Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_16-cv-02286/USCOURTS-cand-3_16-cv-02286-8/pdf.json

Nature of Suit Code: 290
Nature of Suit: Other Real Property Actions
Cause of Action: 28:1332 Diversity-(Citizenship)

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United States District Court

Northern District of California

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

EFREN T. ROMERO and JANETH M. 

ROMERO,

Plaintiffs,

v.

U.S. BANK, N.A., et al.,

Defendants.

Case No. 16-cv-02286-MMC 

ORDER GRANTING DEFENDANTS' 

MOTION TO DISMISS; DISMISSING 

ACTION

Re: Dkt. Nos. 41, 43

Before the Court are two motions: (1) defendant Old Republic National Title 

Insurance Company's ("Old Republic") "Motion to Dismiss the First Amended Complaint," 

filed August 25, 2016; and (2) defendant U.S. Bank National Association's ("U.S. Bank") 

"Motion to Dismiss Plaintiff's First Amended Complaint for Failure to State a Claim," filed 

August 25, 2016. Plaintiff Janeth M. Romero ("Romero") has filed opposition to each 

motion, 1to which Old Republic and U.S. Bank have filed separate replies. Having read 

and considered the papers filed in support of and in opposition to the motions, the Court 

rules as follows.2

The operative complaint, the First Amended Complaint ("FAC"), consists of five 

causes of action. By order filed July 20, 2016, the Court dismissed in its entirety 

Romero's initial complaint; in so doing, the Court identified specific deficiencies as to 

each of the five causes of action, and afforded Romero leave to amend for purposes of 

 

1

The two oppositions, other than the titles, are, in all respects, identical.

2By order filed September 26, 2016, the Court took the matters under submission.

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curing those deficiencies. By the instant motions, defendants argue Romero has failed to 

cure the deficiencies previously identified by the Court.

Prior to addressing the viability of each of the five causes of action alleged on 

behalf of Romero, the Court first notes that, in its order of July 20, 2016, the Court 

dismissed without leave to amend the claims asserted in the initial complaint on behalf of 

Efren T. Romero, who is deceased. The FAC continues, however, to name Efren T. 

Romero as a plaintiff and purports to seek relief on his belief. (See, e.g., FAC at 31:5.) 

In her opposition to each motion, Romero states her deceased husband's name was 

included in error. Consequently, the Court deems the references to Efren T. Romero as 

a party to the instant action to have been withdrawn by Romero.

The Court next considers in turn the five causes of action asserted in the FAC.

A. First Cause of Action: "Intentional Misrepresentation"

In its prior order, the Court dismissed with leave to amend Romero's claim alleging 

intentional misrepresentation. Specifically, the Court found Romero failed to comply with 

Rule 9(b) of the Federal Rules of Civil Procedure by, inter alia, failing to allege "sufficient 

evidentiary facts" to support a finding that "each challenged statement was false or 

misleading at the time it was made." (See Order, filed July 20, 2016, at 5:20 - 6:10.)

In the FAC, Romero alleges the subject false statements are contained in a 

document titled "Blanket Assignment of Deed of Trust" ("Assignment"), which is attached 

as an exhibit to the FAC. (See FAC ¶ 75, Ex. 2.) Romero acknowledges the Assignment 

states the Federal Deposit Insurance Company ("FDIC"), in its capacity as receiver for 

Downey Savings and Loan Association, F.A. ("Downey"), transferred to U.S. Bank its 

interest in a Deed of Trust securing the $749,250 loan obtained by Romero in 2004; 

Romero contends, however, said statement is false, for the asserted reason that the 

FDIC never received an interest in the Deed of Trust from Downey.

3

 (See FAC ¶¶ 8, 26, 

 

3Romero alleges that, at some point after the Deed of Trust was executed in 2004, 

Downey "failed" and became an "incapacitated entity" (see FAC ¶¶ 79, 105), and that the 

FDIC later became the "receiver for Downey" (see FAC ¶¶ 28, 37, 104). 

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37.) Similarly, according to Romero, although the Assignment states that U.S. Bank 

provided "value" to the FDIC in exchange for the Deed of Trust (see FAC Ex. 2 at 2), said 

statement is false for the asserted reason that "[the] FDIC was precluded from receiving 

any value because [Romero's] loan contract was not received by [the] FDIC as [r]eceiver 

for Downey." (See FAC ¶¶ 33-34, 37.)

