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Dana Y. Coward v. Jp Morgan Chase Bank

February 19, 2013

DANA Y. COWARD, PLAINTIFF,
v.
JP MORGAN CHASE BANK, DEFENDANT.



The opinion of the court was delivered by: Allison Claire United States Magistrate Judge

FINDINGS & RECOMMENDATIONS

On February 13, 2013, the court held a hearing on defendant JPMorgan Chase Bank's ("Chase") October 19, 2012 motion to dismiss (ECF No. 51). Dana Coward appeared in pro per. Michael Stusiak appeared for defendant Chase. On review of the motion, the documents filed in support and opposition, and good cause appearing therefor, THE COURT FINDS AS FOLLOWS:

RELEVANT FACTUAL AND PROCEDURAL BACKGROUND

A. Allegations in Third Amended Complaint In October 2005, plaintiff and her husband Ronnie L. Coward, not a party to this action, entered into a residential mortgage agreement with Long Beach Mortgage Company ("LBMC"), a subsidiary of Washington Mutual ("WaMu"), secured by real property located at 4828 Vogelsang Dr., Sacramento, CA 95842 ("the Subject Property")*fn1 . Compl. (ECF No. 41)

¶ 7. Plaintiff contends that WaMu representatives repeatedly represented that the mortgage agreement would be valid without Mr. Coward's signature despite the fact that Mr. Coward's income and guarantee were necessary for the mortgage approval, and further despite the fact that a signature line had been added for Mr. Coward on all necessary pages of the loan documents. Id. ¶ 8. Though not explicitly alleged by plaintiff, the court assumes for the purposes of this motion that Mr. Coward did not sign the loan documents.

In 2007, plaintiff applied for a loan modification, for which she was approved with a new monthly payment amount of $1,579. Compl. ¶ 10. When plaintiff began to make payments on the new monthly amount, however, she was informed that the payment amount was in fact $1,988. Id.

In 2008 and 2009, plaintiff applied to Chase*fn2 to have her loan re-modified. Compl. ¶ 11. Over the course of a number of months, plaintiff submitted 18 loan modification applications and was repeatedly assured by Chase representatives that she qualified for a loan modification both under Chase guidelines and the Home Affordable Modification Program ("HAMP") guidelines. Id.

On an unspecified date, plaintiff was approved for a trial modification under HAMP with a monthly payment of $2,045, which was higher than the monthly payment following plaintiff's first loan modification. Compl. ¶ 14.

When plaintiff began making the new monthly payments, she received notice from Chase that her application had been denied because she failed to prove that the property was her primary residence. Compl. ¶ 15. Plaintiff claims this reason was pretextual because the home had always served as her primary residence. Id.

In the summer of 2010, plaintiff received foreclosure documents from Chase. Compl. ¶ 9. At this time, plaintiff discovered that the loan documents had been forged to include her husband's signature. Id. Plaintiff accuses WaMu and Chase representatives of forging Mr. Coward's signature to avoid rescission or invalidation of the loan. Id. ¶ 9. During this time, plaintiff also informed Chase representatives both verbally and in writing that her husband was, and is, a military service member within the meaning of the Servicemembers Civil Relief Act ("SCRA"), and therefore qualified for assistance under the SCRA. Id. ¶ 16. Chase ignored this information and foreclosed on the property at issue in August 2010. Id.

B. Procedural History

This action was initially filed pro se in the Sacramento County Superior Court on August 19, 2011 against defendant Chase. Chase, which was served on November 21, 2011, timely removed this case to this court on December 20, 2011 pursuant to 28 U.S.C. § 1331 and 28 U.S.C. § 1332.

Following plaintiff's retention of counsel and the stipulation of the parties for the filing of an amended complaint, plaintiff filed a first amended complaint on January 25, 2012. The first amended complaint brought claims for fraud in the inducement, rescission, breach of contract, breach of the covenant of good faith and fair dealing, promissory estoppel, fraud and deceit and/or negligent misrepresentation, violation of the SCRA, and violation of the Truth in Lending Act ('TILA"), 15 U.S.C. § 1601 et seq. Chase sought dismissal of the first amended complaint by arguing, inter alia, that plaintiff and her husband filed a Chapter 7 bankruptcy petition on December 17, 2009, but failed to disclose any of her legal claims as assets in the bankruptcy petition. On April 30, 2012, the Honorable Garland E. Burrell, Jr. granted defendant's motion on the ground that, because plaintiff's claims predated the bankruptcy petition, the claims were therefore an asset of the bankruptcy estate, and, as such, plaintiff lacked standing to assert her claims. ECF No. 22.

Plaintiff filed a second amended complaint on May 14, 2012 again bringing claims for fraud, rescission, breach of contract, breach of the covenant of good faith and fair dealing, promissory estoppel, fraud and decedent and/or negligent misrepresentation, violation of the SCRA, and violation of TILA. Chase moved to dismiss the second amended complaint for plaintiff's purported failure to cure the deficiencies noted in ...


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