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Peterson v. Bank of America

May 10, 2010

RONALD J. PETERSON AND MARILYN D. PETERSON, TRUSTEES OF THE PETERSON TRUST, PLAINTIFFS,
v.
BANK OF AMERICA, N.A., AND DOES 1 THROUGH 25, DEFENDANTS.



The opinion of the court was delivered by: Hayes, Judge

ORDER

The matter before the Court is the Motion to Dismiss Plaintiffs' First Amended Complaint, filed by Defendant Bank of America, N.A. ("Bank of America"). (Doc. # 16).

I. Background

On September 28, 2009, Plaintiffs filed a Complaint against Bank of America in San Diego Superior Court. (Doc. # 1, Ex. A). On November 13, 2009, Bank of America removed the action to this Court, alleging diversity jurisdiction. (Doc. # 1).

On January 21, 2010, Plaintiffs filed the First Amended Complaint. (Doc. # 12).

A. Allegations of the First Amended Complaint

On January 22, 2002, "Plaintiffs and Bank of America entered into a Promissory Note in which Plaintiffs promised to pay Defendant the principal amount of... $592,000.00[], together with interest at the rate of 7.0% per annum until paid in full. The Promissory Note provided for a pre-payment fee if the indebtedness was paid prior to February 1, 2017." (Doc. # 12 ¶ 4). The Promissory Note is attached to the First Amended Complaint. (Id., Ex. A).

On January 22, 2002, "Plaintiffs executed and delivered to Bank of America a Deed of Trust in which Plaintiffs granted, transferred and assigned to certain trustees their right, title and interest in the real property located at 594 Front Street, El Cajon, California ('the 'Property') in order to secure payment of the indebtedness and performance of any and all obligations under the Note." (Id. ¶ 6). The Deed of Trust is attached to the First Amended Complaint. (Id., Ex. B).

On January 22, 2009, "Plaintiffs requested that Bank of America... waive any pre-payment fees that may be due and owing under the Note and allow Plaintiffs to pay off the Note in full and fulfill all obligations due and owing under the Note without any pre-payment fee." (Id. ¶ 7). "In response to Plaintiffs' request..., Bank of America agreed to permit Plaintiffs to pay off the Note without paying any pre-payment fee. The decision of Bank of America was communicated to Plaintiffs by Freddie Torres... a Bank of America employee at Defendant's El Cajon Banking Center located at 512 Fletcher Parkway, El Cajon, California...." (Id. ¶ 8).

On January 22, 2009, "Torres contacted Defendant's loan department to obtain the exact loan payoff amount for Plaintiffs. Defendant's loan department faxed the payoff amount information for the Note to Torres, who relayed the information to Plaintiffs, along with instructions how to complete the Note payoff process." (Id. ¶ 9). "Defendant's instructions regarding payoff of the Note were as follows. Bank of America agreed to waive any and all pre-payment fees and allow Plaintiffs to fulfill all their obligations under both the Note and Deed of Trust on the condition Plaintiffs pay Bank of America a sum certain by the end of the business day on January 22, 2009." (Id. ¶ 10).

"Plaintiffs satisfied the condition imposed by Bank of America. Plaintiffs paid the sum certain in the precise and exact amount required by Defendant Bank of America by the close of business on January 22, 2009. In return, Defendant acknowledged and agreed through its authorized agent and employee Torres, that Plaintiffs had fulfilled all of their duties and obligations under the Note and Deed of Trust. Bank of America also agreed to provide Plaintiffs a confirming letter that afternoon regarding the payoff transaction and further agreed to provide all reconveyance documents within 3--4 weeks." (Id. ¶ 11).

"Plaintiffs did not receive a written monthly loan statement regarding the Note in February, 2009." (Id. ¶ 12). "Plaintiff[s] received a written monthly loan statement regarding the Note in March 2009.... The March Statement reflected Plaintiffs' payment of the exact payoff amount demanded by Bank of America on January 22, 20[09], but showed a balance due on the Note in the sum of $.01. The March Statement did not contain a demand for the payment of any prepayment fee or penalty on the Note, and did not contain any balance due for any prepayment fee." (Id. ¶ 13).

"Immediately upon receiving the March Statement, Plaintiff[s] went to the El Cajon Banking Center of Bank of America and personally tendered to [Jessica] Bachta[, the manager of Defendant's El Cajon Banking Center,] the $.01 balance shown on the March Statement. Bachta refused to accept Plaintiff[s'] $.01 payment. Bachta would not permit Plaintiffs to speak with Torres about the Note payoff. Further, upon review of the matter, Bachta demanded that Plaintiffs pay the full prepayment fee which Bank of America had agreed to forego on January 22, 2009." (Id. ¶ 14).

"Despite its promises and assurances to Plaintiffs, Bank of America... has failed and refused, and continues to fail and refuse, to execute and deliver to the trustee under the Deed of Trust a request for a full reconveyance and... has failed and refused to satisfy Defendant's other obligations and duties under the Note and Deed of Trust that became due and owing when Plaintiffs paid the indebtedness in full in the sum demanded by Defendant on January 22, 20[09]." (Id. ¶ 16).

The First Amended Complaint alleges five causes of action: (1) promissory estoppel, (2) breach of contract, (3) breach of the implied covenant of good faith and fair dealing, (4) fraud, and (5) negligent misrepresentation. Plaintiffs seek compensatory damages, punitive damages, "the statutory penalty set forth in Civil Code Section 2941(d)," and attorney fees. (Id. at 13).

B. Motion to Dismiss

On February 4, 2010, Bank of America filed the Motion to Dismiss. (Doc. # 16). Bank of America contends that "[e]ach of Plaintiffs' claims is fatally defective and should be dismissed." (Doc. # 16-1 at 1).

On March 5, 2010, Plaintiffs filed an opposition to the Motion to Dismiss. (Doc. # 17).

Plaintiffs contend that the Motion to Dismiss should be denied in its entirety.

On March 12, 2010, Bank of America filed a reply in support of the Motion to ...


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