Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-5_10-cv-00400/USCOURTS-cand-5_10-cv-00400-0/pdf.json

Nature of Suit Code: 480
Nature of Suit: Consumer Credit
Cause of Action: 28:1441 Petition for Removal - Fair Credit Reporting Act

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Case No. C 10-0400 JF (HRL)

ORDER GRANTING DEFENDANT’S MOTION TO DISMISS AND REMANDING ACTION TO STATE COURT

(JFLC3)

**E-Filed 4/9/2010**

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

SAN JOSE DIVISION

LaCOBY PHILLIPS, 

 Plaintiff,

 v.

BANK OF AMERICA CORPORATION AND

DOES 1 THROUGH 50 INCLUSIVE,

 Defendants.

Case Number C 10-0400 JF (HRL)

ORDER GRANTING 1

DEFENDANT’S MOTION TO

DISMISS AND REMANDING

ACTION TO STATE COURT

[Re: Document no. 5 ]

Defendant Bank of America Corporation (“Defendant”) moves pursuant to Fed. R.Civ. P.

12(b)(6) to dismiss the complaint in the above-entitled action for failure to state a claim upon

which relief can be granted or, in the alternative, pursuant to Fed. R. Civ. P. 12(e), for a more

definite statement. The motion is unopposed and pursuant to Civil Local Rule 7-1(b) is

appropriate for determination without oral argument. For the reasons set forth below, the motion

to dismiss will be granted, without leave to amend.

I. BACKGROUND

Plaintiff LaCoby Phillips (“Plaintiff”) alleges that Defendant, a mortgage lender, failed to

respond to a Qualified Written Request (“QWR”) sent to Defendant by Plaintiff’s counsel on

Case 5:10-cv-00400-JF Document 8 Filed 04/09/10 Page 1 of 7
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Case No. C 10-0400 JF (HRL)

ORDER GRANTING DEFENDANT’S MOTION TO DISMISS AND REMANDING ACTION TO STATE COURT

(JFLC3)

October 22, 2009. The purported QWR is attached to the complaint. (See Compl. Ex. A.) It

consists of two pages: a fax cover sheet informing Defendant of counsel’s representation of

Plaintiff and the account identification number for the loan to which the inquiry relates; and a

letter formally requesting a list of “specific loan origination documents.” (Compl. ¶ 9.) Plaintiff

alleges that Defendant’s failure to respond “caused Plaintiff damage in an amount to be

determined at trial.” (Id. at ¶ 12.)

On December 9, 2009, Plaintiff filed a complaint in the Santa Clara Superior Court

alleging four claims for relief: violation of the Real Estate and Settlement Procedures Act

(“RESPA”), 12 U.S.C. § 2601 et seq; breach of implied covenant of good faith and fair dealing;

unfair business practices; and breach of fiduciary duty. The action was removed to this Court on

January 28, 2010. Defendant filed the instant motion on February 4, 2010, seeking to dismiss all

of Plaintiff’s claims or, in the alternative, for a more definite statement of the claims. Although

she is represented by counsel, Plaintiff did not file opposition.

II. LEGAL STANDARDS

A. Motion to Dismiss for Failure to State a Claim

Dismissal under Fed. R. Civ. P. 12(b)(6) “is appropriate only where the complaint lacks a

cognizable legal theory or sufficient facts to support a cognizable legal theory.” Mendiondo v.

Centinela Hosp. Med. Ctr., 521 F.3d 1097, 1104 (9th Cir. 2008). For purposes of a motion to

dismiss, the plaintiff’s allegations are taken as true, and the court must construe the complaint in

the light most favorable to the plaintiff. Jenkins v. McKeithen, 395 U.S. 411, 421 (1969). At the

same time, “[w]hile 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 ‘entitle[ment]

to relief’ requires more than labels and conclusions, and a formulaic recitation of the elements of

a cause of action will not do.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (internal

citations omitted). Thus, a court need not accept as true conclusory allegations, unreasonable

inferences, legal characterizations, or unwarranted deductions of fact contained in the complaint. 

Clegg v. Cult Awareness Network, 18 F.3d 752, 754-755 (9th Cir. 1994). 

As the Supreme Court recently has clarified, a court must determine whether the

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Case No. C 10-0400 JF (HRL)

ORDER GRANTING DEFENDANT’S MOTION TO DISMISS AND REMANDING ACTION TO STATE COURT

(JFLC3)

well-pled facts in the complaint “plausibly give rise to an entitlement to relief.” Ashcroft v.

Iqbal, 556 U.S. —, 129 S.Ct. 1937, 1950 (2009) (emphasis added). “[W]here the well-pleaded

facts do not permit the court to infer more than the mere possibility of misconduct, the complaint

has alleged–but it has not ‘show[n]’–‘that the pleader is entitled to relief.’” Id. (quoting Fed. R.

Civ. P. 8(a)(2)) (emphasis added). 

