Urbano v. Bank of America, N.A., 1:12-CV-00464 AWI SMS
| Decision Date | 17 July 2012 |
| Docket Number | 1:12-CV-00464 AWI SMS |
| Court | U.S. District Court — Eastern District of California |
| Parties | MARIA FLORA URBANO, an individual Plaintiff, v. BANK OF AMERICA, N.A., successor in interest to COUNTRYWIDE BANK, a N.A.; RECONTRUST COMPANY, N.A., a wholly-owned subsidiary of BANK OF AMERICA, N.A.; and all persons or entities unknown claiming any legal or equitable right, title, estate, lien or interest in the property described in this complaint adverse to Plaintiff's title thereto, and DOES 1 through 25, inclusive,Defendants. |
This case arises out of a mortgage loan transaction. Plaintiff Maria Flora Urbano ("Plaintiff") brings suit against Defendants Bank of America, N.A., as successor by merger to Countrywide Bank FSB, erroneously sued as Bank of America, N.A., successor in interest to Countrywide Bank, N.A. ("BANA"); and ReconTrust Company, N.A., a wholly owned subsidiary of Bank of America, N.A. ("ReconTrust") (collectively, "Defendants"). On April 16, 2012, Plaintiff filed a First Amended Complaint alleging causes of action for: 1) fraud in origination of loan; 2) set aside pending trustee sale based upon wrongful foreclosure in violation of Cal. Civ. Code § 2923.5; 3) violation of California Civil Code § 2923.6; 4) violation of the Real Estate Settlement Procedures Act ("RESPA"), 12 U.S.C. § 2601, et seq.; 5) breach of contract; 6) breach of implied covenant of good faith and fair dealing; 7) violation of the Truth in Lending Act ("TILA"), 15 U.S.C. § 1601, et seq.; 8) rescission; 9) predatory lending in violationof California Business & Professions Code §17200; 10) unfair and deceptive business act practices; 11) negligence; 12) declaratory relief; and 13) quiet title. See First Amended Complaint ("FAC"), Court's Docket, Doc. No. 8. Defendants have filed a motion to dismiss the FAC pursuant to Federal Rule of Civil Procedure 12(b)(6). See Court's Docket, Doc. No. 11. Plaintiff filed a written opposition to the motion. See id., Doc. No. 12. Defendants filed a reply. See id., Doc. No. 13. For the reasons stated herein, Defendants' motion shall be granted with leave to amend.
Plaintiff obtained a Option Adjustable Rate Mortgage loan from Countrywide Bank2 in the amount of $693,500 to finance the purchase of residential property located at 2202 East Hogan Way, Fresno, CA, 93720. See FAC ¶ 17. The loan was secured by a Deed of Trust ("DOT") which was recorded on August 12, 2005. See FAC, Ex A; RJN, Ex. A. The DOT provides that upon breach of the loan agreement, the lender can give notice to accelerate. Id. Plaintiff contends she was never given an opportunity to review the loan application, and she was not given an opportunity to read the loan documents prior to the closing date. FAC ¶ 22. At closing, Plaintiff alleges she spent only thirty minutes at the escrow office and felt pressured into signing the loan documents based only on the loan agent's representations. Id. ¶ 23. It was notuntil Plaintiff attempted to modify her loan that she discovered the loan application had falsely stated her monthly income was $10,675, even though she had told the loan agent it was $9,000. Id. ¶ 22, Ex. B.
In or about February 2008, Plaintiff became ill and was placed on restricted duty at work for the next two and a half years. FAC ¶ 26. Plaintiff struggled to make her loan payments during this time, and requested assistance from BANA for a loan modification. Id. ¶ 27. Although BANA officials told her they were unable to offer her any loan workout options, Plaintiff applied for a loan modification through the Homes Affordable Modification Program ("HAMP"). Id. ¶ 28. That loan modification application was denied because Plaintiff made too much money. Id. ¶ 28. In or about early 2009, Plaintiff applied for an in-house loan modification, which was also denied because she made too much money. Id. ¶ 29. Later in 2009, Plaintiff sought the assistance of a third-party company to obtain a loan modification. Id. ¶ 30. The third-party company contacted BANA, and Plaintiff was offered a three month trial modification. Id. After making the payments under the trial modification for six months, Plaintiff was informed that the trial period had ended and her payments would return to their original amount. Id. Plaintiff then sought the assistance of a non-profit organization, but after five to seven months of resubmitting documents and negotiation, Plaintiff was again denied a loan modification. Id. ¶ 31.
