Hernandez v. Bank of America, Countrywide
Filing
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ORDER granting 8 Motion for Judgment on the Pleadings signed by Judge Oliver W. Wanger on 5/11/2011. (Lundstrom, T)
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UNITED STATES DISTRICT COURT
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FOR THE EASTERN DISTRICT OF CALIFORNIA
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MARICELA VERDE HERNANDEZ,
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Plaintiff,
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1:11-cv-00001 OWW JLT
ORDER GRANTING MOTION FOR
JUDGMENT ON THE PLEADINGS
(DOC. 8)
v.
BANK OF AMERICA, COUNTRYWIDE,
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Defendants.
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I. INTRODUCTION
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This action concerns real property located at 6651 Via Del
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Mar, Bakersfield, California, 93307 (“Subject Property”).
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Complaint, apparently drafted by counsel, is riddled with
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typographical errors and partial sentences, making it difficult
to understand.
It appears from the Complaint that Plaintiff,
Maricela Verde Herndandez, purchased the property on or about
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June 23, 2006 financed through a loan from “Countrywide, Bank of
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America.”
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experiencing financial difficulties,” and requested a loan
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modification from her lender.
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Doc. 1, Compl. ¶ 12.
At some point, Plaintiff “began
Id. at ¶¶ 14-15.
The lender
requested additional information regarding Plaintiff‟s
modification request.
Id. at ¶ 17.
On June 14, 2010, Bank of
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America informed Plaintiff that it had “completed its review” of
her modification request, but the results of that review are not
articulated in the complaint.
Id. at ¶ 18.
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Regardless of the
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outcome, the property was sold under the power of sale on June
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16, 2010.
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Id.
Plaintiff, through counsel, requested rescission of the
sale, which request was apparently denied.
See id. at ¶ 22.
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Subsequently, Plaintiff filed a Complaint for Damages in the
Superior Court for the “County of Bakersfield,” which was
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accepted for filing by the Superior Court, Metropolitan Division,
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County of Kern, on December 8, 2010.
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twelve causes of action:
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The Complaint alleges
1. Breach of Contract;
2. Violation of California Business & Professions Code
§§ 17200-17500, et seq.,
3. Breach of the Covenant of Good Faith and Fair
Dealing;
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4. Fraud and Intentional Misrepresentation of Fact;
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5. Negligent Misrepresentation of the Fact;
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6. Unlawful Business Practices (Cal. Fin. Code §
22302);
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8. Cancellation and Vacation of Foreclosure Sale;
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9. Quiet Title;
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10. Fraudulent Inducement;
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11. Intentional Infliction of Emotional Distress;
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12. Negligent Infliction of Emotional Distress.
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The Complaint also contains allegations that Defendant violated
various provisions of federal law.
See Compl. at ¶ 19 (alleging
violations of “12 U.S.C., 12 C.F.R., 15 U.S.C.”); 4:27-5:4
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(alleging a violation of the UCL “predicated upon Violations of
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TILA”); 17:15 (seeking relief under TILA).
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On January 3, 2011, Defendant BAC Home Loans, erroneously
sued as Bank of America, Countrywide, timely and properly removed
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this case to federal court pursuant to 28 U.S.C. § 1446(a), based
upon federal question jurisdiction.
Doc. 1.
Defendant
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subsequently noticed for hearing on March 14, 2011 a motion for
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judgment on the pleadings, or in the alternative for summary
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judgment.
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Doc. 10.
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Doc. 8.
That hearing was continued to March 21, 2011.
Notice of the new hearing date was served by U.S. Mail
on Plaintiff‟s counsel.
See Docket Entry Dated 1/27/11.
Plaintiff, who is represented by counsel, failed to file any
opposition.
See Doc. 13.
A March 15, 2010 minute order took the
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matter off calendar and submitted the motion for judgment on the
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pleadings for decision on the papers.
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was served via U.S. Mail on Plaintiff‟s counsel March 15, 2011.
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In an abundance of caution, an Order directing Plaintiff‟s
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counsel to serve notice of the pending dispositive motion on
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Doc. 14.
The minute order
Plaintiff was served by mail on Plaintiff‟s counsel May 1, 2011.
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Doc. 15.
