Solano v. America's Servicing Company, et al

Filing 34

ORDER signed by Judge Garland E. Burrell, Jr. on 5/3/2011 ORDERING Movant's 9 , 15 dismissal motion is GRANTED. Therefore, MortgageIT's 12 motion to strike is DENIED as MOOT; pltf is GRANTED 14 days from the date on which this order is filed to file a First Amended Complaint addressing the deficiencies in any claim dismissed without prejudice. This action may be dismissed with prejudice against the Movants under FRCP 41(b) if pltf fails to file an amended complaint within the prescribed time period. (Reader, L)

1
2
3
4
5

IN THE UNITED STATES DISTRICT COURT

6

FOR THE EASTERN DISTRICT OF CALIFORNIA

7
8

CONSTANCE SOLANO,
Plaintiff,

9
10

v.

15

AMERICA’S SERVICING COMPANY, a
division of WELLS FARGO, NA;
WELLS FARGO, NA; MORTGAGEIT,
INC.; MORTGAGE ELECTRONIC
REGISTRATION SYSTEMS, INC.; NDEX
WEST, LLC; U.S. BANK NA; BANC OF
AMERICA FUNDING 2007-6 TRUST;
MORTGAGE AND INVESTORS
INVESTMENT CONSULTANTS, INC.,

16

Defendants.
________________________________

11
12
13
14

)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)

2:10-cv-02426-GEB-GGH
ORDER GRANTING MOTIONS TO
DISMISS AND DENYING MOTION TO
STRIKE AS MOOT

17
18

Defendant MortgageIT, Inc. (“MortgageIT”) moves for dismissal

19

of Plaintiff’s Complaint under Federal Rule of Civil Procedure (“Rule”)

20

12(b)(6), arguing Plaintiff fails to state a viable claim against it.

21

MortgageIT also moves to strike Plaintiff’s punitive damages allegations

22

under Rule 12(f). Defendant NDeX West, LLC (“NdeX”) joins MortgageIT’s

23

dismissal motion.

24

Defendants Wells Fargo Bank, N.A. dba America’s Servicing

25

Company (“Wells Fargo Bank”); Mortgage Electronic Registration Systems,

26

Inc. (“MERS”); and U.S. Bank N.A. as Trustee for Banc of America Funding

27

2007-6 Trust (“U.S. Bank”) (collectively referred to as “Wells Fargo

28
1

1

Defendants”) also seek dismissal of Plaintiff’s claims under Rule

2

12(b)(6).

3

Plaintiff filed a late opposition to all three motions.

4

I. LEGAL STANDARD

5

“In reviewing the dismissal of a complaint, we inquire whether

6

the

7

inferences, state a plausible claim for relief.” Cafasso, U.S. ex rel.

8

v. General Dynamics C4 Systems, --- F.3d ----, 2011 WL 1053366, at *4

9

(9th Cir. 2011) (citing Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949-50

10

(2009)). The material allegations of the complaint are accepted as true

11

and all reasonable inferences are drawn in favor of the plaintiff.

12

al-Kidd v. Ashcroft, 580 F.3d 949, 956 (9th Cir. 2009). However, this

13

tenant “is inapplicable to legal conclusions.”

14

1949. Further, “[a] pleading that offers ‘labels and conclusions’ or ‘a

15

formulaic recitation of the elements of a cause of action will not do.’

16

Nor does a complaint suffice if it tenders ‘naked assertion[s]’ devoid

17

of ‘further factual enhancement.’” Id. (quoting Bell Atlantic Corp. v.

18

Twombly, 550 U.S. 544, 555, 557 (2007)). “In sum, for a complaint to

19

survive a motion to dismiss, the nonconclusory ‘factual content,’ and

20

reasonable inferences from that content, must be plausibly suggestive of

21

a claim entitling the plaintiff to relief.” Moss v. United States Secret

22

Serv., 572 F.3d 962, 969 (9th Cir. 2009).

complaint’s

factual

allegations,

together

23

all

reasonable

See

Iqbal, 129 S. Ct. at

II.

24

with

REQUEST FOR JUDICIAL NOTICE

25

Defendants’ dismissal motions include requests that the Court

26

take judicial notice of two Deeds of Trust, which are recorded with the

27

Placer County Recorder. (MortgageIT’s Req. for Judicial Notice (“RJN”)

28

Exs. A, C; Wells Fargo Defs.’ RJN, Ex. A.)
2

1

“As a general rule, a district court may not consider any

2

material beyond the pleadings in ruling on a Rule 12(b)(6) motion.” Lee

3

v. City of Los Angeles, 250 F.3d 668, 688 (9th Cir. 2001) (internal

4

quotation marks and citation omitted). However, a court may consider

5

matters properly subject to judicial notice. Swartz v. KPMG LLP, 476

6

F.3d 756, 763 (9th Cir. 2007). A matter may be judicially noticed if it

7

is either “generally known within the territorial jurisdiction of the

8

trial court” or “capable of accurate and ready determination by resort

9

to sources whose accuracy cannot reasonably be questioned.” Fed. R.

