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Ariannejad v. JPMorgan Chase Bank

November 17, 2009

BAHRAM ARIANNEJAD, PLAINTIFF,
v.
JPMORGAN CHASE BANK, N.A., DEFENDANT.



The opinion of the court was delivered by: Honorable Barry Ted Moskowitz United States District Judge

ORDER GRANTING MOTION TO DISMISS FIRST AMENDED COMPLAINT

Defendant JPMorgan Chase Bank, N.A. ("JPMorgan" or "Defendant") has filed a motion to dismiss Plaintiff's First Amended Complaint. For the reasons discussed below, Defendant's motion is GRANTED.

I. BACKGROUND

Plaintiff commenced this action in the Superior Court of the State of California. On September 8, 2009, Defendant removed the action to federal court.

In his First Amended Complaint, Plaintiff brings claims against JPMorgan and other unnamed defendants in connection with two loans he obtained. Although Plaintiff does not provide additional information about the loans, it appears that the loans at issue consist of (1) a loan issued by JPMorgan in the sum of $260,000, secured by real property located at 3967 Nobel Drive, # 260, San Diego, California 92122; and (2) a loan issued by JPMorgan in the sum of $48,750.00 secured by a Closed-End Deed of Trust encumbering the same property. (Def.'s RJN, Exs. 1-2.) Both deeds of trust were recorded on or about April 6, 2007. (Id.)

Plaintiff states that his mortgage is about to become delinquent and is on the verge of foreclosure. (FAC at 3.) Plaintiff asserts causes of action for (1) constructive fraud; (2) violation of Cal. Fin. Code § 4973(f), (n); (3) violation of the Real Estate Settlement Practices Act (12 U.S.C. § 2607(a) and (b)); (4) breach of fiduciary duty; (5) violation of Cal. Bus. & Prof. Code § 17500; and (6) violation of Cal. Bus. & Prof. Code § 17200.

II. STANDARD

Under Fed. R. Civ. P. 8(a)(2), the plaintiff is required only to set forth a "short and plain statement" of the claim showing that plaintiff is entitled to relief and giving the defendant fair notice of what the claim is and the grounds upon which it rests. Conley v. Gibson, 355 U.S. 41, 47 (1957). A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) should be granted only where a plaintiff's complaint lacks a "cognizable legal theory" or sufficient facts to support a cognizable legal theory. Balistreri v. Pacifica Police Dept., 901 F.2d 696, 699 (9th Cir. 1988). When reviewing a motion to dismiss, the allegations of material fact in plaintiff's complaint are taken as true and construed in the light most favorable to the plaintiff. See Parks Sch. of Bus., Inc. v. Symington, 51 F.3d 1480, 1484 (9th Cir. 1995). Although detailed factual allegations are not required, factual allegations "must be enough to raise a right to relief above the speculative level." Bell Atlantic v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 1965 (2007). "A plaintiff's obligation to prove the 'grounds' of his 'entitle[ment] to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Id.

III. DISCUSSION

Defendant moves to dismiss Plaintiff's claims on the ground that they fail to state a claim. Plaintiff did not file an opposition to Defendant's motion. Upon review of the FAC, the Court agrees that the FAC is deficient and fails to state a claim.

A. Constructive Fraud

Under California law, constructive fraud is defined as "any breach of duty which, without an actually fraudulent intent, gains an advantage to the person in fault, or any one claiming under him, by misleading another to his prejudice, or the prejudice of any one claiming under him . . . ." Cal. Civ. Code § 1573. It is essential to the operation of the principle of constructive fraud that there be a confidential or fiduciary relationship. See Pickford Co. v. Bayly Bros., 12 Cal. 2d 501, 525 (1939); Byrum v. Brand, 219 Cal. App. 3d 926, 937-38 (1990).

There is no fiduciary relationship between a mortgagor and mortgagee. See Spencer v. DHI Mortgage Co., Ltd., 642 F. Supp. 2d 1153 (E.D. Cal. 2009) (holding that there was no fiduciary relationship between mortgagor and mortgagee); Nymark v. Heart Federal Savings & Loan, 231 Cal. App. 3d 1089, 1093 n. 1 (1991) ("The relationship between a lending institution and its borrower-client is not fiduciary in nature.") Due to the absence of a fiduciary relationship, Plaintiff's constructive fraud claim fails.

To the extent Plaintiff intends to assert a claim for ordinary fraud or negligent misrepresentation, Plaintiff has failed to plead fraud with the particularity required by Fed. R. Civ. P. 9(b). Plaintiff generally alleges that he was deceived into entering into the loan transactions by Defendants, who allegedly inflated the value of Plaintiff's home, falsified Plaintiff's income amounts, and failed to adequately disclose the terms of repayment. However, Plaintiff does not identify who he talked to, when the pertinent ...


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