Banton v. Wells Fargo Bank, N.A.

          ORDER GRANTING DEFENDANT'S MOTION TO DISMISS (DOC. NO. 5)

         This matter is before the court on defendant Wells Fargo Bank, N.A.'s (“Wells Fargo”) motion to dismiss plaintiff Darryl Banton's complaint. On October 16, 2019, the motion came before the court for hearing. Attorney Fernando Leone appeared on behalf of plaintiff, and attorney Patil Derderian appeared on behalf of defendant. Based on the court's review of the pending motion and the information presented by counsel at the hearing, defendant's motion to dismiss will be granted.

         BACKGROUND

         Plaintiff originally filed this action on May 30, 2019 in Kern County Superior Court, alleging violations of California's Homeowner's Bill of Rights, California Civil Code § 2923.5 et seq., as well as claims of negligence and unfair competition, California Business & Professions Code § 17200 et seq., as they relate to his residential mortgage loan modification application. (Doc. No. 1, Ex. A (“Compl.”) at ¶¶ 20-77.) The crux of the suit is that, according to plaintiff, defendant has attempted to foreclose on his personal residence at 1201 Alder Avenue, Tehachapi, CA 93561 (the “Property”), despite his efforts to seek loan modification. (Id. at ¶¶ 20-77.)

         Defendant removed the action to this court on July 5, 2019 on the basis of diversity jurisdiction and moved to dismiss the complaint on August 9, 2019. (Doc. Nos. 1, 5.) Plaintiff responded in opposition on August 27, 2019, and defendant replied on October 9, 2019. (Doc. Nos. 9, 13.)

         LEGAL STANDARDS

         The purpose of a motion to dismiss pursuant to Rule 12(b)(6) is to test the legal sufficiency of the complaint. Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). “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. U.S. 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 Cal., Inc. v. Cal. State Council of Carpenters, 459 U.S. 519, 526 (1983).

         A claim alleging fraud must satisfy heightened pleading requirements. Fed.R.Civ.P. Rule 9(b) (“In alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake.”) “Fraud can be averred by specifically alleging fraud, or by alleging facts that necessarily constitute fraud (even if the word fraud is not used).” Kearns v. Ford Motor Co., 567 F.3d 1120, 1124 (9th Cir. 2009) (internal quotations omitted). “When an entire complaint, or an entire claim within a complaint, is grounded in fraud and its allegations fail to satisfy the heightened pleading requirements of Rule 9(b), a district court may dismiss the complaint or claim.” Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1107 (9th Cir. 2003) (citing Bly-Magee v. California, 236 F.3d 1014, 1019 (9th Cir. 2001)).

         Under Rule 9(b), the “circumstances constituting the alleged fraud [must] be specific enough to give defendants notice of its particular misconduct . . . so they can defend against the charge and not just deny that they have done anything wrong.” Kearns, 567 F.3d at 1124 (internal quotations omitted) (citing Bly-Magee, 236 F.3d at 1019). To satisfy the particularity standard of Rule 9(b), the plaintiff “must set forth more than the neutral facts necessary to identify the transaction” at issue. Id. (internal quotation marks omitted) (citing In re GlenFed, Inc. Sec. Litig., 42 F.3d 1541, 1548 (9th Cir. 1994) (en banc), superseded by statute on other grounds as stated in SEC v. Todd, 642 F.3d 1207, 1216 (9th Cir. 2011)); see also Vess, 317 F.3d at 1106 (“Averments of fraud must be accompanied by the who, what, when, where, and how of the misconduct charged.”) (internal quotation marks omitted).

         LEGAL ANALYSIS

         In his complaint, plaintiff alleges seven causes of action: 1) violations of the California Homeowner Bill of Rights (“HBOR”), California Civil Code §§ 2923.6(c), 2923.7, 2924.9, and 2924.10 (the First through Fourth Causes of Action, respectively); 2) a negligence claim (the ///// ///// Fifth Cause of Action); and 3) a violation of California's Unfair Competition Law (“UCL”), California Civil Code §§ 17200, et seq (the Sixth Cause of Action).^[1][2]

         Defendant has moved to dismiss the complaint for the following reasons: 1) the HBOR claims fail because the Property is not owner-occupied; 2) the §§ 2923.6, 2924.9, and 2924.10 claims fail because plaintiff's loan modification application (the “Application”) is not complete; 3) the § 2393.7 claim fails because plaintiff did not allow defendant reasonable time to provide him with a Single Point of Contact (“SPOC”); 4) the §§ 2924.9 and 2924.10 claims fail because plaintiff was already aware of the alternatives to foreclosure when he submitted his loan modification application; 5) the negligence claims fail because plaintiff failed to allege any damages and defendant does not owe him an extra duty of care; and 6) the UCL claims fail because plaintiff has not alleged facts showing that defendant's actions are wrongful or unlawful or that they caused him any damage. The court addresses each contention in turn below.

         A. The Homeowner Bill of Rights Claims

         Plaintiff alleges in his complaint that he is the “rightful and lawful owner[]” of the Property and that it “his personal residence.” (Compl. at ¶ 1.) This, if true, would make him eligible for certain protections under the HBOR:

Unless otherwise provided, paragraph (5) of subdivision (a) of Section 2924, and Sections 2923.5, 2923.55, 2923.6, 2923.7, 2924.9, 2924.10, 2924.11, and 2924.18 shall apply only to first lien mortgages or deeds of trust that are secured by owner-occupied residential real property containing no more than four dwelling units. For these purposes, “owner-occupied” means that the property is the principal ...