Daghlan v. TBI Mortgage Company et al

Filing 38

ORDER, Wells Fargo Bank, N.A.'s Motion to Dismiss Plaintiff's Second Amended Complaint 33 is granted; Plaintiff's Second Amended Complaint 32 is dismissed with prejudice for failure to state a claim upon which relief can be granted; the Clerk shall enter judgment dismissing this action with prejudice and shall terminate this case. Signed by Judge Neil V Wake on 4/8/13.(REW)

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1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA 8 9 Abraham Daghlan, No. CV-12-01415-PHX-NVW Plaintiff, 10 11 vs. 12 TBI Mortgage Company, et al., 13 ORDER Defendant. Before the Court is Wells Fargo Bank, N.A.’s Motion to Dismiss Plaintiff’s 14 15 Second Amended Complaint (Doc. 33). 16 I. PROCEDURAL BACKGROUND 17 This case was initially pled against Defendants Deutsche Bank National Trust 18 Company, as Trustee for the RBSGC Mortgage Loan Trust Series 2007-B (“Deutsche”), 19 Mortgage Electronic Registration Systems, Inc. (“MERS”), and TBI Mortgage Co. 20 (“TBI”) in the Maricopa County Superior Court of the State of Arizona and subsequently 21 removed to this Court. On August 22, 2012, Defendants’ motion to dismiss was granted, 22 and Plaintiff was given leave to file an amended complaint. 23 On September 7, 2012, Plaintiff filed his First Amended Verified Complaint, 24 which added Defendants Wells Fargo Home Mortgage and Wells Fargo, N.A. On 25 January 17, 2013, the Court dismissed the First Amended Verified Complaint under Fed. 26 R. Civ. P. 8(a) with leave to amend and ordered that no further leave to amend would be 27 granted. On February 8, 2013, Plaintiff filed a Second Amended Complaint (Doc. 32) 28 against only Wells Fargo Bank, N.A. (“Wells Fargo”). 1 2 II. LEGAL STANDARD 3 On a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), all 4 allegations of material fact are assumed to be true and construed in the light most 5 favorable to the nonmoving party. Cousins v. Lockyer, 568 F.3d 1063, 1067 (9th Cir. 6 2009). To avoid dismissal, a complaint must contain “sufficient factual matter, accepted 7 as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 8 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). Id. The 9 principle that a court accepts as true all of the allegations in a complaint does not apply to 10 11 legal conclusions or conclusory factual allegations. Id. Certain elements of fraud claims must satisfy a higher standard of pleading under 12 the Federal Rules of Civil Procedure. 13 knowledge, and other conditions of a person’s mind may be alleged generally, but the 14 circumstances must be alleged with particularity. Fed. R. Civ. P. 9(b). Rule 9(b) requires 15 allegations of fraud to be “specific enough to give defendants notice of the particular 16 misconduct which is alleged to constitute the fraud charged so that they can defend 17 against the charge and not just deny that they have done anything wrong.” Bly-Magee v. 18 California, 236 F.3d 1014, 1019 (9th Cir. 2001). Plaintiffs alleging fraud “must state the 19 time, place, and specific content of the false representations as well as the identities of the 20 parties to the misrepresentations.” Schreiber Distrib. Co. v. Serv-Well Furniture Co., 806 21 F.2d 1393, 1401 (9th Cir. 1986); accord Odom v. Microsoft Corp., 486 F.3d 541, 553 22 (9th Cir. 2007). In alleging fraud or mistake, malice, intent, 23 Generally, material beyond the pleadings may not be considered in deciding a 24 Rule 12(b)(6) motion. However, material properly submitted as part of the complaint and 25 documents not physically attached to the complaint whose contents are alleged in a 26 complaint and whose authenticity no party questions may be considered. Branch v. 27 28 -2  1 2 Tunnell, 14 F.3d 449, 454 (9th Cir. 1994), overruled on other grounds by Galbraith v. 3 County of Santa Clara, 307 F.3d 1119 (9th Cir. 2002). 4 III. FACTS ALLEGED IN PLAINTIFF’S SECOND AMENDED COMPLAINT 5 On October 17, 2006, Plaintiff purchased a home at 31904 North 19th Avenue, 6 Phoenix, Arizona. To purchase the home, he borrowed $764,150.00. The loan was 7 secured by a Deed of Trust identifying the Lender as TBI Mortgage Company, the 8 Trustee as Westminster Title Agency, and MERS as the beneficiary. 