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Thiel v. GMAC Mortgage

September 2, 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 Mortage, LLC ("Defendant") to Dismiss the claims alleged against it in the First Amended 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 Rule of 12(b)(6)*fn1 . For the reasons set forth below, Defendant's Motion is granted in part and denied in part.


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 a modification of the loan would achieve the same result. In January 2009, Defendant allegedly notified Plaintiff that modification of the loan would not be considered while he was current on his payment, but rather a modification would be granted once Plaintiff was in default on his mortgage loan.

Based on Defendant's statement, Plaintiff purposefully withheld payments on his loan although, to his own admission, he had the money to make payments. In May 2009, Defendant informed Plaintiff that his loan would not be modified because he was behind on his payments and his monthly income was too high. After subsequent attempts to modify his loan proved futile, Plaintiff filed suit.


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, 78 S.Ct. 99, 103 (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 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")).

Nevertheless, "[a] well-pleaded complaint may proceed even if it strikes a savvy judge that actual proof of those facts is improbable, and 'that a recovery is very remote and unlikely.'" Id. at 556.

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).


A. Promissory Estoppel

Under California Law, a cause of action for promissory estoppel requires that plaintiff show "(1) a clear promise, (2) reliance, (3) substantial detriment, and (4) damages." Toscano v. Green Music, 124 Cal. App. 4th 685, 692 (2004). Under this doctrine, "a promise which the promisor should reasonably expect to induce action or forbearance on the part of the promisee or a third person and which does induce such action or forbearance is binding if injustice can be avoided only by enforcement of the promise."

Kajima/Ray Wilson v. Los Angeles County Metropolitan Transportation Authority, 23 Cal. 4th 305, 310 (2000) (quoting Restatement (Second) of Contracts, ยง 90(1) (1981)). The purpose of Promissory Estoppel, under certain circumstances, is to make promises binding although consideration is lacking. Youngman v. Nevada Irrigation District, 70 Cal. 2d 240, 249 (1969). The doctrine relies on equitable principles to satisfy the requirement that consideration must be given to enforce a promise. Id. Where the promissee's reliance was bargained for, promissory estoppel is inapplicable ...

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