ORDER RE: MOTIONS TO DIMSISS(Docs. 5, 10, and 19)
Defendants have filed motions to dismiss Plaintiffs' claims. Plaintiffs have filed an amended complaint. The amended complaint was filed in violation of Fed. Rule Civ. Proc 15 and is stricken. Plaintiffs' original complaint is dismissed, but with leave to amend.
Plaintiffs Resham Singh and Gurmit Kaur ("Plaintiffs"), together with third party Singh Balwinder obtained a $143,114 mortgage from Wells Fargo Home Mortgage Inc., now Defendant Wells Fargo Bank, N.A. ("Wells Fargo") for the purchase of 890 Jessica Street in Turlock, California. The Deed of Trust was dated November 5, 2003 and recorded on November 13, 2003. Plaintiffs fell behind on their mortgage payments, starting on June 1, 2009. A Notice of Default was filed on October 2, 2009. A Notice of Trustee's Sale was filed on January 6, 2010, setting the date of public sale as January 26, 2010. At an unspecified date, Plaintiffs requested a loan modification from Wells Fargo under the federal Home Affordable Modification Program ("HAMP"). Wells Fargo agreed to a loan modification. Notwithstanding the modification agreement, the house was sold in a non-judicial foreclosure on June 28, 2010, to Defendant Federal Home Loan Mortgage Corporation ("Freddie Mac"). An Assignment of Deed of Trust and Trustee's Deed Upon Sale were filed July 7, 2010.
Plaintiffs filed suit against Wells Fargo and Freddie Mac in the Superior Court, County of Stanislaus on August 2, 2010. The complaint alleges a quiet title cause of action against both Wells Fargo and Freddie Mac and breach of contract, breach of implied covenant of good faith and fair dealing, promissory fraud, and intentional infliction of emotional distress causes of action against Wells Fargo only. Freddie Mac removed the case to the Eastern District on September 14, 2010, based on the special federal jurisdiction provisions of 12 U.S.C. §1452(f). Freddie Mac and Wells Fargo filed separate motions to dismiss for failure to state a claim under Fed. Rule Civ. Proc. 12(b)(6). Plaintiffs filed an opposition to Freddie Mac's motion and an amended complaint. Wells Fargo then filed a motion to strike the amended complaint. These matters were taken under submission without oral argument.
Under Federal Rule of Civil Procedure 12(b)(6), a claim may be dismissed because of the plaintiff's "failure to state a claim upon which relief can be granted." A dismissal under Rule 12(b)(6) may be based on the lack of a cognizable legal theory or on the absence of sufficient facts alleged under a cognizable legal theory. Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). "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. Factual allegations must be enough to raise a right to relief above the speculative level, on the assumption that all the allegations in the complaint are true (even if doubtful in fact)....a well-pleaded complaint may proceed even if it strikes a savvy judge that actual proof of those facts is improbable" Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555-56 (2007), citations omitted. "[O]nly a complaint that states a plausible claim for relief survives a motion to dismiss. Determining whether a complaint states a plausible claim for relief will, as the Court of Appeals observed, be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense. But where 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 shown that the pleader is entitled to relief." Ashcroft v. Iqbal, 129 S. Ct. 1937, 1950 (2009), citations omitted. The court is not required "to accept as true allegations that are merely conclusory, unwarranted deductions of fact, or unreasonable inferences." Sprewell v. Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 2001). The court must also assume that "general allegations embrace those specific facts that are necessary to support the claim." Lujan v. Nat'l Wildlife Fed'n, 497 U.S. 871, 889 (1990), citing Conley v. Gibson, 355 U.S. 41, 47 (1957), overruled on other grounds at 127 S. Ct. 1955, 1969. Thus, the determinative question is whether there is any set of "facts that could be proved consistent with the allegations of the complaint" that would entitle plaintiff to some relief. Swierkiewicz v. Sorema N.A., 534 U.S. 506, 514 (2002). At the other bound, courts will not assume that plaintiffs "can prove facts which [they have] not alleged, or that the defendants have violated...laws in ways that have not been alleged." Associated General Contractors of California, Inc. v. California State Council of Carpenters, 459 U.S. 519, 526 (1983).
