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Goldberg v. BAC Home Lonas Servicing, LP

United States District Court, Ninth Circuit

May 30, 2013

BENNETT GOLDBERG, Plaintiff,
v.
BAC HOME LONAS SERVICING, LP; HSBC BANK USA, N.A., Defendants.

ORDER GRANTING MOTION TO DISMISS BREACH OF CONTRACT CLAIM; GRANTING MOTION TO DISMISS REMAINDER OF STATE LAW CLAIMS; GRANTING LEAVE TO AMEND

JEFFREY T. MILLER, District Judge.

Defendants Bank of America, N.A., as successor by merger to BAC Home Loans Servicing LP, ("BAC") and HSBC Bank USA, N.A. ("HSBC") move to dismiss all claims asserted in the First Amended Complaint ("FAC"). Plaintiff Bennett Goldberg opposes the motion. Pursuant to Local Rule 7.1(d)(1), the court finds the matters presented appropriate for decision without oral argument. For the reasons set forth below, the court grants the motion to dismiss the breach of contract claim, grants the motion to dismiss the remainder of the state law claims, and grants Plaintiff fifteen days' leave to amend from the date of entry of this order.

BACKGROUND

On January 8, 2013, Defendants removed this diversity action from the Superior County for the County of San Diego. The FAC, filed on March 22, 2013, alleges eight causes of action for breach of contract, breach of the covenant of good faith and fair dealing, promissory estoppel, fraud, negligent misrepresentation, violation of the Rosenthal Fair Debt Collection Practices Act, unfair business practices under Bus. & Prof. Code section 17200, and declaratory relief.

Plaintiff's claims relate to a June 2004 two-year adjustable rate mortgage in the amount of $400, 000 originally obtained from Countrywide Mortgage and subsequently refinanced through Wilshire Mortgage Corporation ("WMC"). (FAC ¶9). In 2007 Plaintiff's home was severely damaged by the Witch Creek Fire. At that time, WMC informed Plaintiff that he should not make any more payments on the loan "due to the federal government's financial relief program for fire disaster victims." (FAC ¶10). In October 2009, Plaintiff was informed that he did not qualify for federal disaster relief because he had returned to live in the home. (FAC ¶12).

In early 2010, Plaintiff received notice that the servicing of the loan was transferred to BAC. (FAC ¶13). Plaintiff was allegedly unable to obtain information about the status of his mortgage and, on August 23, 2010, Plaintiff commenced an action against BAC in state court alleging, among other things, claims for fraud, negligence and violations of various lending statutes. (FAC ¶16).

On March 27, 2011, Plaintiff signed the First Mutual Settlement Agreement requiring Plaintiff to (1) dismiss the state court action, (2) vacate the property, (3) leave the property in "broom clean" condition, (4) pay and maintain all utilities until Plaintiff vacated the premises, and (5) execute a deed transferring Plaintiff's interest in the property to HSBC. (FAC ¶17). In return, HSBC and BAC were to pay Plaintiff $2, 500 within five days after he vacated the property. (FAC ¶18).

In May 2011, allegedly concerned that there were additional liens on the property, the parties entered into a Second Mutual Settlement Agreement. This agreement added one additional condition providing that "HSBC shall have the option of either accepting a deed from GOLDBERGS or proceeding with foreclosure on the PROPERTY." (FAC ¶21). Knowing that there were no additional loans on the property, Plaintiff executed the Second Mutual Settlement Agreement on May 21, 2011 and, on May 23, 2011, Plaintiff "sent to Defendants a quit claim deed." (FAC ¶22).[1] By July 14, 2011, Defendants provided Plaintiff with two checks totaling $2, 500. (Compl. ¶24). "Defendants never indicated that they rejected the Quit Claim Deed or believed the Quit Claim Deed was unacceptable in any way." (FAC ¶23).

At the heart of Plaintiff's claim is the allegation that BAC and HSBC have continued to report to credit reporting agencies that Plaintiff is in default of his mortgage. (FAC ¶24). In August 2012, "one year after accepting the Quit Claim Deed, " Plaintiff learned that Defendants intended to foreclose on the property. On November 12, 2012, Defendants filed a Notice of Rescission of a Trustee's Deed Upon Sale. (Defendants RJN Exh. L).

On March 11, 2013, the court granted Defendants' motion to dismiss the original complaint and granted Plaintiff leave to amend. (Ct. Dkt. 11). The FAC does not allege any wrongful foreclosure claims. In an opposed motion, Defendants now move to dismiss all claims alleged in the FAC.

DISCUSSION

Legal Standards

Federal Rule of Civil Procedure 12(b)(6) dismissal is proper only in "extraordinary" cases. United States v. Redwood City , 640 F.2d 963, 966 (9th Cir. 1981). Courts should grant 12(b)(6) relief only where a plaintiff's complaint lacks a "cognizable legal theory" or sufficient facts to support a cognizable legal theory. Balistreri v. Pacifica Police Dept. , 901 F.2d 696, 699 (9th Cir. 1990). Courts should dismiss a complaint for failure to state a claim when the factual allegations are insufficient "to raise a right to relief above the speculative level." Bell Atlantic Corp v. Twombly , 550 U.S. 544, 555 (2007) (the complaint's allegations must "plausibly suggest[]" that the pleader is entitled to relief); Ashcroft v. Iqbal , 566 U.S. 662 (2009) (under Rule 8(a), well-pleaded facts must do more than permit the court to infer the mere possibility of misconduct). "The plausibility standard is not akin to a probability requirement, ' but it asks for more than a sheer possibility that a defendant has acted unlawfully." Id. at 678. Thus, "threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Id . The defect must appear on the face of the complaint itself. Thus, courts may not consider extraneous material in testing its legal adequacy. Levine v. Diamanthuset, Inc. , 950 F.2d 1478, 1482 (9th Cir. 1991). The courts may, however, consider material properly submitted as part of the complaint. Hal Roach Studios, Inc. v. Richard Feiner and Co. , 896 F.2d 1542, 1555 n.19 (9th Cir. 1989).

Finally, courts must construe the complaint in the light most favorable to the plaintiff. Concha v. London , 62 F.3d 1493, 1500 (9th Cir. 1995), cert. dismissed, 116 S.Ct. 1710 (1996). Accordingly, courts must accept as true all material allegations in the complaint, as well as reasonable inferences to be drawn from them. Holden v. Hagopian , 978 F.2d 1115, 1118 (9th Cir. 1992). However, conclusory allegations of law and unwarranted inferences ...


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