-PAL Dearaujo v. PNC Bank National Association et al, No. 2:2012cv00981 - Document 22 (D. Nev. 2012)
Court Description: ORDER Granting 8 Defendants' Motion to Dismiss with prejudice. IT IS FURTHER ORDERED THAT any Lis Pendens recorded by the Plaintiff in connection with this lawsuit be expunged, extinguished, and/or released. The Clerk of the Court is ordered to close this case. Signed by Judge Miranda M. Du on 11/15/2012. (Copies have been distributed pursuant to the NEF - AC)
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-PAL Dearaujo v. PNC Bank National Association et al Doc. 22 1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 DISTRICT OF NEVADA 10 *** 11 CARLOS DEARAUJO, Plaintiff, 12 ORDER v. 13 14 15 Case No. 2:12-cv-00981-MMD-PAL PNC BANK, NATIONAL ASSOCIATION; PNC MORTGAGE, A DIVISION OF PNC BANK, et al., (Defs’ Motion to Dismiss – dkt. no. 8) Defendants. 16 17 18 I. SUMMARY 19 Before the Court is Defendants PNC Bank and PNC Mortgage’s (collectively 20 “Defendants”) Motion to Dismiss Plaintiff’s Complaint for failure to state a claim. (Dkt. 21 no. 8.) For the reasons discussed below, the Motion is granted. 22 II. BACKGROUND 23 This case arises out of an alleged failure to modify a home loan. In December 24 2003, Plaintiff executed a Note secured by a Deed of Trust in favor of National City 25 Mortgage (“Loan Agreement”) for the real property located at 11585 Caldicot Drive, Las 26 Vegas, Nevada 89138 (“the Property”). 27 (“PNC”) acquired National City Mortgage and PNC acquired ownership of Plaintiff’s Note 28 and Deed of Trust. Thereafter, PNC National Bank Association Dockets.Justia.com 1 In March 2009, the US Department of Treasury, on behalf of the federal 2 government, introduced a loan modification program, commonly known as the “Home 3 Affordable Modification Program” or HAMP. PNC was a HAMP participant and agreed 4 with the Treasury to modify the mortgages of HAMP qualified consumers. 5 In late 2010, Plaintiff requested a loan modification. On January 30, 2011, PNC 6 Mortgage (the internal administrative organization that services PNC loans) denied the 7 request based on the determination that Plaintiff was an ineligible borrower due to 8 income. 9 modification request. Plaintiff, who was still current on his mortgage payments, resubmitted the On August 30, 2011, PNC again denied the requested 10 modification asserting Plaintiff was an ineligible borrower based on a different income 11 based standard. 12 Plaintiff’s income under HAMP guidelines, and again requested reconsideration. On 13 September 22, 2011, PNC again denied the request asserting that the modification 14 would require excessive forbearance. Plaintiff was then at risk for losing the Property to 15 a foreclosure sale. Plaintiff’s representative found that PNC had incorrectly calculated 16 Plaintiff asserts claims for breach of contract, breach of covenant of good faith 17 and fair dealing and negligence. Defendants seek to dismiss the Complaint for failure to 18 state a claim. Plaintiff opposed the Motion and sought leave to amend in the alternative. 19 III. 20 21 DISCUSSION A. Legal Standard 1. Rule 12(b)(6) 22 A court may dismiss a plaintiff’s complaint for “failure to state a claim upon which 23 relief can be granted.” Fed. R. Civ. P. 12(b)(6). A properly pled complaint must provide 24 “a short and plain statement of the claim showing that the pleader is entitled to relief.” 25 Fed. R. Civ. P. 8(a)(2); Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). While 26 Rule 8 does not require detailed factual allegations, it demands “more than labels and 27 conclusions” or a “formulaic recitation of the elements of a cause of action.” Twombly, 28 550 U.S. at 555 (citing Papasan v. Allain, 478 U.S. 265, 286 (1986). “Factual allegations 2 1 must be enough to rise above the speculative level.” Id. Thus, to survive a motion to 2 dismiss, a complaint must contain sufficient factual matter to “state a claim to relief that 3 is plausible on its face.” Id. at 570. 