Gilliland v. Chase Home Finance, LLC et al

Filing 27

ORDER signed by Judge John A. Mendez on 5/13/2015 ORDERING that the COURT GRANTS WITHOUT LEAVE TO AMEND defendants' 7 motion to dismiss plaintiff's eighth, ninth, and tenth causes of action, and DENIES defendants' motion to dismiss plaintiff's first through seventh causes of action. (Zignago, K.)

1
2
3
4
5
6
7

UNITED STATES DISTRICT COURT

8

EASTERN DISTRICT OF CALIFORNIA

9
10

KAYRINKIA J. GILLILAND,

11

Plaintiff,

12
13
14
15

v.

NO. 2:14-cv-2834 JAM AC
ORDER GRANTING IN PART AND
DENYING IN PART DEFENDANTS’
MOTION TO DISMISS

CHASE HOME FINANCE, LLC; CHASE
HOME FINANCE, INC.; JP MORGAN &
COMPANY; JP MORGAN CHASE; CHASE
BANK USA; GLENN MOURIDY; THOMAS
WIND, and Does 1-20, et al.,

16

Defendants.

17
18

Plaintiff Kayrinkia Gilliland brought this action against

19

defendants Chase Home Finance, LLC; Chase Home Finance, Inc.;

20

JPMorgan Chase & Co.; JPMorgan Chase Bank, N.A.; and Chase Bank

21

USA, N.A., for wrongful foreclosure and other state-law claims. 1

22

1

23
24
25
26
27
28

Plaintiff also names “Glenn Mouridy” and “Thomas Wind” as
defendants in her case. However, her Complaint makes no
reference to either Mouridy or Wind beyond including them as
named defendants. (See Compl. (Docket No. 1).) Plaintiff makes
no allegations of them taking any action related to her lawsuit
or the property it concerns. Accordingly, the court can only
conclude that Mouridy and Wind are nominal defendants, whose
citizenship is disregarded for purposes of diversity
jurisdiction. See Lincoln Prop. Co. v. Roche, 546 U.S. 81, 82
(2005) (describing nominal parties as those who have “no control
of, impact, or stake in the controversy”); Kuntz v. Lamar Corp.,
1

1

Defendants now move to dismiss pursuant to Federal Rule of Civil

2

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

3

can be granted. 2

(Docket No. 7.)

4
5
6

I.

FACTUAL ALLEGATIONS AND PROCEDURAL BACKGROUND

Plaintiff’s allegations concern a residential mortgage loan

7

she took out on her home in Sacramento, California.

(See Compl.

8

¶ 1 (Docket No. 1-1.).)

9

defendants sent her a notice that promised to modify her home

In December 2009, plaintiff alleges that

10

loan if she complied with the terms of a Home Affordable

11

Modification Program Trial Period Plan (“TPP”).

12

TPP’s terms included a requirement that plaintiff make three

13

monthly trial period payments of $731.29 on January 1, 2010,

14

February 1, 2010, and March 1, 2010.

15

alleges that she made all three payments on time, (id. ¶ 22), and

16

on March 31, 2010, defendants wrote to plaintiff congratulating

(Id. ¶ 21.)

(Id. ¶ 20.)

The

Plaintiff

17
18
19
20
21
22
23
24
25
26
27

385 F.3d 1177, 1183 (9th Cir. 2004) (“[A] federal court must
disregard nominal or formal parties and rest jurisdiction only
upon the citizenship of real parties to the controversy.”). .”).
With regard to the remaining Defendants (Chase Home Finance, LLC;
Chase Home Finance, Inc.; JPMorgan Chase & Co.; JPMorgan Chase
Bank, N.A.; and Chase Bank USA, N.A.), the Court concludes that
the allegations in the complaint are sufficiently detailed to
give each Defendant “fair notice of what the . . . claim is and
the grounds upon which it rests.” Bell Atl. Corp. v. Twombly,
550 U.S. 544, 545 (2007). For this reason, Defendants’ argument
that Plaintiff has not complied with F.R.C.P. 8 fails. See
Robinson v. Charter Practices Int'l LLC, No. 2015 WL 1799833, at
*8 (D. Or. Apr. 16, 2015) (denying Rule 8 challenge on the
grounds that the complaint was sufficiently detailed, “as is
evidenced by the defenses raised by and through the defendants’
motion to dismiss”).
2
This motion was determined to be suitable for decision without
oral argument. E.D. Cal. L.R. 230(g). The hearing was scheduled
for April 22, 2015.

28
2

1

her on qualifying for a loan modification and enclosed a Home

2

Affordable Modification Agreement (“CPLM”) containing the terms

3

of her modified loan, (id. ¶ 23).

4

and returned the CPLM to defendants.

