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denying the plaintiff's request for leave to conduct discovery on the grounds that doing would not be useful to plaintiff in opposing the Rule 12(b) motion to dismiss
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No. C-13-5466 EMC
01-06-2014
ROSEMARY N. CHUKWUDEBE, Plaintiff, v. PONSGRI LU, et al., Defendants.
ORDER GRANTING DEFENDANT'S
MOTION TO DISMISS; AND DENYING
PLAINTIFF'S MOTION TO CONTINUE
(Docket Nos. 6, 11)
Plaintiff Rosemary N. Chukwudebe has filed suit against twenty-four different defendants, including but not limited to Wachovia Mortgage, a division of Wells Fargo Bank, N.A. ("Wells Fargo"). While Ms. Chukwudebe's complaint is far from a model of clarity, the thrust of the pleading seems to be that certain real property that she had an ownership interest in was wrongfully foreclosed. Currently pending before the Court is Wells Fargo's motion to dismiss. Having considered the parties' briefs and accompanying submissions, the Court hereby GRANTS the motion but shall give Ms. Chukwudebe leave to amend, as provided below. The Court also DENIES Ms. Chukwudebe's motion to continue. The hearing on February 6, 2014, is VACATED.
I. DISCUSSION
A. Ms. Chukwudebe's Motion to Continue
As a preliminary matter, the Court acknowledges that Ms. Chukwudebe did not file an opposition to Wells Fargo's motion. Instead, she filed a motion to continue. See Docket No. 11 (motion). Like her complaint, Ms. Chukwudebe's motion to continue is difficult to decipher. However, she appears to be making three main arguments: (1) that she should not be obligated to file an opposition to the motion to dismiss until after Wells Fargo answers her complaint; (2) that she needs discovery in order to oppose the motion to dismiss; and (3) that she needs to hire an attorney to represent her who can then file an opposition to the motion to dismiss.
The first argument is without merit. Under Federal Rule of Civil Procedure 12, Wells Fargo is entitled to file a motion to dismiss in lieu of an answer; only if the motion to dismiss is denied would Wells Fargo then be obligated to file an answer. See Fed. R. Civ. P. 12(a)(4) (providing that "serving a motion under this rule alters [time] periods" - e.g., "if the court denies the motion . . . , the responsive pleading must be served within 14 days after notice of the court's action").
As for the second argument, it too is lacking in merit. While a party may need to obtain discovery in order to oppose a motion for summary judgment, currently pending before the Court is a motion to dismiss under Rule 12. In evaluating such a motion, the Court considers only the allegations in the complaint (as well as any judicially noticeable documents). See Americopters, LLC v. FAA, 441 F.3d 726, 732 n.4 (9th Cir. 2006) (indicating that, for a Rule 12(b)(6) motion, a district court is "confined by the facts contained in the four corners of the complaint"); Wolcott v. Meuller, No. 12cv1282-GPC-BLM, 2013 U.S. Dist. LEXIS 179177, at *8 (S.D. Cal. Dec. 20, 2013) (noting that "[a] motion to dismiss under Federal Rules of Civil Procedure 12(b)(6) is ordinarily 'addressed to the four corners of the complaint without consideration of other documents or facts outside of the complaint'"). Furthermore, Ms. Chukwudebe has failed to explain why she needs to obtain any discovery in order to overcome Wells Fargo's argument that her claims against it are barred by the doctrine of res judicata.
See Harris v. Amgen, Inc., No. 10-56014, 2013 U.S. App. LEXIS 21503, at *20 (9th Cir. Oct. 13, 2013) (noting that, on a 12(b)(6) motion, a court should consider not only the complaint in its entirety but also, e.g., documents incorporated into the complaint by reference and matters of which a court may take judicial notice).
Finally, with respect to the third argument, the Court is not without some sympathy for Ms. Chukwudebe. However, the Court concludes that, under the circumstances, it makes more sense for the Court to rule on the motion to dismiss but then give Ms. Chukwudebe an opportunity to amend her complaint, with some time to see if she can locate counsel to assist her on the amendment. B. Legal Standard
To the extent Ms. Chukwudebe has moved in the alternative for a stay of proceedings, that request for relief is also denied. Ms. Chukwudebe has relied on Federal Rule of Civil Procedure 7(b) and Federal Rule of Appellate Procedure 8(a)(2), neither of which are applicable. See Fed. R. Civ. P 7(b) (providing that a request for a court order must be made by motion); Fed. R. App. P. 8(a)(2) (addressing requests for a stay pending appeal).
