Moore v. Wells Fargo Bank, N.A. et al, No. 3:2014cv01342 - Document 9 (S.D. Cal. 2014)
Court Description: ORDER Granting 4 Defendant's Motion to Dismiss; Denying as moot 8 Motion for Leave to Appear Telephonically at Hearing. The hearing set for September 5, 2014 at 1:30 p.m. is Vacated. Plaintiff is granted thirty (30) days to file an amended complaint. Signed by Judge Gonzalo P. Curiel on 9/3/2014. (srm)
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Moore v. Wells Fargo Bank, N.A. et al Doc. 9 1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT 8 SOUTHERN DISTRICT OF CALIFORNIA 9 RONALD MOORE, an individual, 10 vs. 11 12 13 Plaintiff, WELLS FARGO BANK, N.A., a business entity; and DOES 1 through 10, inclusive, 14 CASE NO. 14cv1342-GPC-RBB ORDER GRANTING DEFENDANT’S MOTION TO DISMISS [Dkt. No. 4.] Defendants. 15 16 On June 9, 2014, Defendant Wells Fargo Bank, N.A. (“Defendant”) filed a 17 motion to dismiss Plaintiff Ronald Moore’s (“Plaintiff”) Complaint pursuant to Federal 18 Rules of Civil Procedure 12(b)(6), (Dkt. No. 4), and a related request for judicial 19 notice, (Dkt. No. 4-2). The motion has been fully briefed. (Dkt. Nos. 6, 7.) Pursuant to 20 L. Civ. R. 7.1(d)(1), the Court finds the matter suitable for adjudication without oral 21 argument. For the following reasons, the Court GRANTS Defendant’s Motion to 22 Dismiss Plaintiff’s Complaint. I. BACKGROUND1 23 24 In April 2002, Plaintiff purchased the property located at 1573 Skylark Way, 25 1 Unless otherwise noted, the factual background is taken from the Complaint, 26 (Dkt. No. 1-1, Notice of Removal Ex. A), and Defendant’s Request for Judicial Notice, (Dkt. No. 4, “RJN,” Exhibits A-J). Defendants asks the Court to take judicial notice of 27 exhibits A-J. (Dkt. No. 4-2.) Pursuant to Federal Rule of Evidence 201, the Court takes judicial notice of these documents because they are matters of public record or, 28 alternatively, Plaintiff has cited to them in his Complaint. See Lee v. City of Los Angeles, 250 F.3d 668, 689 (9th Cir. 2001). See also, infra, Section III. -1- 14cv1342-GPC-RBB Dockets.Justia.com 1 Chula Vista, California, 91911 (“Property”). (Dkt. No. 1-1, Notice of Removal Ex. 2 A, “Compl.” ¶ 15.) On December 19, 2006, Plaintiff completed a loan (“Loan”) 3 secured by the Property, in the amount of $409,500.00. (RJN, Ex. A at 1-3.) 4 Plaintiff alleges Defendant acquired the Loan “on around 2010.” (Compl. ¶ 17.) 5 Plaintiff alleges learning that Defendant acquired his Loan in 2011. (Id. ¶ 18.) 6 Plaintiff alleges he was “paying approximately $2165.49 on his monthly mortgage” 7 and “began contacting [Defendant] in an effort to get a loan modification.” (Id. ¶¶ 8 18-19.) Plaintiff alleges Defendant then “informed Plaintiff over the phone that he 9 qualified for a loan modification” after “months of review.” (Id. ¶ 20.) Plaintiff 10 further alleges that Defendant informed Plaintiff that he was to start a “Trial 11 Payment Plan,” under which Plaintiff would make three months of payments at 12 $2216.492 per month in exchange for a loan modification contract that “would 13 reflect a lower amount.” (Id. ¶¶ 20-21.) Plaintiff alleges completing “all three 14 payments on the [Trial Payment Plan]” and that he “continually contacted and 15 waited for Defendant WELLS to provide a written contract with the correct lower 16 amount.” (Id. ¶ 24.) 17 Plaintiff further alleges he repeatedly asked Defendant for a written contract 18 memorializing the terms of the Trial Payment Plan and loan modification while 19 making payments, though Defendant failed to provide one. (Id. ¶¶ 22-25.) 20 Additionally, Plaintiff alleges while he “was attempting to figure out the 21 modification system, [he] was trying to re-start the loan modification process. 22 Plaintiff began sending the same financial paperwork he had sent before to 23 Defendants and continued to do so until late 2013.” (Id. ¶ 26.) Plaintiff alleges he 24 “would send all necessary documents to Defendant WELLS countless times, and 25 each time Defendants stated that they couldn’t find the documents or to call back 26 later.” (Id. ¶ 27.) Plaintiff alleges, as of the filing of his Complaint on March 27, 27 28 2 The Court notes that some allegations in Plaintiff’s Complaint state the Trial Payment Plan payments amount as $2219.49 per month. (See Compl. ¶ 35.) -2- 14cv1342-GPC-RBB 1 2014, “Plaintiff has not been denied a loan modification and for all Plaintiff knows, 2 is still considered to be under review.” (Id. ¶ 28.) 3 In addition, Plaintiff alleges receiving “an incessant amount of phone calls 4 daily to his home and his cell phone, from representatives of Defendants, attempting 5 to collect payments. Plaintiff requested every time for Defendants to stop contacting 6 him but was unsuccessful.” (Id. ¶ 27.) 