10

Evid. 201(b).

11

Since the two Deeds of Trust are publically recorded, they are

12

capable of accurate determination and may be judicially noticed. See W.

13

Fed. Sav. & Loan Ass’n v. Heflin Corp., 797 F. Supp. 790, 792 (N.D. Cal.

14

1992) (taking judicial notice of documents in a county’s public record,

15

including deeds of trust). Therefore, the two Deeds of Trust are

16

judicially noticed.

17

MortgageIT also requests that the Court consider a “Home

18

Equity Credit Line Agreement and Disclosure Statement” between Plaintiff

19

and

20

(MortgageIT’s RJN, Ex. B.) owever, since the document is not referenced

21

in the complaint, this request is denied. See In re Silicon Graphics

22

Inc. Sec. Litig., 183 F.3d 970, 986 (9th Cir. 1999) (stating the

23

incorporation

24

consider documents whose contents are alleged in a complaint and whose

25

authenticity no party questions, but which are not physically attached

26

to the plaintiff’s pleading” (quotation omitted)).

MortgageIT

by

under

the

reference

“incorporation

doctrine

27
28
3

by

“permits

reference

a

district

doctrine.”

court

to

1

III. BACKGROUND

2

On or about March 23, 2007, Plaintiff obtained two loans,

3

which were secured by her real property, located at 3161 Big Bear Drive,

4

Roseville, CA. (MortgageIT’s RJN, Exs. A, C.) The primary loan was for

5

$592,000.00 (the “Primary Loan”), and the second loan was for $83,000.00

6

(the “Secondary Loan”). Id.

7

The Deed of Trust on the Primary Loan identifies Mortgage &

8

Investment Consultants, Inc. as the lender, Financial Title Company as

9

trustee, and MERS as beneficiary. Id., Ex. A. The Deed of Trust on the

10

Secondary Loan identifies MortgageIT as the lender, Financial Title

11

Company as trustee, and MERS as beneficiary. Id., Ex. C. Plaintiff

12

alleges Wells Fargo Bank subsequently began servicing the loans. (Compl.

13

¶¶ 2, 21-22.)

14

On or about March 4, 2010, NdeX West, LLC filed a Notice of

15

Trustee Sale in connection with the Primary Loan, in which it indicated

16

Plaintiff’s property was in foreclosure. Id., ¶24, Ex. D.

17

An Assignment of Deed of Trust dated March 29, 2010, assigned

18

and transferred to U.S. Bank “all beneficial interest under [the] Deed

19

of Trust” on the Primary Loan. (Compl., Ex. E.) U.S. Bank substituted

20

NdeX, West L.L.C., as trustee of the Deed of Trust on the Primary Loan

21

on April 9, 2010. Id., Ex. F.1

22
23
24
25
26
27
28

1

The Assignment of Deed of Trust, Substitution of Trustee, and
Notice of Default “may be considered” in ruling on Defendants’ Rule
12(b)(6) motions, since they are attached to Plaintiff’s Complaint. Hal
Roach Studios, Inc. v. Richard Feiner and Co., Inc., 896 F.2d 1542, 1555
n.19 (9th Cir. 1989) (stating “material which is properly submitted as
part of the complaint may be considered” in ruling on a Rule 12(b)(6)
motion).
4

1

Plaintiff alleges the foreclosure sale was scheduled for

2

September 13, 2010. Id., ¶ 24. It is unclear what, if anything, occurred

3

on this date.

4

Plaintiff’s claims stem from her allegations that Defendants

5

have acted improperly from the loans’ origin through foreclosure. Id. ¶¶

6

25-28.

7

IV. DISCUSSION

8

Plaintiff’s Complaint comprises twelve claims. MortgageIT and

9

the Wells Fargo Defendants (the “Movants”) challenge the sufficiency of

10

every claim in their dismissal motions.

11

A.

Breach of Contract

12

Movants seek dismissal of Plaintiff’s breach of contract

13

claim, arguing, inter alia, Plaintiff does not allege facts supporting

14

the elements of this claim. (MortgageIT’s Mot. 4:11-12;

15

Defs.’ Mot. 7:3-6.)

Wells Fargo

16

In California, “[a] cause of action for breach of contract

17

requires proof of the following elements: (1) existence of the contract;

18

(2)

19

defendant’s breach; and (4) damages to plaintiff as a result of the

20

breach.”

21

(2008).

plaintiff’s

performance

or

excuse

for

nonperformance;

(3)

CDF Firefighters v. Maldonado, 158 Cal. App. 4th 1226, 1239

22

Plaintiff’s breach of contract claim is based upon allegations

23

that Defendants violated the Home Ownership Equity Protection Act

24

(“HOEPA”) by failing to make certain required disclosures prior to when

25

her loan transactions closed; and, by “engaging in a pattern and

26

practice of extending credit to Plaintiff without regard to her ability

27

to pay.” (Compl. ¶ 44.)

