Farren et al. v. Select Portfolio Servicing, Inc. et al.

Filing 42

ORDER signed by District Judge John A. Mendez on 3/17/17 ORDERING that Defedants' MOTION to DISMISS is GRANTED and the case is DISMISSED WITH PREJUDICE. CASE CLOSED. (Mena-Sanchez, L)

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1 2 3 4 5 6 7 8 9 UNITED STATES DISTRICT COURT 10 EASTERN DISTRICT OF CALIFORNIA 11 12 BETTINA L. FARREN; STEVE FARREN, No. 2:16-cv-01077-JAM-DB 13 Plaintiffs, 14 ORDER GRANTING DEFENDANTS’ MOTION TO DISMISS SECOND AMENDED COMPLAINT v. 15 16 17 18 19 SELECT PORTFOLIO SERVICING, INC.; US BANK AS TRUSTEE ON BEHALF OF THE HOLDERS OF THE WAMU MORTGAGE PASS-THROUGH CERTIFICATES SERIES 2007-HY6; JPMORGAN CHASE BANK, N.A.; QUALITY LOAN SERVICE CORPORATION; and Does 1 through 50, inclusive, 20 Defendants. 21 22 This matter is before the Court on Select Portfolio 23 Servicing, Inc.’s and US Bank as Trust on behalf of the holders 24 of the WaMu Mortgage Pass-Through Certificates, Series 2007-HY6’s 25 (collectively “Defendants”) Motion to Dismiss. 26 and Steve Farren (“Plaintiffs”) sued Defendants for various 27 claims connected to the mortgage secured by their residence. 28 the reasons explained below, the Court grants Defendants’ Motion 1 Bettina L. Farren For 1 to Dismiss with prejudice. 1 2 3 I. 4 5 FACTUAL ALLEGATIONS AND PROCEDURAL BACKGROUND The following allegations are taken as true for the purposes of this motion: 6 On March 23, 2007, Plaintiffs executed a Deed of Trust 7 (“DOT”) in favor of Washington Mutual Bank, FA, securing a loan 8 of $1,464,000 with their property located at 2045 Salmon Falls 9 Road, El Dorado Hills, CA 95862 (“Property”). Second Amended 10 Complaint (“SAC”) at ¶¶ 2, 12; see DOT, SAC at Exh. 1. 11 defined the “Borrower” as “Steven Farren and Bettina L. Farren, 12 husband and wife and Stephen R. Hinrichs and Janine G. Hinrichs, 13 husband and wife by deed which recites ‘as to an undivided 50% 14 interest, all as tenants in common[.]’” 15 signed and executed an Adjustable Rate Note (“Note”) concurrently 16 with the Deed of Trust; however, Plaintiffs do not have a copy of 17 the Note they signed. 18 retain a copy of either document but subsequently obtained a copy 19 of the Deed of Trust, which was recorded at the County Recorder’s 20 office. 21 of an Adjustable Rate Note signed by only Stephen R. Henrichs and 22 Janine G. Henrichs, not the Farrens. 23 Additionally, Plaintiffs executed a Fixed/Adjustable Rate Rider 24 and a Second Home Rider, which they also have signed copies of 25 and on which Plaintiffs are listed as Borrowers. SAC at ¶ 19. SAC at ¶ 12, 19. DOT at 1. The DOT Plaintiffs Plaintiffs did not Plaintiffs provide the Court with a copy SAC at Exh. 8. SAC at ¶ 12; 26 27 28 1 This motion was determined to be suitable for decision without oral argument. E.D. Cal. L.R. 230(g). The hearing was scheduled for February 7, 2017. 2 1 Exh. 2, 3. 2 acknowledge that the Property is a Second Home to the Henrichs. 3 SAC at ¶ 44. 4 residence. 5 Plaintiffs executed the Second Home Rider to Plaintiffs claim that the home was their primary Id.; SAC at ¶ 9. At some point after that transaction, but before December 8, 6 2008, Chase became the successor to Washington Mutual Bank, FA. 7 SAC at ¶ 20. 8 Default to be issued against the Property. 9 same day, Chase assigned the Deed of Trust and Note to LaSalle Then, on December 8, 2008, Chase caused a Notice of SAC at ¶ 21. On the 10 Bank NA as trustee for WaMu Mortgage Pass-Through Certificates, 11 Series 2007—HY6. 12 LaSalle Bank in interest as trustee for the WaMu Mortgage Pass- 13 Through Certificates. 14 servicer of the loan throughout these transfers until, at a date 15 unknown to Plaintiffs, Select Portfolio Servicing, Inc. (“SPS”) 16 became the servicer. Id. at ¶¶ 20, 22. 