United States District Court, N.D. California, San Jose Division
ORDER GRANTING MOTION TO DISMISS PLAINTIFF'S
SECOND AMENDED COMPLAINT [RE: ECF 29]
LABSON FREEMAN, UNITED STATES DISTRICT JUDGE
Rosalio Alvarez (“Alvarez”) brings this action
against Defendant Nationstar Mortgage, LLC
(“Nationstar”) in connection with his properties
and his loan modification applications. Before the Court is
Nationstar's motion to dismiss Plaintiffs' second
amended complaint (“SAC”), pursuant to
Fed.R.Civ.P. 12(b)(6). Mot., ECF 29. Having considered the
papers filed in conjunction with the motion and the
parties' oral argument at the hearing on January 26,
2017, the Court GRANTS Nationstar's motion to dismiss for
the reasons set forth below.
following facts are taken from Alvarez's SAC. Alvarez
owns and occupies a seven-bedroom duplex at 121 Topeka Avenue
and 123 Topeka Avenue in San Jose, California. SAC
¶¶ 1, 4. In order to purchase this property,
Alvarez obtained a loan from Bank of America for
approximately $622, 000. Id. ¶ 6. He made
payments on this loan for several years before falling behind
in 2012. Id. ¶¶ 8, 13.
alleges that on or before December 2012, Bank of America
improperly attempted to foreclose on the property.
Id. ¶ 14. His counsel was able to stop the
foreclosure and allegedly got Bank of America to admit
wrongdoing. Id. ¶ 17. In January 2014, Bank of
America sold Alvarez's loan to Nationstar. Id.
April 2014, Alvarez sought a loan modification from
Nationstar. Id. ¶ 19. During the following
several months, he submitted a complete loan modification
application. Id. ¶¶ 20, 29. Alvarez
remained in contact with Nationstar regarding the status of
his application. Id. ¶ 26. During this time,
Nationstar told Alvarez his single point of contact
(“SPOC”) for his application would be Michael
Smith. Id. ¶ 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. ¶¶ 30-32. Each
Nationstar representative gave Alvarez different information
regarding the status of his loan modification. Id.
¶ 33. For example, on May 20, 2014, he was told that his
modification application was complete and under review,
id. ¶ 34, but a few weeks later, on June 6,
2014, a different Nationstar representative told Alvarez his
loan modification application was missing information,
id. ¶36, and on June 14, 2014, another
Nationstar representative claimed the application was missing
more information, id. ¶ 37. This cycle of being
told conflicting and inconsistent information continued
throughout 2014. Id. ¶¶ 38-53.
December 2014, Nationstar sent Alvarez a letter stating it
was denying his loan modification application. Id.
¶ 53. Alvarez alleges that Nationstar offered him
another review of his loan modification if he provided a
complete loan modification application. Id. ¶
55. Alvarez then provided a complete loan modification
application to Nationstar in January of 2015. Id.
¶ 56. Despite entering a new application process with
Nationstar, Alvarez was given a notice of default on April 21
of 2015. Id. ¶ 57. This notice of default was
served without any prior notice stating that his new
application had been denied. Id. ¶ 58. Alvarez
further alleges that Nationstar did not properly notify
Alvarez that he had a right to appeal this denial.
Id. ¶ 59. The only document received by Alvarez
prior to this notice of default was Nationstar's letter
dated April 19, 2015, in which it merely notified Alvarez
that it was assigning him a new loan specialist, Andrew
Harrison, as his SPOC.
on the allegations set forth in the SAC, 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
California Civil Code § 2923.5, violating California
Civil Code § 2923.6, violating California Civil Code
§ 2923.7, violating the California Business and
Professional Code § 17200, and violating the Rosenthal
Fair Debt Collection Practices Act.
August 11, 2015, Alvarez brought this action against
Nationstar in Santa Clara County Superior Court, alleging
several causes of actions arising out of Alvarez's loan
modification applications with Nationstar. The case was later
removed to this Court based on diversity of citizenship
pursuant to 28 U.S.C. §§ 1441 and 1332. On
September 22, 2015, Nationstar moved to dismiss Alvarez's
complaint. ECF 7. Alvarez subsequently amended his complaint
mooting Nationstar's motion to dismiss. ECF 15.
Nationstar then moved to dismiss Alvarez's first amended
complaint on January 27, 2016. ECF 17. On July 29, 2016, the
Court granted Nationstar's motion to dismiss
Alvarez's first amended complaint with leave to amend.
then filed his second amended complaint (“SAC”)
on August 29, 2016, which Nationstar now moves to dismiss.
ECF 28; Mot. On January 26, 2017, the Court held a hearing on
Nationstar's motion to dismiss Alvarez's second
amended complaint. ECF 36. For the reasons set forth below,
the Court rules as follows.
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).
Breach of Contract (First Cause of Action)
brings a breach of contract claim against Nationstar for
“breaching its contractual obligations in unlawfully
violating existing California law and loan procedures in
contradiction to its responsibilities and obligation under
contract.” SAC ¶ 63. Nationstar argues that
Alvarez's breach of contract claim is not sufficiently
pled because Alvarez fails to allege the existence of the
contract at issue. Specifically, Nationstar argues that
Alvarez has not adequately alleged the contract terms, his
performance under the contract, or Nationstar's breach of
the contract. Mot. 3.
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)). To sufficiently allege the
existence of a contract, “the terms [of the contract]
must be set out verbatim in the body of the complaint,
” “a copy of the written instrument must be
attached and incorporated by reference, ” or “a
plaintiff may plead the legal effect of the contract rather
than its precise language.” Id.
Court finds that Alvarez has not adequately alleged a claim
for breach of contract. Alvarez conclusorily alleges that he
was provided an opportunity to pursue a loan modification
application by Nationstar, and Nationstar failed to meet its
obligations under the Homeowner's Bill of Rights
(“HBOR”) by improperly reviewing Alvarez's
loan modification application. However, Alvarez has not set
forth the terms of the contract in the SAC or any of his
prior complaints, nor has he attached a copy of the alleged
contract to the complaint. Alvarez also has not sufficiently
pled the legal effect of the contract. In fact, the alleged
contract and its terms have never been identified by Alvarez.
Alvarez's failure to allege the existence of a contract
is thus fatal to his breach of contract claim against
Nationstar. Alvarez did not dispute at the motion hearing
that the breach of contract claim suffers this failure.
Alvarez has failed to allege facts supporting the other basic
elements of the claim. He has not alleged his own
performance, and in fact, he admits he has failed to pay his
mortgage since 2012, and makes no attempt to allege excuse.
SAC ¶¶ 13, 68, 101-02, 112. He also fails to allege
what portion of the unidentified contract Nationstar
violated. The above-described deficiencies are identical to
those pointed out by the Court in its order granting
Nationstar's motion to dismiss the first amended
complaint. ECF 26. Accordingly, the Court GRANTS
Nationstar's motion to dismiss this breach of contract
Breach of the Covenant of Good Faith and Fair Dealing (Second
Cause of Action)
alleges that Nationstar was “required to conduct a good
faith review” of Alvarez's application packet in
accordance with California statutes and by failing that
obligation, Nationstar breached the covenant of good faith
and fair dealing. SAC ¶¶ 109, 111, 129, 131.
Nationstar argues that Alvarez ...