Plaintiff allegedly executed
(Id. ¶ 25.)

5

Plaintiff alleges that, on April 14, 2010, she had two

6

independent conversations with two different representatives of

7

defendants.

8

confirmed to plaintiff that defendants had received the executed

9

CPLM and that plaintiff had a “solid” agreement with defendants.

(Id. ¶¶ 27-28.)

Both representatives allegedly

10

(Id.)

11

default or arrears, that her home was not in foreclosure

12

proceedings, and that she only needed to make timely payments to

13

remain in compliance with their agreement.

14

They also allegedly assured plaintiff that she was not in

(Id.)

Nevertheless, on April 16, 2010, plaintiff allegedly

15

received a call from a collection agency informing her that

16

defendants had reported her in default on her home loan in an

17

amount of about $3,500.

18

again contacted defendants and spoke to a representative who now

19

told her that defendants would not honor the terms of the CPLM,

20

that there had been no loan modification, that plaintiff was in

21

default, and that plaintiff should not make further payments.

22

(Id. ¶¶ 30-31.)

23

plaintiff that she was being considered for another loan

24

modification, and that while her application for a loan

25

modification was pending, defendants would not file a notice of

26

default or proceed toward foreclosure.

27

this conversation, plaintiff allegedly continued to follow the

28

terms of the CPLM, including tendering payments in accordance

(Id. ¶ 29.)

Plaintiff alleges that she

However, the representative also allegedly told

3

(Id. ¶¶ 31-32.)

Despite

1

with its terms.

(Id. ¶ 34.)

2

On May 29, 2010, defendants allegedly notified plaintiff by

3

letter that she was in default in an amount of more than $5,000.

4

(Id. ¶ 35.)

5

had failed to make the monthly payments required by the TPP

6

agreement--a statement that plaintiff contends was contradicted

7

by earlier correspondence from defendants confirming timely

8

receipt of the three required TPP payments.

9

The same letter also allegedly stated that plaintiff

(Id.)

In June 2010, plaintiff alleges that she again spoke with

10

defendants’ representatives who assured her that she was not in

11

foreclosure proceedings and that foreclosure proceedings would

12

not commence while defendants considered her for a loan

13

modification.

14

another written notice on July 6, 2010, demanding past due

15

payments in the amount of $5,729.88.

16

(Id. ¶¶ 36-38.)

Plaintiff allegedly received

(Id. ¶ 39.)

On August 24, 2011, plaintiff alleges that defendants

17

recorded a Notice of Trustee’s Sale, listing $161,809 as the loan

18

amount owed.

19

foreclosure sale on September 20, 2011, for $30,000.

20

75.)

21

(Id. ¶ 74.)

Plaintiff’s home was sold at a
(Id. ¶¶ 40,

Plaintiff originally filed her Complaint on September 15,

22

2014, in the Superior Court of California, County of Sacramento.

23

(See id. at 1.)

24

the TPP contract, (id. ¶¶ 45-50), (2) breach of the CPLM

25

contract, (id. ¶¶ 51-56), (3) breach of the TPP’s covenant of

26

good faith and fair dealing, (id. ¶¶ 57-61), (4) breach of the

27

CPLM’s covenant of good faith and fair dealing, (id. ¶¶ 62-66),

28

(5) wrongful foreclosure, (id. ¶¶ 67-75), (6) intentional

She asserts ten causes of action: (1) breach of

4

1

misrepresentation, (id. ¶¶ 76-84), (7) unfair business practices

2

in violation of California Business and Professions Code sections

3

17200, et. seq., (id. ¶¶ 85-95), (8) violation of California

4

Civil Code sections 2923 and 2924, (id. ¶¶ 96-105), (9) violation

5

of California Civil Code sections 2953 and 2954, (id. ¶¶ 106-10),

6

and (10) negligence (id. ¶¶ 111-16).

7

to federal court pursuant to 28 U.S.C. §§ 1441 and 1446 on the

8

basis of diversity jurisdiction, 28 U.S.C. § 1332. 3

9

of Removal (Docket No. 1).)

10

Defendants timely removed

(See Notice

The case was originally assigned to the Honorable William B.

11

Shubb.

On December 9, 2014, defendants moved to dismiss all

12

claims against them pursuant to Rule 12(b)(6).

13

After the motion was fully briefed, and in the middle of the

14

hearing on the motion to dismiss, the parties informed Judge

15

Shubb that a notice of related case was pending, requesting that

16

the matter be reassigned to the undersigned.

17

Judge Shubb ordered the matter continued, pending a ruling on the

18

notice of related case.

19

issued a related case order, reassigning the matter to the

20

undersigned.

21

had already been fully briefed - and had been partially heard by

22

Judge Shubb - defendants filed an expanded motion to dismiss,

Id.