17 Quality Loan Service Corporation (“Quality”) became the successor 18 trustee of the DOT. 19 issued and caused to be recorded a Notice of Trustee’s Sale of 20 the Property on March 18, 2016. 21 SAC at ¶ 22; Exh. 5. SAC at ¶ 24. SAC at ¶ 27. US Bank NA succeeded Chase continued to be the On January 4, 2016, At SPS’s direction, Quality SAC at ¶ 28. Plaintiffs originally filed suit in the Superior Court of 22 the State of California for the County of El Dorado on April 12, 23 2016. 24 case to federal court on May 19, 2016, after which Plaintiffs 25 requested, but were denied, a Temporary Restraining Order to 26 enjoin the foreclosure trustee’s sale. 27 Plaintiffs submitted their First Amended Complaint on July 22, 28 2016, ECF No. 17, which this Court dismissed with leave to amend Notice of Removal at ¶ 1, ECF No. 1. 3 Chase removed the ECF Nos. 1, 13, 16. 1 on November 22, 2016, ECF No. 33. 2 Plaintiffs’ claims against JPMorgan Chase Bank, N.A., with 3 prejudice. 4 Complaint in December, removing the claim for declaratory relief— 5 previously identified as Count 1 and which was dismissed with 6 prejudice—and alleging the facts more concretely. ECF No. 34. The Court also dismissed Plaintiffs filed their Second Amended ECF No. 35. 7 8 II. 9 A. 10 OPINION Leave to Amend “The court considers five factors in assessing the propriety 11 of leave to amend—bad faith, undue delay, prejudice to the 12 opposing party, futility of amendment, and whether the plaintiff 13 has previously amended the complaint.” 14 Colleges, 655 F.3d 984, 995 (9th Cir. 2011). 15 district court should freely give leave to amend when justice so 16 requires, the court’s discretion to deny such leave is 17 particularly broad where the plaintiff has previously amended its 18 complaint.” 19 Elec. Co., 713 F.3d 502 (9th Cir. 2013) (citations and quotation 20 marks omitted). 21 U.S v. Corinthian “Although a Ecological Rights Foundation v. Pacific Gas and Plaintiffs have filed three versions of their Complaint in 22 this action. Additionally, Plaintiffs had notice of Defendant’s 23 arguments due to the previous Motion to Dismiss raising nearly 24 identical issues. 25 amend is denied as to all dismissed causes of action. 26 /// 27 /// 28 /// See ECF Nos. 20, 28, & 31. 4 Thus, leave to 1 B. Analysis 2 3 1. The Underlying Note This Court dismissed Plaintiffs’ First Amended Complaint 4 because Plaintiffs failed to plausibly allege that they signed 5 the Note. 6 deficient because Plaintiffs’ allegations are “factually 7 unsupported” and contradicted by the Note attached as an exhibit 8 to their SAC. 9 See ECF No. 33. Defendants argue that the SAC remains MTD at 5–6. “To survive a motion to dismiss, a complaint must contain 10 sufficient factual matter, accepted as true, to state a claim to 11 relief that is plausible on its face.” 12 U.S. 662, 678 (2009) (citation and quotation marks omitted). 13 copy of a written instrument that is an exhibit to a pleading is 14 a part of the pleading for all purposes.” 15 “When an attached exhibit contradicts the allegations in the 16 pleadings, the contents of the exhibits trump the pleadings.” 17 Van Hook v. Curry, No. C 06-3148 PJH (PR), 2009 WL 773361, at *3 18 (N.D. Cal. Mar. 23, 2009). 19 Ashcroft v. Iqbal, 556 “A Fed. R. Civ. P. 10(c). Plaintiffs have plausibly alleged that they signed the Note. 20 Beyond asserting this fact, they explain that they signed the 21 Note concurrently with the Deed of Trust and they explain why 22 they have a copy of the Deed of Trust but not the Note. 23 also allege that the Note they signed was lost, which is why only 24 the Henrichs’ signed copy of the Note is available. 25 ¶ 104. 26 contradict their allegations because they allege that the Note 27 they signed has been lost. 28 Plaintiffs' allegations are unsupported are premature, as this They SAC at The attached Note without their signatures does not Defendants’ arguments that 5 1 Court must take those allegations as true for the purposes of a 2 motion to dismiss. 