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Patera v. CitiBank, N.A.

United States District Court, N.D. California

February 5, 2015

MARCI PATERA, Plaintiff,
v.
CITIBANK, N.A., et al., Defendants

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For Marci Patera, Plaintiff: Peter Leo Kutrubes, LEAD ATTORNEY, Stephen Pei-jing Lin, Law Office of Peter Kutrubes, Walnut Creek, CA.

For Citibank, N.A., a national banking association, CitiMortgage, Inc., a corporation, Defendants: Cuong Minh Nguyen, Pite Duncan, LLP, San Diego, CA.

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ORDER GRANTING DEFENDANTS' MOTION TO DISMISS Re: Dkt. No. 11

JACQUELINE SCOTT CORLEY, United States Magistrate Judge.

Plaintiff Marci Patera brings this action seeking to prevent foreclosure of her home. She sues Defendants Citibank, N.A., and CitiMortgage, Inc. (together, " Defendants" ). Now pending before the Court is Defendants' Motion to Dismiss. (Dkt. No. 11.) Defendants seek to dismiss Plaintiff's First Amended Complaint (" FAC" ) for failure to state a claim upon which relief can be granted and for failure to join a necessary and indispensable party. After carefully considering the arguments and briefing submitted, the Court concludes that oral argument is unnecessary, see Civ. L.R. 7-1(b), and GRANTS Defendants' motion to dismiss with leave to amend.

FACTUAL & PROCEDURAL BACKGROUND

Plaintiff and her ex-significant other Roy Bartlett (" Bartlett" ) purchased the subject property located at 308 Iron Horse Court, Alamo, California in 1999. (Complaint at ¶ 14.) The purchase was financed through a $1,000,000 loan from Citibank Service Corporation which was subsequently assigned to Defendant CitiMortgage. ( Id.; Dkt. No. 13-1 at 15.)[1] Plaintiff and Bartlett subsequently took out two additional mortgages in 2004 and 2005 for $449,500 and $250,000 respectively, which were likewise serviced by CitiMortgage. (Complaint at ¶ ¶ 16-17; Dkt. No. 13-1, Exs. D-E.) The monthly payments on these mortgages were timely made for years. (Complaint at ¶ ¶ 14-17.)

In 2007, Plaintiff became physically disabled. ( Id. at ¶ 18.) Nonetheless, the monthly payments continued to be made until November 2010 when Bartlett lost his job. ( Id. at ¶ 19.) At that time, Plaintiff and Bartlett were unable to make their monthly mortgage payments of approximately $9,500. ( Id. at ¶ 20.) Bartlett contacted CitiBank Private Bank of whom he was a customer to attempt to make " hardship" arrangements and thereafter submitted

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a " Hardship Assistance Package" in April 2011. ( Id.) Two months later, the Director of CitiBank Private Bank, Vita Cusumano, sent Bartlett an email indicating that the loan modification had been approved and including key terms regarding a lower interest rate, forgiveness of all late fees and penalties accumulated to date, and stating that the new lower monthly payment for all three loans would be $5,996.93. ( Id. at ¶ 21.) Bartlett told Plaintiff that CitiBank was drawing up the papers and had told him to make the new lower monthly payment on June 15, 2011. ( Id.) However, Bartlett was unable to do so online, and thus sent an email to Ms. Cusumano asking for assistance. ( Id. at ¶ 22.) Ms. Cusumano arranged for the payments to be debited from Bartlett's CitiBank account instead. ( Id. at ¶ 23.)

Neither Plaintiff nor Bartlett ever received the loan modification paperwork. ( Id. at ¶ ¶ 23-24.) They both attempted to follow up with CitiBank regarding the loan modification and in September 2011 they were told that they needed an appraisal for the property. ( Id. at ¶ 25.) A month later, Plaintiff and Bartlett were told that the loan modification was being submitted to CitiBank " upper management." ( Id. at ¶ 26.) Shortly thereafter, a CitiBank representative, Ms. Douglas, emailed Plaintiff and Bartlett with proposed loan modification terms which they agreed to and the paperwork was again forwarded to CitiBank upper management. ( Id. at ¶ ¶ 30-32.) A month later, Ms. Douglas informed Plaintiff and Bartlett that they would need to submit a new Hardship Assistance Package which they did. ( Id. at ¶ ¶ 33-34.)

In January 2012, Plaintiff emailed Ms. Douglas to follow up on the status of the loan modification, but did not receive a response to her inquiries. ( Id. at ¶ 35.) Two months later, Bartlett informed Plaintiff that he had received a telephone call from Ms. Douglas indicating that the request for a loan modification was likely to be denied. ( Id. at ¶ 37.) Plaintiff and Bartlett attempted to follow-up with CitiBank representatives including Ms. Douglas throughout March and April 2012. ( Id. at ¶ ¶ 38-45.) In May 2012, Bartlett submitted additional documentation regarding his income and Plaintiff received confirmation from CitiBank that she had provided all the necessary documentation. ( Id. at ¶ ¶ 46-47.)