28

something

However,

a

plaintiff

“must . . . do

more . . . than merely point to allegations of a statutory
5

1

violation” to allege a breach of contract claim. Berger v. Home Depot,

2

476 F. Supp. 2d 1174, 1177 (C.D. Cal. 2007). Further, although Plaintiff

3

references

4

introductory allegations of her Complaint (a Promissory Note, Deed of

5

Trust and Modification Agreement), it is unclear which, if any, of the

6

agreements form the basis of her breach of contract claim, and Plaintiff

7

does not allege a breach of the terms of any referenced agreement.

8

(Compl. ¶¶ 19, 21, 29.) Therefore, Plaintiff’s breach of contract claim

9

against the Movants is dismissed.

10

B.

the

existence

of

multiple

written

agreements

in

the

RESPA

11

Movants also seek dismissal of Plaintiff’s 12 U.S.C. § 2607

12

Real Estate Settlement Procedures Act (“RESPA”) claim, arguing, inter

13

alia, it is barred by the one-year statute of limitations. (MortgageIT’s

14

Mot. 5:13-16; Wells Fargo Defs.’ Mot. 5:16-20.) Plaintiff counters that

15

the statute of limitations should be equitably tolled. (Pl.’s Opp’n ¶

16

35.)

17

“The primary ill that § 2607 is designed to remedy is the

18

potential for unnecessarily high settlement charges, . . . caused by

19

kickbacks,

20

competition for settlement services. This ill occurs, if at all, when

21

the plaintiff pays for the tainted service, typically at the closing.”

22

Jensen v. Quality Loan Serv. Corp., 702 F. Supp. 2d 1183, 1195 (E.D.

23

Cal. 2010) (quoting Snow v. First Am. Title Ins. Co., 332 F.3d 356,

24

359-60 (5th Cir. 2003)). 12 U.S.C. § 2614 provides that a section 2607

25

claim “may be brought . . .

26

occurrence of the violation[.]” “Barring extenuating circumstances, the

27

date of the occurrence of the violation is the date on which the loan

28

closed.” Ayala v. World Savings Bank, FSB, 616 F. Supp. 2d 1007, 1020

fee-splitting,

and

other

practices

that

suppress

price

[within] 1 year . . . from the date of the

6

1

(C.D. Cal. 2009) (internal quotation marks and citation omitted); see

2

also Jensen, 702 F. Supp. 2d at 1195 (stating that “courts have

3

considered the ‘occurrence of the violation’ as the date the loan

4

closed.”).

5

Here,

Plaintiff’s

loans

“closed”

on

March

23,

2007.

6

Therefore, the one-year statute of limitations expired on March 23,

7

2008. However, Plaintiff did not file her Complaint in this action until

8

September 10, 2010. Further, neither Plaintiff’s complaint nor her

9

opposition explains why she could not have discovered Defendants’

10

alleged section 2607 violation within the one-year statutory period.

11

Therefore, Plaintiff has not shown that the doctrine of equitable

12

tolling applies to her section 2607 claim, and this portion of the

13

Movants’ dismissal motion is granted.

14

C.

TILA Rescission

15

Movants also seek dismissal of Plaintiff’s Truth in Lending

16

Act (“TILA”) rescission claim, arguing it is barred by the applicable

17

three-year statute of limitations. (MortgageIT’s Mot. 5:24-6:6; Wells

18

Fargo Defs.’ Mot. 5:12-13.)

19

A borrower’s right to rescind a loan transaction under TILA

20

“expire[s] three years after the date of the consummation of the

21

transaction[.]” 15 U.S.C. § 1635(f). “Consummation” is defined under the

22

statute as “the time that a consumer becomes contractually obligated on

23

a credit transaction.” Grimes v. New Century Mortgage Corp., 340 F.3d

24

1007, 1009 (9th Cir. 2003) (quoting 12 C.F.R. § 226.2(a)(13)). This

25

three-year limitations period “represents an absolute limitation on

26

rescission actions [and] bars any claims filed more than three years

27

after the consummation of the transaction. Therefore, § 1635(f) is a

28

statute of repose, depriving the courts of subject matter jurisdiction
7

1

when a § 1635 claim is brought outside of the three-year limitation

2

period.” Miguel v. Country Funding Corp., 309 F.3d 1161, 1164 (9th Cir.

3

2002) (internal quotation marks and citation omitted).

4

Since Plaintiff consummated her loans on March 23, 2007, the

5

three-year statute of limitations expired on March 23, 2010. However,

6

Plaintiff alleges in the complaint that she did not notify Defendants of

7

her

8

Complaint on September 10, 2010.

9

lacks subject matter jurisdiction over Plaintiff’s TILA rescission

“elect[ion]

to

rescind

the

transaction”
(Compl. ¶ 60.)

until

she

filed

her

Therefore, the court

10

claim,

11

prejudice. See Omar v. Sea-Land Serv., Inc., 813 F.2d 986, 991 (9th Cir.

