Sipe v. Countrywide Bank, et al., No. 1:2009cv00798 - Document 37 (E.D. Cal. 2010)

Court Description: Memorandum Decision and ORDER Re: (1) Defendant Sierra Pacific Mortgage Company Inc.'s Motion to Dismiss; and (2) Defendants Countrywide Bank and Mortgage Electronic Registration Systems, Inc.'s Motion to Dismiss, signed by Judge Oliver W. Wanger on 2/16/2010. (Gaumnitz, R)

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1 UNITED STATES DISTRICT COURT 2 EASTERN DISTRICT OF CALIFORNIA 3 VINCENT SIPE, 09-CV-00798-OWW-DLB 4 Plaintiff, 5 6 7 8 9 MEMORANDUM DECISION AND ORDER RE: (1) DEFENDANT SIERRA PACIFIC MORTGAGE COMPANY INC. S MOTION TO DISMISS; and (2) DEFENDANTS COUNTRYWIDE BANK AND MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC. S MOTION TO DISMISS v. COUNTRYWIDE BANK; SIERRA PACIFIC MORTGAGE COMPANY, INC.; MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC.; FINANCIAL ADVANTAGE, INC. DBA : SILVERSTON REALTY; JOHN DANIEL NORBERG; CAROL DESILVA and DOES 120 inclusive, 10 Defendants. 11 I. INTRODUCTION 12 Before the court are two motions to dismiss. 13 One motion is 14 brought by Defendant Sierra Pacific Mortgage Company Inc. ( Sierra 15 Pacific ) 16 Countrywide 17 Registration Systems, Inc. ( MERS ). 18 the claims asserted by Plaintiff Vincent Sipe ( Plaintiff ) in his 19 First Amended Complaint ( FAC or complaint ). 20 background facts are taken from the FAC and other documents on file 21 in this case. and another Bank is brought collectively ( Countrywide ) and by Mortgage Defendants Electronic The motions are directed at The following 22 II. 23 24 25 A. BACKGROUND General Background This is a mortgage fraud case concerning Plaintiff s 26 residential property located in Coarsegold, California. 27 about 28 Defendant Financial Advantage Inc., approached Plaintiff about a May 2006, Defendant Carol 1 Desilva, a loan On or officer for 1 refinance loan on his residence. 2 she could get the best deal and the best interest rates on the 3 market. 4 described his income and provided Desilva with income-related 5 documentation, including income bank statements, W-2s, and 1099s. 6 On Desilva s loan application, however, Plaintiff s monthly income 7 was fraudulently overstated. 8 Desliva could get him 100% financing for his residence and that his 9 loan would be fixed for thirty (30) years at a 2.15% interest rate. 10 Desilva, however, actually sold Plaintiff a five-year fixed loan 11 with an adjustable rate rider. 12 the lender. Plaintiff applied Desilva advised Plaintiff that for the loan, and he accurately Desilva advised Plaintiff that Defendant Sierra Pacific served as On or about May 11, 2006, Plaintiff completed the loan on his 13 14 property. The terms of the loan were memorialized in a Promissory 15 Note, which was secured by a Deed of Trust on the property. 16 Deed of Trust identified Sierra Pacific as the lender and MERS as 17 the lender s nominee and beneficiary. The Plaintiff, allegedly, was not given a copy of any of the loan 18 19 documents prior to closing. At the closing, Plaintiff was only 20 given a few minutes to sign the documents and was not allowed to 21 review them. 22 of a proper notice of cancellation. 23 rescind the loan. Plaintiff also did not receive the required copies Plaintiff now wants to 24 Plaintiff asserts that his loan was part of a larger scheme 25 perpetrated by Defendants pursuant to which they sold home loans 26 on 27 Defendants allegedly pooled these loans into trusts and issued 28 new securities backed by the pool. the secondary market. Once 2 on the secondary market, As part of this scheme, Sierra 1 Pacific s borrowers, including Plaintiff, were steered and 2 encouraged into loans with terms unfavorable to them, or loans 3 which the borrowers . . . were not qualified to obtain. 4 B. Procedural History And Plaintiff s Claims 5 Plaintiff filed an initial complaint on May 5, 2009. (Doc. 1.) 6 The initial complaint included claims for a violation of the Truth 7 In Lending Act ( TILA ), 15 U.S.C. § 1601 et seq., and a violation 8 of the Real Estate Settlement Procedures Act ( RESPA ), 12 U.S.C. 9 § 2605 et seq. In August 2009, Defendant Sierra Pacific filed a 10 motion to dismiss Plaintiff s initial complaint. 11 In response, Plaintiff filed a FAC. 12 In the FAC, Plaintiff asserts causes of action for: (1) a 13 violation of TILA; (2) a violation of the Rosenthal Fair Debt 14 Collection Practices Act ( RFDCPA ), California Civil Code § 1788 15 et seq.; (3) negligence; (4) a violation of RESPA; (5) breach of 16 fiduciary duty; (6) fraud; (7) a violation of California Business 17 and Professions Code § 17200 et seq.; (8) breach of contract; and 18 (9) breach of the implied covenant of good faith and fair dealing. 19 After Plaintiff filed his FAC, Sierra Pacific filed a motion 20 to dismiss, and Countrywide and MERS also filed a separate motion 21 to dismiss. 22 by the TILA and RESPA claims, and supplemental jurisdiction is 23 asserted for the state law claims. 24 C. In the FAC, federal question jurisdiction is invoked Defendants Motions 25 Sierra Pacific moves to dismiss all claims against it, raising 26 various arguments as to why each claim is insufficiently pled or 27 legally barred. 28 against them, raising numerous arguments as to why each claim is Countrywide and MERS move to dismiss the claims 3 1 insufficiently pled. With respect to the fraud claim, Sierra 2 Pacific, Countrywide, and MERS argue, among other things, that it 3 fails to meet the pleading requirements of Rule 9(b). 4 Plaintiff filed untimely opposition briefs to both motions. 5 The hearing date on the motions was continued to permit adequate 6 time for reply briefing.1 7 III. 8 9 10 A. STANDARDS OF DECISION Motion To Dismiss Dismissal under Rule 12(b)(6) is appropriate where the 11 complaint lacks sufficient facts to support a cognizable legal 12 theory. 13 (9th Cir. 1990). 14 survive a 12(b)(6) motion, the pleading "does not need detailed 15 factual allegations" but the "[f]actual allegations must be enough 16 to raise a right to relief above the speculative level." Bell Atl. 17 Corp. v. Twombly, 550 U.S. 544, 555 (2007). 18 conclusions" or a "formulaic recitation of the elements of a cause 19 of action will not do." Id. 20 state a claim to relief that is plausible on its face." Id. at 570. 21 In other words, the "complaint must contain sufficient factual 22 matter, accepted as true, to state a claim to relief that is 23 plausible on its face." Ashcroft v. Iqbal, __ U.S. __, 129 S. Ct. 24 1937, 1949 (2009) (internal quotation marks omitted). 25 Circuit has summarized the governing standard, in light of Twombly 26 and Iqbal, as follows: "In sum, for a complaint to survive a motion Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 To sufficiently state a claim for relief and Mere "labels and Rather, there must be "enough facts to The Ninth 27 28 1 Future compliance with the filing deadlines is expected. 4 1 to dismiss, the non-conclusory factual content, and reasonable 2 inferences from that content, must be plausibly suggestive of a 3 claim entitling the plaintiff to relief." Moss v. U.S. Secret 4 Serv., 572 F.3d 962, 969 (9th Cir. 2009) (internal quotation marks 5 omitted). 6 subject 7 cognizable legal theory, Balistreri, 901 F.2d at 699, or where the 8 allegations on their face "show that relief is barred" for some 9 legal reason, Jones v. Bock, 549 U.S. 199, 215 (2007). to Apart from factual insufficiency, a complaint is also dismissal under Rule 12(b)(6) where it lacks a 10 In deciding whether to grant a motion to dismiss, the court 11 must accept as true all "well-pleaded factual allegations" in the 12 pleading under attack. Iqbal, 129 S. Ct. at 1950. 