Jamison v. Bank of America, N.A.

          ORDER

         Plaintiff Cynthia A. Jamison filed this putative class action against defendant Bank of America, N.A. ("BANA"), alleging BANA: (1) violated the Truth in Lending Act of 1968 ("TILA"), 15 U.S.C. § 1601 et seq., TILA's implementing regulation, Regulation Z, 12 C.F.R. § 1026 et seq., and the California Consumers Legal Remedies Act ("CLRA"), Cal. Civ. Code § 1750 et seq., by failing to disclose insurance claim proceeds in its mortgage payoff and periodic statements; and (2) violated the California Unfair Competition Law ("UCL"), Cal. Bus. & Prof. Code § 17200 et seq., by charging plaintiff a facsimile fee for providing a payoff statement that was delivered by mail. This matter is before the court on defendant's motion to dismiss the complaint or, alternatively, to stay the proceedings pending the Supreme Court's decision in Spokeo, Inc. v. Robins, which has now issued, see 136 S.Ct. 1540, 578 U.S.____ (2016). ECF No. 9 ("Mot."). Plaintiff opposed the motion, ECF No. 11 ("Opp'n"), and defendant replied, ECF No. 18 ("Reply"). The court held a hearing and initial scheduling conference on June 17, 2016; Patricia Avery, Aidan Poppler, and Matthew Insley-Pruitt appeared for plaintiff, and Amanda Groves appeared for defendant. As explained below, the court GRANTS IN PART and DENIES IN PART defendant's motion.

         I. BACKGROUND

         A. Procedural Background

         Plaintiff filed her complaint on February 26, 2016. ECF No. 1. BANA filed the instant motion to dismiss on April 19, 2016. ECF No. 9. Defendant advances four arguments for dismissal: (1) TILA and Regulation Z do not require that mortgage payoff or periodic statements itemize insurance proceeds; (2) TILA's statute of limitations bars plaintiff's claims that arose prior to February 2, 2015; (3) the complaint fails to plead a "good" or "service" covered by the CLRA or any actual damages; and (4) the complaint pleads only conclusory allegations with respect to the UCL claim. See generally Mot. Plaintiff opposes the motion, responding that (1) BANA violated TILA's requirement that banks provide "accurate" mortgage statements; (2) plaintiff's claims are based only on statements issued by BANA within TILA's limitations period; (3) mortgage services are "services" covered by the CLRA, and the complaint alleges damages arising from plaintiff's disputes with her contractor; and (4) the complaint sufficiently states a UCL claim. See generally Opp'n.

         B. Factual Allegations and Claims

         On or about November 19, 2009, plaintiff obtained a mortgage loan with a principal amount of $175, 986.00, secured by a deed of trust recorded against her residential home at 905 Nogales Street, Sacramento, California ("the property"). Compl. ¶ 23, ECF No. 1; Deed of Trust ("DOT"), Def.'s Ex. A, ECF No. 9-1.^[1] BANA was the owner and servicer of the mortgage at all pertinent times. Compl. ¶ 8. Section four of the deed of trust requires plaintiff to maintain property insurance and provides that, in the event of loss, payments be made directly to BANA. Id. ¶ 24; DOT at 3. Section four continues, "All or any part of the insurance proceeds may be applied by Lender, at its option, either (a) to the reduction of the indebtedness under the Note and this Security Instrument . . ., or (b) to the restoration or repair of the damaged Property." Compl. ¶ 25; DOT at 3.

         On or about December 31, 2010, a fire broke out in plaintiff's home, leaving it uninhabitable. Compl. ¶ 28. Plaintiff submitted a claim to her insurance company, USAA, which then issued a series of checks jointly payable to plaintiff, defendant, and the contractor making repairs to cover the loss. Id. ¶ 29. Plaintiff submitted the insurance checks she received, totaling $156, 340.64, to defendant. Id. ¶ 32. Defendant thereafter made a series of payments to plaintiff's contractor totaling $154, 340.64. Id. ¶ 33. Since 2012, defendant has held the remaining $2, 000 in undisbursed insurance funds, which it has failed to disclose to plaintiff. Id. ¶ 35.

         Defendant regularly provides monthly account statements that provide a detailed breakdown of the principal due, interest due, escrow due, overdue payments, current period fees and charges, and unapplied funds to be credited to the account, each accurate up to the cent. Id. ¶¶ 42-45. However, these periodic statements have not disclosed the existence of the property insurance funds or included any line item for undisbursed insurance funds. Id.

