United States District Court, N.D. California, San Jose Division
ORDER GRANTING DEFENDANT NATIONSTAR'S MOTION TO
DISMISS WITH LEAVE TO AMEND [RE: ECF 17]
LABSON FREEMAN UNITED STATES DISTRICT JUDGE
Rosalio Alvarez (“Alvarez”) brings this action
against Defendant Nationstar Mortgage, LLC
(“Nationstar”). This matter comes before the
Court upon Nationstar’s motion to dismiss
Plaintiffs’ first amended complaint
(“FAC”), pursuant to Fed.R.Civ.P. 12(b)(6). Mot.,
ECF 17. For the reasons discussed below, Nationstar’s
motion to dismiss is GRANTED WITH LEAVE TO AMEND.
following facts are taken from Alvarez’s FAC. Alvarez
owns and occupies a seven-bedroom duplex at 121 Topeka Avenue
and 123 Topeka Avenue in San Jose, California. FAC
¶¶ 1, 4. In order to purchase this property,
Alvarez obtained a loan from Bank of America for
approximately $622, 000. Id. at ¶ 6. He made
payments on this loan for several years before falling behind
in 2012. Id. at ¶¶ 8, 13.
alleges that around December 2012, Bank of America improperly
attempted to foreclose on the property. Id. at
¶ 14. His counsel was able to stop the foreclosure and
allegedly got Bank of America to admit wrongdoing,
id. at ¶ 17, and in January 2014, Bank of
America sold Alvarez’s loan to Nationstar, id.
at ¶ 18.
April 2014, Alvarez sought a loan modification from
Nationstar. Id. at ¶ 19. During the following
several months, he submitted a complete loan modification,
id. at ¶¶ 20, 29, and remained in contact
with Nationstar regarding the status of his application,
id. at ¶ 26. During this time, Nationstar told
Alvarez his single point of contact for his application would
be Michael Smith. Id. at ¶ 28. However, during
the month of May, Alvarez and his representatives had to
speak with at least six different individuals at Nationstar
regarding his loan modification. Id. at ¶¶
30-32. Each Nationstar representative gave
Alvarez different information regarding the status of his
loan modification. Id. at ¶ 33. For example, on
May 20, 2014, he was told that his modification application
was complete and under review, id. at ¶ 34, but
a few weeks later, on June 6, 2014, a different Nationstar
representative told Alvarez his loan modification application
was missing information, id. at ¶36, and on
June 14, 2014, another Nationstar representative claimed the
application was missing more information, id. at
¶ 37. This cycle of being told conflicting and
inconsistent information continued through 2014. Id.
at ¶¶ 38-53.
December 2014, Nationstar sent Alvarez a letter stating it
was denying his modification. Id. at ¶ 53.
Alvarez alleges that due to the “suspicious
circumstances surrounding his denial, ” Nationstar
offered him another loan modification in January and February
of 2015. Id. at ¶ 55. On April 19, 2015,
Nationstar sent Alvarez a letter stating that it was
assigning him a new loan specialist as a single point of
contact. Id. at ¶ 59. Despite entering a new
application process with Nationstar, on April 21, 2015,
Alvarez was given a notice of default. Id. at ¶
56. This notice of default was served without any prior
notice stating that his new application had been denied.
Id. at ¶ 57.
result of the above allegations, Alvarez is suing Nationstar
for breach of contract, breach of the covenant of good faith
and fair dealing, promissory estoppel, fraudulent
misrepresentation, wrongful foreclosure in violation of Cal.
Civ. Code § 2923.5, dual tracking in violation of Cal.
Civ. Code § 2923.6, violating Cal. Civ. Code §
2923.7, violating the California Unfair Competition Law, and
violating the Rosenthal Fair Debt Collection Practices Act.
motion to dismiss under Rule 12(b)(6) concerns what facts a
plaintiff must plead on the face of the complaint. Under Rule
8(a)(2) of the Federal Rules of Civil Procedure, a complaint
must include “a short and plain statement of the claim
showing that the pleader is entitled to relief.” Any
complaint that does not meet this requirement can be
dismissed pursuant to Rule 12(b)(6). A “short and plain
statement” demands that a plaintiff plead “enough
facts to state a claim to relief that is plausible on its
face, ” Bell Atl. Corp. v. Twombly, 550 U.S.