Plaintiff‟s counsel was ordered to return proof of
service upon Plaintiff and was given an additional fifteen (15)
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days to inform the court whether or not Plaintiff intends to
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oppose the motion.
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communication from Plaintiff‟s counsel or Plaintiff has been
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Id.
No proof of service or other
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received.
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Defendant‟s motion for judgment on the pleadings or in the
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alternative for summary judgment is GRANTED IN ITS ENTIRETY for
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the reasons set forth below.
In addition, a copy of this order
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shall be served on the State Bar of California with a cover
letter directing that it be added to the disciplinary file of
Plaintiff‟s counsel, Emeka Godfrey Onwualu, SBN # 161868.
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II. STANDARD OF DECISION
A.
Motion for Judgment on the Pleadings.
Federal Rule of Civil Procedure 12(c) states, “[a]fter the
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pleadings are closed but within such time as not to delay the
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trial, any party may move for judgment on the pleadings.”
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Rule 12(c) is used to raise the defense of failure to state a
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claim upon which relief can be granted, the standard governing
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the Rule 12(c) motion for judgment on the pleadings is the same
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as that governing a Rule 12(b)(6) motion.
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When
See McGlinchy v. Shell
Chemical Co., 845 F.2d 802, 810 (9th Cir. 1988).
A motion to
dismiss brought under Federal Rule of Civil Procedure 12(b)(6)
“tests the legal sufficiency of a claim.”
Navarro v. Block, 250
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F.3d 729, 732 (9th Cir. 2001).
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motion to dismiss, the court “accept [s] all factual allegations
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of the complaint as true and draw[s] all reasonable inferences”
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in the light most favorable to the nonmoving party.
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Lewis, 174 F.3d 987, 991 (9th Cir. 1999).
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In deciding whether to grant a
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TwoRivers v.
To survive a motion to
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dismiss, a complaint must “contain sufficient factual matter,
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accepted as true, to „state a claim to relief that is plausible
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on its face.‟”
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Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (May 18,
2009) (quoting Bell Atl. Corp v. Twombly, 550 U.S. 544, 570
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(2007)).
A claim has facial plausibility when the plaintiff
pleads factual content that allows the court to
draw the reasonable inference that the defendant
is liable for the misconduct alleged. The
plausibility standard is not akin to a
“probability requirement,” but it asks for more
than a sheer possibility that defendant has acted
unlawfully. Where a complaint pleads facts that
are “merely consistent with” a defendant‟s
liability, it “stops short of the line between
possibility and plausibility of „entitlement to
relief.‟”
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Id. (citing Twombly, 550 U.S. 556-57).
Dismissal also can be
based on the lack of a cognizable legal theory.
Balistreri v.
Pacifica Police Dep‟t, 901 F.2d 696, 699 (9th Cir. 1990).
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B.
Motion for Summary Judgment.
Summary judgment is appropriate when “the pleadings,
depositions, answers to interrogatories, and admissions on file,
together with affidavits, if any, show that there is no genuine
issue as to any material fact and that the movant is entitled to
judgment as a matter of law.”
Celotex Corp. v. Catrett, 477 U.S.
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317, 322 (1986).
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bears the initial responsibility of informing the district court
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of the basis for its motion, and identifying those portions of
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the pleadings, depositions, answers to interrogatories, and
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A party moving for summary judgment “always
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admissions on file, together with the affidavits, if any, which
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it believes demonstrate the absence of a genuine issue of
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material fact.”
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Id. at 323 (internal quotation marks omitted).
Where the movant has the burden of proof on an issue at
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trial, it must “affirmatively demonstrate that no reasonable
trier of fact could find other than for the moving party.”
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Soremekun v. Thrifty Payless, Inc., 509 F.3d 978, 984 (9th Cir.
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2007); see also S. Cal. Gas Co. v. City of Santa Ana, 336 F.3d
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885, 888 (9th Cir. 2003) (noting that a party moving for summary
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judgment on claim on which it has the burden at trial “must
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establish beyond controversy every essential element” of the
claim) (internal quotation marks omitted).
With respect to an
issue as to which the non-moving party has the burden of proof,
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the movant “can prevail merely by pointing out that there is an
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absence of evidence to support the nonmoving party‟s case.”
