Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-3_13-cv-08089/USCOURTS-azd-3_13-cv-08089-2/pdf.json

Nature of Suit Code: 220
Nature of Suit: Foreclosure
Cause of Action: 28:1331(a) Fed. Question: Real Property

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WO 

IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF ARIZONA 

Todd P. Grecian, 

Plaintiff, 

v. 

Nationstar Mortgage LLC, et al., 

Defendants.

No. CV-13-08089-PCT-DGC

ORDER 

 Defendant Nationstar Mortgage, LLC has filed a motion to dismiss the Second 

Amended Complaint. Doc. 48. The motion has been fully briefed. For the reasons 

stated below, the motion will be granted and the complaint dismissed with prejudice.1

I. Background. 

 On June 13, 2004, Plaintiff obtained a loan secured by a deed of trust on property 

at 3033 Palo Verde Boulevard South, Lake Havasu City, Arizona, in the amount of 

approximately $188,000. Doc. 35, ¶ 8. Defendant was the beneficiary of the deed. Id., 

¶ 9. Plaintiff fell behind on his loan payments in June 2011 and desired to cure the 

arrears with a loan modification. Id. ¶ 13. Plaintiff submitted a complete application for 

a loan modification to Aurora Loans, Defendant’s predecessor in interest. Id., ¶ 14. 

Nothing came of Plaintiff’s application for a loan modification. Defendant recorded a 

 

1

 Defendant’s request for oral argument is denied because the issues have been 

fully briefed and oral argument will not aid the Court’s decision. See Fed. R. Civ. P. 

78(b); Partridge v. Reich, 141 F.3d 920, 926 (9th Cir. 1998). 

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Notice of Trustee’s Sale under Deed of Trust on June 13, 2012, and scheduled a trustee’s 

sale of the property for September 18, 2012. Id., ¶ 10. Plaintiff alleges, however, that he 

had entered into negotiations with Defendant for a loan modification and was given 

assurances that the property would not be sold. Id., ¶ 16. 

 Plaintiff alleges that his efforts bore fruit, and that, in a letter dated December 19, 

2012, he was granted a loan modification agreement that reduced his monthly payments 

to $1,155.09 for a year. Id., ¶ 17. Plaintiff complains that the December 19 letter 

required payment of $3,400.00 and the return of certain signed documents by 

November 30, 2012, which had already passed by the time the letter was sent. Id., ¶ 18. 

Plaintiff claims he attempted to contact Defendant’s representative about the date 

discrepancy to no avail. Id., ¶ 19. Plaintiff then claims both that complying with the 

letter’s orders to make payment and return the documents “had been rendered impossible 

by the very text of the NSM letter” (id., ¶ 19) and that he “relied to his detriment” on the 

letter “in believing that the Loan Modification . . . had been granted under the terms 

stated in the letter” (id., ¶ 20). 

 Plaintiff filed his initial complaint on April 16, 2013, alleging various claims 

including fraud, unjust enrichment, wrongful foreclosure, and violations of federal law. 

Doc. 1. Defendant moved to dismiss the initial complaint, and the Court granted the 

motion with leave to amend a limited number of claims. Doc. 20. Plaintiff filed an 

amended complaint on September 13, 2013, asserting only a claim for fraud, 

misrepresentation, or concealment. Doc. 22. Defendant again moved to dismiss the 

amended complaint and the Court again granted the motion. Doc. 34. Because Plaintiff 

was proceeding pro se, the Court gave Plaintiff leave to amend one last time to cure the 

deficiencies of the complaint. Id. In its order granting Plaintiff a final opportunity to 

amend, the Court directed that the complaint address the deficiencies from both orders 

dismissing the complaints and that it specify the precise nature of Plaintiff’s fraud claim. 

Id. at 4. The Court warned that failure to satisfy the pleading standards articulated in its 

two orders would result in dismissal without leave to amend. Id. 

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II. Legal Standard. 

When analyzing a complaint for failure to state a claim to relief under 

Rule 12(b)(6), the well-pled factual allegations 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). Legal conclusions couched as factual allegations are not entitled to the 

assumption of truth, Ashcroft v. Iqbal, 556 U.S. 662, 680 (2009), and therefore are 

insufficient to defeat a motion to dismiss for failure to state a claim, In re Cutera Sec. 