13 however, "required to accept as true allegations that are merely 14 conclusory, 15 inferences." Sprewell v. Golden State Warriors, 266 F.3d 979, 988 16 (9th Cir. 2001); see, e.g., Doe I v. Wal-Mart Stores, Inc., 572 17 F.3d 677, 683 (9th Cir. 2009). 18 motion to dismiss, if a district court considers evidence outside 19 the pleadings, it must normally convert the 12(b)(6) motion into a 20 Rule 56 motion for summary judgment, and it must give the nonmoving 21 party an opportunity to respond." United States v. Ritchie, 342 22 F.3d 903, 907 (9th Cir. 2003). 23 certain materials-documents attached to the complaint, documents 24 incorporated by reference in the complaint, or matters of judicial 25 notice-without converting the motion to dismiss into a motion for 26 summary judgment." Id. at 908. 27 B. 28 unwarranted deductions of fact, A court is not, or unreasonable "When ruling on a Rule 12(b)(6) "A court may, however, consider Rule 9(b) Rule 9(b) imposes an elevated pleading standard for fraud 5 1 claims. Rule 9(b) states: In alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake. Malice, intent, knowledge, and other conditions of a person's mind may be alleged generally. 2 3 4 5 To comply with Rule 9(b), allegations of fraud must be specific 6 enough to give defendants notice of the particular misconduct which 7 is alleged to constitute the fraud . . . . Swartz v. KPMG LLP, 476 8 F.3d 756, 764 (9th Cir. 2007) (internal quotation marks omitted). 9 Allegations of fraud must include the time, place, and specific 10 content of the false representations as well as the identities of 11 the parties to the misrepresentations. Id. (internal quotation 12 marks omitted). 13 the who, what, when, where, and how of the misconduct charged. 14 Kearns v. Ford Motor Co., 567 F.3d 1120, 1124 (9th Cir. 2009) 15 (internal quotation marks omitted). 16 must set forth more than the neutral facts necessary to identify 17 the transaction. The plaintiff must set forth what is false or 18 misleading about a statement, and why it is false. Vess v. 19 Ciba-Geigy Corp. USA, 317 F.3d 1097, 1106 (9th Cir. 2003) (emphasis 20 and internal quotation marks omitted). The [a]verments of fraud must be accompanied by A plaintiff alleging fraud 21 IV. 22 23 A. DISCUSSION AND ANALYSIS TILA Claim 24 Plaintiff asserts a TILA claim against Sierra Pacific for 25 damages and rescission. Sierra Pacific allegedly violated TILA by: 26 (a) failing to provide required disclosures prior to consummation 27 of the transaction; (b) failing to make required disclosures 28 clearly and conspicuously in writing; (c) failing to timely deliver 6 1 to Plaintiff notices required by TILA; (d) placing terms prohibited 2 by TILA into the transaction; and (e) failing to disclose all 3 finance charge details and the annual percentage rate based upon 4 properly calculated and disclosed finance charges and amounts 5 financed. (Doc. 14 at 11.) 6 Sierra Pacific argues that Plaintiff s TILA claim for damages 7 and rescission are both time-barred, and that the complaint fails 8 to allege facts sufficient to demonstrate a right to rescission. 1. 9 Damages Claim 10 TILA requires creditors to provide borrowers with clear and 11 accurate disclosures of terms dealing with things like finance 12 charges, annual percentage rates of interest, and the borrower's 13 rights. Beach v. Ocwen Fed. Bank, 523 U.S. 410, 412 (1998). 14 Failure 15 statutory and actual damages [that are] traceable to a lender's 16 failure to make the requisite disclosures. Id. to satisfy TILA's requirements exposes a lender to 17 A TILA claim for damages must be brought within one year from 18 the date of the occurrence of the violation. 15 U.S.C. § 1640(e); 19 see also Beach, 523 U.S. at 412. 20 purposes, the occurrence of the violation takes place on the 21 consummation of the transaction. King v. California, 784 F.2d 22 910, 915 (9th Cir. 1986). 23 transaction was consummated on or about May 11, 2006. (Doc. 14 at 24 7.) 25 damages. 26 May 4, 2009, well past the deadline. (See Doc. 1.) 27 Plaintiff s TILA claim for damages is time-barred absent equitable 28 tolling. For statute of limitations Here, according to the complaint, the Plaintiff had until May 2007 to file his TILA claim for Plaintiff, however, filed his TILA claim for damages on 7 Accordingly, 1 2 3 4 5 6 7 8 9 As explained in King, TILA s one-year limitations period may be extended through equitable tolling: [T]he limitations period in Section 1640(e) runs from the date of consummation of the transaction but ... the doctrine of equitable tolling may, in the appropriate circumstances, suspend the limitations period until the borrower discovers or had reasonable opportunity to discover the fraud or nondisclosures that form the basis of the TILA action. Therefore, as a general rule the limitations period starts at the consummation of the transaction. The district courts, however, can evaluate specific claims of fraudulent concealment and equitable tolling to determine if the general rule would be unjust or frustrate the purpose of the Act and adjust the limitations period accordingly. 10 784 F.2d at 915. Equitable tolling may be applied if, despite all 11 due diligence, a plaintiff is unable to obtain vital information 12 bearing on the existence of his claim." Santa Maria v. Pac. Bell, 13 202 F.3d 1170, 1178 (9th Cir. 2000); see also Garcia v. Brockway, 14 526 F.3d 456, 465 (9th Cir. 2008). Fairness, without more, is not 15 sufficient justification to invoke equitable tolling . . . . 16 Garcia, 526 F.3d at 466. 17 Here, Sierra Pacific s failure to make TILA disclosures and 18 alleged misconduct including its failure to make required 19 disclosures 20 placement of terms prohibited by TILA into the transaction 21 occurred, if at all, by the time of the loan transaction in May 22 2006. 23 hand, Plaintiff could have reviewed them and discovered whether 24 illegal terms were included in the loan transaction, or whether the 25 disclosures to be included in the transaction were unclear, omitted 26 or otherwise problematic, and then filed suit within the one-year 27 limitations period. 28 clearly and conspicuously in writing, and its With the transaction completed and the loan documents in In Meyer v. Ameriquest Mortgage Co., 342 F.3d 899, 902 (9th 8 1 Cir. 2003), the court rejected the application of equitable tolling 2 to a TILA damages claim asserted against a lender. 3 reasoned: 4 5 6 7 8 9 The court The failure to make the required disclosures occurred, if at all, at the time the loan documents were signed. The Meyers were in full possession of all information relevant to the discovery of a TiLA violation and a § 1640(a) damages claim on the day the loan papers were signed. The Meyers have produced no evidence of undisclosed credit terms, or of fraudulent concealment or other action on the part of Ameriquest that prevented the Meyers from discovering their claim. Plaintiff argues equitable tolling should apply because, as 10 alleged, he was not allowed to review the loan documents at 11 closing, they were not explained to him at closing, and he was not 12 given a copy of them prior to closing. 13 assuming this is true, Plaintiff does not explain why immediately 14 after the closing, when he had the loan documents, he could not 15 have reviewed them that same day (or at any point thereafter) and, 16 with or without the assistance of others, discovered the alleged 17 TILA violations. (Doc. 14 at 6.) Even 18 Plaintiff also argues that equitable tolling should apply 19 because, as alleged, [t]he facts surrounding this loan transaction 20 were purposely hidden to prevent Plaintiff from discovering the 21 true nature of the transaction and the documents involved therein. 