Guccione v. Jpmorgan Chase Bank, N.A.

• Decision Date: 01 May 2015
• Docket Number: No. 3:14-cv-04587 LB,3:14-cv-04587 LB
• Court: U.S. District Court — Northern District of California
• Parties: SAMIRA GUCCIONE, et al., Plaintiffs, v. JPMORGAN CHASE BANK, N.A., Defendant.

SAMIRA GUCCIONE, et al., Plaintiffs, v. JPMORGAN CHASE BANK, N.A., Defendant.

No. 3:14-cv-04587 LB

UNITED STATES DISTRICT COURT Northern District of California San Francisco Division

May 1, 2015

ORDER GRANTING IN PART AND DENYING IN PART CHASE'S MOTION TO DISMISS PLAINTIFFS' FIRST AMENDED COMPLAINT

[Re: ECF No. 16]

INTRODUCTION

PlaintiffsSamira Guccione and Susan Salehi-Had sued JPMorgan Chase Bank, N.A.("Chase") for claims relating to Chase's allegedly improper charges for unpaid taxes and force-placed insurance and its attempts to collect those charges.(First Amended Complaint ("FAC"), ECF No. 6.¹)Chase moves to dismiss Plaintiffs' First Amended Complaint.(Motion, ECF No. 16.)All parties consent to the undersigned's jurisdiction.(JPMorgan's Consent, ECF No. 10;Plaintiffs' Consent, ECF No. 12.)The court grants in part and denies in part Chase's motion.Plaintiffs may file any Second Amended Complaint by May 25, 2015.

STATEMENT

Ms. Guccione and Ms. Salehi-Had, who is over the age of 65, are the owners of real property located at 300 Darrell Road, Hillsborough, California 94010 (the "Property").(FAC ¶¶ 2, 9.)OnMarch 29, 2006, they refinanced the Property through Washington Mutual Bank, F.A. ("Washington Mutual").(Id.¶ 9.)In doing so, Plaintiffs executed a promissory note for $910,000 and secured it with the Property through a deed of trust.(Id.¶¶ 9, 50 & Ex.A (deed of trust).)Chase subsequently acquired certain assets and assumed certain liabilities of Washington Mutual and became the servicer of Plaintiffs' loan.(Id.¶ 9.²)

In September 2010, Plaintiffs submitted a loan modification application to Chase.(Id.¶ 10.)Thereafter, in April 2011, Chase "created an escrow account and started to pay Plaintiffs' property taxes and insurance, even though Plaintiffs were already doing so."(Id.¶¶ 11, 12 & Ex. B.)Before this time, "Chase did not request or collect monthly escrow payments[,] and all property taxes and insurance payment[s] were paid by Plaintiffs."(Id.¶ 12.)Plaintiffs have never had a lapse in insurance coverage.(Id.¶ 14 & Exs. E, F.)

Nevertheless, Plaintiffs' April 2011 statement from Chase states that Plaintiffs owed $11,609.43 in escrow payments.(Id.¶ 12)Plaintiffs' April 2011 statement thus states that Plaintiffs owe, in addition to their monthly principal and interest amount of $4,622.78, a monthly escrow charge of $1,277.45.(Id.¶ 12 & Ex. B.)The statement states that this amount stems from tax and insurance payments occurring from October 2006 to May 2007.(Id.¶¶ 13, 14, 16 & Ex. B.)But this does not make sense to Plaintiffs because these charges did not appear on Plaintiffs' December 2009 and October 2010 statements, which stated that Plaintiffs' escrow balance was $0.(Id.¶ 13 & Exs. C, D.)According to Plaintiffs, this means that there could not have been an escrow balance "carried forward" from October 2006 to April 2011.(Id.¶ 13.)In addition, the statement also projects an escrow balance shortfall of $15,329.23 in March 2012 and thus states that Plaintiffs also owe a monthly escrow deposit of $1,860.00 to cover future property taxes and insurance.(Id.¶ 12 & Ex. B.)

As for the insurance, Plaintiffs allege that Chase had no reason to pay $898.90 for it because they already had insurance.(Id.¶ 15.)As for the property taxes, Plaintiffs allege that Chase,without first attempting to contact them and despite the fact that Plaintiffs had already timely paid their taxes, paid $10,710.53 in taxes to San Mateo County in December 2010.(Id.¶ 16 & Ex. G.)The next month, however, San Mateo County rejected this "duplicate payment" and refunded it to Chase.(Id.¶ 16 & Ex. G.)But Plaintiffs' January 2011 statement still stated that Plaintiffs owed this amount as an escrow payment.(Id.¶ 16.)Plaintiffs allege that this situation occurred again in April 2011.(Id.¶ 17.)Even though Plaintiffs timely paid their taxes on March 30, 2011, Chase once again paid $10,710.53 in taxes to San Mateo County, and San Mateo County once again rejected the "duplicate payment" and refunded it to Chase the next month.(Id.¶ 17 & Ex. H.)Chase nevertheless continued to charge Plaintiffs a monthly escrow charge and a monthly escrow deposit totaling $3,317.45 to cover the unnecessary insurance payments and the refunded tax payments.(Id.¶ 18.)This made Plaintiffs' monthly bills total $7,760.23, rather than $4,622.78 (principal and interest) as before.(Id.)

