Miller v. GMAC Mortgage, LLC et al

Filing 38

MEMORANDUM and ORDER signed by Judge Morrison C. England, Jr. on 8/5/2011 GRANTING 24 and 27 Motions to Dismiss, with leave to amend. Amended complaint due within 20 days. (Michel, G)

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UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF CALIFORNIA

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MARK MILLER,

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Plaintiff,

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No. 2:11-cv-00257-MCE-DAD

v.

MEMORANDUM AND ORDER

GMAC MORTGAGE, LLC; QUICKEN
LOANS INCORPORATED; MORTGAGE
ELECTRONIC REGISTRATION
SYSTEMS, INC; and DOES 1
through 50, inclusive,

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Defendants.

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----oo0oo----

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Through this action, Plaintiff Mark Miller (“Plaintiff”)

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seeks redress for the alleged deceit and negligence of Defendants

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GMAC Mortgage, LLC (“GMAC”), Quicken Loans Inc. (“Quicken”), and

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Mortgage Electronic Registration Systems, Inc. (“MERS”)

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(collectively “Defendants”) in connection with a home mortgage

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transaction.

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There are two matters presently before the Court.

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First, on May 31, 2011, Defendants GMAC and MERS filed a Motion

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to Dismiss Plaintiff’s First Amended Complaint for failure to

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state a claim upon which relief can be granted pursuant to

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Rule 12(b)(6) of the Federal Rules of Civil Procedure.1

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No. 24.)

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that Motion.

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Quicken filed a separate Motion to Dismiss Plaintiff’s First

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Amended Complaint pursuant to Rule 12(b)(6).

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Plaintiff also filed a timely opposition to Quicken’s Motion to

(ECF

Plaintiff has filed a Statement of Non-Opposition to
(ECF No. 29.)

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Dismiss.

(ECF No. 34.)

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Second, on May 31, 2011, Defendant

(ECF No. 27.)

For the reasons set forth below, both

motions are granted.2

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BACKGROUND3

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As discussed in the Court’s previous Order (ECF No. 20), the

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instant dispute arises out of an alleged mortgage transaction

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between Plaintiff and Quicken.

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with Suren Srabian (“Srabian”), a mortgage broker employed by

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Quicken, about purchasing real property.

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Srabian with his financial information so that Srabian could

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complete Plaintiff’s loan application.

In December 2007, Plaintiff spoke

Plaintiff provided

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All further references to “Rule” or “Rules” are to the
Federal Rules of Civil Procedure unless otherwise noted.
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Because oral argument will not be of material assistance,
the Court orders this matter submitted on the briefs. E.D. Cal.
Local Rule 230(g).
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The factual assertions in this section are based on the
allegations in Plaintiff’s First Amended Complaint (ECF No. 21)
unless otherwise specified.
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Although Plaintiff’s actual monthly income was $6,083.33, Srabian

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allegedly listed Plaintiff’s income on the application as

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$8,125.00.

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mortgage application was inflated by $2,041.66. Based on the

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application, Quicken agreed to issue a loan to Plaintiff.

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As a result, Plaintiff’s monthly income on the

On January 11, 2008, Plaintiff signed the loan documents in

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the presence of a notary, who was sent to Plaintiff’s home by

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Quicken to execute the documents.

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not explain the terms of the loan, and did not counsel Plaintiff

Quicken, and/or Srabian, did

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to read the documents carefully.

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rushed when signing the loan documents, and did not have an

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adequate opportunity to read them.

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guaranteed that the loan would become more affordable as

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Plaintiff’s salary increased, and that the loan could later be

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refinanced.

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Plaintiff claims that he was

Srabian and Quicken allegedly

Plaintiff alleges that GMAC is currently the servicer of the

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subject loan, and that MERS is the beneficiary on the deed of

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trust.

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because he cannot afford his loan, Plaintiff does not allege that

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he is in default or that foreclosure proceedings have actually

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been instituted.

While Plaintiff alleges that he has suffered damages

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STANDARD

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On a motion to dismiss for failure to state a claim under

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Federal Rule of Civil Procedure 12(b)(6), all allegations of

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material fact must be accepted as true and construed in the light

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most favorable to the nonmoving party.
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Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336,337-38 (9th Cir.

