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Corinne Hardwood, John J T Mcmurray v. Bank of America

December 16, 2010

CORINNE HARDWOOD, JOHN J T MCMURRAY,
PLAINTIFF,
v.
BANK OF AMERICA, DOE CORPORATIONS 1-10, DOES 1-10, INCLUSIVE, DEFENDANTS.



The opinion of the court was delivered by: Garland E. Burrell, Jr. United States District Judge

ORDER GRANTING MOTION TO DISMISS AND DENYING MOTION TO STRIKE

Defendant moves for dismissal of Plaintiffs' Complaint under Federal Rule of Civil Procedure ("Rule") 12(b)(6), arguing Plaintiffs have failed to allege sufficient facts to state viable claims. Defendant also moves to strike Plaintiffs' punitive damages allegations under Rule 12(f). Plaintiffs oppose the dismissal motion, arguing "the Complaint is proper as to all causes of action." (Opp'n 1:7-8.)

I. LEGAL STANDARD

A Rule 12(b)(6) dismissal motion tests the legal sufficiency of the claims alleged in the complaint. Novarro v. Black, 250 F.3d 729, 732 (9th Cir. 2001). A pleading must contain "a short and plain statement of the claim showing that the pleader is entitled to relief . . . ." Fed. R. Civ. P. 8(a)(2). The complaint must "give the defendant fair notice of what the [plaintiff's] claim is and the grounds upon which relief rests . . . ." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007).

Dismissal of a claim under Rule 12(b)(6) is appropriate only where the complaint either 1) lacks a cognizable legal theory, or 2) lacks factual allegations sufficient to support a cognizable legal theory. Balistreri v. Pacific Police Dept., 901 F.2d 696, 699 (9th Cir. 1988). To avoid dismissal, a plaintiff must allege "only enough facts to state a claim to relief that is plausible on its face." Twombly, 550 U.S. at 547.

In deciding a Rule 12(b)(6) motion, the material allegations of the complaint are accepted as true and all reasonable inferences are drawn in favor of the plaintiff. See al-Kidd v. Ashcroft, 580 F.3d 949, 956 (9th Cir. 2009). However, conclusory statements and legal conclusions are not entitled to a presumption of truth. See Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949-50 (2009); Twombly, 550 U.S. at 555. "In sum, for a complaint to survive a motion to dismiss, the nonconclusory 'factual content,' and reasonable inferences from that content, must be plausibly suggestive of a claim entitling the plaintiff to relief." Moss v. United States Secret Serv., 572 F.3d 962, 969 (9th Cir. 2009).

II. FACTUAL ALLEGATIONS

"Plaintiffs and [Defendant] entered into a mortgage contract for the purchase of Plaintiffs' home" around September of 2007. (Compl. ¶ 5.) Defendant "is the mortgagee on record of the mortgage loan which is the subject of this action." Id. ¶ 2.

Around April of 2009, Plaintiffs "became unable to make the required payments under the contract" and "began negotiations to modify the mortgage loan." Id. ¶¶ 7, 8. Defendant "was not willing to negotiate or even discuss Plaintiffs['] financial situation and denied Plaintiffs' loan modification." Id. ¶ 9.

"In or about April [of 2009, Defendant] authorized a short sale." Id. ¶ 12. Plaintiffs hired a realtor, and "received an offer for a short sale" more than the property's appraised value. Id. ¶¶ 13-14. Ten months after the offer was sent to Defendant, "Defendant finally responded by sending a counter-offer which led the Bona Fide Purchaser . . . to rescind the agreement to purchase." Id. ¶ 15. Plaintiffs allege they "are facing imminent danger of having their property foreclosed." Id. ¶ 16.

III. DISCUSSION

Plaintiffs allege four state claims against Defendant in their Complaint based upon Defendant's alleged ten month delay in responding to the short sale offer: 1) violation of the duties of good faith and fair dealing, 2) violation of California Business & Professions Code section 17200, 3) unjust enrichment, and 4) infliction of emotional distress.

A. Good Faith and Fair Dealing

Defendant seeks dismissal of Plaintiffs' good faith and fair dealing claim, arguing, "[t]he prerequisite for any action for breach of the covenant of good faith and fair dealing is the existence of a contractual relationship between the parties," and "Plaintiffs do not, and cannot, allege a contractual relationship relating to the short sale." (Mot. 3:14-15, 3:26-27.) Defendant further argues, "[t]o the extent Plaintiffs attempt to allege that the 'promise made by [Defendant] to short sale the property' was a contract, such claim must fail" because the alleged promise "relates to the sale of real property" and is "invalid under the statue of frauds." (Mot. 4:14-19 (citation omitted).) Plaintiffs rejoin, "Defendant['s] ...


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