4 In Ashcroft v. Iqbal, 556 U.S. 662 (2009), the Supreme Court clarified the two-step 5 approach district courts are to apply when considering motions to dismiss. First, a 6 district court must accept as true all well-pled factual allegations in the complaint; 7 however, legal conclusions are not entitled to the assumption of truth. Id. at 679. Mere 8 recitals of the elements of a cause of action, supported only by conclusory statements, 9 do not suffice. Id. at 678. Second, a district court must consider whether the factual 10 allegations in the complaint allege a plausible claim for relief. Id. at 679. A claim is 11 facially plausible when the plaintiff’s complaint alleges facts that allow the court to draw a 12 reasonable inference that the defendant is liable for the alleged misconduct. Id. at 678. 13 Where the complaint does not permit the court to infer more than the mere possibility of 14 misconduct, the complaint has “alleged—but not shown—that the pleader is entitled to 15 relief.” Id. at 679 (internal quotation marks omitted). When the claims in a complaint 16 have not crossed the line from conceivable to plausible, plaintiff’s complaint must be 17 dismissed. Twombly, 550 U.S. at 570. 18 A complaint must contain either direct or inferential allegations concerning “all the 19 material elements necessary to sustain recovery under some viable legal theory.” 20 Twombly, 550 U.S. at 562 (quoting Car Carriers, Inc. v. Ford Motor Co., 745 F.2d 1101, 21 1106 (7th Cir. 1989) (emphasis in original)). 22 “In determining the propriety of a Rule 12(b)(6) dismissal, a court may not look 23 beyond the complaint to a plaintiff's moving papers, such as a memorandum in 24 opposition to a defendant’s motion to dismiss.” Schneider v. Cal. Dep't. of Corr., 151 25 F.3d 1194, 1197 n. 1 (9th Cir. 1998). 26 2. Leave to Amend 27 After the time for amendment as a matter of course has expired, a party may 28 amend its complaint only by leave of the court or by the adverse party’s written consent. 3 1 Fed. R. Civ. P. 15(a)(2). The court has discretion to grant leave and should freely do so 2 “when justice so requires.” Id.; see also Allen v. City of Beverly Hills, 911 F.2d 367, 373 3 (9th Cir. 1990). Nonetheless, courts may deny leave to amend if it will cause: (1) undue 4 delay; (2) undue prejudice to the opposing party; (3) the request is made in bad faith; (4) 5 the party has repeatedly failed to cure deficiencies; or (5) the amendment would be 6 futile. Leadsinger, Inc. v. BMG Music Publ’g, 512 F.3d 522, 532 (9th Cir. 2008). Facts 7 raised for the first time in plaintiff's opposition papers should be considered by the court 8 in determining whether to grant leave to amend or to dismiss the complaint with or 9 without prejudice. Orion Tire Corp. v. Goodyear Tire & Rubber Co., 268 F.3d 1133, 10 1137-38 (9th Cir. 2001). 11 A proposed amendment is futile if no set of facts can be proved under the 12 amendment that would constitute a valid claim or defense. Farina v. Compuware Corp., 13 256 F.Supp.2d 1033, 1061 (9th Cir. 2003) (quoting Miller v. Rykoff-Sexton, Inc., 845 14 F.2d 209, 214 (9th Cir. 1988)). The standard of review is akin to that undertaken by a 15 court in determining the sufficiency of a pleading challenged in a Rule 12(b)(6) motion to 16 dismiss. Id. (quoting Miller, 845 F.2d at 214). Under this standard, a district court must 17 accept as true all well-pled factual allegations in the complaint; however, legal 18 conclusions are not entitled to the assumption of truth. Iqbal, 556 U.S. at 679. When 19 the claims in a complaint have not crossed the line from conceivable to plausible, 20 plaintiff’s complaint must be dismissed. Twombly, 550 U.S. at 555. 21 Futility alone can justify the denial of a motion for leave to amend. Nunes v. 22 Ashcroft, 375 F.3d 805 (9th Cir. 2004). Leave to amend may be denied if a court 23 determines that “allegation of other facts consistent with the challenged pleading could 24 not possibly cure the deficiency.” Abagninin v. AMVAC Chemical Corp., 545 F.3d 733, 25 742 (9th Cir. 2008) (quoting Schreiber Distrib. Co. v. Serv-Well Furniture Co., 806 F.2d 26 1393, 1401 (9th Cir.1986). “Where no colorable grounds exist to support a claim or 27 defense, a motion to amend would be futile.” Hines v. City of Albany, 542 F. Supp. 2d 28 218, 224 (N.D.N.Y. 2008). In general, no colorable grounds exist if the amendment is 4 1 not sufficient to withstand a motion to dismiss or a motion for summary judgment. 