Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_10-cv-01117/USCOURTS-caed-2_10-cv-01117-0/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 28:1331 Fed. Question

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UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

----oo0oo----

JENNIFER GRANT,

Plaintiff,

 v.

WMC MORTGAGE CORP., a

California corporation; SHEA

MORTGAGE INC., a California

corporation; STEWART TITLE

COMPANY OF SACRAMENTO, a

California corporation; WELLS

FARGO BANK, N.A. dba AMERICA’S

SERVICING COMPANY, a

corporation; JENNIFER TALLEY,

as an individual and acting as

an agent for and on behalf of

WMC Mortgage Corp.; MIKE

SMITH, as an individual and

acting as an agent for and on

behalf of Shea Mortgage Inc.;

NDEX WEST, LLC, a Delaware

limited liability company;

BARRETT DAFFIN FRAPPIER TREDER

& WEISS, a limited liability

partnership; DEUTSCHE BANK

NATIONAL TRUST COMPANY; and

DOES 1 through 100, inclusive,

Defendants. /

NO. CIV. 2:10-1117 WBS KJN

MEMORANDUM AND ORDER RE:

MOTION TO DISMISS

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----oo0oo----

Plaintiff Jennifer Grant brought this action against

defendants WMC Mortgage Corp. (“WMC”), Shea Mortgage, Inc.

(“Shea”), Stewart Title Company of Sacramento (“Stewart”), Wells

Fargo Bank, N.A. dba America’s Servicing Company (“ASC”),

Jennifer Talley, Mike Smith, NDEX West, LLC (“NDEX”), Barrett

Daffin Frappier Treder & Weiss (“Barrett Daffin”), and Deutsche

Bank National Trust Company (“Deutsche Bank”) arising out

plaintiff’s mortgage transaction. Presently before the court is

defendants ASC and Deutsche’s motion to dismiss the Complaint

pursuant to Federal Rule of Civil Procedure 12(b)(6).

I. Factual and Procedural Background

In December 2005, plaintiff entered into discussions

with Mike Smith, an agent for Shea, to broker a mortgage loan to

purchase the property located at 3533 20th Avenue in Sacramento,

California. (Compl. ¶¶ 11-12.) On April 3, 2006, plaintiff

obtained a $204,800 first and $51,200 second mortgage from WMC,

secured by a Deed of Trust on the property. (Id. ¶¶ 12, 15, 19.) 

Plaintiff alleges that she was lured into this loan by

misrepresentations by Shea and WMC about the affordability and

terms of the loan. (Id. ¶¶ 91, 315-16.) The Complaint further

alleges that Shea and WMC failed to provide proper disclosures

concerning the terms of the loan in violation of the Truth in

Lending Act, 15 U.S.C. §§ 1601-1667f. (Id. ¶¶ 20, 199, 203, 216-

247.)

ASC eventually became the servicer of plaintiff’s loan. 

(Id. ¶¶ 31-32.) Plaintiff eventually defaulted on the loans and

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ASC commenced foreclosure proceedings. (Id. ¶¶ 146-47.) ASC and

NDEX filed a Notice of Default and Election to Sell Under Deed of

Trust in Sacramento County on April 3, 2009. (Def.’s Req.

Judicial Notice Ex. B.) NDEX subsequently filed a Notice of

Trustee Sale on plaintiff’s property on July 20, 2009. (Id.) 

On January 13, 2010, plaintiff allegedly sent ASC a

Qualified Written Request (“QWR”) pursuant to the Real Estate

Settlement Procedures Act (“RESPA”), 12 U.S.C. §§ 2601-2617. 

(Compl. ¶ 512.) ASC allegedly received the QWR on January 18,

2010 but failed to respond to plaintiff’s request. (Id. ¶¶ 513,

517.)

Plaintiff hired counsel who contacted ASC requesting

that the date of the foreclosure sale on her home be extended to

February 17, 2010. (Id. ¶¶ 148-50.) On February 4, 2010,

plaintiff’s attorney contacted ASC and was allegedly informed by

an ASC agent that there was no foreclosure sale scheduled for

February 17, 2010. (Id. ¶¶ 151-158.) Plaintiff’s attorney was

then referred to ASC’s “Short Sale Liquidation Department” who

allegedly also told counsel that there was no foreclosure sale

date associated with plaintiff’s property. (Id. ¶¶ 165-68.) 

However, a foreclosure sale did in fact take place on February

17, 2010, where defendants sold plaintiff’s property to Deutsche.

(Id. ¶¶ 42, 170.)

 Plaintiff subsequently filed this action in Sacramento

County Superior Court, which was subsequently removed to this

court on May 5, 2010. (Docket No. 2.) The Complaint alleges

eighteen state and federal claims against nine defendants. ASC

filed a motion to dismiss those causes of action in the Complaint

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against it on May 12, 2010, which Deutsche subsequently joined. 

(Docket No. 10.) 

