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Iezza v. Saxon Mortgage Services


September 28, 2010


The opinion of the court was delivered by: Dean D. Pregerson United States District Judge

Order Granting in Part and Denying in Part Defendant's Motion to Dismiss [Motion filed on June 26, 2010]

This matter comes before the Court on defendant Saxon Mortgage Services, Inc.'s motion to dismiss for failure to state a claim, or in the alternative, motion for more definite statement, and motion to strike. After reviewing the papers submitted by the parties, the Court grants in part and denies in part the motion to dismiss, denies the motion to strike, and adopts the following order.


On or about August 2005, Plaintiff Marco Iezza ("Marco") purchased the subject property located at 1614 Country Club Drive, Glendale, California. (First Am. Compl. ("FAC") ¶¶ 1, 4.) Marco financed his purchase by obtaining a mortgage loan in the amount of $784,000 from Paul Financial, LLC, and the loan was secured by a deed of trust on the property. (FAC ¶ 4.)

On November 1, 2005, the servicing rights to the loan were transferred to General Motors Acceptance Corporation ("GMAC"). (FAC ¶ 19.) On May 1, 2006, GMAC transferred the servicing rights to Novastar Mortgage, Inc. ("Novastar"). (FAC ¶ 21.) Then on October 26, 2007, plaintiffs received notice from defendant Saxon Mortgage Services, Inc. ("Saxon") that the servicing rights to the loan would be transferred from Novastar to Saxon, effective November 1, 2007. (FAC ¶ 24.)

By 2008, plaintiffs were having problems making their monthly mortgage payments. (FAC ¶ 33.) On April 30, 2008, plaintiffs attempted to negotiate a loan modification, and were finally able to obtain one on August 4, 2008. (FAC ¶¶ 43,61.) Plaintiffs allege that Saxon failed to honor the Loan Modification Agreement by "demanding" monthly payments in excess of the terms of the agreements and miscalculating the interest rate as set forth in the agreement, the amount of the outstanding balance, and the amount of the fully amortized payments based on a 30-year amortization rather than a 40-year amortization. (FAC ¶ 108.)

Plaintiffs filed this action against Saxon alleging claims for: (1) breach of contract; (2) unjust enrichment; (3) conversion; (4) intentional infliction of emotional distress; (5) intentional misrepresentation; (6) negligent misrepresentation; (6) violation of the Real Estate Settlement Procedures Act, 12 U.S.C. § 2605(e); (7) negligence per se; and (9)violation of the Fair Credit Reporting Act ("FCRA"), 15 U.S.C. § 1681s-2(a).

II. Motion to Dismiss

A. Legal Standard

Pursuant to Federal Rule of Civil Procedure 12(b)(6), a complaint is subject to dismissal when the Plaintiff's allegations fail to state a claim upon which relief can be granted. When considering a 12(b)(6) motion to dismiss for failure to state a claim, "all allegations of material fact are accepted as true and should be construed in the light most favorable to [the] plaintiff." Resnick v. Hayes, 213 F.3d 433, 447 (9th Cir. 2000).

In Ashcroft v. Iqbal, 129 S.Ct. 1937, 1950 (2009), the Supreme Court explained that a court considering a 12(b)(6) motion should first "identif[y] pleadings that, because they are no more than conclusions, are not entitled to the assumption of truth."

Id. Next, the court should identify the complaint's "well-pleaded factual allegations, . . . assume their veracity and then determine whether they plausibly give rise to an entitlement to relief."

Id.; see also Moss v. U.S. Secret Serv., 572 F.3d 962, 969 (9th Cir. 2009) ("In sum, for a complaint to survive a motion to dismiss, the non-conclusory factual content, and reasonable inferences from that content, must be plausibly suggestive of a claim entitling the plaintiff to relief") (internal quotation marks omitted).

B. Analysis

1. Melina Iezza's Standing

Saxon moves to dismiss the FAC as to Melina Iezza on the ground that she lacks standing to assert any claim because she lacks title to the subject property and was not a borrower in connection with the loan at issue. (Mot. 2:7-9.)

In response to Saxon's motion, plaintiffs assert that Melina Iezza may maintain an action pursuant to her community property interest in the loan agreement because she made mortgage payments from community funds. (Opp'n 3:11-22.)