2 Johnson v. American Airlines, Inc., 834 F.2d 721, 724 (9th Cir.1987); see also 3 Gabrielson v. Montgomery Ward & Co., 785 F.2d 762, 766 (9th Cir. 1986) (stating that 4 an amendment is futile if it “could be defeated on motion for summary judgment”). 5 6 B. Analysis 1. Breach of Contract 7 A breach of contract claim requires a plaintiff to show: (1) the existence of a valid 8 contract; (2) a breach by the defendant; and (3) damage because of the breach. Saini v. 9 Int’l Game Tech., 434 F. Supp 2d 913, 919–20 (D. Nev. 2006) (citing Richardson v. 10 Jones, 1 Nev. 405, 405 (Nev. 1865). To create an enforceable contract there must be 11 an “offer, acceptance, meeting of the minds, and consideration.” May v. Anderson, 119 12 P.3d 1254, 1257 (Nev. 2005). 13 Here, dismissal is proper for two reasons. First, Plaintiff’s Complaint amounts to 14 nothing more than a bare recital of the elements of the claim without any supporting 15 factual allegations. Second, while Plaintiff’s opposition brief argues that the breached 16 contract was “the promise that Defendants would consider Plaintiff’s modification in 17 accord with HAMP guidelines,” Plaintiff’s breach of contract claim in the Complaint refers 18 exclusively to the “Loan” collectively defined as the “Note and Deed of Trust” and not any 19 subsequent agreement to modify. The Court cannot look beyond the allegations made 20 in the Complaint and the Complaint refers exclusively to a different agreement than what 21 Plaintiff argues in his opposition brief. Plaintiff’s Complaint essentially concedes default 22 under the Loan Agreement, and thus Plaintiff, not Defendants, breached the Loan 23 Agreement. Plaintiff’s breach of contract claim is dismissed. 24 2. 25 Breach of Covenant of the Implied Covenant of Good Faith and Fair Dealing 26 Plaintiff bases his claim for breach of the implied covenant of good faith and fair 27 dealing on an alleged breach of duty by Defendants when they failed to modify the loan 28 and his alleged third-party beneficiary status under the HAMP agreement. 5 1 To establish a claim for contractual breach of the implied covenant of good faith 2 and fair dealing, a plaintiff must allege the existence of a valid contract and a breach of 3 the implied duty of good faith and fair dealing by performing in a manner that was 4 unfaithful to the purpose of the contract. Perry v. Jordan, 900 P.2d 335, 338; see Hilton 5 Hotels v. Butch Lewis Productions, 808 P.2d 919, 923 (Nev. 1991). A plaintiff must 6 establish that the defendant intentionally breaches the intention and spirit of the 7 agreement. Morris v. Bank of America, 886 P.2d 454, 457 (Nev. 1994) (citing Hilton 8 Hotels v. Butch Lewis Productions, 808 P.2d 919, 922-23 (Nev. 1991)). 9 Plaintiff’s claim fails because (1) there was no enforceable contract between the 10 parties requiring Defendant to modify the loan, (2) there was no duty to modify under the 11 operative Loan Agreement, and (3) Plaintiff has failed to plead any plausible facts that 12 Defendants breached the intention and spirit of the Loan Agreement. Plaintiff has not 13 pled facts showing that Defendants were under any obligation to grant a loan 14 modification. 15 As for the HAMP contract, Plaintiff is not a third-party beneficiary with standing to 16 allege breach of the HAMP contract. 17 argument that borrowers are third-party beneficiaries to the HAMP agreement between 18 the US Treasury and banks. Tucker v. JPMorgan Chase Bank, N.A., no. 2-10-cv-00959- 19 JCM-LRL, 2011 WL 280962 *4 (D. Nev. Jan. 25, 2011). 20 21 22 Nevada courts have consistently rejected the Plaintiff cannot plausibly state a claim for a contractual breach of the implied covenant of good faith and fair dealing. Accordingly, this claim is dismissed. 