United States District Court, E.D. California
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 ...