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Beltrame v. JPMorgan Chase Bank


August 25, 2010


The opinion of the court was delivered by: Honorable Janis L. Sammartino United States District Judge


Presently before the Court are Defendant JPMorgan Chase Bank, N.A.'s motion to dismiss and request for judicial notice. (Doc. Nos. 22-1& 22-2.) The Court has also received Plaintiff's opposition and Defendant's reply. (Doc. Nos. 25 & 26.) Both the request for judicial notice and motion to dismiss are GRANTED.


Plaintiff Eugenio Beltrame owns the property located at 45600 Rainbow Canyon Road, Temecula, California. (Doc. No. 21 (FAC) ¶ 2.) On "July 17, 2007, Plaintiff applied for a loan with Defendant WASHINGTON MUTUAL BANK." (Id.) This loan, amounting to $372,000, was approved the next day and secured by a deed of trust on the property. (Id. ¶ 3.) In April 2009, "Plaintiff began to suspect that Defendant JPMORGAN CHASE BANK was overcharging Plaintiff for his mortgage payment." (Id. ¶ 4.) He alleges that he subsequently sent Defendant two Qualified Written Requests (QWRs), and that Defendant only responded to one. (Id. ¶¶ 5--9.)


Federal Rule of Civil Procedure 12(b)(6) permits a party to raise by motion the defense that the complaint "fail[s] to state a claim upon which relief can be granted," generally referred to as a motion to dismiss. The Court evaluates whether a complaint states a cognizable legal theory and sufficient facts in light of Federal Rule of Civil Procedure 8(a), which requires a "short and plain statement of the claim showing that the pleader is entitled to relief." Although Rule 8 "does not require 'detailed factual allegations,' . . . it [does] demand[] more than an unadorned, the-defendant-unlawfully-harmed-me accusation."*fn1 Ashcroft v. Iqbal, -- US - , 129 S.Ct. 1937, 1949 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). In other words, "a plaintiff's obligation to provide 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." Twombly, 550 U.S. at 555 (citing Papasan v. Allain, 478 U.S. 265, 286 (1986)). "Nor does a complaint suffice if it tenders 'naked assertion[s]' devoid of 'further factual enhancement.'" Iqbal, 129 S.Ct. at 1949 (citing Twombly, 550 U.S. at 557).

"To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Id. (quoting Twombly, 550 U.S. at 570); see also Fed. R. Civ. P. 12(b)(6). A claim is facially plausible when the facts pled "allow[] the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 129 S.Ct. at 1949 (citing Twombly, 550 U.S. at 556). That is not to say that the claim must be probable, but there must be "more than a sheer possibility that a defendant has acted unlawfully." Id. Facts "'merely consistent with' a defendant's liability" fall short of a plausible entitlement to relief. Id. (quoting Twombly, 550 U.S. at 557). Further, the Court need not accept as true "legal conclusions" contained in the complaint. Id. This review requires context-specific analysis involving the Court's "judicial experience and common sense." Id. at 1950 (citation omitted). "[W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged-but it has not 'show[n]'-'that the pleader is entitled to relief.'" Id.



Defendant moves the Court to take judicial notice of three documents. (Doc. No. 22-2 (RJN).) It requested that this Court take judicial notice of the same three documents for purposes of its previous motion to dismiss. (Doc. No. 12-2.) The Court granted that request, and finds it proper to GRANT it here as well. (See Doc. No. 20 (Prior Order) at 3.) Although Plaintiff again objects, his objections are word-for-word identical to those made in opposition to the documents' consideration for the prior motion to dismiss. (Compare Doc. No. 14 at 19--20; with Opp. at 14.) As the Court observed in its Prior Order, these "broad and generalized allegations of general impropriety with the mortgage market" are inadequate to merit denial of this motion and do not "offer any actual reasons for the Court to decline this request for notice." (Prior Order at 3.)