544, 570 (2007), which requires that “the plaintiff
plead factual content that allows the court to draw the
reasonable inference that the defendant is liable for the
misconduct alleged.” Ashcroft v. Iqbal, 556
U.S. 662, 678 (2009). The Court must “accept factual
allegations in the complaint as true and construe the
pleadings in the light most favorable to the nonmoving
party.” Manzarek v. St. Paul Fire & Marine Ins.
Co., 519 F.3d 1025, 1031 (9th Cir. 2008).
Leave to Amend
Rule 15(a), a court should grant leave to amend “when
justice so requires, ” because “the purpose of
Rule 15…[is] to facilitate decision on the merits,
rather than on the pleadings or technicalities.”
Lopez v. Smith, 203 F.3d 1122, 1127 (9th Cir. 2000)
(en banc). A court may deny leave to amend for several
reasons, including “undue delay, bad faith, . . . [and]
futility of amendment.” Eminence Capital, LLC v.
Aspeon, Inc., 316 F.3d 1048, 1052 (9th Cir. 2003).
initial matter, the Court notes that Alvarez’s
opposition to the motion to dismiss uses the plural form of
plaintiff and refers to allegations not contained in the FAC,
arguments not made by Nationstar, exhibits not attached to
the FAC, and defendants that are not defendants in this
action. While the Court is giving Alvarez leave to amend, in
part because of the confusing nature of his FAC and
opposition brief, the Court expects all parties to carefully
review any future filings to reduce such confusion. Further,
any unexplained mismatches or ambiguities between any amended
pleadings and Alvarez’s briefing will not be grounds
for leave to amend in the future.
Breach of Contract (First Cause of Action)
argues that Alvarez’s breach of contract claim is not
sufficiently pled because he has not adequately alleged the
contract terms, his performance under the contract, or
Nationstar’s breach of the contract. Mot. 3, ECF 17.
Alvarez responds that he has sufficiently alleged a breach of
contract since he pled the legal effect and substance of the
loan agreement and attached a copy of the contract to the
FAC. Opp. 7, ECF 19.
Court finds that Alvarez has not adequately alleged a claim
for breach of contract. “A cause of action for breach
of contract requires proof of the following elements: (1)
existence of the contract; (2) plaintiff’s performance
or excuse for nonperformance; (3) defendant’s breach;
and (4) damages to plaintiff as a result of the
breach.” Miles v. Deutsche Bank National Trust
Co., 236 Cal.App.4th 394, 402 (2015) (quoting CDF
Firefighters v. Maldonado, 158 Cal.App.4th 1226, 1239
(2008)). In order to sufficiently allege the existence of a
contract, (1) “the terms must be set out verbatim in
the body of the complaint[, (2)] a copy of the written
instrument must be attached…, ” or (3) “a
plaintiff may plead the legal effect of the contract rather
than its precise language.” Id. at ¶ 402;
see also 4 Witkin, Cal. Procedure, Pleading §
519 (“The other method of pleading a written contract
is according to its legal effect, by alleging the making, and
then proceeding to allege the substance of its relevant
terms. This is more difficult, for it requires a careful
analysis of the instrument, comprehensiveness in statement,
and avoidance of legal conclusions, and it involves the
danger of variance where the instrument proved differs from
that alleged. Nevertheless, it is an established method,
although infrequently employed.”). Here, Alvarez has
not set forth verbatim the terms of the contract in the FAC
and contrary to his statements in his opposition brief, he
has not attached the contract to the FAC. Furthermore,
Alvarez has not sufficiently pled the legal effect of the
contract. In the FAC, Alvarez alleges that the contract
required Nationstar to follow California law and that by
violating law, Nationstar breached the contract. See,
e.g., FAC ¶¶ 86, 87, 93, 94. But in his
opposition brief, Alvarez refers to a “breach of the
Trial Payment Agreement, ” an agreement that is not
mentioned in the FAC. Alvarez’s non-existent
allegations regarding a “Trial Payment Agreement”
are not sufficient to show the existence of the contract. His
failure to adequately allege the existence of a contract is
fatal to his breach of contract claim and accordingly, the
Court GRANTS Nationstar’s motion to dismiss with leave
Breach of the Covenant of Good Faith and Fair Dealing ...