Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_13-cv-01784/USCOURTS-casd-3_13-cv-01784-0/pdf.json

Nature of Suit Code: 220
Nature of Suit: Foreclosure
Cause of Action: 28:1331 Fed. Question

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

GEORGE D. BORRIA and GRACE

A. NEFFA-BORRIA, as trustees of the

George and Grace Borria 2006 Trust,

Plaintiffs,

CASE NO. 13-CV-1784 JLS (KSC)

ORDER: (1) GRANTING

DEFENDANTS WELLS FARGO

AND HSBC’S REQUEST FOR

JUDICIAL NOTICE; AND (2)

GRANTING DEFENDANTS

WELLS FARGO, HSBC, AND

FIDELITY’S MOTIONS TO

DISMISS THE COMPLAINT

(ECF Nos. 26, 27, 28)

vs.

WELLS FARGO BANK N.A.; HSBC

BANK USA, a federally chartered

banking institution, as trustee on

behalf of The Wells Fargo Asset

Securities Corporation, mortgage passthrough certificates, series 2007-11;

FIDELITY NATIONAL TITLE

INSURANCE; DEFAULT

RESOLUTION NETWORK; ALL

PERSONS UNKNOWN claiming any

legal or equitable right, title, estate,

lien or interest in the property

described in the complaint adverse to

plaintiffs’ title, or any cloud on

plaintiffs’ title thereto; and DOES

1–60,

Defendants.

Presently before the Court is Defendants Wells Fargo Bank N.A. (“Wells Fargo”)

and HSBC Bank USA’s (“HSBC,” and, collectively, “the Banks”) Motion to Dismiss

(“MTD”) (ECF No. 26), as well as Fidelity National Title Insurance’s (“Fidelity”) MTD

(ECF No. 28). Also before the Court are Plaintiffs George D. Borria and Grace A.

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Neffa-Borria, as trustees of the George and Grace Borria 2006 Trust’s (“Plaintiffs”), 

Oppositions to (ECF Nos. 29, 30) and the Banks’ (ECF No. 31) and Fidelity’s (ECF No.

32) Replies in Support of the MTDs, as well as the Banks’ Request for Judicial Notice

(“RJN”) (ECF No. 27). The Court vacated the hearings on the MTDs set for April 10,

2014, and took the matters under submission without oral argument pursuant to Civil

Local Rule 7.1(d)(1). (ECF No. 33.) Having considered the parties’ arguments and the

law, the Court GRANTS the Banks’ RJN and GRANTS both the Banks’ and Fidelity’s

(collectively, “Defendants”) MTDs.

BACKGROUND

On June 12, 2007, Plaintiffs executed a Deed of Trust (“DOT”) encumbering the

real property located at 6169 Primrose Drive, La Mesa, California, 91942 (“the

Property”). (Corrected 1st Am. Verified Compl. (“FAC”) ¶ 8, ECF No. 24; RJN Ex.

1, ECF No. 27.) The DOT secures a $960,000.00 promissory note (“the Note”), and

names Plaintiffs as the borrowers, Wells Fargo as the lender, and Fidelity as the trustee. 

(FAC ¶ 8, ECF No. 24; RJN Ex. 1, ECF No. 27.) On October 10, 2007, Plaintiffs

executed a Trust Transfer Deed granting their interest in the Property to the George and

Grace Borria 2006 Trust (“the Trust”), of which Plaintiffs are the trustees. (RJN Ex.

2, ECF No. 27.) 

On August 18, 2011, Fidelity recorded a Notice of Default (“NOD”) against the

Property, claiming that Plaintiffs were $36,856.77 in arrears. (FAC ¶ 9, ECF No. 24;

RJN Ex. 3, ECF No. 27.) On February 6, 2012, Wells Fargo recorded a Corporate

Assignment of DOT to HSBC. (FAC ¶ 10, ECF No. 24; RJN Ex. 4, ECF No. 27.) 

On March 1, 2012, Fidelity recorded a Notice of Trustee’s Sale (“NOTS”). (FAC

¶ 14, ECF No. 24; RJN Ex. 5, ECF No. 27.) On July 30, 2013, Plaintiffs filed their

Complaint. (ECF No. 1.) Defendants subsequently filed MTDs. (ECF Nos. 7, 16.) 

Defendants recorded a second NOTS on August 7, 2013. (RJN Ex. 6, ECF No. 27.) 

On February 4, 2014, the Court granted Defendants’ MTDs and granted Plaintiffs

fourteen (14) days in which to file an amended complaint. (See Order 13, ECF No. 22.) 

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On February 19, 2014, Plaintiffs filed their FAC. (See ECF No. 24.) The house was

apparently sold on February 20, 2014. (MTD 10, ECF No. 26.) Defendants

subsequently filed the present MTDs.

