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Edward Scott Helmer v. Bank of America

March 21, 2013

EDWARD SCOTT HELMER, PLAINTIFF,
v.
BANK OF AMERICA, N.A. AND DOES 1 THROUGH 100, INCLUSIVE DEFENDANTS.



ORDER

Plaintiff Edward Scott Helmer filed a complaint against defendant Bank of America in the Superior Court of California, County of Sutter on February 17, 2012, after plaintiff's home was sold in a foreclosure sale. (ECF 1.) Defendant removed the case to this court on March 22, 2012. (Id.) Defendant filed a motion to dismiss on April 2, 2012, which the court denied as moot on May 9, after receiving plaintiff's First Amended Complaint (FAC) on April 26, 2012. (ECF 8, 13, 14.) Defendant filed a second motion to dismiss on June 20, 2012, and plaintiff filed an opposition on July 13, 2012. (ECF 17, 24.) For the reasons explained below, the court grants in part and denies in part defendant's motion to dismiss.

I. BACKGROUND

In or around 2005, plaintiff entered into a mortgage agreement with Countrywide Lending to purchase a house at 135 Montana Court in Yuba City, California. (ECF 13 ¶¶ 1, 8.) Defendant subsequently acquired the mortgage by merger. (Id. ¶ 8.) In January 2011, plaintiff contacted defendant to inquire about a loan modification and was told that he needed to cease making mortgage payments in order to qualify. (Id. ¶ 9.) Plaintiff was told that his house would not be foreclosed on during the loan modification process. (Id.)

Over the next six months, plaintiff repeatedly contacted defendant to obtain loan modification paperwork, which he ultimately received in July 2011. (Id. ¶¶ 10-11.) Also in July 2011, defendant sent a letter to plaintiff informing him that he qualified for a refinance of his mortgage. (Id. ¶ 12.) Plaintiff applied both for loan modification and refinancing. (Id.) After submitting the applications, plaintiff was unable to obtain updates through phone calls to defendant, was repeatedly placed on hold for extensive periods, given vague answers to his questions, or transferred between multiple lines. (Id. ¶ 13.) Plaintiff had to resubmit the applications several times after being told that defendant had lost the original copies. (Id.) As of October 2011, plaintiff was $30,000 behind on his mortgage payments. (Id. ¶ 14.) Plaintiff alleges that he could have made these payments, but did not, because he was told that defendant would not foreclose on plaintiff's house while he was under consideration for loan modification and refinance. (Id.) Plaintiff does not specify whether defendant continued to advise him not to make payments at this time.

In November 2011, defendant began foreclosure proceedings on plaintiff's home. (Id. ¶ 15.) Plaintiff contacted defendant and was told by a representative that his applications were still under consideration and that he should not worry about the foreclosure or any trustee sale. (Id.) In early December 2011, plaintiff was given notice of the trustee sale, which defendant told him to disregard. (Id. ¶ 16.)

Defendant requests that the court take judicial notice of several documents recorded with the Sutter County Recorder. (ECF 18.) In resolving a motion to dismiss, the court may consider matters that are subject to judicial notice, which includes matters of public record. Akhtar v. Mesa, 698 F.3d 1202, 1212 (9th Cir. 2012); Lee v. City of Los Angeles, 250 F.3d 668, 689 (9th Cir. 2001). Because the Sutter County documents are matters of public record, the court takes judicial notice of these documents. See Grant v. Aurora Loan Servs., Inc., 736 F. Supp. 2d 1257, 1264 (C.D. Cal. 2010) (taking judicial notice of records of county recorder). One document shows that on December 19, 2011, defendant conveyed all its beneficial interest in plaintiff's mortgage to Federal National Mortgage Association ("Fannie Mae"). (Ex. 11, ECF 20.) A second document shows that Fannie Mae purchased the house at foreclosure sale on December 29, 2011. (Ex. 12, ECF 20.)

Plaintiff's First Amended Complaint makes the following claims against defendant: (1) breach of good faith and fair dealing; (2) promissory estoppel; (3) wrongful foreclosure in violation of California Civil Code § 2924, et seq.; (4) intentional infliction of emotional distress; (5) unfair competition in violation of California Business and Professions Code § 17200, et seq.; and (6) quiet title.

III. STANDARD

Under Rule 12(b)(6) of the Federal Rules of Civil Procedure, a party may move to dismiss a complaint for "failure to state a claim upon which relief can be granted." A court may dismiss "based on the lack of cognizable legal theory or the absence of sufficient facts alleged under a cognizable legal theory." Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1990).

Although a complaint need contain only "a short and plain statement of the claim showing that the pleader is entitled to relief," Fed. R. Civ. P. 8(a)(2), in order to survive a motion to dismiss this short and plain statement "must contain sufficient factual matter . . . to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A complaint must include something more than "an unadorned, the-defendant-unlawfully-harmed-me accusation" or "'labels and conclusions' or 'a formulaic recitation of the elements of a cause of action.'" Id. (quoting Twombly, 550 U.S. at 555). Determining whether a complaint will survive a motion to dismiss for failure to state a claim is a "context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Id. at 679. Ultimately, the inquiry focuses on the interplay between the factual allegations of the complaint and the dispositive issues of law in the action. See Hishon v. King & Spalding, 467 U.S. 69, 73 (1984).

In making this context-specific evaluation, this court must construe the complaint in the light most favorable to the plaintiff and accept as true the factual allegations of the complaint. Erickson v. Pardus, 551 U.S. 89, 93-94 (2007). This rule does not apply to "'a legal conclusion couched as a factual allegation,'" Papasan v. Allain, 478 U.S. 265, 286 (1986) (quoted in Twombly, 550 U.S. at 555), nor to "allegations that contradict matters properly subject to judicial notice" or to material attached to or incorporated by reference into the complaint. Sprewell v. Golden State Warriors, 266 F.3d 979, 988-89 (9th Cir. 2001). A court's consideration of documents attached to a complaint or incorporated by reference or matter of judicial notice will not convert a motion to dismiss into a motion for summary judgment.

United States v. Ritchie, 342 F.3d 903, 907-08 (9th Cir. 2003); Parks Sch. of Bus. v. Symington, 51 F.3d 1480, 1484 (9th Cir. 1995); compare Van Buskirk v. Cable News Network, Inc., 284 F.3d 977, 980 (9th Cir. 2002) (noting that even though court may look beyond pleadings on motion to dismiss, generally court is limited to face of the complaint on 12(b)(6) motion).

The Ninth Circuit has instructed that "'a district court should grant leave to amend even if no request to amend the pleading was made, unless it determines that the pleading could not possibly be cured by the allegation of other facts.'" Lopez v. Smith, 203 F.3d 1122, 1130 (9th Cir. 2000) (en banc) (quoting Doe v. United States, 58 F.3d 484, 497 (9th Cir. 1995)); see also Gardner v. Marino, 563 F.3d 981 ...


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