Free Motion to Dismiss - District Court of California - California

Case 3:08-cv-00474-LAB-JMA

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Filed 04/17/2008

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Stuart B. Wolfe (Bar No. 156471)

Yaron Shaham (Bar No. 217192)

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WOLFE & WYMAN LLP
5 Park Plaza, Suite 1100

Irvine, California 92614-5979
Telephone: (949) 475-9200 Facsimile: (949) 475-9203

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Attorneys for Defendant GMAC MORTGAGE, LLC

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UNITED STATES DISTRICT COURT

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SOUTHERN DISTRICT OF CALIFORNIA

PAMELA JEAN CRUZ,
Plaintiff,
v.

Case No. 3:08-cv-00474-LAB-JMA

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GMAC MORTGAGE, LLC, EXPERIAN INFORMATION SOLUTIONS, INC., and
Does 1 through 10 Inclusive,

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DEFENDANT GMAC MORTGAGE, LLC'S MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF ITS MOTION TO DISMISS PLAINTIFF'S COMPLAINT FOR FAILURE TO STATE A CLAIM; DECLARATION IN SUPPORT THEREOF (FRCP 12(b)(6))
Date: June 16, 2008

Defendants.

Time: 11:15 a.m.

Place: Courtroom 9, 2nd Floor

940 Front Street San Diego, California 92101

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TO THE HONORABLE LARRY ALAN BURNS, UNITED STATES DISTRICT COURT

JUDGE, PLAINTIFF PAMELA JEAN CRUZ, PLAINTIFF'S COUNSEL OF RECORD,

22 AND ALL OTHER INTERESTED PARTIES:

23 Defendant GMAC Mortgage, LLC ("GMACM") hereby submits the following in support
24 of its Motion to Dismiss Plaintiff s Complaint for her failure to state a claim pursuant to Rule
25 12(b)( 6) of the Federal Rules of Civil Procedure.

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MEMORANDUM OF POINTS AND AUTHORITIES
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INTRODUCTION
GMACM hereby moves for dismissal of each and every cause of action set forth in the

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Plaintiffs Complaint (the "Complaint") filed by Pamela Jean Cruz (the "Plaintiff') on March 14,
2008 with this Court. A true and correct copy of the Complaint is attached hereto as Exhibit 1 and

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incorporated herein by this reference. The Plaintiffs' Complaint contains, at a minimum,
allegations that are unsubstantiated by her very own evidence, ambiguous and uncertain

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allegations, and allegations that are improperly plead. Pursuant to this Motion, GMACM requests
that the Court dismiss each and every cause of action (there are four (4) alleged causes of action as to GMACM) asserted in the Complaint pursuant to FRCP 12(b)(6) for the Plaintiffs' failure to state
a claim against GMACM upon which relief can be granted.
The Plaintiffs' First and Second Causes of Action relate to alleged violations of

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the Fair

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Credit Reporting Act. The Plaintiff s allegations are misleading and fail to inform the Court that
on or about April

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2, 2007, GMACM transferred the servicing rights to the subject loan to Saxon

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Mortgage Services, Inc. ("Saxon"). GMACM no longer made any reports to any credit agencies
about the subject loan after March 2007. See Exhibit 1, Exhibit B of

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Plaintiffs Complaint.

Conspicuously, Saxon is not named as a party to this Adversary Proceeding.

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The Third Cause of Action for Defamation is meritless. The evidence clearly shows that
GMACM stopped servicing the subject loan pre-petition and also stopped reporting to Experian
pre-petition. See Exhibit 1, Exhibit B of

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Plaintiffs Complaint. There is no malice and/or wilful

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intent on behalf of GMACM as the servicing rights for the subject loan were transferred, prepetition, to Saxon in early April 2007. As of April

2007, GMACM had no contact or any reason to

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contact the Plaintiff.

The Fourth Cause of Action for Declaratory Relief is baseless as no actual controversy

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exists between the paries. GMACM stopped servicing the subject loan pre-petition, stopped

27 making any contact with Defendant Experian Information Solutions, Inc. ("Experian") pre-petition,
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and informed the Plaintiff that Saxon would be servicing the subject loan beginning in April

2007.