Leave to amend must be granted unless it is clear that the complaint’s deficiencies cannot

be cured by amendment. Lucas v. Dep't of Corrs., 66 F.3d 245, 248 (9th Cir. 1995). When

amendment would be futile, however, dismissal may be ordered with prejudice. Dumas v. Kipp,

90 F.3d 386, 393 (9th Cir. 1996). 

B. Motion for a More Definite Statement

Under Fed. R. Civ. P. 12(e), “[a] party may move for a more definite statement of a

pleading to which a responsive pleading is allowed but which is so vague or ambiguous that the

party cannot reasonably prepare a response.” Rule 8(a) requires “a short and plain statement” of

the basis for relief including grounds for the court’s jurisdiction, a statement showing that

Plaintiffs are entitled to relief, and a demand for the relief sought. Rule 8(d) requires each

allegation to be “simple, concise, and direct.” 

III. DISCUSSION

A. Motion to Dismiss for Failure to State a Claim

1. The RESPA Claim

A request must meet certain criteria in order to constitute a QWR under 12 U.S.C. §

2605(e). A QWR requests information relating to the servicing of a loan. 12 U.S.C. §

2605(e)(1)(A). It is something other than notice on a payment coupon or other payment medium

supplied by the servicer. 12 U.S.C. § 2605(e)(1)(B). It must provide sufficient information for

the servicer to identify the name and account of the borrower. 12 U.S.C. § 2605(e)(1)(B)(i). 

Finally, it must either include a statement of the reasons for the borrower’s belief, to the extent

applicable, that the account is in error or provide sufficient detail to the servicer regarding other

information sought by the borrower. 12 U.S.C. § 2605(e)(1)(B)(ii). 

Under RESPA, loan servicers

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Case No. C 10-0400 JF (HRL)

ORDER GRANTING DEFENDANT’S MOTION TO DISMISS AND REMANDING ACTION TO STATE COURT

(JFLC3)

ha[ve] a duty to respond to a borrower’s inquiry or “qualified written

request.” 12 U.S.C. § 2605(e). A qualified written request is a written

correspondence that enables the servicer to identify the name and account of the

borrower. 12 U.S.C. § 2605(e)(1). It also either includes a statement describing

why the borrower believes that the account is in error or provides sufficient detail

to the servicer regarding other information sought by the borrower. Id. The loan

servicer is required to respond by making appropriate corrections to the

borrower’s account, if necessary and, after conducting an investigation, providing

the borrower with a written clarification or explanation. 12 U.S.C. § 2605(e)(2). 

Keen v. Amer. Home Mortgage Servicing, Inc., 664 F. Supp. 2d 1086 (E.D. Cal. 2009). 

Plaintiff’s RESPA claim is based entirely on Defendant’s alleged failure to respond to her QWR. 

The paragraphs in the complaint most relevant to Plaintiff's RESPA claim read as follows:

1. LACOBY PHILLIPS is an individual that owns 7051 Livery Lane,

San Jose, CA in Santa Clara County (hereinafter "Subject Property") at all times

mentioned herein.

. . . 

8. Defendants are mortgage lenders. Defendants [sic] residential

mortgage lending business model consists of making many residential loans, or

loans made to borrowers with limited or impaired credit.

9. On October 22, 2009, a Qualified Written Request was made for

specific loan origination documents (Exhibit A). As of the filing of this cause of

action, Defendant has not provided an acknowledgement of this request and these

documents have not been received.

 . . . 

11. Defendants have violated the RESPA by engaging in prohibited

acts as set forth in this complaint, including but not necessarily limited to:

a. Failing to provide loan origination documents after the

submission of a Qualified Written Request for loan documents.

12. Defendants knew or by the exercise of reasonable care should have

known, that these acts or omissions were unlawful. Defendants [sic] actions

stated herein are in violation of the Real Estate Procedures Act of 1974 (RESPA)

and have caused Plaintiff damage in an amount to be determined at trial. Second

Plaintiff requests reasonable attorney fees and costs. 

(Complaint ¶¶ 1, 8, 9, 11, 12.)

The purported QWR introduces Plaintiff’s counsel, informs Defendant that Plaintiff “is

currently dealing with some financial issues and [that counsel] would like to discuss [Plaintiff's]

options (Modification, Short Sale, Bankruptcy, etc.) at this point,” and requests the following list

of documents related to Plaintiff’s loan:

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Case No. C 10-0400 JF (HRL)

ORDER GRANTING DEFENDANT’S MOTION TO DISMISS AND REMANDING ACTION TO STATE COURT

(JFLC3)

C Lender’s Closing Instructions (if available)

C HUD-1 Settlement Statement

C Uniform Residential Loan Application (FNMA 1003)

C Promissory Note with all endorsements, medications, attachments, riders,

addendum’s [sic], etc.

C Mortgage/Deed of Trust/Security Instrument with all endorsements,

modifications, attachments, riders addendums, etc.

C Prepayment Rider (if applicable)

C Initial Truth in Lending Disclosure

C Final Truth in Lending Disclosure

C Section 32 Disclosures (if applicable)

C Good Faith Estimate

C Broker Fee Agreement (if applicable)

C Rescission Notice/Right to Cancel (if applicable)

C Mortgage Insurance Certificate (if applicable)

C Escrow/Impound Disclosure Statement

C Escrow Waiver

(Compl. Ex. A.) 

