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Rose v. Seamless Financial Corp. Inc.

United States District Court, S.D. California

January 2, 2013

Marcella ROSE, an individual, Plaintiff,
v.
SEAMLESS FINANCIAL CORPORATION INC., a Nevada Corporation; Michael McDevitt, an individual; Chad Hagobian, an individual; Jean-Pierre Radtke, an individual; Premiere Capital Escrow, Inc., a California corporation; Luis Antonio Venegas, an individual; and Does 1-100, Defendants.

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Malinda Dickenson, Law Office of Malinda R. Dickenson, Lawrence J. Salisbury, Majors and Fox, San Diego, CA, for Plaintiff.

ORDER:

(1) DENYING DEFENDANT'S MOTION TO DISMISS PLAINTIFF'S THIRD AMENDED COMPLAINT; AND

(2) DENYING DEFENDANT'S MOTION FOR RULE 11 SANCTIONS

(Doc. No. 76).

ANTHONY J. BATTAGLIA, District Judge.

Presently before the Court are Defendant Chad Hagobian's (" Defendant" or " Hagobian" ) motion to dismiss Plaintiff's Third Amended Complaint and motion for sanctions pursuant to Rule 11. (Doc. No. 76.) Plaintiff filed a response in opposition on November 26, 2012, (Doc. No. 78), and Defendant filed a reply on December 10, 2012, (Doc. No. 80). On December 21, 2012 the Court took both motions under submission and vacated the hearing scheduled for January 10, 2013. (Doc. No. 83.) For the reasons set forth below, the Court DENIES Defendant's motion to dismiss and DENIES Defendant's motion for Rule 11 sanctions pursuant.

BACKGROUND

I. Factual Background

On or around April 2008, Plaintiff Marcella Rose (" Plaintiff" ) executed a loan in the amount of $510,000 (the " Loan" ).[1] The Loan was secured by a first deed of trust on the property located at 3665 Trenton Avenue, San Diego, California 92117 (the " Property" ). (Doc. No. 78, Ex. 3, p. 4.) Prior to executing the Loan, Plaintiff alleges tat on or about April 8, 2009, Premiere Capital Escrow, Inc. (" Premiere" ) requested a preliminary title report on the Property through Ms. Evelyn Ortega. Plaintiff then received a telephone call from Michael McDevitt (" McDevitt" ), an individual employed by Seamless Financial Corporation, Inc. (" Seamless" ). (TAC, Doc. No. 74 ¶ 19.) McDevitt requested information from Plaintiff regarding the possibility of refinancing the loan on her current mortgage. ( Id. )

During initial conversations between McDevitt and Plaintiff, Plaintiff disclosed that she had a savings account containing approximately $85,000. ( Id. ¶ 20.) Plaintiff also provided McDevitt with proof of income showing she received monthly social security benefits in the amount of $1,077, and pension payments in the amount of $338.83. ( Id. ) McDevitt then informed Plaintiff that if she could contribute $27,000 from her saving account up front, she could get a loan with a 3.75% interest rate fixed for fifteen years. ( Id. ¶ 24.) Plaintiff further alleges that Seamless, through Ms. Grosser (" Grosser" ), Mr. Radtke (" Radtke" ), and/or McDevitt, caused Plaintiff's loan application to state that her monthly income was $9,600 ($7,800 from her pension and retirement and $1,800 a month in pension benefits) and forged her signature on the typewritten loan application documents to falsely state her monthly income to ensure she would qualify for the Loan. ( Id. at ¶ 23.)

After the Loan documents were finalized, Plaintiff made payments on the Loan

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for over a year. Plaintiff then became aware that her Loan was in fact a " Pick-A-Payment" mortgage rather than a loan with a fixed interest rate of 3.75%.[2] ( Id. ¶ 26.) Soon thereafter, the Loan payments became unaffordable and Plaintiff defaulted on the Loan. ( Id. ¶ 26-29.) On August 11, 2009, after several unsuccessful attempts to modify the terms of Plaintiff's Loan, foreclosure proceeding commenced against the Property. ( Id. ¶ 30.) Shortly thereafter, the Property was sold in a short sale to avoid foreclosure. ( Id. )

II. Procedural Background

Plaintiff originally filed this action in state court on December 29, 2010, against Defendants Wachovia, Wells Fargo, Seamless, McDevitt, and Hagobian (collectively, " Defendants" ). (Doc. No. 1.) The complaint contained six causes of action: (1) violation of the Real Estate Settlement Procedures Act, 12 U.S.C. § 2605 (" RESPA" ); (2) violation of the Federal Fair Debt Collection Practices Act, 15 U.S.C. § 1692 (" FDCPA" ); (3) violation of the California Rosenthal Fair Debt Collection Practices Act, Cal. Civ.Code §§ 1788 et seq. (" Rosenthal Act" ); (4) unfair competition under California Business and Professions Code §§ 17200 et seq. (" UCL" ); (5) fraud and deceit; and (6) violation of the Elder Abuse and Dependent Adult Civil Protection Act, Cal. Welfare & Institutions Code § 15610.30 (the " Elder Abuse Act" ). The first, second, and third causes of action were alleged solely against Wachovia and Wells Fargo, whereas the remaining state law causes of action were alleged against all Defendants. ( Id. )

On February 4, 2011, Defendants removed this action to federal court on the basis of federal question jurisdiction and supplemental jurisdiction over the related state law claims. ( Id. ) On February 11, 2011, Defendant Wells Fargo filed a motion to dismiss the complaint, (Doc. No. 2), which was subsequently denied as moot after Plaintiff filed a First Amended Compliant (" FAC" ). (Doc. No. 7.) On March 18, 2011, Wells Fargo moved to dismiss Plaintiff's FAC, (Doc. No. 13.), and on May 25, 2011, Plaintiff and Hagobian filed a joint motion for an extension of time for Hagobian to respond to the FAC.[3] (Doc. No. 23.) While Wells Fargo's motion to dismiss was pending, Wells Fargo and Plaintiff entered into a good faith settlement. (Doc. No. 32.) The settlement was approved by the Court on March 2, 2012, (Doc. No. 50), and Wells Fargo and the federal causes of action alleged against Wells Fargo were thereby dismissed, (Doc. No. 56).

Plaintiff filed a Second Amended Complaint (" SAC" ) on April 2, 2012. (Doc. No. 53.) The SAC alleged four causes of action: (1) violation of the Elder Abuse Act; (2) fraud and deceit; (3) breach of fiduciary duty; and (4) unlawful, unfair, and deceptive practices under the UCL.[4] (Doc. No. 53.) On May 1, 2012, Defendant Hagobian filed a motion to dismiss the SAC,

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(Doc. No. 59), and on June 1, 2012, Plaintiff filed a motion to remand, (Doc. No. 61). On September 10, 2012, 2012 WL 3985964, the Court denied Plaintiff's motion to remand and granted in part and denied in part Defendant's motion to dismiss the SAC. (Doc. No. 73.) The Court granted Hagobian's motion to dismiss with respect to the first three causes of action without leave to amend, and granted the motion with leave to amend with respect to the fourth cause of action alleging violation of the UCL. Plaintiff filed a Third Amended Complaint (" TAC" ) on October 10, ...


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