22 Facts surrounding the transaction continue to be hidden from 23 Plaintiff to this day. (Doc. 14 at 7.) This conclusory allegation 24 may relate to the averment in the TILA claim that Sierra Pacific 25 failed to disclose all finance charge details and the annual 26 percentage rate based upon a properly calculated and disclosed 27 finance charges and amounts financed. 28 9 Plaintiff does not, 1 however, allege what facts were purposely hidden from Plaintiff 2 to prevent discovery of his TILA claim. 3 Plaintiff s allegation that the facts surrounding this loan 4 transaction were 5 discovering the true nature of the transaction and the documents 6 and continue to be hidden from Plaintiff to this day is a legal 7 conclusion, and the complaint does not assert how the hidden 8 facts prevented him from discovering the alleged TILA violations 9 or how they relate to the alleged TILA violations committed by 10 Sierra Pacific. 11 purposely hidden to prevent Plaintiff from not been alleged. 12 Facts sufficient to invoke equitable tolling have Plaintiff s TILA claim for damages is time-barred absent 13 equitable tolling. Defendant Sierra Pacific s motion to dismiss, 14 on the grounds that this 15 limitations, is GRANTED WITH LEAVE TO AMEND. 16 one opportunity to allege what facts were hidden that prevented him 17 from discovering his claim, and how those hidden facts relate to 18 the TILA violations Sierra Pacific allegedly committed. claim is barred by the statute of Plaintiff shall have 19 2. Rescission Claim 20 Generally, TILA provides that a borrower has until midnight of 21 the third business day following the consummation of the loan 22 transaction to rescind the transaction. 15 U.S.C. § 1635(a). 23 borrower's right of rescission is extended from three days to three 24 years if the lender (1) fails to provide notice of the borrower's 25 right of rescission or (2) fails to make a material disclosure. See 26 Reagen v. Aurora Loan Servs., No. 1:09-CV-00839-OWW-DLB, 2009 WL 27 3789997, at *6 (E.D. Cal. Nov. 10, 2009) (citing 12 C.F.R. § 28 10 A 1 2 3 4 5 6 7 226.23(a)(3)).2 Section 1635(f) of TILA provides: An obligor's right of rescission shall expire three years after the date of consummation of the transaction or upon the sale of the property, whichever occurs first, notwithstanding the fact that the information and forms required under this section or any other disclosures required under this part have not been delivered to the obligor. 15 U.S.C. § 1635(f). Here, the date of loan consummation is on or about May 11, 8 2006. Plaintiff filed his TILA rescission claim on May 4, 2009. 9 Accordingly, Plaintiff s rescission claim is well outside the 10 three-day window but within the three-year period if the three-year 11 period applies in this case. 12 Sierra Pacific argues that Plaintiff cannot avail himself of 13 the three-year period because (i) he, in fact, received his notice 14 of his right of rescission and (ii) there are no facts pled in the 15 complaint as to what material disclosures Sierra Pacific failed to 16 make. 17 judicial notice be taken of a document entitled NOTICE OF RIGHT OF 18 CANCEL. This document identifies Sierra Pacific as the lender and 19 Plaintiff as the borrower, explains to the reader how to cancel the 20 loan transaction, and bears the purported signature of Plaintiff at 21 the bottom.3 As to the rescission notice, Sierra Pacific requests that Sierra Pacific argues that this document proves that 22 2 23 24 25 26 27 28 Regulation Z provides that [t]he term material disclosures' means the required disclosures of the annual percentage rate, the finance charge, the amount financed, the total payments, the payment schedule, and the disclosures and limitations referred to in §§ 226.32(c) and (d) and 226.35(b)(2). 12 C.F.R. § 226.23(a)(3) n.48. 3 Even assuming it were proper to take judicial notice of this document, and further assuming that doing so would eviscerate any claim that Plaintiff did not receive notice of his rescission 11 1 Plaintiff received the requisite notice regarding his rescission 2 rights. 3 The issue of whether this document is judicially noticeable, 4 whether Sierra Pacific provided Plaintiff with the requisite notice 5 regarding his right of rescission, and whether Plaintiff has failed 6 to sufficiently plead the failure to make material disclosures, 7 need not be determined. 8 fails for another reason. Plaintiff s TILA claim for rescission 9 Plaintiff must allege (subject to Rule 11) an ability to 10 tender in order to state a claim for rescission under TILA and 11 Regulation Z. Garcia v. Wachovia Mortgage Corp., __ F. Supp. 2d 12 __, 2009 WL 3837621, at *5 (C.D. Cal. 2009); see also Gonzalez v. 13 HomeQ Servicing, No. 1:09-CV-00951-OWW-SMS, 2010 WL 289303, at *3 14 (E.D. Cal. Jan. 15, 2010); Yamamoto v. Bank of N.Y., 329 F.3d 1167, 15 1171 (9th Cir. 2003) ( [R]escission should be conditioned on 16 repayment of the amounts advanced by the lender. ) (emphasis 17 omitted).4 18 restore the parties to the status quo ante. Am. Mortgage Network, 19 Inc. v. Shelton, 486 F.3d 815, 820 (4th Cir. 2007) (internal 20 quotation marks omitted). 21 The equitable goal of rescission under TILA is to The complaint does not allege that Plaintiff has tendered or 22 23 24 rights, this would still not resolve whether Sierra Pacific otherwise failed to provide material disclosures to Plaintiff which would extend the limitations period to three years. 25 4 26 27 28 As recognized in Garcia, [b]y far, the majority of Courts to address the issue recently have required that borrowers allege an ability to tender the principal balance of the subject loan in order to state a claim for rescission under TILA. 2009 WL 3837621 at *3. 12 1 has the ability to tender the principal balance of the loan. 2 is required. 3 This rescission is subject to dismissal. Absent such allegations, Plaintiff s TILA claim for Sierra Pacific s motion to dismiss the TILA rescission claim 4 5 is GRANTED, and this claim is DISMISSED WITH LEAVE TO AMEND. 6 B. 7 RFDCPA Claim Plaintiff asserts a claim for violation of the RFDCPA, 8 California Civil Code § 1788 et seq., against Countrywide and 9 Sierra Pacific who raise two arguments for dismissal. First, that 10 the RFDCPA, which applies to debt collection activities, does not 11 cover foreclosure-related activities and is not implicated here. 12 Second, 13 violations with no facts to support them. that Plaintiff has only generically alleged RFDCPA 14 The RFDCPA was enacted to prohibit debt collectors from 15 engaging in unfair or deceptive acts or practices in the collection 16 of consumer debts, and to require debtors to act fairly in entering 17 into and honoring such debts. Cal. Civ. Code § 1788.1. 18 RFDCPA, a debt collector is defined as any person who, in the 19 ordinary course of business, regularly, on behalf of himself or 20 herself or others, engages in debt collection. Cal. Civ. Code § 21 1788.2(c). 22 in connection with the collection of consumer debts, § 1788.2(b), 23 and consumer debt means money, property or their equivalent, due 24 or owing or alleged to be due or owing from a natural person by 25 reason of a consumer credit transaction, § 1788.2(f). 26 consumer 27 natural person and another person in which property, services or 28 money is acquired on credit by that natural person from such other Under the The term debt collection means any act or practice credit transaction means 13 a transaction In turn, between a 1 person primarily for personal, family, or household purposes. § 2 1788.2(e). 