         On March 26, 2015 and February 5, 2016, defendant issued payoff statements to plaintiff claiming to reflect the amount payable in order for defendant to release its lien on the property. Id. ¶¶ 47, 49. The payoff statements itemized the principal, interest, escrow, and other fees due, with accuracy up to the cent. Id. ¶¶ 47-50, 55-56. The statements also included a daily calculation of the amount that would be due in the weeks before and after the expiration date of the payoff statement, as well as a summary of upcoming expenses that would be paid out of the escrow account. Id. ¶¶ 55-56. However, as with the periodic statements, the payoff statements did not disclose the existence of the undisbursed insurance funds. Id. ¶ 54. In addition, the 2016 payoff statement included a "Payoff Statement via Facsimile Fee" of $5.00, even though the statement was sent by mail, and the BANA website states there is no charge for sending the statement by mail. Id. ¶¶ 51-53, 86. Plaintiff did not request the statement be sent via facsimile and does not own a fax machine. Id. ¶¶ 51-52.

         With respect to plaintiff's injury, the complaint alleges "Plaintiff has been harmed and has suffered an increased cost or burden due to Defendant's actions . . . ." Id. ¶ 80. Since 2012, plaintiff has been concerned that her contractor overbilled her for unperformed and shoddily performed work. Id. ¶¶ 36-37. Plaintiff seeks information from defendant "to enable her to know the details of all payments made and the funds that have not been disbursed from her account." Id. ¶ 37. In addition, if class members were to apply for a loan modification or refinancing, if they wished to fully satisfy their loan obligation, or if BANA attempted foreclosure, the payoff statements would not provide an accurate view of the outstanding balance. Id. ¶¶ 3, 72-75.

         II. LEGAL STANDARDS

         A motion to dismiss under Federal Rule of Civil Procedure 12(b)(1) tests the court's subject matter jurisdiction. See, e.g., Savage v. Glendale Union High Sch., 343 F.3d 1036, 1039-40 (9th Cir. 2003). When a party moves to dismiss for lack of subject matter jurisdiction, "the plaintiff bears the burden of demonstrating that the court has jurisdiction." Boardman v. Shulman, No. 12-00639, 2012 WL 6088309, at *2 (E.D. Cal. Dec. 6, 2012), aff'd sub nom. Boardman v. C.I.R., 597 F.App'x 413 (9th Cir. 2015). If a plaintiff lacks standing, the court lacks subject matter jurisdiction under Article III of the U.S. Constitution. Cetacean Cmty. v. Bush, 386 F.3d 1169, 1174 (9th Cir. 2004).

         Under Rule 12(b)(6) of the Federal Rules of Civil Procedure, a party may move to dismiss a complaint for "failure to state a claim upon which relief can be granted." The motion may be granted only if the complaint "lacks a cognizable legal theory or sufficient facts to support a cognizable legal theory." Hartmann v. Cal. Dep't of Corr. & Rehab., 707 F.3d 1114, 1122 (9th Cir. 2013).

         Although a complaint need contain only "a short and plain statement of the claim showing that the pleader is entitled to relief, " Fed.R.Civ.P. 8(a)(2), in order to survive a motion to dismiss this short and plain statement "must contain sufficient factual matter . . . 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 complaint must include something more than "an unadorned, the-defendant-unlawfully-harmed-me accusation" or "‘labels and conclusions' or ‘a formulaic recitation of the elements of a cause of action.'" Id. (quoting Twombly, 550 U.S. at 555). Determining whether a complaint will survive a motion to dismiss for failure to state a claim is a "context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Id. at 679. Ultimately, the inquiry focuses on the interplay between the factual allegations of the complaint and the dispositive issues of law in the action. See Hishon v. King & Spalding, 467 U.S. 69, 73 (1984).

         In making this context-specific evaluation, this court must construe the complaint in the light most favorable to the plaintiff and accept its factual allegations as true. Erickson v. Pardus, 551 U.S. 89, 93-94 (2007). This rule does not apply to "a legal conclusion couched as a factual allegation, " Twombly, 550 U.S. at 555 (quoting Papasan v. Allain, 478 U.S. 265, 286 (1986)), "allegations that contradict matters properly subject to judicial notice, " Sprewell v. Golden State Warriors, 266 F.3d 979, 988-89 (9th Cir. 2001), or material attached to or incorporated by reference into the complaint, see Id. A court's consideration of documents attached to a complaint, documents incorporated by reference in the complaint, or matters of judicial notice will not convert a motion to dismiss into a motion for summary judgment. United States v. Ritchie, 342 F.3d 903, 907-08 (9th Cir. 2003); Parks Sch. of Bus. v. Symington, 51 F.3d 1480, 1484 (9th Cir. 1995); cf. Van Buskirk v. Cable News Network, Inc., 284 F.3d 977, 980 (9th Cir. 2002) (noting that even though court may look beyond pleadings on motion to dismiss, generally court is limited to face of the complaint on 12(b)(6) motion).

         III. DISCUSSION

         A. TILA and Regulation Z ...