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Amacker v. Bank of America, A National Association

United States District Court, N.D. California

September 24, 2014

BANK OF AMERICA, a national association; THE BANK OF NEW YORK MELLON, as trustee for THE CERTIFICATE HOLDERS OF CWALT, INC., ALTERNATIVE LOAN TRUST 2005-58 MORTGAGE PASS-THROUGH CERTIFICATES SERIES 2005-58, a business entity; and Does 1 through 100, inclusive, Defendants.


CLAUDIA WILKEN, District Judge.

Plaintiffs Celedonia Amacker and Joseph Amacker assert various mortgage-related claims against Defendants Bank of America, N.A. (BOA) and Bank of New York Mellon (BNYM). Both Defendants move separately to dismiss Plaintiffs' first amended complaint (1AC) in its entirety. BNYM also moves to strike portions of the 1AC. Plaintiffs have filed an opposition to both motions to dismiss. Each Defendant has filed a reply. The Court took the motions under submission on the papers. Having considered the arguments presented by the parties, the Court GRANTS both Defendants' motions and GRANTS Plaintiffs leave to amend.


I. Facts

The following facts are taken from the 1AC and certain documents of which the Court takes judicial notice.[1]

In October 2005, Plaintiffs obtained a loan funded by Countrywide Home Loans, Inc. in the amount of $624, 000. Request for Judicial Notice (RFJN), Ex. B. This loan refinanced a prior loan secured by a deed of trust encumbering the real property located at 6589 Fountaine Avenue, Newark, California. Id . The deed of trust identifies America's Wholesale Lender as the lender, CTC Foreclosure Services Corp. as the Trustee, and Mortgage Electronic Registration System (MERS) as the beneficiary. RFJN, Ex. A.

The deed of trust, which Plaintiffs signed, included an Adjustable Rate Rider. RFJN, Ex. B. The rider provided for an adjustable interest rate starting at two percent for approximately the first fifty days of the loan. Id . After that, the interest rate was set to vary monthly according to a set margin above a variable interest-rate index. Id . Plaintiffs allege that between October 2005 and 2008, their monthly loan payment increased from approximately $2, 100 to $3, 000. 1AC ¶ 13. Because Plaintiffs were only paying the minimum payment, which did not always cover the interest accruing on the loan, the principal amount they owed on the loan increased over time. RFJN, Ex. B. This is known as "negative amortization." Id . Plaintiffs allege that they were not aware when they entered into the loan agreement that the principal could negatively amortize. 1AC ¶ 5, Pls.' Opp. 1.

Plaintiffs allege that, in 2008, while current on their payments, they began to pursue a loan modification with Countrywide. 1AC ¶ 14. They claim that, during conversations with Countrywide, they were told that in order to obtain a loan modification, they must first default on their loan. Id . Plaintiffs also allege that they were told that they would not face a foreclosure while they were pursuing a loan modification. Id.

Because they felt they needed to modify their loan agreement, Plaintiffs stopped paying on their loan. Id . In May 2008, ReconTrust Company, as the agent for the beneficiary, recorded a Notice of Default and Election to Sell Under the Deed of Trust. RFJN, Ex. B. The notice stated that Plaintiffs were $16, 556.72 in arrears. Id . In late 2008, Bank of America acquired Plaintiffs' loan.[2] 1AC ¶ 16. Plaintiffs continued their loan modification negotiations with BOA. Id.

Plaintiffs allege that, around September 2009, BOA representatives advised them that their property was subject to imminent foreclosure. Id. at ¶ 17. Plaintiffs claim they then retained the assistance of the Housing and Economic Rights Advocates (HERA). Id . After they retained HERA, Plaintiffs were interviewed by the San Francisco Chronicle, which then published an article featuring Plaintiffs. Id.

According to Plaintiffs, soon after the news article was published, a BOA representative named Tammy Tipton contacted them to "personally assist with [their] account." Id . During the conversation, Plaintiffs allege, Ms. Tipton told Joseph Amacker that she "was working to help keep him keep his home" and would provide a modification that would be "really good" for Plaintiffs. Id. at ¶ 18. Plaintiffs allege that they received a written copy of the proposed modification a few days later. Id. at ¶ 19.

