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Whitehurst v. Bank2 Native American Home Lending, LLC

United States District Court, E.D. California

September 10, 2014

GENNY D. WHITEHURST, an individual and borrower, Plaintiff,
BANK2 NATIVE AMERICAN HOME LENDING, LLC, a business entity; and DOES 1 through 10, inclusive, Defendants.


TROY L. NUNLEY, District Judge.

This matter is before the Court on Defendant Bank2 Native American Home Lending, LLC's ("Defendant") Motion to Dismiss Pursuant to Federal Rule of Civil Procedure 12(b)(6). ( See Def.'s Mot. to Dismiss Compl., ECF No. 4.) For the reasons set forth below, Defendant's motion with respect to Plaintiff's first, second, third, fourth and sixth causes of action is GRANTED with leave to amend. Defendant's motion with respect to Plaintiff's fifth cause of action is DENIED.[1]


In 2010, Plaintiff Genny D. Whitehurst ("Plaintiff") sought to buy a home, whereupon she obtained financing with Defendant. (Def.'s Req. for Judicial Notice, ECF No. 5, Ex. 5 ¶ 19.)[2] On August 5, 2010, Plaintiff borrowed $320, 369 from Defendant to purchase the residence located at 3941 Lakeview Drive in Shingle Springs, California. (ECF No. 5, Ex. 5 ¶¶ 18, 20.) The loan was secured by a note and deed of trust, recorded in El Dorado County on August 9, 2010. ( See ECF No. 5, Ex. 2.) The deed of trust indicates that Defendant is the original lender, and Old Republic Title Co. the trustee. ( See ECF No. 5, Ex. 2.) Plaintiff made a down payment of $10, 000, and has resided at 3941 Lakeview Drive since purchasing the home. (ECF No. 5, Ex. 5 ¶¶ 18, 21.)

Plaintiff alleges that Defendant's agent promised she could refinance "one or two years" after the receiving the loan. (ECF No. 5, Ex. 5 ¶ 45.) However, when Plaintiff attempted to refinance in 2011, Defendant's agent allegedly stated that she was ineligible. (ECF No. 5, Ex. 5 ¶ 46.) In 2012, Plaintiff lost her job and, as a result, she sought to sell her house. Plaintiff claims that Defendant refused her request to short-sell the residence. (ECF No. 5, Ex. 5 ¶¶ 48-49.) Instead, Defendant's agent allegedly induced Plaintiff to stop making mortgage payments, assuring her that once the loan was in default, it would be considered for modification. (ECF No. 5, Ex. 5 ¶ 52.) Even after she defaulted, Defendant's agents allegedly offered Plaintiff conflicting information as to whether she could, in fact, refinance her mortgage. (ECF No. 5, Ex. 5 ¶¶ 54-57.) Nevertheless, Plaintiff submitted an application to modify the loan and asserts that a decision on her application is still pending. (ECF No. 5, Ex. 5 ¶¶ 59-61, 70.)

Additionally, Plaintiff alleges that she cashed out her retirement account to pay her mortgage through February of 2013. (ECF No. 5, Ex. 5 ¶ 66.) However, Plaintiff received a letter in May of 2013 informing her that Defendant intended to foreclose on the residence. (ECF No. 5, Ex. 5 ¶ 68.) Plaintiff also claims that during the same time period, Defendant's agent phoned her and sent threatening correspondence regarding foreclosure. (ECF No. 5, Ex. 5 ¶ 95.) To date, Defendant has not recorded a notice of default against Plaintiff. (ECF No. 4 at 3:13.)[3]

On August 13, 2013, Plaintiff filed suit against Defendant in the El Dorado County Superior Court. ( See ECF No. 5, Ex. 3.) On September 25, 2013, Defendant removed the action to federal court, and on October 2, 2013, Defendant moved to dismiss. ( See ECF No. 5, Ex. 4.) Plaintiff did not move to remand the case, nor did she oppose Defendant's motion to dismiss. ( See ECF No. 5, Ex. 4.) On November 6, 2013, the court granted Defendant's motion, but afforded Plaintiff leave to amend. ( See ECF No. 5, Ex. 4.) Instead, Plaintiff voluntarily dismissed the suit on November 21, 2013, and the case was closed on November 22, 2013. ( See ECF No. 5, Ex. 4.) Five days later, Plaintiff filed the instant action in state court. ( See ECF No. 5, Ex. 5.) On January 31, 2014, Defendant removed the second suit to this Court. ( See Def.'s Notice of Removal, ECF No. 1.) On February 14, 2014, Defendant once again moved to dismiss. ( See ECF No. 4.) Plaintiff opposes the motion. ( See Pl.'s Opp'n to Def.'s Mot. to Dismiss Compl., ECF No. 14.)


A complaint must satisfy the requirements of Rule 8(a)(2) to survive a motion to dismiss under Rule 12(b)(6). Porter v. Jones, 319 F.3d 483, 494 (2003). Specifically, the complaint must provide a short and plain statement of the claim showing that the plaintiff is entitled to relief. Fed.R.Civ.P. 8(a)(2). The purpose of this requirement is to give the defendant fair notice of the plaintiff's claims. Jones v. Cmty. Redevelopment Agency of City of L.A., 733 F.2d 646, 649 (9th Cir. 1984). To that end, the Supreme Court has held that a plaintiff is required to present facts sufficient to render the claim plausible on its face. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcoft v. Iqbal, 556 U.S. 662, 678 (2009). Although Rule 8 does not require detailed factual allegations, it does require more than bald accusations of wrongdoing. Id.

