Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_15-cv-00900/USCOURTS-cand-3_15-cv-00900-1/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

For the Northern District of California

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IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

GARY RAYMOND BORG,

Plaintiff,

 v.

JPMORGAN CHASE BANK N.A., et al.,

Defendant. /

No. C 15-00900 WHA

ORDER GRANTING MOTION

TO DISMISS COMPLAINT

INTRODUCTION

In this foreclosure-related action, defendant moves to dismiss under the doctrine of

res judicata (claim preclusion). For the reasons stated below, defendant’s motion is GRANTED.

STATEMENT

Pro se plaintiff Gary Raymond Borg obtained title to real property located in Concord,

California. Borg executed a promissory note in 2007 for a loan that was secured by a deed of

trust on the property. JPMorgan Chase Bank N.A. (“Chase”) became the beneficiary under the

deed of trust through a purchase agreement with the original beneficiary. Chase then substituted

its own trustee to replace the original trustee. Chase’s trustee initiated a foreclosure proceeding

on the property in 2011 (Def.’s Req. for Judicial Notice, Exhs. 1–6). 

Borg then sued Chase along with the original beneficiary and the original trustee in

California state court for wrongful foreclosure, negligence, and fraud. Judge Laurel Brady of the

Contra Costa Superior Court dismissed Borg’s complaint for failure to state a claim. In relevant

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part, Judge Brady held that, “To the extent that this action is based in part upon a challenge to

the chain of title of the beneficial interest in the Deed of Trust, [plaintiff fails] to allege any legal

basis for his claim.” Leave to amend was denied. Final judgment was entered against Borg in

January 2015 (Def.’s Req. for Judicial Notice, Exh. 7). 

Borg now brings this action against Chase in federal court. The complaint does not

allege a violation of any law or any wrongdoing. The sole claims are requests for declaratory

and injunctive relief. Borg seeks a determination “of the status of the two parties” in regards to

the same promissory note that Borg executed in 2007. The purpose of this relief is “so that the

responsibilities and authorities of the two parties in regards to the Note can be [better] assessed.” 

Borg also seeks a “temporary and emergency stay of the administrative foreclosure being made”

(Compl. ¶¶ 4–7; Borg Exh. A). 

ANALYSIS

The doctrine of res judicata precludes relitigation of any claim arising out of the same

transaction or occurrence in a prior action between the parties that was resolved on the merits,

including all claims that could have been asserted. The dismissal of the prior state court action

for failure to state a claim constitutes a judgment on the merits for purposes of claim preclusion. 

Federated Dept. Stores, Inc. v. Moitie, 452 U.S. 394, 399 n.3 (1981); United States ex rel.

Barajas v. Northrop Corp., 147 F.3d 905, 909 (9th Cir. 1998). 

In Le v. Bank of America, NA, 585 Fed. Appx. 362 (9th Cir. 2014), our court of appeals

affirmed a district court’s dismissal of a lawsuit under res judicata for “claims arising out of the

same loan transaction and related foreclosure proceedings against the same defendant” as two

prior federal actions brought by the same plaintiff in which there were final judgments on the

merits. 

Similarly, here, this lawsuit involves the same loan transaction and related foreclosure

proceeding against one of the same defendants as the prior state court action brought by Borg in

which there was a final judgment on the merits. Although Borg no longer challenges Chase’s

right to foreclose on the property (Dkt. No. 17, at 1), the declaratory and injunctive relief that he

seeks would require this Court to revisit the same loan transaction that was the subject of the

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prior state court action. Because Borg could have requested this relief in the prior lawsuit, res

judicata precludes this new action. Moreover, the right of the parties were declared (or could

have been declared if plead in issue) in the state court action and no further declaration of rights

is warranted on this record. 

Defendant’s request for judicial notice of the prior state court decision and other public

documents related to the loan transaction is GRANTED. 

CONCLUSION

Defendant’s motion to dismiss the complaint is GRANTED. Judgment shall be issued in a

companion order. 

IT IS SO ORDERED.

Dated: May 14, 2015. WILLIAM ALSUP

UNITED STATES DISTRICT JUDGE

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