REQUEST FOR JUDICIAL NOTICE

Federal Rule of Evidence 201 provides that “[t]he court may judicially notice a

fact that is not subject to reasonable dispute because it: (1) is generally known within

the trial court’s territorial jurisdiction; or (2) can be accurately and readily determined

from sources whose accuracy cannot reasonably be questioned.” “Judicially noticed

facts often consist of matters of public record.” Botelho v. U.S. Bank, N.A., 692 F.

Supp. 2d 1174, 1178 (N.D. Cal. 2010) (citations omitted); see also W. Fed. Sav. & Loan

Ass’n v. Heflin Corp., 797 F. Supp. 790, 792 (N.D. Cal. 1992). While “a court may take

judicial notice of the existence of matters of public record, such as a prior order or

decision,” it should not take notice of “the truth of the facts cited therein.” Marsh v.

Cnty. of San Diego, 432 F. Supp. 2d 1035, 1043 (S.D. Cal. 2006).

The Banks ask the Court to judicially notice the following nine (9) documents,

all recorded in the San Diego County Recorder’s Office: (1) Deed of Trust, Doc. No.

2007-0396404, recorded on June 12, 2007 (ECF No. 27, Ex. 1); (2) Trust Transfer

Deed, Doc. No. 2007-0703583, recorded on November 5, 2007 (ECF No. 27, Ex. 2);

(3) Notice of Default and Election to Sell Under Deed of Trust, Doc. No. 2011-

0424537, recorded on August 18, 2011 (ECF No. 27, Ex. 3); (4) Corporate Assignment

of Deed of Trust, Doc. No. 2012-0067234, recorded February 6, 2012 (ECF No. 27, Ex.

4); (5) Notice of Trustee’s Sale, Doc. No. 2012-0118490, recorded on March 2, 2012

(ECF No. 27, Ex. 5); (6) Notice of Trustee’s Sale, Doc. No. 2013-0494997, recorded

on August 7, 2013 (ECF No. 27, Ex. 6); (7) Quitclaim Deed, Doc. No. 2005-0896659,

recorded on October 17, 2005 (ECF No. 27, Ex. 7); Correction Deed, Doc. No. 2006-

0026861, recorded on January 12, 2006 (ECF No. 27, Ex. 8); and (9) Grant Deed, Doc.

No. 2007-0396403, recorded on June 12, 2007 (ECF No. 27, Ex. 9). 

All of these documents are available to the public and are certified and

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maintained by an official office. Their accuracy cannot therefore be reasonably

disputed. Accordingly, the Court GRANTS the Banks’ RJN as to all nine (9)

documents. 

MOTIONS TO DISMISS

I. Legal Standard

Federal Rule of Civil Procedure 12(b)(6) permits a party to raise by motion the

defense that the complaint “fail[s] to state a claim upon which relief can be granted,”

generally referred to as a motion to dismiss. The Court evaluates whether a complaint

states a cognizable legal theory and sufficient facts in light of Federal Rule of Civil

Procedure 8(a), which requires a “short and plain statement of the claim showing that

the pleader is entitled to relief.” Although Rule 8 “does not require ‘detailed factual

allegations,’ . . . it [does] demand[] more than an unadorned, the-defendant-unlawfullyharmed-me accusation.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl.

Corp. v. Twombly, 550 U.S. 544, 555 (2007)). In other words, “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 (citing Papasan v. Allain, 478 U.S. 265, 286 (1986)). “Nor

does a complaint suffice if it tenders ‘naked assertion[s]’ devoid of ‘further factual

enhancement.’” Iqbal, 556 U.S. at 678 (citing Twombly, 550 U.S. at 557).

“To survive a motion to dismiss, a complaint must contain sufficient factual

matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” Id.

(quoting Twombly, 550 U.S. at 570); see also Fed. R. Civ. P. 12(b)(6). A claim is

facially plausible when the facts pled “allow[] the court to draw the reasonable

inference that the defendant is liable for the misconduct alleged.” Id. (citing Twombly,

550 U.S. at 556). That is not to say that the claim must be probable, but there must be

“more than a sheer possibility that a defendant has acted unlawfully.” Id. Facts

“‘merely consistent with’ a defendant’s liability” fall short of a plausible entitlement to

relief. Id. (quoting Twombly, 550 U.S. at 557). Further, the Court need not accept as

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true “legal conclusions” contained in the complaint. Id. This review requires contextspecific analysis involving the Court’s “judicial experience and common sense.” Id. at

679 (citation omitted). “[W]here the well-pleaded facts do not permit the court to infer

more than the mere possibility of misconduct, the complaint has alleged—but it has not

‘show[n]’—‘that the pleader is entitled to relief.’” Id.

