The opinion of the court was delivered by: Hon. Roger T. BenitezUnited States District Judge
(1) GRANTING IN PART THE MOTION TO DISMISS FILED BYDEFENDANT WELLS FARGOBANK, N.A.;
(2) GRANTING IN PART THE MOTION FOR JUDGMENT ON THE PLEADINGS FILED BY
DEFENDANTS TRUMAN CAPITAL ADVISORS, LP;
TRUCAP GRANTOR TRUST 2010-2;
AND MARIX SERVICING, LLC [Dkt. Nos. 4, 5]
Two motions are before the Court. Defendant Wells Fargo Bank, N.A., individually and as Wells Fargo Home Mortgage ("Wells Fargo") moves to dismiss Plaintiffs' Second Amended Complaint for failure to state a claim pursuant to Federal Rule of Civil Procedure 12(b)(6). Defendants Truman Capital Advisors, LP; TruCap Grantor Trust 2010-2; and Marix Servicing, LLC move for judgment on the pleadings pursuant to Federal Rule of Civil Procedure 12(c). For the reasons stated below, Defendants' motions are granted in part.
This is an action involving real estate lending and debt collection practices. Plaintiffs are Gordon E. Dunfee and Maureen L. Dunfee, individually and as trustees for the Gordon and Maureen Dunfee 2003 Trust, Dated 11/05/04. Defendants are Wells Fargo Bank, N.A and Wells Fargo Home Mortgage*fn1 (Plaintiffs' original lender); Truman Capital Advisors, LP (purchaser of Plaintiffs' loan); Marix Servicing, LLC (Truman's loan servicer); TruCap Grantor Trust 2010-2 (identified only as an "aka" for Truman); and Assured Lender Servicers, Inc. (a foreclosure trustee).
Plaintiffs filed this action in state court in September 2011 against Truman, TruCap, Marix, and Assured. Plaintiffs amended the complaint in March 2012, and then added as defendants Wells Fargo Bank, N.A and Wells Fargo Home Mortgage. Plaintiffs filed a Second Amended Complaint on July 19, 2012. The Second Amended Complaint asserts nine causes of action: (1) Unfair Debt Collection Practices; (2) Violation of Fair Credit Reporting Act; (3) Fraudulent Misrepresentation; (4) Breach of Fiduciary Duty; (5) Unjust Enrichment; (6) Civil Conspiracy; (7) Civil RICO; (8) Violation of Business & Professions Code Section 17200; and (9) Declaratory Relief.
According to the Plaintiffs' Second Amended Complaint, in April 2007, Plaintiffs took out an $856,000 home loan from Wells Fargo. Wells Fargo handled all of Plaintiffs' banking needs, and even assigned them a private banker to advise them on financial matters. By December 2008, Plaintiffs financial condition had deteriorated, and they approached Wells Fargo about modifying the loan. Wells Fargo led them to believe a modification was possible. For nearly two years, Wells Fargo regularly requested financial statements, hardship letters, and other information from Plaintiffs. Relying on Wells Fargo's statements that it would agree to a modification, Plaintiffs continued to make timely payments on their loan until February 2010. At that point, Wells Fargo informed them that a modification was not possible as long as their loan was "current," so Plaintiffs stopped making payments for a time, then resumed partial payments.
Wells Fargo eventually sold Plaintiffs' loan to Truman in October 2010. At the time of sale, Plaintiffs' loan "was in a defaulted status." Marix, Truman's loan servicer, sent Plaintiffs a notice of default on October 28, 2010. Plaintiffs continued making partial payments, and Marix accepted most of them. Marix also continued loan modification discussions with Plaintiffs, demanding "reams" of Plaintiffs' personal and financial records, while knowing that Truman would not accept a modification. Marix used the information "to abuse, tease, antagonize, berate, insult, and humiliate" Plaintiffs. Truman and Marix made numerous collection calls "that intimidated, [and] harassed Plaintiffs." Marix sent letters to Plaintiffs "containing false factual information" that threatened Plaintiffs with loan acceleration and foreclosure.
Assured sent notices of default to Plaintiffs on February 15, 2011 and March 24, 2011, followed by a notice of trustee's sale, dated August 30, 2011. Plaintiffs allege that they asked "Defendants" for an accounting, but "the explanations, details and itemizations were all incorrect."
