Chatman et al v. Bank of America Home Loans et al

Filing 49

FINDINGS and RECOMMENDATIONS signed by Magistrate Judge John F. Moulds on 2/16/2012 RECOMMENDING that Bank of America's motion to dismiss # 25 be granted; and this action be dismissed without leave to amended; Referred to Judge Lawrence K. Karlton; Objections due within 20 days after being served with these F & R's.(Reader, L)

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IN THE UNITED STATES DISTRICT COURT
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FOR THE EASTERN DISTRICT OF CALIFORNIA
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ROBERT JULIUS CHATMAN, et al.,
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Plaintiffs,

No. 10-cv-0141 LKK JFM PS

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vs.
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BANK OF AMERICA HOME LOANS,
et al.,
Defendants.

FINDINGS & RECOMMENDATIONS

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On June 9, 2011, the court held a hearing on defendant Bank of America Home
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Loans’ (“Bank of America”) March 10, 2011 motion to dismiss. Julius and Annie Chatman
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appeared in pro per. Tami S. Crosby appeared for Bank of America. Upon review of the motion
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and the documents in support and opposition, and good cause appearing therefor, THE COURT
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FINDS AS FOLLOWS:
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FACTUAL AND PROCEDURAL BACKGROUND
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Plaintiffs Robert and Annie Chatman initiated this action on January 19, 2010
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against defendants Bank of America and Wilbert Thompson (“Thompson”), a Home Rescue
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Programs Agent. This matter is proceeding on plaintiffs’ September 8, 2010 first amended
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complaint (“FAC”), which is substantively identical to the initial complaint.
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Upon review of the FAC, it is not entirely clear the grounds upon which this

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matter is brought. Although plaintiffs claim that “a Home Modification Program, is mandated

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by the Federal Government, if certain conditions are met,” they do not identify what statute(s)

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defendants have purportedly violated. Nonetheless, review of the factually-sparse FAC reveals

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that plaintiffs seek the following: First, they seek a Deed of Trust for unidentified real property

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from Bank of America. On May 7, 2009, plaintiffs wrote a letter to Bank of America asking for

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the Deed of Trust, but claim they have not yet received it. Second, plaintiffs seek an order

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directing Bank of America to modify plaintiffs’ home loan. Finally, they seek partial

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reimbursement of funds they submitted to Thompson1 on March 20, 2009, purportedly as part of

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their application for a home loan modification. They were informed by Thompson that if their

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request for a loan modification was not accepted, Bank of America would return $1,105.00 of

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the $1,600.00 submitted by plaintiffs.
STANDARDS

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The purpose of a motion to dismiss pursuant to Rule 12(b)(6) is to test the legal

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sufficiency of the complaint. N. Star Int’l v. Ariz. Corp. Comm’n, 720 F.2d 578, 581 (9th Cir.

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1983). “Dismissal can be based on the lack of a cognizable legal theory or the absence of

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sufficient facts alleged under a cognizable legal theory.” Balistreri v. Pacifica Police Dep’t, 901

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F.2d 696, 699 (9th Cir. 1990). A plaintiff is required to allege “enough facts to state a claim to

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relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S. Ct.

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1955, 1974 (2007). Thus, a defendant’s Rule 12(b)(6) motion challenges the court’s ability to

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grant any relief on the plaintiff’s claims, even if the plaintiff’s allegations are true.

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In determining whether a complaint states a claim on which relief may be granted,

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the court accepts as true the allegations in the complaint and construes the allegations in the light

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Thompson was served with personal service on April 1, 2010. See Doc. No. 14.
Although Thompson has not yet appeared in this action, default has not been entered against
him.
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most favorable to the plaintiff. Hishon v. King & Spalding, 467 U.S. 69, 73 (1984); Love v.

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United States, 915 F.2d 1242, 1245 (9th Cir. 1989).

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The court is permitted to consider material properly submitted as part of the

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complaint, documents not physically attached to the complaint if their authenticity is not

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contested and the complaint necessarily relies on them, and matters of public record. Lee v. City

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of Los Angeles, 250 F.3d 668, 688-89 (9th Cir. 2001). Matters of public record include

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pleadings and other papers filed with a court. Mack v. South Bay Beer Distributors, 798 F.2d

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1279, 1282 (9th Cir. 1986). The court need not accept as true conclusory allegations,

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unreasonable inferences, or unwarranted deductions of fact. Western Mining Council v. Watt,

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643 F.2d 618, 624 (9th Cir. 1981).

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DISCUSSION

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Bank of America seeks dismissal of the FAC for plaintiffs’ failure to state the

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basis of this court’s jurisdiction and for their failure to allege any wrongdoing by defendants.

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Federal Rule of Civil Procedure 8(a) requires “a short and plain statement of the grounds for the

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court’s jurisdiction.” See Fed. R. Civ. P. 8(a)(1). Because plaintiffs do not identify the basis for

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this court’s jurisdiction other than to say that “a Home Modification Program, is mandated by the

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Federal Government, if certain conditions are met,” the FAC falls short of Rule 8's minimal

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pleading requirements. Furthermore, although the Federal Rules adopt a flexible pleading

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policy, a complaint must give fair notice and state the elements of the claim plainly and

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succinctly. Jones v. Community Redev. Agency, 733 F.2d 646, 649 (9th Cir. 1984). Plaintiffs

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must allege with at least some degree of particularity overt acts which defendants engaged in that

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support their claim. Id. Plaintiffs here do neither. The FAC, therefore, must be dismissed for

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plaintiffs’ failure to comply with Rule 8.