12

1987) (“A trial court may dismiss a claim sua sponte under Fed. R. Civ.

13

P. 12(b)(6) . . . without notice where the claimant cannot possibly win

14

relief.”); see also

15

(9th Cir. 1981) (stating court may enter sua sponte dismissal as to

16

defendants who have not moved to dismiss where such defendants are in a

17

position similar to that of moving defendants).

18
19

D.

and

this

claim

is

dismissed

against

all

Defendants

with

Silverton v. Dep’t of Treasury, 644 F.2d 1341, 1345

FCRA Claim
Movants

also

seek

dismissal

of

Plaintiff’s

Fair

Credit

20

Reporting Act (“FCRA”) claim alleged under 15 U.S.C. § 1681s, arguing

21

there is no private right of action for reporting inaccurate consumer

22

credit information under subsection 2(a), and Plaintiff has alleged

23

insufficient

24

(MortgageIT’s Mot. 8:14-9:3, Wells Fargo Defs.’ Mot. 6:10-22.) Since

25

Plaintiff’s FCRA claim is premised upon subsection 2(b) only, Movants’

26

argument concerning subsection 2(a) is irrelevant. (Compl. ¶ 63.)

facts

to

support

a

claim

under

subsection

2(b).

27

The FCRA imposes responsibilities on the sources that provide

28

credit information to credit reporting agencies (“CRA’s”). Gorman v.
8

1

Wolpoff

2

(quotation omitted). The duties imposed by subsection 2(b) of the FCRA

3

are “triggered only when a [source of credit information] receives

4

notice of a dispute from a [CRA] that has itself received notice of a

5

dispute from a consumer.” Pineda v. GMAC Mortgage, LLC, No. CV 08-5341

6

AHM (PJWx), 2009 WL 1202885, at *4 (C.D. Cal. Apr. 30, 2009) (citation

7

omitted); see also Clark v. FLA Card Services, N.A., No. C 09-5240 SBA,

8

2010 WL 2232161, at *3 (N.D. Cal. June 3, 2010) (citing Gorman, 584 F.3d

9

at 1154).

&

Abramson,

LLP,

584

F.3d

1147,

1153-54

(9th

Cir.

2009)

10

Plaintiff’s FCRA claim includes the following allegations:

11

Defendants wrongfully, improperly, and illegally
reported negative information as to the Plaintiff
to one or more credit reporting agencies, resulting
in Plaintiff having negative information on her
credit reports and the lowering of her FICO scores.

12
13
14

A.

The negative information included but
was not limited to an excessive amount
of debt into which Plaintiff was tricked
into seed [sic] into signing;

B.

Notwithstanding the above, Plaintiff has
paid each and every payment on time from
the time of the closing of the loan and
until Plaintiff’s default.

15
16
17
18
19

22

Pursuant to 15 USC § 1681 (s)(2)(b), Plaintiff
is entitled to maintain a private cause of action
against Defendants for an award of damages in an
amount to be proven at the time of trial for all
violations of The Fair Credit Reporting Act which
caused actual damages to Plaintiff, including
emotional distress and humiliation.

23

Id. ¶¶ 62-63. These allegations are insufficient to state a FCRA

24

subsection 2(b) claim since Plaintiff does not allege that she disputed

25

any negative information with a CRA or that notice of such dispute was

26

provided to any Defendant. Therefore, Plaintiff’s FRCA claim against the

27

Movants is dismissed. See Clark, 2010 WL 2232161, at * 3 (dismissing the

28

plaintiff’s FRCA claim where the complaint included “no allegations that

20
21

9

1

Plaintiff disputed any charges with any credit reporting bureau or that

2

notice of such dispute was provided to [defendant]”).

3

E.

Negligent Misrepresentation

4

Movants

also

seek

dismissal

of

Plaintiff’s

negligent

5

misrepresentation claim, arguing, inter alia, that this claim fails to

6

comply with Rule 9(b)’s heightened pleading standard. (MortgageIT’s Mot.

7

12:2-10; Wells Fargo Defs.’ Mot. 10:21-22.)

8
9

Plaintiff’s negligent misrepresentation claim includes the
following allegations:

10

Defendants
knowingly
and
intentionally
concealed material information from Plaintiff which
is required by federal and state statutes and
regulations to be disclosed to the Plaintiff both
before and after closing.

11
12
13

Defendants also materially misrepresented
material information to the Plaintiff with full
knowledge of Defendants at their affirmative
representations
were
false,
fraudulent,
and
misrepresented the truth at the time said
representations were made.

14
15
16
17

(Compl. ¶¶ 66-67.)

18

Rule 9(b)’s heightened pleading standard applies to “averments

19

of fraud” in all civil cases, regardless of whether or not “fraud” is an

20

essential element of the claim.