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Soremekun, 509 F.3d at 984.
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is properly made and supported, the non-movant cannot defeat the
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motion by resting upon the allegations or denials of its own
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When a motion for summary judgment
pleading, rather the “non-moving party must set forth, by
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affidavit or as otherwise provided in Rule 56, specific facts
showing that there is a genuine issue for trial.‟” Id. (quoting
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Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986)).
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“Conclusory, speculative testimony in affidavits and moving
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papers is insufficient to raise genuine issues of fact and defeat
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Id.
summary judgment.”
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To defeat a motion for summary judgment, the non-moving
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party must show there exists a genuine dispute (or issue) of
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material fact.
A fact is “material” if it “might affect the
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outcome of the suit under the governing law.”
at 248.
Anderson, 477 U.S.
“[S]ummary judgment will not lie if [a] dispute about a
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material fact is „genuine,‟ that is, if the evidence is such that
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a reasonable jury could return a verdict for the nonmoving
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party.”
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the district court does not make credibility determinations;
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Id. at 248.
rather, the “evidence of the non-movant is to be believed, and
all justifiable inferences are to be drawn in his favor.”
III. DISCUSSION
A.
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Id. at
255.
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In ruling on a motion for summary judgment,
First Claim for Breach of Contract.
Plaintiff‟s first cause of action appears to assert that the
parties entered into a contract requiring a loan modification.
It is not clear whether Plaintiff alleges that this agreement was
written or oral.
Compl. at ¶ 24.
Defendant argues that Plaintiff has failed to establish that
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the parties have entered into a contract requiring a loan
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modification.
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directly contradict the written Deed of Trust, which provides
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Defendant points out that any such agreement would
that:
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Borrower Not Released; Forbearance By Lender Not a
Waiver. Extension of the time for payment or
modification of amortization of the sums secured by
this Security Instrument granted by Lender to Borrower
or any Successor in Interest of Borrower shall not
operate to release the liability of Borrower or any
Successors in Interest of Borrower. Lender shall not be
required to commence proceedings against any Successor
in Interest of Borrower or to refuse to extend time for
payment or otherwise modify amortization of the sums
secured by this Security Instrument by reasons of any
demand made by the original Borrower or any Successors
in Interest of Borrower. Any forbearance by Lender in
exercise of any right or remedy including, without
limitation, Lender‟s acceptance of payments from third
persons, entities or Successors in Interest of Borrower
or in amounts less than the amount then due, shall not
be a waiver or preclude the exercise of any right or
remedy.
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See RFJN, Doc. 8-2, Ex. 3 § 12.1
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Defendant has satisfied its burden to “point[] out that
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there is an absence of evidence to support the nonmoving party‟s
Soremekun, 509 F.3d at 984. Plaintiff failed to respond
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case.”
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to Defendant‟s motion.
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existence of an agreement to modify the loan nor any definite and
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certain terms.
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breach of contract claim is GRANTED.
The record contains no evidence of the
Defendant‟s motion for summary judgment on the
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B.
Second Claim for Unfair Competition.
Plaintiff‟s unfair competition clause is expressly
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“Predicated on Violations of TILA.”
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TILA “requires creditors to provide borrowers with clear and
Compl. at 5:3-4 (caption).
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A court may consider a document referenced in the Complaint even in the
context of a Rule 12(b)(6) motion to dismiss. See Van Buskirk v. Cable News
Network, Inc., 284 F.3d 977, 980 (9th Cir. 2002).
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accurate disclosures of terms dealing with things like finance
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charges, annual percentage rates of interest, and the borrower's
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rights.”
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Beach v. Ocwen Fed. Bank, 523 U.S. 410, 412 (1998).
Failure to satisfy TILA‟s requirements exposes a lender to
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“statutory and actual damages [that are] traceable to a lender's
failure to make the requisite disclosures.”
Id.
Plaintiff‟s Complaint seeks only damages.
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Doc. 1 at page
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25-26 of 32.
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suit within one year of the date of the alleged violation.
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U.S.C. § 1640(e).
