Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_14-cv-05053/USCOURTS-cand-3_14-cv-05053-1/pdf.json

Nature of Suit Code: 290
Nature of Suit: Other Real Property Actions
Cause of Action: 28:1332 Diversity-(Citizenship)

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United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

ANGELITA JOHNSON,

Plaintiff,

v.

BANK OF AMERICA, N.A.,

Defendant.

Case No. 14-cv-05053-JSC 

ORDER RE: DEFENDANT’S MOTION 

TO DISMISS

Re: Dkt. No. 8

Plaintiff Angelita Johnson brings this action seeking to prevent foreclosure of her home. 

She sues Defendant Bank of America, N.A. for violation of California’s Homeowner’s Bill of 

Rights and fraud. Plaintiff contends that over a four-year period she attempted to apply for a loan 

modification with Bank of America, but received contradictory messages from Defendant’s 

representatives and had multiple Notices of Trustee Sales recorded against her property in 

violation of the dual tracking prohibitions in the Homeowner’s Bill of Rights. Now pending 

before the Court is Defendant’s Motion to Dismiss for failure to state a claim upon which relief 

can be granted. (Dkt. No. 8.) After carefully considering the arguments and briefing submitted

and having had the benefit of oral argument on January 22, 2015, the Court hereby GRANTS in 

part and DENIES in part Defendant’s motion to dismiss. 

FACTUAL & PROCEDURAL BACKGROUND

Plaintiff is the owner of real property located at 1408 Bacon Street, Unit 1, San Francisco, 

California. At all times relevant to this action, Defendant has been the servicer and/or beneficiary 

under the Deed of Trust on this property, which is a first lien deed of trust. (Complaint at ¶ 9.) 

Beginning in May 2010, Plaintiff contacted Defendant requesting a loan modification. (Id. at ¶

10.) Over course of the next four years Plaintiff was in frequent contact with Defendant regarding 

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applying for a loan modification. (Id. at ¶ 27.) Plaintiff contends that during this time Defendant 

would repeatedly request additional documents, which she would promptly provide. (Id. at ¶ 10.) 

Despite this, and Defendant’s assurances that her loan modification was complete and being 

processed, Defendant recorded five Notices of Trustee’s Sale against the subject property. (Id. at 

¶¶ 12, 16, 17, and 22.) 

The problems commenced in November 2011 when—despite having submitted a complete 

loan modification to Defendant in May 2010—Defendant recorded a Notice of Default against the 

subject property with the San Francisco County Recorder’s Office. (Id. at ¶ 11.) Although 

Plaintiff continued to apply for a loan modification and Defendant confirmed, in writing, that it 

had received all the requested documents from Plaintiff in November 2011, Defendant caused a 

Notice of Trustee’s Sale to be recorded against the property on or around December 12, 2011. (Id. 

at ¶ 12.) Plaintiff nonetheless continued to apply for a loan modification, and on June 29, 2012, 

Defendant sent Plaintiff a letter stating that her loan modification application was complete and 

was being submitted to an underwriter. (Id. at ¶ 13.) Plaintiff was told that she would receive a 

response to her application within 30 days. (Id.) Plaintiff did not receive a response until August 

20, 2012, at which point Defendant requested additional documents. (Id. at ¶ 14.) Plaintiff 

complied with this request, and after much back and forth regarding the form of the documents 

required, in November 2012 Plaintiff received an email from her point of contact confirming 

receipt of the required documents and stating that her application would be submitted to 

underwriting for a decision. (Id. at ¶ 15.) Despite this representation, on November 8, 2012

Defendant caused a new Notice of Trustee’s Sale to be recorded against the property. (Id. at ¶ 16.) 

Plaintiff immediately attempted to contact her point of contact with Defendant and was referred to 

a new individual who told her that they had no record Plaintiff had even applied for a loan 

modification. (Id.)

On January 22, 2013, Plaintiff submitted a new loan modification application. Despite 

confirmation that Defendant had received the complete loan modification application, Defendant 

caused a Notice of Trustee’s Sale to be recorded against the property two days later. (Id. at ¶ 17.) 

