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Fischer v. Ditech Financial LLC

United States District Court, E.D. California

May 23, 2017

ALVINA FISCHER, formerly known as ALVINA BANNISTER, Plaintiff,


         This matter is before the court on defendants Ditech Financial LLC (“Ditech Financial”), Ditech Mortgage Corporation (“Ditech Mortgage”), Green Tree Servicing LLC (“Green Tree”), EverBank, and EverHome Mortgage Company's (“EverHome”) motion to dismiss plaintiff Alvina Fischer's amended complaint for failure to state a claim. Having considered the parties' briefs and oral arguments and for the reasons set forth below, the court will grant defendants' motion to dismiss.


         According to her amended complaint, plaintiff Alvina Fischer entered into a mortgage contract in 2001 with Mission Hills Mortgage Company for the purchase of a property located at 9124 East Herndon Avenue, in Clovis, California. (Doc. No. 16 ¶¶ 1, 13.) A deed of trust was recorded and subsequently transferred to the defendants. (Id. ¶¶ 14-15.) In 2011, plaintiff filed for bankruptcy protection in the Eastern District of California. (Id. ¶ 16.) She continued to make payments on her mortgage loan until March 2016. (Id. ¶ 19.)

         At some unspecified time, defendants informed plaintiff that her loan was current. (Id. ¶ 20.)[1] Defendants also allegedly transferred their interest in the loan among them, but plaintiff was not originally informed of the transfer or provided year-end tax information. (Id. ¶¶ 21-23.) Plaintiff went to refinance her property and was told by both a representative of defendant Green Tree and an independent broker that the balance due on her loan was $0.00. (Id. ¶¶ 24-25.) When plaintiff contacted defendant Ditech Mortgage, she was told it was unaware of any loan in her name. (Id. ¶ 26.)

         In March 2016, plaintiff Fischer, through counsel, sent a letter to defendants requesting information regarding her loan, and for a reconveyance of the deed of trust on her property. The letter stated that if no response was received by her within thirty days, plaintiff would believe her loan to be satisfied. (Id. ¶¶ 27-28, 30.) Plaintiff did not receive a response. (Id. ¶¶ 29, 31.) Plaintiff also alleges that payments she sent to defendants, through defendant Green Tree, were not being cashed, and that in May 2016, she received a letter from defendants stating that her prior payment checks could no longer be cashed because they were considered stale. (Id. ¶¶ 32, 35.)

         Plaintiff commenced this action in Fresno County Superior Court on September 15, 2016. On October 14, 2016, defendants Ditech Financial, Ditech Mortgage, and Green Tree removed the action to federal court on the basis of diversity jurisdiction. (Doc. No. 1.) Plaintiff's original complaint, based on substantially the same factual allegations as those now appearing in her amended complaint, alleged causes of action to quiet title to her property, and for declaratory relief. Following this court's order dismissing plaintiff's original complaint (see Doc. No. 13), plaintiff amended her complaint to remove those causes of action and instead assert the following causes of action: (1) breach of contract, (2) breach of covenant of good faith and fair dealing, (3) violation of California's Unfair Competition Law, (4) intentional misrepresentation, (5) negligent misrepresentation, and (6) negligent infliction of emotional distress. (See Doc. No. 16.)

         On February 6, 2017, defendants filed the instant motion to dismiss. (Doc. No. 18.) Plaintiff initially filed no opposition or statement of non-opposition to the motion. A hearing on defendants' motion to dismiss was held on April 4, 2017. Plaintiff Fischer, proceeding pro se, appeared on her own behalf, and attorney Meagan S. Tom appeared on behalf of the defendants. At the hearing, it became apparent to the court that plaintiff misunderstood her obligations under the court's Local Rules in regard to responding to defendants' motion. Accordingly, the court gave plaintiff an additional two weeks to file a written opposition to that motion and later extended that filing deadline by two more weeks. (See Doc. Nos. 21, 23.) On May 2, 2017, plaintiff timely filed her opposition to the pending motion to dismiss. (Doc. No. 24.) On May 9, 2017, defendants filed their reply. (Doc. No. 25.)