Docket No. 7.

Docket No. 19.

(Docket No. 20).

On February 5, 2015, this Court

Although their motion to dismiss

23
3

24
25
26
27
28

Defendants represent that Chase Home Finance LLC and Chase Home
Finance, Inc., merged with and into JPMorgan Case Bank, N.A., in
May 2011, and they provide a copy of a letter approving the
merger from the Comptroller of the Currency, Administrator of
National Banks, signed on April 15, 2011. (See Notice of Removal
at 2-3, Ex. 5 (Docket No. 1-1).) Accordingly, the court uses the
citizenship of the surviving entity, JP Morgan Chase Bank, N.A.,
to determine citizenship of the non-surviving entities. See
Meadows v. Bicrodyne Corp., 785 F.2d 670, 671-72 (9th Cir. 1986).
5

1

raising new arguments not discussed in their original motion to

2

dismiss.

3

receive leave of the Court to raise these new arguments, the

4

Court will address only the arguments raised in defendants’

5

original motion to dismiss (Docket No. 7), plaintiff’s original

6

opposition (Docket No. 13), and defendants’ reply (Docket #10),

7

which are properly before the Court.

(Docket No. 21).

8
9
10

Because defendants did not request or

II.
A.

OPINION

Legal Standard

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

11

Rule 12(b)(6), the court must accept the allegations in the

12

complaint as true and draw all reasonable inferences in favor of

13

the plaintiff.

14

overruled on other grounds by Davis v. Scherer, 468 U.S. 183

15

(1984); Cruz v. Beto, 405 U.S. 319, 322 (1972).

16

motion to dismiss, a plaintiff must plead “only enough facts to

17

state a claim to relief that is plausible on its face.”

18

Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007).

19

See Scheuer v. Rhodes, 416 U.S. 232, 236 (1974),

To survive a

Bell

The plausibility standard “does not require detailed factual

20

allegations.”

Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).

Nor

21

does it “impose a probability requirement at the pleading stage.”

22

Starr v. Baca, 652 F.3d 1202, 1213 (9th Cir. 2011).

23

standard “‘simply calls for enough facts to raise a reasonable

24

expectation that discovery will reveal evidence’ to support the

25

allegations.”

26

Ultimately, “[d]etermining whether a complaint states a plausible

27

claim for relief will . . . be a context-specific task that

28

requires the reviewing court to draw on its judicial experience

This

Id. at 1217 (quoting Twombly, 550 U.S. at 556).

6

1

and common sense.”

Iqbal, 556 U.S. at 679.

2

B.

Judicial Notice

3

In general, a court may not consider items outside the

4

complaint when deciding a Rule 12(b)(6) motion to dismiss, but it

5

may consider items of which it can take judicial notice.

6

v. Reich, 13 F.3d 1370, 1377 (9th Cir. 1994).

7

request that the court take judicial notice of several documents

8

for purposes of this motion.

9

Notice (“RJN”) (Docket No. 7-1).)

10

1.

11

Barron

Defendants’

(See Defs.’ Req. for Judicial

Judicial Notice of Bankruptcy Filings

A district court may consider materials in a Rule 12(b)(6)

12

motion to dismiss that are not part of the pleadings but that are

13

“matters of public record.”

14

668, 688 (9th Cir. 2001).

15

court to take judicial notice of facts that are not subject to

16

reasonable dispute in that they are either (1) generally known

17

within the territorial jurisdiction of the trial court or (2)

18

capable of accurate and ready determination by resort to sources

19

whose accuracy cannot reasonably be questioned.

20

Health and Rehab. Servs., Inc., 356 B.R. 18, 22 (E.D. Cal. 2006)

21

(Ishii, J.) (citing Duke Energy Trading & Marketing, L.L.C. v.

22

Davis, 267 F.3d 1042, 1048 n.3 (9th Cir. 2001)) (taking judicial

23

notice of filings in bankruptcy proceedings).

24

Lee v. City of Los Angeles, 250 F.3d
Federal Rule of Evidence 201 allows a

Rose v. Beverly

Defendants request judicial notice of three exhibits: (1) a

25

voluntary bankruptcy petition (2) a discharge order, and (3) a

26

final decree.

27

2).)

28

bankruptcy case initiated by plaintiff in the Bankruptcy Court of

(See RJN at 1; Defs.’ RJN Exs. A-C (Docket No. 7-

These three documents apparently relate to a Chapter Seven

7

1

the Eastern District of California, which is within this court’s

2

territorial jurisdiction.

3

these bankruptcy filings--but not necessarily the truth of that

4

statement--cannot be reasonably questioned.

5

at 22 (suggesting that judicial notice may be appropriately used

6

to consider the existence, but not the truth, of the matter

7

judicially noticed).