9 In 2008, Plaintiff contacted Wells Fargo and requested a loan modification. Wells 10 Fargo informed Plaintiff that he would not be considered for a loan modification unless 11 he was at least 90 days past due in making his loan payments, and Plaintiff therefore did 12 not make three monthly payments. Missing these payments adversely affected Plaintiff’s 13 bond insurance for his work line of credit. In March 2009, Plaintiff paid a law center to 14 assist him in obtaining a loan modification. Plaintiff does not allege that he made any 15 payments in 2009. 16 On February 19, 2010, Wells Fargo entered into a Loan Modification Agreement 17 with Plaintiffs, which stated that it “amends and supplements (1) the Mortgage, Deed of 18 Trust, or Security Deed (the “Security Instrument”) dated OCTOBER 17, 2006 and (2) 19 the adjustable rate/fixed rate note (the “Note”), bearing the same date as, and secured by, 20 the Security Instrument.” The Loan Modification Agreement stated that, as of January 21 21, 2010, the unpaid principal balance was $841,693.59, and interest would be charged 22 on the unpaid principal balance at the annual rate of 5.450% from January 21, 2010. It 23 further stated, “Borrower promises to make monthly payments of interest of U.S. 24 $3,822.69, beginning on 03/01/2010 until 02/01/2015; at which time the interest rate will 25 be determined in accordance with the terms of the Note.” And: “In addition to monthly 26 payments, Borrower shall make monthly escrow deposits as defined in the Note. Escrow 27 deposit payments may be subject to change in the future.” The Loan Modification 28 -3  1 2 Agreement also stated that all rights and conditions in the Deed of Trust relating to 3 default in the making of payments under the Deed of Trust applied to default in the 4 making of the modified payments. 5 After entering into the Loan Modification Agreement, Plaintiff made the following 6 five payments to Wells Fargo: $4,400.00 on February 26, 2010; $4,487.06 on March 24, 7 2010; $3,842.69 on April 28, 2010; $3,842.69 on May 27, 2010; and $3,822.69 on June 8 29, 2010. Plaintiff does not allege that he made any additional escrow deposit payments. 9 In June 2010, Plaintiff received a voice mail message from a representative of Wells 10 Fargo, stating that the Loan Modification Agreement was being cancelled by Wells 11 Fargo. At some point thereafter, Wells Fargo began sending Plaintiff statements that no 12 longer reflected the modified terms. 13 On October 27, 2010, Plaintiff signed a Forbearance Agreement that stated his 14 loan was due for the April 1, 2009 payment. It also stated, “This is not a waiver of the 15 accrued or future payments that become due, but a period for you to determine how you 16 will be able to resolve your financial hardship.” It required Plaintiff to pay $1,493.00 for 17 five months, November 10, 2010, through March 10, 2011, and then to pay $112,413.94 18 on April 10, 2011. Plaintiff does not allege that he made any payments required under 19 the Forbearance Agreement. On April 3, 2012, a notice of trustee’s sale for Plaintiff’s home was recorded. 20 21 Plaintiff does not allege that the home has been sold. 22 IV. ANALYSIS 23 A. 24 Count One alleges that Wells Fargo breached the Loan Modification Agreement 25 by cancelling it and refusing to continue to accept modified payments. It further alleges 26 that “Plaintiff performed under the modified terms, paying his timely full payment, and 27 sometimes in excess of the required $3,822.69 monthly payment,” but payments of 28 Count One (Breach of Contract) -4  1 2 $3,822.69 do not include the required escrow deposits for property taxes and insurance. 3 In fact, in a previous pleading, Plaintiff alleged that Wells Fargo “put force place 4 insurance on his home.” 5 Further, Plaintiff alleges he received notice of the cancellation by a voicemail 6 message in June 2010, but does not allege receiving written notice as required by the 7 Deed of Trust before he stopped making payments. The Second Amended Complaint 8 does not allege when Plaintiff began receiving statements requesting payments in the 9 amounts required before the Loan Modification Agreement was executed, but as pled, it 10 appears that he did not comply with the terms of the Loan Modification Agreement 11 before June 2010 and did not make any payment after June 29, 2010. Receiving a 12 voicemail would not be sufficient to cancel the Loan Modification Agreement, but even if 13 it were, Plaintiff would have been required to make payments required under the Deed of 14 Trust. 