7 On March 27, 2014, Plaintiff filed the present lawsuit before the San Diego 8 County Superior Court. (Id. at 1.) Plaintiff’s Complaint alleges five causes of 9 action: (1) breach of contract; (2) promissory estoppel; (3) breach of the implied 10 covenant of good faith and fair dealing; (4) unfair business practices in violation of 11 California Business and Professions Code section 17200 et seq.; and (5) violation of 12 the Rosenthal Fair Debt Collection Practices Act, California Civil Code sections 13 1788-1788.3. (Id.) 14 On June 2, 2014, Defendant removed this action to federal court. (Dkt. No. 1, 15 Notice of Removal.) Presently before the Court is Defendant’s Motion to Dismiss 16 Plaintiff’s Complaint for Failure to State a Claim. (Dkt. No. 4.) 17 18 II. STANDARD A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) tests the 19 sufficiency of a complaint. Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). 20 Dismissal is warranted under Rule12(b)(6) where the complaint lacks a cognizable 21 legal theory. Robertson v. Dean Witter Reynolds, Inc., 749 F.2d 530, 534 (9th Cir. 22 1984); see Neitzke v. Williams, 490 U.S. 319, 326 (1989) (“Rule12(b)(6) authorizes 23 a court to dismiss a claim on the basis of a dispositive issue of law.”). Alternatively, 24 a complaint may be dismissed where it presents a cognizable legal theory yet fails to 25 plead essential facts under that theory. Robertson, 749 F.2d at 534. While a plaintiff 26 need not give “detailed factual allegations,” a plaintiff must plead sufficient facts 27 that, if true, “raise a right to relief above the speculative level.” Bell Atlantic Corp. 28 v. Twombly, 550 U.S. 544, 545 (2007). “To survive a motion to dismiss, a -3- 14cv1342-GPC-RBB 1 complaint must contain sufficient factual matter, accepted as true, to ‘state a claim 2 to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) 3 (quoting Twombly, 550 U.S. at 547). A claim is facially plausible when the factual 4 allegations permit “the court to draw the reasonable inference that the defendant is 5 liable for the misconduct alleged.” Id. In other words, “the non-conclusory ‘factual 6 content,’ and reasonable inferences from that content, must be plausibly suggestive 7 of a claim entitling the plaintiff to relief.” Moss v. U.S. Secret Service, 572 F.3d 8 962, 969 (9th Cir. 2009). “Determining whether a complaint states a plausible claim 9 for relief will . . . be a context-specific task that requires the reviewing court to draw 10 on its judicial experience and common sense.” Iqbal, 556 U.S. at 679. 11 In reviewing a motion to dismiss under Rule 12(b)(6), the court must assume 12 the truth of all factual allegations and must construe all inferences from them in the 13 light most favorable to the nonmoving party. Thompson v. Davis, 295 F.3d 890, 895 14 (9th Cir. 2002); Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336, 337-38 (9th Cir. 1996). 15 Legal conclusions, however, need not be taken as true merely because they are cast 16 in the form of factual allegations. Ileto v. Glock, Inc., 349 F.3d 1191, 1200 (9th Cir. 17 2003); W. Mining Council v. Watt, 643 F.2d 618, 624 (9th Cir. 1981). When ruling 18 on a motion to dismiss, the court may consider the facts alleged in the complaint, 19 documents attached to the complaint, documents relied upon but not attached to the 20 complaint when authenticity is not contested, and matters of which the court takes 21 judicial notice. Lee v. Los Angeles, 250 F.3d 668, 688-89 (9th Cir. 2001). 22 III. DISCUSSION 23 A. Judicial Notice 24 Defendant seeks judicial notice of ten documents: (1) a deed of trust recorded 25 in the San Diego County Recorder’s Office on December 13, 2006; (2) a Certificate 26 of Corporate Existence dated April 21, 2006; (3) a letter on Office of Thrift 27 Supervision letterhead authorizing a name change from World Savings Bank, FSB 28 to Wachovia Mortgage, FSB (“Wachovia”); (4) the charter of Wachovia Mortgage, -4- 14cv1342-GPC-RBB 1 FSB; (5) an official certification by the Comptroller of the Currency, Administrator 2 of National Banks; (6) a printout from the website of the Federal Deposit Insurance 3 Corporation showing the history of World Savings Bank, FSB; (7) a Notice of 4 Default and Election to Sell Under Deed of Trust dated December 5, 2012 and 5 recorded on December 6, 2012; (8) a Notice of Trustee’s Sale dated December 6, 6 2012; (9) a Home Affordable Modification Agreement dated and signed by Plaintiff 7 on July 31, 2013; and (10) a Notice of Rescission of Notice of Default dated 8 September 3, 2013. (Dkt. No. 4-2.) 9 Under Federal Rule of Evidence 201(b), a district court may take notice of 10 facts not subject to reasonable dispute that are capable of accurate and ready 11 determination by resort to sources whose accuracy cannot reasonably be questioned. 