Wassef et al v. JPMorgan Chase Bank NA et al

Filing 22

ORDER, Defendants' Motion to Dismiss 7 is granted; Plaintiffs' amended complaint is dismissed with prejudice; the Clerk is directed to terminate this matter. Signed by Judge David G Campbell on 3/15/13.(REW)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE DISTRICT OF ARIZONA

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Michael Wassef and Angela Wassef,
husband and wife,

No. CV-12-02480-PHX-DGC
ORDER

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Plaintiffs,

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v.

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JPMorgan Chase Bank, N.A.; U.S. Bank
National Association, as Trustee for J.P.
Morgan Mortgage Acquisition Trust 2006CH2, Asset Backed Pass-Through
Certificates, Series 2006-CH2,

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Defendants.

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Defendants JPMorgan Chase Bank, N.A. (“Chase”) and U.S. Bank National

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Association as Trustee for J.P. Morgan Mortgage Acquisition Trust 2006-CH2, Asset

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Backed Pass-Through Certificates, Series 2006-CH2 (“U.S. Bank”), filed a motion to

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dismiss Plaintiffs Michael and Angela Wassef’s amended complaint. Doc. 7. The

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motion has been fully briefed and neither party has requested oral argument. Docs. 15,

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17. For the reasons that follow, the Court will grant the motion and will dismiss the

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amended complaint with prejudice.

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I.

Background.

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In May 2006, Plaintiffs borrowed $556,400 subject to a promissory note (the

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“Note”) from Defendant Chase Bank, N.A. (“Chase”) to refinance a home in Litchfield

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Park, Arizona (the “Property”). Amended Complaint (“AC”), ¶¶ 6-7. Plaintiffs secured

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the Note with a deed of trust on the Property (“DOT”). Id., ¶ 7. Approximately three

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years later, Chase assigned the DOT to U.S. Bank as Trustee for J.P. Morgan Mortgage

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Acquisition Trust 2006-CH2, Asset Backed Pass-Through Certificates, Series 2006-CH2.

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Id., ¶ 8. The Assignment was recorded in the Maricopa County Recorder’s Office on

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April 3, 2009. Id.

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On February 12, 2010, Plaintiff Michael Wassef entered into a Home Affordable

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Modification Agreement (“Modification Agreement”) with Chase. Id., ¶ 9. Plaintiffs

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made payments according to the terms of the new agreement until September, 2011,

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when they encountered financial difficulties and were unable to continue their payments.

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Id., ¶ 10. Plaintiffs allege that on March 12, 2012, Chase entered into a repayment plan

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with them (“Repayment Agreement”) in which they agreed to make a down payment on

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their arrearages of $12,800 by March 30, 2012, and resume monthly payments under the

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modification agreement of $4,562.89 per month plus continued arrearage payments of

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$1,923.49 a month. Id., ¶¶ 11-13. In exchange, Chase agreed not to take legal action and

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to reinstate the Modification Agreement as if no default had occurred. Id., ¶ 12.

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Plaintiffs allege that on March 30, 2012, they made a timely down payment of

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$12,800 via Western Union as required under the Repayment Agreement, but Chase

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representatives began calling them to say that no payments had been received, and a

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representative informed them that Chase had no record of the alleged Repayment

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Agreement. Id., ¶¶ 14-15.

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Plaintiffs allege that on April 29, 2012, they made a subsequent monthly payment

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plus arrearages of $6,486.38. Id., ¶16. Thereafter, in May, 2012, a Chase representative

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delivered a yellow envelope to their door stating they had not made payments for more

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than 45 days. Id., ¶ 17. Later, during an in-person meeting at the Chase Homeownership

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Center in Phoenix, Arizona, a Chase representative stated that Chase had “rejected” the

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March 30 and April 29 payments. Id., ¶ 18.

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Plaintiffs allege that on May 29, 2012, they made their second monthly payment

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plus arrearages through Western Union as required by the Repayment Agreement. Id.,

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¶ 19.