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II.

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FACTUAL BACKGROUND
On or about September 2006, GMACM began servicing the subject loan for the current
beneficiary for the subject loan for the real propert located at 2563 Floradale Way, Lincoln, CA

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95648 (the "Subject Property"). On or about March 16,2007, as required by the Real Estate
Settement Procedures Act (12 U.S.c. Section 2601 et. seq.), GMACM provided notice to the
Plaintiff that Saxon would be the new servicer of the subject loan as of April

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1, 2007. A true and
is attached hereto as

correct copy ofGMACM's March 16,2007 correspondence to the Plaintiff

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Exhibit 2 and incorporated herein by this reference. After said correspondence, GMACM ceased

communicating with the Plaintiff. GMACM's "History for Account" also shows that GMACM
ceased servicing the subject loan as of April 2007, and never had any further contact with the

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Plaintiff thereafter. A true and correct copy of GMACM' s "History for Account" is attached
hereto and incorporated herein as Exhibit 3.
Months later, on June 29,2007, the Plaintiff

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filed her voluntary Chapter 7 Bankruptcy

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Petition with the United States Banuptcy Court, Southern District of California. The Plaintiff s

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bankuptcy case was assigned case number 07-03493-LA7. During her bankptcy case, Saxon,
not GMACM, field a Motion for Relief

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from Stay ("Saxon's Motion") on or about August 14,

2007. Saxon's Motion received no opposition from the Plaintiff, and the Court entered an order

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granting Saxon's Motion on or about September 10,2007.
The Plaintiff

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received her discharge on or about October 10,2007, and the Court

subsequently ordered the Plaintiff s banuptcy case closed, and the Chapter 7 Trustee relieved
from his duties on or about October 15,2007. A true and correct copy of

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the Court's docket from

Pacer, as of April

17, 2008, is attached hereto as Exhibit 4 and incorporated herein by this

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reference.

More than three months after the Plaintiff obtained her discharge, the Plaintiff initiated a

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Bankptcy Adversary Proceeding on January 25,2008, which was assigned Adversary Case No.
08-90031- LA (the "Adversary Proceeding"). The Adversary Proceeding contained nearly identical

causes of action and the same defendants. GMACM and Experian fied respective motions to

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1 dismiss governed by Rule 7012 of

the Federal Rules of

Bankptcy Procedure. Rather than oppose

2 said motions, the Plaintiff noticed the dismissals of the Adversary Proceeding on or about March

3 13,2008. The Bankruptcy Court subsequently closed the Adversar Proceeding on or about April
4 7,2008.

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On or about March 14, 2008 the Plaintiff fied her Complaint with the Court.

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III.
LEGAL STANDARD
Rule 12(b) of the Federal Rules of Civil Procedure provides, in part, that:

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Every defense, in law or fact, to a claim for relief in any pleading,
whether a claim, ... shall be asserted in the responsive pleading

thereto if one is required, except that the following defenses may at the option of the pleader be made by motion: (1) lack of jurisdiction
over the subject matter, (2) lack of

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jurisdiction over the person, (3)

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process, (5) insufficiency of service of process, (6) failure to state a claim upon which relief can be granted, (7) failure to join a party under Rule 19.
improper venue, (4) insufficiency of

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F or purposes of a motion to dismiss brought under Rule 12(b)( 6), the Court considers all
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properly pleaded material allegations of

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the operative complaint to be true, and construes them in

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the light most favorable for the plaintiff. Associated General Contractors of America v.

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Metropolitan Water Dist. of So. Calif., 159 F.3d 1178, 1181 (9th Cir. 1998). More to the point, in
determining a Rule 12(b)( 6) motion, a court is required to (i) construe the complaint in the light

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most favorable to plaintiff, (ii) accept all well-pleaded allegations as true, and (iii) determine

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whether plaintiff can prove any set of

facts to support a claim that would merit relief. Cahil v.