8

existence of statements made within the three bankruptcy filings

9

for purposes of this motion.

10
11

2.

The existence of a statement within

See Rose, 356 B.R.

Accordingly, the court will consider the

(See RJN Exs. A-C.)

Judicial Notice of the Trustee’s Deed Upon Sale

Through the “incorporation by reference” doctrine, the court

12

may also “take into account documents . . . alleged in a

13

complaint and whose authenticity no party questions, but which

14

are not physically attached to the [plaintiff’s] pleading . . .

15

even though the plaintiff does not explicitly allege the contents

16

of that document in the complaint.”

17

1068, 1076 (9th Cir. 2005) (internal quotation marks and

18

citations omitted).

19

“Trustee’s Deed Upon Sale” dated September 20, 2011, listing the

20

address of plaintiff’s home, “JPMorgan Chase Bank, N.A.” as the

21

mortgage beneficiary, and “Alpine Holdings Inc.” as the

22

purchaser.

23

has not affirmed the authenticity of this document, and

24

therefore, the court finds judicial notice of it inappropriate at

25

this time.

26

of only those documents “whose authenticity no party questions”

27

on a motion to dismiss).

Knievel v. ESPN, 393 F.3d

Defendants have provided the court with a

(See RJN Ex. D (Docket No. 7-2).)

However, plaintiff

See Knievel, 393 F.3d at 1076 (allowing consideration

28
8

1
2

3.

Judicial Notice of Consent Order

Finally, defendants’ request that the court consider a

3

“consent order” pertaining to “the case entitled United States of

4

America et al. v. Bank of America Corporation, et al., filed in

5

the United States District Court of the District of Columbia,

6

case number 1:12-cv-00361 RMC.”

7

(Docket No. 7-2).)

8

defendants represent, in light of California Civil Code section

9

2924.12, which states:

10
11
12
13
14
15
16

(Defs.’ Mem. at 14; RJN Ex. E

This consent order is relevant here,

A signatory to a consent judgment entered in the case
entitled United States of America et al. v. Bank of
America Corporation et al., filed in the United States
District Court for the District of Columbia, case
number 1:12-cv-00361 RMC, that is in compliance with
the relevant terms of the Settlement Term Sheet of
that consent judgment with respect to the borrower who
brought an action pursuant to this section while the
consent judgment is in effect shall have no liability
for a violation of Section 2923.55, 2923.6, 2923.7,
2924.9, 2924.10, 2924.11, or 2924.17.
Cal. Civ. Code § 2924.12(g).

17

Consistent with a number of recent district court decisions,

18

the court denies defendants’ request for judicial notice and will

19

not consider the applicability of section 2924.12(g) on a motion

20

to dismiss.

21

00884 NC, 2014 WL 7243096, at *19 (N.D. Cal. Dec. 19, 2014)

22

(declining to consider section 2924.12(g) on a motion to dismiss

23

because it “appears to be an affirmative defense to be raised on

24

summary judgment”); Rijhwani v. Wells Fargo Home Mortgage, Inc.,

25

Civ. No. 13-05881 LB, 2014 WL 890016, at *9 (N.D. Cal. Mar. 3,

26

2014) (same); Segura v. Wells Fargo Bank, N.A., Civ. No. 14-04195

27

MWF AJWX, 2014 WL 4798890, at *5 (C.D. Cal. Sept. 26, 2014)

28

(same).

See Mulato v. Wells Fargo Bank, N.A., Civ. No. 14-

9

1

C.

Discussion

2
3

1.

Judicial Estoppel

“Judicial estoppel is an equitable doctrine that precludes a

4

party from gaining an advantage by asserting one position, and

5

then later seeking an advantage by taking a clearly inconsistent

6

position.”

7

782 (9th Cir. 2001) (citing Rissetto v. Plumbers & Steamfitters

8

Local 343, 94 F.3d 597, 600 (9th Cir. 1996)).

9

court at its discretion.

10
11

Hamilton v. State Farm Fire & Cas. Co., 270 F.3d 778,

It is invoked by a

New Hampshire v. Maine, 532 U.S. 742,

750 (2001).
“In the bankruptcy context, the federal courts have

12

developed a basic default rule:

13

pending (or soon-to-be-filed) lawsuit from the bankruptcy

14

schedules and obtains a discharge (or plan confirmation),

15

judicial estoppel bars the action.”

16

Dep’t of Transp., 733 F.3d 267, 271 (9th Cir. 2013); see also

17

Payless Wholesale Distribs., Inc. v. Alberto Culver (P.R.) Inc.,

18

989 F.2d 570, 571 (1st Cir. 1993) (“Conceal your claims; get rid

19

of your creditors on the cheap, and start over with a bundle of

20

rights.