3 support Plaintiffs’ claims and each is dismissed on separate 4 grounds, as described below. 5 2. However, these allegations are not enough to Count Two: Violation of Cal. Civ. Code § 2923.6 (c) and (d) 6 7 “If a borrower submits a complete application for a first 8 lien loan modification offered by, or through, the borrower's 9 mortgage servicer, a mortgage servicer, mortgagee, trustee, 10 beneficiary, or authorized agent shall not record a notice of 11 default or notice of sale, or conduct a trustee's sale, while the 12 complete first lien loan modification application is pending.” 13 Cal. Civil Code § 2923.6(c). 14 submitted a complete modification as of April 8, 2016. 15 ¶ 42. Plaintiffs allege that they SAC at 16 Defendants argue that Plaintiffs’ application was never 17 “pending” because Defendants refused to accept or acknowledge the 18 modification application. 19 need only allege they submitted a “complete” modification 20 application under the code section. 21 directs the Court’s attention to Cal. Civ. Code § 2924.10, which 22 addresses “Submission of first lien modification document; 23 written acknowledgment of receipt” and defines the term 24 “complete.” 25 borrower has supplied the mortgage servicer with all documents 26 required by the mortgage servicer within the reasonable 27 timeframes specified by the mortgage servicer,” Defendants 28 contend that Plaintiff will be unable to allege submission of a MTD at 6. Plaintiffs assert that they Opp. at 3. Defendant Because an application is deemed “‘complete’ when a 6 1 complete application in these circumstances. 2 § 2923.6(h) (defining the same). 3 See Cal. Civ. Code Plaintiffs’ claim under § 2923.6(c) and (d) must be 4 dismissed as insufficiently pled. “A bald allegation that a 5 party submitted ‘complete’ loan modification applications—without 6 sufficient supporting factual allegations—is a conclusory 7 statement, and the Court does not rely on such assertions in 8 evaluating the sufficiency of Plaintiff’s complaint.” 9 CitiMortgage, Inc., No. CV 14-00278 BRO (SHx), 2014 WL 4359193, Stokes v. 10 at *7 (C.D. Cal. Sep. 3, 2014); see also Cornejo v. Ocwen Loan 11 Servicing, LLC, 151 F. Supp. 3d 1102, 1111 (E.D. Cal. 2015). 12 Plaintiffs failed to allege any facts other than the conclusory 13 statement that they submitted a complete application. 14 ¶ 42. 15 See SAC at Furthermore, given the code’s definition, Plaintiffs cannot 16 allege that they submitted a complete application because their 17 application was never acknowledged. 18 the Court with a single case in which a plaintiff proceeded on a 19 claim for a violation of § 2923.6(c) or (d) where the defendant 20 never acknowledged the plaintiff’s application. 21 22 Plaintiffs do not provide Count Two is dismissed without leave to amend. 3. Count 3: Intentional Misrepresentation 23 To state a claim for intentional misrepresentation a 24 plaintiff must show “(1) a misrepresentation, (2) knowledge of 25 falsity, (3) intent to induce reliance, (4) actual and 26 justifiable reliance, and (5) resulting damage.” 27 Skype Inc., 220 Cal. App. 4th 217, 230–31 (2013). 28 of Civil Procedure 9(b) applies to state-law claims that sound in 7 Chapman v. Federal Rule 1 fraud and requires the plaintiff to state with particularity the 2 circumstances constituting fraud. 3 317 F.3d 1097, 1103 (9th Cir. 2003). 4 constituting the alleged fraud [must] be specific enough to give 5 defendants notice of the particular misconduct so that they can 6 defend against the charge and not just deny that they have done 7 anything wrong.” 8 omitted). 9 where, and how of the misconduct charged.” 