Searching over 5,500,000 cases.

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Maria Flora Urbano, An Individual v. Bank of America

July 17, 2012




This case arises out of a mortgage loan transaction. Plaintiff Maria Flora Urbano ("Plaintiff") brings suit against Defendants Bank of America, N.A., as successor by merger to Countrywide Bank FSB, erroneously sued as Bank of America, N.A., successor in interest to Countrywide Bank, N.A. ("BANA"); and ReconTrust Company, N.A., a wholly owned subsidiary of Bank of America, N.A. ("ReconTrust") (collectively, "Defendants"). On April 16, 2012, Plaintiff filed a First Amended Complaint alleging causes of action for: 1) fraud in origination of loan; 2) set aside pending trustee sale based upon wrongful foreclosure in violation of Cal. Civ. Code § 2923.5; 3) violation of California Civil Code § 2923.6; 4) violation of the Real Estate Settlement Procedures Act ("RESPA"), 12 U.S.C. § 2601, et seq.; 5) breach of contract; 6) breach of implied covenant of good faith and fair dealing; 7) violation of the Truth in Lending Act ("TILA"), 15 U.S.C. § 1601, et seq.; 8) rescission; 9) predatory lending in violation of California Business & Professions Code §17200; 10) unfair and deceptive business act practices; 11) negligence; 12) declaratory relief; and 13) quiet title. See First Amended Complaint ("FAC"), Court's Docket, Doc. No. 8. Defendants have filed a motion to dismiss the FAC pursuant to Federal Rule of Civil Procedure 12(b)(6). See Court's Docket, Doc. No. 11. Plaintiff filed a written opposition to the motion. See id., Doc. No. 12. Defendants filed a reply. See id., Doc. No. 13. For the reasons stated herein, Defendants' motion shall be granted with leave to amend.


Plaintiff obtained a Option Adjustable Rate Mortgage loan from Countrywide Bank*fn2 in the amount of $693,500 to finance the purchase of residential property located at 2202 East Hogan Way, Fresno, CA, 93720. See FAC ¶ 17. The loan was secured by a Deed of Trust ("DOT") which was recorded on August 12, 2005. See FAC, Ex A; RJN, Ex. A. The DOT provides that upon breach of the loan agreement, the lender can give notice to accelerate. Id. Plaintiff contends she was never given an opportunity to review the loan application, and she was not given an opportunity to read the loan documents prior to the closing date. FAC ¶ 22. At closing, Plaintiff alleges she spent only thirty minutes at the escrow office and felt pressured into signing the loan documents based only on the loan agent's representations. Id. ¶ 23. It was not until Plaintiff attempted to modify her loan that she discovered the loan application had falsely stated her monthly income was $10,675, even though she had told the loan agent it was $9,000. Id. ¶ 22, Ex. B.

In or about February 2008, Plaintiff became ill and was placed on restricted duty at work for the next two and a half years. FAC ¶ 26. Plaintiff struggled to make her loan payments during this time, and requested assistance from BANA for a loan modification. Id. ¶ 27. Although BANA officials told her they were unable to offer her any loan workout options, Plaintiff applied for a loan modification through the Homes Affordable Modification Program ("HAMP"). Id. ¶ 28. That loan modification application was denied because Plaintiff made too much money. Id. ¶ 28. In or about early 2009, Plaintiff applied for an in-house loan modification, which was also denied because she made too much money. Id. ¶ 29. Later in 2009, Plaintiff sought the assistance of a third-party company to obtain a loan modification. Id. ¶ 30. The third-party company contacted BANA, and Plaintiff was offered a three month trial modification. Id. After making the payments under the trial modification for six months, Plaintiff was informed that the trial period had ended and her payments would return to their original amount. Id. Plaintiff then sought the assistance of a non-profit organization, but after five to seven months of resubmitting documents and negotiation, Plaintiff was again denied a loan modification. Id. ¶ 31.

On January 20, 2011, ReconTrust recorded and sent a Notice of Default to Plaintiff informing her that she was $53,584.97 in default. Id. ¶ 32; RJN, Ex. B. On August 2, 2011, ReconTrust recorded a Notice of Trustee Sale under the DOT.FAC ¶ 33; RJN, Ex. C. The sale date was postponed from August 24, 2011, until November7, 2011. FAC ¶ 36. In or about November 2011, Plaintiff hired another third-party company to assist her in obtaining a loan modification through HAMP. Id. ¶ 34. The November 7, 2011 sale date was cancelled, but BANA is still in the process of foreclosing. Id. ¶ 36.

