Nardico v. J.P. Morgan Chase & Company, Inc. et al

Filing 34

ORDER by Judge Hamilton granting 12 Motion to Dismiss; finding as moot 15 Ex Parte Application ; denying 15 Motion for TRO and Preliminary Injunction (pjhlc1, COURT STAFF) (Filed on 1/11/2013)

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UNITED STATES DISTRICT COURT
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NORTHERN DISTRICT OF CALIFORNIA
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DARRIO NARDICO,
Plaintiff,

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v.

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For the Northern District of California

United States District Court

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J P MORGAN CHASE AND CO., et al.,

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No. C 12-4891 PJH
ORDER GRANTING MOTION
TO DISMISS; ORDER DENYING
MOTION FOR PRELIMINARY
INJUNCTION

Defendants.
_______________________________/

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Defendants’ motion to dismiss the above-entitled action pursuant to Federal Rule of

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Civil Procedure for failure to state a claim, and plaintiff’s motion for preliminary injunction,

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came on for hearing before this court on January 9, 2013. Plaintiff Darrio Nardico

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appeared by John Holman (who has not entered a notice of appearance in this case), and

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defendants appeared by their counsel John C. Hedger. Having read the parties’ papers

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and carefully considered their arguments and the relevant legal authority, the court hereby

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GRANTS the motion to dismiss and DENIES the motion for preliminary injunction as

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follows for the reasons stated at the hearing.

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1.

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Defendants seek an order dismissing defendant JPMorgan Chase and Co., and also

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Motion to Dismiss

dismissing all causes of action alleged in the complaint.
a.

The motion to dismiss defendant JPMorgan Chase and Co. – the

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JPMorgan entitity that is named as a defendant in the complaint – is GRANTED. The

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dismissal is with leave to amend to name the correct JPMorgan defendant – JPMorgan

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Chase Bank N.A. In addition, plaintiff is advised that if he adds JPMorgan Chase Bank

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N.A. as a defendant, he will need to request issuance of a summons for that defendant,

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and will need to properly serve the summons and amended complaint on the defendant.

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b.

The motion to dismiss the first cause of action for injunctive relief is

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GRANTED. The dismissal is with prejudice, as injunctive relief is a remedy, not a cause of

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action in federal court.

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c.

The motion to dismiss the second cause of action for declaratory relief

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is GRANTED. The dismissal is with leave to amend to allege facts showing what “actual

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controversy” exists between himself and defendants.

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d.

The motion to dismiss the third cause of action for quiet title is

GRANTED, as plaintiff has failed to allege facts supporting the elements of this claim. The

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For the Northern District of California

United States District Court

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dismissal is with prejudice, because plaintiff cannot allege an “adverse interest,” given that

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the title to the property remains in his name. In addition, he has not alleged a willingness or

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ability to tender the loan proceeds. As for plaintiff’s suggestion that this claim be dismissed

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with leave to amend to allege quiet title as a remedy, the court is unaware of any authority

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that would permit a plaintiff to seek quiet title as a “remedy” when he is unable to allege

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facts sufficient to support the elements of the cause of action.

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e.

The motion to dismiss the fourth cause of action for intentional infliction

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of emotional distress is GRANTED. The dismissal is with prejudice. Under California law,

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foreclosing on a loan because a borrower has defaulted on the payments does not

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constitute behavior so extreme as to exceed all bounds of that usually tolerated in a decent

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society or a civilized community. See Mehta v. Wells Fargo Bank, N.A., 737 F.Supp. 2d

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1185, 1204 (S.D. Cal. 2010).

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f.