In deciding whether to dismiss a claim under Fed. Rule Civ. Proc. 12(b)(6), the Court is generally limited to reviewing only the complaint. "There are, however, two exceptions....First, a court may consider material which is properly submitted as part of the complaint on a motion to dismiss...If the documents are not physically attached to the complaint, they may be considered if the documents' authenticity is not contested and the plaintiff's complaint necessarily relies on them. Second, under Fed. Rule Evid. 201, a court may take judicial notice of matters of public record." Lee v. City of Los Angeles, 250 F.3d 668, 688-89 (9th Cir. 2001), citations omitted. The Ninth Circuit later gave a separate definition of "the 'incorporation by reference' doctrine, which permits us to take into account documents whose contents are alleged in a complaint and whose authenticity no party questions, but which are not physically attached to the plaintiff's pleading." Knievel v. ESPN, 393 F.3d 1068, 1076 (9th Cir. 2005), citations omitted. "[A] court may not look beyond the complaint to a plaintiff's moving papers, such as a memorandum in opposition to a defendant's motion to dismiss. Facts raised for the first time in opposition papers should be considered by the court in determining whether to grant leave to amend or to dismiss the complaint with or without prejudice." Broam v. Bogan, 320 F.3d 1023, 1026 n.2 (9th Cir. 2003), citations omitted.
If a Fed. Rule Civ. Proc. 12(b)(6) motion to dismiss is granted, claims may be dismissed with or without prejudice, and with or without leave to amend. "[A] district court should grant leave to amend even if no request to amend the pleading was made, unless it determines that the pleading could not possibly be cured by the allegation of other facts." Lopez v. Smith, 203 F.3d 1122, 1127 (9th Cir. 2000) (en banc), quoting Doe v. United States, 58 F.3d 494, 497 (9th Cir. 1995). In other words, leave to amend need not be granted when amendment would be futile. Gompper v. VISX, Inc., 298 F.3d 893, 898 (9th Cir.2002).
Plaintiffs filed an amended complaint on November 23, 2010, containing twelve causes of action. Doc. 17. Plaintiffs were not granted leave to amend by the court nor did they have written consent from opposing parties per Fed. Rule Civ. Proc. 15(a)(2). Fed. Rule Civ. Proc. 15(a)(1) states, "A party may amend its pleading once as a matter of course within: (A) 21 days after serving it, or (B) if the pleading is one to which a responsive pleading is required, 21 days after service of a responsive pleading or 21 days after service of a motion under Rule 12(b), (e), or (f), whichever is earlier." Freddie Mac filed a Fed. Rule Civ. Proc. 12(b) motion on September 30, 2010. Doc. 5. Freddie Mac has provided proof of service by electronic transmission through the Eastern District's CM/ECF system upon Plaintiffs' attorney, Aldon Louis Bolanos, on September 30, 2010. Doc. 8. Mr. Bolanos consented to electronic service. Plaintiff's amended complaint was not filed within the 21 day window after the September 30, 2010 service of the Fed. Rule Civ. Proc. 12(b) motion. It is stricken and will not be considered.
Plaintiffs' first cause of action is that Wells Fargo breached a written contract: Plaintiffs approached defendant for a loan modification. Defendant initially obliged, and plaintiffs made all payments at the modified amount in a timely fashion. At the same time, plaintiffs provided all requested information to defendant lender in compliance with the HAMP program....Defendant was obligated to follow HAMP guidelines and allow these Americans to remain in their family home under the terms of the modified loan. But they did not. Instead, they simply without warning foreclosed on the family home.... Plaintiffs and defendant did in fact enter into a written loan modification agreement. Plaintiffs complied with all terms and conditions and covenants and promises under that modification, including but not limited to making timely payments at the modified amounts. Defendant Wells Fargo Bank breached the contract by foreclosing on the family home.
Doc. 1, Complaint, at 2:23-3:15 (8-9 of 19). "The standard elements of a claim for breach of contract are (1) the contract, (2) plaintiff's performance or excuse for nonperformance, (3) defendant's breach, and (4) damage to plaintiff therefrom." Wall Street Network, Ltd. v. New York Times Co., 164 Cal. App. 4th 1171, 1178 (Cal. App. 2nd Dist. 2008), ...