Defendant contends that Plaintiff’s RESPA claim is insufficient for three reasons: the fax

Defendant received from Plaintiff’s counsel is not a QWR under RESPA and thus did not trigger

any obligation on behalf of Defendant; the purported QWR fails to allege any servicing errors;

and Plaintiff fails to allege any pecuniary harm. 

Defendant contends that the fax is not a QWR under RESPA because the statute defines

the term as “a ‘written request from the borrower (or agent of the borrower) for information

relating to the servicing of [a] loan,’ rather than its ‘origination.’” (Def.’s Mot. 5 (citing 12

U.S.C. § 2605(e)(1)(A)) (emphasis in original).) Defendant maintains that the fax “expressly

relates to ‘origination’ documents and a proposed ‘modification’ of the loan, not servicing,” and

that, as a result, Defendant “had no duty under RESPA to respond.” (Id. at 5-6.) Defendant is

correct. See, e.g., Consumer Solutions REO, LLC v. Hillery, 658 F. Supp. 2d 1002, 1014 (N.D.

Cal. 2009) (dismissing the plaintiff’s RESPA claim with prejudice after observing that the

requirement “[t]hat a QWR must address the servicing of the loan, and not its validity, is borne

out by the fact that § 2605(e) expressly imposes a duty upon the loan servicer, and not the owner

of the loan”); MorEquity, Inc. v. Naeem, 118 F. Supp. 2d 885, 901 (N.D. Ill. 2000) (“According

to the allegations . . . , the letter sought information about the validity of the loan and mortgage

documents, but made no inquiry as to the status of the [] account balance. Therefore, the request

did not relate to ‘servicing’ of the loan, and Count V fails to state a claim under [12 U.S.C.] §

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Case No. C 10-0400 JF (HRL)

ORDER GRANTING DEFENDANT’S MOTION TO DISMISS AND REMANDING ACTION TO STATE COURT

(JFLC3)

2605.”)

Relatedly, Defendant argues that even if the letter were considered a QWR, it does not

allege any servicing errors. Instead, it simply requests information and states that Plaintiff “is

currently dealing with some financial issues” and seeks to modify the terms of the loan. (Compl.

Ex. A.) This language does not come close to satisfying the requirements of the statute. See 12

U.S.C. § 2605(e)(1)(B)(ii) (“a qualified written request shall be a written correspondence . . . that

. . . includes a statement of the reasons for the belief of the borrower, to the extent applicable,

that the account is in error or provides sufficient detail to the servicer regarding other information

sought by the borrower”).

Finally, Defendant points out that Plaintiff does not allege any actual damages other than

“an amount to be determined at trial.” (Compl. ¶ 12.) Again, Defendant is correct. Section

2605(f)(1)(A) requires expressly that RESPA plaintiffs allege that actual damages flowed from

the alleged violation. 

The Court concludes that each of Defendant’s arguments is well-taken. Because

Plaintiff’s RESPA claim depends entirely on the content of the fax, there appears to be no

reasonable possibility that the deficiencies in the claim could be cured by amendment. Plaintiff’s

failure to respond to the instant motion, even though she is represented by counsel, provides an

additional basis to deny leave to amend.

2. Supplemental Jurisdiction

Plaintiff's RESPA claim is the sole basis for federal subject matter jurisdiction. While

federal courts may exercise supplemental jurisdiction over state-law claims “that are so related to

claims in the action within [the court’s] original jurisdiction that they form part of the same case

or controversy under Article III of the United States Constitution,” 28 U.S.C. § 1367(a), a court

may decline to exercise supplemental jurisdiction where it “has dismissed all claims over which

it has original jurisdiction,” id. § 1367(c)(3). Indeed, unless “considerations of judicial economy,

convenience[,] and fairness to litigants” weigh in favor of the exercise of supplemental

jurisdiction, “a federal court should hesitate to exercise jurisdiction over state claims.” United

Mine Workers v. Gibbs, 383 U.S. 715, 726 (1966); see also Carnegie-Mellon Univ. v. Cohill, 484

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Case No. C 10-0400 JF (HRL)

ORDER GRANTING DEFENDANT’S MOTION TO DISMISS AND REMANDING ACTION TO STATE COURT

(JFLC3)

U.S. 343, 350 (1988) (“[A] federal court should consider and weigh in each case, and at every

stage of the litigation, the values of judicial economy, convenience, fairness, and comity.”). 

Because Plaintiff cannot state a viable federal claim, the Court declines to address her state law

claims and will remand the action to the superior court.

B. Motion for a More Definite Statement

In light of the above discussion, Defendant’s alternative motion for a more definite

statement will be terminated as moot.

 IV. CONCLUSION

Good cause therefor appearing, the motion to dismiss is GRANTED, without leave to

amend. The instant action is remanded to the Santa Clara Superior Court for further proceedings. 

IT IS SO ORDERED.

DATED: 4/9/2010

__________________________________

JEREMY FOGEL

United States District Judge

Case 5:10-cv-00400-JF Document 8 Filed 04/09/10 Page 7 of 7