10 Vess v. Ciba-Geigy Corp. USA, “[T]he circumstances Id. at 1106 (citations and quotation marks The claim “must be accompanied by the who, what, when, Id. (citations and quotation marks omitted). 11 Plaintiffs allege that, through telephone conversations, SPS 12 employees misrepresented to Plaintiffs that they were not parties 13 to the Note. 14 details necessary under the heightened pleading standard. 15 instance, Plaintiffs have not alleged when these conversations 16 occurred, how many conversations occurred, or how the 17 misrepresentations were conveyed. SAC at ¶ 53. Plaintiffs fail to provide the For 18 More fatal to Plaintiffs’ claim is their theory of reliance. 19 Plaintiffs claim that they relied on the representation that they 20 were not parties to the loan, but Plaintiffs did not take any 21 action or change their legal position due to that representation. 22 As Plaintiffs put it, they “could not avail [themselves] of any 23 option to prevent the foreclosure trustee sale,” but that is 24 because all of their remedies “would necessarily involve SPS who 25 refused to communicate with [P]laintiffs on any option to avoid 26 foreclosure.” 27 wrongly or rightly—did not acknowledge them as parties to the 28 Note and thus would not work with them on their foreclosure SAC at ¶¶ 53–54. Their problem is that SPS— 8 1 avoidance options. 2 alleged, they were wrongfully denied relief from their loan 3 servicer. 4 this reliance theory. 5 Plaintiffs do not cite a single case in support of Count Three is thus dismissed without leave to amend. 6 7 Plaintiffs were not induced to act; as 4. Count 4: Negligent Misrepresentation “The elements of negligent misrepresentation are similar to 8 intentional fraud except for the requirement of scienter; in a 9 claim for negligent misrepresentation, the plaintiff need not 10 allege the defendant made an intentionally false statement, but 11 simply one as to which he or she lacked any reasonable ground for 12 believing the statement to be true.” 13 App. 4th 170, 184 (2006). 14 misrepresentation rests upon the existence of a legal duty, 15 imposed by contract, statute or otherwise, owed by a defendant to 16 the injured person.” 17 (1988). 18 Charnay v. Cobert, 145 Cal. “[R]esponsibility for negligent Eddy v. Sharp, 199 Cal. App. 3d 858, 864 Defendants correctly argue that because the elements of 19 intentional and negligent misrepresentation overlap, this claim 20 fails for the reasons described above. 21 Four, too, is dismissed without leave to amend. 22 5. For those reasons, Count Count 5: Breach of Implied Covenant of Good Faith and Fair Dealing 23 24 “Every contract imposes upon each party a duty of good faith 25 and fair dealing in its performance and its enforcement.” Carma 26 Developers (Cal.), Inc. v. Marathon Dev. Cal., Inc., 2 Cal. 4th 27 342, 371 (1992). 28 application in situations where one party is invested with a “The covenant of good faith finds particular 9 1 discretionary power affecting the rights of another. Such power 2 must be exercised in good faith.” 3 to effectuate the intentions and reasonable expectations of the 4 parties reflected by mutual promises within the contract.” 5 v. HostPro, Inc., 174 Cal. App. 4th 833, 852 (2009). 6 covenant also requires each party to do everything the contract 7 presupposes the party will do to accomplish the agreements 8 purposes.” 9 Cal. App. 4th 1230, 1244 (2013). Id. at 372. It is “designed Nein “The Thrifty Payless, Inc. v. Americana at Brand, LLC, 218 Because a breach of the 10 covenant is it a breach of contract, a plaintiff must allege 11 (1) a contract, (2) plaintiff’s performance (or excuse), 12 (3) defendant’s breach, and (4) resulting damages to the 13 plaintiff. 