Two months later, Plaintiff requested that she be assigned a single-point of contact 

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(“SPOC”). (Id. at ¶ 18.) The woman assigned as her SPOC told Plaintiff to submit an entirely 

new loan modification which Plaintiff did on April 10, 2013. (Id.) Over the course of the next 

two months, Plaintiff complied with Defendant’s repeated requests for additional documents. (Id. 

at ¶ 19.) During this time, Plaintiff received duplicate requests for documents, including 

documents she had already submitted. (Id.) Plaintiff thus confirmed with her SPOC that she had 

received the documents at issue. (Id.) Plaintiff was assured that she had and was told that her 

application was complete and was being forwarded to the underwriting department. (Id.) While 

awaiting a determination on this application, Plaintiff was reassigned to three different SPOCs. 

(Id. at ¶ 20.) Then, in September 2013, Plaintiff’s most recent SPOC informed Plaintiff that she 

did not in fact have an open loan modification application on file. (Id. at ¶ 21.)

Accordingly, at the suggestion of her fourth SPOC, Plaintiff submitted yet another loan 

modification application on September 30, 2013. (Id.) Plaintiff was thereafter advised that she 

would no longer have a SPOC and in October and November 2013 Plaintiff was unable to reach a 

representative of Defendant to check on the status of her loan modification application. (Id. at ¶

21.) Defendant recorded another Notice of Trustee Sale against the property on November 18, 

2013. (Id. at ¶ 22.) Nonetheless, in early December 2013, Plaintiff was advised by a 

representative of Defendant that they had received all her documents and her application had been 

sent to underwriting. (Id. at ¶ 23.) Plaintiff was also advised that the trustee’s sale, scheduled for 

December 10, 2013, might go forward despite her pending loan modification. (Id.) Plaintiff 

therefore filed for bankruptcy on December 10, 2013. (Id.)

After her bankruptcy was discharged, Plaintiff submitted a new loan modification to her 

new SPOC on March 5, 2014. (Id. at ¶ 24.) On April 4, 2014, Plaintiff’s SPOC informed her that 

they had all the necessary documents and her application would be forwarded to the underwriter. 

(Id.) A few weeks later, Plaintiff was assigned a new SPOC who advised her that they had not 

received documents they requested on April 1 and thus, her application was no longer being 

considered. (Id. at ¶ 25.) Plaintiff attempted to follow-up regarding the inconsistent information 

she had received, but she was unable to reach a representative to do so. (Id.) Plaintiff therefore 

submitted a new loan application at the end of April 2014, but that application was also closed 

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because the changing SPOCs could not coordinate receipt of documents. (Id. at ¶ 26.) 

Plaintiff contends that although she has been attempting to apply for a loan modification 

for over four years she has never actually been considered for a modification because of 

Defendant’s lack of continuity with the loan modification process and its refusal to provide her

with a single point of contact. Plaintiff thus filed suit in November 2014 alleging fraud and that 

Defendant violated California’s Homeowner’s Bill of Rights by (1) recording a notice of default of 

trustee’s sale while her complete first lien loan modification application was pending, see Cal. 

Civ. Code § 2923.6, and (2) failing to assign her a single point of contact to coordinate receipt of 

documents and advise Plaintiff of the status of her account, see Cal. Civ. Code § 2923.7. (Dkt. 

No. 1.) Defendant thereafter filed the underlying motion to dismiss contending that Plaintiff’s 

allegations fail to state a claim upon which relief could be granted. (Dkt. No. 8.)

LEGAL STANDARD

A motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) challenges the 

sufficiency of the complaint where the action fails to allege “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). “A claim has 

facial plausibility when the plaintiff pleads factual content that allows the court to draw the 

reasonable inference that the defendant is liable for the misconduct alleged. The plausibility 

standard is not akin to a ‘probability requirement,’ but it asks for more than a sheer possibility that 

a defendant has acted unlawfully.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal citations 

omitted). Under Federal Rule of Civil Procedure 8(a)(2) a party is only required to make “a short 

and plain statement of the claim showing that the pleader is entitled to relief, in order to give the 

defendant fair notice of what the claim is and the grounds upon which it rests.” Twombly, 550 

U.S. at 554 (internal citations and quotations omitted).