21

1097, 1103-05 (9th Cir. 2003). Rule 9(b) provides that “[i]n alleging

22

fraud

23

circumstances constituting fraud or mistake.”

The required specificity

24

includes

content

25

representations

26

misrepresentations.”

27

quotation marks and citation omitted). Further, in alleging fraud

28

against multiple defendants,

or

mistake,

the

a

“time,
as

party

place,

well

as

Vess v. Ciba-Geigy Corp., 317 F.3d

must

and
the

state

specific

identities

with

of

particularity

the

of

the

parties

the

false
to

the

Swartz v. KPMG LLP, 476 F.3d at 764 (internal

10

1

Rule 9(b) does not allow a complaint to merely lump
multiple
defendants
together
but
requires
plaintiff[] to differentiate [her] allegations when
suing more than one defendant . . . and inform each
defendant separately of the allegations surrounding
his alleged participation in the fraud. . . . [A]
plaintiff must, at a minimum, identify the role of
each defendant in the alleged fraudulent scheme.

2
3
4
5
6

Id. at 764-65 (quotations omitted).

7

Plaintiff’s conclusory “averments of fraud” do not provide the

8

specificity required by Rule 9(b) since they lack sufficient detail

9

concerning the time, date, and place of the alleged misrepresentations

10

and non-disclosures, and the identity of the individual(s) who made

11

them. See Kearns v. Ford Motor Co., 567 F.3d 1120, 1125-27 (9th Cir.

12

2009)

13

non-disclosures “are grounded in fraud” and are subject to Rule 9(b)).

14

Plaintiff’s allegations also fail to distinguish among the defendants.

15

Therefore, Plaintiff’s negligent misrepresentation claim against the

16

Movants is dismissed.

17

(holding

F.

allegations

concerning

false

representations

and

Breach of Fiduciary Duty

18

Movants also seek dismissal of Plaintiff’s breach of fiduciary

19

duty claim, arguing Plaintiff does not allege the necessary existence of

20

a fiduciary relationship with any Movant. (MortgageIT’s Mot. 11:8-9,

21

11:17-18; Wells Fargo Defs.’ Mot. 8:7-21.)

22

In California, to state a claim for breach of fiduciary duty,

23

a plaintiff must allege: (1) the existence of a fiduciary relationship;

24

(2) the breach of that relationship; and (3) damage proximately caused

25

thereby.

Roberts v. Lomanto, 112 Cal. App. 4th 1553, 1562 (2003).

26

“Breach of fiduciary duty is a tort that by definition may be

27

committed by only a limited class of persons.” 1-800 Contacts, Inc. v.

28

Steinberg, 107 Cal. App. 4th 568, 592 (2003). As a general rule, “a loan
11

1

transaction

2

fiduciary relationship between the borrower and lender.”

3

Corp. v. Superior Court, 145 Cal. App. 4th 453, 466 (2006). Further,

4

loan servicers typically do not have a fiduciary relationship with

5

borrowers. See Linder v. Aurora Loan Servicing, LLC, No. 2:09-cv-03490-

6

JAM-KJM, 2010 WL 1525399, at *5 (E.D. Cal. Apr. 15, 2010); Moreno v.

7

Citibank, N.A., No. C-09-5339 CW, 2010 WL 103822, at *3 (N.D. Cal. Mar.

8

19, 2010).

9
10

is

[an]

Plaintiff’s

at

arms-length

fiduciary

duty

[transaction]

claim

and

contains

there

is

no

Oaks Mgmt.

the

following

allegations::

11

Defendants, by . . . contracting to provide
mortgage loan services and a loan program to
Plaintiff which was not only to be best suited to
the Plaintiff given her income and expenses, but by
which Plaintiff would also be able to satisfy her
obligations without risk of losing her home, were
“fiduciaries” in which Plaintiff reposed trust and
confidence . . . .

12
13
14
15

18

Defendants breached their fiduciary duties to
the Plaintiff by fraudulently inducing Plaintiff to
enter into a mortgage transaction which was
contrary to the Plaintiff stated intentions;
contrary to the Plaintiff’s interest; and contrary
to the Plaintiff’s preservation of her home.

19

(Compl. ¶¶ 73-74.) These allegations are insufficient to show the

20

existence of a fiduciary relationship between Plaintiff and any Movant.

21

See Pajarillo v. Bank of America, No. 10CV937 DMS (JMA), 2010 WL

22

4392551, at *5 (S.D. Cal. Oct. 28, 2010) (dismissing breach of fiduciary

23

claim based upon identical allegations to those plead in this case).

24

Therefore, Plaintiff’s breach of fiduciary duty claim against the

25

Movants is dismissed.

16
17

26

G.