14 See id. at 1244. The only alleged breach of the implied covenant is 15 Defendants’ failure to acknowledge Plaintiffs as parties to the 16 Note. 17 Plaintiffs have not alleged that they performed or were excused 18 from performance. 19 SAC at ¶ 70. This claim is also insufficiently pled. The SAC is also deficient with respect to causation and 20 damages. “[N]o liability attaches if the damages sustained were 21 otherwise inevitable or due to unrelated causes.” 22 Bank of Am., N.A., 219 Cal. App. 4th 1481, 1499 (2013) (citations 23 and quotation marks omitted). 24 complete causal relationship and allege specific facts showing 25 “how the actions he or she took in reliance on the defendant’s 26 misrepresentations caused the alleged damages.” 27 Plaintiffs have not alleged facts indicating they would have been 28 successful in pursuing the remedies they list but for Defendants’ Rossberg v. Plaintiffs must establish a 10 See id. 1 failure to acknowledge them as parties to the Note. 2 Plaintiffs allege that they would have qualified for a loan 3 modification or would have been allowed to enter into a short 4 sale transaction, SAC at ¶ 53(d), these allegations do not 5 establish a sufficiently plausible, causal connection between the 6 alleged misrepresentation and damages. 7 Mortg. Servicing, Inc., No. 2:12-00201 WBS CKD, 2014 WL 172537 8 (E.D. Cal. Jan. 15, 2014) (“[Plaintiffs] do not allege any facts 9 suggesting how pursuing these hypothetical avenues could have Although See Dick v. American Home 10 prevented the foreclosure of their home. . . . [T]he allegations 11 do not allow for a plausible inference that plaintiffs would have 12 been able to make the payments on the loan, or that these 13 purported alternative remedies would have been successful in 14 stemming the eventual foreclosure.”). 15 that the injuries complained of were not otherwise inevitable. 16 Count Five is also dismissed without leave to amend. 17 18 6. The Court cannot presume Count 6: Negligence To state a claim for negligence, a plaintiff must show (1) a 19 legal duty to use reasonable care, (2) breach of that duty, and 20 (3) proximate cause between the breach and (4) the plaintiff's 21 injury. Mendoza v. City of L.A., 66 Cal.App.4th 1333, 1339 22 (1998). “The existence of a legal duty to use reasonable care in 23 a particular factual situation is a question of law for the court 24 to decide.” 25 App. 4th 269, 278 (2004). 26 Vasquez v. Residential Investments, Inc., 118 Cal. Defendants argue that they do not owe Plaintiffs a duty of 27 care due to the “general rule [that] a financial institution owes 28 no duty of care to a borrower when the institution’s involvement 11 1 in the loan transaction does not excess the scope of its 2 conventional role as a mere lender of money.” 3 Nymark v. Heart Fed. Savings & Loan Assn., 231 Cal. App. 3d 1089, 4 1096 (1991)). 5 court decisions following the principle—set out in Lueras v. BAC 6 Home Loans Servicing, LP, 221 Cal. App. 4th 49 (2013)—that a 7 lending institution does not owe a duty of care when 8 renegotiating a loan because renegotiation falls within the 9 conventional role of money lender. 10 MTD at 10 (citing They direct the Court to a number of district While authority on this issue is divided, this Court has 11 previously found that lending institutions do have a duty toward 12 borrowers in processing a loan modification application. 13 Hsin-Shawn Sheng v. Select Portfolio Servicing, Inc., No. 2:15- 14 cv-0255-JAM-KJN, 2015 WL 4508759, at *5 (E.D. Cal. July 24, 15 2015). 16 the other direction does not defeat this claim. 17 See Thus, Defendants’ argument in reliance on decisions going Defendants also argue that they did not breach a duty of 18 care because Plaintiffs were not parties to the Note. 19 accepts Plaintiffs’ allegations that they signed the Note and 20 thus this argument fails as well. 21 The Court Although Defendants did not reassert the point, their 22 argument that Plaintiff has not adequately pled causation and 23 damages applies with the same force on this claim, which repeats 24 the “causation/damages” allegations of the previous claims 25 verbatim. 