12 Fed. R. Evid. 201(b); see also Lee v. City of Los Angeles, 250 F.3d 668, 689 (9th 13 Cir. 2001) (noting that the court may take judicial notice of undisputed matters of 14 public record), overruled on other grounds by Galbraith v. County of Santa Clara, 15 307 F.3d 1119, 1125-26 (9th Cir. 2002). Courts have routinely taken judicial notice 16 of records filed with the county recorder. See e.g., Reyna Pasta Bella, LLC v. Visa 17 USA, Inc., 442 F.3d 741, 746 n. 6 (9th Cir. 2006); Liebelt v. Quality Loan Serv. 18 Corp., 2011 WL 741056, at *6 n. 2 (N.D. Cal. 2011); Reynolds v. Applegate, 2011 19 WL 560757, at *1 n. 2 (N.D. Cal. 2011); Giordano v. Wachovia Mortg., FSB, 2010 20 WL 5148428, at * 1 n. 2 (N.D. Cal. 2011). Here, Plaintiff does not object to 21 Defendants’ Request for Judicial Notice, and the documents are publically recorded 22 documents or official documents whose accuracy cannot reasonably be questioned. 23 Thus, the Court finds that the accuracy of these documents cannot reasonably be 24 questioned. Accordingly, the Court hereby takes judicial notice of Exhibits 1-10. 25 B. Motion to Dismiss 26 Defendant moves to dismiss all five causes of action in Plaintiff’s Complaint 27 for failure to state a plausible claim for relief pursuant to Federal Rules of Civil 28 Procedure 12(b)(6). (Dkt. No. 4.) The Court addresses each cause of action in turn. -5- 14cv1342-GPC-RBB 1 1. 2 Plaintiff alleges Defendant verbally told Plaintiff he qualified for a loan Breach of Contract 3 modification that would increase his monthly payment by $100.00 per month for 4 three months under a Trial Payment Plan and then his loan would be “fixed at the 5 previous lower amount.” (Compl. ¶¶ 32-34.) In reliance on this verbal agreement, 6 Plaintiff “fully performed on the Trial Payment Plan and provided all three 7 payments that were required under the Plan.” (Id. ¶ 34.) Plaintiff alleges Defendant 8 thereafter “refused to provide any paperwork supplementing their previous promise 9 to Plaintiff” and has “refused to review Plaintiff for another loan modification.” 10 (Id.) 11 Defendant moves to dismiss Plaintiff’s breach of contract claim on the ground 12 that the HAMP Modification Agreement (“HAMP Agreement”) entered into by the 13 Parties in or around July 2013 demonstrates that Defendant in fact granted Plaintiff 14 a loan modification. (Dkt. No. 4-1 at 6.) Defendant argues the HAMP Agreement 15 expressly stated that it superceded the terms of any previous modification 16 previously agreed to by the parties, barring Plaintiff from enforcing an alleged oral 17 loan modification agreement between the Parties other than the HAMP agreement. 18 (Id.) Defendant further argues the oral contract Plaintiff alleges is barred by the 19 statute of frauds, which requires any agreement to create, renew, or extend a 20 mortgage to be in writing. (Id.) (citing Cal. Civ. Code § 2922; Cal. Civ. Code § 21 1924(a)(3); Secrest v. Security National Mortgage Loan Trust 2002, 167 Cal. App. 22 4th 544, 552-554 (2008)). 23 Plaintiff responds that his Complaint “clearly alleges Defendant’s breach of 24 the oral agreement.” (Dkt. No. 6 at 6.) Plaintiff argues Defendant “promised him 25 that once [the Trial Plan Payments] were made, the loan would be permanently 26 modified at a lower amount.” (Id.) Plaintiff argues “Wells Fargo led Plaintiff to 27 believe that the agreement he was signing was temporary and that they would honor 28 their promise to reduce his monthly payment.” (Id.) Plaintiff further argues the -6- 14cv1342-GPC-RBB 1 alleged oral agreement falls within an exception to the statute of frauds. (Id. at 7-9.) 2 As an initial matter, the Court notes that Plaintiff’s response brief alternates 3 between referring to the alleged agreement between the Parties as an “oral 4 agreement,” (id. at 6:8, 6:19, 7:16), and an agreement Plaintiff “was signing,” (id. at 5 6:24, 7:12, 7:9). These characterizations of the agreement at issue appear to conflict. 6 As alleged in Plaintiff’s Complaint, Plaintiff alleges a verbal agreement between the 7 Parties made “over the phone,” (Compl. ¶ 23) and alleges that Defendant refused to 8 send Plaintiff written paperwork, (id. ¶¶ 23-25); as such, the Court disregards 9 Plaintiff’s arguments regarding any “signing” of the agreement for the purposes of 10 considering the present motion to dismiss. 11 Under California law, “the elements of a cause of action for breach of 12 contract are (1) the existence of the contract, (2) plaintiff’s performance or excuse 13 for nonperformance, (3) defendant’s breach, and (4) the resulting damages to the 14 plaintiff.” Oasis West Realty, LLC v. Goldman, 51 Cal. 4th 811, 821 (2011). A 15 claim for breach of an oral contract must “set forth the substance of its relative 16 terms.” Gautier v. General Tel. Co., 234 Cal. App. 2d 302, 305 (1965). In fact, “not 17 only must the facts constituting the defendant’s breach be stated with certainty, but 18 there must also be an allegation that the damage to plaintiffs resulting therefrom is 19 legally actionable.” Id. at 305-06. 