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1996).

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of the claim showing that the pleader is entitled to relief” in

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order to “give the defendant fair notice of what the [...] claim

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is and the grounds upon which it rests.”

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Twombly, 550 U.S. 544, 555 (2007) (quoting Conley v. Gibson,

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355 U.S. 41, 47 (1957)).

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motion to dismiss does not require detailed factual allegations.

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However, “a plaintiff’s obligation to provide the grounds of his

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entitlement to relief requires more than labels and conclusions,

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and a formulaic recitation of the elements of a cause of action

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will not do.”

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A court is not required to accept as true a “legal conclusion

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couched as a factual allegation.”

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1937, 1950 (2009) (quoting Twombly, 550 U.S. at 555).

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allegations must be enough to raise a right to relief above the

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speculative level.”

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Alan Wright & Arthur R. Miller, Federal Practice and Procedure

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§ 1216 (3d ed. 2004) (stating that the pleading must contain

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something more than “a statement of facts that merely creates a

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suspicion [of] a legally cognizable right of action.”)).

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Rule 8(a)(2) requires only “a short and plain statement

Bell Atl. Corp. v.

A complaint attacked by a Rule 12(b)(6)

Id. (internal citations and quotations omitted).

Ashcroft v. Iqbal, 129 S. Ct.
“Factual

Twombly, 550 U.S. at 555 (citing 5 Charles

Furthermore, “Rule 8(a)(2)...requires a showing, rather than

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a blanket assertion, of entitlement to relief.”

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550 U.S. at 556 n.3 (internal citations and quotations omitted).

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Thus, “[w]ithout some factual allegation in the complaint, it is

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hard to see how a claimant could satisfy the requirements of

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providing not only ‘fair notice’ of the nature of the claim, but

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also ‘grounds’ on which the claim rests.”
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Twombly,

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Id. (citing 5 Charles Alan Wright & Arthur R. Miller, supra, at

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§ 1202).

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claim to relief that is plausible on its face.”

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the “plaintiffs...have not nudged their claims across the line

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from conceivable to plausible, their complaint must be

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dismissed.”

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proceed even if it strikes a savvy judge that actual proof of

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those facts is improbable, and ‘that a recovery is very remote

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and unlikely.’”

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A pleading must contain “only enough facts to state a

Id.

Id. at 570.

If

However, “[a] well-pleaded complaint may

Id. at 556 (quoting Scheuer v. Rhodes, 416 U.S.

232, 236 (1974)).

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A court granting a motion to dismiss a complaint must then

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decide whether to grant leave to amend.

Leave to amend should be

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“freely given” where there is no “undue delay, bad faith or

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dilatory motive on the part of the movant,...undue prejudice to

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the opposing party by virtue of allowance of the amendment, [or]

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futility of the amendment....”

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(1962); Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048,

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1052 (9th Cir. 2003) (listing the Foman factors as those to be

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considered when deciding whether to grant leave to amend).

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all of these factors merit equal weight.

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consideration of prejudice to the opposing party...carries the

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greatest weight.”

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833 F.2d 183, 185 (9th Cir. 1987).

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amend is proper only if it is clear that “the complaint could not

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be saved by any amendment.”

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Foman v. Davis, 371 U.S. 178, 182

Not

Rather, “the

Id. (citing DCD Programs, Ltd. v. Leighton,

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Dismissal without leave to

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Intri-Plex Techs. v. Crest Group, Inc., 499 F.3d 1048, 1056 (9th

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Cir. 2007) (citing In re Daou Sys., Inc., 411 F.3d 1006, 1013

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(9th Cir. 2005); Ascon Props., Inc. v. Mobil Oil Co., 866 F.2d

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1149, 1160 (9th Cir. 1989) (“Leave need not be granted where the

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amendment of the complaint...constitutes an exercise in

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futility....”)).

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ANALYSIS

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A.

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Motion to Dismiss by GMAC and MERS

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On May 31, 2011, GMAC and MERS filed the pending Motion to

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Dismiss for failure to state a claim upon which relief can be

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granted pursuant to Rule 12(b)(6).