The three payments they made under the agreement to that point totaled

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$25,772.76. Id., ¶ 20. Chase informed Plaintiffs in June of 2012 that they should make

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no further payments under the Repayment Agreement and that their previous payments

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would be refunded by Western Union. Id., ¶¶ 21-22. Plaintiffs made repeated calls to

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Western Union and did not receive their refunded payments until August 17, 2012. Id.,

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¶¶ 22-23. At that time, Chase informed Plaintiffs that their Repayment Agreement had

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been cancelled because it did not meet “investor repayment guidelines,” and stated that

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resumption of the Modification Agreement would require a down payment of $25,000 to

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$30,000 and monthly payments of $11,000 through August of 2013. Id., ¶ 24. Plaintiffs

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stated that they could not meet these requirements. Id.

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On September 11, 2012, Plaintiffs sent a letter to Chase demanding that it reinstate

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the Repayment Agreement with an extension of the repayment schedule to account for its

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failure to credit Plaintiff’s payments.

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September 20, 2012, California Reconveyance Company, successor Trustee on the DOT,

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recorded a Notice of Trustee’s Sale for a sale of the Property scheduled to take place

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December 20, 2012. Id., ¶ 27. To date, no trustee sale has been held. Doc. 7 at 2.

Id., ¶ 26.

Chase did not respond, and on

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Plaintiffs, who are represented by counsel, filed an amended complaint in which

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they alleged nine claims for relief: (1) breach of contract/implied covenant of good faith

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and fair dealing against Chase, (2) unjust enrichment against Chase, (3) consumer fraud

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against Chase, (4) promissory estoppel against Chase, (5) specific performance/equitable

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reformation against Chase, (6) declaratory judgment against Chase, (7) punitive damages

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against Chase, (8) violation of the Fair Debt Collection Practices Act against Chase, and

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(9) violation of A.R.S. § 33-420 against U.S. Bank. A.C. ¶¶ 28-75.

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II.

Legal Standard.

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When analyzing a complaint for failure to state a claim to relief under Rule

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12(b)(6), the well-pled factual allegations are taken as true and construed in the light

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most favorable to the nonmoving party. Cousins v. Lockyer, 568 F.3d 1063, 1067 (9th

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Cir. 2009). Legal conclusions couched as factual allegations are not entitled to the

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assumption of truth, Ashcroft v. Iqbal, 556 U.S. 662, 680 (2009), and therefore are

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insufficient to defeat a motion to dismiss for failure to state a claim, In re Cutera Sec.

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Litig., 610 F.3d 1103, 1108 (9th Cir. 2010). To avoid a Rule 12(b)(6) dismissal, the

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complaint must plead enough facts to state a claim to relief that is plausible on its face.

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Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). Dismissal is appropriate where the

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complaint lacks a cognizable legal theory, lacks sufficient facts alleged under a

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cognizable legal theory, or contains allegations disclosing some absolute defense or bar

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to recovery. See Balistreri v. Pacifica Police Dept., 901 F.2d 696, 699 (9th Cir. 1988);

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Weisbuch v. County of L.A., 119 F.3d 778, 783, n.1 (9th Cir. 1997).

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III.

Defendants’ Motion to Dismiss.

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A.

Count One: Breach of Contract/Implied Covenant of Good Faith.

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Plaintiffs’ first claim for relief rests on allegations that Chase breached the

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Repayment Agreement under which it allegedly agreed to forgo legal enforcement of the

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DOT and to reinstate the Modification Agreement as if no default had occurred. A.C.

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¶ 29. Chase asserts that the Repayment Agreement is not an enforceable contract because

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Plaintiffs merely agreed to meet obligations they already had, something that does not

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constitute adequate consideration for a valid contract. Doc. 7 at 5-6. The Court agrees.

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For a valid contract to exist, “there must be an offer, an acceptance, consideration,

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and sufficient specification of terms so that the obligations involved can be ascertained.”