20 Here, the Court finds that Plaintiff has failed to plead sufficient facts 21 regarding the relative terms of the alleged oral contract and therefore has failed to 22 plead contract formation or Defendant’s breach to the requisite level of plausibility. 23 See Iqbal, 556 U.S. at 678. For example, in relation to contract formation, the 24 Complaint fails to allege when the alleged agreement was made; the “lower 25 amount” to which Defendant agreed to lower Plaintiff’s mortgage payments; or the 26 “new payment terms” allegedly promised by Defendant. 27 With respect to Defendant’s breach, Plaintiff’s Complaint appears to allege 28 two actions by Defendant that could constitute a breach of an oral agreement -7- 14cv1342-GPC-RBB 1 between the Parties: (1) that Defendant “unilaterally breached the verbal 2 modification contract” by refusing to “provide any paperwork supplementing their 3 previous promise to Plaintiff,” (Compl. ¶ 34); and (2) that Plaintiff “substantially 4 relied on Defendant’s verbal promise that if he made three payments in the amount 5 of $2219.49, the monthly payments on his mortgage would be fixed at the previous 6 lower amount,” (id. ¶ 35). Neither allegation provides sufficient facts to allege a 7 plausible claim that Defendant breached an oral contract. As for the first possible 8 allegation of Defendant’s breach, Plaintiff has not alleged that the provision of 9 paperwork was a material term of the Parties’ oral contract, so Defendant’s failure 10 to provide supplemental paperwork cannot allege a plausible breach of the Parties’ 11 agreement. 12 The second possible allegation of Defendant’s breach suffers from at least 13 two fatal flaws. First, paragraph 35 of Plaintiff’s Complaint indicates the Parties 14 agreed that Plaintiff would pay an increased Trial Payment Plan for three months in 15 order to maintain his previous monthly payment amount. As an initial matter, the 16 Court is not convinced that such an agreement constitutes a valid contract supported 17 by consideration. Furthermore, even if the terms of the Parties’ oral agreement were 18 as alleged in paragraph 35 of Plaintiff’s Complaint, Plaintiff fails to allege receiving 19 any bills or making any payments after Plaintiff allegedly completed his Trial Plan 20 Payments. The Complaint’s allegations are thus silent as to whether Plaintiff’s 21 payments remained at the Trial Plan Payment amount of $2219.49 per month after 22 the three-month Trial Plan Payment period, or whether Plaintiff’s subsequent 23 monthly payments returned to the previous amount of $2165.49 per month. 24 Although Plaintiff’s allegations may be “consistent with” a breach of Defendant’s 25 alleged oral agreement with Plaintiff, they are also consistent with Defendant’s 26 performance and thus fail to allege a plausible entitlement to relief. See Iqbal, 556 27 U.S. at 678 (“Where a complaint pleads facts that are merely consistent with a 28 defendant’s liability, it stops short of the line between possibility and plausibility of -8- 14cv1342-GPC-RBB 1 entitlement to relief.”) (quoting Twombly, 550 U.S. at 557) (internal quotation 2 marks omitted). 3 Because Plaintiff has failed to allege a plausible claim for breach of contract, 4 the Court GRANTS Defendant’s motion to dismiss Plaintiff’s breach of contract 5 claim.3 6 2. 7 Plaintiff’s second cause of action alleges that Defendant “made a verbal Promissory Estoppel 8 promise to Plaintiff that after full payment of the Trial Payment Plan, Plaintiff 9 would be given a modification on his mortgage loan at the correct lower amount.” 10 (Compl. ¶ 39.) Plaintiff further alleges: 11 Because Defendants4 breached their promise and refused to give Plaintiff a loan modification by requiring Plaintiff to perform under the Trial Payment Plan, and thereafter failing to revert Plaintiff’s mortgage payments back to the previous correct lower amount that Plaintiff was paying Defendants. Defendants did not provide a modification like they had promised. Plaintiff’s detrimental reliance on this promise left him no other foreclosure alternatives. 12 13 14 15 16 (Compl. ¶ 42.) 17 Defendant argues Plaintiff fails to state a claim for promissory estoppel 18 because the “equities do not favor plaintiff.” (Dkt. No. 4-1 at 8.) In essence, 19 Defendant argues the Complaint is “devoid of facts showing . . . agreement . . . 20 entered into by the parties” and fails to allege a “clear promise and/or unambiguous 21 terms related to a modification.” (Id.) The Court agrees. 