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Liberty Mutual Insurance Co., 80 F.3d 336,337-338 (9th Cir. 1996). "However, conclusory
allegations of law and unwarranted inferences are not sufficient to defeat a motion to dismiss."

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Pareto v. FDIC, 139 F.3d 696, 699 (9th Cir. 1998). It is appropriate to dismiss claims for relief
under Rule 12(b)( 6) in the "absence of suffcient facts alleged under a cognizable legal theory."
Balistreri v. Pacifica Police Dept., 901 F. 2d 696, 699 (9th Cir. 1999).
The Complaint contains, at a minimum, allegations that are unsubstantiated by the

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Plaintiff s very own evidence, ambiguous and uncertain allegations, and allegations that are

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1 improperly plead. For the reasons set forth below, each and every cause of action asserted in the
2 Complaint should be dismissed for failure to state a claim against GMACM upon which relief can

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5 THE PLAINTIFFS' FIRST AND SECOND CAUSES OF ACTION AGAINST GMACM

6 MUST BE DISMISSED
7 The First and Second Causes of Action alleged by the Plaintiff

refer to the Fair Credit alleges that GMACM negligently

8 Reporting Act (15 U.S.c. Section 1681 et. seq.). The Plaintiff

9 and wilfully failed to investigate what was being transmitted to Experian, and that GMACM
10 negligently and willfully failed to direct Experian to delete any information about the Plaintiff.
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The Plaintiffs allegations are misleading and fail to allege necessary facts which release GMACM
from any alleged liability.

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The Plaintiff fails to point out that GMACM transferred the servicing rights to the subject
loan to Saxon on or about April

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2, 2007. See Exhibit 2. After the transfer, GMACM no longer had

any interest in the subject loan nor did it make any further reports to any credit agencies about the

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subject loan after March 2007. See Exhibit 1, Exhibit B of Plaintiff s Complaint. Though the
Plaintiff

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was informed that Saxon was servicing the subject loan beginning in April 2007, and that

it filed a Motion for Relief from Stay in her bankuptcy case, the Plaintiff has not named Saxon as
a party to this case. GMACM was not responsible for the subject loan or any activities associated

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with the subject loan since the beginning of April 2007. Accordingly, the Plaintiffs First and
Second Causes of Action fail to state a claim upon which relief can be granted and must be

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v.
THE PLAINTIFFS' THIRD CAUSE OF ACTION AGAINST GMACM
MUST BE DISMISSED
The Plaintiff s Third Cause of Action alleges that GMACM defamed the Plaintiff, which is

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27 completely inaccurate and not possible. GMACM's dealings with the Plaintiff ceased at the end of
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March 2007. See Exhibit 2. Moreover, after March 2007, GMACM had no further contact with

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Experian. See Exhibit 1, Exhibit B of Plaintiff s Complaint. Even though the facts herein
demonstrate that GMACM had no contact whatsoever with the Plaintiff beginning in April

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2007,

the Plaintiff

falsely alleges that GMACM defamed her. The Plaintiffs Third Cause of Action fails

4 to inform the Court of the necessary facts surounding her dealings with GMACM, and most
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importantly, the cessation of GMACM' s dealings with her. Due to the fact that the Plaintiff s

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allegations are meritless, her Third Cause of Action must be dismissed.
VI.

THE PLAINTIFFS' FOURTH CAUSE OF ACTION AGAINST GMACM
MUST BE DISMISSED
The Plaintiff seeks Declaratory Relief via her Fourth Cause of Action. For a plaintiff to obtain Declaratory Relief, an actual controversy must exist. As proved herein, GMACM stopped
servicing the subject loan pre-petition, stopped making any contact with Experian pre-petition, and
informed the Plaintiff

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that Saxon would be servicing the subject loan beginning in April 2007.

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Contrary to the Plaintiffs allegations, GMACM has not continued to make credit reports to
Experian. The Plaintiff s allegations are baseless and do not state a viable claim against GMACM.

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Based thereon, the Plaintiffs Fourth Amended Complaint should be dismissed.

