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Moore v. Freedom Mortgage Corp.

United States District Court, E.D. California

June 19, 2017

PRISCILLA N. MOORE, Plaintiff,
v.
FREEDOM MORTGAGE CORPORATION and NORTHWEST TRUSTEE SERVICES, INC., Defendants.

          MEMORANDUM DECISION AND ORDER RE DEFENDANT'S MOTION TO DISMISS (Doc. 3)

          Lawrence J. O'Neill, UNITED STATES CHIEF DISTRICT JUDGE

         I. PRELIMINARY STATEMENT TO PARTIES AND COUNSEL

         Judges in the Eastern District of California carry the heaviest caseloads in the nation, and this Court is unable to devote inordinate time and resources to individual cases and matters. Given the shortage of district judges and staff, this Court addresses only the arguments, evidence, and matters necessary to reach the decision in this order. The parties and counsel are encouraged to contact the offices of United States Senators Feinstein and Harris to address this Court's inability to accommodate the parties and this action. The parties are required to reconsider consent to conduct all further proceedings before a Magistrate Judge, whose schedules are far more realistic and accommodating to parties than that of U.S. Chief District Judge Lawrence J. O'Neill, who must prioritize criminal and older civil cases.

         Civil trials set before Chief Judge O'Neill trail until he becomes available and are subject to suspension mid-trial to accommodate criminal matters. Civil trials are no longer reset to a later date if Chief Judge O'Neill is unavailable on the original date set for trial. Moreover, this Court's Fresno Division randomly and without advance notice reassigns civil actions to U.S. District Judges throughout the nation to serve as visiting judges. In the absence of Magistrate Judge consent, this action is subject to reassignment to a U.S. District Judge from inside or outside the Eastern District of California.

         II. INTRODUCTION

         This case concerns a mortgage loan (“the Loan”) Plaintiff Priscilla N. Moore obtained on the home she previously owned (“the Property”) that was secured by a deed of trust assigned to Defendant Freedom Mortgage Corporation, and a non-judicial foreclosure sale on the Property. Plaintiff brings eight claims against Defendant under California statutory, contract, and tort law, and Defendant moves to dismiss them entirely with prejudice. See Doc. 3 at 3.

         The Court took the matter under submission on the papers pursuant to Local Rule 230(g). Doc. 9. For the following reasons, the Court GRANTS IN PART and DENIES IN PART Defendant's motion to dismiss (Doc. 3).

         III. FACTUAL AND PROCEDURAL BACKGROUND

         In June 2015, Plaintiff obtained the Loan. Doc. 1, Ex. 1, Complaint (“Compl.”) ¶ 10. At some time in “early 2016, ” Plaintiff began to suffer financial problems, so she attempted to modify the terms of the Loan. Id. ¶ 11. Specifically, Plaintiff attempted to enter into a “trial period plan” (“TPP”), which would make the terms of the Loan more manageable for her. See Id. ¶ 8. Plaintiff submitted to Defendant “a full and complete loan modification application and supplementary financial documents requested by Defendant.” Id. ¶ 12.

         By February 2016, however, Plaintiff had defaulted on the loan. See Doc. 4, Ex. 4. In late February 2016, the deed trustee, Defendant Northwest Trustee Services, Inc., filed a “Notice of Default and Election to Sell under the Deed of Trust” (“NTS”). See id.

         Nonetheless, in July 2016, Defendant informed Plaintiff that she had qualified for a federally sponsored loan modification program. Compl. ¶ 16. Defendant also sent Plaintiff a written TPP, which set forth certain obligations related to the Loan. Id. In particular, the TPP established a three-month payment schedule that was set to begin in August 2016 that provided lower monthly payments than required under the original terms of the Loan. Id. ¶ 17. The TPP explained that Plaintiff would qualify for a permanent loan modification if she timely made all three payments, and further stated that Defendant would abstain from initiating foreclosure proceedings if Plaintiff complied fully with the TPP's terms. Id. ¶¶ 18-19, 31. Plaintiff accepted the TPP, signed and returned a copy, and furnished to the loan servicer a notification of acceptance, all documents required for modification, and funds [for] each and every month as required by the TPP.” Id. ¶ 20. Plaintiff fully complied with the TPP's terms from August 2016 to January 2017. Id. ¶¶ 21-23.

         In January 2017, however, the Property was sold in a non-judicial foreclosure sale. See Doc. 4, Ex. 6. In February 2017, Defendant informed “Plaintiff that it would no longer accept her mortgage payments, and that it would not permanently modify the loan, and would not provide her with a final modification agreement.” Id. ¶ 27.

         As discussed in more detail below, Plaintiff alleges Defendant's conduct was unlawful for several reasons. Accordingly, Plaintiff brings eight claims against Defendant for: (1) breach of contract; (2) promissory estoppel; (3) violation of California Civil Code § 2923.6(c); (4) violation of California Civil Code § 2924.18; (5) violation of California Civil Code § 1788 et seq. (a.k.a. “the Rosenthal Act”); (6) negligence; (7) fraudulent misrepresentation; and (8) injunctive relief. Compl. at 1. Defendant moves to dismiss each claim on the ground that they fail as a matter of law.

         IV. STANDARD OF DECISION

         A motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) is a challenge to the sufficiency of the allegations set forth in the complaint. A 12(b)(6) dismissal is proper where there is either a “lack of a cognizable legal theory” or “the absence of sufficient facts alleged under a cognizable legal theory.” Balisteri v. Pacifica Police Dept., 901 F.2d 696, 699 (9th Cir. 1990). In considering a motion to dismiss for failure to state a claim, the court generally accepts as true the allegations in the complaint, construes the pleading in the light most favorable to the party opposing the motion, and resolves all doubts in the pleader's favor. Lazy Y. Ranch LTD v. Behrens, 546 F.3d 580, 588 (9th Cir. 2008).

         To survive a 12(b)(6) motion to dismiss, the plaintiff must, in accordance with Rule 8, 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). “The plausibility standard is not akin to a ‘probability requirement, ' but it asks for more than a sheer possibility that a defendant has acted unlawfully.” Id. (quoting Twombly, 550 U.S. at 556). “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.” Twombly, 550 U.S. at 555 (internal citations omitted). Thus, “bare assertions . . . amount[ing] to nothing more than a ‘formulaic recitation of the elements' . . . are not entitled to be assumed true.” Iqbal, 556 U.S. at 681. “[T]o be entitled to the presumption of truth, allegations in a complaint . . . must contain sufficient allegations of underlying facts to give fair notice and to enable the opposing party to defend itself effectively.” Starr v. Baca, 652 F.3d 1202, 1216 (9th Cir. 2011). In practice, “a complaint . . . must contain either direct or inferential allegations respecting all the material elements necessary to sustain recovery under some viable legal theory.” Twombly, 550 U.S. at 562.

         V. DISCUSSION

         A. ...


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