3 harassment, threats, the use of profane language, false simulation 4 of the judicial process, or when it cloaks its true nature as a 5 licensed collection agency in an effort to collect a consumer debt. 6 See Cal. Civ. Code. §§ 1788.10-1788.16. A debt collector violates the act when it engages in 7 Plaintiff alleges that Countrywide and Sierra Pacific violated 8 the RFDCPA by collecting on a debt not owed to the Defendants, 9 making false reports to credit reporting agencies, falsely stating 10 the amount of a debt, increasing the amount of debt by including 11 amounts that are not permitted by law or contract, and using unfair 12 and unconscionable means to collect a debt. (Doc. 14 at 13.)5 13 Plaintiff s RFDCPA claim is deficient in at least two respects. 14 First, [t]he law is clear that foreclosing on a deed of trust 15 does not invoke the statutory protections of the RFDCPA. Collins 16 v. Power Default Servs., Inc., No. 09 4838 SC, 2010 WL 234902, at 17 *3 18 [F]oreclosure pursuant to a deed of trust does not constitute debt 19 collection under the RFDCPA. Castenda v. Saxon Mortgage Servs., 20 Inc., __ F. Supp. 2d __, 2009 WL 4640673, at *3 (E.D. Cal. 2009); 21 see also Gonzalez v. First Franklin Loan Servs., No. 1:09-CV-00941 22 AWI-GSA, 23 ( [F]oreclosure 24 RFDCPA. ). The conduct Plaintiff complains of concerns foreclosure (N.D. Cal. 2010 Jan. WL 14, 144862, related 2010) at (collecting *7 actions . (E.D. . . numerous Cal. do Jan. not cases). 11, 2010) implicate the 25 26 27 28 5 This conclusory allegation is a verbatim repetition of a RFDCPA claim in Sorenson v. Countrywide Home Loans, Inc., No. 2:09-cv-01943-MCE-KJM, 2010 WL 308794, at *4 (E.D. Cal. Jan. 12, 2010). 14 1 related actions in connection with his residential mortgage. This 2 conduct is not covered by the RFDCPA. For this reason, Plaintiff s 3 RFDCPA claim is subject to dismissal. Second, the RFDCPA claim lacks any supporting facts. 4 5 complaint 6 suggest that Countrywide and Sierra Pacific violated the RFDCPA by 7 engaging in acts (such as harassment) prohibited by the statute. 8 See Keen v. Am. Home Mortgage Servicing, Inc., __ F. Supp. 2d __, 9 2009 WL 3380454, at *5 (E.D. Cal. 2009); Gonzalez, 2010 WL 144862 10 has no non-conclusory factual content to The plausibly at *7. Defendant Countrywide s motion to dismiss the RFDCPA claim is 11 12 GRANTED WITH LEAVE TO AMEND. 13 C. Negligence Claim 14 To establish a negligence claim, it must be shown that (1) 15 the defendant owed the plaintiff a legal duty, (2) the defendant 16 breached that duty, and (3) the breach was a proximate or legal 17 cause of the plaintiff's injuries. 18 three 19 Ellington, 159 Cal. App. 4th 190, 195 (2008) (internal citation 20 omitted). 21 a particular factual situation is a question of law for the court 22 to decide. Vasquez v. Residential Invs., Inc., 118 Cal. App. 4th 23 269, 24 negligence claim on the ground that nothing is alleged in the 25 complaint which would suggest that they owed a duty to Plaintiff 26 upon which to predicate a negligence claim. 27 28 elements 278 is fatal to a The absence of any one of these negligence claim. Gilmer v. The existence of a legal duty to use reasonable care in (2004). Defendants principally attack Plaintiff s Plaintiff s negligence claim is asserted against Countrywide, MERS, and Sierra Pacific. Plaintiff alleges that Countrywide, 15 1 MERS, and Sierra Pacific owed a duty to the Plaintiff to perform 2 acts in such a manner as to not cause Plaintiff harm. (Doc. 14 at 3 17.) 4 maintain the original Mortgage Note, failed to properly create 5 original documents, [and] failed to make required disclosures to 6 the Plaintiff. (Id.) 7 MERS and Sierra Pacific breached this duty of care when they took 8 payments to which they were not entitled, charged fees they were 9 not entitled to charge, and made or otherwise authorized negative 10 reporting of Plaintiff s creditworthiness to various credit bureaus 11 wrongfully. (Id.) 12 those in Castenda, 2009 WL 4640673 at *4, there found insufficient 13 to state a claim. 14 Defendants allegedly breached this duty when they failed to Consistent Plaintiff further alleges that Countrywide, These negligence allegations are identical to with his complaint, Plaintiff argues that 15 Defendants had a general duty not to harm Plaintiff. 16 of this theory, Plaintiff cites McGarry v. Sax, 158 Cal. App. 4th 17 983 (2008), Giraldo v. Department of Corrections & Rehabilitation, 18 168 Cal. App. 4th 231 (2008), and Peart v. Ferro, 119 Cal. App. 4th 19 60 (2004). 20 21 22 23 In support In McGarry, the court noted: Under general negligence principles and Civil Code section 1714, a person ordinarily is obligated to exercise due care in his or her own actions so as not to create an unreasonable risk of injury to others. This legal duty generally is owed to the class of persons who it is reasonably foreseeable may be injured as the result of the actor's conduct. 24 158 Cal. App. 4th at 995. 25 that [a]s a general principle, a defendant owes a duty of care to 26 all persons who are foreseeably endangered by his conduct, with 27 respect 28 dangerous. 168 Cal. App. 4th at 245 (internal quotation marks to all risks Similarly, the Giraldo court recognized which make 16 the conduct unreasonably 1 omitted). Finally, in Peart, the court noted that [u]nder general 2 principles of negligence law, persons have a duty to use due care 3 to avoid injury to others, and may be held liable if their careless 4 conduct 5 (internal quotation marks omitted). 6 injures another person. 119 Cal. App. 4th at 70-71 No issue is taken with these statements on the general duty of 7 care owed to others. 8 out of context. 9 cases. Plaintiff, however, takes these statements McGarry, Giraldo and Peart were personal injury In McGarry the plaintiff was injured at a skateboard park, 10 158 Cal. App. 4th at 987, in Giraldo the plaintiff was raped and 11 physically beaten, 168 Cal. App. 4th at 237, and in Peart the 12 plaintiff was injured in a watercraft collision, 119 Cal. App. 4th 13 at 65-67 & n.2. 14 articulated the general duty of care owed by persons to avoid 15 engaging in conduct that poses an unreasonable risk of personal 16 injury to foreseeable plaintiffs. 17 a personal injury case. 18 generalized harm caused by various lending-related activities. 19 Plaintiff has cited no authority to support the application of the 20 general duty of care in personal injury cases to avoid engaging 21 in conduct that poses an unreasonable risk of personal injury to 22 foreseeable plaintiffs to the lending field of commercial law. 23 As far as the case law reveals, the concept of duty in the lending 24 context is more nuanced than the general duty of care owed in 25 personal injury cases. 26 In each of these personal injury cases, the court This case, by contrast, is not At most, Plaintiff alleges some sort of Under California law, a lender does not owe a borrower or 27 third party any duties beyond 28 agreement, except those imposed due to special circumstance. 17 those expressed in the loan 1 Resolution Trust Corp. v. BVS Dev., 42 F.3d 1206, 1214 (9th Cir. 2 1994) (citing Nymark v. Heart Fed. Sav. & Loan Ass n, 231 Cal. App. 3 3d 1089, 1096 (1991)); see also Castaneda, 2009 WL 4640673 at *4 4 (concluding that a loan servicer owed no duty of care to the 5 plaintiff). 6 participates in the financed enterprise beyond the domain of the 7 usual money lender. Wagner v. Benson, 101 Cal. App. 3d 27, 35 8 (1980) (internal quotation marks omitted). 