To do something about this, Plaintiffs solicited the Gordon Law Firm about obtaining a loan modification from Chase.(Id.¶ 19.)The Gordon Law Firm told Plaintiffs to stop making their mortgage payments so they would qualify for one.(Id.)Plaintiffs followed the Gordon Law Firm's advice, and the Property subsequently went into foreclosure.(Id.;seeRJN, Exs. 3(notice of default), 4 (notice of trustee's sale).)The Gordon Law Firm later was shut down by the Consumer Finance Protection Bureau, which also sued the firm and its attorney, Chance Gordon, who was disbarred.(FAC ¶ 19 n.1.)

On November 21, 2011, Plaintiff, through counsel, sued Chase and the Gordon Law Firm in San Mateo County Superior Court for claims related to Plaintiffs' attempts to seek a loan modification and the foreclosure of the Property (the "State Court Action").(RJN, Ex. 5(original complaint in the State Court Action).)Plaintiffs brought the following 11 claims: (1) violation of California Civil Code § 2923.5;(2) violation of California's Unfair Competition Law, California Civil Code § 17500 et seq.;(3) violation of California Civil Code § 2945 et seq.;(4) false advertising; (5) intentional misrepresentation; (6) negligent misrepresentation; (7) breach of fiduciary duty; (8) negligence; (9) to enjoin the trustee's sale; (10) negligence per se; and (11) violation of California Civil Code § 2924.(RJN, Ex. 7(second amended complaint in the State Court Action).)

"After filing the lawsuit, Plaintiffs wanted to reinstate their loan."(FAC ¶ 20.)On January 6, 2012, Chase's counsel sent Plaintiffs a "reinstatement quote letter," which "incorrectly stated that Plaintiffs owed $61,464.00, when in fact Plaintiffs owed $28,984.00."(Id.¶ 20 & Ex. I.)On January 20, 2012, Plaintiffs' counsel informed Chase's counsel that the reinstatement amount quoted in the letter was incorrect.(Id.¶ 21.)On January 23, 2012, "it was explained in writing to Chase's counsel what was wrong with the payoff amount," and that same day Chase's counsel"stated she would get clarification from Chase."(Id.¶ 22.)Plaintiffs, however, never got clarification.(Id.)

On March 8, 2012, Ms. Guccione "served Chase [with] a Qualified Written [Request]" that sought her payment history, the monthly statements sent to her, an escrow analysis, the current amount needed to pay off their loan in full, and Chase's relationship to her (e.g., servicer of her loan, etc.)(Id.¶ 23.³)Separately, Plaintiffs' counsel also told Chase's counsel that "if we can determine the reinstatement amount, [Plaintiffs] can and will pay.It is unfortunate that we cannot get this, but maybe the letter will get it to us quicker."(Id.)

The problems did not end.In March 2012, Plaintiffs"went to the San Mateo County Office and paid their property tax payment on March 7, 2012."(Id.¶ 24.)This payment was later refunded because "Chase paid the payment hours before"Plaintiffs did.(Id.)Chase did this before the payment was due.(Id.)

On May 10, 2012, Chase sent Plaintiffs a "payoff quote letter demanding $989,061.52 to [pay off]Plaintiffs' loan."(Id.¶ 25.⁴)"In its calculations, Chase demanded that Plaintiffs pay several thousand[ dollars] in additional unsubstantiated escrow fees to reinstate their loan."(Id.)

On May 11, 2012, in response to Plaintiffs' request for a reinstatement quote, Chase sent Plaintiffs a "payoff quote letter" stating that as of May 15, 2012, Plaintiffs could reinstate their loanfor $92,315.30.(Id.¶ 26 & Ex. L.)"In its calculations, Chase demanded that Plaintiffs pay several thousand[ dollars] in additional unsubstantiated escrow fees to reinstate their loan."(Id.¶ 26.)"This letter demanded,""in addition to the regular monthly payment of $4,622.78,""an escrow payment of $3,137.45 and a $898.50 payment without specifying what the payments [were] for."(Id.)Plaintiffs allege that they actually owed only $67,540.00.(Id.)

Over the next several months, Plaintiffs wrote to Chase several times to inquire about the unsubstantiated escrow fees and to provide documentation refuting those fees.(Id.¶ 27.)

On April 2013, Plaintiffs received a "payoff quote" dated April 19, 2013 which states that Plaintiffs owed $40,005.95 for escrow advances.(Id.¶ 28 & Ex. M.)But they also received a "reinstatement quote," which was dated April 19, 2013 as well, stating that they owed $0.00 for escrow advances.(Id.¶ 28 & Ex. N.)If that was not odd enough, Plaintiffs received another "payoff quote," this one dated April 25, 2013, which states that they owed $28,714.90 for escrow advances.(Id.¶ 28 & Ex. O.)

Plaintiffs thereafter received a notice dated July 9, 2013, thanking Plaintiffs for providing proof of insurance and stating that the insurance coverage Chase had purchased on their behalf had been cancelled effective August 4, 2012.(Id.¶ 29 & Ex. P.)It also states that "[t]he premium charged has been refunded to your account."(Id., Ex. P.)Plaintiffs allege that this letter was sent nearly one year after Chase claimed that it was not longer paying for insurance on Plaintiffs' behalf and that Chase continues to pay for insurance on their behalf "to this day."(Id.¶ 29.)

Then, when Plaintiffs tried to timely pay their property taxes in August 2013, they discovered that Chase already had paid the taxes for them and that Chase did this six weeks before the taxes were due.(Id.¶ 30.)

On January 16, 2014, Plaintiffs' counsel sent Chase a "notice of error" pursuant to 12 C.F.R. § 1024.35(b)(5...