Michael Lincoln et al v. GMAC Mortgage, LLC et al, No. 2:2009cv04871 - Document 21 (C.D. Cal. 2009)
Court Description: ORDER GRANTING Defendant's Motion to Dismiss 12 by Judge Dean D. Pregerson. For the reasons set forth above, the Court dismisses Plaintiffs claims arising under federal law. With respect to the RESPA § 2609 claim, the Court grants Plainti ffs leave to amend the FAC. Plaintiffs must file an amended complaint within twenty (20) days of the date of this Order. Failure to do so will be deemed consent to dismissal of Plaintiffs federal law claims with prejudice. (See Order for Details). (sch)
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Michael Lincoln et al v. GMAC Mortgage, LLC et al Doc. 21 1 2 O 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA 10 11 MICHAEL LINCOLN, SHARON OWENS, 12 Plaintiff, 13 v. 14 15 16 GMAC MORTGAGE, LLC a Delaware limited liability company; EXECUTIVE TRUSTEE SERVICES, a limited liability company, 17 18 19 Defendants. ___________________________ ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) Case No. CV 09-04871 DDP (PJWx) ORDER GRANTING DEFENDANTS’ MOTION TO DISMISS [Motion filed on September 16, 2009 ] This matter comes before the Court on Defendants GMAC 20 Mortgage, LLC (“GMAC”) and Executive Trustees Services, LLC 21 (“ETS”)’s motion to dismiss Plaintiffs’ First Amended Complaint 22 (“FAC”) for failure to state a claim. 23 moving papers, the Court grants the motion with respect to 24 Plaintiffs’ federal law claims, but grants them leave to amend 25 their complaint. 26 states a federal claim on which relief can be granted, the Court 27 will likely decline to exercise supplemental jurisdiction over the 28 pendent state law claims. After reviewing the parties’ If Plaintiffs fail to amend the FAC such that it See 28 U.S.C. § 1367(c). Dockets.Justia.com 1 I. 2 Background Plaintiffs are the owners of real property located at 3667 3 Olympiad Drive, Los Angeles, California, 90043. (FAC ¶ 6.) On or 4 about May 27, 2008, Plaintiffs entered into and signed a loan 5 modification agreement (“agreement”) with GMAC. (FAC ¶ 35, Ex. A.) 6 Following approval and execution of the agreement, Plaintiffs 7 received letters from GMAC notifying them that their required 8 monthly payments would increase. (FAC ¶ 22, Ex. B.) Plaintiffs 9 contend that the agreement did not authorize GMAC to increase their 10 monthly payments. (FAC ¶ 23-24.) 11 GMAC sent several letters (dated August 4, 2008, August 11, 12 2008, September 2, 2008, September 11, 2008, October 2, 2008) to 13 Plaintiffs informing them their loan was in default, and a notice 14 of default was recorded on November 19, 2009. (FAC, Exhibits B & 15 D.) ETS, the trustee designated on the Deed of Trust, then 16 commenced non-judicial foreclosure proceedings. 17 (FAC ¶ 23.) In the FAC, Plaintiffs state the following causes of action: 18 (1) breach of contract; (2) breach of the covenant of good faith 19 and fair dealing; (3) violations of California Business & 20 Professions Code § 17200 et seq.; (4) negligent misrepresentation 21 and general negligence; (5) violations of the Real Estate 22 Settlement Procedures Act (“RESPA”); and (6) violations of 23 California Civil Code § 2924. 24 II. Legal Standard 25 Pursuant to Federal Rule of Civil Procedure 12(b)(6), a 26 complaint is subject to dismissal when the Plaintiff's allegations 27 fail to state a claim upon which relief can be granted. When 28 considering a 12(b)(6) motion to dismiss for failure to state a 2 1 claim, “all allegations of material fact are accepted as true and 2 should be construed in the light most favorable to [the] 3 plaintiff.” 4 Resnick v. Hayes, 213 F.3d 433, 447 (9th Cir. 2000). In Ashcroft v. Iqbal, 129 S. Ct. 1937, 1950 (2009), the 5 Supreme Court explained that a court considering a 12(b)(6) motion 6 should first “identify[] pleadings that, because they are no more 7 than conclusions, are not entitled to the assumption of truth.” 8 Id. Next, the court should identify the complaint’s “well-pleaded 9 factual allegations, . . . assume their veracity and then determine 10 whether they plausibly give rise to an entitlement to relief.” 11 Id.; see also Moss v. U.S. Secret Serv., 572 F.3d 962, 969 (9th 12 Cir. 2009) (“In sum, for a complaint to survive a motion to 13 dismiss, the non-conclusory factual content, and reasonable 14 inferences from that content, must be plausibly suggestive of a 15 claim entitling the plaintiff to relief” (internal quotation marks 16 omitted)). 