II. Discussion

On a motion to dismiss, the court must accept the

allegations in the complaint as true and draw all reasonable

inferences in favor of the plaintiff. Scheuer v. Rhodes, 416

U.S. 232, 236 (1974), overruled on other grounds by Davis v.

Scherer, 468 U.S. 183 (1984); Cruz v. Beto, 405 U.S. 319, 322

(1972). To survive a motion to dismiss, a plaintiff needs to

plead “only 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). This “plausibility standard,” however, “asks

for more than a sheer possibility that a defendant has acted

unlawfully,” and where a complaint pleads facts that are “merely

consistent with” a defendant’s liability, it “stops short of the

line between possibility and plausibility.” Ashcroft v. Iqbal,

129 S. Ct. 1937, 1949 (2009) (quoting Twombly, 550 U.S. at 556-

57).

In general a court may not consider items outside the

pleadings upon deciding a motion to dismiss, but may consider

items of which it can take judicial notice. Barron v. Reich, 13

F.3d 1370, 1377 (9th Cir. 1994). A court may take judicial

notice of facts “not subject to reasonable dispute” because they

are 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.” Fed. R. Evid. 201.

ASC submitted a two requests for judicial notice. ASC

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requests the court take judicial notice of several publically

recorded documents related to plaintiff’s mortgage. (Docket Nos.

7, 12.) The court will take judicial notice of these documents,

since they are matters of public record whose accuracy cannot be

questioned. See Lee v. City of Los Angeles, 250 F.3d 668, 689

(9th Cir. 2001).

A. Conceded Claims

 In response to defendants’ motion, plaintiff submitted 

an opposition that conceded that many of plaintiff’s claims must

be amended to survive a motion to dismiss. Specifically,

plaintiff requests that the court grant her leave to amend her

claims for wrongful foreclosure, breach of contract, breach of

the implied covenant of good faith and fear dealing, violations

of TILA, violations of RESPA, and fraud to cure various defects

in pleading. Plaintiff also did not oppose defendants’ arguments

in favor of dismissal of her claims under the Rosenthal Fair Debt

Collection Practices Act, Cal. Civ. Code §§ 1788.1-1788.33;

California Civil Code sections 1916.7(1)(c), 1916.7(b)(2),

1918.5-1921, 1916.7(A)(8), and 1637; and California Financial

Code section 50505. Accordingly, the court will grant 

defendants’ motion to dismiss these claims and give plaintiff an

opportunity to amend them so as to cure the defects noted by

defendants. 

B. Intentional Infliction of Emotional Distress Claim

The elements for the tort of intentional infliction of

emotional distress are “(1) extreme and outrageous conduct by the

defendant with the intention of causing, or reckless disregard of

the probability of causing, emotional distress; (2) the

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plaintiff’s suffering severe or extreme emotional distress; and

(3) actual and proximate causation of the emotional distress by

the defendant’s outrageous conduct . . . . Conduct to be

outrageous must be so extreme as to exceed all bounds of that

usually tolerated in a civilized community.” Christensen v. Sup.

Court, 54 Cal.3d 868, 904 (1991) (internal quotations and

citations omitted); see also Cook v. Lindsay Olive Growers, 911

F.2d 233, 239 (9th Cir. 1990). For emotional distress to be

severe, it must be “of such substantial quantity or enduring

quality that no reasonable man in a civilized society should be

expected to endure it.” Fletcher v. Western Nat’l Life Ins. Co.,

10 Cal. App. 3d 376, 397 (1970).

Plaintiff’s intentional infliction of emotional

distress incorporates the Complaint’s earlier allegations and

then simply states that “[d]efendants [sic] conduct as alleged

herein relating to the foreclosure sale of Subject Property rises

to the level of intentional infliction of emotional distress.” 

(Compl. ¶ 189.) Such a vague and conclusory claim, that fails to

indicate specifically what conduct constituted intentional

infliction of emotional distress and lumps all defendants

together is plainly insufficient under the pleading requirements

of Federal Rule of Civil Procedure 8. See Iqbal, 129 S. Ct. at

1949; see also Gauvin v. Trombatore, 682 F. Supp. 1067, 1071

(N.D. Cal. 1988). The claim does even state that plaintiff

suffered severe emotional distress as the result of ASC or

Deutsche’s conduct. Accordingly, the court will grant ASC and

Deutsche’s motion to dismiss plaintiff’s intentional infliction

of emotional distress claim. 

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C. Negligence Claim

To prove a cause of action for negligence, plaintiff

must show “(1) a legal duty to use reasonable care; (2) breach of

that duty, and (3) proximate [or legal] cause between the breach

and (4) the plaintiff injury.” Mendoza v. City of Los Angeles,

66 Cal. App. 4th 1333, 1339 (1998) (citation omitted). “The

existence of a legal duty to use reasonable care in a particular

factual situation is a question of law for the court to decide.” 

