United States District Court, C.D. California
Present: Honorable CHRISTINA A. SNYDER
IN CHAMBERS MOTION TO DISMISS CASE (DOCKET #25, FILED
MAY 29, 2013) APPLICATION TO REMAND (Docket #14, filed April
CHRISTINA A. SNYDER JUDGE
filed the instant action in Los Angeles County Superior
Court, and on March 13, 2013, defendants removed the case to
this Court. Plaintiff’s complaint seeks to recover
damages and prevent the foreclosure of her home.
this case was removed, plaintiff requested a temporary
restraining order and preliminary injunction preventing
defendants from foreclosing on plaintiff’s home. The
state court held a hearing on the requests on February 25,
2013, at which no appearance was made on behalf of
defendants. The state court issued the requested preliminary
injunction at the hearing, subject to plaintiff posting an
undertaking in the amount of $50, 000 by March 11, 2013. Dkt.
#1 at 62 - 63.
April 15, 2013, the Court dismissed plaintiff’s
complaint without prejudice pursuant to Federal Rule of Civil
Procedure 8. Dkt. #17. On May 28, 2013, plaintiff filed a
First Amended Complaint (“FAC”), which alleges
claims for rescission, breach of contract, unfair business
practices pursuant to California’s Unfair Competition
Law (“UCL”), California Business and Professions
Code § 17200, and declaratory relief. Plaintiff’s
FAC seeks damages in excess of $50, 000, and an injunction
preventing defendants from continuing with a foreclosure of
29, 2013, defendants filed a motion to dismiss the FAC.
Plaintiff filed an opposition on June 14, 2013, and
defendants replied on June 18, 2013. The Court heard oral
argument on July 1, 2013. At that time, the parties agreed to
attempt to mediate this dispute. Those efforts were
unsuccessful. Therefore, after considering the parties’
arguments, the Court finds and concludes as follows.
case arises out of defendants’ attempts to foreclose on
real property located at 25431 Prado Las Fresas in Calabasas,
California (“the property”). FAC ¶ 1. On
July 27, 2006, plaintiff executed a note in favor of
non-party American Home Mortgage (“AHM”), which
was secured by a deed of trust to the property. Id.
¶ 9. At some subsequent point in time, Citibank, N.A.
(“Citibank”) acquired AHM’s interest in the
alleges that prior to executing the note, none of AHM’s
agents disclosed certain material and misleading aspects of
the note. Id. ¶¶ 11 - 12. Specifically,
plaintiff alleges that her note was a negative amortization
loan with a variable interest rate, and that none of
AHM’s agents disclosed the fact that her monthly
payments would therefore increase drastically increase over
the course of her loan. Id. ¶¶ 13 - 14.
While plaintiff admits that the terms of the loan documents
disclosed information regarding the possible fluctuations in
her loan payments, she claims that due to the confusing,
vague, and contradictory language in the documents, she was
unable to comprehend the documents she executed. Id.
¶¶ 12 - 15. Plaintiff alleges that AHM’s
agents intentionally failed to disclose the changes in
interest rates and monthly payments with intent to deceive
plaintiff and induce her to execute the note. Id.
point before August 7, 2012, plaintiff defaulted on the note.
On August 7, 2012, plaintiff and defendant Citibank entered
into a Forbearance Agreement. FAC ¶ 20, Ex. 3. The terms
of this agreement provided that plaintiff would make three
monthly payments to Citibank in the amount of $14, 033.38,
and that in exchange, Citibank would not initiate a
trustee’s sale during the months covered by the
agreement. Id. ¶ 21. Additionally, the
Forbearance Agreement provides that if plaintiff is unable to
cure her default prior to the expiration of the agreement,
plaintiff will be considered for a loan modification. FAC
¶ 21, Ex. 3. Plaintiff alleges that she timely made the
first two monthly payments under the Forbearance Agreement,
but that contrary to the terms of the agreement, Citibank
conducted a trustee’s sale in September 2012.
Id. ¶ 23. After the sale was conducted,
Citibank allegedly refused to accept the third monthly
payment due under the Forbearance Agreement. Id.
¶ 24. While Citibank rescinded the trustee’s sale
on September 28, 2012, plaintiff alleges that they still
refused to accept payment following the rescission.
Id. Additionally, plaintiff alleges that Citibank
will not attempt in good faith to offer her a reasonable loan
modification. Id. ¶ 26.
Motion to Dismiss
12(b)(6) motion tests the legal sufficiency of the claims
asserted in a complaint. “While a complaint attacked by
a Rule 12(b)(6) motion to dismiss does not need detailed
factual allegations, a plaintiff’s obligation to
provide the ‘grounds’ of his ‘entitlement
to relief’ requires more than labels and conclusions,
and a formulaic recitation of the elements of a cause of
action will not do.” Bell Atlantic Corp. v.
Twombly, 550 ...