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Dang v. First Horizon Home Loan Corp.

United States District Court, Ninth Circuit

August 22, 2013



JOHN A. HOUSTON, District Judge.


Currently pending before this Court is the motion to dismiss Plaintiffs' first amended complaint filed by defendants First Horizon Loan Corporation ("First Horizon") (a.k.a. "First Tennesee") and Nationstar Mortgage, LLC ("Nationstar") (collectively "defendants"). The motion has been fully briefed by the parties. After a careful review of the parties' submissions, and for the following reasons, this Court GRANTS Defendants' motion to dismiss.


I. Factual Background

Plaintiffs Hien Le Dang and Thanh Hung Nguyen ("Plaintiffs") allege in their first amended complaint that, in October 2004, they obtained financing to purchase a home in San Diego, California through Defendant First Horizon. Doc. # 16 ¶ 10. Plaintiffs allege that they understand little English and that both speak with heavy accents. Id . ¶ 11. Plaintiffs allege that they were never "asked for any verification of income, nor [were they asked to] provide any documentation of income during the entire application process." Id . ¶ 13. Plaintiffs further allege that when they asked a question to their loan officer that the loan officer replied, "[d]on't worry, just read and then sign." Id . The loan documents were executed on October 28, 2004. Id . ¶ 14. Sometime thereafter, Plaintiffs defaulted on the loan. Id . On November 13 and 30, 2009, Plaintiffs received notices of default ("NOD") from Quality Loan Service Corporation, as Trustee for First Horizon. Id . ¶ 16. On June 10, 2011, Defendant New Horizon sent Plaintiffs a notice of trustee sale indicating a sale date of July 6, 2011, which stated that the foreclosing party was Metlife Home Loans of Irving, Texas. Id . ¶ 17. Plaintiffs claim no notice of the transfer to Metlife Home Loans was provided them. Id . The trustee sale was postponed to September 8, 2011, and New Horizon provided a notice of transfer of servicing rights to Nationstar effective August 16, 2011. Id . ¶ 27. Plaintiff Nguyen filed for bankruptcy in September 2011. Id . ¶ 27. The bankruptcy court entered an order dismissing the bankruptcy petition on October 27, 2011. Id . The record does not reflect that the trustee sale has been conducted.

II. Procedural History

On December 12, 2011, Plaintiffs filed a complaint in Superior Court against defendants First Horizon; Nationstar Mortgage; and Metlife Bank, N.A. ("Metlife"). See Doc. # 1. On February 9, 2012, Defendant Metlife removed the action to this Court citing diversity jurisdiction. See id. On February 16, 2012, Metlife filed a motion to dismiss the complaint. See Doc. # 5. This motion was unopposed and the claims against Metlife were dismissed without prejudice on April 10, 2012. See Doc. # 11. On February 16, 2012, First Horizon and Nationstar filed a motion to dismiss the claims against them. See Doc. # 6.

On December 18, 2012, the Court dismissed the claims against First Horizon and Nationstar without prejudice and with leave to amend, finding the claims were untimely under the "gravamen of the action doctrine." See Doc. # 14. The Court also found that the delayed discovery rule, which would toll the statute of limitations, did not apply in this case. See id. at 6.

On January 17, 2013, Plaintiffs filed a first amended complaint alleging: (1) breach of covenant of good faith and fair dealing, (2) cancellation of contract, (3) unfair business practices, (4) actual fraud, (5) negligent lending, (6) violation of Finance Lenders Law, and (7) violation of the Rosenthal Fair Debt Collection Practices Act. See Doc. # 16. On February 4, 2013, Defendants filed the instant motion to dismiss Plaintiffs' first amended complaint. See Doc. # 19-1. Plaintiffs filed an opposition[1] on February 22, 2013 and on March 4, 2013, Defendants filed their reply. See Docs # 22, 25. This Court subsequently took the motion under submission without oral argument. See CivLR 7.1(d.1).


Defendant moves to dismiss Plaintiff's complaint pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure.

I. Legal Standard

A motion to dismiss under Rule 12(b)(6) tests the sufficiency of the complaint. Navarro v. Block , 250 F.3d 729, 732 (9th Cir. 2001). Dismissal is warranted under Rule 12(b)(6) where the complaint lacks a cognizable legal theory. Robertson v. Dean Witter Reynolds, Inc. , 749 F.2d 530, 534 (9th Cir. 1984); see Neitzke v. Williams , 490 U.S. 319, 326 (1989) ("Rule 12(b)(6) authorizes a court to dismiss a claim on the basis of a dispositive issue of law."). Alternatively, a complaint may be dismissed where it presents a cognizable legal theory yet fails to plead essential facts under that theory. Robertson , 749 F.2d at 534. While a plaintiff need not give "detailed factual ...

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