9 under a deed of trust is not a true trustee, and owes no fiduciary 10 obligations; [it] merely acts as a common agent for the trustor and 11 beneficiary of the deed of trust. [The trustee's] only duties are: 12 (1) upon default to undertake the steps necessary to foreclose the 13 deed of trust; or (2) upon satisfaction of the secured debt to 14 reconvey the deed of trust. Wong v. Am. Servicing Co., Inc., 2:09- 15 CV-01506 FCD/DAD, 2009 WL 5113516, at *6 (E.D. Cal. Dec. 18, 2009) 16 (alterations in original) (internal quotation marks omitted). Special circumstances arise when the lender actively Further, a trustee 17 The complaint fails to allege any facts that show special 18 circumstances, such as, that as a lender, Sierra Pacific actively 19 participated in the financed enterprise beyond the realm of the 20 usual 21 respective 22 actively participated in the financed enterprise beyond the usual 23 practices associated with the lending business, Wong, 2009 WL 24 5113516 at *6. There are no special circumstances alleged. Under 25 the facts pled, Defendants owed Plaintiff no duty of care. There 26 is no basis for the negligence claim. 27 motions money to lender, or capacities dismiss as are that Countrywide servicer GRANTED, 28 18 and and and nominee MERS, of in the their trust, The moving Defendants the negligence claim is 1 DISMISSED WITH LEAVE TO AMEND.6 2 D. RESPA Claim 3 1. Countrywide 4 Plaintiff asserts a RESPA claim against Countrywide, alleging 5 that Defendant Countrywide violated RESPA, 12 U.S.C. § 2605(e)(2), 6 by failing and refusing to provide a proper written explanation or 7 response to Plaintiff s QWR. (Doc. 14 at 15.) 8 that this RESPA claim is subject to dismissal because the complaint 9 does not allege facts showing that what Countrywide argues Plaintiff sent to 10 Countrywide constitutes a qualified written request under RESPA. 11 Countrywide contends that Plaintiff alleges, in conclusory fashion, 12 that he sent a Qualified Written Request to Countrywide without 13 alleging any facts to support this legal characterization of the 14 document. Countrywide is correct. 15 Section 2605 imposes certain disclosure obligations on loan 16 servicers who transfer or assume the servicing of a federally 17 related mortgage loan. 12 U.S.C. § 2605(b). 18 has to 19 qualified 20 specifically, 21 receives a qualified written request from the borrower (or an agent 22 of the borrower) for information relating to the servicing of such 23 loan to provide the borrower with a written acknowledgment of 24 receipt within twenty days. 25 a statutory duty written § respond request. 2605(e)(1)(A) 12 to a borrower's U.S.C. requires A loan servicer also a § inquiry 2605(e). loan servicer or More who A qualified written request is a written correspondence 26 27 28 6 At oral argument Plaintiff expressed some doubt about whether he could amend the complaint to state a viable negligence claim, but he still requested leave to amend. Rule 11 governs. 19 1 that (i) includes, or otherwise enables the servicer to identify, 2 the name and account of the borrower; and (ii) includes a statement 3 of the reasons for borrower s belief that the account is in error 4 or provides sufficient detail to the servicer regarding other 5 information sought by the borrower. § 2605(e)(1)(B)(i)-(ii). 6 term servicing means receiving any scheduled periodic payments 7 from a borrower pursuant to the terms of any loan . . . and making 8 the payments of principal and interest and such other payments with 9 respect to the amounts received from the borrower as may be 10 The required pursuant to the terms of the loan. § 2605(i)(3). After 11 receiving a qualified written request under § 12 2605(e)(1)(A), no later than sixty days afterwards, the loan 13 servicer is required to respond by making appropriate corrections 14 to the borrower's account, if necessary, and, after conducting an 15 investigation, providing the borrower with a written clarification 16 or explanation. § 2605(e)(2). Plaintiff alleges that on or about April 7, 2009, a Qualified 17 18 Written 19 included a demand to rescind the loan under the TILA provisions. 20 (Doc. 14 at 7.) 21 about the validity of the loan and not its servicing. Wong, 2009 WL 22 5113516 at *7. Nothing in the complaint indicates that the written 23 correspondence 24 Plaintiff s loan, which is required to qualify the correspondence 25 as 26 allegation 27 Request is insufficient. 28 "labels and conclusions" are insufficient to state a claim); see a Request qualified that was mailed to Defendant Countrywide and it A demand to rescind the loan is a communication to Countrywide written the concerned request under correspondence was the RESPA. a servicing A of conclusory Qualified Written See Twombly, 550 U.S. at 555 (mere 20 1 also Doe I v. Wal-Mart Stores, Inc., 572 F.3d 677, 683 (9th Cir. 2 2009). Similarly 3 insufficient is the complaint s conclusory 4 allegation that, apart from failing to respond to Plaintiff s 5 correspondence, Defendants, including Countrywide, engaged in a 6 pattern or practice of non-compliance with . . . § 2605. (Doc. 14 7 at 15.) 8 assertion. See Wong, 2009 WL 5113516 at *7 (dismissing a similar 9 claim). The motion to dismiss the RESPA claim against Countrywide is 10 11 There are no facts alleged to support this boilerplate GRANTED and this claim is DISMISSED WITH LEAVE TO AMEND. 12 2. Sierra Pacific 13 Plaintiff also asserts a RESPA claim against Sierra Pacific. 14 The complaint alleges that Sierra Pacific violated RESPA at the 15 time of closing of the Loan . . . by failing to correctly and 16 accurately comply with the disclosure requirements. (Doc. 14 at 17 15.) For several reasons, this claim fails. 18 First, it is entirely conclusory there are no facts alleged 19 that explain what information, if any, Sierra Pacific failed to 20 provide at closing. 21 No. CIV. 2:09-CV-578 WBS DAD, 2009 WL 4674904, at *6 (E.D. Cal. 22 Dec. 4, 2009) (dismissing identical RESPA claim due to conclusory 23 allegation of illegality). Second, to the extent this claim really 24 asserts a violation of § 2603, which requires a standard disclosure 25 at or before settlement, this section does not create a private 26 right of action. Lingad v. Indymac Fed. Bank, No. 2:09-cv-2347, __ 27 F. Supp. 2d __, 2010 WL 347994, at *6 (E.D. Cal. Jan. 29, 2010); 28 Olivier v. NDEX West, LLC, No. 1:09-CV-00099 OWW GSA, 2009 WL Blanco v. Am. Home Mortgage Servicing, Inc., 21 1 2486314, at *3 (E.D. Cal. Aug. 12, 2009). Third, the RESPA 2 disclosure provisions that do confer a private right of action do 3 not pertain to disclosures at a loan s closing. Lingad, 2010 WL 4 347994 at *7. 5 Plaintiff also alleges that Defendants, including Sierra 6 Pacific, engaged in a pattern and practice of non-compliance with 7 the requirements of § 2605. 8 supported by any other factual allegations and is insufficient to 9 state a claim. This conclusory allegation is not Sierra Pacific s motion to dismiss the RESPA claim against it 10 11 is GRANTED. At oral argument, Plaintiff indicated that he did not 12 believe he could amend the complaint to state a RESPA claim against 13 Sierra 14 DISMISSED WITHOUT LEAVE TO AMEND. 15 E. Pacific. The RESPA claim against Sierra Pacific is Fiduciary Duty Claim 16 Plaintiff asserts a claim against Sierra Pacific for breach of 17 fiduciary duty. Sierra Pacific argues that the complaint lacks any 18 facts to support the assertion that Sierra Pacific owed Plaintiff 19 a fiduciary duty. 20 In order to plead a cause of action for breach of fiduciary 21 duty, there must be shown the existence of a fiduciary 22 relationship, its breach, and damage proximately caused by that 23 breach. 24 cause of action. Brown v. Cal. Pension Adm rs & Consultants, Inc., 25 45 Cal. App. 4th 333, 347-48 (1996) (internal quotation marks 26 omitted). 