For purposes of ruling on a Rule 12(b)(6) motion, the court “accept[s] factual allegations in 

the complaint as true and construe[s] the pleadings in the light most favorable to the non-moving 

party.” Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008). 

However, even under the liberal pleading standard of Federal Rule of Civil Procedure 8(a)(2), “a 

plaintiff’s obligation to provide the grounds of his entitlement to relief requires more than labels 

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and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” 

Twombly, 550 U.S. at 555 (internal citations and quotations omitted). “Determining whether a 

complaint states a plausible claim for relief . . . [is] a context-specific task that requires the 

reviewing court to draw on its judicial experience and common sense.” Ashcroft v. Iqbal, 556 

U.S. 662, 663-64 (2009).

Generally, when a complaint is dismissed, “leave to amend shall be freely given when 

justice so requires.” Carvalho v. Equifax Info. Servs., LLC, 629 F.3d 876, 892 (9th Cir. 2010); see

Fed. R. Civ. P. 15(a). The Ninth Circuit has “repeatedly held that a district court should grant 

leave to amend even if no request to amend the pleading was made, unless it determines that the 

pleading could not possibly be cured by the allegation of other facts.” Lopez v. Smith, 203 F.3d 

1122, 1130 (9th Cir. 2000) (citations and internal quotation marks omitted).

DISCUSSION

The California Homeowner Bill of Rights (“HBOR”) is a “state law designed to both 

provide protections for homeowners facing [non-judicial] foreclosure and reform aspects of the 

foreclosure process.” Shapiro v. Sage Point Lender Servs., No. 14-1591, 2014 WL 5419721, at *4 

(C.D. Cal. Oct. 24, 2014) (citing Cal. Civ. Code § 2923.4(a)). The HBOR took effect on January 

1, 2013. Among its protections to home borrowers, the HBOR “attempts to eliminate the practice, 

commonly known as dual tracking, whereby financial institutions continue to pursue foreclosure 

even while evaluating a borrower’s loan modification application.” Rockridge Trust v. Wells 

Fargo, N.A., 985 F. Supp. 2d 1110, 1149 (N.D. Cal. 2013); see Cal. Civ. Code § 2923.4 (noting 

that the purpose of the act is to ensure that borrowers are “considered for, and have a meaningful 

opportunity to obtain, available loss mitigation options” in order to avoid foreclosure).

Thus, while a borrower’s complete application for a first lien loan modification is pending, the 

servicer may not record a notice of default, notice of trustee’s sale, or conduct a trustee’s sale. See

Cal. Civ. Code § 2923.6(c). 

A. Plaintiff has Stated a Claim for Violation of the HBOR § 2923.6

Plaintiff contends that Defendant violated Section 2923.6’s dual tracking prohibition when 

it recorded the Notice of Trustee Sale on January 24, 2013, and again, on November 18, 2013, 

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because Plaintiff had complete loan modifications pending with Defendant at the time. 

(Complaint ¶ 33.) The provisions of the HBOR relevant to Plaintiff’s dual-tracking claim are:

(c) If a borrower submits a complete application for a first lien loan 

modification offered by, or through, the borrower’s mortgage 

servicer, a mortgage servicer, trustee, mortgagee, beneficiary, or 

authorized agent shall not record a notice of default, notice of sale, 

or conduct a trustee’s sale while the complete first lien loan 

modification application is pending ... until ... the mortgage servicer 

makes a written determination that the borrower is not eligible for a 

first lien loan modification, and any appeal period ... has expired.

...

(g) In order to minimize the risk of borrowers submitting multiple 

applications for first lien loan modification for the purpose of delay, 

the mortgage servicer shall not be obligated to evaluate applications 

from borrowers who have already been evaluated or afforded a fair 

opportunity to be evaluated for a first lien loan modification prior to 

January 1, 2013, or who have been evaluated or afforded a fair 

opportunity to be evaluated consistent with the requirements of this 

section, unless there has been a material change in the borrower's 

financial circumstances since the date of the borrower's previous 

application and that change is documented by the borrower and 

submitted to the mortgage servicer.

Cal. Civ. Code § 2923.6.