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Norman v. State Farm Mut. Auto. Ins. Co., 33 P.3d 530, 532(Ariz. Ct. App. 2001). “A

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promise lacks consideration if the promisee is under a preexisting duty to counter-

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perform.” Travelers Ins. Co. v. Breese, 675 P.2d 1327, 1330 (Ariz. Ct. App. 1983); see

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also Hisel v. Upchurch, 797 F. Supp. 1509, 1521 (D. Ariz. 1992) (“A well-established

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principle of consideration is that ‘giving a party something to which he or she has an

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absolute right is not consideration to support that party’s contractual promise.’”) (internal

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citation omitted).

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Plaintiffs argue that the Repayment Agreement was supported by consideration

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because the express language of the agreement states that it is “in consideration of the

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Recitals above, the mutual promises contained herein and the benefits accruing to the

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parties hereunder.” Doc. 15 at 4. Absent allegations of any obligations in addition to or

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separate from their pre-existing duty to perform under the original DOT and the

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Modification Agreement, however, Plaintiffs’ mere reliance on the formalistic language

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of the Repayment Agreement is unavailing.

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Plaintiffs argue that Chase received consideration for the Repayment Agreement

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because it had more rights under that agreement than it would have had through

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immediate foreclosure – had Chase proceeded with foreclosure, Plaintiffs would no

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longer have been obligated to make payments, and, under A.R.S. § 33-814 (G), Chase

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would not have been able to recoup any deficiency. Doc. 15 at 4-5. The Court is not

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persuaded. When Plaintiffs signed the Repayment Agreement, Chase had not initiated

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foreclosure and Plaintiffs remained contractually obligated under the Note and the

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Modification Agreement to cure their default. As this district found under similar facts in

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Salgado v. Am.’s Servicing Co., No. CV-10-1909-PHX-GMS, 2011 WL 3903072, at *2

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(D. Ariz. Sept. 6, 2011), Plaintiffs could not have given up any rights under Arizona’s

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anti-deficiency statute, which applies only in the event of foreclosure, when foreclosure

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proceedings had not yet begun. As in Salgado, Plaintiffs’ pre-foreclosure obligation to

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pay arrearages greater than the partial payments agreed to under the Repayment

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Agreement renders that agreement unenforceable for lack of consideration.

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(“[B]y asserting that he paid less than the note obliged him to pay, Plaintiff has made no

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plausible allegation that the agreement was supported by consideration.”).

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Plaintiffs have failed to allege facts showing that the Repayment Agreement was

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supported by consideration and that it was, therefore, a legally enforceable contract,

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Plaintiffs’ breach of contract claim fails.

See id.

Because

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The lack of an enforceable contract is also fatal to Plaintiffs’ breach of the

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covenant of good faith and fair dealing claim. See Norman v. State Farm Mut. Auto. Ins.

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Co., 33 P.3d 530, 532 (Ariz. Ct. App. 2001) (“[W]e reiterate the well-settled principle

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that a contract must exist before there can be a breach of the covenants of good faith and

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fair dealing implied in every contract.”). The Court will dismiss count one.

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B.

Count Two: Unjust Enrichment.

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Plaintiffs allege that Chase has been unjustly enriched at their expense. A.C. ¶ 37.

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Unjust enrichment is a claim in equity that Plaintiffs put forth as an alternative to their

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breach of contract claims. Doc. 15 at 5. “In Arizona, five elements must be proved to

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make a case of unjust enrichment: (1) an enrichment; (2) an impoverishment; (3) a

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connection between the enrichment and the impoverishment; (4) absence of justification

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for the enrichment and the impoverishment; and (5) an absence of a remedy provided by

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law.” Community Guardian Bank v. Hamlin, 898 P.2d 1005, 1008 (Ariz. Ct. App. 1995)

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(citations omitted).

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Chase argues, and the Court agrees, that Plaintiffs have failed to allege facts to

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support the necessary elements of this claim. Doc. 7 at 7. Specifically, they have failed

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to allege that Chase was enriched, that they were impoverished, or that these results, to

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the extent Plaintiffs have attempted to allege them, were unjust. See id.