Plaintiff first pursued claims against Defendants in a mass tort action brought by 1,329 co-plaintiffs in the Superior Court for Orange County (the "Orange County Action"). See FAC ¶ 37; RJN, Ex. F. The claims in that case appear to relate to the same mortgage transaction at issue here. On June 9, 2011, the plaintiffs in the Orange County Action filed a Second Amended Complaint alleging (1) fraudulent concealment; (2) intentional misrepresentation; (3) negligent misrepresentation; (4) injunctive relief for wrongful intentional misrepresentation; (5) injunctive relief for wrongful foreclosure under Cal. Civ. Code § 2923.5; (6) injunctive relief; and (7) unfair competition in violation of Cal. Bus. & Prof. Code § 17200 et seq. See RJN, Ex. F. The Superior Court sustained Defendants' demurrer to the SAC, and granted the plaintiffs leave to amend within 60 days. FAC ¶ 37. On March 26, 2012, Defendants' attorney sent a letter to Plaintiff informing her that Defendants intended to apply for an ex parte order granting relief from the court's order temporarily staying the action for the purposes of filing a motion to dismiss. See FAC, Ex. C. The letter stated that the motion to dismiss would be based on the plaintiffs' failure to amend their complaint within the time required. Id.

Plaintiff filed the instant action in the Superior Court for Fresno County on or about March 2, 2012, alleging ten causes of action, including a claim under the federal Truth in Lending Act ("TILA"), 15 U.S.C. § 1601 et seq. Defendants removed the action to this Court on March 27, 2012, on the basis of federal question jurisdiction. Defendants filed a motion to dismiss the original complaint on March 29, 2012. On April 16, 2012, the day her opposition to the motion was due, Plaintiff filed the FAC. Defendants withdrew their first motion to dismiss, and filed the instant motion directed at the FAC.


Under Federal Rule of Civil Procedure 12(b)(6),a claim may be dismissed because of the plaintiff's "failure to state a claim upon which relief can be granted." Fed. R. Civ. P. 12(b)(6). A complaint must contain "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). Where the plaintiff fails to allege "enough facts to state a claim to relief that is plausible on its face," the complaint may be dismissed for failure to allege facts sufficient to state a claim upon which relief may be granted. Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 1974, 167 L.Ed.2d 929 (2007); see Fed. R. Civ. P. 12(b)(6). "A claim has facial plausibility," and thus survives a motion to dismiss, "when the pleaded factual content allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 1940, 173 L.Ed.2d 868 (2009). On a Rule 12(b)(6) motion to dismiss, the court accepts all material facts alleged in the complaint as true and construes them in the light most favorable to the plaintiff. Knievel v. ESPN, 393 F.3d 1068, 1072 (9th Cir. 2005). However, the court need not accept conclusory allegations, allegations contradicted by exhibits attached to the complaint or matters properly subject to judicial notice, unwarranted deductions of fact or unreasonable inferences. Daniels--Hall v. National Educ. Ass'n, 629 F.3d 992, 998 (9th Cir.2010). "Dismissal with prejudice and without leave to amend is not appropriate unless it is clear . . . the complaint could not be saved by amendment." Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048, 1052 (9th Cir. 2003).


A. Claim Splitting

As a preliminary matter, Defendants argue Plaintiff has engaged in impermissible claim splittingbecause the claims in the FAC could have been pled in the pending Orange County Action.Plaintiff contends the FAC is proper because the Orange County Action is "currently nearing dismissal" for failure to amend the Second Amended Complaint within the time required by the court.

