Choudhuri v. Specialized Loan Servicing

Background

Kabita Choudhuri filed a third amended complaint against Bosco Credit LLC, alleging that Bosco participated in a conspiracy to defraud her by illegally foreclosing on her home. The court had previously dismissed all claims against Specialized Loan Servicing, LLC with prejudice. It had allowed Choudhuri to amend only her fraud and Racketeer Influenced and Corrupt Organizations Act (RICO) claims against Bosco.

Bosco moved to dismiss those two claims under Federal Rule of Civil Procedure 12(b)(6), which allows dismissal when a complaint does not state a legally sufficient claim. Choudhuri also moved for entry of default against Franklin Credit LLC for allegedly failing to answer.

Judicial Notice

The court took judicial notice of recorded real-estate documents, including deeds of trust, foreclosure notices, and a trustee’s deed. It also took judicial notice of the existence of prior court orders and filings, but not the truth of factual statements contained in those court opinions. The court did not resolve disputed facts in the recorded documents.

Fraud Claim

Under California law, a fraud claim requires a false representation, knowledge that it was false, an intent to defraud, justifiable reliance, and damages. Federal Rule of Civil Procedure 9(b) also requires fraud to be alleged with particularity, including the basic details of who committed the misconduct, what occurred, when and where it occurred, and how it was carried out.

The court found that Choudhuri’s fraud claim was difficult to understand and appeared to rely on alleged violations of the Homeowner’s Bill of Rights. Because the court had previously dismissed her Homeowner’s Bill of Rights claims with prejudice, it found no foundation for the fraud claim. The court also found that any remaining fraud allegations were conclusory and did not satisfy Rule 9(b). It dismissed the fraud claim.

RICO Claim

To state a civil RICO claim under 18 U.S.C. § 1962(c), a plaintiff must allege conduct involving an enterprise, carried out through a pattern of racketeering activity. The court had previously found that Choudhuri’s RICO allegations lacked the required detail but had allowed her to amend the claim against Bosco.

The court found that the amended allegations still did not adequately describe an enterprise or a pattern of racketeering activity. Choudhuri relied on alleged excerpts from Bosco’s annual report and asserted connections among Bosco, Franklin, and Thomas Axon, but the court found that the allegations did not show the required conduct and were unsupported conjecture. The court dismissed the RICO claim.

Default Request and Disposition

The court denied Choudhuri’s motion for entry of default against Franklin Credit LLC because Franklin was not a defendant. The court stated that Choudhuri had improperly sought to add Franklin as a defendant and that the court had denied that request.

The court granted Bosco’s motion to dismiss in all respects. Because Choudhuri had already been given an opportunity to amend and had not corrected the deficiencies, the court found that further amendment would be futile and dismissed the remaining claims with prejudice. The court stated that no claims against any defendant remained, directed the Clerk to enter judgment, and closed the file.