Unjust Enrichment

27

Movants also seek dismissal of Plaintiff’s unjust enrichment

28

claim, arguing, inter alia, an unjust enrichment claim cannot be stated
12

1

“where

2

covering the same subject matter.” (MortgageIT’s Mot. 12:4-8, 13:5-15;

3

Wells Fargo Defs.’ Mot. 8:23.)

there

exists

between

the

parties

a

valid

express

contract

4

Plaintiff’s unjust enrichment claim is based upon an alleged

5

“implied contract” ensuring she “understood all fees which would be paid

6

to the Defendants to obtain credit on [her] behalf” and that she would

7

not be “charge[d] any fees which were not related to the settlement of

8

the loan and without full disclosure” of the same. (Compl. ¶ 76.)

9

However, under California law, “it is well settled that an action based

10

upon an implied-in-fact or quasi-contract cannot lie where there exists

11

between the parties a valid express contract covering the same subject

12

matter.” Lance Camper Manufacturing Corp. v. Republic Indemnity Company

13

of America, 44 Cal. App. 4th 194, 203 (1996); see also Paracor Finance,

14

Inc. v. General Electric Capital Corp., 96 F.3d 1151, 1167 (9th Cir.

15

1996) (stating under California law “unjust enrichment is an action in

16

quasi-contract,

17

agreement exists defining the rights of the parties”). Here, Plaintiff

18

entered into two loans, secured by Deeds of Trust, and alleges to have

19

entered into a written loan modification agreement with Wells Fargo.

20

(Compl. ¶¶ 18-19, 21; MortgageIT’s RJN, Exs. A, C.) Further, none of

21

Plaintiff’s allegations plausibly suggest that valid contracts did not

22

exist between the parties. Therefore, Plaintiff’s unjust enrichment

23

claim against the Movants is dismissed. See Smith v. Aurora Loan

24

Services, No. CIV S-10-0198 MCE DAD P, 2010 WL 3504899, at *4 (E.D. Cal.

25

Sep. 7, 2010) (stating “[t]he complaint does not allege sufficient facts

26

to maintain a plausible claim for unjust enrichment” where the plaintiff

27

“alleges

which

Plaintiff

and

does

not

lie

Defendants

28
13

when

entered

an

enforceable,

into

the

Loan,

binding

and

no

1

allegations in the complaint support a claim that no contract exists

2

between the parties”).

3

H.

Civil RICO

4

Movants also seek dismissal of Plaintiff’s civil Racketeer

5

Influenced

6

Plaintiff did not adequately plead its elements, and the allegations

7

were not plead with the required specificity. (MortgageIT’s Mot. 15:9-

8

18; Wells Fargo Defs.’ Mot. 12:2-6, 13:3-6.)

9

and

18

Corrupt

U.S.C.

§

Organizations

1962

Act

identifies

(“RICO”)

the

claim,

activities

arguing

which

are

10

prohibited under RICO. “Subsections (a), (b) and (c) [of § 1962] provide

11

for stand-alone RICO violations, while subsection (d) makes it a crime

12

to conspire to commit a violation of subsections (a), (b) or (c).”

13

Pindeda v. Reyes, No. 09-cv-01938-H-WMc, 2009 WL 3388376, at *8 (S.D.

14

Cal. Oct. 20, 2009) (citing 15 U.S.C. § 1962). Since subsections (a),

15

(b)

16

plaintiff must plead and prove to prevail under each subsection are

17

therefore different.” Id.

and

(c)

each

criminalize

different

conduct,

“the

elements

a

18

In addition, the Ninth Circuit “applie[s] the particularity

19

requirements of [R]ule 9(b) to [averments of fraud in] RICO claims.”

20

Moore v. Kayport Package Express, Inc., 885 F.2d 531, 541 (9th Cir.

21

1989). Therefore, Plaintiff’s fraud allegations in her RICO claim must

22

“identify the time, place and manner of each fraud plus the role of each

23

defendant in each scheme.” Id. (quotation omitted).

24
25
26
27
28

Plaintiff’s

civil

RICO

claim

contains

the

allegations:
Defendants’ actions and use of multiple
corporate entities, multiple parties, and concerted
and predetermined acts and conduct specifically
designed to defraud Plaintiff constitutes an
“enterprise”, with the aim and objective at the
enterprise bean [sic] to perpetuate a fraud upon
14

following

1

the Plaintiff through the use of intentional
nondisclosure, material misrepresentation, and
creation of the fraudulent loan documents.

2
3

(Compl. ¶ 88.)

4

These conclusory allegations are insufficient to state a civil

5

RICO claim. Plaintiff does not identify “the subsection of 15 U.S.C. §

6

1962 which Defendants allegedly violate, and the . . . allegations fail

7

to ‘give defendant[s] fair notice of what the . . . claim is and the

8

grounds upon which it rests.” Pindeda v. Reyes, 2009 WL 3388376, at *8

9

(quoting Twombly, 550 U.S. at 555.) Further, Plaintiff does not allege

10

facts

11

misrepresentations and non-disclosures, the identity of who made them,

12

or

13

Plaintiff’s civil RICO claim against the Movants is dismissed.