The proposed modification provided an initial interest rate of 3.5% for the first five years and a monthly payment of $2, 981.58. Id. at ¶ 20. After the first five years, the interest rate would increase to 5.125%. Id . Plaintiffs were unhappy with the terms of the proposed modification. Id. at ¶ 27. On the same day Plaintiffs received the proposed loan modification, Plaintiffs allege, Ms. Tipton called them and said, "Let me tell you that this is just to get you started. Once the dust settles, we will definitely re-modify you and get you a better loan in the future, in about two years." Id . Plaintiffs allege that, prior to receiving the 2009 modification, they were "ready to take legal action." Id. at ¶ 20. Nevertheless, Plaintiffs accepted the modification, even though they thought the terms of the modification were "unfavorable." Id. at ¶ 20. They allege that they felt they had no other choice. Id . Plaintiffs allege they have not heard from Ms. Tipton again, despite attempts to reach her. Id. at ¶ 21.

In November 2009, on behalf of the beneficiary, ReconTrust recorded a notice of rescission of declaration of default and demand for sale and notice of default. RFJN, Ex. C.

In April 2011, Plaintiffs contacted BOA to discuss modifying their loan. Id. at ¶ 22. Plaintiffs were told to submit a loan modification application, which they did immediately. Id . Plaintiffs spoke to a BOA representative several times, each time reiterating what they allege Ms. Tipton told them in 2009. Id.

In November 2011, MERS recorded an assignment of deed of trust to BNYM, assigning "all beneficial interest... together with the note(s) and obligations... and the money due and to become due." RFJN, Ex. D.[3] Bank of America continued as the loan servicer. BNYM Mot. Dismiss 1.

Plaintiffs allege that, in early 2012, Anita Lewis, a BOA representative, told them there was no record of Ms. Tipton's assurance that BOA would modify their loan. 1AC ¶ 23. At that time, Plaintiffs were notified that their loan modification application had expired and they were required to file a new application. Id . They do not allege that they did so, or that their completed application was then denied.

In March 2013, BYNM recorded a substitution of trustee, replacing CTC Foreclosure Services with ReconTrust. RFJN, Ex. E. On March 19, 2013, BYNM recorded a notice of default and election to sell under deed of trust. RFJN, Ex. F.

Plaintiffs filed suit in July 2013 and filed their amended complaint in September 2013. Plaintiffs' 1AC alleges claims for (1) fraud (against Defendant BOA); (2) promissory estoppel (against both Defendants); (3) negligent misrepresentation (against both Defendants); (4) violation of the Uniform Fraudulent Transfer Act (against both Defendants); and (5) violation of Business and Professions Code section 17200 et seq. (against both Defendants).


A complaint must contain a "short and plain statement of the claim showing that the pleader is entitled to relief." Fed.R.Civ.P. 8(a). The plaintiff must proffer "enough facts to state a claim to relief that is plausible on its face." Ashcroft v. Iqbal , 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly , 550 U.S. 544, 570 (2007)). A claim is facially plausible "when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id.

In considering whether the complaint is sufficient to state a claim, the court will take all material allegations as true and construe them in the light most favorable to the plaintiff. Metzler Inv. GMBH v. Corinthian Colls., Inc. , 540 F.3d 1049, 1061 (9th Cir. 2008). The court's review is limited to the face of the complaint, materials incorporated into the complaint by reference, and facts of which the court may take judicial notice. Id. at 1061. However, the court need not accept legal conclusions, including "threadbare recitals of the elements of a cause of action, supported by mere conclusory statements." Iqbal , 556 U.S. at 678 (citing Twombly , 550 U.S. at 555).

When granting a motion to dismiss, the court is generally required to grant the plaintiff leave to amend, even if no request to amend the pleading was made, unless amendment would be futile. Cook, Perkiss & Liehe, Inc. v. N. Cal. Collection Serv. Inc. , 911 F.2d 242, 246-47 (9th Cir. 1990). In determining whether amendment would be futile, the court examines whether the complaint could be amended to cure the defect requiring dismissal "without contradicting any of the allegations of [the] original complaint." Reddy v. Litton Indus., Inc. , 912 F.2d 291, 296 (9th Cir. 1990).


Both Defendants seek to dismiss all claims against them.

A. First Cause of Action: Fraud

Plaintiffs allege that BOA[4] "knowingly and recklessly made false and misleading statements that Plaintiffs relied on to their detriment and were damaged thereby." 1AC ¶ 33. Plaintiffs base their fraud claim on "the statements by Ms. Tipton that ...

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