27 arms-length and there is no fiduciary relationship between the 28 borrower The absence of any one of these elements is fatal to the Absent special circumstances, a loan transaction is at and lender. Keen, 2009 22 WL 3380454 at *7 (internal 1 quotation marks omitted). 2 institution and its borrower-client is not fiduciary in nature. 3 commercial lender is entitled to pursue its own economic interests 4 in a loan transaction. Nymark, 231 Cal. App. 3d at 1093 n.1 5 (internal citation omitted). 6 obligations of a fiduciary . . . to subordinate its interests to 7 act on behalf of and for the benefit of another. Id. 8 Here, no special circumstances are pled. 9 The relationship between a lending A This right is inconsistent with the Nothing in the complaint suggests that Sierra Pacific acted as anything other than 10 a typical lender. 11 give rise to a fiduciary relationship between Sierra Pacific and 12 Plaintiff. To the extent the complaint alleges that Sierra Pacific 13 breached 14 insufficiently pled and subject to dismissal. a Plaintiff has failed to allege any facts that fiduciary Alternatively, 15 liability duty owed Plaintiff is to Plaintiff, appears derived from to an this assert agency claim that is Sierra 16 Pacific s relationship 17 between certain individuals, including Norberg and Desilva, and 18 Plaintiff who acted as the principal. In turn, Norberg and Desilva 19 acted as agents for Sierra Pacific, these agents (not Sierra 20 Pacific) breached a fiduciary duty they owed to Plaintiff, and 21 Sierra Pacific is secondarily responsible for their conduct. A lender may . . . be secondarily liable through the actions 22 23 of a mortgage broker, who has a fiduciary duty to its 24 borrower-client, but only if there is an agency relationship 25 between the lender and the broker. Gonzalez, 2010 WL 144862 at 26 *13. 27 to plausibly suggest an agency relationship existed between Sierra The problem with this theory is that there are no facts pled 28 23 1 Pacific (the lender) and Norberb or Desilva. Absent such facts, 2 Sierra Pacific cannot be pursued on a secondary liability theory. 3 Id. Sierra Pacific s motion to dismiss the fiduciary duty claim is 4 5 GRANTED, and this claim is DISMISSED WITHOUT LEAVE TO AMEND.7 6 F. Fraud Claim 7 Plaintiff asserts a fraud claim against Countrywide, MERS, and 8 Sierra Pacific. The moving defendants argue that Plaintiff s fraud 9 claim is insufficiently pled under Rule 9(b). With respect to Sierra Pacific, the complaint alleges that it 10 11 directed, 12 fraudulently induce Plaintiff to enter into his loan transaction. 13 (Doc. 14 at 17.) 14 that 15 "Defendants" 16 "secondary market, then "pooled" these loans into trusts, and 17 issued new securities backed by the pool. (Id. at 5, 7) 18 scheme, Sierra Pacific's borrowers, including Plaintiff, "were 19 steered and encouraged into loans with terms unfavorable to them, 20 or loans which the borrowers . . . were not qualified to obtain." 21 (Id. at 8.) 22 his With authorized, loan participated in a scheme to Elsewhere in the complaint, Plaintiff asserts was part pursuant respect or to to of a larger which they Countrywide, the "scheme" sold perpetrated home complaint loans on by the Under this alleges that 23 Countrywide misrepresented to Plaintiff that Countrywide has the 24 right to collect monies from Plaintiff on its behalf or on behalf 25 26 27 7 At oral argument, when asked about leave to amend, Plaintiff conceded that dismissal of this claim should be without leave to amend. 28 24 1 of others when Defendant Countrywide had no legal right to collect 2 such monies. (Id. at 17.) 3 MERS misrepresented to Plaintiff on the Deed of Trust that it is 4 a qualified beneficiary with the ability to assign or transfer the 5 Deed of Trust and/or the Note and/or substitute trustees under the 6 Deed of Trust. (Id. at 17-18.) As to MERS, the complaint alleges that 7 In California, [t]he elements of fraud, which give[ ] rise to 8 the tort action for deceit, are (a) misrepresentation (false 9 representation, concealment, or nondisclosure); (b) knowledge of 10 falsity (or scienter); (c) intent to defraud, i.e., to induce 11 reliance; (d) justifiable reliance; and (e) resulting damage. 12 Small v. Fritz Companies, Inc., 30 Cal. 4th 167, 173 (2003) 13 (internal quotation marks omitted). 14 subject to Rule 9(b) s elevated pleading standard, which Plaintiff 15 has failed to meet with respect to each moving defendant. Plaintiff s fraud claim is 16 As to Sierra Pacific, the allegations in the complaint fail to 17 specify the who, what, when, where, and how of the misconduct 18 charged, Kearns, 567 F.3d at 1124 (internal quotation marks 19 omitted). 20 specific 21 fraudulently induce Plaintiff to enter into his loan transaction, 22 or when and where the scheme occurred. See Swartz, 476 F.3d at 764- 23 65 (concluding that, in a fraud suit involving multiple defendants, 24 a plaintiff must identif[y] the role each defendant played in 25 the 26 separately of the allegations surrounding his alleged participation 27 in the fraud ) (alteration in original) (internal quotation marks The complaint provides no particular details on what role alleged Sierra fraudulent Pacific played scheme, 28 25 in informing the scheme each to defendant 1 omitted); Vess, 317 F.3d at 1106 (concluding that a fraudulent 2 conspiracy claim failed to satisfy Rule 9(b) because, among other 3 things, the pleading failed to provide the particulars of when, 4 where, or how the alleged conspiracy occurred ). 5 complaint fails to specify what particular misrepresentation was 6 involved in the fraudulent scheme. 7 certain 8 material facts, including, but not limited to, interest rates, 9 financing agents made options, for false this The complaint alleges that statements availability loan . of . In addition, the to Plaintiff financing, . [which and were] regarding Plaintiff s 10 qualification designed to 11 fraudulently induce Plaintiff to enter into his transaction. (Doc. 12 14 at 17.) 13 false statements were, when they were made, and how they were 14 false. 15 what particular misrepresentation(s) are at issue in the fraud 16 claim. 17 out. The complaint, however, fails to specify what these Sierra Pacific, or any defendant, is not required to guess Under Rule 9(b), the obligation is on Plaintiff to spell it 18 The complaint s allegation of a larger scheme in which 19 defendants sold home loans on the "secondary market, "pooled" 20 these loans into trusts, and issued new securities backed by the 21 pool, is similarly deficient under Rule 9(b). 22 identified the role each defendant played in this fraudulent 23 scheme, when and where the scheme occurred, or details on the 24 specific misrepresentation involved in the fraudulent scheme. 25 As to Countrywide, the allegation Plaintiff has not that Countrywide 26 "misrepresented to Plaintiff that Countrywide has the right to 27 collect monies from Plaintiff on its behalf or on behalf of others 28 26 1 when Defendant Countrywide had no legal right to collect such 2 monies," fails to satisfy Rule 9(b). 3 the 4 statement was made, where it was made, and how it was false. 5 specific content of the false No details are provided on representation, when the Finally, as to MERS, the complaint is also deficient with 6 respect to the allegation 7 Plaintiff on the Deed of Trust that it is a qualified beneficiary 8 with the ability to assign or transfer the Deed of Trust and/or the 9 Note and/or substitute trustees under the Deed of Trust and (ii) that it (i) MERS followed the misrepresented applicable to 10 MERS 11 requirements to transfer the Note and Deed of Trust to subsequent 12 beneficiaries. 