14

the

I.

concerning

role

of

the

each

time,

date,

Defendant

in

and

the

place

of

the

“enterprise.”

alleged

Therefore,

Quiet Title

15

Movants also seek dismissal of Plaintiff’s quiet title claim,

16

arguing, inter alia, Plaintiff has not pled her ability to tender the

17

amount of her debt. (MortgageIT’s Mot. 16:11-124; Wells Fargo Defs.’

18

Mot. 11:3-11.)

19

Under California law, it is well-settled that “a mortgagor

20

cannot quiet his title against the mortgagee without paying the debt

21

secured.” Briosos v. Wells Fargo Bank, 737 F. Supp. 2d 1018, 1032 (N.D.

22

Cal. 2010) (quoting Shimpones v. Stickney, 219 Cal. 637, 649 (1934)

23

(citations omitted)). Therefore, “to maintain a quiet title claim, a

24

plaintiff ‘is required to allege tender of the proceeds of the loan at

25

the pleading stage.’” Id. (quoting Velasquez v. Chase Home Finance, LLC,

26

No. C 10-01641 SI, 2010 WL 3211905, at *4 (N.D. Cal. Aug. 12, 2010));

27

see also Hensley v. Bank of New York Mellon, No. 1:10-CV-1316 AWI SMS,

28

2010 WL 5418862, at *3 (E.D. Cal. Dec. 23, 2010) (dismissing quiet title
15

1

claim where the plaintiff did “not allege that she has tendered, or is

2

able to tender”).

3

Plaintiff does not allege tender of the amount of debt owed,

4

or her ability to tender, under her quiet title claim. She does allege

5

the following under her breach of contract claim, which is incorporated

6

by reference into her quiet title claim: “Upon the true ‘lenders’ full

7

performance of its obligations under HOEPA, Plaintiff shall tender all

8

sums to which the true lender is entitled.” (Compl. ¶¶ 49, 111.)

9

However, “[a] tender must be one of full performance and must be

10

unconditional to be valid.” Arnolds Management Corp. v. Eischen, 158

11

Cal.

12

Plaintiff’s quiet title claim against the Movants is dismissed.

13

App.

J.

3d

575,

5780

(1984)

(citations

omitted).

Therefore,

Usury and Fraud

14

Movants also seek dismissal of Plaintiff’s “usury and fraud”

15

claim, arguing Plaintiff failed to allege that the interest rate on

16

either loan exceeded the statutory minimum. (MortgageIT’s Mot. 17:5-7;

17

Wells Fargo Defs.’ Mot. 13:7-9.) The Wells Fargo Defendants also argue

18

the claim was not plead with the specificity Rule 9(b) requires. (Wells

19

Fargo Defs.’ Mot. 12:2-6.)

20
21
22
23

Plaintiff’s “usury and fraud” claim contains the following
allegations:
[T]he subject loan, notes, and mortgage were
structured so as to create the appearance of a
higher value of real property than the actual fair
market value.

24
25
26
27
28

Defendants disguised the transaction to create
the appearance of the lender being a properly
chartered and registered financial institution . .
. when in fact the real party in interest was not
disclosed to Plaintiff, and neither were the
various fees, rebates, refunds, kickbacks, profits
and gains of the various parties who participated
in this unlawful scheme.
16

1

Said real party in interest . . . was neither
a financial institution or an entity . . .
authorized . . . to do business in the state, nor
to act as banking, lending or other financial
institution anywhere else.

2
3
4

As such, this fraudulent scheme . . . was in
fact a sham to use Plaintiff’s interest in the real
property to collect interest in excess of the legal
rate. . . .

5
6

The transaction of all the loan of money
pursuant to a written agreement, and as such,
subject to the rate limitation set forth under
state and federal law. The “formula break” a
reference to end these laws was exceeded by a
factor in excess of 10 contrary to the applicable
law and contrary to the requirements for disclosure
under TILA and HOEPA.

7
8
9
10
11

(Compl. ¶¶ 105-09.)

12

Although Plaintiff alleged “Usury and Fraud” as a single

13

claim, they are separate claims under California law. Therefore, the

14

sufficiency of Plaintiff’s allegations are addressed separately under

15

each claim.

16

Under California law, the elements of a usury claim are: “(1)

17

The transaction must be a loan or forbearance; (2) the interest to be

18

paid must exceed the statutory maximum; (3) the loan and interest must

19

be absolutely repayable by the borrower; and (4) the lender must have a

20

willful intent to enter into a usurious transaction.” Ghirardo v.

21

Antonioli, 8 Cal. 4th 791, 798 (1994). “A loan that charges an interest

22

rate greater than 10 percent per annum is usurious.” 321 Henderson

23

Receivables Origination LLC v. Sioteco, 173 Cal. App. 4th 1059, 1076

24

(2009).