The claim splitting doctrine is derived from principles of res judicata, or claim preclusion. See Adams v. California Dept. of Health Servs., 487 F.3d 684, 689 (9th Cir. 2007)."The doctrine of claim splitting bars a party from subsequent litigation where the 'same controversy' exists." Single Chip Systems Corp. v. Intermec IP Corp., 495 F. Supp. 1052, 1058 (S.D. Cal. 2007) (quoting Nakash v. Superior Court, 196 Cal. App. 3d 59, 68, 241 Cal. Rptr. 578 (Cal. App. 1987)). However, "the doctrine of claim splitting, unlike res judicata, does not require a final judgment on the merits." Single Chip Systems, 495 F. Supp. 1052, 1059 (S.D. Cal. 2007) (citing Adams, 487 F.3d at 684). "What is required in the context of a claim-splitting analysis is to assume that the first suit was final, and then determine if the second suit could be precluded." Id. (emphasis in original). "A main purpose behind the rule preventing claim splitting is 'to protect the defendant from being harassed by repetitive actions based on the same claim.'" Clements v. Airport Authority of Washoe County, 69 F.3d 321, 328 (9th Cir.1995) (citing Restatement (Second) Judgments, § 26, cmt. A).

To determine whether a suit is duplicative, and therefore barred by the claim splitting doctrine, the Ninth Circuit applies the four-part transaction test for claim preclusion:

(1) whether rights or interests established in the prior judgment would be destroyed or impaired by prosecution of the second action; (2) whether substantially the same evidence is presented in the two actions; (3) whether the two suits involve infringement of the same right; and (4) whether the two suits arise out of the same transactional nucleus of facts.

Adams, 487 F.3d at 684 (citing Cosantini v. Trans World Airlines, 681 F.2d 1199, 1201-02 (9th Cir. 1982)). Defendants argue the four-part test is met here because both the Orange County Action and the instant matter seek similar relief, assert some of the same causes of action, and allege Defendants committed wrongdoing at the origination of the same mortgage loan.

However, the claim splitting doctrine "does not forbid a plaintiff from proceeding on the same cause of action in two different courts of concurrent jurisdiction at the same time, if jurisdiction is in personam." Walton v. UTV of San Francisco, Inc., 776 F.Supp. 1399, 1400 (N.D. Cal. 1991) (citing Kline v. Burke Construction Co., 260 U.S. 226, 230, 43 S.Ct. 79, 81, 67 L.Ed. 226 (1922); Donovan v. City of Dallas, 377 U.S. 408, 84 S.Ct. 1579, 12 L.Ed.2d 409 (1963); Princess Lida v. Thompson, 305 U.S. 456, 59 S.Ct. 275, 83 L.Ed. 285 (1939); Fowler v. Ross, 142 Cal.App.3d 472, 191 Cal.Rptr. 183 (Cal. App. 1983)). As the Ninth Circuit noted in Adams, the claim splitting doctrine embraces the general rule that plaintiffs "have no right to maintain two separate actions involving the same subject matter at the same time, in the same court and against the same defendants." Adams, 487 F.3d at 688 (emphasis added). Indeed, the majority of the claim splitting cases cited by Defendants involve two successive suits filed in the same court. In Single Chip Systems, for example, the Southern District of California dismissed a defendant's 2007 action under the claim splitting doctrine where the court had denied the defendant leave to file an amended counterclaim in a 2004 action in the same court. See 495 F.Supp.2d at 1058-65. Similarly, the Northern District of California found that the claim splitting doctrine barred a plaintiff from asserting infringement of the same patent in a second action where the court had denied the plaintiff's motion for leave to amend the infringement claim in the first action. See Biogenex Laboratories, Inc. v. Ventana Medical Systems, Inc., No. C-05-860-JF, 2005 WL 1869342, *2-4 (N.D. Cal., Aug. 5, 2005).

Defendants cite no case law suggesting that the claim splitting doctrine bars a later action removed to federal court that involves the same subject matter as a pending state court action. Although a foreclosure proceeding is itself a quasi in rem action, jurisdiction in the instant action challenging the foreclosure proceeding is in personam. The Court therefore finds that the claim splitting doctrine does not bar Plaintiff's FAC.*fn3

B. Rule 8

Defendants next argue that, on its face, the FAC fails to meet the pleading requirements set forth in Rule 8 of the Federal Rules of Civil Procedure. Under Rule 8(a), a complaint must contain enough factual allegations to "raise a right to relief above the speculative level." Twombly, 550 U.S. at 558. This standard requires that the defendant be provided with fair or meaningful notice of the specific conduct alleged. Id. Defendants contend Plaintiff fails to allege any facts relating to the basic elements of her asserted claims. Moreover, Defendants argue that Plaintiff cites various statutes but fails to articulate comprehensible legal theories pursuant to those laws. The Court disagrees. Plaintiff alleges with specificity Defendants' ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.