Wells Fargo's motion is made pursuant to Federal Rule of Civil Procedure 12(b)(6). Rule 12(b)(6) allows for dismissal based on a failure to state a claim for relief. A motion to dismiss based on Rule 12(b)(6) challenges the legal sufficiency of the claims alleged. See Parks Sch. of Bus. v. Symington, 51 F.3d 1480, 1484 (9th Cir. 1995). In considering such a motion, a court must take all allegations of material fact as true and construe them in the light most favorable to the nonmoving party, although "conclusory allegations of law and unwarranted inferences are insufficient to avoid a Rule 12(b)(6) dismissal." Cousins v. Lockyer, 568 F.3d 1063, 1067 (9th Cir. 2009). While "a complaint need not contain detailed factual allegations . . . it must plead 'enough facts to state a claim to relief that is plausible on its face.'" Id. "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009); see also Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556 (2007). "The plausibility standard is not akin to a 'probability requirement,' but it asks for more than sheer possibility that a defendant acted unlawfully." Iqbal, 129 S. Ct. at 1949. C. Failure to State a Claim for Relief
In its motion, Wells Fargo makes two arguments: (1) that Ms. Chukwudebe has failed to state a claim for relief and (2) that, even if her claims were properly pled, they are barred by the doctrine of res judicata.
As to the first argument, the Court agrees with Wells Fargo that, to the extent Ms. Chukwudebe asserts that Wells Fargo's wrongdoing was a failure to comply with California Civil Code § 2923.5, she has failed to state a claim for relief. This is because, even if a defendant has violated § 2923.5, the only relief a plaintiff can obtain is a postponement of an impending foreclosure (i.e., "to permit the lender to comply with [§] 2923.5"), Mabry v. Superior Court, 185 Cal. App. 4th 208, 214 (2010), and, in the instant case, there is no dispute that the foreclosure sale regarding the real property at issue has already taken place.
However, the Court does not agree with Wells Fargo's suggestion that the only specific wrongdoing identified in the complaint is a purported failure to comply with § 2923.5. Although it is difficult to decipher the complaint, particularly as Ms. Chukwudebe has often "lumped together" the various defendants, see Yost v. Nationstar Mortg., No. 1:13-cv-00745-AWI-SAB, 2013 U.S. Dist. LEXIS 128504, at *7-8 (E.D. Cal. Sept. 9, 2013) (stating that "[a] plaintiff suing multiple defendants 'must allege the basis of his claim against each defendant to satisfy Federal Rule of Civil Procedure 8(a)(2), which requires a short and plain statement of the claim to put defendants on sufficient notice of the allegations against them'"; adding that, "[u]nder the pleading standard of either Rule 8 or Rule 9, Plaintiffs must distinguish Defendants' particular roles in the alleged causes of action"), it seems fair to construe the complaint as suggesting that Wells Fargo (more specifically, its predecessor) engaged in wrongdoing such as predatory lending and/or fraudulent representations.
Accordingly, the Court grants Wells Fargo's motion to dismiss to the extent Ms. Chukwudebe's claims are based on Wells Fargo's (more specifically, its predecessor's) failure to comply with § 2923.5. However, as Ms. Chukwudebe's claims are based on additional alleged wrongdoing by Wells Fargo (or its predecessor), the Court must now turn to Wells Fargo's argument that any such claims would be barred by the doctrine of res judicata. D. Res Judicata
"The doctrine of res judicata provides that a final judgment on the merits bars further claims by parties or their privies based on the same cause of action." Tahoe-Sierra Pres. Council, Inc. v. Tahoe Reg'l Planning Agency, 322 F.3d 1064, 1077 (9th Cir. 2003) (internal quotation marks omitted). The doctrine "is meant to protect parties against being harassed by repetitive actions." Id. (internal quotation marks omitted). Wells Fargo contends that res judicata is applicable here because Ms. Chukwudebe previously brought suit against it (in state court with the case then being removed to bankruptcy court as an adversary proceeding after Ms. Chukwudebe filed for bankruptcy), in which she similarly challenged Wells Fargo's (or its predecessor's) authority to foreclose, but the bankruptcy court found in Wells Fargo's favor in May and July 2013. See Docket No. 7-2 (RJN, Exs. I-J) (bankruptcy court orders dismissing all claims asserted in the third amended complaint against Wells Fargo); see also Docket No. 7-2 (RJN, Ex. H) (docket sheet reflecting closure of adversary proceeding in July 2013).
The Court agrees with Wells Fargo that res judicata is a bar to Ms. Chukwudebe's claims in the instant case. Under Ninth Circuit law, "[r]es judicata is applicable whenever there is (1) an identity of claims, (2) a final judgment on the merits, and (3) privity between parties." Tahoe-Sierra Pres. Council, 322 F.3d at 1077. The second and third factors are easily met here. The adversary proceeding was resolved in July 2013, see Docket No. 7-2 (RJN, Ex. H) (docket sheet reflecting closure of adversary proceeding in July 2013); see also Allen Group Ptrs. v. Golden (In re Eisen), 460 Fed. Appx. 681, 681 (9th Cir. 2011) (stating that "[a] judgment in an adversary proceeding in a bankruptcy case is a valid final judgment for the purposes of claim and issue preclusion"), and, in both the adversary proceeding and the instant case, Ms. Chukwudebe and Wells Fargo are parties. As to the first factor, the Ninth Circuit has explained that "[i]dentity of claims exists when two suits arise from the same transactional nucleus of facts. Newly articulated claims based on the same nucleus of facts may still be subject to a res judicata finding if the claims could have been brought in the earlier action." Tahoe-Sierra Pres. Council, Inc., 322 F.3d at 1078 (internal quotation marks omitted). Here, there is identity of claims because, in both cases, Ms. Chukwudebe is challenging Wells Fargo's authority to foreclose.