21

tolerate, even passively.”).

22

judicial estoppel “when the debtor has knowledge of enough facts

23

to know that a potential cause of action exists during the

24

pendency of the bankruptcy, but fails to amend his schedules or

25

disclosure statements to identify the cause of action as a

26

contingent asset.”

27
28

If a plaintiff-debtor omits a

Ah Quin v. Cnty. of Kauai

This is a palpable fraud that the court will not
The Ninth Circuit has thus applied

Hamilton, 270 F.3d at 784.

The Ninth Circuit recently expressed concern over hard-andfast applications of this rule, particularly if a party’s prior
10

1

failure to disclose might have been inadvertent or mistaken.

2

Ah Quin, 733 F.3d at 271-77.

3

plaintiff-debtor inadvertently or mistakenly omits a claim from

4

schedules in a bankruptcy case that may be reopened and amended,

5

“the application of judicial estoppel . . . would do nothing to

6

protect the integrity of the courts, would enure to the benefit

7

only of an alleged bad actor, and would eliminate any prospect

8

that Plaintiff’s unsecured creditors might have of recovering.”

9

Id. at 275-76.

10

See

It reasoned that, in cases where a

Here, plaintiff filed a voluntary petition under Chapter

11

Seven of the United States Bankruptcy Code on February 26, 2011.

12

(RJN Ex. A at 3 (Docket No. 7-2).)

13

that, in Section 5 of the Statement of Financial Affairs, under a

14

line asking plaintiff to list “all property that has been

15

repossessed by a creditor, sold at a foreclosure sale,

16

transferred through a deed in lieu of foreclosure or returned to

17

the seller,” plaintiff listed the property in question, along

18

with an address for “Chase Home Finance” and a date of “10/10.”

19

(Id. at 27.)

20

believed her home had been foreclosed on October 10, 2010, and

21

that plaintiff was “aware of all the facts necessary to assert

22

the claims presented in the Complaint” at the time she filed for

23

bankruptcy.

24

Defendants point to the fact

This line shows, defendants argue, that plaintiff

(Defs.’ Mem. at 9-10.)

However, plaintiff did not list any claims as personal

25

property in her bankruptcy schedules.

26

The bankruptcy court subsequently entered a discharge order on

27

May 31, 2011, (see RJN Ex. B), and closed the bankruptcy estate

28

on June 3, 2011, (see RJN Ex. C).
11

(See RJN Ex. A at 13.)

Defendants argue that this

1

omission should therefore estop plaintiff from asserting her

2

claims here.

3

(Defs.’ Mem. at 10.)

The Court does not agree.

First, the Court is unwilling to

4

conclude from only a vague statement on plaintiff’s bankruptcy

5

petition that she had “knowledge of enough facts to know that a

6

potential cause of action exists.”

7

784.

8

sold at a foreclosure sale at the time she filed her bankruptcy

9

petition on February 26, 2011, when she now alleges that her home

See Hamilton, 270 F.3d at

Second, plaintiff could not have known that her home was

10

was sold at a foreclosure sale on September 20, 2011.

11

Compl. ¶¶ 40, 75.)

12

questions regarding plaintiff’s decision to list the property in

13

her bankruptcy petition that are appropriately left for a later

14

stage of litigation, when more evidence and context has been

15

presented.

16

the use of judicial estoppel after the parties presented

17

substantial evidence and moved for summary judgment); Hay v.

18

First Interstate Bank of Kalispell, N.A., 978 F.2d 555, 556-57

19

(9th Cir. 1992) (same).

20

motion to dismiss on the basis of judicial estoppel.

21

At a minimum, these points raise factual

See, e.g., Hamilton, 270 F.3d at 780-82 (considering

2.

22

The Court therefore denies defendants’

Sufficiency of Plaintiff’s Complaint
a.

23
24

(See

Plaintiff’s First Four Claims for Breach of
Contract and Breach of the Covenant of Good
Faith and Fair Dealing

Defendants argue that plaintiff’s first four claims for

25

breach of contract and breach of the covenant of good faith and

26

fair dealing are barred by the statute of limitations.

27

Mem. at 10-11.)

28

may dismiss a claim ‘[i]f the running of the statute is apparent

(Defs.’

It is well established that “[a] district court

12

1

on the face of the complaint.’”

2

Loans, Inc., 656 F.3d 1034, 1045 (9th Cir. 2011) (quoting Jablon

3

v. Dean Witter & Co., 614 F.2d 677, 682 (9th Cir. 1980)).

4

Cervantes v. Countrywide Home

Under California law, the statute of limitations for breach

5

of contract and breach of the covenant of good faith and fair

6

dealing is four years.

7

“[a] cause of action for breach of contract does not accrue

8

before the time of breach.”

