Zoldessy v. MUFG Union Bank, N.A.
| Decision Date | 03 May 2021 |
| Docket Number | No. CV-20-08329-PCT-SPL,CV-20-08329-PCT-SPL |
| Parties | Adam Zoldessy, Plaintiff, v. MUFG Union Bank, N.A., d/b/a Union Bank, Defendant. |
| Court | U.S. District Court — District of Arizona |
Before the Court is Defendant's Motion to Dismiss Plaintiff's Complaint (Doc. 10) filed pursuant to Fed. R. Civ. P. ("Rule") 12(b)(6). The Motion has been fully briefed and is ripe for review. (Docs. 13, 5) For the following reasons, the Motion will be granted.
Also before the Court are Defendant's Request for Judicial Notice (Doc. 11) and Plaintiff's Request for Judicial Notice. (Doc. 13-1) Defendant's Request for Judicial Notice will be granted in part. Plaintiff's Request for Judicial Notice will be denied.
Finally, Defendant included a Motion to Strike Plaintiff's requests for punitive damages in its Reply brief. (Doc. 15 at 8-9) The Motion to Strike will be denied as moot.
This case arises from a loan from Defendant MUFG Union Bank, N.A. ("Union Bank") to Plaintiff Adam Zoldessy. (Doc. 1-1 at ¶13)
Plaintiff is the owner of the property located at 185 Caballo Dr., Sedona, AZ 86336-6909 ("the Property"). (Doc. 1-1 at ¶5) Plaintiff took out two mortgages on the Property, secured by deeds of trust. (Docs. 11-2, 11-3) Plaintiff refinanced one of those loans in 2017, and Defendant Union Bank is now the loan servicer.1 (Doc. 1-1 at 3, Doc. 11-7) Plaintiff alleges Defendant placed his loan into "undisclosed forbearance" that prevented him from refinancing the loan through third parties. (Doc. 1-1 at ¶¶16,19) Plaintiff allegedly discovered this "undisclosed forbearance" in "about June/July of 2020." (Doc. 1-1 at ¶19)
On November 3, 2020, Plaintiff filed a Complaint in Coconino County Superior Court against Defendant Union Bank. (Doc. 1-1) He alleges Defendant "willfully and recklessly mismanaged the CARES Act Program." (Doc. 1-1 at ¶23) The Complaint sets forth nine causes of action: (1) a violation of the Arizona Consumer Fraud Act ("ACFA"), (2) breach of contract, (3) fraud in fact and fraud in inducement, (4) negligent misrepresentation, (5) negligence, (6) breach of covenant of good faith and fair dealing, (7) unjust enrichment, (8) violation of the Arizona Fair Debt Collection Practices Act ("FDCPA"), and (9) a request for declaratory judgment. (Doc. 1-1 at 3-15) Plaintiff seeks compensatory, punitive, statutory, and "other" damages. He also requests a permanent injunction enjoining Defendant from "performing further unfair, deceptive and unlawful acts." (Doc. 1-1 at 16) Finally, he asks for "restitution and disgorgement of Defendant' [sic] profits from its unfair, deceptive and unlawful practices..." (Doc. 1-1 at 16)
Defendant removed the case to this Court on December 10, 2020 on diversity grounds under 28 U.S.C. § 1332(a). (Doc. 1 at 2) Plaintiff is a resident of Sedona, Coconino County, Arizona. (Doc. 1-1 at ¶1) Union Bank is incorporated in New York and has its principle place of business in California. (Doc. 1 at 2) The amount in controversy exceeds $75,000 because the instant loan was for $705,000. (Doc. 10 at 2-3) Defendant also removed on federal question grounds, because Plaintiff's claims are based on an alleged violation of the Coronavirus Aid, Relief and Economic Security Act ("CARES Act"). (Docs. 1-1 at ¶¶11-37, Doc. 1 at 3) Subject matter jurisdiction is not at issue.
On March 1, 2021, Defendant filed the Motion to Dismiss. (Doc. 10) Defendant moves to dismiss the Complaint in its entirety for failure to state a claim upon which relief can be granted pursuant to Rule 12(b)(6). (Doc. 10 at 3-4) Plaintiff filed a Response in Opposition to Defendant's Motion to Dismiss. (Doc. 13) Within the response he withdrew counts Eight and Nine of the Complaint.2 (Doc. 13 at 17) Defendant filed a timely Reply. (Doc. 15)
"Under Federal Rule of Evidence 201(b), a judicially noticed fact 'must be one not subject to reasonable dispute in that it is either (1) generally known within the territorial jurisdiction of the trial court or (2) capable of accurate and ready determination by resort to sources whose accuracy cannot reasonably be questioned.'" Bell Atl. Corp. v. Twombly, 550 U.S. 544, 593, n.11 (2007).
Judicial notice may be denied when the materials to be noticed will not assist in resolution of the instant motion or when they will not change the court's analysis. See Santa Monica Nativity Scenes Cmte. v. City of Santa Monica, 784 F.3d 1286, 1298 n.6 (9th Cir. 2015); Flores v. County of Los Angeles, 758 F.3d 1154, 1159 n.11 (9th Cir. 2014).