Defendant contends that Plaintiff’s claims are barred because Plaintiff was previously 

considered for a loan modification. See Cal. Civ. Code. § 2923.6(g) (“the mortgage servicer shall 

not be obligated to evaluate applications from borrowers who have already been evaluated or 

afforded a fair opportunity to be evaluated for a first lien loan modification prior to January 1, 

2013.”). In particular, Defendant cites to Plaintiff’s June 2012 application and the September 

2012 denial. Defendant further argues that because Plaintiff has not alleged any changed

circumstances since her 2012 denial she is not eligible for Section 2923.6(g)’s exception for when 

“there has been a material change in the borrower’s financial circumstances since the date of the 

borrower’s previous application and that change is documented by the borrower and submitted to 

the mortgage servicer.”

According to the Complaint, Plaintiff first contacted Defendant regarding a loan 

modification in May 2010. (Complaint ¶ 10.) After much back and forth and further document 

submission, Defendant sent Plaintiff a letter in June 2012 advising her that her loan modification 

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was complete and was being submitted to an underwriter. (Id. ¶ ¶ 11-13.) Two months later, 

Defendants requested additional documents. Plaintiff submitted the requested documents by the 

deadline. (Id.) Nonetheless, in September 2012 Plaintiff received a letter stating that her 

application had been denied because she failed to submit the required documents. (Id. ¶ 14.) The 

question for the Court is whether this denial counts for purposes of Section 2923.6(c) as a matter 

of law. The Court concludes that it does not. 

Plaintiff, for her part, contends that because the denial was not on the merits, but rather 

because Defendant contended she had not submitted the necessary documents, such a denial 

cannot constitute a good faith evaluation of Plaintiff’s loan application. Defendant correctly 

points out that nothing in the language of the statute requires the prior denial to be “on the merits” 

or a “good faith evaluation.” The provision, however, is limited to borrowers “who have already 

been evaluated or afforded a fair opportunity to be evaluated for a first lien loan modification.” 

Cal. Civ. Code § 2923.6(g). Neither party has submitted any case law interpreting what it means 

to be “evaluated” or “afforded a fair opportunity to be evaluated.” The legislative history for the 

HBOR states that one purpose of the amendments “is to ensure that, as part of the non-judicial 

process, borrowers have a meaningful opportunity to obtain available loss mitigation options...” 

Sen. Floor Analysis of Assemb. Bill No. 278 (“AB 278 Analysis”), Conf. Rep. No. 1, Reg. Sess., 

at 27 (Cal. July 2, 2012). Thus, “[b]orrowers must be thoroughly evaluated for all available loss 

mitigation options before foreclosure referral, and banks must act on loss mitigation applications 

before referring loans to foreclosure; i.e. “dual tracking” will be restricted.” Id. at 3. 

The Court cannot conclude as a matter of law that Plaintiff’s application was evaluated or 

that she was afforded a fair opportunity to be evaluated. First, Plaintiff has not alleged that her 

application was actually evaluated; to the contrary, Defendant denied her application for failing to 

submit documents, not because upon evaluation Defendant concluded that she did not qualify for a 

loan modification. Second, drawing all reasonable inferences in Plaintiff’s favor, Plaintiff was 

also not afforded a fair opportunity to be evaluated. Her application was denied for failing to 

submit documents that she did in fact submit and, in any event, were requested after Defendant 

had already advised her that her application was complete (that is no more documents were 

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required). Such circumstances are not a fair opportunity to be evaluated. 

Defendant laments that such a holding will increase the risk “of borrowers submitting 

multiple applications for first lien loan modification for the purpose of delay,” Cal. Civ. Code §

2923.6, a risk the legislature specifically sought to avoid or at least mitigate. The Court disagrees. 

While such intentional delay might result where the borrower fails to submit the requested 

documents, the allegation here is that the borrower did submit the requested documents and the 

Court’s holding is limited to the circumstances alleged in the Complaint. Accordingly, 

Defendant’s motion to dismiss Plaintiff’s claim under Section 2923.6 is denied.

B. Plaintiff has Stated a Claim for Violation of the HBOR § 2923.7

“In connection with its enactments to address dual tracking, the California legislature also 

enacted a single point of contact provision [SPOC] to prevent borrowers from being given the runaround.” Rockridge Trust v. Wells Fargo NA, No. 13-01457, 2014 WL 688124, at *23 (N.D. Cal. 