Romano v. Rockwell Internat., Inc.,

9

14 Cal. 4th 479, 488 (1996).

However, “if a party to a contract

Cal. Civ. Proc. Code § 337.

Generally,

10

expressly or by implication repudiates the contract before the

11

time for his or her performance has arrived, an anticipatory

12

breach is said to have occurred.”

13

Id.

In the case of anticipatory breach, a plaintiff may elect to

14

either “treat the repudiation as an anticipatory breach and

15

immediately seek damages for breach of contract . . . or . . .

16

treat the repudiation as an empty threat, wait until the time for

17

performance arrives and exercise his [or her] remedies for actual

18

breach if a breach does in fact occur at such time.”

19

the event the plaintiff disregards the repudiation, the statute

20

of limitations does not begin to run until the time set by the

21

contract for performance.”

22

contractual obligations, allowing a plaintiff to “elect to rely

23

on the contract despite a breach, and the statute of limitations

24

does not begin to run until the plaintiff has elected to treat

25

the breach as terminating the contract.”

26

Id.

Id.

“[I]n

The same rule applies to ongoing

Id.

According to the Complaint, the earliest date plaintiff

27

allegedly learned of problems regarding her loan modification

28

contract with defendants was on April 16, 2010, when she received
13

1

a phone call from a collection agency.

2

Plaintiff alleges that “[i]mmediately thereafter” she spoke to

3

one of defendants’ representatives who informed her that

4

defendants would not honor the terms of the modification

5

contract.

6

allegedly received a letter confirming this fact.

7

(Id. ¶¶ 30-31.)

(See Compl. ¶ 29.)

Later, on May 29, 2010, plaintiff
(Id. ¶ 35.)

Based on these allegations, plaintiff may have regarded

8

these statements and the letter as an anticipatory breach.

9

therefore had the option to treat defendants’ communications as

10

empty threats and continue performance according to the TPP and

11

CPLM’s terms.

12

that she made all timely payments according to the TPP and the

13

CPLM, (Compl. ¶¶ 47, 53), suggesting that she continued

14

performing according to those agreements.

15

action for breach of the TPP and CPLM thus would not yet have

16

accrued.

17

See Romano, 14 Cal. 4th at 488.

She

Plaintiff alleges

Plaintiff’s causes of

On September 20, 2011, plaintiff alleges that defendants

18

sold her home at a foreclosure sale, breaching the TPP and CPLM.

19

(Id. ¶¶ 40, 49, 54.)

20

15, 2014--just under three years later and well within the four-

21

year period provided by the statute of limitations.

Plaintiff filed her complaint on September

22

Because the Court cannot definitively determine from the

23

face of the Complaint that plaintiff’s cause of action accrued

24

earlier than September 20, 2011, see Cervantes, 656 F.3d at 1045,

25

it cannot find that the statute of limitations has run on

26

plaintiff’s contract-related claims.

27
28
14

Defendants’ motion to

1
2

dismiss claims one through four is denied. 4
b.
Plaintiff’s Fifth Claim for Wrongful
Foreclosure

3

Defendants argue that plaintiff fails to state a claim for

4

wrongful foreclosure because she fails to allege tender of the

5

amount owed.

6

several exceptions to the tender requirement, however, including

7

“if the borrower’s action attacks the validity of the underlying

8

debt,” Lona v. Citibank, N.A., 202 Cal.App.4th 89, 112 (6th Dist.

9

2011), or “when a plaintiff proves that the entity lacked the

(Defs.’ Mem. at 11-12.)

California law recognizes

10

authority to foreclose on the property,” Glaski v. Bank of Am.,

11

Nat’l Ass’n, 218 Cal.App.4th 1079, 1100 (5th Dist. 2013).

12

example, courts have not required tender when a debtor and

13

beneficiary enter into a loan modification agreement to cure

14

default, but the beneficiary still forecloses.

15

Ocwen Loan Servicing, LLC, 208 Cal.App.4th 1001, 1017 (2d Dist.

16

2012) (citing Bank of Am., N.A. v. La Jolla Grp. II, 129 Cal.

17

App. 4th 706, 712 (5th Dist. 2005)).

18

For

See Barroso v.

