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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1 2 3 4 5 NO JS-6 6 7 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA 10 11 LUIS COLOMA and BARBARA COLOMA, 12 Plaintiff, 13 v. 14 15 U.S. BANCORP, a Delaware corporation, 16 Defendant. ___________________________ ) ) ) ) ) ) ) ) ) ) ) ) Case No. CV 14-06440 DDP (ASx) ORDER GRANTING DEFENDANT’S MOTION TO DISMISS [Dkt. No. 8] 17 18 Presently before the Court is Defendant’s motion to dismiss 19 Plaintiffs’ complaint, alleging negligence and other torts in 20 connection with loan modification services, in its entirety for 21 failure to state a claim. 22 I. BACKGROUND 23 Plaintiffs have purchased and reside at a property in Norwalk, 24 California. 25 means of a loan secured by a deed of trust on the property. 26 at ¶ 15.) 27 subsequently transferred to Defendant. 28 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 1 Plaintiffs allege that in early 2013, experiencing “financial 2 difficulties,” they applied to Defendant for a loan modification, 3 based on Defendant’s advertising that such modifications were 4 available for customers “with financial hardships.” 5 18.) 6 process the application, giving them no information as to its 7 status during that time, and ultimately denied the application 8 without explanation. 9 (Compl. ¶¶ 17- They further allege that Defendant took four months to (Id. at ¶ 19.) Plaintiffs allege they then submitted a second application in 10 February 2014, attempting to take advantage of the federal Home 11 Affordable Modification Program (“HAMP”). 12 This application was also denied, albeit with a written explanation 13 suggesting that Plaintiffs’ loan could not be modified because it 14 did not meet HAMP requirements. 15 (Id. at ¶¶ 18, 20.) (Id. at ¶ 20.) Plaintiffs, however, argue that “this denial was in error.” 16 Id. 17 breach of the covenant of good faith and fair dealing, unfair 18 business practices, and intentional infliction of emotional 19 distress (IIED). 20 that (1) clarifies the rights and responsibilities of each party in 21 connection with the loan note and the deed of trust, and (2) 22 clarifies the rights of each party in the property that is the 23 subject of the deed of trust. 24 25 26 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 27 “either (1) lacks a cognizable legal theory or (2) fails to allege 28 sufficient facts to support a cognizable legal theory.” 2 Somers v. 1 Apple, Inc., 729 F.3d 953, 959 (9th Cir. 2013). 2 of material fact in the complaint are taken as true and construed 3 in the light most favorable to the plaintiff.” 4 Products Co., 552 F.3d 934, 937 (9th Cir. 2008). 5 well-pleaded factual allegations, a court should assume their 6 veracity and then determine whether they plausibly give rise to an 7 entitlement to relief.” 8 (2009). 9 III. DISCUSSION 10 11 “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 12 to the second through fifth causes of action. 13 arguments with regard to those causes of action have some merit and 14 Plaintiffs do not oppose, the Court grants the motion to dismiss 15 with regard to each of those claims and does not discuss them 16 further. 17 B. First Cause of Action: Negligence 18 Because Defendant’s In order to establish negligence under California law, “a 19 plaintiff must prove duty, breach, causation and damages.” 20 v. Kmart Corp., 26 Cal. 4th 1200, 1205 (2001). 21 arguments in support of dismissal: first, it had no legal duty of 22 care to the Plaintiffs with regard to the loan modification 23 application; and second, Plaintiffs do not allege any particular 24 damages or injury resulting from the alleged negligence. 25 Ortega Defendant makes two As to duty, the briefs show that courts are divided on whether 26 lenders offering loan modifications are under a duty of care to 27 their borrowers. However, the Court declines to reach this complex 28 3 1 issue at this time, because Defendant’s second argument, regarding 2 damages, suffices to support the motion to dismiss. 3 Plaintiffs have not alleged damages with sufficient 4 specificity to satisfy the Iqbal standard. 5 that they have suffered “damages” as a result of Defendant’s 6 alleged negligence, “according to proof at trial.” 7 While it is perfectly acceptable at the pleadings stage for a 8 plaintiff to be unable to name the exact amount of damages 9 incurred, he should nonetheless be able to state something more Plaintiffs do allege (Compl. ¶ 39.) 10 than a legal conclusion. 11 1:12-CV-00498-AWI, 2014 WL 67254, at *1, *10 (E.D. Cal. Jan. 8, 12 2014) (“Plaintiff's allegation that he has suffered ‘special 13 damages’ is . . . a legal conclusion and not an actual allegation 14 of damages sufficient to state a claim under Iqbal.”). 15 Singh v. U.S. Dep't of Homeland Sec., No. Plaintiffs allege that they are “[j]ustifiably concerned with 16 a possible foreclosure of their home,” (Compl. ¶ 24 (emphasis 17 added)), but they do not state facts showing that such a 18 foreclosure is actually threatened by Defendant, rather than merely 19 feared. 20 including Defendant, prefer not to modify loans, because they can 21 charge additional fees when borrowers default. 22 However, they do not allege that they themselves have been charged 23 such default fees. 24 They also allege that “mortgage servicers,” presumably (Id. at ¶¶ 25-28.) Absent such allegations, the Complaint does not state 25 sufficient facts to show the damages element of Plaintiff’s 26 negligence claim. 27 28 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 4 1 case Plaintiffs wish to amend their Complaint. 2 find that amendment would be futile. 3 futile only if no set of facts can be proved under the amendment to 4 the pleadings that would constitute a valid and sufficient claim or 5 defense.” 6 Cir. 1988). 7 suffered or are suffering actual damages which have simply not been 8 stated with sufficient particularity in the Complaint. 9 IV. CONCLUSION 10 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. 11 Plaintiffs are granted leave to amend and have fourteen (14) days 12 from the date of this order to file an amended complaint with the 13 Court. 14 15 IT IS SO ORDERED. 16 17 18 Dated: September 19, 2014 DEAN D. PREGERSON United States District Judge 19 20 21 22 23 24 25 26 27 28 5

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