25

Plaintiff does not allege the rate of interest charged on

26

either of her two loans, or that it exceeded the maximum rate allowable

27

by law. Therefore, Plaintiff’s usury claim against the Movants is

28

dismissed. See Parjarillo, 2010 WL 4392551, at *8 (dismissing usury
17

1

claim when the plaintiff failed to “sufficiently allege how the interest

2

. . . received by Defendants exceeded the statutory maximum rate”).

3

Under California law, the elements of a fraud claim are: (1)

4

misrepresentation (including, false representation, concealment, or

5

nondisclosure); (2) knowledge of falsity; (3) intent to induce reliance;

6

(4)

7

Permanente Medical Group, Inc., 15 Cal. 4th 951, 974 (1997).

8

for fraud in federal court must satisfy Rule 9(b)’s heightened pleading

9

requirements.

justifiable

10

reliance;

and

(5)

resulting

damage.

Engalla

v.

A claim

See Vess, 317 F.3d at 1103.

Plaintiff’s

conclusory

allegations

concerning

Defendants’

11

“fraudulent scheme” do not provide the specificity required by Rule

12

9(b).

13

dismissed.

14
15

Therefore,

K.

Plaintiff’s

fraud

claim

against

the

Movants

is

Wrongful Foreclosure
Movants

also

seek

dismissal

of

Plaintiff’s

wrongful

16

foreclosure claim, arguing, inter alia, that Plaintiff lacks standing to

17

challenge the foreclosure since “[she] does not make a valid tender

18

offer.” (Wells Fargo Defs.’ Mot. 9:9-10:11.)

19

To state a wrongful foreclosure claim, “a plaintiff must

20

allege a credible tender of the amount of the secured debt . . . .”

21

Roque v. Suntrust Mortg., Inc., No. C-09-00040 RMW, 2010 WL 546896, at

22

*4 (N.D. Cal. Feb. 10, 2010) (citing Abdallah v. United Savings Bank, 43

23

Cal. App. 4th 1101, 1109 (1996)); see also Guerrero v. Greenpoint

24

Mortgage Funding, Inc., No. 10-15333, 2010 WL 4117102, at *1 (9th Cir.

25

Oct. 20, 2010) (stating the plaintiffs “lacked standing to bring a claim

26

for ‘wrongful foreclosure,’ because they failed to allege actual, full

27

and unambiguous tender of the debt owed on the mortgage”).

28
18

1

Since Plaintiff does not allege tender of the amount of debt

2

owed, or her ability to tender, her wrongful foreclosure claim against

3

the Movants is dismissed.

4

L.

Civil Conspiracy

5

Movants also seek dismissal of Plaintiff’s civil conspiracy

6

claim, arguing it is not an independent cause of action, and Plaintiff

7

has not plead an underlying tort against them. (MortgageIT’s Mot. 13:19-

8

21,

9

Defendants further argue that Plaintiff’s civil conspiracy claim was not

10

plead with the necessary specificity. (Wells Fargo Defs.’ Mot. 12:2-6.)

11

“Conspiracy is not a cause of action, but a legal doctrine

12

that imposes liability on persons who, although not actually committing

13

a tort themselves, share with the immediate tortfeasors a common plan or

14

design in its perpetration.” Applied Equipment Corp., Litton Saudi

15

Arabia Ltd., 7 Cal. 4th 503, 510 (1994) (citation omitted). “Standing

16

alone, a conspiracy does no harm and engenders no tort liability. It

17

must be activated by the commission of an actual tort.” Id. at 511.

18

Further, to allege a civil “conspiracy to defraud,” a complaint must

19

meet the particularity requirements of [Rule] 9(b). Sandry v. First

20

Franklin Financial Corp., No. 1:10-cv-01923-OWW-SKO, 2011 WL 202285, at

21

*4 (E.D. Cal. Jan. 20, 2011).

14:1-2;

Wells

Fargo

Defs.’

Mot.

12:11-13:2.)

The

Wells

Fargo

22

Since Plaintiff’s tort claims have been dismissed against the

23

Movants, and Plaintiff’s conclusory allegations that Defendants “agreed

24

. . . to engage in [a] conspiracy to defraud” Plaintiff “for the common

25

purpose of accruing economic gains for themselves at the expense of and

26

detriment to Plaintiff” do not provide the specificity required by Rule

27

9(b),

28

dismissed.

Plaintiff’s

civil

conspiracy

19

claim

against

the

Movants

is

1

V. CONCLUSION

2

For the stated reasons, each Movant’s dismissal motion is

3

GRANTED. Therefore, MortgageIT’s motion to strike is DENIED as moot.

4

Plaintiff is granted fourteen (14) days from the date on which this

5

order

6

deficiencies in any claim dismissed without prejudice.

is

filed

to

file

a

First

Amended

Complaint

addressing

the

7

This action may be dismissed with prejudice against the

8

Movants under Federal Rule of Civil Procedure 41(b) if Plaintiff fails

9

to file an amended complaint within the prescribed time period.

10

Dated:

May 3, 2011

11
12
13

GARLAND E. BURRELL, JR.
United States District Judge

14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
20