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To the extent that Plaintiffs’ claim rests on the alleged payments they made to

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Chase pursuant to the Repayment Agreement, Plaintiffs do not dispute that Chase was

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entitled to these payments as partial compensation for Plaintiffs’ failure to meet its

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monthly payment obligations under the original Note and Modification Agreement. See

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A.C. ¶¶ 9-13. This fact negates any assertion that either the “enrichment” Chase received

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or the corresponding “impoverishment” Plaintiffs incurred was unjust. Moreover, even

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accepting Plaintiffs’ theory that the payments made under the Repayment Agreement

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were somehow unjust because they were induced by misrepresentation on the part of

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Chase, it is undisputed that Chase returned the payments, thereby obviating any

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remaining ground for unjust enrichment. See A.C. ¶¶ 22-24; Doc. 15 at 2, 5.

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To the extent that Plaintiffs’ unjust enrichment claim rests on the noticed

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foreclosure sale of the Property, this also is not an adequate basis for showing either that

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Chase was unjustly enriched or that Plaintiffs were unjustly impoverished.

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Plaintiffs have alleged no facts showing that Chase gained financially by initiating

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foreclosure or that Plaintiffs suffered impoverishment as a result. To the contrary, Chase

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First,

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asserts, and Plaintiffs do not dispute, that no foreclosure sale has taken place and

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Plaintiffs have continued to reside in the Property for months despite their default.

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Docs. 7 at 2; 17 at 4. Second, even if Plaintiffs could show an enrichment to Chase and a

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corresponding impoverishment to themselves should the foreclosure sale proceed,

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Plaintiffs acknowledge that they defaulted on the Modification Agreement and that the

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payments they proffered under the Repayment Agreement, even if credited, only partially

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covered their past arrearages. The Court cannot conclude that foreclosure under these

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circumstances would be unjust. The Court will dismiss count two.

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C.

Claim Three: Consumer Fraud.

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To state a claim for consumer fraud under A.R.S. § 44-1522, a Plaintiff must

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allege “a false promise or misrepresentation made in connection with the sale or

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advertisement of merchandise and consequent and proximate injury resulting from the

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promise.” Kuehn v. Stanley, 91 P.3d 346, 351 (Ariz. Ct. App. 2004). Plaintiffs allege

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both that Chase made false promises and misrepresentations in connection with the

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Repayment Agreement and that Plaintiffs suffered damages as a result. A.C. ¶¶ 40, 42.

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Chase argues that Plaintiffs’ consumer fraud claim fails because Plaintiffs fail to

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plead with particularity the time, place, and parties to the alleged misrepresentations as

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required under Federal Rule of Civil Procedure 9(b). Doc. 7 at 7-8; see Fed. R. Civ. P.

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9(b) (“a party must allege with particularity the circumstances constituting fraud or

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mistake.”); Lancaster Community Hosp. v. Antelope Valley Hosp. Dist., 940 F.2d 397,

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405 (9th Cir. 1991) (averments of fraud must be accompanied by the who, what, when,

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where, and how of the misconduct charged); A.G. Edwards & Sons, Inc. v. Smith, 736 F.

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Supp. 1030, 1033 (D. Ariz. 1989) (same). Chase also argues that Plaintiffs have suffered

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no injury as the basis for this claim. Doc. 17 at 5.

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It is questionable whether A.R.S. § 44-1522, which applies to misrepresentations

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“in connection with the sale or advertisement of any merchandise,” applies to Chase’s

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alleged misrepresentations in the Repayment Agreement given that that agreement did

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not involve the sale or advertisement of merchandise and even the DOT to which it

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relates involved only a refinancing of Plaintiffs’ home. The Court need not reach this

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question or the question of whether Plaintiffs have met the particularity requirements of

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Rule 9(b). Instead, the Court finds that the lack of actual damages, as noted with respect

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to Plaintiffs’ first two claims, is fatal to any consumer fraud claim. Plaintiffs have not

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alleged that they made any payments under the Repayment Agreement that they were not

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already obligated to make, nor that Chase’s alleged fraudulent misrepresentations with

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respect to the Repayment Agreement have left Plaintiffs worse off than before Chase

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allegedly proffered that agreement.

