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Mohammad H. Shapouri, An Individual v. Citimortgage

August 1, 2012

MOHAMMAD H. SHAPOURI, AN INDIVIDUAL;
RONA SHAPOURI; AN INDIVIDUAL,
PLAINTIFFS,
v.
CITIMORTGAGE, INC., A NEW YORK CORPORATION;
DOES 1 THROUGH 100, INCLUSIVE
DEFENDANTS.



The opinion of the court was delivered by: T. Miller Je Jefffreeyy United U United States District District Judge

JM

ORDER GRANTING DEFENDANT AMENDAND DENYING PLAINTIFFS' CITIMORTGAGE, INC'S MOTION TO DISMISS WITH LEAVE TO MOTION TO REMAND Docket Nos. 3, 6

Plaintiffs Mohammad and Rona Shapouri filed a complaint against CitiMortgage ("Citi") in California Superior Court for San Diego County on April 2, 2012, alleging ten causes of action based on Defendants' alleged misrepresentations concerning a mortgage loan and its handling of a loan modification plan. Citi removed the case to this court on May 9, 2012, then filed a motion to dismiss for failure to state a claim. Plaintiffs have filed a motion to remand the case to state court for lack of subject matter jurisdiction. For the reasons explained below, Citi's motion to dismiss is GRANTED, and Plaintiffs are given leave to amend the complaint. Plaintiffs' motion to remand is DENIED.

I. BACKGROUND

In March of 2004, Plaintiffs obtained a 30-year loan in the amount of $1,160,000 from "doe defunct Defendant 'SILVERGATE'" ("Silvergate"). Compl. ¶ 11. Plaintiffs allege that agents and/or employees of Silvergate engaged in deception and misrepresentation concerning the loan's details, overstating Plaintiffs' income (from $15,000 per month to $27,867 per month) on the loan application. ¶ 12. Plaintiffs also allege that Silvergate and Citi1 "had no financial stake . . . in the transaction and no interest other than obtaining Plaintiffs' signature on the loan that could never be repaid, contrary to representations and assurances from the conspiring participants in this scheme." ¶ 13. Plaintiffs assert that they relied on representations of these professionals and were induced into signing the documentation through oral misrepresentations concerning the terms of the contracts. ¶¶ 14, 16.

On September 20, 2010, CR Title Services, Inc. recorded a Notice of Default against Plaintiffs. ¶ 39. Plaintiffs also allege that on March 22, 2011, Citi "agreed to a repayment plan and sent Plaintiffs a contract for 12 payments of $13,346.06 starting on April 20, 2011." ¶ 27. Though Plaintiffs sent a $10,000 payment on March 24 along with the signed contract, Citi called Plaintiffs on April 11, 2011 and cancelled the contract without stating a reason. ¶ 27. Plaintiffs sent one more check for $13,346.06, which Citi cashed despite the agreement's cancellation. ¶ 27. The complaint alleges a sale date was scheduled for April 13, 2012. ¶ 27.2

Based on these allegations, Plaintiffs state the following ten causes of action: (1) breach of contract; (2) declaratory relief; (3) demand for accounting; (4) breach of implied covenant of good faith and fair dealing; (5) unfair business practices and predatory lending; (6) rescission/cancellation; (7) quiet title; (8) injunctive relief; (9) negligent misrepresentation; (10) violation of Cal. Civ. Code § 2923.5.

The complaint alleges that Citi "is apparently the successor-in-interest" to Silvergate. ¶ 26. The parties' submissions indicate that the sale has not yet occurred, but have not clarified the current status of the sale date.

II. MOTION TO REMAND

Plaintiffs assert that this case must be remanded because Citi has not "prove[n] that Plaintiffs' claims that are pleaded under California law actually 'arise under' Federal law." Pl. Mtn. to Remand at 4. However, as pointed out by Citi, removal of this case was based on diversity jurisdiction under 28 U.S.C. § 1332(a). As required by the statute, Plaintiffs and Citi are citizens of different states,3 and the amount in controversy is above $75,000. Plaintiffs have filed no reply memorandum to address Citi's arguments concerning diversity jurisdiction.

III. MOTION TO DISMISS

Citi has moved for dismissal of all ten causes of action. Based on the parties' arguments, the court will grant the motion as to several of the claims, but allow leave to amend. Because leave to amend has been granted, the court will reserve judgment on the following claims: (2) declaratory relief; (3) demand for accounting; and (7) quiet title. Plaintiffs have stated their intention to abandon claim (4) for breach of implied covenant of good faith and fair dealing and claim (5) for unfair business practices and predatory lending. They have also requested leave to amend specific allegations included in claim (9) for negligent misrepresentation and claim (10) for violation of Cal. Civ. Code § 2923.5. The remaining three claims are discussed below.

A. Legal Standard

For Plaintiffs to overcome this 12(b)(6) motion, their "[f]actual allegations must be enough to raise a right to relief above the speculative level." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). In evaluating the motion, the court must construe the pleadings in the light most favorable to the non-moving party, accepting as true all material allegations in the complaint and any reasonable inferences drawn therefrom. See, e.g., Broam v. Bogan, 320 F.3d 1023, 1028 (9th Cir. 2003). The court should grant 12(b)(6) relief only if the complaint lacks either a ...


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