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The undersigned recognizes its obligation to freely give leave to amend when

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justice so requires, Fed. R. Civ. P. 15(a)(2), and to “ensure that pro se litigants do not

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unwittingly fall victim to procedural requirements,” Waters v. Young, 100 F.3d 1437, 1441 (9th
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Cir. 1996). To this end, the court has reviewed the FAC and the initial complaint. Upon review,

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the court finds that the FAC contains substantially identical allegations as in the original

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complaint. Plaintiffs have now had two opportunities to present their claims. Although they are

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proceeding pro se, plaintiffs “must follow the same rules of procedure that govern other

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litigants.” King v. Atiyeh, 814 F.2d 565, 567 (9th Cir. 1986).

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Furthermore, insofar as the plaintiffs’ FAC can be construed as a request for a

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home loan modification pursuant to federal law, their request fails. The only relevant federal

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program that addresses home loan modifications is the Home Affordable Modification Program

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(“HAMP”). HAMP was created by Congress as part of the Troubled Assets Relief Program,

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under the authority of the Emergency Economic Stabilization Act of 2008, Pub. L. 110–343.

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Pursuant to this program, mortgage loan servicers enter into Servicer Participation Agreements

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(“SPAs”) with Fannie May acting as the financial agent for the United States. The servicer’s

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obligations are set forth in the SPA, as well as in Program Guidelines established by the

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Department of the Treasury. See Villa v. Wells Fargo Bank, N.A., 2010 WL 935680 at *1 (S.D.

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Cal., Mar.15, 2010); see also Escobedo v. Countrywide Home Loans, Inc., 2009 WL 4981618,

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*1 (S.D. Cal. 2009). Participating servicers are required to consider all loans eligible under the

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program; however, they are not required to modify mortgages. See Escobedo, 2009 WL

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4981618 at *2; see also Hoffman v. Bank of America, N.A., 2010 WL 2635773 at *4 (N.D. Cal.,

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June 30, 2010); Marks v. Bank of America, 2010 WL 2572988 at *3 (D. Ariz., June 22, 2010).

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The HAMP program itself is not codified as a public law.

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Numerous district courts within the Ninth Circuit have ruled that there is no

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express or implied private right of action to sue lenders or loan servicers for violation of HAMP.

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See, e.g., Manabat v. Sierra Pac. Mortg. Co., 2010 WL 2574161 at *11 (E.D. Cal., June 25,

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2010) (dismissing plaintiff's wrongful foreclosure claim because there is no private right of

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action for HAMP violations against lenders that receive HAMP funds); Simon v. Bank of Am.,

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N.A., 2010 WL 2609436 at *7 (D. Nev., June 23, 2010) (“[C]ourts have consistently held that
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[HAMP] does not provide borrowers with a private cause of action against lenders for failing to

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consider their application for loan modification, or even to modify an eligible loan.”); Marks,

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2010 WL 2572988 at *5-7 (“By designating compliance authority to one entity, Freddy Mac,

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Congress intended that a private cause of action was not permitted”); see also Phipps v. Wells

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Fargo Bank, N.A., 2011 WL 302803 at *9 (E.D. Cal., Jan.27, 2011); Inman v. Suntrust

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Mortgage, Inc., 2010 WL 3516309 at *2 (E.D. Cal., Sept.3, 2010); Wright v. Bank of America,

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N.A., 2010 WL 2889117 at *5 (N.D. Cal., Jul.22, 2010).

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Since plaintiffs have no right of action under HAMP to challenge the denial of

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their request for loan modification, the court would have no basis upon which to make a judicial

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determination of plaintiffs’ rights.2 Lastly, plaintiffs’ requests for a copy of a deed of trust and

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for reimbursement of funds are not matters which the court may consider.

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Having carefully considered the allegations in the FAC, the parties’ briefs and

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relevant legal authority, the undersigned concludes that the FAC does not satisfy the pleading

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requirements of Rule 8 of the Federal Rules of Civil Procedure. The undersigned further

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concludes that it does not appear plaintiffs can cure the deficiencies in a second amended

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complaint. Therefore, leave to amend the FAC should not be granted. See McHenry v. Renne,

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84 F.3d 1172, 1174, 1179-80 (9th Cir. 1996) (affirming dismissal of amended complaint where it

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failed to satisfy Rule 8's pleading requirements).

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Accordingly, IT IS HEREBY RECOMMENDED that

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1. Bank of America’s March 10, 2011 motion to dismiss be granted;

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2. This action be dismissed without leave to amend.

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These findings and recommendations are submitted to the United States District

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Judge assigned to the case, pursuant to the provisions of 28 U.S.C. § 636(b)(l). Within twenty

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days after being served with these findings and recommendations, any party may file written

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At any rate, during the January 12, 2012 status conference, Bank of America
represented to the court that plaintiffs did receive a home loan modification.
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objections with the court and serve a copy on all parties. Such a document should be captioned

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“Objections to Magistrate Judge’s Findings and Recommendations.” The parties are advised

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that failure to file objections within the specified time may waive the right to appeal the District

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Court’s order. Martinez v. Ylst, 951 F.2d 1153 (9th Cir. 1991).

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DATED: February 16, 2012.

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