Over the next two months Plaintiff and Bartlett attempted to regularly follow-up regarding the status of their loan modification, and in late July 2012 they were told that the loan modifications " looked good" and they had secured " preliminary approval." ( Id. at ¶ ¶ 48-53.) After much back and forth in October 2012, Plaintiff and Bartlett were advised that the loan modifications had been approved and the only question was whether they would be done as one loan or three loans. ( Id. at ¶ 60.) Plaintiff and Bartlett attempted to follow-up throughout October and November, and then in mid-November, Plaintiff was contacted by a new unidentified CitiBank representative who told her they needed to submit another loan modification application. ( Id. at ¶ ¶ 61-64.) Two days later, Bartlett's attorney advised Bartlett and Plaintiff that he had received a Notice of Default which had been recorded on November 1, 2012. ( Id. at ¶ 65.) Nonetheless, on November 26, 2012, a CitiBank representative informed Plaintiff that the loan modification had been approved and informed her that servicing of the loan was being transitioned to CitiMortgage and gave her a new point of contact there. ( Id. at ¶ 66.) This new point of contact, Ms. Villanueva, advised Plaintiff and Bartlett that they needed to submit a new loan modification application. ( Id.) That same day Bartlett's attorney received another Notice of Default. ( Id. at ¶ 67.)

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In January 2013, Plaintiff and Bartlett submitted a new loan modification. ( Id. at ¶ 68.) After more back and forth including requests to resubmit documents which had already been submitted, on February 22, 2013, Plaintiff and Bartlett were told that CitiBank had all the necessary paperwork and that CitiBank would not pursue any further foreclosure . ( Id. at ¶ 70.) Three days later Bartlett received a Notice of Trustee Sale, which was subsequently postponed. ( Id.) Over the next several months, Plaintiff and Bartlett continued to follow-up with CitiBank and two more Notices of Trustee Sale were recorded against the property. ( Id. at ¶ ¶ 71-72.) In October 2013, CitiBank offered a loan modification on the second mortgage loan only, but simultaneously recorded another Notice of Trustee Sale. ( Id. at ¶ 74.) The following month Plaintiff was informed that foreclosure was imminent and her only options were short sale, foreclosure or repayment. ( Id. at ¶ 78.) Three days later, Plaintiff was notified that they were approved modifications on all three loans. ( Id. at ¶ 80.) Plaintiff continued to follow-up regarding the status of the loan modifications throughout December 2013, but she did not receive a response although a further Notice of Trustee Sale was postponed. ( Id. at ¶ ¶ 81-87.)

The current status of Plaintiff's loan modification applications and the subject property is unclear.

Plaintiff filed the underlying action in October 2014 alleging thirteen state law claims against Defendants CitiBank, N.A. and CitiMortgage including (1) deceit: promise made without intent to perform; (2) deceit: intentional misrepresentation; (3) fraud and deceit: suppression of material facts; (4) fraud and deceit: negligent misrepresentation; (5) negligence; (6) violations of California Business and Professions Code § 17200; (7) promissory estoppel; (8) breach of contract; (9) breach of contract: October 2012 Modification Agreement; (10) slander of title; (11) cancellation of instruments; (12) violation of the Rosenthal Fair Debt Collection Practices Act; and (13) breach of the covenant of good faith and fair dealing. Defendants thereafter filed the now pending motion to dismiss contending that the Court lacks subject matter over the action, or alternatively, that Plaintiff has failed to state a claim upon which relief could be granted.

LEGAL STANDARD

A. Rule 12(b)(1)

A party challenging the court's subject matter jurisdiction under Rule 12(b)(1) may bring a facial challenge or a factual challenge. See White v. Lee, 227 F.3d 1214, 1242 (9th Cir. 2000). A facial attack is one where " the challenger asserts that the allegations contained in a complaint are insufficient on their face to invoke federal jurisdiction." Safe Air for Everyone v. Meyer, 373 F.3d 1035, 1039 (9th Cir. 2004). In evaluating such a challenge, the court accepts the factual allegations in the complaint as true. See Miranda v. Reno, 238 F.3d 1156, 1157 n.1 (9th Cir. 2001).

B. Rule 12(b)(7)

Pursuant to Federal Rule of Civil Procedure 12(b)(7), a party may move to dismiss a case for " failure to join a party under Rule 19." Rule 19 imposes a three-step inquiry: (1) whether the absent party is necessary (i.e., required to be joined if feasible) under Rule 19(a); (2) if so, whether it is feasible to order that absent party to be joined; and (3) if joinder is not feasible, whether the case can proceed without the absent party, or whether the absent party is ...


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