22 “The elements of a promissory estoppel claim are (1) a promise clear and 23 unambiguous in its terms; (2) reliance by the party to whom the promise is made; 24 3 As the Court finds that Plaintiff fails to state a plausible claim for breach of 25 contract, the Court declines to address Defendant’s motion to dismiss the breach of contract claim based on an asserted statute of frauds defense. See Rivera v. Peri & Sons 26 Farms, Inc., 735 F.3d 892, 902 (9th Cir. 2013) (holding that a motion to dismiss should only be granted due to an affirmative defense if the defense “is obvious on the face of 27 a complaint”). 28 4 The Court notes that although the Complaint repeatedly refers to plural “Defendants,” there is only one currently-named Defendant in this matter. -9- 14cv1342-GPC-RBB 1 (3) [the] reliance must be both reasonable and foreseeable; and (4) the party 2 asserting the estoppel must be injured by his reliance.” U.S. Ecology, Inc. v. State, 3 129 Cal. App. 4th 887, 901 (2005) (internal citation omitted). As with Plaintiff’s 4 breach of contract claim, Plaintiff’s claim for promissory estoppel lacks sufficient 5 factual allegations to support a plausible claim that the Parties reached an 6 unambiguous modification agreement. Lacking are allegations regarding when the 7 alleged promise was made; the “lower amount” to which Defendant promised to 8 lower Plaintiff’s mortgage payments; or the temporal limitations of Defendant’s 9 promise. Failure to allege sufficient facts regarding Defendant’s alleged promise is 10 fatal to a promissory estoppel claim. See, e.g., Ward v. Wells Fargo Home 11 Mortgage, No. 14-cv-00887-JCS, 2014 WL 1922082 at *12 (N.D. Cal. May 6, 12 2014). 13 Furthermore, Plaintiff fails to explain how a promise to raise mortgage 14 payments for three months and then revert the monthly payments to the previous 15 mortgage amount is a “loan modification” promise on which Plaintiff’s reliance was 16 reasonable or foreseeable. In fact, Plaintiff’s response to Defendant’s motion to 17 dismiss states that “Plaintiff relied on the verbal promises made by Wells Fargo that 18 once he made the first three (3) payments at a higher amount, the loan would be 19 permanently modified at a lower amount.” (Dkt. No. 6 at 9.) This statement mis20 characterizes the allegations in the Complaint; Plaintiff’s Complaint plainly alleges 21 that Defendant “fail[ed] to revert Plaintiff’s mortgage payments back to the previous 22 correct lower amount that Plaintiff was paying Defendants.” (Compl. ¶ 42.) As set 23 forth in Plaintiff’s Complaint, the Court therefore finds that Plaintiff has failed to 24 allege a promise on which Plaintiff reasonably or foreseeably relied. Accordingly, 25 the Court GRANTS Defendants’ motion to dismiss Plaintiff’s promissory estoppel 26 claim. 27 3. 28 “There is implied in every contract a covenant by each party not to do Implied Covenant of Good Faith and Fair Dealing - 10 - 14cv1342-GPC-RBB 1 anything which will deprive the other parties thereto of the benefits of the contract.” 2 Harm v. Frasher, 181 Cal. App. 2d 405 (1960). However, “[w]here there is no 3 underlying contract there can be no duty of good faith arising from the implied 4 covenant.” Horn v. Cushman & Wakefield W., Inc., 72 Cal. App. 4th 798, 804 5 (1999). As stated above, the Court finds that Plaintiff has failed to allege a plausible 6 claim for breach of contract; accordingly, the Court also finds that Plaintiff has 7 failed to allege a plausible claim for breach of the implied covenant of good faith 8 and fair dealing. Id. The Court GRANTS Defendant’s motion to dismiss Plaintiff’s 9 third cause of action. 10 4. 11 Plaintiff’s fourth cause of action for violation of California’s Unfair Unfair Business Practices 12 Competition Law (“UCL”), Cal. Bus. & Prof. Code § 17200, alleges Defendant 13 “engaged in deceptive business practices” by: 14 15 16 17 18 1) making untrue or misleading statements regarding Defendants intention to modify Plaintiff’s loan; 2) concealing the true intentions to not modify Plaintiff’s loan but instead accelerate Plaintiff’s house into foreclosure; 3) failing to apply payments to a Trial Payment Plan made to Plaintiffs[sic] account, as promised by Defendants; and 4) refusing to assist Plaintiff or review for any foreclosure mitigation options thereafter, including applications for modification, in violation of Cal. Civ. Code § 2924. 