To support her allegation that the above-identified statements are false, Romero 

alleges that Downey had no interest to convey to the FDIC, as Downey "did not use [its] 

own funds at closing of escrow[ ]." (See FAC ¶¶ 9, 21.) Rather, according to Romero, 

Downey issued a "wiring instruction" directing a "differently named [c]ompany," the name 

of which is unknown to Romero, to wire the necessary funds "into the escrow." (See FAC 

¶¶ 9-10.) Romero further alleges that, as a consequence, "there is no calculable default, 

financial or otherwise, between [Romero] and [U.S. Bank]" (see FAC ¶ 41), and U.S. 

Bank thus wrongfully issued, through Old Republic, a "Notice of Default" advising 

Romero that her real property was subject to foreclosure for failure to pay the sum of 

$34,737.82 to the "beneficiary" (see FAC ¶ 48, Ex. 4).

As the Court explained in its prior order, Romero, in the initial complaint and in her

oppositions to the motions to dismiss said pleading, failed to explain the legal significance 

of any decision by Downey to contract with a third party to advance the funds necessary 

to close escrow, rather than using funds it had not borrowed. In the FAC, as well as in 

the oppositions to the instant motions, Romero, again, fails to cite any authority to 

support a finding that a lender, in order to close an escrow, is prohibited from using funds 

that have been borrowed from a third party.

Moreover, as the Court also explained in its prior order, Romero signed the Deed 

of Trust identifying Downey as the "lender" and giving the "lender" the right to foreclose 

upon the subject property in the event she breached her obligations thereunder (see FAC 

Ex. 1 at 1, 13), and, consequently, she may not, under California law, challenge the 

ability of Downey, or its successors or assigns, to foreclose upon the property in the 

event of her default. See Gomes v. Countrywide Home Loans, Inc., 192 Cal. App. 4th 

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1149, 1157 (2011) (holding, where plaintiff executed deed of trust in which plaintiff 

acknowledged defendant "as nominee for [l]ender and [l]ender's successors and assigns" 

had "authority to initiate a foreclosure," plaintiff's claim that defendant lacked authority to 

initiate foreclosure was subject to dismissal at pleading stage). In the FAC, Romero fails 

to add any factual allegations that could support a finding that Downey did not obtain an 

interest in the Deed of Trust.

Additionally, as to Old Republic, Romero has failed to allege any facts to support a 

finding that said defendant can be held responsible for a false statement in the 

Assignment, which deficiency also was identified in the Court's prior order. (See Order, 

filed July 20, 2016, at 6:2-3.)

Accordingly, as Romero has failed to cure the deficiencies identified in the Court's 

prior order, the First Cause of Action is subject to dismissal without further leave to 

amend.

B. Second Cause of Action: "Intentional Interference With Contractual Relations"

In its prior order, the Court dismissed with leave to amend Romero's claim that 

U.S. Bank, by asserting it has obtained an interest in the Deed of Trust from Downey's 

receiver, and Old Republic, by issuing the Notice of Default in its capacity as trustee,

intentionally interfered with Romero's contractual relations with a third party; in particular, 

the Court found Romero had failed to include any allegations to support a finding that 

Downey had not in fact obtained an interest in the Deed of Trust. (See Order, filed July 

20, 2016, at 6:21 - 7:6.) Additionally, as to Old Republic, the Court dismissed the claim 

for the further reason that said defendant was entitled to qualified immunity, as Romero 

failed to plead any facts to support a finding that Old Republic issued the Notice of 

Default with "malice." (See id. at 7:14-19.)

In the FAC, Romero alleges, as she did in the initial complaint, that the contract at 

issue is a "quasi-contract" between herself and the entity that "funded the subject loan" at 

Downey's alleged request (see FAC ¶¶ 21, 94), and she identifies the "quasi-contract" as 

"Exhibit 1" to the FAC (see FAC ¶ 94), which exhibit is the Deed of Trust (see FAC Ex. 1). 