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resulting from the [false] promise” to forgo foreclosure is fatal to Plaintiffs’ consumer

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The lack of “consequent and proximate injury

fraud claim. Kuehn, 91 P.3d at 351. The Court will dismiss count three.

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D.

Claim Four: Promissory Estoppel.

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Plaintiffs’ claim of promissory estoppel, like their unjust enrichment claim, is a

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claim for equitable relief predicated on the allegation that Chase promised to forgo

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enforcing the terms of the DOT and to reinstate Plaintiffs’ Modification Agreement in

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exchange for specified payments, and that Plaintiffs justifiably relied on this promise to

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their detriment. A.C. ¶¶ 45-47. Plaintiffs allege, in particular, that Chase’s promise

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induced them to make the March, April, and May payments and not to make the

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subsequent June payments. Id., ¶ 46. This claim also fails because Plaintiffs have failed

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to allege facts showing that their actions in reliance on Chase’s alleged promise caused

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them injury.

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As set forth in the amended complaint, Plaintiffs’ March, April, and May

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payments consisted of partial payments of amounts already owed to Chase under the

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DOT and Modification Agreement. Again, Plaintiffs cannot claim damages for paying

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what they already owed. Plaintiffs’ non-payment in June following Chase’s instruction

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that they make no further payments under the Repayment Agreement also does not show

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injury. To the extent that Plaintiffs imply that they were injured because they were

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unwittingly led to believe that they no longer had to make any payments, this assertion is

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belied by Plaintiffs’ own allegations that Chase informed them that the Repayment

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Agreement did not meet “investor repayment guidelines” and that reinstatement of the

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Modification Agreement would require adherence to new payment terms. A.C. ¶ 24.

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Plaintiffs no doubt suffered inconvenience and frustration in making a number of

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payments in the expectation of curing their default, only to have those payments rejected

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and reimbursed after considerable delay. But Plaintiffs have not alleged facts plausibly

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showing that they were made materially worse off by the actions they took in reliance on

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Chase’s promises such that equity can only be served if those promises are enforced. See

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Restatement (Second) of Contracts § 90(1) (requiring for purposes of promissory

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estoppel that “injustice can be avoided only by enforcement of the promise”); quoted in

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Double AA Builders, Ltd. v. Grand State Const. L.L.C., 114 P.3d 835, 839 (Ariz. Ct. App.

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2005). Plaintiffs are in at least the same or better position than they were before they

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relied on Chase’s promises because the payments they made were smaller than the

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amounts they owed, the payments have nonetheless been fully refunded, and Plaintiffs

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have been able to remain in the Property despite default. The Court has no basis in equity

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to enforce an otherwise non-binding promise, reliance on which did not leave Plaintiffs

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materially worse off than if the promise had not been made.

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E.

Claim Five: Specific Performance/Equitable Reformation.

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Plaintiffs’ specific performance claim is predicated on the assertion that the

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Repayment Agreement constitutes an enforceable contract.

This claim fails for the

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reasons already discussed with respect to Plaintiffs’ breach of contract claim. Plaintiffs

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additionally seek “equitable reformation of the Repayment Agreement to the extent

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necessary to effect specific performance.” A.C. ¶ 54. To the extent that Plaintiffs

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attempt to assert an additional claim in equity, this claim fails for the reasons discussed

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with respect to counts two and four.

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F.

Count Six: Declaratory Judgment.

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Plaintiffs seek a judgment “declaring that the Repayment Agreement is fully

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enforceable against Chase” and had been breached. A.C. ¶¶ 59-60. A request for

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declaratory judgment is a remedy, not a separate cause of action. See Silvas v. GMAC

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Mortgage, L.L.C., No. CV-09-265-PHX-GMS, 2009 WL 4573234, at *7 (D. Ariz.