In Austero v. Nat'l Cas. Co., the California Court of Appeals rejected this contention. 62 Cal. App. 3d 511, 517 (1976). In Austero, the wife of a named insured had no standing to sue her husband's disability insurer even though insurance premiums were paid with community funds. Id. The court stated: "Whatever plaintiff's property rights with respect to the policies and their proceeds may be, the fact remains that she is not a party to the contracts. . . and as such, can state no cause of action . . . arising from the contractual relationship." Id.

Here, Melina Iezza's community property interest does not give her standing because she was not a contracting party to the loan agreement. Marco Iezza is the only named borrower under the loan agreement. (FAC ¶ 2; Ex.1.) Thus, the Court dismisses Melina Iezza's claims for breach of contract; conversion; intentional infliction of emotional distress; intentional misrepresentation; negligent misrepresentation; violation of RESPA; negligence per se; and violation of the FCRA.

2. Melina Iezza's Unjust Enrichment Claim

Melina Iezza alleges that Saxon was unjustly enriched because Saxon "wrongfully demanded" and retained monies, to which it was not due. (FAC ¶ 116.)

Under California law, a claim for unjust enrichment cannot stand alone as an independent claim for relief. See Jogani v. Super. Ct., 165 Cal. App. 4th 901, 911 (2008) ("[U]njust enrichment is not a cause of action. Rather, it is a general principle underlying various doctrines and remedies, including quasi-contract.") (citation omitted); Melchior v. New Line Prods., Inc., 106 Cal. App. 4th 779, 793 (2003). "The phrase 'Unjust Enrichment' does not describe a theory of recovery, but an effect: the result of a failure to make restitution under circumstances where it is equitable to do so." Lauriedale Assoc., Ltd. v. Wilson, 7 Cal. App. 4th 1439, 1448 (1992).

Here, Melina Iezza's unjust enrichment claim is premised on the same alleged course of conduct that underlies her other claims. Because Melina Iezza lacks standing to allege a claim for relief, her claim for unjust enrichment must also be dismissed with prejudice.

3. Marco Iezza's FCRA Claim

Although Saxon requests that the Court grant dismissal of the FAC in its entirety, Saxon only moves to dismiss Marco Iezza's FCRA claim. (Mot. 12:15-27,13:1-19.)

Under 15 U.S.C. § 1681s-2(a)(1)(A), "[a] person shall not furnish any information relating to a consumer to any consumer reporting agency if the person knows or has reasonable cause to believe that the information is inaccurate." 15 U.S.C. § 1681s-2(a)(1)(A).

Under 15 U.S.C. § 1681s-2(a)(d), "[s]ubsection (a) of . . .[§ 1681s2] shall be enforced exclusively under section 1681s . . . by the Federal agencies and officials and the State officials identified in that section." 15 U.S.C. § 1681s-2(d). Here, plaintiffs are not federal or state officials. Thus, plaintiffs' claim pursuant to 15 U.S.C. § 1681s-2(a) fails as a matter of law. Accordingly, plaintiffs' FRCA claim is dismissed with prejudice.

B. Motion to Strike

Saxon moves to strike portions of the FAC to which the plaintiffs seek recovery for damages on the ground that such damages are precluded as a matter of law. (Mot. 14:3-14, 15:1-24.)

Recently, the Ninth Circuit has held that Federal Rule of Civil Procedure 12(f) does not authorize a district court to strike a claim for damages on the ground that such damages are precluded as a matter of law. Whittlestone, Inc. v. Handi-Craft Co., ---F.3d ---, 2010 WL 3222417, at *1 (9th Cir. Aug. 17, 2010). Accordingly, the Court denies Saxon's motion to strike.


For the foregoing reasons, the Court GRANTS in part and DENIES in part Defendant's motion to dismiss.

* The Court grants dismissal of plaintiff Melina Iezza's claims with prejudice.

* The Court grants dismissal of plaintiff Marco Iezza's FRCA claim with prejudice.

* The Court denies Saxon's motion to dismiss all other remaining claims in the FAC with leave to amend as to Marco Iezza.

* The Court denies Saxon's motion to strike.



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