ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT PNC‟s MOTION TO DISMISS
This matter comes before the Court on Defendant PNC Bank National Association‟s ("PNC") Motion to Dismiss (Doc. 16) and Motion to Strike Portions of Plaintiff‟s First Amended Complaint (Doc. 19). PNC asks the Court to dismiss and to strike portions the First Amended Complaint ("FAC") (Doc. 13) filed by Plaintiff William Allen Smith ("Plaintiff"). Plaintiff opposes the motions.*fn1
I. FACTUAL AND PROCEDURAL BACKGROUND
Plaintiff alleges that Defendants National City Mortgage,*fn2 United Lenders Group ("United"), Jeff Moore ("Moore"), and Kondaur Capital Corporation ("Kondaur") fraudulently conspired 5 to induce him into an usurious loan for their financial gain and 6 that his right to cancel the loan agreement was improperly reneged by PNC.
In October of 2006, Plaintiff sought a construction loan to finance the construction of a home located at 5 Stonefield Court, Sacramento, California. One week after being denied a 1 loan from PNC, Plaintiff was contacted by Moore, an independent broker, who allegedly stated that he had been directed by PNC to broker Plaintiff‟s loan through United.
Moore allegedly advised Plaintiff that he could get him the best deal and the best interest rate available on the market. On or about January 31, 2007, PNC approved Plaintiff for a construction loan at a 30-year fixed rate of 7.825% to borrow a principal sum of $880,000.00 with a monthly mortgage payment of $6,350.10 per month. Based on PNC‟s alleged verbal authorization, Plaintiff began construction on his home.
Plaintiff alleges that United and Moore overstated his income on the loan application without Plaintiff‟s knowledge or consent. Plaintiff claims he accurately stated his income as $23,000.00 per month whereas Moore stated his income as $33,000.00 per month. Plaintiff avers that since Plaintiff already gave PNC his correct income in his initial loan 2 application, PNC was aware that Moore inflated Plaintiff‟s 3 income in order to qualify him for the loan.
On February 9, 2007, the day of the loan closing, Plaintiff 5 alleges that the loan terms presented were worse than the terms 6 he had been promised. On closing day, the loan was an 7 adjustable rate loan that included a ten year interest-only 8 provision and required twice the down payment. Plaintiff claims 9 he felt pressured to sign the loan documents because construction had already began on his house. Plaintiff alleges 1 that he would not have signed the loan agreement except that the loan documents contained a right to cancel notification citing the Truth in Lending Act ("TILA"). Plaintiff claims the escrow agent reassured him that the TILA notice gave him the right to cancel the loan within three days of signing. Plaintiff alleges that he agreed to sign the documents based on the promise he could rescind the loan.
Plaintiff alleges that within the three day cancellation period, he exercised and delivered the loan cancellation to the lender and title company. Plaintiff was notified by representatives of PNC and Moore that the construction loan could not be cancelled.
In or around June 2008, Plaintiff sought a forbearance settlement and Plaintiff was allegedly advised by a PNC representative that he would be eligible for a permanent modification of his loan after a three month trial payment period, if Plaintiff reduced his unsecured debt. On or about July 3, 2008, PNC sent a "forbearance agreement" to Plaintiff requesting payments of $2,895.00 respectively, for Plaintiff‟s July, August, and September mortgage payments. Plaintiff alleges that at PNC‟s direction, he filed Chapter bankruptcy on July 30, 2008 to reduce his unsecured debt. On December 15, 2008, Plaintiff contacted PNC and was advised by a PNC customer representative that PNC had approved the loan modification and 7 that the modification paperwork was forthcoming.
While waiting for the loan modification confirmation, Plaintiff was allegedly notified by PNC that his loan had been sold to Kondaur, who would finalize the loan modification. On February 12, 2009, Plaintiff alleges he was assured by a Kondaur representative that the modification began by PNC would continue to be processed. On the same day, Kondaur issued a Notice of Default to Plaintiff.
Plaintiff brings this action alleging nine causes of action for fraud, declaratory relief (T.I.L.A.), breach of fiduciary duty, declaratory relief (U.C.C. and California Commercial Code), accounting, violation of the Rosenthal Debt Collection Act, unjust enrichment, negligence and violation of California Business and Professions Code Section 17200 et. seq.
A party may move to dismiss an action for failure to state a claim upon which relief can be granted pursuant to Federal Rule of Civil Procedure section 12(b)(6). In considering a motion to dismiss, the court must accept the allegations in the complaint as true and draw all reasonable inferences in favor of 2 the plaintiff. Scheuer v. Rhodes, 416 U.S. 232, 236 (1975), 3 overruled on other grounds by Davis v. Scherer, 468 U.S. 183 (1984); Cruz v. Beto, 405 U.S. 319, 322 (1972). Assertions that are mere "legal conclusions," however, are not entitled to the assumption of truth. Ashcroft v. Iqbal, 129 S.Ct. 1937, 1950 (2009), citing Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). To survive a motion to dismiss, a plaintiff needs to 9 plead "enough facts to state a claim to relief that is plausible on its face." Twombly, 550 U.S. at 570. Dismissal is 1 appropriate where the plaintiff fails to state a claim supportable by a cognizable legal theory. Balistreri v. Pacifica Police Department, 901 F.2d 696, 699 (9th Cir. 1990).
Upon granting a motion to dismiss for failure to state a claim, the court has discretion to allow leave to amend the complaint pursuant to Federal Rule of Civil Procedure § 15(a). "Dismissal with prejudice and without leave to amend is not appropriate unless it is clear . . . that the complaint could not be saved by amendment." Eminence Capital, L.L.C. v. Aspeon, Inc., 316 F.3d 1048, 1052 (9th Cir. 2003).
Rule 12(f) provides in pertinent part that:
The Court may order stricken from any pleading any insufficient defense or any redundant, immaterial, impertinent, or scandalous matter. . . . Motions to strike are disfavored and infrequently granted. A motion to strike should not be granted unless it is clear that the matter to be stricken could have no possible bearing on the subject matter of the litigation.
Bassett v. Ruggles, et al., 2009 WL 2982895 at *24(E.D. Cal. Sept. 14, 2009) (internal citations omitted).
PNC argues that Plaintiff does not plead his first claim 6 for fraud with particularity. Plaintiff responds that he pleads the fraud elements with sufficient detail to satisfy Rule 9(b)‟s 8 heightened pleading requirements.
While pleadings generally require "a short and plain statement of the claim showing that the pleader is entitled to 1 relief," FED.R.CIV.P. 8(a)(2), when fraud is alleged "a party must state with particularity the circumstances constituting fraud. . . ." FED.R.CIV.P. 9(b).
Rule 9(b) requires fraud claims to 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." Bly-Magee v. California, 236 F.3d 1014, 1019 (9th Cir. 2001) (internal quotations omitted). "Averments of fraud must be accompanied by the who, what, when, where, and how of the misconduct charged." Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1106 (9th Cir. 2003) (internal citations omitted). While Rule 9(b) requires a heightened pleading standard, it "does not require nor make legitimate the pleading of detailed evidentiary matter." Walling v. Beverly Enterprises, 476 F.2d 393, 397 (9th Cir. 1973).
To plead a cause of action for fraud, Plaintiff must show:
(1) a misrepresentation; (2) knowledge of falsity; (3) intent to defraud; (4) justifiable ...