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Thiel v. GMAC Mortgage


May 11, 2010


The opinion of the court was delivered by: Morrison C. England, Jr. United States District Judge


Presently before the Court is a Motion by Defendant GMAC Mortgage, LLC ("Defendant") to dismiss the claims alleged against it in the Complaint of Plaintiff Brian Thiel ("Plaintiff") for failure to state a claim upon which relief may be granted pursuant to Federal Rule of Civil Procedure 12(b)(6).*fn1 For the reasons set forth below, Defendant's Motion is granted.


In December 2008, Plaintiff contacted Defendant to request a refinance of his mortgage loan. Plaintiff was told that the value of the property did not allow for refinance but that a modification of the loan could be considered. In January 2009, Defendant notified Plaintiff that modification of the loan would not be considered while he was current on his payments, but rather "a modification to his loan would only be made if he was delinquent in his payments." Based on this information, Plaintiff then purposefully withheld payments on his loan although, to his own admission, he had the money to make payment. When Plaintiff later contacted Defendant in order to modify his loan, he was told that modification could not be considered because he was behind on his payments and his income was too high.

Plaintiff thereafter filed suit. Plaintiff states that at all times he was able to pay but was knowingly misled into withholding payment. A Notice of Default was subsequently filed and a foreclosure sale scheduled on April 9, 2010.


On a motion to dismiss for failure to state a claim under Rule 12(b)(6), all allegations of material fact must be accepted as true and construed in the light most favorable to the nonmoving party.

Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336, 337-38 (9th Cir. 1996). Rule 8(a)(2) requires only "a short and plain statement of the claim showing that the pleader is entitled to relief" in order to "give the defendant fair notice of what the...claim is and the grounds upon which it rests." Bell Atl. Corp. v. Twombly, 127 S.Ct. 1955, 1964 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)). While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the "grounds" of his "entitlement to relief" requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do. Id. at 1964-65 (internal citations and quotations omitted). Factual allegations must be enough to raise a right to relief above the speculative level. Id. at 1965 (citing 5 C. Wright & A. Miller, Federal Practice and Procedure § 1216, pp. 235-36 (3d ed. 2004) ("The pleading must contain something more...than...a statement of facts that merely creates a suspicion [of] a legally cognizable right of action")). A court is not required to accept as true a legal conclusion couched as a factual allegation. Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009).

A court granting a motion to dismiss a complaint must then decide whether to grant leave to amend. A court should "freely give" leave to amend when there is no "undue delay, bad faith[,] dilatory motive on the part of the movant,...undue prejudice to the opposing party by virtue of...the amendment, [or] futility of the amendment...." Fed. R. Civ. P. 15(a); Foman v. Davis, 371 U.S. 178, 182 (1962).

Generally, leave to amend is denied only when it is clear the deficiencies of the complaint cannot be cured by amendment. DeSoto v. Yellow Freight Sys., Inc., 957 F.2d 655, 658 (9th Cir. 1992).


The gravemen of Plaintiff's Complaint is that Defendant had indicated Plaintiff's loan would be modified if Plaintiff was delinquent on payments. However, Plaintiff has failed to set forth any information supporting the existence of a binding obligation in which Defendant was required to provide such modification or incur liability for failure to do so.

Plaintiff's Complaint at no point alleges that an oral contract was executed or that the conversations alleged amounted to a legally cognizable modification to the written agreement entered into by parties. Despite Plaintiff's attempt in his Opposition to couch Defendant's words as guaranteeing that "modification ''" (Pl.'s Opp'n 3:9.), Plaintiff's Complaint acknowledges that Plaintiff was "informed that he must be behind in his payments before a loan modification would be considered." (Pl.'s Compl. ¶ 15.) (emphasis added).

Defendant's advice on what might trigger consideration is hardly ground on which Defendant may incur liability on the myriad of causes of action alleged. Regardless of Plaintiff's implication that an agreement existed, "[a] court is not required to accept as true a legal conclusion couched as a factual allegation." Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009).

Plaintiff's Complaint has failed to allege facts sufficient to support a claim upon which relief may be granted.


Accordingly, Defendant's Motion to Dismiss (Docket No. 6) is hereby GRANTED with leave to amend.

Plaintiff may file an amended complaint not later than twenty (20) days after the date this Memorandum and Order is filed electronically. If no amended complaint is filed within said twenty (20)-day period, without further notice, Plaintiff's claims will be dismissed without leave to amend.


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