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As explained above, and in the Court's prior order, however, Romero, in the Deed of 

Trust, acknowledged Downey as the "lender" and gave it the power to foreclose, and, 

consequently, cannot at this time claim Downey never obtained an interest in the Deed of 

Trust or that its successors and assigns could not obtain an interest. See Gomes, 192 

Cal. App. 4th at 1157. Further, as to Old Republic, although Romero alleges said 

defendant "acted with malice and/or oppression" (see FAC ¶ 4), she fails to support such 

conclusory assertion with any facts. See Kachlon v. Markowitz, 168 Cal. App. 316, 333, 

343 (2008) (holding, in absence of showing trustee "acted with malice," trustee is 

"immune" from suit based on "mailing, publication, and delivery of notices in nonjudicial 

foreclosure[s]"); Ashcroft v. Iqbal, 556 U.S. 662, 678-79 (2009) (holding complaint subject 

to dismissal where it lacks "sufficient factual matter" to support its "legal conclusions"; 

further holding "the tenet that a court must accept as true all of the allegations contained 

in a complaint is inapplicable to legal conclusions").

Accordingly, as Romero has failed to cure the deficiencies identified in the Court's 

prior order, the Second Cause of Action is subject to dismissal without further leave to 

amend.

C. Third Cause of Action: "Violation of California Homeowner Bill of Rights

California Civil Code § 2924.17"

In its prior order, the Court dismissed with leave to amend Romero's claim that 

defendants violated § 2924.17 of the California Civil Code by issuing the Notice of Default 

without having evidence of U.S. Bank's right to foreclose. As the basis of the claim

pleaded in the initial complaint appeared to be that Downey never obtained an interest in 

the Deed of Trust, the Court dismissed the claim for failure to allege facts to support a 

finding that Downey obtained no such interest. Additionally, as to Old Republic, the Court 

dismissed the claim for failure to allege facts to support a finding that it acted with malice 

in issuing the Notice of Default.

The basis of the claim pleaded in the FAC appears unchanged, and, as set forth 

above, Romero fails to allege in the FAC any facts to support a finding that Downey did 

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not obtain an interest in the Deed of Trust or that Old Republic acted with malice in 

issuing the Notice of Default.

Accordingly, as Romero has failed to cure the deficiencies identified in the Court's 

prior order, the Third Cause of Action is subject to dismissal without further leave to 

amend.

D. Fourth Cause of Action: "Unfair Business Practices Cal. B&P Code § 17200"

In its prior order, the Court dismissed with leave to amend Romero's claim that 

defendants violated § 17200 of the California Business & Professions Code, for the 

reason that said claim was, as pleaded, derivative of the First through Third Causes of 

Action.

In the FAC, Romero continues to base her § 17200 claim on the First, Second and 

Third Causes of Action. (See FAC ¶¶ 146, 148.) As set forth above, the First, Second 

and Third Causes of Action are subject to dismissal without further leave to amend.

Accordingly, as Romero has failed to cure the deficiencies identified in the Court's 

prior order, the Fourth Cause of Action is subject to dismissal without further leave to 

amend.

E. Fifth Cause of Action: "Wrongful Foreclosure"

In its prior order, the Court dismissed Romero's claim of wrongful foreclosure, for 

the reason that no such cause of action can be brought unless "the trustee or mortgagee 

caused [a] . . . sale of real property" (see Order, filed July 20, 2016, at 9:18-20 (internal 

quotation and citation omitted)), and there was no allegation that defendants had sold the 

subject property. The Court afforded Romero leave to reassert such claim in her FAC 

only if the property had been sold in the interim.

In the FAC, Romero fails to allege the property has been sold, and, indeed, 

concedes in her oppositions to the motions that the property has not been sold. (See

Pl.'s Opps., filed September 8, 2016, at 14:21.)

Accordingly, as Romero has conceded she cannot cure the deficiency identified in 

the Court's prior order, the Fifth Cause of Action is subject to dismissal without further 

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leave to amend, and without prejudice to its being reasserted in another action in the 

event of a foreclosure and sale of the real property at issue.

CONCLUSION

For the reasons stated above, defendants' motions to dismiss are hereby 

GRANTED, and the above-titled action is hereby DISMISSED.

IT IS SO ORDERED.

Dated: October 7, 2016

MAXINE M. CHESNEY

United States District Judge

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