Rodriguez v. JP Morgan Chase & Co., Case No. 11–CV–01188–H (POR).

• Court: U.S. District Court — Southern District of California
• Writing for the Court: MARILYN L. HUFF
• Citation: Rodriguez v. JP Morgan Chase & Co., 809 F. Supp. 2d 1291 (S.D. Cal. 2011)
• Decision Date: 25 August 2011
• Docket Number: Case No. 11–CV–01188–H (POR).
• Parties: Gabriel RODRIGUEZ, Plaintiff, v. JP MORGAN CHASE & CO. formally doing business as Washington Mutual BK FA; MTC Financial Inc.; and Does 1–50, Defendants.

809 F.Supp.2d 1291

Gabriel RODRIGUEZ, Plaintiff,

v.JP MORGAN CHASE & CO. formally doing business as Washington Mutual BK FA; MTC Financial Inc.; and Does 1–50, Defendants.

Case No. 11–CV–01188–H (POR).

United States District Court, S.D. California.

Aug. 25, 2011.

Preempted

West's Ann.Cal.Civ.Code § 2923.5

Gabriel Rodriguez, Chula Vista, CA, pro se.

Alyson M. Dudkowski, Alvarado Smith, Santa Ana, CA, Richard J. Reynolds, Turner Reynolds Greco & O'Hara, Irvine, CA, for Defendant.

ORDER

(1) GRANTING MOTIONS TO DISMISS WITH LEAVE TO AMEND [Doc. Nos. 6, 7]

(2) DENYING WITHOUT PREJUDICE AS MOOT MTC'S MOTION TO STRIKE [Doc. No. 6]

MARILYN L. HUFF, District Judge.

On June 17, 2011, Defendant MTC Financial Inc. (“MTC”) filed a motion to dismiss Plaintiff's complaint and a motion to strike portions of Plaintiff's complaint. (Doc. No. 6.) On July 8, 2011, Defendant JP Morgan Chase & Co. (“JP Morgan”) also filed a motion to dismiss Plaintiff's complaint. (Doc. No. 7.) On August 10, 2011, the Court submitted the motion on the papers. (Doc. No. 9.) In addition, on August 10, 2011, the Court noted that Plaintiff had not filed an opposition and ordered the opposition to be filed on or before August 22, 2011. ( Id.) To date, Plaintiff has yet to file an opposition. For the reasons below, the Court GRANTS MTC's motion to dismiss the complaint without prejudice, DENIES without prejudice as moot MTC's motion to strike, and GRANTS JP Morgan's motion to dismiss the complaint without prejudice.

Background

On May 10, 2011, Plaintiff filed a complaint in the San Diego Superior Court against Defendants JP Morgan and MTC, alleging causes of action for (1) violations of California Civil Code § 2923.5; (2) fraud; (3) intentional misrepresentation; (4) violations of California Civil Code § 2923.6; (5) violations of California Civil Code § 1572; (6) violations of California's Unfair Competition Law (“UCL”), California Business & Professions Code §§ 17200, et seq. ; (7) violations of Truth in Lending Act (“TILA”), 15 U.S.C. §§ 1601, et seq. (Doc. No. 1, Compl.) On May 31, 2011, Defendants removed the action to this Court on the basis of federal question and diversity jurisdiction. ( Id., Notice of Removal.)

The Court takes judicial notice under Federal Rule of Evidence 201, of the following public documents: (1) Grant Deed recorded on November 26, 2003 with the San Diego County Recorder's Office as instrument number 2003–1419113 (Doc. No. 7–1, Request for Judicial Notice (“RJN”) Ex. 1); (2) Deed of Trust recorded on September 18, 2006 with the San Diego County Recorder's Office as instrument number 2006–0662587 ( Id. Ex. 2); (3) Deed of Trust recorded on October 10, 2006 with the San Diego County Recorder's Office as instrument number 2006–0718568 ( Id. Ex. 3); (4) the Purchase and Assumption Agreement between the FDIC and JP Morgan Chase Bank, N.A. dated September 25, 2008 ( Id. Ex. 4); (5) Notice of Default recorded on or about January 14, 2009, with the San Diego County Official Records as instrument number 2009–0017864 ( Id. Ex. 5); (6) Substitution of Trustee recorded on February 27, 2009 with the San Diego County Recorder's Office as instrument number 2009–0097934 ( Id. Ex. 6); (7) Notice of Trustee's Sale recorded on or about April 20, 2009 with the San Diego County Recorder's Office as instrument number 2009–0097934 ( Id. Ex. 7); (8) Loan Modification Agreement, which was recorded on January 26, 2010 with the San Diego County Recorder's Office as instrument number 2010–0040217 ( Id. Ex. 8); (9) Rescission of Notice of Default recorded on January 19, 2010 with the San Diego County Recorder's Office as instrument number 2010–00246374 ( Id. Ex. 9); (10) Notice of Default recorded on January 3, 2011 with the San Diego County Recorder's Office as instrument number 2011–0000148 ( Id. Ex. 10); and (11) List of licensees that are exempt from the requirements of the California Foreclosure Prevention Act issued by the California Department of Corporations. ( Id. Ex. 11.)

On September 11, 2006, Plaintiff borrowed $417,000.00 from Washington Mutual Bank, FA (“Washington Mutual”) and executed a Deed of Trust to real property commonly known as 991 Calma Drive, Chula Vista, California as security for the loan. (Compl. ¶¶ 1, 6; Doc. No. 7–1, RJN Ex. 2.) On September 25, 2008, JP Morgan Chase Bank, N.A. acquired certain assets and liabilities of Washington Mutual from the FDIC acting as receiver, including the loan at issue in this action. (Doc. No. 7–1, RJN Ex. 4.) On January 3, 2011, there was a Notice of Default on Plaintiff's property. ( Id. Ex. 10.) As of the date of the motions to dismiss, Plaintiff's property has not been sold at a trustee's sale. (Doc. No. 6–1 at 2.)