13 the particular verbal or written misrepresentations at issue, when 14 they were made, where they were made, and how or why they are 15 false. See Morgera v. Countrywide Home Loans, Inc., No. 2:09-cv- 16 1476-MCE-GGH, 2010 WL 160348, at *6 (E.D. Cal. Jan. 11, 2010) 17 (dismissing same fraud claim as to MERS for failure to satisfy Rule 18 9(b) requirements); Webb v. Indymac Bank Home Loan Servicing, No. 19 CIV 2:09-2380 WBS DAD, 2010 WL 121084, at *4 (E.D. Cal. Jan. 7, 20 2010) (same).8 21 misrepresented that legal Missing from the complaint are facts specifying In addition, and apart from Rule 9(b), under California law, 22 23 24 25 26 27 8 To the extent any fraud claim against Countrywide, MERS or any defendant is tied to or involves the theory that possession of the original promissory note is a prerequisite to the initiation of non-judicial foreclosure, this theory lacks merit. See Castaneda, 2009 WL 4640673 at *7 ( Under California law, there is no requirement for the production of the original note to initiate a non-judicial foreclosure. ); see also Nool v. HomeQ Servicing, 653 F. Supp. 2d 1047, 1053 (E.D. Cal. 2009). 28 27 1 resulting damage is a necessary element of fraud. 2 stage, the pleading must show a cause and effect relationship 3 between the fraud and damages sought; otherwise no cause of action 4 is stated. Commonwealth Mortgage Assurance Co. v. Superior Court, 5 211 Cal. App. 3d 508, 518 (1989). 6 argues, does not indicate how Plaintiff was damaged by MERS s 7 alleged misrepresentations. 8 conclusory 9 damages (Doc. 14 at 18) as a result of the fraud. fashion, that At the pleading The complaint, as MERS correctly Instead, the complaint states, in Plaintiff was harmed and suffered Absent facts to 10 plausibly suggest a causal connection between the alleged fraud and 11 some damage to Plaintiff, the fraud claim is insufficiently pled. 12 The motions to dismiss the fraud claim are GRANTED, and this 13 claim is DISMISSED WITH LEAVE TO AMEND. 14 G. 15 UCL Claim The complaint alleges that Countrywide, MERS, and Sierra 16 Pacific engaged in unlawful, unfair, and/or unfair business 17 practices in violation of California s Unfair Competition Law 18 ( UCL ), Business & Professions Code § 17200 et seq. (Doc. 14 at 19 18.) The complaint does not assert any particular facts in support 20 of this claim; rather, the pleading indiscriminately incorporates 21 by reference all prior allegations in the complaint. (Id.) 22 The UCL prohibits unfair competition including any unlawful, 23 unfair or fraudulent business act or practice. Cal. Bus. & Prof. 24 Code § 17200. 25 it applies separately to business acts or practices that are (1) 26 unlawful, (2) unfair, or (3) fraudulent. See Pastoria v. Nationwide 27 Ins., 112 Cal. App. 4th 1490, 1496 (2003). Because the statute is written in the disjunctive, 28 28 Each prong of the UCL 1 is a separate and distinct theory of liability; thus, the unfair 2 practices prong offers an independent basis for relief. Kearns, 3 567 F.3d at 1127. 4 As to the unlawful prong, the UCL incorporates other laws and 5 treats violations of those laws as unlawful business practices 6 independently actionable under state law. 7 Life Ins. Co., 225 F.3d 1042, 1048 (9th Cir. 2000). 8 unfair prong, [a]n unfair business practice is one that either 9 offends an established public policy or is immoral, unethical, 10 oppressive, unscrupulous or substantially injurious to consumers. 11 McDonald v. Coldwell Banker, 543 F.3d 498, 506 (9th Cir. 2008) 12 (quoting People v. Casa Blanca Convalescent Homes, Inc., 159 Cal. 13 App. 3d 509, 530 (1984)). 14 acts are ones where members of the public are likely to be 15 deceived. Sybersound Records, Inc. v. UAV Corp., 517 F.3d 1137, 16 1151-52 (9th Cir. 2008). Chabner v. United Omaha As to the As to the fraudulent prong, fraudulent 17 Plaintiff s UCL claim has several deficiencies. First, to the 18 extent Plaintiff asserts a UCL claim based on a violation of other 19 law, his complaint fails to state a claim for a violation of TILA, 20 RESPA, or any other law. 21 is predicated on the violation of other law, it is insufficiently 22 pled. Second, to the extent Plaintiff seeks to impose liability on 23 Countrywide, 24 practices, the complaint fails to indicate which particular acts or 25 practices Plaintiff is relying upon to advance this claim, or what 26 acts or practices each defendant did which constitute unfair acts 27 or practices. MERS, or Accordingly, to the extent the UCL claim Sierra Pacific for unfair business Third, to the extent Plaintiff asserts a UCL claim 28 29 1 that 2 requirements of Rule 9(b), Kearns, 567 F.3d at 1124-27, Vess, 317 3 F.3d at 1103-04, which it does not. 4 what particular role each defendant played in the fraudulent 5 conduct or scheme, when and where the scheme occurred, or details 6 on 7 scheme. 10 the based specific on or grounded in misrepresentation fraud, it must meet the The complaint fails to specify involved in the fraudulent The motions to dismiss the UCL are GRANTED, and this claim is 8 9 is DISMISSED WITH LEAVE TO AMEND. H. Breach of Contract Claim 11 The complaint asserts a claim for breach of contract against 12 Sierra Pacific. As alleged, Plaintiff entered into an agreement 13 with Defendant[] Sierra Pacific . . . whereby [it] promised to 14 provide Plaintiff with an affordable loan. (Doc. 14 at 19.) 15 Sierra Pacific allegedly breached this agreement in a number of 16 respects. 17 To state a claim for breach of contract under California law, 18 Plaintiff must allege: (1) the existence of a contract; (2) his 19 performance or excuse for non-performance of the contract; (3) 20 Sierra Pacific s breach of the contract; and (4) resulting damage. 21 Harris v. Rudin, Richman & Appel, 74 Cal. App. 4th 299, 307 (1999). 22 Plaintiff s breach of contract claim against Sierra Pacific is 23 deficient in at least two respects. First, the complaint lacks any 24 facts to plausibly suggest that a contract existed between Sierra 25 Pacific and Plaintiff to provide Plaintiff with an affordable 26 loan. 27 Plaintiff alleges that Sierra Pacific entered into a loan 28 30 1 agreement with 2 memorialized in a Promissory Note, which was secured by a Deed of 3 Trust. (Doc. 14 at 7.) 4 that among the terms memorialized in the Promissory Note was a 5 written provision to provide Plaintiff with an affordable loan. 6 In 7 memorialized, he spoke with Defendant Desilva who was a loan 8 officer for Defendant Financial [Advantage Inc.]. (Doc. 14 at 6.) 9 Desilva advised Plaintiff that Desilva could get Plaintiff the 10 best deal and the best interest rates available on the market. 11 (Doc. 14 at 6.) 12 and that these statements support the inference that Desilva 13 offered to provide Plaintiff with an affordable loan, there are 14 no facts pled in the complaint to suggest that Desilva was an 15 employee or agent of Sierra Pacific or that Sierra Pacific was even 16 aware of Desilva s statements and agreed to them. 17 lacks any facts to suggest that Sierra Pacific, whether in writing 18 or orally, ever entered into a contract with Plaintiff to provide 19 him 20 (dismissing breach of contract claim with same allegations). addition, an Plaintiff and the terms of the loan were The complaint, however, does not allege Plaintiff alleges that before the loan was Even assuming that Desilva made these statements, affordable loan. See Lingad, 2010 The complaint WL 347994 at *9 Second, Plaintiff s breach of contract claim against Sierra 21 22 Pacific 23 Plaintiff with affordable loan is too vague and indefinite to 24 form 25 sufficiently 26 reasonably certain. Alexander v. Codemasters Group Ltd., 104 Cal. 27 App. 4th 129, 141 (2002) (internal quotation marks omitted). a also fails contract. because To definite the form ... a that 28 31 alleged agreement contract, the an to offer performance provide must be promised is In 1 the lending context, [a] loan commitment is not binding on the 2 lender unless it contains all of the material terms of the loan, 3 which include the identity of the lender and borrower, the amount 4 of the loan, and the terms for repayment. Peterson Dev. Co. v. 5 Torrey Pines Bank, 233 Cal. App. 3d 103, 115 (1991) (alteration in 6 original) (internal quotation marks omitted). 