Litig., 610 F.3d 1103, 1108 (9th Cir. 2010). To avoid a Rule 12(b)(6) dismissal, the 

complaint must plead 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 “is not 

akin to a ‘probability requirement,’ but it asks for more than a sheer possibility that a 

defendant has acted unlawfully.” Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 

556). “[W]here the well-pleaded facts do not permit the court to infer more than the mere 

possibility of misconduct, the complaint has alleged B but it has not ‘show[n]’ B ‘that the 

pleader is entitled to relief.’” Id. at 679 (quoting Fed. R. Civ. P. 8(a)(2)). Where a 

complaint alleges fraud, Rule 9(b) requires that a party “state with particularity the 

circumstances constituting fraud or mistake.” 

III. Analysis. 

 In its previous order, the Court noted that Plaintiff’s first amended complaint 

failed adequately to plead the who, what, when, and where of the alleged fraud, and that 

Plaintiff omitted key facts necessary to make the claim plausible. Doc. 34 at 3. 

Plaintiff’s second amended complaint (“SAC”) does not correct this deficiency. 

 The SAC asserts a claim for common law fraud. Doc. 35. Such a claim requires: 

(1) a representation, (2) its falsity, (3) its materiality, (4) the speaker’s knowledge of its 

falsity or ignorance of its truth, (5) his intent that it should be acted upon by the person 

and in the manner reasonably contemplated, (6) the hearer’s ignorance of its falsity, 

(7) his reliance on its truth, (8) his right to rely thereon, and (9) his consequent and 

proximate injury. Nielson v. Flashberg, 419 P.2d 514, 517-18 (Ariz. 1966). 

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 The gravamen of the SAC is that Defendant made false and misleading statements 

in the December 19, 2012 letter. Docs. 35; 54 at 4. Although the SAC alleges in some 

places that false statements were made by Defendant’s employee Mike Kanzler, the only 

false statements identified in the SAC are those in the letter, a copy of which is attached 

as Exhibit D to the SAC. See Doc. 35, ¶¶ 15, 16, 17, 18, 19, 20, 26, 27, 28, 29, 30, 31, 

32, 34, 35, 36, 37. 

 The letter informed Plaintiff that his loan modification had been approved and 

would be finalized when he submitted a payment of $3,400 and certain documents by 

November 30, 2012 – a date that had already passed. Doc. 35-1 at 22. Plaintiff noticed 

the date discrepancy and attempted to resolve it with Defendant’s representative, but 

received no response. Doc. 35, ¶¶ 30-35. Having received no clarification on the date, 

and having made no payment or executed the required documents, Plaintiff nonetheless 

claims that he “detrimentally relied upon the written representations” of the letter to 

conclude that the loan had been modified. Id. 

 As noted in the Court’s earlier order, the letter clearly indicated that further steps 

were required to finalize the modification. Doc. 35-1 at 22. The letter stated that the 

modification agreement must be signed and returned within 30 days of receipt and that 

the initial payment of $3,400 must be made. Id. The fact that the letter postdated the due 

date should, if anything, have prompted Plaintiff to complete the required steps even 

more promptly to finalize the loan modification, but Plaintiff does not allege that he took 

any steps to comply with the terms of the letter. 

 Plaintiff’s complaint still does not sufficiently allege certain elements of fraud. 

Plaintiff has not alleged any facts indicating that Defendant somehow intended Plaintiff 

to be misled by the clearly incorrect November due date. Nor does the complaint clearly 

allege that Plaintiff was ignorant of the alleged false statement – it alleges, rather, that he 

noticed the incorrect date and attempted to contact Defendant about it. Doc. 35, ¶¶ 19, 

20. The complaint also fails to allege facts that would support Plaintiff’s allegation that 

he reasonably relied on a letter – or had the right to rely on a letter – that clearly said 

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additional steps were required to complete the loan modification. 

 In addition to these deficiencies in the elements of common law fraud, the claim 

alleged in the complaint simply is not plausible. Iqbal, 556 U.S. at 678. The letter upon 

which Defendant bases his entire case stated that certain steps were required “to complete 

your loan modification,” and that he should “[c]omplete the following steps to finalize 

your loan modification.” Doc. 35-1 at 22. Plaintiff admits that he did not complete the 

steps. Given these facts, Plaintiff’s claim that he was misled by the letter into believing 

that an enforceable modification had been completed is not plausible. 

 IT IS ORDERED that Defendant’s motion to dismiss (Doc. 48) is granted. 

Because Plaintiff has had three opportunities to state a claim and has failed to do so, 

further leave to amend will not be granted. The Clerk is directed to terminate this 

action. 

 Dated this 15th day of May, 2014. 

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