Discussion

I. Motion to Dismiss Pursuant to Fed.R.Civ.P. 12(b)(6)

A motion to dismiss a complaint under Federal Rule of Civil Procedure 12(b)(6) tests the legal sufficiency of the claims asserted in the complaint. Navarro v. Block, 250 F.3d 729, 732 (9th Cir.2001). Rule 8(a)(2) requires that a pleading stating a claim for relief contain “a short and plain statement of the claim showing that the pleader is entitled to relief.” The function of this pleading requirement is to “give the defendant fair notice of what the ... claim is and the grounds upon which it rests.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). “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, and a formulaic recitation of the elements of a cause of action will not do.” Id. A complaint does not “suffice if it tenders ‘naked assertion[s]’ devoid of ‘further factual enhancement.’ ” Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009) ( quoting Twombly, 550 U.S. at 557, 127 S.Ct. 1955). “Factual allegations must be enough to raise a right to relief above the speculative level.” Twombly, 550 U.S. at 555, 127 S.Ct. 1955 (citing 5 C. Wright & A. Miller, Federal Practice and Procedure § 1216, pp. 235–36 (3d ed.2004)). “All allegations of material fact are taken as true and construed in the light most favorable to plaintiff. However, conclusory allegations of law and unwarranted inferences are insufficient to defeat a motion to dismiss for failure to state a claim.” Epstein v. Wash. Energy Co., 83 F.3d 1136, 1140 (9th Cir.1996); see also Twombly, 550 U.S. at 555, 127 S.Ct. 1955.

II. Plaintiff's ComplaintA. Violations of California Civil Code § 2923.5

Plaintiff alleges that Defendants violated California Civil Code section 2923.5 by failing to file a proper declaration, provide Plaintiff with a toll-free number, or comply with the provisions for contacting Plaintiff prior to foreclosure as required by the statute. ( Id. ¶¶ 11–24.) MTC argues that Plaintiff's claim is preempted. (Doc. No. 6–1, at 10–11.) The Court agrees with Defendant.

Plaintiff's section 2923.5 claim fails because the asserted portions of section 2923.5 have been preempted by the Home Owners' Loan Act (“HOLA”) of 1933, 12 U.S.C. § 1461 et seq. since the loan provider, Washington Mutual Bank, FA, was a federally chartered savings bank at the time the loan was originated. (Doc. No. 7–1, RJN Ex. 2.) ¹ See Quintero Family Trust v. OneWest Bank, F.S.B., 2010 WL 2618729, *4–7, 2010 U.S. Dist. LEXIS 63659, at *13–19 (S.D.Cal.2010); see also Odinma v. Aurora Loan Servs., 2010 WL 1199886, at *6–8, 2010 U.S. Dist. LEXIS 28347, at *19–24 (N.D.Cal.2010); Taguinod v. World Sav. Bank, FSB, 755 F.Supp.2d 1064, 1073–74 (C.D.Cal.2010). Accordingly, the Court GRANTS Defendants' motions to dismiss this claim. B. Violations of Cal. Civil Code § 2923.6

Plaintiff alleges Defendants violated California Civil Code § 2923.6 by failing to offer her a loan modification. (Doc. No. 1, Compl. ¶¶ 45–54.) Defendants argue that there is no private right of action under § 2923.6. (Doc. No. 6–1, at 14; Doc. No. 7, at 13–14.) Defendants are correct. Section 2923.6 does not require loan servicers to modify loans, and it does not create a private right of action for borrowers. See Monet v. Countrywide Home Loans, 2011 WL 1196461, at *1, 2011 U.S. Dist. LEXIS 37695, at *3 (N.D.Cal.2011) (citing cases); Arreola v. Wells Fargo Home Mortg., 2011 WL 1205249, at *1, 2011 U.S. Dist. LEXIS 33493, at *4 (E.D.Cal.2011) (citing cases); see also Mabry v. Sup. Ct., 185 Cal.App.4th 208, 222, 110 Cal.Rptr.3d 201 (2010) (“[S]ection 2923.6 ... does not operate substantively. Section 2923.6 merely expresses the hope that lenders will offer loan modifications on certain terms.”). Accordingly, the Court GRANTS Defendants' motions to dismiss this claim.

C. Fraud, Intentional Misrepresentation, and Violations of California Civil Code § 1572

Plaintiff alleges that Defendants engaged in fraud, intentional misrepresentation, and violations of California Civil Code section 1572. (Doc. No. 1, Compl. ¶¶ 25–44, 55–61.) Defendants argue that Plaintiff's fraud based claims lack the specificity required by Federal Rule of Civil Procedure 9(b). (Doc. No. 6–1, at 11–14; Doc. No. 7, at 12–13.)

Under California law, “[t]he elements of intentional misrepresentation, or actual fraud, are: ‘(1) misrepresentation (false representation, concealment, or nondisclosure); (2) knowledge of falsity (scienter); (3) intent to defraud (i.e., to induce reliance); (4) justifiable reliance; and (5) resulting damage.’ ” Anderson v. Deloitte & Touche, 56 Cal.App.4th 1468, 1474, 66 Cal.Rptr.2d 512 (1997). The elements of fraud in inducement of a contract are the same elements as actual fraud. See Cal. Civ.Code § 1572; Zinn v. Ex–Cell–O Corp., 148 Cal.App.2d 56, 68, 306 P.2d 1017 (1957).

Under Federal Rule of Civil Procedure 9, a plaintiff must plead fraud with particularity. “Rule 9(b)'s particularity requirement applies to state-law causes of action.” Vess v. Ciba–Geigy Corp. USA...