Vasquez v. Residential Invs., Inc., 118 Cal. App. 4th 269, 278

(2004). Plaintiff argues that the defendants had “a duty to deal

with [p]laintiff in a manner so as not to recklessly or

intentionally cause [her] harm.” (Compl. ¶ 359.) The Complaint

additionally avers that ASC had a duty to “honestly and fairly

deal with [p]laintiff” and “abide by state and federal laws in

dealing with [p]laintiff.” (Id. ¶¶ 396-97.) ASC allegedly

breached this duty by “failing to deal with [p]laintiff in an

honest and fair manner” and “failing to abide by state and

federal laws and rules . . . .” (Id. ¶¶ 398-99.)

First, the complaint’s negligence claim against

Deutsche is clearly inadequate because it does not mention any

duty Deutsche owed to plaintiff as a purchaser of the subject

property and does not so much as mention Deutsche by name. 

Second, plaintiff cites no authority for the proposition that ASC

owed a duty to not cause plaintiff harm in its capacity as a loan

servicer. Generally, “[a]bsent ‘special circumstances’ a loan

transaction ‘is at arms-length’” and no duties arise from the

loan transaction outside of those in the agreement. Rangel v.

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DHI Mortgage Co., Ltd., No. CV F 09-1035 LJO GSA, 2009 WL

2190210, at *3 (E.D. Cal. July 21, 2009) (quoting Oaks Management

Corp. v. Superior Court, 145 Cal. App. 4th 453, 466 (2006)). 

Absent contrary authority, a pleading of an assumption of duty by

ASC, or a special relationship, plaintiff cannot establish ASC

owed her a duty of care. See Hardy v. Indymac Federal Bank, ---

F.R.D. ---, No. CV F 09-935 LJO SMS, 2009 WL 2985446, at *7 (E.D.

Cal. Sept. 15, 2009); Bentham v. Aurora Loan Servs., No. C-09-

2059 SC, 2009 WL 2880232, at *2-3 (N.D. Cal. Sept. 1, 2009). The

Complaint pleads no such circumstances, and accordingly the court

will grant defendants’ motion to dismiss plaintiff’s negligence

claim.

D. Breach of Fiduciary Duty Claim

The elements of a breach of fiduciary duty claim are

(1) existence of a fiduciary relationship; (2) breach of the

fiduciary duty; and (3) damage proximately caused by that breach. 

Roberts v. Lomanto, 112 Cal. App. 4th 1553, 1562 (2003). “The

absence of any one of these elements is fatal to the cause of

action.” Pierce v. Lyman, 1 Cal. App. 4th 1093, 1101 (1991). Aa

previously noted, “[a]bsent special circumstances, a loan

transaction is at arms-length and there is no fiduciary

relationship between the borrower and lender.” Rangel, 2009 WL

2190210, at *3. Plaintiff has not plead any special

circumstances that would indicate that ASC acted as anything

other than a typical servicer. The Complaint has therefore not

plead the existence of a fiduciary relationship between plaintiff

and ASC, and the court must accordingly grant ASC’s motion to

dismiss the breach of fiduciary duty claim.

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E. California’s Unfair Competition Law Claim

California’s Unfair Competition Law (“UCL”), Cal. Bus.

& Prof. Code §§ 17200-17210, prohibits “any unlawful, unfair, or

fraudulent business act or practice.” Cal-Tech Commc’ns, Inc. v.

L.A. Cellular Tel. Co., 20 Cal. 4th 163, 180 (1999). This cause

of action is generally derivative of some other illegal conduct

or fraud committed by a defendant, and “[a] plaintiff must state

with reasonable particularity the facts supporting the statutory

elements of the violation.” Khoury v. Maly’s of Cal., Inc., 14

Cal. App. 4th 612, 619 (1993).

Plaintiff’s UCL claim is vague and conclusory, simply

alleging that “the [d]efendants’ acts, as alleged herein,

constitute unlawful, unfair, and/or fraudulent business practices

. . . .” (Compl. ¶ 459.) Plaintiff’s claim lumps all defendants

together and fails to identify any specific act taken by any one

of the named defendants. Such vague and conclusory allegations

are insufficient to inform defendants as to their liability. See

Gauvin, 682 F. Supp. at 1071; see also Lingad v. Indymac Fed.

Bank, No Civ. 2:09-02347 GEB JFM, --- F. Supp. 2d ----, 2010 WL

347994, at *11 (E.D. Cal. Jan. 29, 2010). Plaintiff’s claim also

appears to be based solely on the other claims in the Complaint,

which the court has already indicated it will dismiss. 

Accordingly, the court will grant ASC and Deutsche’s motion to

dismiss plaintiff’s UCL claim.

IT IS THEREFORE ORDERED that ASC and Deutsche’s motion

to dismiss plaintiff’s complaint as to ASC and Deutsche be, and

the same hereby is, GRANTED.

Plaintiff has twenty days from the date of this Order

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to file an amended complaint, if she can do so consistent with

this Order. 

DATED: June 17, 2010

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