17 III. Discussion 18 A. RESPA, 12 U.S.C. § 2605 19 Plaintiffs allege that Defendants violated RESPA by failing to 20 respond to “inquiries [made by Plaintiffs] in June, July, August, 21 September, October, December 2008 and in May 2009." (FAC ¶ 81.) 22 Section 2605(e)(1)(A) of the statute provides that loan 23 servicers that receive a “qualified written request from the 24 borrower (or an agent of the borrower) for information relating to 25 the servicing of such loan” must acknowledge receipt, investigate, 26 correct any errors, and respond. 12 U.S.C. § 2605(e)(1)(A). 27 defines a “qualified written request” as: 28 /// 3 RESPA 1 2 3 4 5 6 a written correspondence, other than notice on a payment coupon or other payment medium supplied by the servicer, that– (I) includes, or otherwise enables the servicer to identify, the name and account of the borrower; and (ii) includes a statement of the reasons for the belief of the borrower, to the extent applicable, that the account is in error or provides sufficient detail to the servicer regarding other information sought by the borrower. 7 8 Id. § 2605(e)(1)(B). Section 2605(e)(1)(A) requires loan servicers 9 to acknowledge receipt of qualified written requests within twenty 10 days. Id. § 2605(e)(1)(A). Following acknowledgment, servicers have 11 a duty to respond to the borrowers “not later than 60 days” in one 12 of three ways outlined in Section 2605(e)(2). Id. § 2605(e)(2). 13 The Court is persuaded that Plantiffs’ letters dated June 11, 14 2008, July 13, 2008, August 8, 2008, September 25, 2008 and October 15 29, 2008 were not qualified written requests within the meaning of 16 RESPA. (FAC, Exhibits C1-C5.) The letters object to the monthly 17 payment increase, and demand that GMAC present evidence of its 18 authority to enforce the terms of the loan. They do not, however, 19 identify any error in the servicing of the loan at issue. 20 Accordingly, the letters are not qualified written requests, and 21 GMAC had no duty under RESPA to respond. 22 The May 20, 2009 letter disputes the amount that Plaintiffs 23 owed to GMAC under the agreement, and contains a heading identifying 24 the letter as a “qualified written request.” (FAC, Ex. C6.) Even 25 assuming that the letter satisfied § 2605(e)(1)(A)’s definitional 26 criteria, Plaintiffs’ claim fails because they filed the present 27 lawsuit on June 15, 2009, and thus, the sixty window for responding 28 to qualified written requests had not yet elapsed. 4 Accordingly, the 1 claim was premature. See Sicairos v. NDEX West, LLC, 2009 WL 385855 2 at *3 (S.D. Cal. 2009) (dismissing RESPA § 2605 claim where 3 plaintiff filed suit before sixty-day window for responding to 4 alleged qualified written request had elapsed). 5 Plaintiffs § 2605 claims against ETS must also be dismissed, 6 with prejudice, because Plaintiffs fail to allege facts indicating 7 that ETS is a loan servicer subject to the requirements of § 2605. 8 B. RESPA, 12 U.S.C. § 2609 9 Plaintiffs next allege that Defendants violated RESPA by 10 failing to “provide an explanation” for “increasing Plaintiffs 11 escrow account.” (FAC ¶ 88.) 12 Pursuant to 12 U.S.C § 2609, lenders and servicers are 13 prohibited from requiring homeowners to maintain more than one14 twelfth of the estimated total yearly amount necessary for taxes, 15 insurance premiums, and other charges, plus an additional cushion of 16 one-sixth of the estimated total of such taxes, insurance premiums 17 and other charges. See 12 U.S.C.§ 2609(a). In addition, the loan 18 servicer must notify the borrower “not less than annually of any 19 shortage of funds in the escrow account.” 20 Id. § 2609(b). Plaintiffs fail to allege that the escrow amount GMAC required 21 was in excess of the level that RESPA permits, and they do not 22 allege that GMAC failed to provide the required notice of any 23 shortage of funds. The Court therefore concludes that the factual 24 allegations set forth in the FAC are not plausibly suggestive of a 25 claim entitling Plaintiffs to relief, and thus, their § 2609 claim 26 must be dismissed. 27 /// 28 /// 5 1 IV. Conclusion 2 For the reasons set forth above, the Court dismisses 3 Plaintiffs’ claims arising under federal law. With respect to the 4 RESPA § 2609 claim, the Court grants Plaintiffs leave to amend the 5 FAC. Plaintiffs must file an amended complaint within twenty (20) 6 days of the date of this Order. Failure to do so will be deemed 7 consent to dismissal of Plaintiffs’ federal law claims with 8 prejudice. 9 10 11 IT IS SO ORDERED. 12 13 14 Dated: December 18, 2009 15 DEAN D. PREGERSON United States District Judge 16 17 18 19 20 21 22 23 24 25 26 27 28 6
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