Claims of fraud are subject to the heightened pleading requirements of Rule 9(b). The plaintiff must state with particularity the circumstances that constitute the alleged fraud or mistake. Fed.R.Civ.P. 9(b). Malice, intent, knowledge and other conditions of one's mind may be alleged generally. Id. The specificity required by Rule 9(b) is intended to: (1) provide defendants with adequate notice to defend against claims and deter plaintiffs from filing pretextual complaints; (2) protect the reputations of those subject to allegations of fraud; and (3) prevent plaintiffs from imposing huge social and economic costs upon the court, litigants, and the general public without some factual basis. Kearns v. Ford Motor Co., 567 F.3d 1120, 1125 (2009). Consequently, a plaintiff alleging fraud must plead more than the neutral facts necessary to identify the transaction. Id. at 1124 (citing Decker v. GlenFed, Inc., 42 F.3d 1541, 1548 (9th Cir. 1994) (en banc), superseded by statute on other grounds, Private Securities Litigation Reform Act of 1995, Pub. L. 104-67, 109 Stat. 737). Rather, Rule 9(b) requires specific facts such as the time, place, and content of the alleged misrepresentations as well as the names of those who made them. Schreiber Distrib. Co. v. Serv-Well Furniture Co., Inc., 806 F.2d 1393, 1401 (9th Cir. 1986). In short, "[a]verments of fraud must be accompanied by the who, what, when, where, and how' of the misconduct charged." Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1106 (9th Cir. 2003), (quoting Cooper v. Pickett, 137 F.3d 616, 627 (9th Cir. 1997)).

To determine whether a complaint states a claim upon which relief can be granted, the court must accept the plaintiff's allegations as true and construe them in the light most favorable to the plaintiff. Love v. U.S., 915 F.2d 1242, 1245 (9th Cir. 1989). However, the court need not accept the truth of any conclusory allegations, unreasonable inferences, or unwarranted deductions of fact. Sprewell v. Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 2001). A pleading is insufficient if it merely proffers legal conclusions or simply recites the elements of a claim. Twombly, 550 U.S. at 555. In such a case, the district court should dismiss with leave to amend unless the complaint cannot be cured by the allegation of other facts. Cook, Perkiss and Liehe, Inc. v. N. Cal. Collection Serv., 911 F.2d 242, 247 (9th Cir. 1990). In addition to futility of amendment, the court may deny leave to amend on the basis of bad faith, undue delay, prejudice to the opposing party, and if the plaintiff has previously amended the complaint. U.S. v. Corinthian Colls., 655 F.3d 984, 995 (9th Cir. 2011). The district court's discretion to deny a plaintiff leave to amend is particularly broad where it has already afforded the plaintiff an opportunity to amend. Chodos v. W. Publ'g Co., 292 F.3d 992, 1003 (9th Cir. 2002).


A. Breach of Contract

To state a cause of action for breach of contract, a plaintiff must plead as follows: (1) the existence of a contract; (2) plaintiff's performance or, in the alterative, excuse(s) for nonperformance; (3) defendant's breach; and (4) resulting damages. McKell v. Washington Mut., Inc., 142 Cal.App.4th 1457, 1489 (2006). Initially, Defendant argues that Plaintff does not clearly allege which contract serves as the basis for her claim. (ECF No. 4 at 5:10.) Defendant also asserts that Plaintiff's first cause of action fails because she does not allege a tender. (ECF No. 4 at 6:4-5.)

i. Existence of a Contract

First, Defendant argues that Plaintiff does not allege which contract serves as the basis for her claim. (ECF No. 4 at 5:10-12.) Indeed, Plaintiff refers in the complaint simply to a "loan agreement." ( E.g., ECF No. 5, Ex. 5 ¶ 130.) In her opposition, though, Plaintiff states that "[t]he contractual relationship between [Defendant] and Plaintiff lies in the Deed of Trust." (ECF No. 14 at 11:18-19.) Plaintiff does not argue that Defendant's failure to modify the subject loan constitutes a breach of the deed of trust. Rather, Plaintiff seems to contend that Defendant breached an oral agreement affording her the opportunity to refinance within one or two years. (ECF No. 5, Ex. 5 ¶ 45.) Due to Plaintiff's apparently conflicting theories, the Court is unable to determine which alleged contract serves as the basis for her first cause of action-a provision of the deed of trust or an alleged oral agreement for later modification.

While it may set forth conflicting theories of liability, a pleading must plainly and succinctly state the elements of each claim to provide the defendant with fair notice. Fed.R.Civ.P. 8(d)(3); Jones, 733 F.2d at 649. Here, Plaintiff's factual allegations fail to put Defendant on notice of her claims. Thus, the Court agrees with Defendant that Plaintiff has insufficiently pled the first element of her cause of action for breach of contract. Since Plaintiff fails to allege the existence of a contract, the Court need not address Defendant's arguments concerning Plaintiff's failure to allege facts supporting the other ...

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