The opinion of the court was delivered by: Hayes, Judge
The matter before the Court is the Motion to Dismiss filed by Defendants Bank of America, N.A. and Wells Fargo Bank, N.A. (ECF No. 14).
On January 10, 2012, Plaintiff initiated this action by filing a complaint. (ECF No. 1). On March 9, 2012, Plaintiff filed a First Amended Complaint ("Complaint"). (ECF No. 12). In the Complaint, Plaintiff asserts the following nine causes of action against Defendants: (1) declaratory relief to determine the status of Defendants' claims to Plaintiff's property, (2) negligence against Bank of America, (3) negligent infliction of emotional distress against Bank of America, (4) violation of 15 U.S.C. § 1641(g) of the Truth in Lending Act ("TILA") against Wells Fargo, (5) violation of 12 U.S.C. § 2605 of the Real Estate Settlement Practices Act ("RESPA") against Bank of America, (6) violation of California Business and Professional Code § 17200, et seq. against Bank of America and Wells Fargo, (7) breach of contract against Bank of America and Wells Fargo, (8) breach of the implied covenant of good faith and fair dealing against Bank of America and Wells Fargo, and (9) violation of California Civil Code §§ 2923.5 and 2924 against Bank of America and Wells Fargo.
On March 26, 2012, Defendants Bank of America and Wells Fargo filed a Motion to Dismiss. (ECF No. 14). On April 19, 2012, Plaintiff filed an Opposition. (ECF No. 16-1).
I. Allegations of the Complaint
On February 5, 2004, Janice and Gary Mueller executed a Note and Deed of Trust in favor of Bank of America in the amount of $770,000 secured by a deed of trust for real property located at 1544 Rancho Encinitas Drive, Encinitas, California 92024. Until July 2010, Plaintiff made timely mortgage payments on the property.
In March 2010, Plaintiff and her husband commenced contentious divorce proceedings. In June 2010, Plaintiff anticipated that she would not be able to make her mortgage payments. Plaintiff contacted Bank of America Servicing to discuss options for a loan modification. Plaintiff was told by Bank of America representatives that she could apply for a "special forbearance program for victims of domestic abuse." (ECF No. 12 at 8). In July 2010, as anticipated, Plaintiff was unable to make payments on the mortgage and stopped.
On September 29, 2011, Bank of America executed an Assignment of the Deed of Trust to Wells Fargo Bank, N.A. and a Substitution of the Trustee of the Deed of Trust to ReconTrust Company, N.A. (Complaint Exh. C, D; ECF No. 12-3, 12-4). On September 29, 2011, ReconTrust recorded a Notice of Default on the property on behalf of the beneficiary. (Complaint Exh. E; ECF No. 12-5). The Assignment, Substitution, and Notice of Default are invalid. No legal transfer ever occurred because the documents were all signed by "a 'robo-signer' - an individual who simply signs thousands of foreclosure documents on behalf of several entities without any personal knowledge or corporate authority." Id. at 14.
Between June 2010 and November 2011, Plaintiff engaged in exhaustive efforts with Bank of America in an attempt to apply for the special forbearance program and to obtain information relating to the Wells Fargo transfer. Plaintiff submitted numerous loan modification applications, financial documents, and banks statements to Bank of America. Bank of America representatives provided contradictory information to Plaintiff, transferred her among numerous representatives, and claimed to have lost or to have never received her application materials.
On December 15, 2011, Plaintiff sent Bank of America a Qualified Written Request ("QWR") to verify and validate her debt. Bank of America failed to acknowledge receipt of Plaintiff's QWR and has yet to substantively respond to the QWR. Plaintiff does not dispute that she owes money on the mortgage, but disputes the amount owed and seeks the Court's assistance in determining the true creditor.
Federal Rule of Civil Procedure 12(b)(6) permits dismissal for "failure to state a claim upon which relief can be granted." Fed. R. Civ. P. 12(b)(6). Federal Rule of Civil Procedure 8(a) provides: "A pleading that states a claim for relief 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). Dismissal under Rule 12(b)(6) is appropriate where the complaint lacks a cognizable legal theory or sufficient facts to support a cognizable legal theory. See Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1990).
"[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." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)(quoting Fed. R. Civ. P. 8(a)(2)). When considering a motion to dismiss, a court must accept as true all "well-pleaded factual allegations." Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009). However, a court is not "required to accept as true allegations that are merely conclusory, unwarranted deductions of fact, or unreasonable inferences." Sprewell v. Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 2001). "In sum, for a complaint to survive a motion to dismiss, the non-conclusory factual content, and reasonable inferences from that content, must be plausibly suggestive of a claim entitling the plaintiff to relief." Moss v. U.S. Secret Service, 572 F.3d 962, 969 (9th Cir. 2009) (quotations omitted).
I. Negligence and Negligent Infliction of Emotional Distress
Plaintiff alleges that "BOA Servicing, as the purported mortgage servicer, has a duty to exercise reasonable care and skill with regard to engaging Plaintiff in loan modification and special forbearance negotiations and handling Plaintiff's forbearance and loan modification applications with reasonable care...." (ECF No. 12 at 20). Plaintiff alleges that "BOA Servicing breached their duty when it repeatedly mismanaged Plaintiff's loan assistance applications, repeatedly requested Plaintiff resubmit identical documents, failed to handle and maintain each of her documents with reasonable care, and expressed to Plaintiff that she would qualify for forbearance and other foreclosure assistance programs." Id. at 21. Plaintiff alleges that "BOA Servicing went beyond its conventional role as Plaintiff's purported mortgage servicer to offer Plaintiff an opportunity for a special forbearance and to modify her Loan.... BOA Servicing actively participated in special forbearance and loan modification negotiations and efforts giving rise to a duty owed to Plaintiff." Id. Plaintiff alleges that, "[a]s a result of the acts of BOA Servicing, Plaintiff suffered, and continues to suffer from extreme anxiety, loss of sleep, loss of appetite, and other psychological and emotional issues." Id. at 22.
Defendants contend that lenders and loan servicers owe no duty in processing loans or making representations regarding loan modifications. Defendants contend that Plaintiff fails to allege a tort duty of care owed by Defendants, as required for a negligence claim. Defendants contend that California law does not recognize a negligent ...