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Richard Perez v. Ocwen Loan Servicing

July 8, 2011

RICHARD PEREZ,
PLAINTIFF,
v.
OCWEN LOAN SERVICING, LLC, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Honorable Janis L. SammartinoUnited States District Judge

ORDER GRANTING DEFENDANTS' MOTION TO DISMISS (ECF No. 17.)

Presently before the Court is Defendants' motion to dismiss. (Mot. Dismiss, ECF No. 17). Also before the Court are Plaintiff's opposition, (Opp'n, ECF No. 21), and Defendants' reply, (Reply, ECF No. 22). After consideration, the Court GRANTS Defendants' motion to dismiss.

BACKGROUND

This action arises out of a $344,250 loan Plaintiff obtained on August 19, 2005, from New Century Mortgage Corporation. (Mot. Dismiss 2.) The loan was secured by a deed of trust on the subject property located at 9316 Woodruff Way, Santee, California 92071. (Id.) Not long after the loan was consumated, New Century assigned its interest in the deed of trust to Deutsche National Trust Company. (Id.) And nearly three years later, on November 4, 2008, Plaintiff signed a loan modification agreement with Ocwen Loan Servicing, LLC. (SAC ¶ 14, ECF No. 16.)

In March 2010 a Notice of Default was recorded, showing the amount of default on the loan to be $18,749.95. (Mot. Dismiss 2.) On July 1, 2010, the Notice of Trustee's sale was recorded, and the home was sold on December 16, 2010. (Id.)

Plaintiff filed his second amended complaint against Ocwen Loan Servicing, LLC, Ocwen Financial Corporation, Deutsche National Trust Company, and Ronald Farris (Defendants) on February 14, 2011, asserting twelve causes of action: (1) breach of contract; (2) breach of implied covenant of good faith and fair dealings; (3) fraud (misrepresentation); (4) fraud (omission); (5) economic duress; (6) unconscionablility; (7) tortious breach of contract; (8) intentional and negligent misrepresentation; (9) violation of Fair Debt Collection Practice Act (FDCPA), 15 U.S.C. § 1692; (10) violation of Real Estate Settlement Procedures Act (RESPA), 12 U.S.C. § 2605, and Truth-in-Lending Act (TILA), 15 U.S.C. § 1601; (11) quiet title; and (12) injunctive relief. This complaint is the subject of Defendants' present motion to dismiss.

LEGAL STANDARD

Federal Rule of Civil Procedure 12(b)(6) permits a party to raise by motion the defense that the complaint "fail[s] to state a claim upon which relief can be granted," generally referred to as a motion to dismiss. The Court evaluates whether a complaint states a cognizable legal theory and sufficient facts in light of Federal Rule of Civil Procedure 8(a), which requires a "short and plain statement of the claim showing that the pleader is entitled to relief." Although Rule 8 "does not require 'detailed factual allegations,' . . . it [does] demand[] more than an unadorned, the-defendant-unlawfully-harmed-me accusation." Ashcroft v. Iqbal, ---- U.S. ----, 129 S. Ct. 1937, 1949 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). In other words, "a plaintiff's obligation to provide the 'grounds' of his 'entitle[ment] to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Twombly, 550 U.S. at 555 (citing Papasan v. Allain, 478 U.S. 265, 286 (1986)). "Nor does a complaint suffice if it tenders 'naked assertion[s]' devoid of 'further factual enhancement.'" Iqbal, 129 S. Ct. at 1949 (citing Twombly, 550 U.S. at 557).

"To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Id. (quoting Twombly, 550 U.S. at 570); see also Fed. R. Civ. P. 12(b)(6). A claim is facially plausible if the facts pleaded "allow[] the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 129 S. Ct. at 1949 (citing Twombly, 550 U.S. at 556). That is not to say that the claim must be probable, but there must be "more than a sheer possibility that a defendant has acted unlawfully." Id. Facts "'merely consistent with' a defendant's liability" fall short of a plausible entitlement to relief. Id. (quoting Twombly, 550 U.S. at 557). Further, the Court need not accept as true "legal conclusions" contained in the complaint. Id. This review requires context-specific analysis involving the Court's "judicial experience and common sense." Id. at 1950 (citation omitted). "[W]here 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 'show[n]'----'that the pleader is entitled to relief.'" Id.

ANALYSIS

1. Breach of Contract

There are two contracts in this case, the original loan and the loan modification agreement. Plaintiff alleges that these contracts were breached by Ocwen Loan Servicing and Ocwen Financial Corporation's "systematic and universal creation of junk fees such as monthly property inspection, late charges, defensive litigation fees and other similar and related charges that are illegal." (SAC ¶ 105.) Plaintiff's breach of contract claim fails to satisfy the pleading standard of Rule 8(a). Plaintiff alleges breach of contract without identifying any contractual provisions. (See SAC ¶¶ 51--60, 102--105.) And Plaintiff fails to ascribe the alleged breach to any particular defendant, asserting instead that the collective was at fault. Without these pieces, Plaintiff does not "state a claim to relief that is plausible on its face." Twombly, 550 U.S. at 570.

2. Breach of Implied Covenant of Good Faith and Fair Dealing

Plaintiff claims Defendants breached the implied covenant of good faith and fair dealing inherent in the loan and loan modification agreement. This claim can arise under contract law or tort law. Melegrito v. CitiMortgage Inc., 2011 WL 2197534, at *9 (N.D. Cal. June 6, 2011). Because Plaintiff ...


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