VII.

PLAINTIFF SHOULD BE SANCTIONED BY THIS COURT AND GMAMCM SHOULD

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BE ENTITLED TO ITS ATTORNEY'S FEES AND COSTS FOR DEFENDING ITSELF AS
THE PLAINTIFF'S COMPLAINT IS FRIVOLOUS AND WITHOUT ANY MERIT
Plaintiff filed a complaint wrought with allegations that are unsubstantiated by her very
own evidence, ambiguous and uncertain, and are plead without the proper presentation of facts and
evidence to support said allegations. The Plaintiff canot state any claim against GMACM as its

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24 relationship with the Plaintiff ended in March 2007.
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A district cour has the inherent power to assess attorney's fees against a part who has
"acted in bad faith, vexatiously, wantonly, or for oppressive reasons." Alyeska Pipeline Servo Co.
v. Wilderness Soc'y, 421 U.S. 240, 258-59,44 L. Ed. 2d 141,95 S. Ct. 1612 (1975) (internal

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quotations omitted). In this regard, if a cour finds "that fraud has been practiced upon it, or that
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the very temple of

justice has been defied," it may assess attorney's fees against the responsible

2 party. Universal Oil Products Co. v. Root Refining Co., 328 U.S. 575,580,90 L. Ed.1447, 66 S.
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Ct. 1176 (1946). In such instances, the imposition of sanctions "transcends a cour's equitable

4 power concerning relations between the paries and reaches a court's inherent power to police
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itself, thus serving the dual purpose of vindicat(ing) judicial authority without resort to the more

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drastic sanctions available for contempt of court and mak(ing) the prevailing pary whole for

expenses caused by his opponent's obstinacy." Chambers v. Nasco, 501 U.S. 32,46, 115 L. Ed. 2d
27, 111 S. Ct. 2123 (1991) (quoting Universal Oil, 328 U.S. at 580).
The Plaintiff

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has made accusations against GMACM which are baseless and which her own

evidence contradicts. Plaintiffs arguments are entirely without merit, and the frivolous natue of

the Complaint is sanctionable by the Court. Accordingly, GMACM should be awarded its
attorney's fees and costs incured to defend itself

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from Plaintiffs groundless allegations.

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VIII.
CONCLUSION
Wherefore, GMACM respectfully requests that the Court dismiss each of

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the four causes of

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action set forth in the Complaint for failure to state a claim against GMACM upon which relief can
be granted, impose sanctions against the Plaintiff, and require the Plaintiff to pay GMACM for its
attorney's fees and costs to defend itself.

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DATED: April /1, 2008
By:

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S ART B. WOLFE ARON SHAHAM Att rneys for Defendant GMAC MORTGAGE, LLC

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DE

CLARA TION OF Y ARON SHAHAM

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I, Yaron Shaham, hereby declare:
1. I am an attorney at law duly licensed to practice before the courts of the State of

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California and this Court. I am an associate attorney with Wolfe & Wyman LLP, which is counsel

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of record to Defendant GMAC Mortgage, LLC in this case. I have personal knowledge,
information, and/or belief of

the facts set forth below, and, if called as a witness, could and would
the attached

competently testify thereto under oath. I make this declaration in support of

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Memorandum of Points and Authorities.
2. A true and correct copy of

the Plaintiffs Complaint is attached hereto as Exhibit 1

and incorporated herein by this reference.
3. A true and correct copy ofGMACM's March 16,2007 correspondence to the

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Plaintiff is attached hereto as Exhibit 2 and incorporated herein by this reference.
4. A true and correct copy ofGMACM's "History for Account" is attached hereto and

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incorporated herein as Exhibit 3.
5. A true and correct copy of the Cour's docket from Pacer, as of April

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17, 2008, is

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attached hereto as Exhibit 4 and incorporated herein by this reference.

I declare under penalty of perjury that the foregoing is true and correct.

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EXECUTED THIS /í., DA Y OF APRIL, 2008 AT IRVINE, CALIFORNIA.

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Yaron Shaham

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