Plaintiffs filed suit. Wells Fargo removed the case to this court. It then moved to dismiss the Second Amended Complaint for failure to state a claim.*fn2
Truman, TruCap, and Marix moved for judgment on the pleadings. Because TruCap is described in the Second Amended Complaint only as an "aka" for Truman, the Court will treat them as a single entity for the purposes of this Order.*fn3
A motion under Federal Rule of Civil Procedure 12(b)(6) tests the legal sufficiency of a claim. Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). As a general rule, a complaint must set out "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). However, claims that sound in fraud or mistake must also meet the heightened pleading standards of Federal Rule of Civil Procedure Rule 9(b). Vess v. CibaGeiby Corp., 317 F.3d 1097, 1103-04 (9th Cir. 2003).
In evaluating a pleading under Rule 12(b)(6), the Court accepts all material allegations in the complaint as true and construes them in the light most favorable to the plaintiff. N. Star Int'l v. Az. Corp. Comm'n, 720 F.2d 578, 580 (9th Cir. 1983). "Dismissal without leave to amend is improper unless it is clear, upon de novo review, that the complaint could not be saved by any amendment." Schneider v. Cal. DOC, 151 F.3d 1192, 1196 (9th Cir. 1998).
"After the pleadings are closed-but early enough not to delay trial-a party may move for judgment on the pleadings." FED. R. CIV. P. 12(c). "Analysis under Rule 12(c) is 'substantially identical' to analysis under Rule 12(b)(6) because, under both rules, 'a court must determine whether the facts alleged in the complaint, taken as true, entitle the plaintiff to a legal remedy.'" Chavez v. United States, 683 F.3d 1102, 1108 (9th Cir. 2012) (citations omitted). Judgment on the pleadings is properly granted "'when, taking all the allegations in the pleadings as true, the moving party is entitled to judgment as a matter of law.'" Milne ex rel. Coyne v. Stephen Slesinger, Inc., 430 F.3d 1036, 1042 (9th Cir. 2005) (citation omitted).
Plaintiffs also ask for additional time and opportunity for discovery under Federal Rules of Civil Procedure 56(d) (in briefing mistakenly referred to as Rule 56(f)). However, Rule 56(d) is inapplicable to motions brought under Rule 12(b) or (c). Since both motions in this action are brought under Rule 12(b) and (c), Plaintiffs request for a continuance for discovery is denied.
As a threshold matter, the Court must address whether it has jurisdiction to hear this case. Plaintiffs raise an "Opposition to Motion to Remand." Presumably, Plaintiffs mean to oppose the removal of this action from state court. Because federal courts have an independent duty to ensure that they have jurisdiction over a case, the court will briefly address this issue.
Under the general removal statute, a civil action filed in state court may be removed to a federal district court if that court has original jurisdiction based on either "diversity of citizenship" or a "federal question." See 28 U.S.C. § 1441(a); see also 28 U.S.C. §§ 1331, 1332. As three of Plaintiffs' claims for relief assert violations of federal law, federal question jurisdiction exists here. At this point in the proceedings, the Court need not address whether diversity exists.
B. Unfair Debt Collection Practices (First Claim for Relief)
In their first claim for relief, Plaintiffs allege violations of both the federal Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692 et seq., against all Defendants, and violations of California's Fair Debt Collection Practices Act ("Rosenthal Act"), Cal. Civ. Code § 1788 et seq., against Truman and Marix. Specifically, Plaintiffs allege that each Defendant is a "debt collector" under the statutes and that they: (1) used unfair or unconscionable means to collect a debt; and (2) threatened action not intended by sending letters "threatening foreclosure while orally promising Plaintiffs otherwise." In addition, Plaintiffs allege that Truman and Marix made collection calls that "intimidated, [and] harassed Plaintiffs."
1. Federal Fair Debt Collection Practices Act
The FDCPA imposes civil liability on "debt collectors" for certain unlawful debt collection practices. Jerman v. Carlisle, McNellie, Rini, Kramer & Ulrich LPA, 130 S. Ct. 1605, 1608 (2010). To state a claim, a plaintiff must allege that: (1) Defendant was collecting debt as a "debt collector"; and (2) its debt collections actions violated a federal statute. Oliver v. Ocwen Loan Servs., LLC, No. C12-5374 BHS, 2013 U.S. Dist. LEXIS 7884, at *6-7 (W.D. Wash. Jan. 18, 2013) (citing Jerman, 130 S. Ct. at 1606). The FDCPA distinguishes between debt ...