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Neng-Guin Chen, An Individual v. Citibank (West)

August 24, 2011


The opinion of the court was delivered by: Marilyn L. Huff, District Judge United States District Court


On July 22, 2011, Defendant Citibank (West), FSB ("Citibank") filed a motion dismiss Plaintiff's complaint. On August 12, 2011, Plaintiff Neng-Guin Chen ("Plaintiff") filed a response in opposition to Defendant's motion. (Doc. No. 10.) On August 22, 2011, Defendant filed a reply. (Doc. No. 11.) A hearing on the matter is currently scheduled for August 29, 2011 at 10:30 a.m. The Court, pursuant to its discretion under Local Rule 7.1(d)(1), determines this matter is appropriate for resolution without oral argument, submits the motion on the parties' papers, and vacates the hearing. For the reasons below, the Court GRANTS Citibank's motion to dismiss the complaint without prejudice.


On April 29, 2011, Plaintiff filed a complaint in the San Diego Superior Court against Defendant Citibank alleging causes of action for (1) breach of contract; (2) breach of the implied covenant of good faith and fair dealing; and (3) violations of California's Unfair Competition Law ("UCL"), California Business & Professions Code §§ 17200, et seq. (Doc. No. 1-1, Compl.) On May 31, 2011, Defendant Citibank removed the action to this Court on the basis of diversity jurisdiction. (Doc. No. 1, Notice fo Removal.)

The Court takes judicial notice under Federal Rule of Evidence 201, of the following public documents: (1) The Home Equity Line of Credit Agreement between Plaintiff NengGuin Chen and Citibank executed on July 21, 2005; and (2) the letter regarding a reduction in Plaintiff Neng-Guin Chen's line of credit sent to Plaintiff from Citibank on March 7, 2008. (Doc. No. 8-1, Request for Judicial Notice ("RJN") Exs. A-B.)

On or about July 21, 2005, Plaintiff entered into a home equity line of credit ("HELOC") agreement with Citibank. (Id. Ex. A.) The agreement was secured by a mortgage on Plaintiff's house and had an initial credit limit of $150,000. (Id.) On March 7, 2008, Defendant Citibank sent Plaintiff a letter stating:

We have determined that home values in your area, including your home value, have significantly declined. As a result of this decline, your home's value no longer supports the current credit limit for your home equity line of credit. Therefore, we are reducing the credit limit for your home equity line of credit, effective March 5, 2008, to 10,000. (Id. Ex. B.)


I. Motion to Dismiss Pursuant to Fed. R. Civ. P. 12(b)(6)

A motion to dismiss a complaint under Federal Rule of Civil Procedure 12(b)(6) tests the legal sufficiency of the claims asserted in the complaint. Navarro v. Black, 250 F.3d 729, 732 (9th Cir. 2001). Rule 8(a)(2) requires that a pleading stating a claim for relief contain "a short and plain statement of the claim showing that the pleader is entitled to relief." The function of this pleading requirement is to "give the defendant fair notice of what the . . . claim is and the grounds upon which it rests." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). "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." Id. A complaint does not "suffice if it tenders 'naked assertion[s]' devoid of 'further factual enhancement.'" Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009) (quoting Twombly, 550 U.S. at 557). "Factual allegations must be enough to raise a right to relief above the speculative level." Twombly, 550 U.S. at 555 (citing 5 C. Wright &

A. Miller, Federal Practice and Procedure § 1216, pp. 235-36 (3d ed. 2004)). "All allegations of material fact are taken as true and construed in the light most favorable to plaintiff. However, conclusory allegations of law and unwarranted inferences are insufficient to defeat a motion to dismiss for failure to state a claim." Epstein v. Wash. Energy Co., 83 F.3d 1136, 1140 (9th Cir. 1996); see also Twombly, 550 U.S. at 555.

II. Plaintiff's Complaint

A. Breach of Contract

Plaintiff alleges that Citibank breached a material term of the HELOC agreement when it reduced her credit limit because her home value did not decline significantly. (Compl. ¶ 17.) Plaintiff further alleges that Citibank breached the terms of the HELOC agreement by failing to reinstate Plaintiff's credit limits after the value of her home was no longer in significant decline. (Id. ¶ 18.)Citibank argues that these claims should be dismissed because its actions were permitted under the terms of the contract. (Doc. No. 8-2, at 4-7.)In response, Plaintiff argues that she ...

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