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Kurt Ehlert and Melissa Ehlert Traub v. America's Servicing Company

October 12, 2011


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


Presently before the Court is Defendant Wells Fargo Bank's ("Defendant" or "Wells Fargo")*fn1 motion to dismiss Plaintiffs' first amended complaint ("FAC") for failure to state a claim. (ECF No. 4) Also before the Court is Plaintiffs Kurt Ehlert and Melissa Ehlert-Traub's ("Plaintiffs") response in opposition, (Resp. in Opp'n, ECF No. 12), and Defendant's reply in support, (Reply in Supp., ECF No. 14). For the reasons stated below, Defendant's motion is GRANTED.


1. Factual Background

Plaintiffs are owners of a condominium located in Coronado, California ("the Property"). (FAC ¶ 7, ECF No. 1-1) Plaintiffs obtained a loan from Defendant, secured by a deed of trust on the Property. (Mot to Dismiss 1, ECF No. 4) In 2009, Plaintiffs "began to experience financial difficulties and were unable to pay their monthly mortgage payment." (FAC ¶ 9, ECF No. 1-1) As a result, Plaintiffs contacted Defendant to request a loan modification. (Id. ¶ 10) Plaintiff and Defendant entered into a forbearance agreement whereby Defendant would forbear from foreclosing on the Property if Plaintiffs made timely payments. (Id. ¶¶ 10--11) At this time, Defendant allegedly "represented to Plaintiffs that Plaintiffs would qualify for a loan modification if they were timely in making three trial payments." (Id. ¶ 11)

Pursuant to the forbearance agreement, Plaintiffs made six timely payments. (Id.) "These monthly trial payments were considerably less than the monthly payments Plaintiffs were previously paying under the loan." (Id.) Nevertheless, Defendant "failed to respond to Plaintiffs' numerous communications regarding the status of their loan modification request," and "denied the Plaintifs' loan modification." (Id. ¶ 12)

A notice of trustee sale of the Property was recorded on February 11, 2011. (Id. ¶ 13) The trustee's sale was later postponed, (Mot. to Dismiss 2, ECF No. 4), but the Property was eventually foreclosed on, subsequent to the filing of the FAC, (Resp. in Opp'n 8, ECF No. 12).

2. Procedural Background

Plaintiffs filed their original complaint in California Superior Court for the County of San Diego on April 5, 2011. (Notice of Removal 2, ECF No. 1) Plaintiffs filed the instant FAC on April 7, 2011, alleging claims for breach of contract, promissory estoppel, intentional misrepresentation, negligent misrepresentation, false promise, and injunction. (FAC, ECF No. 1-1) Defendant removed the case pursuant to 28 U.S.C. §§ 1332, 1441, and 1446. (Id.) On June 23, 2011, Defendant filed a motion to dismiss Plaintiffs' FAC for failure to state a claim pursuant to Federal Rule of Civil Procedure 12(b)(6).


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, - US - , 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 when the facts pled "allow[] the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. (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. Moreover, "for a complaint to be dismissed because the allegations give rise to an affirmative defense[,] the defense clearly must appear on the face of the pleading."

McCalden v. Ca. Library Ass'n, 955 F.2d 1214, 1219 (9th Cir. 1990).

Where a motion to dismiss is granted, "leave to amend should be granted 'unless the court determines that the allegation of other facts consistent with the challenged pleading could not possibly cure the deficiency.'" DeSoto v. Yellow Freight Sys., Inc., 957 F.2d 655, 658 (9th Cir. 1992) (quoting Schreiber Distrib. Co. v. Serv-Well Furniture Co., 806 F.2d 1393, 1401 (9th Cir. 1986)). In other words, where leave to amend ...

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