26 27 28 Thus, Count Six is dismissed without leave to amend. 7. Count 7: Violation of Cal. Civ. Code § 17200 California’s Unfair Competition Law (“UCL”) defines unfair competition as any unlawful, unfair, or fraudulent business 12 1 practice and any unfair, deceptive, untrue or misleading 2 advertising. 3 based on the violation of another law or on a practice that is 4 unfair but not independently unlawful. 5 Health, 30 Cal. 4th 798, 828 (2003). 6 the UCL may be brought by a person who has suffered injury in 7 fact and has lost money or property as a result of the unfair 8 competition. 9 Cal. Bus. & Prof. Code § 17200. A UCL claim may be See Olszewski v. Scripps Actions for relief under Cal. Bus. & Prof. Code § 17204. Plaintiffs argue that the violations alleged in Counts 1-6 10 constitute unlawful or unfair businesses practices under the UCL. 11 SAC at ¶ 83; Opp. at 8. 12 insufficient to support those claims and, in turn, they will not 13 support Plaintiffs’ UCL theory as pled. 14 dismissed without leave to amend. 15 8. The Court has found the allegations This claim, too, is Count 8: Intentional Infliction of Emotional Distress 16 17 The elements for the tort of intentional infliction of 18 emotional distress are: (1) extreme and outrageous conduct by the 19 defendant with the intention of causing, or with reckless 20 disregard of the probability of causing, emotional distress; 21 (2) plaintiff suffered severe or extreme emotional distress; and 22 (3) actual and proximate causation of the emotional distress by 23 defendant’s outrageous conduct. 24 1035, 1050 (2009). 25 conduct that is so extreme as to exceed all bounds of that 26 usually tolerated in a civilized community and so extreme and 27 outrageous as to go beyond all possible bonds [sic] of decency, 28 and to be regarded as atrocious, and utterly intolerable in a Hughes v. Pair, 46 Cal. 4th “Outrageous conduct has been defined as 13 1 civilized community.” 2 App. 3d 602, 616 (1985) (internal citations and quotation marks 3 omitted). 4 such substantial quality or enduring quality that no reasonable 5 person in civilized society should be expected to endure it.” 6 Id. at 1051. 7 Bogard v. Emp’r Casualty Co., 164 Cal. “Severe emotional distress means emotion distress of With respect to the second element, Plaintiffs’ allegations 8 are plainly insufficient. Plaintiffs simply state that “[they] 9 did, in fact, suffer extreme and/or severe emotional distress.” 10 SAC at ¶ 89. 11 the nature or extent of their distress. 12 Prudential Fin., No. 2:07-cv-00944-MCE-DAD, 2007 WL 2827792 (E.D. 13 Cal. Sep. 27, 2007) (finding that plaintiff’s allegations that he 14 suffered from depression, frustration, nervousness, and anxiety 15 lacked the necessary specificity to show their nature or extent). 16 This cause of action fails on this basis. 17 Plaintiffs fail to offer any facts that would show See Hamilton v. Furthermore, the allegations could not sustain an outrageous 18 conduct finding. Although “outrageous conduct” is a question of 19 fact, the Court may still dismiss the claim if the allegations 20 could not sustain such a finding. 21 Ragland v. U.S. Bank Nat. Assn., the court denied summary 22 judgment where the plaintiff alleged that the defendant had 23 induced her to skip a loan payment, later refused to accept loan 24 payments, and then sold her home in foreclosure. 25 4th 182, 204 (2012). 