7 A purported agreement to provide an affordable loan is not 8 sufficiently definite that the performance promised is reasonably 9 certain. Even if it were tantamount to a loan commitment, it lacks 10 the material terms necessary to form an enforceable contract. 11 alleged commitment to provide an affordable loan is too vague and 12 uncertain to form a contract between Plaintiff and Sierra Pacific. 13 See Blanco, 2009 WL 4674904 at *7 (analyzing the same alleged 14 promise to provide an affordable loan and concluding [s]uch a 15 vague 16 contract ); see also See Hardy v. Indymac Federal Bank, __ F.R.D__, 17 2009 WL 2985446, at *5 (E.D. Cal. Sept. 15, 2009). promise is not sufficient to show the existence The of a Sierra Pacific s motion to dismiss the breach of contract 18 19 claim against it is GRANTED WITH LEAVE TO AMEND. 20 I. Implied Covenant Claim Plaintiff asserts a claim against Sierra Pacific for breach of 21 22 the implied covenant of good faith and fair dealing. 23 covenant of good faith and fair dealing exists in every contract. 24 The implied covenant is aimed at making effective the agreement's 25 promises. Kransco v. Am. Empire Surplus Lines Ins. Co., 23 Cal.4th 26 390, 27 stated, that covenant requires that neither party do anything which 400 (2000) (internal quotation 28 32 marks The implied omitted). Broadly 1 will deprive the other of the benefits of the agreement. Freeman 2 & Mills, Inc. v. Belcher Oil Co., 11 Cal. 4th 85, 91 (1995) 3 (internal 4 prevent[s] a contracting party from engaging in conduct which 5 (while 6 frustrates 7 contract. Racine & Laramie, Ltd. v. Dep t of Parks & Recreation, 8 11 Cal. App. 4th 1026, 1031-32 (1992) (internal quotation marks 9 omitted). not quotation marks technically the other omitted). The transgressing party's rights the to implied express the covenant covenants) benefits of the 10 The implied covenant does not extend beyond the terms of the 11 contract at issue. Poway Royal Mobilehome Owners Ass'n v. City of 12 Poway, 149 Cal. App. 4th 1460, 1477 (2007). 13 covenant of good faith and fair dealing is limited to assuring 14 compliance with the express terms of the contract. Pasadena Live, 15 LLC v. City of Pasadena, 114 Cal. App. 4th 1089, 1094 (2004) 16 (internal quotation marks omitted). 17 action for breach of the implied covenant of good faith and fair 18 dealing is the existence of a contractual relationship between the 19 parties . . . . Smith v. City & County of San Francisco, 225 Cal. 20 App. 3d 38, 49 (1990). 21 fair dealing rests upon the existence of some specific contractual 22 obligation and there is no obligation to deal fairly or in good 23 faith absent an existing contract. Racine & Laramie, Ltd., 11 Cal. 24 App. 4th at 1031-32. 25 Instead, the implied The prerequisite for any The implied covenant of good faith and Here, as Sierra Pacific correctly argues, Plaintiff s implied 26 covenant claim is insufficiently pled for two reasons. 27 complaint does not allege or identify what underlying contract 28 33 First, the 1 between Sierra Pacific and Plaintiff forms the basis for this 2 claim. 3 faith and fair dealing was implied by law into the contract at 4 issue (Doc. 14 at 20) without ever identifying that contract. 5 the extent the contract at issue is the alleged promise to provide 6 an affordable loan, this vague and indefinite commitment cannot 7 supply the predicate contract between Sierra Pacific and Plaintiff. 8 Second, the implied covenant claim is also deficient in that 9 it fails to identify any acts that Sierra Pacific committed which Instead, the complaint merely alleges that a duty of good To 10 allegedly constitute a breach of the implied covenant. 11 extent the contract at issue is the loan agreement memorialized in 12 the Promissory Note, Plaintiff has not alleged any conduct by 13 Sierra Pacific that frustrated Plaintiff s rights to the benefits 14 of any express provision in that contract. See Lingad, 2010 WL 15 347994 at *10 (concluding same implied covenant claim failed 16 because Plaintiff had not alleged what contract form[ed] the basis 17 of [the] claim; nor . . . identified any express provision which 18 ha[d] been frustrated by [defendant s] conduct ). 19 20 To the Sierra Pacific s motion to dismiss the implied covenant claim against it is GRANTED WITHOUT LEAVE TO AMEND.9 21 22 V. 23 For the reasons stated: 24 1. 25 CONCLUSION As to the TILA claim for damages, Sierra Pacific s motion to dismiss is GRANTED, and this claim is DISMISSED WITH LEAVE TO 26 27 9 At oral argument, Plaintiff agreed that dismissal of this claim should be without leave to amend. 28 34 1 AMEND. 2 were hidden that prevented him from discovering his claim, and how 3 those hidden facts relate to the TILA violations Sierra Pacific 4 allegedly committed. 5 2. Plaintiff shall have one opportunity to allege what facts As to the TILA claim for rescission, Sierra Pacific s 6 motion to dismiss is GRANTED, and this claim is DISMISSED WITH 7 LEAVE TO AMEND. 8 9 10 11 3. As to the RFDCPA claims against Countrywide and Sierra Pacific, the motions to dismiss are GRANTED, and these claims are DISMISSED WITH LEAVE TO AMEND. 4. As to the negligence claims against Countrywide, MERS, 12 and Sierra Pacific, the motions to dismiss are GRANTED, and these 13 claims are DISMISSED WITH LEAVE TO AMEND. 14 5. As to the RESPA claim against Countrywide, its motion to 15 dismiss is GRANTED, and this claim is DISMISSED WITH LEAVE TO 16 AMEND. 17 6. As to the RESPA claim against Sierra Pacific, its motion 18 to dismiss is GRANTED, and this claim is DISMISSED WITHOUT LEAVE TO 19 AMEND. 20 7. As to the fiduciary duty claim against Sierra Pacific, 21 the motion to dismiss is GRANTED, and this claim is DISMISSED 22 WITHOUT LEAVE TO AMEND. 23 8. As to the fraud claims against Countrywide, MERS, and 24 Sierra Pacific, the motions to DISMISS are GRANTED, and these 25 claims are DISMISSED WITH LEAVE TO AMEND. 26 27 9. As to the UCL claims against Countrywide, MERS, and Sierra Pacific, the motions to DISMISS are GRANTED, and these 28 35 1 claims are DISMISSED WITH LEAVE TO AMEND. 10. 2 As to the breach of contract claim against Sierra 3 Pacific, the motion to dismiss is GRANTED, and this claim is 4 DISMISSED WITH LEAVE TO AMEND. 11. 5 As to the implied covenant claim against Sierra Pacific, 6 the motion to dismiss is GRANTED, and this claim is DISMISSED 7 WITHOUT LEAVE TO AMEND. Any amended complaint is due within thirty (30) days from the 8 9 date of electronic service of this Memorandum Decision. Any 10 responsive pleading is due within thirty (30) days from the date of 11 electronic service of any such amended complaint. Defendants shall submit a form of order consistent with, and 12 13 within five (5) days 14 Memorandum Decision. 15 IT IS SO ORDERED. 16 Dated: 9i274f February 16, 2010 following electronic service /s/ Oliver W. Wanger UNITED STATES DISTRICT JUDGE 17 18 19 20 21 22 23 24 25 26 27 28 36 of, this

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