While plaintiff titles her fifth cause of action “Wrongful

19

Foreclosure and Violation of Civil Code Sections 2923.6 and

20

4

21
22
23
24
25
26
27
28

Defendants also suggest that that plaintiff’s breach of
contract claims are ill-plead because plaintiff fails to attach a
copy of the TPP or CPLM to her Complaint. (Defs.’ Mem. at 1213.) Plaintiff does not attach the TPP or CPLM, but her
Complaint does purport to quote several passages verbatim from
the contracts and describes the material terms of both the TPP
and CPLM in some detail. (See Compl. ¶¶ 20-21, 23-26, 46, 52.)
Accordingly, because plaintiff has plead the form of contract,
those terms material to her claim, and defendant’s alleged breach
of those terms, the court finds this case distinguishable from
cases that have dismissed ill-plead breach of contract claims.
See, e.g., Altman v. PNC Mortgage, 850 F. Supp. 2d 1057, 1078
(E.D. Cal. 2012) (O’Neill, J.) (noting that plaintiff failed to
attach the contract, allege specific terms, or describe what
terms a defendant had breached).
15

1

2023.7,” her allegations do not involve statutory violations and

2

focus instead on the validity of her default and defendants’

3

contractual authority to foreclose in light of the alleged loan

4

modification agreement.

5

the exceptions to tender, plaintiff alleges that the terms of the

6

TPP and CPLM modified her loan to cure all delinquent payments

7

and interest, deeming her not in default.

8

contrary to these terms, defendants allegedly contended that she

9

was in default and proceeded to foreclose on her home.

(See Compl. ¶¶ 67-75.)

Consistent with

(Id. ¶¶ 68-69.)

Yet,

(Id.

10

¶¶ 70-75.)

11

not required to tender, the Court denies defendants’ motion to

12

dismiss this claim.

13

Because plaintiff’s allegations suggest that she was

c.

Plaintiff’s Sixth Claim for Intentional
Misrepresentation

14
15

Defendants argue that plaintiff’s sixth claim is also barred

16

by the statute of limitations.

17

California law, the statute of limitations for a fraud claim,

18

such as intentional misrepresentation, is three years.

19

Proc. § 338(d); Lazar v. Superior Court, 12 Cal. 4th 631, 638

20

(1996).

21

accrued until discovery, by the aggrieved party, of the facts

22

constituting the fraud or mistake.”

23

(Defs.’ Mem. at 11-12.)

Under

Cal. Civ.

“The cause of action in that case is not deemed to have

Cal. Civ. Proc. § 338(d).

Plaintiff’s intentional misrepresentation claim centers on

24

defendants’ assurances that, although they would not honor the

25

terms of the TPP and CPLM, defendants were still considering her

26

for a modification and would not foreclose.

27

Plaintiff alleges that she continued to receive and rely upon

28

defendants’ assurances “throughout 2010 and 2011.”
16

(Compl. ¶¶ 77-84.)

(Id. ¶ 81.)

1

Because those assurances were not proven false until defendants

2

foreclosed on plaintiff’s home, it is plausible that plaintiff

3

did not discover the facts constituting the fraud until after the

4

foreclosure sale on September 20, 2011.

5

Plaintiff’s intentional misrepresentation claim is thus not

6

barred by the three-year statute of limitations on the face of

7

the Complaint, and the Court denies defendants’ motion to dismiss

8

this claim.

(See id. ¶¶ 40, 75.)

9
10

d.

Plaintiff’s Seventh Claim for Unfair
Business Practices

11
12

Defendants also raise the statute of limitations with regard

13

to plaintiff’s seventh claim.

14

of unfair business practices pursuant to the California Unfair

15

Competition Law (“UCL”), California Business and Professions Code

16

§§ 17200, et seq., must be brought within four years after the

17

cause of action has accrued.

18

(Defs.’ Mem. at 11-12.)

Claims

See Cal. Bus. & Prof. Code § 17208.

Plaintiff premises her UCL claim on allegations that

19

defendants falsely promised her a permanent loan modification and

20

misled her into believing she could remain in her home by

21

complying with the terms of that modification as described in the

22

TPP and CPLM.

23

claims, nothing within plaintiff’s Complaint indicates that her

24

cause of action accrued before defendants actually broke these

25

promises by selling her home at a foreclosure sale on September

26

20, 2011.

27

limitations has not run on the face of plaintiff’s Complaint, the

28

Court denies defendants’ motion to dismiss this claim.

(See Compl. ¶¶ 86-87, 95.)

(See id. ¶¶ 40, 75.)

Like her contract

Since the four year statute of

17

1
e.

Plaintiff’s Eighth and Ninth Claims under
HBOR

2
3

Plaintiff’s eighth and ninth causes of action assert
4
violations of California’s Homeowner Bill of Rights (“HBOR”).
5
(See Compl. ¶¶ 16-18, 96-110.)

Her eighth cause of action

6
asserts violations of a variety of statutory obligations during
7
foreclosure proceedings, including California Civil Code sections
8
2923.5 (Compl. ¶ 97), 2923.7 (id. ¶ 101), 2924 (id. ¶ 103),
9
2924.6 (id. ¶ 99), 2924.17 (id. ¶ 100), 2924.18 (id. ¶ 98), and
10
2923.55 (id. ¶ 102).