Plaintiff's first cause of action alleges violations of the Real Estate Settlement Procedure Act (RESPA). According to Plaintiff "Defendant JPMORGAN CHASE BANK failed to properly respond to Plaintiff's inquiry and Qualified Written Request [(QWR)] by not responding in a timely manner and by not providing all of the requested information. Further, Defendant JPMORGAN CHASE BANK did not make corrections to Plaintiff's account, crediting late charges and penalties, or provide Plaintiff with an explanation as to why it believed the account was correct." (FAC ¶ 17.)

Plaintiff's RESPA complaints arise out of 12 U.S.C. § 2605. Section 2605(e)(1)(A) provides, in relevant part:

If any servicer of a federally related mortgage loan receives a qualified written request from the borrower . . . for information relating to the servicing of such loan, the servicer shall provide a written response acknowledging receipt of the correspondence within 20 days . . . unless the action requested is taken within such period.

A qualified written request is "a written correspondence, other than notice on a payment coupon or other payment medium supplied by the servicer that-(i) includes, or otherwise enables the servicer to identify, the name and account of the borrower; and (ii) includes a statement of the reasons for the belief of the borrower , to the extent applicable, that the account is in error or provides sufficient detail to the servicer regarding other information sought by the borrower." 12 U.S.C. § 2605(e)(1)(B). A plaintiff suing for violation of this section may recover actual damages, up to $1,000 in statutory damages where there is "a pattern or practice of noncompliance," and reasonable costs and attorney's fees. 12 U.S.C. § 2605(f).*fn2

This cause of action fails to state a claim for several reasons. First, the FAC assumes but does not allege facts demonstrating that the documents sent to Defendant were QWRs. (See FAC ¶¶ 5 & 8.) The allegations merely state that "Plaintiff sent Defendant . . . a Qualified Written Request." (Id. ¶ 5.) This does not show that the alleged QWR "include[d], or otherwise enable[d] the servicer to identify, the name and account of the borrower." 12 U.S.C. § 2605(e)(1)(B)(i). Nor are there facts indicating that the QWR "included a statement of reasons for the belief of the borrower . . . that the account is in error." Id. § 2605(e)(1)(B)(ii). Without these allegations the Court cannot find that Plaintiffs' recovery is plausible. See Lincoln v. GMAC Mortgage, LLC, 2009 WL 5184413, at *2 (C.D. Cal. 2009).

Although it is true that "[t]here is no requirement for Plaintiff to list specifically word for word what was contained in the written correspondence in a complaint to sustain the cause of action," that does not save this cause of action. (Opp. at 10.) A legal theory is not plausible when the complaint does not allege facts which would permit recovery. Idqbal, 129 S.Ct. at 1949. That is not to say that Plaintiff must provide "detailed factual allegations," but his allegations must be more than mere "labels and conclusions" or "a formulaic recitation of the elements of a cause of action." Id.; Twombly, 550 U.S. at 555 (citing Papasan, 478 U.S. at 286). That is what the FAC presents here, baldly alleging that the correspondence was a QWR without including sufficient facts to make that legal conclusion plausible. Plaintiff need not include the text of the alleged QWR word-for-word to remedy this problem (although he could certainly attach them as exhibits to the complaint if he chose) but he must present more than what is in the FAC.

Further, Plaintiff has not adequately pled an injury. At best, the FAC notes the legal proposition that Plaintiff could recover actual or statutory damages. (FAC ¶ 19.) Although Plaintiff claims that he "has alleged that Defendant JP MORGAN's violation of RESPA caused him actual and pecuniary damages," he provides no indication of where such an allegation lies. (Opp. at 11.) Nor can the Court find an allegation of actual damages which result from the alleged failure to respond to the QWR. RESPA allows recovery only for "actual damages . . . as a result of [Defendant's] failure" to respond to the QWR and statutory damages in the event of a pattern or practice of non-compliance.

12 U.S.C. § 2605(f)(1). As a result, where, as here, the Plaintiff does not allege facts which would support a finding of actual damages resulting directly from the alleged QWR violation or a pattern or practice of non--compliance, the right to relief is implausible and the claim must be DISMISSED. See Garcia v. Wachovia Mortgage Corp., 676 F. Supp. 2d 895, 909 (C.D. Cal. 2009).