         The purpose of a motion to dismiss pursuant to Rule 12(b)(6) is to test the legal sufficiency of the complaint. N. Star Int'l v. Ariz. Corp. Comm'n, 720 F.2d 578, 581 (9th Cir. 1983). “Dismissal can be based on the lack of a cognizable legal theory or the absence of sufficient facts alleged under a cognizable legal theory.” Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1990). A plaintiff is required to allege “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). “A claim has facial plausibility when the plaintiff pleads 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).

         In determining whether a complaint states a claim on which relief may be granted, the court accepts as true the allegations in the complaint and construes the allegations in the light most favorable to the plaintiff. Hishon v. King & Spalding, 467 U.S. 69, 73 (1984); Love v. United States, 915 F.2d 1242, 1245 (9th Cir. 1989). However, the court need not assume the truth of legal conclusions cast in the form of factual allegations. United States ex rel. Chunie v. Ringrose, 788 F.2d 638, 643 n.2 (9th Cir. 1986). While Rule 8(a) does not require detailed factual allegations, “it demands more than an unadorned, the defendant-unlawfully-harmed-me accusation.” Iqbal, 556 U.S. at 678. A pleading is insufficient if it offers mere “labels and conclusions” or “a formulaic recitation of the elements of a cause of action.” Twombly, 550 U.S. at 555; see also Iqbal, 556 U.S. at 676 (“Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.”). Moreover, it is inappropriate to assume that the plaintiff “can prove facts which it has not alleged or that the defendants have violated the . . . laws in ways that have not been alleged.” Associated Gen. Contractors of California, Inc. v. California State Council of Carpenters, 459 U.S. 519, 526 (1983). In ruling on a motion to dismiss brought pursuant to Rule 12(b)(6), the court is permitted to consider material which is properly submitted as part of the complaint, documents that are not physically attached to the complaint if their authenticity is not contested and the plaintiffs' complaint necessarily relies on them, and matters of public record. Lee v. City of Los Angeles, 250 F.3d 668, 688-89 (9th Cir. 2001).


         As noted above, plaintiff asserts six new state law causes of action in her amended complaint. Federal courts sitting in diversity apply state substantive law and federal procedural law. See Mason & Dixon Intermodal, Inc. v. Lapmaster Int'l LLC, 632 F.3d 1056, 1060 (9th Cir. 2011) (“When a district court sits in diversity, or hears state law claims based on supplemental jurisdiction, the court applies state substantive law to the state law claims.”); Zamani v. Carnes, 491 F.3d 990, 995 (9th Cir. 2007). When interpreting state law, a federal court is bound by the decisions of a state's highest court. Trishan Air, Inc. v. Fed. Ins. Co., 635 F.3d 422, 427 (9th Cir. 2011). In the absence of a governing state decision, a federal court attempts to predict how the highest state court would decide the issue, using intermediate appellate court decisions, decisions from other jurisdictions, statutes, treatises, and restatements as guidance. Id. Below, the court will address defendants' motion to dismiss with respect to each of plaintiff's claims brought pursuant to state law.

         A. Breach of Contract

         Under California law, to state a claim for breach of contract, a plaintiff must allege facts showing (1) the existence of the contract, (2) plaintiff's performance or excuse for nonperformance of the contract, (3) defendant's breach of the contract, and (4) resulting damages. Oasis W. Realty, LLC v. Goldman, 51 Cal.4th 811, 821 (2011) (citing Reichert v. General Ins. Co., 68 Cal. 2d 822, 830 (1968)); Armstrong Petrol Corp. v. Tri Valley Oil & Gas Co., 116 Cal.App.4th 1375, 1391 n.6 (2004). When pleading the existence of a contract, a plaintiff need not attach the contract as an exhibit to the complaint or set forth the relevant terms verbatim, but she is required to “identify the specific provision of the contract allegedly breached by the defendant.” Kaar v. Wells Fargo Bank, N.A., No. C 16-01290 WHA, 2016 WL 3068396, at *1 (N.D. Cal. June 1, 2016); see also In re Anthem, Inc. Data Breach Litig., 162 F.Supp.3d 953, 978 (N.D. Cal. 2016); Blanco v. Am. Home Mortg. Servicing, Inc., 2:09-cv-00578-WBS-DAD, 2009 WL 4674904, at *7 (E.D. Cal. Dec. 4, 2009) (holding that vague allegations of a promise in a written contract, without reference to the ...

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