26 claim at the pleading stage, even where the complaint alleged 27 wrongful foreclosure or negligent behavior that led to a 28 foreclosure. In the case Plaintiffs cite, 209 Cal. App. Other courts, however, have dismissed the See Martinez v. Flagstar Bank, FSB, No. 2:15-cv14 1 01934-KJM-CKD, 2016 WL 3906810 (E.D. Cal. Jul. 19, 2016) 2 (dismissing the IIED claim where plaintiffs alleged that 3 defendants lost and mismanaged their loan modification 4 application materials, promised not to have a foreclosure sale, 5 and then sold the home in foreclosure anyway); Aguinaldo v. Ocwen 6 Loan Servicing, LLC, 5:12-cv-01393-EJD, 2012 WL 3835080 (N.D. 7 Cal. Sep. 4, 2012) (dismissing the IIED claim where plaintiffs 8 alleged that defendant promised not to foreclose on their home, 9 plaintiffs relied on that promise in choosing not to pursue 10 alternative measures to prevent foreclosure, and defendant 11 foreclosed anyway). 12 that the lawfulness of foreclosure is in dispute, Defendants are 13 not alleged to have engaged in the kind of trickery presented in 14 the Ragland case. 15 the level of outrageousness necessary to survive a motion to 16 dismiss. 17 18 19 Although this case is similar to Ragland in Defendants’ alleged behavior does not approach Count Eight is dismissed without leave to amend. 9. Count 9: Interference with Prospective Advantage A claim for intentional interference with prospective 20 economic advantage has five elements: “(1) an economic 21 relationship between plaintiff and a third party, with the 22 probability of future economic benefit to the plaintiff; 23 (2) defendant's knowledge of the relationship; (3) an intentional 24 act by the defendant, designed to disrupt the relationship; 25 (4) actual disruption of the relationship; and (5) economic harm 26 to the plaintiff proximately caused by the defendant's wrongful 27 act, including an intentional act by the defendant that is 28 designed to disrupt the relationship between the plaintiff and a 15 1 third party.” 2 944 (2008). 3 Edwards v. Arthur Andersen LLP, 44 Cal. 4th 937, Defendants argue that this claim fails because Plaintiffs 4 have failed to allege any economic relationship between 5 themselves and any third party or allege economic harm or injury. 6 Plaintiff did not oppose dismissal of this claim. 7 thus dismissed without leave to amend. 8 10. Count Nine is Count 10: Establishment of Lost or Destroyed Promissory Note 9 10 Defendants argue that Plaintiffs’ final cause of action is 11 time barred because the statute of limitations began running from 12 the date of the alleged execution of the Note. 13 Plaintiffs argue that the statute of limitations should run from 14 the date Plaintiffs discovered that the Note did not exist. 15 at 10. 16 MTD at 14. Opp. “The discovery rule protects those who are ignorant of their 17 cause of action through no fault of their own. 18 delayed accrual until a plaintiff knew or should have known of 19 the wrongful conduct at issue.” 20 KTTV, 147 Cal. App. 3d 805, 832 (1983). 21 benefit of the discovery rule must specifically plead facts to 22 show (1) the time and manner of discovery and (2) the inability 23 to have made earlier discovery despite reasonable diligence.” 24 Stocco v. Gemological Inst. of Am., Inc., No. 12-cv-1291 WQH 25 (DHB), 2015 WL 472143 at *7 (S.D. Cal. Feb. 5, 2015) (citations 26 and quotation marks omitted). 27 28 It permits April Enterprises, Inc., v. “A plaintiff seeking the The SAC does not allege when Plaintiffs made the discovery. Plaintiffs knew of this deficiency and failed to amend their 16 1 complaint accordingly. 2 Dismiss, ECF No. 28, at 14. 3 to amend. 4 5 6 See Opposition to Defendants’ Motion to Count Ten is dismissed without leave III. ORDER For the foregoing reasons, the Court GRANTS Defendants’ Motion to Dismiss and the case is DISMISSED WITH PREJUDICE: 7 IT IS SO ORDERED. 8 Dated: March 17, 2017 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 17

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