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Sheila Gooden, An Individual v. Suntrust Mortgage

March 22, 2012



This matter is before the Court upon Defendants Suntrust Mortgage, Inc. and Suntrust Banks, Inc.'s Motion to Dismiss Class Action Complaint (Doc. #11).*fn1 Plaintiff Sheila Gooden ("Plaintiff") opposes the motion (Doc. #14). Defendants also filed a Request for Judicial Notice In Support of Motion to Dismiss (Doc. which Plaintiff opposes in part (Doc. #14, Attachment 1).*fn2 #12),


This action originated when Plaintiff filed her complaint in 3 this Court on September 30, 2011. Plaintiff alleges that she 4 obtained a mortgage from Suntrust Mortgage, Inc. ("Defendant") to 5 refinance the existing debt on her property in June 2005. 6

Plaintiff's property is located at 632 S. Murdock, Willows, CA 7 95988. According to Plaintiff, the terms of the mortgage agreement 8 required Plaintiff to purchase hazard and flood insurance coverage 9 at least equal to the replacement value of the improvements on the property or the principal balance of the mortgage, whichever was less. Plaintiff alleges that she maintained coverage on the property between $130,130 and $161,960 at all times.

Plaintiff also alleges that at the time her property was refinanced, it was in a Federal Emergency Management Agency ("FEMA") designated flood zone. As a result, the complaint indicates that Plaintiff was required to maintain flood insurance based on the Flood Disaster Protection Act ("FDPA") and the agreement between the parties. If Plaintiff did not maintain adequate insurance, then Defendant was empowered to "force place" coverage on Plaintiff's property and bill her for the cost of that coverage. Then, in August 2010, FEMA published a new flood zone map that indicated that Plaintiff's property was no longer subject to the insurance requirements of the FDPA.

The replacement value of improvements on the property is not explicitly alleged in Plaintiff's complaint. Plaintiff alleges that from July 1, 2010 through June 30, 2011, the Glenn County Assessor's office valued the improvements on Plaintiff's property at between $85,000 and $120,057. The complaint does not indicate whether or not the assessor's determination was for replacement 2 value or resale value. 3

Plaintiff alleges that in October 2010, after 6 years of 4 carrying the same amount of insurance, Defendant determined without 5 explanation that her existing insurance coverage was inadequate. 6

In a series of letters starting on October 19, 2010 and concluding 7 on March 1, 2011, Defendant allegedly demanded that Plaintiff 8 increase her flood insurance coverage by amounts ranging from 9 $25,300 to $44,900, depending on the letter. Plaintiff alleges that she purchased additional flood insurance in November 2010 and provided documentation of that insurance to Defendant. In December 2010, Defendant allegedly force placed additional flood coverage on Plaintiff's property. Finally, in March 2011, Defendant force placed additional flood and hazard insurance on Plaintiff's property and sent her a mortgage bill that contained line item charges for the premiums of the additional coverage. Plaintiff's monthly mortgage payment allegedly increased from $517.37 to $775.89.

Plaintiff asserts six causes of action in her complaint:

(1) Violation of Truth in Lending Act ("TILA") (Hazard Insurance), 15 U.S.C. § 1601; (2) Violation of TILA (Flood Insurance), 15 U.S.C. § 1601; (3) Breach of Contract; (4) Violation of Cal. Civ. Code § 2955.5; (5) Violation of California Unfair Competition Law ("UCL") (Hazard Insurance), Cal. Bus. & Prof. Code § 17200; and (6) Violations of California Unfair Competition Law (Flood Insurance), Cal. Bus. & Prof. Code § 17200.

The Court has jurisdiction over Plaintiff's federal causes of 2 action pursuant to 28 U.S.C. § 1331 and the related state law 3 claims pursuant to 28 U.S.C. § 1367. 4 5


A. Legal Standard 7

1. Motion to Dismiss

A party may move to dismiss an action for failure to state a 9 claim upon which relief can be granted pursuant to Federal Rule of Civil Procedure 12(b)(6). In considering a motion to dismiss, the court must accept the allegations in the complaint as true and draw all reasonable inferences in favor of the plaintiff. Scheuer v. Rhodes, 416 U.S. 232, 236 (1974), overruled on other grounds by Davis v. Scherer, 468 U.S. 183 (1984); Cruz v. Beto, 405 U.S. 319, 322 (1972). Assertions that are mere "legal conclusions," however, are not entitled to the assumption of truth. Ashcroft v. Iqbal, 129 S. Ct. 1937, 1950 (2009) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). To survive a motion to dismiss, a plaintiff needs to plead "enough facts to state a claim to relief that is plausible on its face." Twombly, 550 U.S. at 570. Dismissal is appropriate where the plaintiff fails to state a claim supportable by a cognizable legal theory. Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1990).

Upon granting a motion to dismiss for failure to state a claim, the court has discretion to allow leave to amend the complaint pursuant to Federal Rule of Civil Procedure 15(a). "Dismissal with prejudice and without leave to amend is not appropriate unless it is clear . . . that the complaint could not be saved by amendment." Eminence Capital, L.L.C. v. Aspeon, Inc., 2 316 F.3d 1048, 1052 (9th Cir. 2003). 3

B. Discussion 4

1. Defendant Sun Trust Banks, Inc.

Defendant Suntrust Banks, Inc. argues that all claims against 6 it should be dismissed because the allegations in the complaint 7 appear to only address actions taken by defendant Suntrust 8

Mortgages, Inc. Plaintiff does not dispute Suntrust Banks, Inc.'s 9 dismissal, but requests leave to amend the complaint in order to include allegations specific to defendant Suntrust Banks, Inc. Plaintiff does not, however, provide any explanation as to why Suntrust Banks, Inc. was named as a defendant or specify any of the claims she believes can be brought against this defendant. Given Plaintiff's failure to provide this information, it appears to this Court that granting leave to file an amended complaint ...

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