19 (Compl. ¶ 59.) The Complaint adds no further factual allegations regarding the 20 second, third, or fourth allegations; nowhere else in the Complaint does Plaintiff 21 allege any acceleration of Plaintiff’s loan; Defendant’s failure to apply payments; or 22 Defendant’s failure to review foreclosure mitigation options with Plaintiff. The 23 Court therefore finds these conclusory statements insufficient to state a plausible 24 claim for relief under the UCL. See Iqbal, 556 U.S. at 678 (“Threadbare recitals of 25 the elements of a cause of action, supported by mere conclusory statements, do not 26 suffice [to withstand a motion to dismiss].”); see also Moss v. U.S. Secret Serv., 572 27 F.3d 962, 969 (9th Cir. 2009) (“In sum, for a complaint to survive a motion to 28 dismiss, the non-conclusory factual content, and reasonable inferences from that - 11 - 14cv1342-GPC-RBB 1 content, must be plausibly suggestive of a claim entitling the plaintiff to relief.”). 2 However, Plaintiff’s first UCL allegation relates to untrue or misleading 3 statements regarding Defendant’s intention to modify Plaintiff’s loan; this allegation 4 finds factual support in Plaintiff’s allegations that Defendant verbally promised 5 “that good faith payments made on time from Plaintiff would offer a permanent 6 modification” but that Defendant failed to give Plaintiff a loan modification after 7 Plaintiff made three Trial Plan Payments. (See Compl. ¶ 57.) Accordingly, the Court 8 addresses whether Plaintiff’s claim of untrue or misleading statements states a claim 9 under the UCL. 10 California’s UCL provides a cause of action for “unfair competition,” which 11 is defined as “any unlawful, unfair or fraudulent business act or practice.” Cal. Bus. 12 & Prof. Code § 17200. “Unlawful,” “unfair,” and “fraudulent” represent three 13 separate and distinct theories of liability under California’s UCL. Rubio v. Capital 14 One Bank, 613 F.3d 1195, 1203 (9th Cir. 2010). 15 Defendant first moves to dismiss Plaintiff’s UCL claim on the ground that 16 Plaintiff lacks standing to bring a UCL claim. (Dkt. No. 4-1 at 9-10.) Defendant 17 argues Plaintiff “did not suffer an economic injury, or loss of money or property, as 18 he borrowed money in 2006 and has not repaid the loan.” (Id. at 9.) The Court 19 disagrees. Among other injuries, Plaintiff’s Complaint alleges that Plaintiff has 20 suffered “loss of equity in his property,” (Compl. ¶ 66), and made payments higher 21 than his previous payments for at least three months under a Trial Payment Plan, (id. 22 ¶ 58). Although Defendant may contest the extent of these injuries, Plaintiff’s 23 alleged injuries certainly constitute economic injuries sufficient to establish 24 standing under the UCL. Bower v. AT&T Mobility, LLC, 196 Cal. App. 4th 1545, 25 1554 (2011) (“[S]tanding to sue under [the UCL] . . . is confined to any person who 26 has suffered injury in fact and has lost money or property as a result of unfair 27 competition.”) (internal quotation marks omitted). 28 Defendant next moves to dismiss Plaintiff’s UCL claim on the ground that - 12 - 14cv1342-GPC-RBB 1 Plaintiff has not established an “unlawful,” “unfair,” or “fraudulent” business 2 practice actionable under the UCL. (Dkt. No. 4-1 at 10-12.) 3 4 a. Unlawful “Unlawful” practices under the UCL include “anything that can properly be 5 called a business practice and at the same time is forbidden by law.” Farmers Ins. 6 Exch. v. Superior Court, 2 Cal. 4th 377, 383 (1992). Section 17200 thus “borrows” 7 violations of other laws and treats them as unlawful practices independently 8 actionable under section 17200. Id. Defendant argues the Complaint “fails to set 9 forth any unlawful business practice on Wells Fargo’s part” because no enforceable 10 agreement between the Parties exists, other than the 2013 HAMP loan modification 11 contract not at issue in Plaintiff’s Complaint. (Dkt. No. 4-1 at 10-11.) 12 The Court agrees that Plaintiff has failed to state a claim under a “borrowed” 13 law and thus cannot state a claim under the UCL. See Webb v. Smart Document 14 Solutions, LLC, 499 F.3d 1078, 1082 (9th Cir. 2007) (finding that the alleged 15 conduct “must violate a law . . . in order for Plaintiffs to state a claim for relief 16 under Section 17200’s ‘unlawful’ prong”). Although the Complaint lists a number 17 of California statutes allegedly violated by Defendant in conclusory fashion, 18 (Compl. ¶ 61, 62, 63), Plaintiff’s response brief fails to point to a law Defendant has 19 violated to support a theory of “unlawful” conduct actionable under the UCL, (see 20 Dkt. No. 6 at 13-14). Furthermore, the Court has already concluded that Plaintiff 21 failed to allege sufficient facts to support a claim of breach of contract, breach of the 22 implied covenant of good faith and fair dealing, or promissory estoppel. 23 Accordingly, the Court finds that the Complaint does not adequately state an 24 “unlawful practice” under section 17200 to serve as a basis for a UCL claim. 25 26 b. Unfair or Fraudulent Along with “unlawful” practices, the UCL provides a cause of action for 27 “unfair” or “fraudulent” business practices. Cal. Bus. & Prof. Code § 17200. 