Tyler v. National City Mortgage Co. et al

Filing 40

ORDER by Judge Hamilton granting 31 Motion to Dismiss (pjhlc1, COURT STAFF) (Filed on 4/22/2011)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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LEROY TYLER,
Plaintiff,

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ORDER GRANTING MOTION
TO DISMISS

PNC BANK, NATIONAL ASSOCIATION,
et al.,

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For the Northern District of California

United States District Court

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v.

No. C 10-3415 PJH

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Defendants.
_______________________________/
The motion of defendant PNC Bank, N.A. (“PNC”), to dismiss the claims asserted

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against it (first, third, fourth, and sixth causes of action) in the first amended complaint

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(“FAC”) came on for hearing before this court on April 20, 2011. Plaintiff Leroy Tyler

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appeared by his counsel Veronica Garcia, and PNC appeared by its counsel Marcus

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Brown. Having read the parties’ papers and carefully considered their arguments, the court

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hereby GRANTS the motion as follows.

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1.

PNC argues that the first cause of action for fraud should be dismissed for

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failure to state a claim. Under California law, fraud claims have five elements – “(a)

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misrepresentation (false representation, concealment, or nondisclosure); (b) knowledge of

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falsity (scienter); (c) intent to defraud (to induce reliance); (d) justifiable reliance; and (e)

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resulting damage.” Small v. Fritz Cos., Inc., 30 Cal. 4th 167, 173 (2003); see also City

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Solutions Inc. v. Clear Channel Commc’ns, Inc., 365 F.3d 835, 839 (9th Cir. 2004). Plaintiff

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has not adequately alleged justifiable reliance with particularity as required by Federal Rule

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of Civil Procedure 9(b). See In re GlenFed Sec. Litig., 42 F.3d 1541, 1547-49 (9th

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Cir.1994). Thus, the motion to dismiss the first cause of action for fraud is GRANTED, with

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leave to amend to allege detrimental reliance with particularity.

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2.

PNC argues that the third cause of action for breach of the implied covenant

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of good faith and fair dealing should be dismissed because the FAC does not allege an

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underlying contract. California law implies a covenant of good faith and fair dealing in

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every contract. Carma Developers, Inc. v. Marathon Dev. Calif., Inc., 2 Cal. 4th 342, 371

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(1992). Thus, to state a claim for breach of the implied covenant of good faith and fair

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dealing, a plaintiff must allege the specific contractual obligation on which the implied

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covenant is based. Grant v. Aurora Loan Servs., Inc., 736 F. Supp. 2d 1257, 1268 (C.D.

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Cal. 2010). Here, plaintiff has not adequately alleged that he and PNC entered into a loan

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modification contract following the loan origination. Even assuming as true that PNC had
written up a loan modification contract, where it is understood that an agreement is

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For the Northern District of California

United States District Court

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incomplete until reduced to writing and signed by the parties, no contract results until this is

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done. Peterson Dev. Co. v. Torrey Pines Bank, 233 Cal. App. 3d 103, 115 (1991).

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Because plaintiff never received the final writing, there was no contract, and he has failed

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to state a claim for breach of the implied covenant. The motion to dismiss the third cause

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of action for breach of the implied covenant is GRANTED, with prejudice.

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3.

PNC argues that the fourth cause of action for declaratory relief should be

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dismissed because it is duplicative of plaintiff’s other claims. The motion is GRANTED,

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with leave to amend to clarify the basis of the claim and the relief sought. If the claim is

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duplicative of another cause of action, it should be omitted from the amended complaint.

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4.

PNC argues that the sixth cause of action for violation of California Business

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and Professions Code § 17200 (“UCL”) should be dismissed for failure to state a claim,

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because the FAC fails to allege fraud with particularity. To state a claim for a fraudulent

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business practice under the UCL, a plaintiff must allege facts showing that the defendant

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engaged in a business practice that was likely to deceive the public. Korea Supply Co. v.

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Lockheed Martin Corp., 29 Cal. 4th 1134, 1151 (2003). In addition, to the extent that a

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UCL claim is based upon purported fraudulent conduct of any defendant, the plaintiff must

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allege that fraud with “reasonable particularity” and must state the who, what, where, and

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when of such conduct. See Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1106 (9th Cir.
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2003). To the extent that plaintiff reincorporates the facts underlying his fraud cause of

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action into his § 17200 claim, the § 17200 claim is not sufficiently pled with particularity, as

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discussed above. Thus, the motion to dismiss the sixth cause of action is GRANTED, with

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leave to amend to allege detrimental reliance with particularity.

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The second amended complaint, which shall be filed no later than May 11,

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2011, shall allege no new claims and name no new defendants unless plaintiff has obtained

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the agreement of defendants or leave of court.

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IT IS SO ORDERED.

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Dated: April 22, 2011
______________________________
PHYLLIS J. HAMILTON
United States District Judge

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For the Northern District of California

United States District Court

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