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Dec. 1, 2009). For this reason, and because the Court has already dismissed Plaintiffs’

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breach of contract claim, the Court will dismiss count six.

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G.

Count Seven: Punitive Damages.

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Plaintiffs allege that they are entitled to punitive damages because Chase’s

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conduct “was malicious, shows spite or ill will, and demonstrates a reckless indifference

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to Plaintiffs’ interests.” A.C. ¶ 64. Chase argues, and the Court agrees, that because

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Plaintiffs have failed to show actual damages, they lack sufficient grounds to assert a

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claim for punitive damages. See Medasys Acquisition Corp. v. SDMS, P.C., 55 P.3d 763,

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766 (Ariz. 2002) (“The traditional rule requires an award of actual damages before

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punitive damages may be awarded, and we adhere to that rule.”).

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H.

Count Eight: Violation of the Fair Debt Collection Practices Act.

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Plaintiffs allege that Chase’s conduct violated several provisions of the Fair Debt

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Collection Practices Act (“FDCPA”), including that a “debt collector” may not engage in

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conduct “the natural consequence of which is to harass, oppress, or abuse any person in

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connection with the collection of a debt” (15 U.S.C. § 1692d), “may not use any false,

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deceptive, or misleading representation or means in connection with the collection of any

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debt” (Id. at § 1692d), and “may not use unfair or unconscionable means to collect or

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attempt to collect any debt” (Id. at § 1692e). See A.C. ¶ 70.

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Under the FDCPA, a “debt collector” is “any person who uses any instrumentality

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of interstate commerce or the mails in any business the principal purpose of which is the

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collection of any debts, or who regularly collects or attempts to collect, directly or

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indirectly, debts owed or due or asserted to be owed or due another.

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§ 1692a(6). This definition does not include “any officer or employee of a creditor while,

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in the name of the creditor, collecting debts for such creditor.” Id. at 1692a(6)(A).

15 U.S.C.

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Plaintiffs do not allege that Chase is a business “the principal purpose of which is

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the collection of any debts.” Nor do they allege that Chase regularly collects or was

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attempting to collect any debts “owed or due or asserted to be owed or due another.”

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Rather, the allegations respecting Chase’s collection activities all pertain to the mortgage-

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related debt Plaintiffs acknowledge owing to Chase itself. See A.C. ¶ 7. As the above-

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cited definition makes clear, the FDCPA has no application to Chase’s alleged

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misconduct in attempting to collect a debt in its own name.

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The legislative history of the Act further supports that it was proposed to address

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“serious and widespread abuses” by “third party debt collectors” and was not intended to

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apply to “the collection of debts, such as mortgages and student loans, by persons who

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originated such loans.” S. Rep. No. 95-382 (1977), reprinted in 1977 U.S.C.C.A.N.

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1695, at 1696-98, 1977 WL 16047. Courts have routinely found that the Act does not

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apply to mortgagees, their beneficiaries, or mortgage service companies. See Perry v.

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Stewart Title Co., 756 F.2d 1197, 1208 (5th Cir. 1985) (finding that neither mortgage

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servicing company nor pre-default assignee on promissory note were debt collectors);

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Mansour v. Cal-Western Reconveyance Corp., 618 F. Supp. 2d 1178, 1182 (D. Ariz.

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2009) (an assignee, a servicing company, and a fiduciary were not debt collectors under

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the FDCPA); Bergdale v. Countrywide Bank FSB, No. CV-12-8057-PCT-GMS. 2012

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WL 4120482 at *8 (D. Ariz. Sept. 18, 2012) (mortgagees and their beneficiaries are not

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debt collectors under the FDCPA).

