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Wickman v. Aurora Loan Services, LLC

United States District Court, Ninth Circuit

August 23, 2013

AURORA LOAN SERVICES, LLC, et. al., Defendants.


JOHN A. HOUSTON, District Judge.


Pending before this Court is defendant Aurora Loan Services, LLC's ("Aurora") motion to dismiss the complaint. The motion has been fully briefed by parties. After a thorough review of the parties' submissions, and for the reasons set forth below, this Court GRANTS IN PART and DENIES IN PART Defendant's motion to dismiss.


Plaintiff originally filed a complaint in Superior Court of California, County of San Diego on June 29, 2012, against Aurora Loan Services, LLC, Aurora Bank, FSB and Does 1 through 20, asserting claims for fraud, negligent misrepresentation, promissory estoppel, and accounting. Complaint (Doc. No. 1-1). Plaintiff alleges he sought to modify his home loan for his property located at 3212 Goldsmith Street, San Diego, California with his loan servicer and was told he had to default on the loan to secure a modification. Relying on the representation, Plaintiff failed to make loan payments, submitted a modification application and was later told he would not qualify due to his unemployment status. Plaintiff eventually received a Notice of Trustee Sale for the property.

Defendants removed the action to federal court on July 10, 2012. Thereafter, Plaintiff sought a temporary restraining order, which this Court granted. Following a hearing, the Court issued a preliminary injunction and enjoined Defendants and their successors from proceeding with a Trustee's Sale, or otherwise foreclosing, selling or transferring the real property at issue. Defendants now move to dismiss the complaint.


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 allegations, " he must plead sufficient facts that, if true, "raise a right to relief above the speculative level." Bell Atlantic Corp. v. Twombly , 550 U.S. 544, 545 (2007).

"To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 1129 S.Ct. 1937, 1949 (2009) (quoting Twombly , 550 U.S. at 547). A claim is facially plausible when the factual allegations permit "the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id . In other words, "the non-conclusory factual content, ' and reasonable inferences from that content, must be plausibly suggestive of a claim entitling the plaintiff to relief. Moss v. U.S. Secret Service , 572 F.3d 962, 969 (9th Cir. 2009). "Determining whether a complaint states a plausible claim for relief will... be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Iqbal, 129 S.Ct. at 1950.

In reviewing a motion to dismiss under Rule 12(b)(6), the court must assume the truth of all factual allegations and must construe all inferences from them in the light most favorable to the nonmoving party. Thompson v. Davis , 295 F.3d 890, 895 (9th Cir. 2002); Cahill v. Liberty Mut. Ins. Co. , 80 F.3d 336, 337-38 (9th Cir. 1996). However, legal conclusions need not be taken as true merely because they are cast in the form of factual allegations. Ileto v. Glock, Inc. , 349 F.3d 1191, 1200 (9th Cir. 2003); Western Mining Council v. Watt , 643 F.2d 618, 624 (9th Cir. 1981). When ruling on a motion to dismiss, the Court may consider the facts alleged in the complaint, documents attached to the complaint, documents relied upon but not attached to the complaint when authenticity is not contested, and matters of which the Court takes judicial notice. Lee v. City of Los Angeles , 250 F.3d 668, 688-89 (9th Cir. 2001). If a court determines that a complaint fails to state a claim, the court should grant leave to amend unless it determines that the pleading could not possibly be cured by the allegation of other facts. See Doe v. United States , 58 F.3d 494, 497 (9th Cir. 1995).

II. Analysis

Defendants argue the complaint should be dismissed because the claims are preempted by federal law, the claims are barred for failure to tender and none of the claims are sufficiently pled.

A. Preemption

Defendants argue Plaintiff's claims are preempted by the Home Owner's Loan Act ("HOLA"), 12 U.S.C. section1461, and the regulations promulgated thereunder by the Office of Thrift Supervision ("OTS").

Under 12 CFR ยง560.2, OTS provides for federal preemption of state law which regulates federal savings associations as follows:

OTS hereby occupies the entire field of lending regulation for federal savings associations. OTS intends to give federal savings associations maximum flexibility to exercise their lending powers in accordance with a uniform federal scheme of regulation. Accordingly, federal savings associations may extend credit as authorized under federal law, including this part, without regard to state laws purporting to regulate or otherwise affect their credit activities

Section 560.2(b) sets forth the types of state laws that are preempted by HOLA. Among the ten categories of state laws preempted are those that regulate the ...

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