United States District Court, C.D. California
JESUS G. BERNAL, District Judge.
Proceedings: Order (1) GRANTING IN PART and DENYING IN PART Defendants' Motion to Dismiss (Doc. No. 12); (2) VACATING the June 29, 2015 Hearing; and (3) DENYING AS MOOT Plaintiffs' Counsel's Request to Appear Telephonically at the Hearing (Doc. No. 17) (IN CHAMBERS)
Before the Court is Defendants' Motion to Dismiss Plaintiffs' First Amended Complaint. (Doc. No. 12.) The Court finds this matter appropriate for resolution without a hearing. See Local Rule 7-15; Fed.R.Civ.P. 78. After considering all papers timely filed in support of and in opposition to the Motion, the Court GRANTS IN PART and DENIES IN PART Defendants' Motion to Dismiss. The Court VACATES the June 29, 2015 hearing, and DENIES AS MOOT Plaintiffs' Counsel's Request to Appear Telephonically at the hearing.
A. Procedural History
On December 19, 2014, Plaintiffs Nicolas and Martha Colunga ("Plaintiffs") filed a Complaint in the San Bernardino Superior Court against Defendants Nationstar Mortgage LLC ("Nationstar") and Aurora Loan Services LLC ("Aurora") (collectively, "Defendants"). (Complaint, Doc. No. 1, Ex. A.) Defendants removed the case to this Court on April 2, 2015. (Not. of Removal, Doc. No. 1.) Plaintiffs filed their First Amended Complaint on April 30, 2015. ("FAC, " Doc. No. 11.)
On May 21, 2015, Defendants filed a Motion to Dismiss the FAC. ("Motion, " Doc. No. 12.) Plaintiffs opposed on June 1, 2015. ("Opp'n, " Doc. No. 15.) Defendants filed their reply on June 8, 2015. ("Reply, " Doc. No. 16.)
B. Allegations in the FAC
On March 2, 2006, Plaintiffs obtained a $344, 500.00 loan from Lehman Brothers Bank, (FAC, Ex. A), to refinance their property at 18775 Sahale Ln., Apple Valley, CA 92307 ("Sahale Property"). (FAC ¶¶ 7-9). Plaintiffs allege that at some point their loan was transferred to Aurora, and that Aurora is the current beneficiary of the loan. (FAC ¶¶ 2, 10.)
Plaintiffs assert that they began to experience financial hardship and sought relief through a permanent loan modification; nevertheless, they claim they stayed current on all their mortgage payments up to that point. (FAC ¶¶ 11-12.) Plaintiffs allege that when they approached Aurora for a modification, Aurora advised Plaintiffs that Plaintiffs could not receive a modification unless their payments were delinquent. (Id. ¶ 13.) Aurora advised them to miss at least three payments before submitting their loan modification application package. (Id. ¶ 14.)
Plaintiffs assert that, in reliance upon Aurora's advice, Plaintiffs defaulted on their loan in 2010 and Aurora caused a Notice of Default ("NOD") to be recorded against Plaintiffs' property on December 10, 2010. (Id. ¶¶ 15-16). Plaintiffs then submitted a loan modification application package to Aurora. (Id. ¶ 18). Plaintiffs allege that, for months after their submission, Aurora requested many rounds of additional documentation, and Plaintiffs claim they always provided the requested documents. (Id. ¶¶ 19-20.) On November 18, 2011, Aurora rescinded the original NOD and caused a second NOD to be recorded on Plaintiffs' property. (Id. ¶¶ 21-22.) Finally, after months of requesting additional documents, Aurora denied Plaintiffs' loan modification application for failure to submit the requested documents. (Id. ¶¶ 23, 38.)
Plaintiffs then submitted a second request for loan modification. (Id. ¶ 39.) Plaintiffs allege that Aurora nevertheless continued foreclosure proceedings and, on October 9, 2012, caused a Notice of Trustee's Sale to be recorded against Plaintiffs' property even while the second modification request was still under consideration. (Id. ¶¶ 23-24.) The second modification request was denied on the same grounds as the first. (Id. ¶¶ 25, 41.) Finally, Plaintiffs submitted another complete loan modification package in 2014 that was again denied by Aurora for failure to submit various requested documents. (Id. ¶¶ 26-28.)
The FAC alleges three causes of action against Defendants: (1) fraud; (2) negligent administration of Plaintiffs' loan modification applications; and (3) violation of ...