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A plaintiff seeking damages under TILA must file
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As stated in Meyer v. Ameriquest Mortg. Co.,
342 F.3d 899, 902 (9th Cir. 2003):
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The failure to make the required disclosures occurred,
if at all, at the time the loan documents were signed.
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Here, the only possible transaction for which disclosures would
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have been required was the closing of Plaintiff‟s loan on or
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about June 27, 2006.
barred.
This lawsuit, filed January 3, 2011 is time
Defendant‟s motion for judgment on the pleadings and/or
for summary judgment that the TILA claim is time barred is
GRANTED.
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Third Claim for Breach of the Implied Covenant of Good Faith
& Fair Dealing.
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The Complaint alleges that Defendant‟s omissions and
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misleading conduct in connection with the negotiation of a loan
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modification breached the implied covenant of good faith and fair
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C.
dealing.
However, a “courts are not at liberty to imply a
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covenant directly at odds with a contract‟s express grant of
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discretionary power.”
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4th 798 (1996).
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Here, the deed of trust expressly provides:
Any forbearance by Lender in exercise of any right or
remedy including, without limitation, Lender‟s
acceptance of payments from third persons, entities or
Successors in Interest of Borrower or in amounts less
than the amount then due, shall not be a waiver or
preclude the exercise of any right or remedy.
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Third Story Music v. Waits, 41 Cal. App.
See RFJN Ex. 3 § 12.
Plaintiff does not respond to Defendant‟s
contention that her claim for breach of the covenant of good
faith and fair dealing requires implication of a covenant at odds
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with this language.
Defendant‟s motion for judgment on the
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pleadings as to the breach of the covenant of good faith and fair
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dealing claim is GRANTED.
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D.
Fourth Claim for Fraud, Tenth Claim for Fraudulent
Inducement, and Fifth Claim for Negligent Misrepresentation.
Justifiable reliance is an element of fraud, fraudulent
inducement, and negligent misrepresentation.
See Engalla v.
Permanente Medical Group, Inc., 15 Cal. 4th 951, 973-74 (1997);
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Conroy v. Regents of the Univ. of Cal., 45 Cal. 4th 1244, 1255-56
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(2009).
The Complaint does not allege and Plaintiff offers no
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proof of any action Plaintiff took in justifiable reliance on any
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misrepresentation allegedly made by Defendant.
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motion for summary judgment as to the fourth and tenth claims for
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relief is GRANTED.
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Defendant‟s
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E.
Sixth Claim for Violation of Cal. Bus. & Prof. Code § 17200
predicated on Violations of Cal. Fin. Code § 22302.
California Business and Professions Code § 17200,
California‟s Unfair Competition Law, provides: “[U]nfair
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competition shall mean and include any unlawful, unfair or
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fraudulent business act or practice and unfair, deceptive, untrue
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or misleading advertising.”
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predicated on an allegation that Defendant violated California
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Plaintiff‟s § 17200 claim is
Financial Code § 22302.
Section 22302 applies California Civil Code § 1670.5‟s
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prohibition on unconscionability to loan agreements.
Civil Code
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Section 1670.5(a) allows the court to refuse to enforce all or
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part of a contract if the court finds as a matter of law that the
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contract or any clause of the contract was unconscionable at the
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time it was made.
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“unconscionable” is not defined by statute but has been defined
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Cal. Civ. Code § 1670.5(a).
by the California courts.
The term
Trend Homes, Inc. v. Superior Court,
131 Cal. App. 4th 950, 956 (2005). “[U]nconscionability has both
a „procedural‟ and a „substantive‟ element.”
Armendariz v.
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Foundation Health Psychcare Services, Inc., 24 Cal. 4th 83, 114
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(2000). The procedural element of unconscionability focuses on
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oppression and surprise.
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Cal. 4th 148, 160 (2005).
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Discover Bank v. Superior Court, 36
“Oppression' arises from an inequality
of bargaining power which results in no real negotiation and „an
absence of meaningful choice.”
Bruni v. Didion, 160 Cal. App.
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4th 1272 (2008); Aron v. U-Haul Co. of California, 143 Cal. App.
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4th 796, 808 (2006).
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supposedly agreed-upon terms of the bargain are hidden in a
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“Surprise‟ involves the extent to which the
prolix printed form drafted by the party seeking to enforce the
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disputed terms.”