Where a motion to dismiss is granted, “leave to amend should be granted ‘unless

the court determines that the allegation of other facts consistent with the challenged

pleading could not possibly cure the deficiency.’” DeSoto v. Yellow Freight Sys., Inc.,

957 F.2d 655, 658 (9th Cir. 1992) (quoting Schreiber Distrib. Co. v. Serv-Well

Furniture Co., 806 F.2d 1393, 1401 (9th Cir. 1986)). In other words, where leave to

amend would be futile, the Court may deny leave to amend. 

II. Analysis 

Plaintiffs assert the following two claims: (1) violation of California’s Unfair

Competition Law, California Business and Professions Code § 17200 et seq.; and (2)

cancellation of instruments. (See generally FAC, ECF No. 24.)

Defendants argue that this Court lacks subject-matter jurisdiction over this

controversy, as Plaintiffs’ claims arise under state law and Plaintiffs have failed to plead

the requirements for diversity jurisdiction. (See MTD 10–11, ECF No. 26; MTD 4–5,

ECF No. 28.) Plaintiffs, on the other hand, argue that the FAC alleges original

jurisdiction under the Declaratory Judgment Act (“DJA”), 28 U.S.C. § 2201–02, and

that this gives the Court supplemental jurisdiction over their state law claims. (Resp.

in Opp’n 6–7, ECF No. 29-2; Resp. in Opp’n 6–7, ECF No. 30-2.) Plaintiffs

alternatively claim that the Court has diversity jurisdiction over this suit. (Resp. in

Opp’n 7, ECF No. 29-2; Resp. in Opp’n 7–8, ECF No. 30-2.)

First, the DJA does not confer jurisdiction where it otherwise does not exist. See

Geni-Chlor Int’l, Inc. v. Multisonics Dev. Corp., 580 F.2d 981 (9th Cir. 1978)

(“Declaratory judgment merely provides procedural and remedial flexibility to the

federal courts. It does not, however, extend their jurisdiction” (citing Skelly Oil Co. v.

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Phillips Petroleum Co., 339 U.S. 667, 671 (1950)).); Tashima v. Admin. Office of the

U.S. Courts, 719 F. Supp. 881, 886–87 (C.D. Cal. 1989) (“The [DJA] does not create

an independent jurisdictional basis for suits in federal court. A declaratory judgment

suit must conform to traditional jurisdictional requirements” (citations omitted).). 

Hence, the Court rejects this purported basis for jurisdiction.

Second, the Court agrees with Defendants that Plaintiff has failed to plead the

necessary facts to establish diversity jurisdiction. Diversity jurisdiction exists when

both: (1) “the matter in controversy exceeds the sum or value of $75,000, exclusive of

interests and costs”; and (2) no defendant is a citizen of the same state as the plaintiff. 

28 U.S.C. § 1332(a); Caterpillar Inc. v. Lewis, 519 U.S. 61, 68 (1996) (reading § 1332

to require complete diversity). Plaintiffs plead neither of these elements.

Plaintiffs fail to establish that the amount-in-controversy requirement is met. 

Although “Plaintiffs believe this amount will be in excess of the amount of her [sic]

debt obligation,” it is unclear what “this amount,” or “[their] debt obligation,” is—the

full balance of the loan? the amount by which Plaintiffs are in arrears? (FAC ¶ 22, ECF

No. 24.) Plaintiffs do not claim that “this amount” exceeds $75,000, as required by the

diversity jurisdiction statute. While Plaintiffs do estimate their “compensatory, special

and general damages” to be “not less than $75,000,” the requirement is that the amount

in controversy exceed $75,000—in other words, the required value is at least

$75,000.01. (FAC at 29, ECF No. 24.) Plaintiffs do not assert this.

More importantly, Plaintiffs fail to plead the citizenship of Defendants anywhere

in the FAC. “The party asserting diversity jurisdiction bears the burden of proof.” 

Kanter v. Warner-Lambert Co., 265 F.3d 853, 857–58 (9th Cir. 2001) (citing Lew v.

Moss, 797 F.2d 747, 749 (9th Cir. 1986)). Thus, the failure to specify Defendants’

citizenship is fatal to Plaintiffs’ assertion of diversity jurisdiction. See id. The Court

therefore also rejects Plaintiffs’ argument that this Court has diversity jurisdiction over

this matter. Accordingly, because this Court lacks subject-matter jurisdiction over this

suit, the Court GRANTS Defendants’ MTDs.

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CONCLUSION

For the foregoing reasons, the Court GRANTS the Banks’ Request for Judicial

Notice in its entirety. The Court also GRANTS Defendants’ Motions to Dismiss. 

If Plaintiffs wish, they SHALL FILE an amended complaint correcting the

deficiencies of pleading noted above within fourteen (14) days of the date on which this

Order is electronically docketed. Failure to file an amended complaint by this date may

result in dismissal of this action with prejudice. Further, the Court cautions Plaintiffs

that this will be their final opportunity to amend.

IT IS SO ORDERED.

DATED: June 11, 2014

Honorable Janis L. Sammartino

United States District Judge

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