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Imai v. Northwest Trustee Services, Inc.

United States District Court, W.D. Washington, Tacoma

March 31, 2017

KRYPTON IMAI, et al., Plaintiffs,


          Ronald B. Leighton United States District Judge

         THIS MATTER is before the Court on Defendant Chase Bank's Motion for Judgment on the Pleadings [Dkt. #15]. The case involves a residential loan, evidenced by a promissory note and secured by a deed of trust on the home. The Imais sued a variety of lenders and servicers connected with their loan, claiming primarily that payments they made to reinstate their in-arears loan were not properly credited, leading to a default and an apparently pending foreclosure. They seek to enjoin the foreclosure and damages for violations of Washington's Consumer Protection Act.

         Chase seeks judgment on the pleadings on the two claims apparently asserted against it. First, it seeks dismissal of the Imais' injunction claim, arguing that it assigned its interest in the loan in 2013, prior to the reinstatement payment dispute, and prior to the pending foreclosure.

         Second, Chase argues that the only other claim the Imais assert against it-a CPA claim for failure to give them the required 15 days' notice of the transfer of Chase's interest in servicing their loan-is undermined by the Imais' own allegations and evidence[1], demonstrating conclusively that the required notice was timely given.

         A. Judgment on the Pleadings Standard.

         Dismissal under Rule 12(b)(6) may be based on either the lack of a cognizable legal theory or the absence of sufficient facts alleged under a cognizable legal theory. Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1990). A plaintiff's complaint must allege facts to state a claim for relief that is plausible on its face. See Aschcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009). A claim has “facial plausibility” when the party seeking relief “pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. Although the Court must accept as true the Complaint's well-pled facts, conclusory allegations of law and unwarranted inferences will not defeat a Rule 12(c) motion. Vazquez v. L. A. County, 487 F.3d 1246, 1249 (9th Cir. 2007); Sprewell v. Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 2001). “[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. Factual allegations must be enough to raise a right to relief above the speculative level.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (citations and footnotes omitted). This requires a plaintiff to plead “more than an unadorned, the-defendant-unlawfully-harmed-me-accusation.” Iqbal, 129 S.Ct. at 1949 (citing Twombly).

         Although Iqbal establishes the standard for deciding a Rule 12(b)(6) motion, Rule 12(c) is “functionally identical” to Rule 12(b)(6) and that “the same standard of review” applies to motions brought under either rule. Cafasso, U.S. ex rel. v. General Dynamics C4 Systems, Inc., 647 F.3d 1047 (9th Cir. 2011), citing Dworkin v. Hustler Magazine Inc., 867 F.2d 1188, 1192 (9th Cir.1989); see also Gentilello v. Rege, 627 F.3d 540, 544 (5th Cir. 2010) (applying Iqbal to a Rule 12(c) motion).

         On a 12(b)(6) motion, “a district court should grant leave to amend even if no request to amend the pleading was made, unless it determines that the pleading could not possibly be cured by the allegation of other facts.” Cook, Perkiss & Liehe v. N. Cal. Collection Serv., 911 F.2d 242, 247 (9th Cir. 1990). However, where the facts are not in dispute, and the sole issue is whether there is liability as a matter of substantive law, the court may deny leave to amend. Albrecht v. Lund, 845 F.2d 193, 195-96 (9th Cir. 1988).

         B. Injunction claim.

         Chase has argued persuasively that they are not subject to an injunction because they are not foreclosing on the loan. The Imais' Response does not address their injunction claim. The Motion to for Judgment on the Pleadings as to the plaintiffs' injunction claim against Chase is GRANTED. LCR 7(b)(2).

         C. CPA claim.

         As pled, the Imais' CPA claim broadly alleges that “all defendants” misrepresented the ownership of their promissory note, and how their payments were applied. They claim that all defendants “colluded to give the false impression that they complied with the Deed of Trust Act, ” and falsely claimed the Imais owe money that they do not. Their complaint does not specifically allege that Chase did anything else to violate the CPA.

         In Response to the Motion, the Imais repeat these general allegations, and argue that part of the reason the subsequent lenders/servicers did not properly credit their payment(s) was because Chase failed to give them timely notice that their loan servicing was being transferred. They claim they did not get the required “15 days minimum notice” of the transfer. 12 U.S.C. §2605(b)(2).

         Chase demonstrates that the Imais have repeatedly conceded that they were notified on October 31, 2013, that the loan servicing would be transferred, and that the transfer became effective more than 15 days later, on November 16, 2013. To the extent the Imais' CPA claim is based on this alleged failure to give timely notice of the ...

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