On January 20, 2011, ReconTrust recorded and sent a Notice of Default to Plaintiff informing her that she was $53,584.97 in default. Id. ¶ 32; RJN, Ex. B. On August 2, 2011, ReconTrust recorded a Notice of Trustee Sale under the DOT. FAC ¶ 33; RJN, Ex. C. The sale date was postponed from August 24, 2011, until November 7, 2011. FAC ¶ 36. In or about November 2011, Plaintiff hired another third-party company to assist her in obtaining a loan modification through HAMP. Id. ¶ 34. The November 7, 2011 sale date was cancelled, but BANA is still in the process of foreclosing. Id. ¶ 36.
Plaintiff first pursued claims against Defendants in a mass tort action brought by 1,329 co-plaintiffs in the Superior Court for Orange County (the "Orange County Action"). See FAC ¶37; RJN, Ex. F. The claims in that case appear to relate to the same mortgage transaction at issue here. On June 9, 2011, the plaintiffs in the Orange County Action filed a Second Amended Complaint alleging (1) fraudulent concealment; (2) intentional misrepresentation; (3) negligent misrepresentation; (4) injunctive relief for wrongful intentional misrepresentation; (5) injunctive relief for wrongful foreclosure under Cal. Civ. Code § 2923.5; (6) injunctive relief; and (7) unfair competition in violation of Cal. Bus. & Prof. Code § 17200 et seq. See RJN, Ex. F. The Superior Court sustained Defendants' demurrer to the SAC, and granted the plaintiffs leave to amend within 60 days. FAC ¶ 37. On March 26, 2012, Defendants' attorney sent a letter to Plaintiff informing her that Defendants intended to apply for an ex parte order granting relief from the court's order temporarily staying the action for the purposes of filing a motion to dismiss. See FAC, Ex. C. The letter stated that the motion to dismiss would be based on the plaintiffs' failure to amend their complaint within the time required. Id.
Plaintiff filed the instant action in the Superior Court for Fresno County on or about March 2, 2012, alleging ten causes of action, including a claim under the federal Truth in Lending Act ("TILA"), 15 U.S.C. § 1601 et seq. Defendants removed the action to this Court on March 27, 2012, on the basis of federal question jurisdiction. Defendants filed a motion to dismiss the original complaint on March 29, 2012. On April 16, 2012, the day her opposition to the motion was due, Plaintiff filed the FAC. Defendants withdrew their first motion to dismiss, and filed the instant motion directed at the FAC.
Under Federal Rule of Civil Procedure 12(b)(6), a claim may be dismissed because of the plaintiff's "failure to state a claim upon which relief can be granted." Fed. R. Civ. P. 12(b)(6). A complaint must contain "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). Where the plaintiff fails to allege "enough facts to state a claim to relief that is plausible on its face," the complaint may be dismissed for failure to allege facts sufficient to state a claim upon which relief may be granted. Bell Atlantic Corp. v.Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 1974, 167 L.Ed.2d 929 (2007); see Fed. R. Civ. P. 12(b)(6). "A claim has facial plausibility," and thus survives a motion to dismiss, "when the pleaded factual content allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 1940, 173 L.Ed.2d 868 (2009). On a Rule 12(b)(6) motion to dismiss, the court accepts all material facts alleged in the complaint as true and construes them in the light most favorable to the plaintiff. Knievel v. ESPN, 393 F.3d 1068, 1072 (9th Cir. 2005). However, the court need not accept conclusory allegations, allegations contradicted by exhibits attached to the complaint or matters properly subject to judicial notice, unwarranted deductions of fact or unreasonable inferences. Daniels-Hall v. National Educ. Ass'n, 629 F.3d 992, 998 (9th Cir.2010). "Dismissal with prejudice and without leave to amend is not appropriate unless it is clear . . . the complaint could not be saved by amendment." Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048, 1052 (9th Cir. 2003).
As a preliminary matter, Defendants argue Plaintiff has engaged in impermissible claim splitting because the claims in the FAC could have been pled in the pending Orange County Action. Plaintiff contends the FAC is proper because the Orange County Action is "currently nearing dismissal" for failure to amend the Second Amended Complaint within the time required by the court.
The claim splitting doctrine is derived from principles of res judicata, or claim preclusion. See Adams v. California Dept. of Health Servs., 487 F.3d 684, 689 (9th Cir. 2007). "The doctrine of claim splitting bars a party from subsequent litigation where the 'same controversy' exists." Single Chip Systems Corp. v. Intermec IP Corp., 495 F. Supp. 1052, 1058 (S.D. Cal. 2007) (quoting Nakash v. Superior Court, 196 Cal. App. 3d 59, 68, 241 Cal. Rptr. 578 (Cal. App. 1987)). However, "the doctrine of claim splitting, unlike res judicata, does not require a finaljudgment on the merits." Single Chip Systems, 495 F. Supp. 1052, 1059 (S.D. Cal. 2007) (citing Adams, 487 F.3d at 684). "What is required in the context of a claim-splitting analysis is to assume that the first...
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