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Linares v. Citimortgage, Inc.

United States District Court, N.D. California

May 5, 2015

MARYLINE LINARES, et al., Plaintiffs,


EDWARD M. CHEN, District Judge.

In their first amended complaint ("FAC"), Plaintiffs Maryline Linares and Mark Joseph Linares (collectively, "Plaintiffs") have asserted claims against Defendant CitiMortgage, Inc. ("CMI") for unfair business practices, see Cal. Bus. & Prof. Code § 17200, and intentional misrepresentation. Currently pending before the Court are two motions filed by CMI: a motion to dismiss and a motion to strike.[1]

Having considered the parties' briefs and accompanying submissions, as well as the oral argument of counsel, the Court hereby GRANTS both motions. Plaintiffs, however, have leave to amend within the parameters discussed below.


Plaintiffs initiated this lawsuit in state court on May 23, 2014. See Docket No. 1-1, at 2 (original complaint). At the time, Plaintiffs were proceeding pro se. Subsequently, the case was removed to federal court and the complaint was challenged by a motion to dismiss and a motion to strike. See Docket Nos. 13-14 (motions). Plaintiffs then found counsel to represent them, and the parties stipulated to allowing Plaintiffs to file a FAC. See Docket No. 29 (stipulation and order). Plaintiffs did so, and the FAC is now subject to challenge by another motion to dismiss, as well as a motion to strike.

Plaintiffs' FAC and CMI's request for judicial notice ("RJN") reflect as follows.

Plaintiffs own certain real property located in San Francisco. See FAC ¶ 1. In April 2007, Plaintiffs obtained a primary and secondary loan on the property from CMI. See FAC ¶ 10. Several years later, in October 2009, Plaintiffs "were experiencing financial and medical hardships, " and therefore they contacted CMI to see if they could get assistance with respect to the loans. FAC ¶ 13. Subsequently, CMI acknowledged the request for assistance but also notified Plaintiffs that the primary loan was in default in the amount of $8, 709.81. See FAC ¶ 14.

In December 2009, Plaintiffs contacted CMI again and spoke with a representative by the name of Tina. Tina informed Plaintiffs that they were "approved for a Forbearance Plan' that would commence in January 2010." FAC ¶ 16. Under the Forbearance Plan, Plaintiffs were to make seven monthly payments of $500 each from January 15 to July 15, 2010. See FAC ¶ 17. According to the FAC, the only thing that CMI would forbear from doing in return was to foreclose. See, e.g., FAC ¶ 20 ("As explained to Plaintiff Maryline Linares, the terms of the Forbearance Plan provided that, so long as PLAINTIFFS complied by making on time monthly payments..., PLAINTIFFS were protected from any foreclosure proceedings from CITI."); FAC ¶ 47 ("Defendant CITI intentionally and willfully deceived PLAINTIFFS, making misrepresentations to PLAINTIFFS that the Forbearance Plan offered would prevent any foreclosure....").

Tina also told Plaintiffs at the time that "there was no reasonable prospect of recouping in the years ahead'" and "urged PLAINTIFFS to contact [the] Loan Modification Department regarding a short refinance for both the primary and secondary loans." FAC ¶ 18 (emphasis omitted). There is no allegation that Tina, or any other CMI representative, ever promised Plaintiffs that they would get a loan modification.

Subsequently, Plaintiffs made the $500 monthly payments for the months of January, February, March, April, May, and June 2010. CMI accepted and cashed each of those payments except the last (June 2010). See FAC ¶ 23.

During the time that Plaintiffs were making the monthly payments, they received - on three occasions - letters from CMI notifying them that their primary loan was in default. See, e.g., FAC ¶¶ 24, 27, 33. On each occasion, a CMI representative confirmed the Forbearance Plan and told Plaintiffs to disregard the letter. See FAC ¶¶ 26, 28, 34. However, in June 2010, Plaintiffs' June 2010 payment was rejected; on the back of Plaintiffs' check, the following was printed: "LOAN TOO DELINQUENT... - FORECLOSURE LOAN CMI.'" FAC ¶ 35.

Subsequently, in July 2010, CMI recorded a Notice of Default and Election to Sell Under Deed of Trust. See FAC ¶ 39; see also Defs.' RJN, Ex. 2 (notice). In the notice, CMI falsely alleged that Plaintiffs had been contacted to assess their financial situation and explore options to avoid foreclosure. See FAC ¶ 39.

On July 23, 2010, a CMI representative told Plaintiffs that there was no Forbearance Plan. The representative also told Plaintiffs that they had "90 days to come up with a solution in order to make nine payments of $2, 763.96 each, totaling $24, 875.74 to bring the primary loan current, in addition to the monthly mortgage payment of $2, 238.58." FAC ¶ 40.

On October 31, 2010, Plaintiffs filed for Chapter 13 bankruptcy. See FAC ¶ 41.

In August 2012, CMI rescinded the notice of default. See Defs.' RJN, Ex. 3 (notice).

In September 2012, Plaintiffs received a letter from CMI, stating that there was a Forbearance Plan but that it had been cancelled because the first payment was due on January 15, 2010, but was not received until January 23, 2010. See FAC ¶ 44.

On February 22, 2013, Plaintiffs' bankruptcy case was dismissed without their obtaining a discharge. See FAC ¶ 45.

In May 2014, CMI recorded a loan modification agreement that it entered into with Plaintiffs. See Defs.' RJN, Ex. 4 (modification agreement).

Based on, inter alia, the above allegations, Plaintiffs have asserted two claims for relief: (1) intentional misrepresentation and (2) a violation of ...

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