15 On November 2, 2010, Plaintiff signed a Forbearance Agreement, which the Court 16 can consider because Plaintiff referenced it in and attached it to the First Amended 17 Complaint and its authenticity is not disputed. 18 Forbearance Agreement abrogated and discharged the Loan Modification Agreement, but 19 it makes no difference because, as alleged, Plaintiff did not make any payments from July 20 2010 through October 2010 and was in default. 21 22 The parties dispute whether the Therefore, Count One will be dismissed because it fails to state a claim upon which relief can be granted. 23 B. 24 Count Two alleges that Wells Fargo breached the covenant of good faith and fair 25 dealing implied in the Loan Modification Agreement by failing to tell Plaintiff it planned 26 to breach it. It also alleges that Wells Fargo misled Plaintiff regarding its authority to 27 enter into the Loan Modification Agreement, but it does not allege that the 28 Count Two (Breach of the Covenant of Good Faith and Fair Dealing) -5  1 2 misrepresentation caused any injury. It does not allege that Wells Fargo’s authority had 3 any relationship to cancellation of the Loan Modification Agreement. Plaintiff’s alleged 4 facts show that his actions led to the cancellation. 5 Moreover, it is not plausible that Wells Fargo would enter into a Loan 6 Modification Agreement with the intent to breach it. Plaintiff was already in default, and 7 Wells Fargo could have noticed a trustee’s sale without pretense. 8 9 Therefore, Count Two will be dismissed because it fails to state a claim upon which relief can be granted. 10 C. Count Three (Fraud/False Representation) 11 Count Three alleges that Wells Fargo falsely represented that it “had the authority 12 and the willingness to perform a permanent modification of Daghlan’s loan.” But the 13 Loan Modification Agreement expressly does not provide a permanent modification. It 14 provided a reduced payment schedule for March 1, 2010, through February 1, 2015, after 15 which the interest rate and amount of monthly payments could change in accordance with 16 the terms of the Note. Moreover, the Second Amended Complaint does not allege that 17 the Loan Modification Agreement was cancelled because Wells Fargo lacked authority to 18 execute it. Thus, any misrepresentations regarding Wells Fargo’s authority did not cause 19 Plaintiff’s alleged damages. 20 Count Three also alleges that Plaintiff relied on Wells Fargo’s false 21 representations by making five monthly payments based on the Loan Modification 22 Agreement—in amounts less than required by the Deed of Trust. He does not allege that, 23 but for entering into the Loan Modification Agreement, he would not have made any 24 payments. 25 Agreement, he could and would have paid all of the arrearages accrued before February 26 2010 and he could and would have made the monthly payments required by the Deed of 27 Trust, thereby avoiding late fees, credit damage, loss of equity, overdraft fees, etc. 28 Nor does he allege that, but for entering into the Loan Modification -6  1 2 Rather, the Second Amended Complaint expressly alleges that Plaintiff requested a loan 3 modification “stressing financial hardship.” Therefore, Count Three fails to state a claim upon which relief can be granted. 4 5 V. LEAVE TO AMEND 6 Although leave to amend should be freely given “when justice so requires,” Fed. 7 R. Civ. P. 15(a)(2), the Court has “especially broad” discretion to deny leave to amend 8 where the plaintiff already has had one or more opportunities to amend a complaint. 9 Ascon Props., Inc. v. Mobil Oil Co., 866 F.2d 1149, 1161 (9th Cir. 1989). “Leave to 10 amend need not be given if a complaint, as amended, is subject to dismissal.” Moore v. 11 Kayport Package Exp., Inc., 885 F.2d 531, 538 (9th Cir. 1989). 12 unsuccessfully amended his complaint twice and will not be granted leave for further 13 amendment. 14 15 Plaintiff has IT IS THEREFORE ORDERED that Wells Fargo Bank, N.A.’s Motion to Dismiss Plaintiff’s Second Amended Complaint (Doc. 33) is granted. 16 IT IS FURTHER ORDERED that Plaintiff’s Second Amended Complaint (Doc. 17 32) is dismissed with prejudice for failure to state a claim upon which relief can be 18 granted. 19 20 21 IT IS FURTHER ORDERED that the Clerk shall enter judgment dismissing this action with prejudice and shall terminate this case. Dated this 8th day of April, 2013. 22 23 24 25 26 27 28 -7 

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