The motion to dismiss the fifth cause of action for negligent infliction of

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emotional distress and the sixth cause of action for negligence is GRANTED. The general

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rule is that a financial institution does not owe a borrower a duty not to foreclose if the loan

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is in default, even if it previously promised not to foreclose, and also does not owe a duty to

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modify a loan. See, e.g., Chanthavong v. Aurora Loan Servs., Inc., 2011 WL 6012353 at

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*8 (E.D. Cal. Dec. 1, 2011); Dooms v. Fed. Home Loan Mortg. Corp., 2011 WL 1232989 at
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*11-12 (E.D. Cal. March 31, 2011)). A financial institution generally “owes no duty of care

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to a borrower when the institution’s involvement in the loan transaction does not exceed the

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scope of its conventional rule as a mere lender of money.” Nymark v. Heart Fed. Sav. &

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Loan Ass’n, 231 Cal. App. 3d 1089, 1096 (1991).

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Here, the allegations in the complaint are not sufficiently detailed or precise to show

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that defendants owed a duty based on conduct separate from their usual money-lending

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role. Accordingly, the dismissal is with leave to amend to plead facts supporting the

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elements of the claims, in particular, the element of duty.

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g.

The motion to dismiss the seventh, eighth, ninth, and tenth cause of

action – each of which alleges some variety of fraud or deceit – is GRANTED. The

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For the Northern District of California

United States District Court

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dismissal is with leave to amend to plead fraud with particularity (the who, what, when,

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where, and how of the alleged misconduct) as required by Federal Rule of Civil Procedure

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9(b), and also to plead facts sufficient to show that particular defendants made a

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misrepresentation or misrepresentations of fact, and that plaintiff justifiably relied on such

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misrepresentation(s).

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h.

The motion to dismiss the eleventh cause of action for promissory

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estoppel is GRANTED. The dismissal is with leave to amend to allege the claim with

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specificity, including pleading facts showing that plaintiff justifiably relied on a particular

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promise made by a particular defendant.

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i.

The motion to dismiss the twelfth cause of action for violation of

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Business and Professions Code § 17200 is GRANTED. The dismissal is with leave to

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amend, to allege facts supporting the elements of the claim. In particular, plaintiff must

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specify whether he is alleging an unlawful business practice (and which law defendants are

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alleged to have violated), an unfair business practice (and why the practice is unfair), or a

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fraudulent business practice (which must be pled with particularity under Rule 9(b).

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j.

Any amended complaint shall be filed no later than February 6, 2013.

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Defendant’s answer or any further motion to dismiss shall be filed no later than 21 days

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after the date the amended complaint is filed.
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Motion for Preliminary Injunction

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Plaintiff seeks an order enjoining defendants from conducting a trustee sale of the

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property until the present action has concluded. The motion was originally filed as a TRO

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application, but subsequently converted into a motion for preliminary injunction.

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A plaintiff seeking a preliminary injunction must establish that he is likely to succeed

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on the merits of the claims alleged in the complaint, that he is likely to suffer irreparable

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harm in the absence of preliminary relief, that the balance of equities tips in his favor, and

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that an injunction is in the public interest. Winter v. Natural Resources Defense Council,

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Inc., 555 U.S. 7, 20 (2008). Alternatively, the plaintiff may demonstrate that the likelihood
of success is such that “serious questions going to the merits were raised and that the

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For the Northern District of California

United States District Court

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balance of hardships tips sharply in the plaintiff's favor,” so long as the other two elements

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of the Winter test are met. Alliance for Wild Rockies v. Cottrell, 632 F.3d 1127, 1131-32

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(9th Cir. 2011). A preliminary injunction “should not be granted unless the movant, by a

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clear showing, carries the burden of persuasion.” Mazurek v. Armstrong, 520 U.S. 968,

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972 (1997) (per curiam) (citation omitted).

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The court finds that the motion must be DENIED. For the reasons set forth above

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with regard to the motion to dismiss, plaintiff has not established that he is likely to succeed

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on the merits of any of his causes of action, or even that he has raised serious questions

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going to the merits. In addition, given that there is currently no date set for a trustee sale,

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he has not established that he is likely to suffer irreparable harm in the absence of

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preliminary relief.

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IT IS SO ORDERED.

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Dated: January 11, 2013
______________________________
PHYLLIS J. HAMILTON
United States District Judge

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