ORDER GRANTING DEFENDANT'S MOTION TO DISMISS

[Dkt. 13]

DEAN D. PREGERSON, District Judge.

Presently before the court is Defendant JPMorgan Chase Bank, N.A.'s Motion to Dismiss. Having considered the submissions of the parties, the court grants the motion and adopts the following Order.

I. Background

Plaintiffs Stephen and Paula Johnson ("Plaintiffs") filed an action against Defendant JPMorgan Chase Bank, N.A. ("Defendant") in the San Bernardino County Superior Court in March 2014. (Case No. 5:14-cv-00777-DDP-JEMx, the "First Action"). The case was later removed to this court. In the First Action, Plaintiffs alleged that Defendant did not have standing to initiate foreclosure proceedings against Plaintiffs' property because Defendant did not acquire the right to enforce a deed of trust that was executed as part of Plaintiffs' refinancing of their home in November 2006. (First Action Dkt. No. 1.) Plaintiffs alleged five causes of action: "(1) Quiet Title; (2) Violations of Business and Professions Code section 17200, et seq.; (3) Quasi-Contract; (4) Negligence; and (5) Wrongful Foreclosure. (Id.) Defendant filed a motion to dismiss Plaintiffs' Complaint, which this Court granted. (First Action Dkt. No. 21.) Plaintiffs filed a motion to set aside the judgment, which the Court denied. (First Action Dkt. No. 29.)

Plaintiffs then filed a second state court action against Defendant. (Case No. 5:14-cv-01372-DDP-JEMx, the "Second Action"). The case, like its predecessor, was then removed to this Court. In the Second Action, Plaintiffs alleged the same underlying facts as the First Action and brought a claim for Quiet Title. (Second Action Dkt. No. 12.) Defendant filed a motion to dismiss Plaintiffs' First Amended Complaint on res judicata grounds and the court granted the motion.

Plaintiffs then filed the instant action in this Court (the "Third Action)" against Defendant, alleging causes of action for violation of the Truth in Lending Act ("TILA"), quiet title, and "cancellation of instrument." Plaintiffs' First Amended Complaint ("FAC") alleges the same underlying facts as the First and Second Actions, and bring a single claim for declaratory relief pursuant to TILA and based upon a Notice of Rescission allegedly sent to Defendant in July 2015. Defendant now moves to dismiss the FAC.

II. Legal Standard

A complaint will survive a motion to dismiss when it contains "sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). When considering a Rule 12(b)(6) motion, a court must "accept as true all allegations of material fact and must construe those facts in the light most favorable to the plaintiff." Resnick v. Hayes, 213 F.3d 443, 447 (9th Cir. 2000). Although a complaint need not include "detailed factual allegations," it must offer "more than an unadorned, the-defendant-unlawfully-harmed-me accusation." Iqbal, 556 U.S. at 678. Conclusory allegations or allegations that are no more than a statement of a legal conclusion "are not entitled to the assumption of truth." Id. at 679. In other words, a pleading that merely offers "labels and conclusions," a "formulaic recitation of the elements," or "naked assertions" will not be sufficient to state a claim upon which relief can be granted. Id. at 678 (citations and internal quotation marks omitted).

"When there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement of relief." Id. at 679. Plaintiffs must allege "plausible grounds to infer" that their claims rise "above the speculative level." Twombly, 550 U.S. at 555. "Determining whether a complaint states a plausible claim for relief" is a "context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Iqbal, 556 U.S. at 679.

III. Discussion

Defendant contends that this action, like the Second Action before it, is barred by the doctrine of res judicata. Res judicata "bars litigation in a subsequent action of any claims that were raised or could have been raised in the prior action." Owens v. Kaiser Foundation Health Plan, Inc. 244 F.3d 708, 713 (9th Cir. 2001); W. Radio Servs. Co. v. Glickman, 123 F.3d 1189, 1192 (9th Cir. 1997). It applies when there is "1) [an] identity of claims, 2) a final judgment on the merits, and 3) identity or privity between the parties." W. Radio Servs. Co., 123 F.3d at 1192.

A. Identity of Claims

The Ninth Circuit relies on four factors to determine if there is an identity of claims. The factors are

Harris v. Jacobs, 621 F.2d 341, 343 (9th Cir. 1980); Constantini v. Trans World Airlines, 681 F.2d 1199, 1201-02 (9th Cir. 1982).

The central issue in determining whether there is an identity of claims is whether the two suits "arise out of the same transactional nucleus of facts." Costantini, 681 F.2d at 1202; see also Frank v. United Airlines, Inc., 216 F.3d 845, 851 (9th Cir. 2000). Indeed, satisfaction of the fourth Constantini factor is often sufficient to find an identity of claims for res judicata without analysis of the other factors. Quinto v. JPMorgan Chase Bank, No. 11-CV-02920, 2011 WL 6002599, at *8 (N.D. Cal. Nov. 30, 2011); see Int'l Union of Operating Eng'rs-Employers Constr. Indus. Pension, Welfare and Training Trust Funds v. Karr, 994 F.2d 1426, 1430 (9th Cir. 1993).