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Plaintiffs argue that Chase is subject to the FDCPA because it identified itself as a

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“debt collector” in its own correspondence. Doc. 15 at 7. Chase acknowledges that it

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identified itself as the “lender” or “servicer” of Plaintiffs’ debt, and that it routinely uses

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boiler-plate language in its correspondence to indicate that it is collecting a debt, but it

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argues that this does not mean it is a “debt collector” for purposes of the FDCPA when

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the definition under that Act does not otherwise apply. Doc. 17 at 6; 6 nn. 2 & 3. For the

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reasons stated above, the Court agrees. The Court will dismiss count eight.

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I.

Count Nine: Violation of A.R.S. § 33-420.

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Plaintiffs allege that U.S. Bank caused a Notice of Trustee’s Sale to be recorded

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with the Maricopa County Recorder’s Office “knowing or having reason to know that the

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document is forged, groundless, contains a material misstatement or false claim or is

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otherwise invalid” in violation of A.R.S. § 33-420. A.C. ¶ 74. Plaintiffs acknowledge

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that their assertion that the Notice of Trustee’s Sale is groundless rests entirely on their

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allegations that Chase breached the Repayment Agreement or, in the alternative, should

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be equitably estopped from rescinding that agreement. Doc. 15 at 7. As previously

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discussed, Plaintiffs have failed to allege facts showing that the Repayment Agreement

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was a legally-binding contract or that they otherwise are entitled to equitable relief.

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Plaintiffs have also failed to allege facts showing that U.S. Bank knew or should have

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known of Plaintiffs’ attempts to cure their default. Finally, courts in this district have

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routinely found that A.R.S. § 33-420, which pertains to recording documents “purporting

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to claim an interest in, or a lien or encumbrance against, real property,” does not apply to

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a Notice of Trustee sale. See Bergdale, 2012 WL 4120482, at *4 (citing cases and

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concluding that “notices of trustee's sale do not ‘create an interest’ in property such that

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A.R.S. § 33–420 applies.”). Plaintiffs fail to state a claim under A.R.S. § 33–420.

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IV.

Plaintiffs’ Request for Leave to Amend.

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Plaintiffs ask the Court to grant leave to amend. Doc. 15 at 9. Rule 15 of the

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Federal Rules of Civil Procedure declares that courts should “freely give leave [to

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amend] when justice so requires.” Fed. R. Civ. P. 15(a)(2). While “this mandate is to be

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heeded,” leave to amend may be denied if the amendment would be futile. Foman v.

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Davis, 371 U.S. 178, 182 (1962).

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The Court has dismissed Plaintiffs’ breach of contract and breach of the implied

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covenant of good faith and fair dealing claims because Plaintiffs’ allegations fail to show

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that the Repayment Agreement was a binding contract supported by consideration.

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Plaintiffs, with full knowledge of the facts of that agreement, have failed to identify any

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contractual obligations that required them to do more than they were already obligated to

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do. Thus, leave to amend those claims would be futile. Plaintiffs’ consumer fraud,

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punitive damages, FDCPA, and A.R.S. § 33-420 claims similarly fail as a matter of law

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because, as fully discussed above, the facts upon which Plaintiffs rely fail to support

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necessary elements of those claims. Because it does not appear from Plaintiffs’ amended

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complaint or the arguments put forth in response to the motion to dismiss that any new

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facts could avoid the fatal deficiencies of those claims, leave to amend those claims

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would be futile. Finally, granting Plaintiffs leave to amend its remaining claims in equity

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would be futile because Plaintiffs acknowledge that they were in default on the

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Modification Agreement for an amount greater than they proffered under any subsequent

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payment plan, and this prevents the Court from finding either the collection of partial

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payments from Plaintiffs (subsequently returned) or the noticed trustee’s sale under the

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terms of the DOT unjust. In sum, the Court denies leave to amend because it finds that

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amendment would be futile with respect to all claims.

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IT IS ORDERED:

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1.

Defendants’ motion to dismiss (Doc. 7) is granted.

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2.

Plaintiffs’ amended complaint is dismissed with prejudice.

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3.

The Clerk of the Court is directed to terminate this matter.

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Dated this 15th day of March, 2013.

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