MEMORANDUM AND ORDER RE: MOTION TO DISMISS
Plaintiff Cecilia Argueta brought this action against defendants J.P. Morgan Chase ("Chase"), d/b/a Washington Mutual F.S.B. ("Washington Mutual" or "WAMU"), Quality Loan Service Corporation, and Federal Home Loan Mortgage Corporation ("FHLMC" or "Freddie Mac"), arising from defendants' allegedly wrongful conduct related to a residential loan modification application and a Notice of Default and Election to Sell Under Deed of Trust.
Chase and FHLMC have filed a joint motion to dismiss the Second Amended Complaint ("SAC"), (Docket No. 38), in its entirety for failure to state a claim upon which relief can be granted pursuant to Federal Rule of Civil Procedure 12(b)(6). (Docket No. 42.)
I. Factual and Procedural Background
In January of 2007, plaintiff refinanced an existing loan and signed a promissory note with Washington Mutual for a $320,000.00 loan, which was secured by a deed of trust for plaintiff's primary residence. (SAC ¶¶ 3, 4, 12, 14; Req. for Judicial Notice in Supp. of Defs.' Mot. to Dismiss ("Defs.' Req. for Judicial Notice") Ex. A (Docket No. 42-2).)
The SAC alleges that "[t]he promissory note and the deed of trust was subsequently transferred to Freddie Mac, although WaMu, now Chase, retained servicing rights." (SAC ¶ 13.)
A Notice of Default and Election to Sell Under Deed of Trust reflecting a default in the amount of $8,007.99 was recorded on April 24, 2009, in the Recorder's Office of San Joaquin County. (Defs.' Req. For Judicial Notice Ex. B.) On August 26, 2010, a Notice of Trustee's Sale was recorded. (Id. Ex. D.) The SAC details a series of interactions between plaintiff and Chase from August of 2010 to January of 2011 in which plaintiff applied for a loan modification, the trustee sale date was postponed, and ultimately Chase did not give plaintiff a loan modification. (See, e.g., SAC ¶¶ 15-55.)
On or about January 10, 2011, Chase wrote to plaintiff that "she was denied for the Home Affordable Modification Program ("HAMP") because Chase was 'unable to verify that you live in the Property as your primary residence.'" (Id. ¶ 49.) The SAC alleges that "[u]p to that point, Chase never requested information from Plaintiff verifying that she lives in the Property as her primary residence," which she does. (Id. ¶¶ 49, 66.)
On January 19, 2011, Chase refused to discuss plaintiff's account because the "account [was] in litigation." (Id. ¶ 50.) Approximately a day later, "Plaintiff received a letter from Chase confirming that she was denied for a HAMP modification, but also solicited Plaintiff to further contact Chase for other 'workout' options." (Id. ¶ 51.) The SAC alleges that "[o]ther than a HAMP modification, Plaintiff was never denied for any other modification review, such as an internal review." (Id. ¶ 52.)
Plaintiff alleges that even if she qualified for a modification under a program other than HAMP, "Chase has refused to actually review Plaintiff [sic] such a program since Chase has a policy to not review any borrower for any modification program after that borrower has been denied for a modification for any reason." (Id. ¶ 53.) Plaintiff further alleges that, because of this policy, Chase has "refused to allow Plaintiff to submit additional information to Chase in order to confirm that the Property was Plaintiff's primary residence" and has "refused to consider Plaintiff for any other modification programs that Chase participates in, including an internal modification program." (Id. ¶¶ 54-55.)
On January 26, 2011, plaintiff filed a complaint in state court. On February 16, 2011, Chase and FHLMC removed the action to this court. (Docket No. 1.) The court dismissed all but the claim for violation of California Civil Code section 2923.5 in plaintiff's original Complaint and afforded plaintiff leave to amend. (Apr. 11, 2011, Order at 15:13-17 (Docket No.
11).) Plaintiff then filed a First Amended Complaint that abandoned the stand-alone claim for violation of section 2923.5 and asserted claims for "Promissory Estoppel/Breach of Contract," breach of covenant of good faith and fair dealing, negligence, and violation of California's Unfair Competition Law ("UCL"), Cal. Bus. & Prof. Code §§ 17200-17210. (Docket No. 12.) The court dismissed all of these claims, again affording plaintiff leave to amend. (June 30, 2011, Order at 15:16-22 (Docket No. 24).)
The parties stipulated to extend the time for filing a SAC to Jule 28, 2011. (Docket Nos. 28, 29.) After failing to file an amended complaint within that time, plaintiff filed a motion requesting leave to amend her FAC to which defendants did not respond. (Docket Nos. 31, 32.) The court granted plaintiff's motion, and plaintiff filed a SAC that abandoned the claims for negligence and UCL violations and asserted new claims to quiet title and for negligent misrepresentation. (Docket Nos. 35, 38.)
To survive a motion to dismiss, a ...