When analyzing this factor, courts ask "whether [the two actions] are related to the same set of facts and whether they could conveniently be tried together." W. Systems, Inc. v. Ulloa, 958 F.2d 864, 871 (9th Cir. 1992). Here, the three actions involve the same nucleus of facts; all three actions allege that Defendant cannot proceed with a foreclosure of the property or enforcement of the underlying debt obligation because Defendant lacks interest in Plaintiffs' loan as the result of errors in the process of assigning the deed of trust and promissory note. Claims for quiet title and declaratory relief could conveniently be tried together because Plaintiffs' allegations about improper loan assignment would be central to both causes of action. Even though Plaintiffs now base their declaratory relief action for a TILA violation upon a July 2015 Notice of Rescission, the underlying facts are the same as contained in an earlier, April 2012 Notice of Rescission, which was allegedly sent to Defendant prior to the filing of the Second Action. See Owens, 244 F.3d at 714 (upholding dismissal on res judicata grounds on claims not previously raised where the new claims were based on the same predicate facts).

Although the similarity of the nuclei of facts would alone be reason to find an identity of claims, the other three factors also suggest an identity of claims. First, Defendant's rights and interests as established in the prior litigation could be destroyed or impaired by the prosecution of this action, as Defendant will not be allowed to continue foreclosure proceedings or recover on the debt obligation for the duration of the lawsuit, if ever.

Second, the evidence needed to prove Plaintiffs' cause of action for declaratory relief for a TILA violation centers around the assignment of the original lender's deed of trust to Defendant. Plaintiffs could use the same evidence to prove that Defendant lacks the ability to enforce the promissory note or deed of trust in an action for declaratory relief that would have been needed in the earlier actions for quiet title based on the same, allegedly improper assignment.1

Third, all three actions involve the alleged wrongful foreclosure. Plaintiffs' claim the right at issue in the instant action is not the same as that presented by the earlier actions because the TILA violation alleged here is based on Defendant's failure to adequately respond to the July 2015 Notice of Rescission within the 20 days required by statute. Plaintiffs, however, mailed a similar notice in April 2012, and thus, could have brought the TILA violation for declaratory relief in the Second Action. (Third Action Dkt. No. 12 at 8:9-17.) Although Plaintiffs appear to assert that they sent both notices because they allege that Defendant has no interest in the promissory note and deed of trust, which is important for both the quiet title and declaratory relief claims, Plaintiffs do not explain why both causes of action could not have been brought at the same time. See United States v. Liquidators of European Fed. Credit Bank, 630 F.3d 1139, 1151 (9th Cir. 2011) (finding that if the new claim "arose at the same time as the harm alleged in the previous action, then there is no reason why the plaintiff could not have brought the claim in the first action . . . [t]he plaintiff simply could have added a claim to the complaint") (citation omitted).

Accordingly, the identity of claims factor of the res judicata test is satisfied.

B. Final Judgment on the Merits

There was a final judgment on the merits of both the First and

Second Actions. The First Action was dismissed with prejudice after Plaintiffs failed to oppose Defendant's motion to dismiss. The Federal Rules of Civil Procedure provide that, unless otherwise specified, a dismissal for failure to prosecute or to comply with a court order "operates as an adjudication on the merits." Fed. R. Civ. P. 41(b); see Stewart v. U.S. Bancorp, 297 F.3d 953, 956 (9th Cir. 2002); Owens, 244 F.3d at 714; In re Schimmels, 127 F.3d 875, 884 (9th Cir. 1997)("[I]nvoluntary dismissal generally acts as a judgment on the merits for the purposes of res judicata"); Johnson v. United States Dep't of Treasury, 939 F.2d 820, 825 (9th Cir. 1991) (noting that dismissal for failure to prosecute is "treated as an adjudication on the `merits' for purposes of preclusion") (citation omitted). Even if the First Action had not been adjudicated on the merits, the Second Action was dismissed based on res judicata grounds after Plaintiffs opposed Defendant's Motion to Dismiss and filed a Motion to Remand, which was denied. (Second Action Dkt. No. 21.)

C. Identity of Parties

Lastly, there is no dispute that there is an identity of parties. Plaintiffs and Defendant were parties to both the First and Second Actions.

Thus, because there is "1) [an] identity of claims, 2) a final judgment on the merits, and 3) identity or privity between the parties" here and in the prior actions, the doctrine of res judicata applies, and Plaintiffs' FAC must be dismissed. W. Radio Servs. Co., 123 F.3d at 1192.

IV. Conclusion

For the reasons stated above, Defendant's Motion to Dismiss is GRANTED. The FAC is DISMISSED, with prejudice.

IT IS SO ORDERED.