28 “Unfair” means “conduct that threatens an incipient violation of an antitrust law, or - 13 - 14cv1342-GPC-RBB 1 violates the policy or spirit of one of those laws because its effects are comparable 2 to or the same as a violation of the law, or otherwise significantly threatens or harms 3 competition.” Cel-Tech Communications, Inc. v. Los Angeles Cellular Telephone 4 Co., 20 Cal. 4th 163, 187 (1999). California courts have also held that “unfair” 5 conduct occurs when a practice “offends an established public policy or when the 6 practice is immoral, unethical, oppressive, unscrupulous or substantially injurious to 7 consumers.” S. Bay Chevrolet v. Gen. Motors Acceptance Corp., 72 Cal. App. 4th 8 861 (1999) (internal quotation marks omitted). “Fraudulent” as used in the statute 9 does not refer to the common law tort of fraud, but rather requires a showing that 10 members of the public are likely to be deceived. Olsen v. Breeze, Inc., 48 Cal. 4th 11 1254, 1267 (1992); Bank of the West v. Superior Court, 2 Cal. 4th 1254, 1267 12 (1992). 13 Defendant argues Plaintiff’s Complaint fails to articulate an “unfair” business 14 activity and lacks the requisite specificity to support a claim for fraudulent business 15 practices in violation of the UCL. (Dkt. No. 4-1 at 11-12.) The Court agrees. As set 16 forth above, Plaintiff’s primary allegation with regard to Defendant’s alleged 17 violation of the UCL focuses on Defendant’s untrue or misleading statements 18 regarding Defendant’s intention to modify Plaintiff’s loan. Plaintiff fails to advance 19 any factual allegations to support a claim that Defendant’s misleading statements 20 threatened to violate the letter, policy, or spirit of the antitrust laws, or that they 21 threatened competition; neither does Plaintiff’s Complaint allege the contents of the 22 alleged untrue or misleading statements to state a plausible claim that the statements 23 were against public policy, immoral, unethical, oppressive, or unscrupulous. See 24 Davis v. HSBC Bank Nevada, N.A., 691 F.3d 1152, 1170 (9th Cir. 2012) (holding 25 that a plaintiff failed to state a claim under either the Cel-Tech or S. Bay Chevrolet 26 definitions of “unfair” conduct in violation of the UCL). Accordingly, the Court 27 finds that Plaintiff has failed to state a claim for “unfair” business practices in 28 violation of the UCL. - 14 - 14cv1342-GPC-RBB 1 In addition, Plaintiff’s allegations of fraudulent conduct are subject to the 2 heightened pleading standards of Federal Rules of Civil Procedure 9(b). See Kearns 3 v. Ford Motor Co., 567 F.3d 1120, 1125 (9th Cir. 2009). Under Rule 9(b), parties 4 alleging fraud or mistake must “state with particularity the circumstances 5 constituting fraud or mistake.” Fed. R. Civ. P. 9(b). However, Plaintiff’s allegations 6 regarding untrue or misleading statements fall short of alleging fraud “with 7 particularity.” See Rodriguez v. JP Morgan Chase & Co., 809 F. Supp. 2d 1291, 8 1297 (S.D. Cal. 2011) (dismissing plaintiff’s UCL claim because the plaintiff 9 “presented only conclusory allegations of fraud in his complaint” and failed to 10 “allege with specificity who engaged in the fraud and when and how”). Specifically, 11 Plaintiff fails to allege who made the statements, or when the statements were made, 12 (see Compl. ¶¶ 18-20) (using vague temporal references such as “[s]ome time 13 passed after,” “[t]hereafter,” and “[a]fter months of review”). 14 Accordingly, the Court dismisses without prejudice Plaintiff’s claim for 15 violation of California’s UCL, Cal. Bus. & Prof. Code § 17200. 16 5. 17 Plaintiff’s fifth and final cause of action alleges violation of the California Violation of California Civil Code Section 1788-1788.5 18 Rosenthal Act, Cal. Civ. Code section 1788-1788.5. (Compl. at 17.) Plaintiff alleges 19 Defendant “harassed Plaintiff, through multiple telephone calls, calls made 20 repeatedly throughout the day, with the intent to harass and annoy Plaintiff so that 21 he would pay his mortgage.” (Id. ¶ 78.) Plaintiff alleges “Defendants would call 22 Plaintiff sometimes even up to 10 times per day from early morning to late at night, 23 even when the Plaintiff is sleeping.” (Id. ¶ 79.) 24 The purpose of the Rosenthal Act is “to prohibit debt collectors from 25 engaging in unfair or deceptive acts or practices in the collection of consumer debts 26 and to require debtors to act fairly in entering into and honoring such debts.” Cal. 27 Civ. Code § 1788.1(b). To achieve this end, the Rosenthal Act “prohibits a host of 28 unfair and oppressive methods of collecting debt, but to be liable . . . a defendant - 15 - 14cv1342-GPC-RBB 1 must fall under its definition of ‘debt collector.’ ” Izenberg v. ETS Services, LLC, 2 589 F. Supp. 2d 1193, 1199 (C.D. Cal. 2008). “A debt collector violates the act, 3 e.g., when it engages in threats, use of profane language, or harassment; when it 4 places telephone calls without disclosing the caller’s identity; when it 5 communicates to a third party that a debtor has engaged in conduct, other than 6 failure to pay a consumer debt, that the debt collector knows or has reason to 7 believe will defame the debtor; and when it makes a false representation that a 8 consumer debt may be increased by the addition of fees or other charges if such fees 9 or charges may not be lawfully added to the existing debt.” Walters v. Fidelity 10 Mortg. of Cal., 730 F. Supp. 2d 1185, 1203 (E.D. Cal.2010) (citing Cal. Civ. Code 11 §§ 1788.10; 1788.11(a), (b), (e); 1788.13(e)). 12 Defendant moves to dismiss Plaintiff’s Rosenthal Act claim on the ground 13 that the Act does not apply to Defendant’s actions in seeking to enforce a deed of 14 trust or proceeding with a non-judicial foreclosure. (Dkt. No. 4-1 at 13.) Defendant 15 argues it “is merely enforcing its rights under the loan, secured by a deed of trust,” 16 which does not amount to a “debt collection” under the Rosenthal Act. (Id.) 17 Plaintiff responds that his allegations focus on Defendant’s “incessant 18 telephone calls attempting to collect payment” rather than Defendant’s foreclosure 19 procedures. (Dkt. No. 6 at 16.) Plaintiff argues the cases cited by Defendant exempt 20 the actual act of foreclosing on a property from the Rosenthal Act, but that 21 Defendant’s telephone calls to collect payment constitute “debt collection” under 22 the Act. (Id.) 23 The Court finds that Plaintiff has not alleged sufficient facts to state a claim 24 under the Rosenthal Act. As set forth above, the Parties hotly dispute whether 25 Defendant’s calls to Plaintiff constitute “debt collection” by a “debt collector” under 26 the Rosenthal Act. However, Plaintiff’s Complaint fails to include sufficient details 27 for the Court to determine the timing, content, or nature of Defendant’s alleged 28 “incessant calls” to Plaintiff. For example, Plaintiff conclusorily alleges that, “[a]ll - 16 - 14cv1342-GPC-RBB 1 the while, Plaintiff received an incessant amount of phone calls daily to his home 2 and his cell phone, from representatives of Defendants, attempting to collect 3 payments.” (Compl. ¶ 27.) The Complaint is thus unclear as to whether these calls 4 were received while Plaintiff was making payments on his Loan, (see Compl. ¶ 23), 5 while Plaintiff was paying the alleged Trial Payment Plan payments, (see Compl. ¶ 6 24), or afterward. Furthermore, Plaintiff alleges that, at the time he was receiving 7 calls from Defendant, Plaintiff was simultaneously sending documents “to 8 Defendant WELLS countless times, and each time Defendants stated that they 9 couldn’t find the documents or to call back later.” (Compl. ¶ 27.) Due to the lack of 10 allegations regarding when Defendant allegedly “harassed Plaintiff, through 11 multiple telephone calls,” Plaintiff has failed to allege a plausible claim that 12 Defendant repeatedly contacted Plaintiff for a reason within the ambit of the 13 Rosenthal Act rather than to return Plaintiff’s communications or to notify Plaintiff 14 about pending judicial foreclosure proceedings. Accordingly, the Court hereby 15 GRANTS Defendant’s motion to dismiss Plaintiff’s fifth cause of action for 16 violation of the California Rosenthal Act, Cal. Civ. Code section 1788-1788.5. 17 C. Leave to Amend 18 Plaintiff has requested leave to amend the FAC should the Court grant 19 Defendant’s motion to dismiss. (Dkt. No. 6 at 9, 10, 11, 14, 16-17.) Where a motion 20 to dismiss is granted, “leave to amend should be granted ‘unless the court 21 determines that the allegation of other facts consistent with the challenged pleading 22 could not possibly cure the deficiency.’ ” DeSoto v. Yellow Freight Sys., Inc., 957 23 F.2d 655, 658 (9th Cir. 1992) (quoting Schreiber Distrib. Co. v. Serv–Well 24 Furniture Co., 806 F.2d 1393, 1401 (9th Cir. 1986)). Finding Plaintiff’s pleading 25 defects curable, the Court grants Plaintiff leave to amend the FAC. 26 CONCLUSION 27 Based on the above, the Court hereby GRANTS Defendant’s motion to 28 dismiss all causes of action alleged against it in Plaintiff’s Complaint. The motion - 17 - 14cv1342-GPC-RBB 1 hearing set for September 5, 2014 at 1:30 p.m. is accordingly VACATED and 2 Plaintiff’s motion for leave to appear at the hearing telephonically, (Dkt. No. 8), is 3 DENIED as MOOT. 4 Plaintiff is granted thirty (30) days from the date this Order is electronically 5 docketed to file an amended complaint addressing the deficiencies set forth above. 6 IT IS SO ORDERED. 7 DATED: September 3, 2014 8 9 HON. GONZALO P. CURIEL United States District Judge 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 - 18 - 14cv1342-GPC-RBB
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