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Statement of Non-Opposition to that Motion.

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Motion to Dismiss filed by MERS and GMAC is granted.

Plaintiff has filed a
As a result, the

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B.

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Motion to Dismiss by Quicken

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On May 31, 2011, Quicken filed a Motion to Dismiss pursuant

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to Rule 12(b)(6) for failure to state a claim upon which relief

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can be granted.

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Quicken’s Motion to Dismiss.

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merits of the Motion, the Court concludes that Quicken’s Motion

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to Dismiss is also granted.

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Plaintiff has filed a timely opposition to
However, after consideration of the

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Deceit

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Under California law, a claim for deceit is essentially an

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allegation of fraud, and a plaintiff must prove the following

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elements: (1) misrepresentation; (2) “knowledge of falsity;” (3)

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intent to defraud; (4) justifiable reliance; and (5) “resulting

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damage.”

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835, 839 (9th Cir. 2004).

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plaintiff must “distinctly allege” the injury or damage suffered.

City Solutions, Inc. v. Clear Channel Comm., 365 F.3d
Furthermore, to recover for fraud, a

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Stephenson v. Argonaut Ins. Co., 125 Cal. App. 4th 962, 974

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(2004).

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the heightened pleading standards of Rule 9(b), which require a

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party to “state with particularity the circumstances constituting

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fraud or mistake.”

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In addition, any claim for fraud must additionally meet

Plaintiff alleges that Quicken is liable for deceit based on

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allegedly false statements made to Plaintiff by broker Srabian.

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While Plaintiff has amended his complaint to include somewhat

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more detailed facts regarding the allegedly false statements,

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Plaintiff has again failed to specifically allege the injury or

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damage he has suffered.

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afford, and is unable to refinance his loan.

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alleges that he has “suffered, and will continue to suffer,

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damages, the exact amount of which have not been fully

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ascertained.”

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However, no foreclosure proceedings have been initiated against

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Plaintiff.

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his loan.

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Plaintiff claims that he is unable to
Plaintiff further

(Pl.’s 1st Am. Compl., 11:8, ECF No. 21.)

Plaintiff has not alleged that he has defaulted on

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Accordingly, it is unclear that Plaintiff has actually suffered

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any “resulting damage” as required to bring a claim for deceit.

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If Plaintiff has in fact suffered any actual injury, he has

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failed to plead these damages with the requisite specificity.

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Because Plaintiff has failed to meet the heightened pleading

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requirements of Rule 9(b), and has failed to distinctly allege

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any cognizable damage, Quicken’s Motion to Dismiss is granted as

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to Plaintiff’s first cause of action.

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2.

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Civil Conspiracy, Negligence, Breach of Fiduciary
Duty, and Violations of the California Business
and Professional Code § 17200

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Plaintiff’s First Amended Complaint also alleges that

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Quicken is liable for Civil Conspiracy, Negligence, Breach of

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Fiduciary Duty, and for violating the California Business and

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Professional Code § 17200.

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Plaintiff’s causes of action in his original Complaint.

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No. 1.)

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causes of action are dismissed.

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(ECF No. 20) dismissing Plaintiff’s Complaint for the Court’s

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analysis as to these causes of action.

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These claims are identical to
(See ECF

As such, Plaintiff’s second, third, fourth and fifth
See the Court’s previous order

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CONCLUSION

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As a matter of law, and for the reasons set forth above,

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Defendant Quicken’s Motion to Dismiss (ECF No. 27) is GRANTED

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with leave to amend.

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oppose dismissal of his claims against GMAC and MERS, their

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Motion to Dismiss (ECF No. 24) is GRANTED with leave to amend.

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Plaintiff has not demonstrated any bad faith or other malicious

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conduct, and therefore may file an amended complaint not later

Additionally, because Plaintiff does not

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than twenty (20) days after the date of the Memorandum and Order

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is filed electronically.

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said twenty (20)-day period, without further notice, Plaintiff’s

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claims will be dismissed without leave to amend.

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If no amended complaint is filed within

IT IS SO ORDERED.
Dated: August 5, 2011

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_____________________________
MORRISON C. ENGLAND, JR.
UNITED STATES DISTRICT JUDGE

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