To survive a motion to dismiss under Rule 12(b)(6), a complaint must contain "a short and plain statement of the claim showing the pleader is entitled to relief" so the defendant is given fair notice of the claim and the grounds upon which it rests. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quoting Rule 8(a)(2)). A court may dismissa complaint for failure to state a claim under Rule 12(b)(6) for two reasons: (1) lack of a cognizable legal theory, or (2) insufficient facts alleged under a cognizable legal theory. Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1990). When deciding a motion to dismiss, all allegations of material fact in the complaint are taken as true and construed in the light most favorable to the nonmoving party. Cousins v. Lockyer, 568 F.3d 1063, 1067 (9th Cir. 2009).
The Court will first address the requests for judicial notice, before turning to the merits of the case under Rule 12(b)(6).
Defendant requests judicial notice of the following: (1) copy of a recorded Warranty Deed dated July 25, 2006, (2) copy of a recorded Deed of Trust, dated August 16, 2006, (3) copy of a recorded Deed of Trust, dated August 16, 2006, (4) copy of a recorded Deed of Release, dated November 3, 2011, (5) copy of a recorded Assignment of Deed of Trust, dated June 5, 2011, (6) copy of a recorded Notice of Trustee's Sale, dated July 28, 2011, (7) copy of a recorded Deed of Release, and (8) MERS Servicer ID results, dated 15 December 2020, for MERS ID No. 1000768-0000045366-2. (Doc. 11 at 2-3)
Matters of public record are suitable for judicial notice. See Todd v. JPMorgan Chase Bank, NA, No. CV-12-01643-PHX-NVW, 2012 WL 4339259, at *1 (D. Ariz. Sept. 20, 2012) (citing Lee v. City of Los Angeles, 250 F.3d 668, 689 (9th Cir. 2001)). "Courts do not have to accept alleged facts as true when they contradict those matters subject to judicial notice." Id. (citing Sears, Roebuck & Co. v. Metropolitan Engraver, Ltd., 245 F.2d 67, 70 (9th Cir. 1956)). See also Garrison v. CitiMortgage Inc., No. CV-11-1392-PHX-FJM, 2011 WL 4702958, at *1, n. 1 (D. Ariz. Oct. 6, 2011) () (citing Rule 12(d), Mir v. Little Co., 844 F.2d 646, 649 (9th Cir. 1988)). Recorded documents are matters of public record. See Todd, 2012 WL 4339259 at *1. Therefore, the Court takes judicial notice of items One through Seven of Defendant'sRequest for Judicial Notice. (Doc. 11 at 2-3)
Judicial notice of websites is permitted when the "authenticity of a website or the accuracy of the information on the website is not disputed." Poll v. Stryker Sustainability Sols., Inc., No. CIV 13-440-TUC-CKJ, 2014 WL 199150, at *2 (D. Ariz. Jan. 17, 2014). Because of this standard, it is usually government websites that are judicially noticed. Id. Courts have declined to judicially notice printouts of MERS webpages because the information they contained was not "generally known" or "accurately and readily determined from sources whose accuracy cannot reasonably be questioned. Mortg. Elec. Registration Sys., Inc. v. Koeppel, No. 5:18-CV-03443-EJD, 2019 WL 2568860, at *3 (N.D. Cal. June 21, 2019) (citing Fed. R. Evid. 201(b)). This Court will do the same and decline to judicially notice item Eight in Defendant's Request for Judicial Notice. (Doc. 11 at 3) The Court will also decline to judicially notice the copy of Senator Elizabeth Warren's press release attached to Plaintiff's Response to the Motion to Dismiss (Doc. 13-1) because it does not change the Court's analysis or assist in resolution of the Motion to Dismiss. See Santa Monica Nativity Scenes, 784 F.3d at 1298, n.6.
The Court now turns to the merits of the arguments presented in the Motion to Dismiss and responsive filings.
The ACFA, A.R.S. § 44-1521, et seq., "is a broadly drafted remedial provision designed to eliminate unlawful practices in merchant-consumer transactions." In re Arizona Theranos, Inc., Litig., 308 F. Supp. 3d 1026, 1040 (D. Ariz. 2018) (quoting State ex rel. Woods v. Hameroff, 180 Ariz. 380, 884 P.2d 266, 268 (1994)). "The elements of a private cause of action under the Arizona Consumer Fraud Act are a false promise or misrepresentation made in connection with the sale or advertisement of merchandise and the hearer's consequent and proximate injury." Naiman v. Alle Processing Corp., No. CV20-0963-PHX-DGC, 2020 WL 6869412, at *5 (D. Ariz. Nov. 23, 2020) (internal citations omitted). "Loan transactions constitute a sale within the meaning of the ArizonaConsumer Fraud Act." Loomis v. U.S. Bank Home Mortg., 912 F. Supp. 2d 848, 856 (D. Ariz. 2012) (citing Villegas v. Transamerica Fin. Servs., Inc., 147 Ariz. 100, 102-03 (Ariz. Ct. App. 1985)). However, the "transaction" must constitute an offer for a new loan. Rich v. BAC Home Loans Servicing LP, No. CV-11-00511-PHX-DLR, 2014 WL 7671615, at *10 (D. Ariz. Oct. 9, 2014), aff'd sub nom. Rich v. Bank of Am., N.A., 666 F. App'x 635 (9th Cir. 2016).
Plaintiff asserts a claim under the ACFA based on alleged false promises and misrepresentations by Defendant and/or its representatives. (Doc. 1-1 at ¶¶13,15, 24-29,39) Plaintiff claims he inquired about forbearance on his loan, then Defendant placed...
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