Her ninth cause of action alleges that

11
defendant engaged in “dual tracking,” a deceptive process by
12
which the lender negotiates a loan modification with a borrower
13
in default while simultaneously pressing forward with
14
foreclosure.

See Cal. Civ. Code §§ 2923.6, 2924.18; Lapper v.

15
SunTrust Mortgage, N.A., Civ. No. 2:13-04041 ODW, 2013 WL
16
2929377, at *2 (C.D. Cal. June 7, 2013) (describing “dual
17
tracking” and its relation to HBOR).
18
HBOR’s provisions became effective on January 1, 2013.

See

19
Cal. Stats. 2012, Ch. 86, Assembly Bill 278, § 20; Rockridge
20
Trust v. Wells Fargo, N.A., 985 F. Supp. 2d 1110, 1152 (N.D. Cal.
21
2013).

“California courts comply with the legal principle that

22
unless there is an express retroactivity provision, a statute
23
will not be applied retroactively unless it is very clear from
24
extrinsic sources that the Legislature . . . must have intended a
25
retroactive application.”

Rockridge Trust, 985 F. Supp. 2d at

26
1152 (quoting Myers v. Philip Morris Companies, Inc., 28 Cal. 4th
27
828, 841 (2002)).

The sections of HBOR cited by plaintiff do not

28
18

1

contain a retroactivity clause, and several courts have already

2

concluded that HBOR’s provisions do not apply retroactively.

3

See, e.g., id. (dismissing a claim of HBOR violations that

4

occurred before January 1, 2013); Emick v. JPMorgan Chase Bank,

5

Civ. No. 2:13–340 JAM AC, 2013 WL 3804039, at *3 (E.D. Cal. July

6

19, 2013).

7

Plaintiff’s complaint alleges that defendants failed to

8

comply with several obligations under HBOR relating to the

9

recording of a notice of default on September 24, 2010, and

10

during the foreclosure process that culminated in the foreclosure

11

sale on September 20, 2011.

12

Her Complaint makes no mention of any conduct that occurred after

13

January 1, 2013, and therefore, no conduct that might plausibly

14

support a violation of HBOR.

15

causes of action therefore fail to state a claim, and the Court

16

grants defendant’s motion to dismiss these claims.

17

of plaintiff’s complaint would be futile, the Court declines to

18

grant plaintiff leave to amend these claims.

19

L.L.C. v. Aspeon, Inc., 316 F.3d 1048, 1052 (9th Cir. 2003).

20
21

f.

(See Compl. ¶¶ 72, 74-75, 97-110.)

Plaintiff’s eighth and ninth

As amendment

Eminence Capital,

Plaintiff’s Tenth Claim for Negligence

Finally, defendants argue that plaintiff’s tenth cause of

22

action for negligence is barred by the two year statute of

23

limitations.

24

§ 339; Hydro-Mill Co. v. Hayward, Tilton & Rolapp Ins.

25

Associates, Inc., 115 Cal.App.4th 1145, 1154 (2d Dist. 2004).

26

Plaintiff’s allegations focus on an alleged “duty to

(Defs.’ Mem. at 11-12.)

See Cal. Civ. Proc. Code.

27

exercise reasonable care in locating, interpreting and verifying

28

[plaintiff’s] account information,” (Compl. ¶ 112), and “a duty
19

1

of due care in responding to Plaintiff’s questions and in

2

advising her how to proceed,” (id. ¶ 114).

3

claim focuses on alleged conversations she had with defendants’

4

representatives “on or about April 14, 2010” (Compl. ¶ 112), and

5

clearly reveals that she could not plausibly have discovered the

6

facts constituting this claim later than the time her home was

7

sold on September 20, 2011 (see id. ¶ 116); Fox v. Ethicon Endo-

8

Surgery, Inc., 35 Cal. 4th 797, 807 (2005) (“The discovery rule

9

only delays accrual until the plaintiff has, or should have,

Plaintiff’s tenth

10

inquiry notice of the cause of action.”). This claim is barred on

11

its face by the statute of limitations and is dismissed.

12

amendment of plaintiff’s complaint would be futile, the Court

13

declines to grant plaintiff leave to amend her complaint.”

14

Eminence Capital, L.L.C. v. Aspeon, Inc., 316 F.3d 1048, 1052

15

(9th Cir. 2003).

As

16
17
18

III. ORDER
For the reasons set forth above, the COURT GRANTS WITHOUT

19

LEAVE TO AMEND defendants’ motion to dismiss plaintiff’s eighth,

20

ninth, and tenth causes of action, and DENIES defendants’ motion

21

to dismiss plaintiff’s first through seventh causes of action.

22
23

IT IS SO ORDERED.
Dated: May 13, 2015

24
25
26
27
28
20