Plaintiff's second cause of action alleges that JPMorgan defrauded him. (FAC ¶¶ 20--27.) According to Plaintiff, Defendant "knowingly sent Plaintiff billing statements on his loan with [] fraudulent overcharges with the intent to induce the relieance of Plaintiff and for Plaintiff to pay the fraudulent overcharges on his mortgage payment." (Id. ¶ 22.)

"The elements of fraud, which gives rise to the tort action for deceit, are (a) misrepresentation (false representation, concealment, or nondisclosure); (b) knowledge of falsity (or 'scienter'); (c) intent to defraud, i.e., to induce reliance; (d) justifiable reliance; and (e) resulting damage." Small v. Frits Cos., Inc., 65 P.3d 1255, 1258 (Cal. 2003) (quoting Lazar v. Superior Court, 909 P.2d 981, 984 (Cal. 1996)). In federal court, Federal Rule of Civil Procedure 9(b) sets the bar for claims alleging fraud. Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1102--03 (9th Cir. 2003). Rule 9(b) states that "In alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake." These allegations must "be 'specific enough to give defendants notice of the particular misconduct . . . so that they can defend against the charge and not just deny that they have done anything wrong.' Averments of fraud must be accompanied by 'the who, what, when, where, and how' of the misconduct charged. '[A] plaintiff must set forth more than the neutral facts necessary to identify the transaction. The plaintiff must set forth what is false or misleading about a statement, and why it is false.'" Vess, 317 F.3d at 1106 (citations omitted).

Plaintiff has not satisfied the pleading standard set forth by Rule 9(b). Although he claims that the billing statements were "fraudulent," he does not provide any real explanation. For example, Plaintiff fails to "set forth what is false or misleading about [his billing] statement[s], and why [they are] false." Id. The mere claim of "overcharging" does not explain what or how these bills claimed that Plaintiff owed more than his contractual mortgage obligation. Without this adequate specificity regarding the fundamental element of a misrepresentation, this claim must be DISMISSED.


The FAC's third claim alleges unjust enrichment. (FAC ¶¶ 28--34.) Specifically, Plaintiff believes that the inflated billing statements caused him to pay Defendant JPMorgan money which he did not owe. (Id. ¶¶ 29--30.) He argues that the acceptance of these payments unjustly enriched JPMorgan and thus he is entitled to restitution. (Id. ¶¶ 31--32.)

The elements of an unjust enrichment claim are: (1) receipt of a benefit; and (2) the unjust retention of the benefit at the expense of another. Peterson v. Cellco P'ship, 80 Cal. Rptr. 3d 316, 323 (Cal. Ct. App. 2008). "However, the mere fact that a person benefits another is not of itself sufficient to require the other to make restitution therefor. Thus, even when a person has received a benefit from another, he is required to make restitution only if the circumstances of its receipt or retention are such that, as between the two persons, it is unjust for him to retain it." Cal. Med. Ass'n, Inc. v. Aetna U.S. Healthcare of Cal., Inc., 94 Cal. App. 4th 151, 171 n.23 (2001).

The Court finds that Plaintiff's FAC fails to raise his right to relief for unjust enrichment above the speculative level. As discussed supra, Plaintiff has not pled facts which would establish that he actually paid more than he owed on his loan. As Defendant notes, the mere repayment of what was owed on the loan would almost certainly not state an unjust enrichment claim. (Memo. ISO Motion at 7.) And at this point, Plaintiff has merely stated the legal conclusion that he was over-billed and overpaid for his loan. However, without the factual allegations which would support this conclusion, the third claim must be DISMISSED.


For the reasons stated, Defendant's motion to dismiss is GRANTED and the FAC is DISMISSED WITHOUT PREJUDICE.*fn3 Further, the Court finds that each of the defects identified could potentially be cured through further amendment. Therefore, the Court GRANTS Plaintiff leave to amend. Any amended complaint MUST BE FILED within 21 days of the date this Order is electronically docketed.


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