Bruni, 160 Cal. App. 4th at 1289; Aron, 143
Cal. App. 4th at 808.
“The substantive element of
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unconscionability focuses on the actual terms of the agreement
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and evaluates whether they create „overly harsh‟ or „one-sided‟
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results as to „shock the conscience.‟”
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at 1289; Aron, 143 Cal. App. 4th at 808.
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Bruni, 160 Cal. App. 4th
“Both elements must be
present, but the more substantively oppressive the contract term,
the less evidence of procedural unconscionability is required to
come to the conclusion that the term is unenforceable, and vice
Trend Homes, 131 Cal. App. 4th at 956 (internal
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versa.”
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quotation and citation omitted).
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Here, Plaintiff does not allege let alone provide evidence
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of any contract that could even arguably be considered
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unconscionable.
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Defendant‟s motion for summary judgment on the
sixth claim for relief is GRANTED.
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F.
Eleventh Cause of Action for Intentional Infliction of
Emotional Distress.
The elements of the tort of intentional infliction of
emotional distress (“IIED”) are: “(1) extreme and outrageous
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conduct by the defendant with the intention of causing, or
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reckless disregard of the probability of causing, emotional
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distress; (2) the plaintiff's suffering severe or extreme
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emotional distress; and (3) actual and proximate causation of the
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emotional distress by the defendant's outrageous conduct....”
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Christensen v. Superior Court, 54 Cal. 3d 868, 903 (1991)
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(internal quotation and citation omitted).
To be considered
“outrageous,” conduct “must be so extreme as to exceed all bounds
of that usually tolerated in a civilized community.”
Id.
Plaintiff alleges that Defendant is liable for IIED by
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virtue of the misrepresentations they allegedly made to
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Plaintiff.
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The Complaint does not explain the nature of these
alleged misrepresentations in a manner that would permit them to
be classified as “outrageous.”
Defendant has moved for summary
judgment, arguing that Plaintiff has not come forward with
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evidence establishing a dispute as to whether the alleged conduct
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was outrageous.
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entitles Defendant to summary judgment on this claim.
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Plaintiff‟s failure to respond in any way
Defendant‟s motion for summary judgment as to the IIED claim
is GRANTED.
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G.
Twelfth Claim for Negligent Infliction of Emotional
Distress.
In California, there is no independent tort of Negligent
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Infliction of Emotional Distress (“NIED”).
Rather, a NIED claim
is treated as a traditional negligence claim, the elements of
Wong v.
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which are duty, breach of duty, causation, and damages.
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Tai Jing, 189 Cal. App. 4th 1354, 1377 (2010) (citing Potter v.
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Firestone Tire & Rubber Co., 6 Cal. 4th 965, 984 (1993)).
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Plaintiff has failed to respond to Defendant‟s motion for summary
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judgment.
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There is no evidence in the record to support any of
the elements of this claim.
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Defendant‟s motion for summary judgment on the NIED claim is
GRANTED.
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Seventh Cause of Action for Injunctive Relief, Eighth Cause
of action to Cancel and Vacate the Foreclosure Sale, Ninth
Cause of Action to Quiet Title.
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Plaintiff‟s remaining claims for injunctive relief
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H.
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(seventh), to cancel and vacate the foreclosure sale (eighth),
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and to quiet title (ninth), are dependent and derivative of the
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other claims in the case.
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Because Defendant is entitled to
summary judgment as to all of the underlying substantive claims,
Defendant‟s motion for summary judgment as to the seventh,
eighth, and ninth claims is GRANTED.
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IV. CONCLUSION
For the reasons set forth above, Defendant‟s motion for
summary judgment is GRANTED as to all of the claims in the
Complaint.
Defendant shall submit a proposed form of order
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consistent with this memorandum decision within five (5) days of
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electronic service.
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In addition, a copy of this order shall be served on the
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State Bar of California at 180 Howard Street, San Francisco,
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California, 94105, with a cover letter directing that it be added
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to the disciplinary file of Plaintiff‟s counsel, Emeka Godfrey
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Onwualu, SBN # 161868.
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SO ORDERED
Dated: May 11, 2011
/s/ Oliver W. Wanger
United States District Judge
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