3. Negligence 23 To bring a negligence claim in Nevada, a plaintiff must show that: (1) defendant 24 owed a duty of care to plaintiff; (2) defendant breached that duty; (3) defendant’s breach 25 was the actual and proximate cause of the plaintiff’s injuries; and (4) plaintiff was injured. 26 Scialabba v. Brandise Constr., 921 P.2d 928, 930 (Nev. 1996). 27 negligence does not exist without a breach of a duty. Bradshaw v. Blystone Equip. Co. 28 of Nev., 386 P.2d 396, 397 (Nev. 1963). 6 Liability based on 1 Here, dismissal is proper for two reasons. First, Plaintiff’s Complaint amounts to 2 nothing more than a bare recital of the elements of the claim without any supporting 3 factual allegations. Second, Plaintiff claims Defendants owed him a duty to “perform 4 their professional services in a manner consistent with similarly situated professionals.” 5 However, Plaintiff’s Complaint does not allege that Defendants’ duty extend beyond their 6 existing lender-borrower relationship. Plaintiff has not convinced the Court that Nevada 7 law imposes a duty on lenders to modify a loan or undertake to do anything in response 8 to a request for a loan modification. Plaintiff thus cannot bring an actionable negligence 9 claim under Nevada law. 10 4. Leave to Amend 11 Plaintiff requests leave to amend the deficient Complaint without identifying which 12 claims he seeks to amend claims or which additional facts would support the unidentified 13 claims. The Court denies Plaintiff’s request both on procedural and substantive grounds. 14 When seeking leave to amend a pleading, Local Rule 15-1 requires the moving 15 party to “attach the proposed amended pleading to any motion to amend so that it will be 16 complete in itself without reference to the superseding pleading.” Plaintiff has failed to 17 attach a proposed amendment, and thus a grant of leave to amend is improper. 18 Moreover, amendment is futile here. As Plaintiff has failed to attach a proposed 19 amendment, the Court assumes any amendment would be consistent with arguments 20 made in Plaintiff’s opposition and the Court considers factual assertions contained in the 21 Opposition to determine whether to dismiss the Complaint with or without prejudice 22 Plaintiff raised the alleged “loan modification consideration” contract for the first time in 23 his opposition. Plaintiff argues that the parties entered into an enforceable contract 24 when Defendants offered to consider a loan modification if Plaintiff provided certain 25 financial documents and other information. Plaintiff allegedly accepted Defendants’ offer 26 and provided consideration by submitting all the financial information requested, which 27 Plaintiff was not otherwise required to do. Accepting all factual allegations as true, 28 Plaintiff has failed to show a valid offer and acceptance. 7 If Plaintiff’s request for a 1 modification amounts to an offer, Defendants’ denial on January 30, 2011, constitutes 2 rejection rather than acceptance. Similarly, Defendants rejected, rather than accepted, 3 Plaintiff’s second and third requests for modification. The facts show that the parties 4 never came to an agreement or had a meeting of the minds as to the terms of the loan 5 modification. Thus, the Court finds Plaintiff cannot establish the existence of a valid 6 contract to modify Plaintiff’s loan. Here, amendment would be futile because Plaintiff 7 cannot allege any additional facts consistent with the Complaint to cure the deficiencies 8 discussed above. Accordingly, the Court dismisses all three claims with prejudice. 9 III. 10 11 12 13 14 15 CONCLUSION IT IS THEREFORE ORDERED that Defendants’ Motion to Dismiss is GRANTED with prejudice. IT IS FURTHER ORDERED THAT any Lis Pendens recorded by the Plaintiff in connection with this lawsuit be expunged, extinguished, and/or released. The Clerk of the Court is ordered to close this case. DATED THIS 15th day of November 2012. 16 17 18 MIRANDA M. DU UNITED STATES DISTRICT JUDGE 19 20 21 22 23 24 25 26 27 28 8
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