civ.P. 12(b)(6). A motion to dismiss under Rule 12(b)(6)

tests the complaint’s sufficiency. See North Star Int’l v. Arizona Corp. Comm’n., 720

F.2d 578, 581 (9th Cir. 1983). All material allegations in the complaint, “even if

doubtful in fact,” are assumed to be true. Id. The court must assume the truth of all 

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

party.” Gompper v. VISX, Inc., 298 F.3d 893, 895 (9th Cir. 2002); see also Walleri v.

Fed. Home Loan Bank of Seattle, 83 F.3d 1575, 1580 (9th Cir. 1996).

As the Supreme Court recently explained, “[w]hile 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.” Bell Atlantic Corp. v. Twombly, 127 S.Ct. 1955, 1964 (2007). Instead, the

allegations in the complaint “must be enough to raise a right to relief above the

speculative level.” Id. at 1964-65. A complaint may be dismissed as a matter of law

either for lack of a cognizable legal theory or for insufficient facts under a cognizable

theory. Robertson v. Dean Witter Reynolds, Inc., 749 F.2d 530, 534 (9th Cir. 1984).

Generally, courts may not consider material outside the complaint when ruling

on a motion to dismiss. Hal Roach Studios, Inc. v. Richard Feiner & Co., 896 F.2d

1542, 1555 n.19 (9th Cir. 1990). However, courts may consider documents specifically

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identified in the complaint whose authenticity is not questioned by parties. Fecht v.

Price Co., 70 F.3d 1078, 1080 n.1 (9th Cir. 1995) (superceded by statutes on other

grounds). Moreover, courts may consider the full text of those documents, even when

the complaint quotes only selected portions. Id. Courts may also consider material

properly subject to judicial notice without converting the motion into one for summary

judgment. Barron v. Reich, 13 F.3d 1370, 1377 (9th Cir. 1994) (citing Mack v. South

Bay Beer Distribs., Inc., 798 F.2d 1279, 1282 (9th Cir. 1986); abrogated on other grounds

by Astoria Federal Savings and Loan Ass’n v. Solimino, 501 U.S. 104 (1991)).

III. DISCUSSION

Defendant argues that Plaintiffs’ Complaint must be dismissed in its entirety

because it is barred by res judicata. The Court agrees.

Res judicata or claim preclusion bars “lawsuits on ‘any claims that were raised or

could have been raised’ in a prior action.” Stewart v. U.S. Bancorp, 297 F.3d 953, 956

(9th Cir.2002) (quoting Owens v. Kaiser Found. Health Plan, Inc., 244 F.3d 708, 713

(9th Cir.2001)). It is immaterial whether the claims asserted following the judgment

were actually pursued in the previous action. U.S. ex rel Barajas v. Northrop Corp., 147

F.3d 905, 909 (9th Cir. 1998). A prior federal action may have preclusive effect on a

subsequent action if the issue was litigated and the decision was on the merits. Hawkins

v. Risley, 984 F.2d 321, 323 (9th Cir. 1993). 

Claim preclusion requires the moving party to satisfy three elements: (1) an

identity of the claims, (2) the previous action must have resulted in a final judgment on

the merits, and (3) the present action must involve the same parties or persons in privity

of interest. Providence Health Plan v. McDowell, 385 F.3d 1168, 1173–1174 (9th Cir.

2004). To determine an identity of the claims courts look to “whether the two suits

arise out of the same transactional nucleus of facts.” Robertson v. Isomedix, Inc., 28

F.3d 965, 970 (9th Cir. 1994). 

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- 5 - 10-CV-0031W

The Complaint in this case, as well as all three complaints in Rosales I, directly

relate to the two “piggybacked” mortgages used to purchase the real property located at

1681 Thompson Ave., Chula Vista, California. (See Compl. at 2:26; Rosales I, Doc.1.)

Additionally, in Rosales I, Plaintiffs asserted claims against Mortgage Store Financial

Inc., Indymac Bank, Athome Funding, Quality Loan Service Corporation, F.S.B., and

One West Bank, the same defendants in the present action. (See Compl., 2:8–13;)

Furthermore, Plaintiffs’ claims of misrepresentation, fraud, quiet title, TILA and RESPA

violations were all previously asserted in Rosales I. (See Rosales I, Doc.14.) Lastly,

Plaintiff’s second amended complaint in Rosales I was adjudicated and dismissed with

prejudice and, therefore, resulted in a final judgment on the merits. (Rosales I, Doc.44;

see also MTD at 5:24.) 

Because all of the Plaintiffs’ claims relate to the same underlying transaction, were

asserted against the same parties in Rosales I, and have been actually litigated "on the

merits," Plaintiffs’ claims in this case are bared by res judicata.

IV. CONCLUSION AND ORDER

In light of the foregoing, the Court GRANTS Defendant’s motion to dismiss

(Doc. 5). Because the Court finds Plaintiff’s claims are bared by res judicata, leave to

amend in not warranted in this case.

IT IS SO ORDERED.

DATED: July 2, 2010

Hon. Thomas J. Whelan

United States District Judge

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