Luis Coloma et al v. U.S. Bank National Association, et al.

Filing 14

ORDER GRANTING DEFENDANTS MOTION TO DISMISS 8 by Judge Dean D. Pregerson: Plaintiffs Complaint is dismissed without prejudice. Plaintiffs are granted leave to amend and have 14 days from the date of this order to file an amended complaint with the Court. (lc). Modified on 9/19/2014. (lc).

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NO JS-6

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UNITED STATES DISTRICT COURT

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CENTRAL DISTRICT OF CALIFORNIA

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LUIS COLOMA and BARBARA
COLOMA,

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Plaintiff,
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v.
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U.S. BANCORP, a Delaware
corporation,

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Defendant.
___________________________

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Case No. CV 14-06440 DDP (ASx)
ORDER GRANTING DEFENDANT’S MOTION
TO DISMISS
[Dkt. No. 8]

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Presently before the Court is Defendant’s motion to dismiss

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Plaintiffs’ complaint, alleging negligence and other torts in

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connection with loan modification services, in its entirety for

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failure to state a claim.

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I. BACKGROUND

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Plaintiffs have purchased and reside at a property in Norwalk,

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California.

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means of a loan secured by a deed of trust on the property.

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at ¶ 15.)

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subsequently transferred to Defendant.

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Req. Judicial Notice.)

(Compl. ¶¶ 1, 15.)

They purchased the property by
(Id.

That loan and the interest in the deed of trust were
(Id. at 16; Ex. B, Def.’s

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Plaintiffs allege that in early 2013, experiencing “financial

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difficulties,” they applied to Defendant for a loan modification,

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based on Defendant’s advertising that such modifications were

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available for customers “with financial hardships.”

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18.)

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process the application, giving them no information as to its

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status during that time, and ultimately denied the application

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without explanation.

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(Compl. ¶¶ 17-

They further allege that Defendant took four months to

(Id. at ¶ 19.)

Plaintiffs allege they then submitted a second application in

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February 2014, attempting to take advantage of the federal Home

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Affordable Modification Program (“HAMP”).

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This application was also denied, albeit with a written explanation

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suggesting that Plaintiffs’ loan could not be modified because it

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did not meet HAMP requirements.

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(Id. at ¶¶ 18, 20.)

(Id. at ¶ 20.)

Plaintiffs, however, argue that “this denial was in error.”

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Id.

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breach of the covenant of good faith and fair dealing, unfair

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business practices, and intentional infliction of emotional

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distress (IIED).

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that (1) clarifies the rights and responsibilities of each party in

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connection with the loan note and the deed of trust, and (2)

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clarifies the rights of each party in the property that is the

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subject of the deed of trust.

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Consequently, they have filed this suit, alleging negligence,

Plaintiffs also ask for a declaratory judgment

(Id. at ¶¶ 63-64.)

Defendant moves to dismiss the complaint in its entirety.
II. LEGAL STANDARD
A complaint may be dismissed under Rule 12(b)(6) only if it

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“either (1) lacks a cognizable legal theory or (2) fails to allege

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sufficient facts to support a cognizable legal theory.”
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Somers v.

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Apple, Inc., 729 F.3d 953, 959 (9th Cir. 2013).

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of material fact in the complaint are taken as true and construed

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in the light most favorable to the plaintiff.”

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Products Co., 552 F.3d 934, 937 (9th Cir. 2008).

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well-pleaded factual allegations, a court should assume their

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veracity and then determine whether they plausibly give rise to an

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entitlement to relief.”

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(2009).

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III. DISCUSSION

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“All allegations

Williams v. Gerber
“When there are

Ashcroft v. Iqbal, 556 U.S. 662, 679

A. Second Through Fifth Causes of Action
As an initial matter, Plaintiffs do not oppose the motion as

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to the second through fifth causes of action.

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arguments with regard to those causes of action have some merit and

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Plaintiffs do not oppose, the Court grants the motion to dismiss

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with regard to each of those claims and does not discuss them

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further.

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B. First Cause of Action: Negligence

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Because Defendant’s

In order to establish negligence under California law, “a

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plaintiff must prove duty, breach, causation and damages.”

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v. Kmart Corp., 26 Cal. 4th 1200, 1205 (2001).

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arguments in support of dismissal: first, it had no legal duty of

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care to the Plaintiffs with regard to the loan modification

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application; and second, Plaintiffs do not allege any particular

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damages or injury resulting from the alleged negligence.

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Ortega

Defendant makes two

As to duty, the briefs show that courts are divided on whether

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lenders offering loan modifications are under a duty of care to

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their borrowers.

However, the Court declines to reach this complex

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issue at this time, because Defendant’s second argument, regarding

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damages, suffices to support the motion to dismiss.

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Plaintiffs have not alleged damages with sufficient

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specificity to satisfy the Iqbal standard.

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that they have suffered “damages” as a result of Defendant’s

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alleged negligence, “according to proof at trial.”

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While it is perfectly acceptable at the pleadings stage for a

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plaintiff to be unable to name the exact amount of damages

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incurred, he should nonetheless be able to state something more

Plaintiffs do allege

(Compl. ¶ 39.)

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than a legal conclusion.

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1:12-CV-00498-AWI, 2014 WL 67254, at *1, *10 (E.D. Cal. Jan. 8,

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2014) (“Plaintiff's allegation that he has suffered ‘special

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damages’ is . . . a legal conclusion and not an actual allegation

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of damages sufficient to state a claim under Iqbal.”).

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Singh v. U.S. Dep't of Homeland Sec., No.

Plaintiffs allege that they are “[j]ustifiably concerned with

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a possible foreclosure of their home,” (Compl. ¶ 24 (emphasis

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added)), but they do not state facts showing that such a

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foreclosure is actually threatened by Defendant, rather than merely

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feared.

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including Defendant, prefer not to modify loans, because they can

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charge additional fees when borrowers default.

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However, they do not allege that they themselves have been charged

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such default fees.

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They also allege that “mortgage servicers,” presumably

(Id. at ¶¶ 25-28.)

Absent such allegations, the Complaint does not state

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sufficient facts to show the damages element of Plaintiff’s

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negligence claim.

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Therefore, this claim must be dismissed.

Thus the Complaint as a whole is dismissed, and Defendant’s
motion granted.

However, the Court dismisses without prejudice, in
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case Plaintiffs wish to amend their Complaint.

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find that amendment would be futile.

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futile only if no set of facts can be proved under the amendment to

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the pleadings that would constitute a valid and sufficient claim or

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defense.”

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Cir. 1988).

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suffered or are suffering actual damages which have simply not been

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stated with sufficient particularity in the Complaint.

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IV. CONCLUSION

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The Court does not

“[A] proposed amendment is

Miller v. Rykoff-Sexton, Inc., 845 F.2d 209, 214 (9th
Here it is entirely possible that the Plaintiffs have

Plaintiffs’ Complaint is dismissed without prejudice.

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Plaintiffs are granted leave to amend and have fourteen (14) days

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from the date of this order to file an amended complaint with the

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Court.

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IT IS SO ORDERED.

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Dated: September 19, 2014
DEAN D. PREGERSON
United States District Judge

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