Thus, as a facial matter, res judicata is a bar to Ms. Chukwudebe's claims against Wells Fargo in the instant case. Furthermore, nothing in Ms. Chukwudebe's papers has suggested that there is a reason why res judicata should not apply. See, e.g., E.& J. Gallo Winery v. Gallo Cattle Co., 967 F.2d 1280, 1287-88 (9th Cir. 1992) (indicating that res judicata may be avoided where there is extrinsic fraud, and not intrinsic fraud; "[e]xtrinsic fraud essentially entails preventing a party 'from presenting all of his case to the court,' as opposed to defrauding the party with respect to the substantive rights being adjudicated at a proceeding"); see also Portnoy v. US Bank NA, No. S-06-2375 LKK GGH PS, 2007 U.S. Dist. LEXIS 88599, at *8 (E.D. Cal. Nov. 30, 2007) (stating that, "[i]f a party was kept ignorant of a lawsuit, induced not to appear, where a claim or defense was concealed from a party, or where a judgment was obtained against a party through coercion or duress, extrinsic fraud may be established[;] [c]onversely, intrinsic fraud goes to the merits of the original action such as where perjury or altered or forged documents were used").
The Court acknowledges that Ms. Chukwudebe's complaint does assert that there was a conspiracy to deprive her of her rights. But it is not clear from the complaint which defendants were a part of the alleged conspiracy and whether Ms. Chukwudebe is contending that the judgment in the adversary proceeding was fraudulently obtained because of the conspiracy. Moreover, Ms. Chukwudebe has largely made conclusory allegations of a conspiracy without pleading any facts to support her claim that there was a conspiracy among some or all of the defendants.
The Court, therefore, concludes that res judicata is a facial bar to Ms. Chukwudebe's claims against Wells Fargo such that dismissal of all claims against Wells Fargo is appropriate. However, the Court shall give Ms. Chukwudebe an opportunity to amend her complaint if she can, in good faith, allege facts establishing that res judicata is not applicable. The Court shall afford Ms. Chukwudebe an extended amount of time to file an amended complaint so that she can seek the assistance of counsel or find an attorney to represent her.
The Court advises Ms. Chukwudebe that, even if she is not able to find an attorney to assist or represent her, she must still file and serve an amended complaint within the time frame identified below. The Court further advises Ms. Chukwudebe that, under Federal Rule of Civil Procedure 8(a)(2), her amended complaint need only contain "a short and plain statement of the claim showing that [she] is entitled to relief." Fed. R. Civ. P. 8(a)(2) (emphasis added). Of course, this does not mean that Ms. Chukwudebe should allege facts in a conclusory fashion. As noted above, under Twombly and Iqbal, "a complaint need not contain detailed factual allegations [but] it must plead 'enough facts to state a claim to relief that is plausible on its face.'" Cousins, 568 F.3d at 1067 (emphasis added); see also Somers v. Apple, Inc., 729 F.3d 953, 960 (9th Cir. 2013) (stating that "[p]lausibility requires pleading facts, as opposed to conclusory allegations or the 'formulaic recitation of the elements of a cause of action'"). Finally, the Court advises Ms. Chukwudebe that, if she amends her complaint to allege facts establishing that res judicata is not applicable, those allegations must be made in good faith or she risks being sanctioned. See Fed. R. Civ. P. 11(b)-(c).
III. CONCLUSION
For the foregoing reasons, the Court denies Ms. Chukwudebe's motion to continue and grants Wells Fargo's motion to dismiss. The dismissal is without prejudice, except to the extent her claims are based on Wells Fargo's failure to comply with § 2923.5. The claims based on failure to comply with § 2923.5 are dismissed with prejudice. Ms. Chukwudebe (whether proceeding pro se or represented by counsel) has until March 13, 2014, to file and serve an amended complaint to address the deficiency identified above (i.e., concerning res judicata). If she does not file an amended complaint by the above date, then the Clerk of the Court shall automatically dismiss with prejudice the claim against Wells Fargo, leaving Ms. Chukwudebe with only her claims against the remaining defendants.
The hearing on February 6, 2014, is vacated.
This order disposes of Docket No. 6.
IT SO ORDERED.
___________________
EDWARD M. CHEN
United States District Judge