Feb. 19, 2014) (internal citation and quotation marks omitted). In particular, Section 2923.7 of the 

California Civil Code provides that upon a borrower’s request for a foreclosure prevention 

alternative, the servicer must promptly designate one person to be the point of contact to 

communicate directly with the borrower. Cal. Civ.Code § 2923.7(a). The SPOC is responsible for 

doing all of the following:

(1) Communicating the process by which a borrower may apply for 

an available foreclosure prevention alternative and the deadline 

for any required submissions to be considered for these options.

(2) Coordinating receipt of all documents associated with available 

foreclosure prevention alternatives and notifying the borrower of 

any missing documents necessary to complete the application.

(3) Having access to current information and personnel sufficient to 

timely, accurately, and adequately inform the borrower of the 

current status of the foreclosure prevention alternative.

(4) Ensuring that a borrower is considered for all foreclosure 

prevention alternatives offered by, or through, the mortgage 

servicer, if any.

(5) Having access to individuals with the ability and authority to 

stop foreclosure proceedings when necessary.

Cal. Civ. Code § 2923.7(b). 

Plaintiff contends that Defendant violated Section 2923.7 “when it purported to assign 

Plaintiff multiple single points of contact from 2013 to the present whom were unable to 

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coordinate the receipt of documents and were unable to advise Plaintiff as to the status of her 

account.” (Complaint ¶ 39.) Specifically, Plaintiff alleges while she was in the process of 

submitting a loan modification application with one SPOC, she would be transferred to a new 

SPOC who would inform Plaintiff that she had no loan modification pending or close her 

application for failure to submit documents which she had previously submitted to another SPOC. 

(Id.)

Defendant’s arguments in favor of dismissal are two-fold. First, Defendant contends

Plaintiff fails to allege a violation of Section 2923.7 because nothing in the statute precludes 

reassignment of a SPOC once assigned, and the statute does not require the SPOC to be 

knowledgeable to Plaintiff’s satisfaction. Second, Defendant argues that even if Plaintiff’s 

allegations were sufficient, Plaintiff is ineligible for any relief under the statue. The Court is not 

persuaded by either argument.

Plaintiff alleges that she was assigned at least eight different SPOCs during the four years 

she attempted to obtain a loan modification from Defendant. (Complaint ¶¶ 18-26.) While this is 

not sufficient to demonstrate a violation of the statute per se, Plaintiff’s allegations that the SPOCs 

were unable to coordinate receipt of documents with one telling Plaintiff that her application was 

complete and another telling her she had no application pending, see Complaint ¶¶19-21, or telling 

her that her application was no longer being considered because they had not received documents 

that her prior SPOC told her they had received, id. ¶¶24-25, 26, are sufficient to state a claim 

under Section 2923.7.1 See, e.g., Cal. Civ. Code § 2923.7(b)(2) (the SPOC is responsible for 

“coordinating receipt of all documents”); § 2923.7(b)(3)(the SPOC shall “[have] access to current 

information and personnel sufficient to timely, accurately, and adequately inform the borrower of 

the current status”); see also Garcia v. Wells Fargo Bank N.A., No. 13–3670, 2014 WL 458208 at 

*4 (N.D. Cal. Jan. 31, 2014) (denying motion to dismiss Section 2923.7 claim where plaintiff 

alleged that her SPOC was unresponsive to her phone calls); Mungai v. Wells Fargo Bank, No. 14-

 

1 Defendant’s suggestion that the Court should infer that Plaintiff was at fault in these 

communications and failed to submit the necessary documents based on her prior bankruptcy 

filings is wholly improper on a motion to dismiss where the Court resolves all inferences in 

Plaintiff’s favor. 

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00289, 2014 WL 2508090, at *10 (N.D. Cal. June 3, 2014) (“Finding that a mortgage servicer 

complies with Section 2923.7 when it assigns an SPOC who fails to communicate with the 

borrower would render the SPOC requirement a nullity.”) (internal citations omitted).

The Court thus turns to the more complicated question of whether Plaintiff’s claim is 

nonetheless barred because she is ineligible for any relief under the statute. Section 2924.12 

governs relief under Section 2923.7. Subsection (a) provides that if a “trustee’s deed upon sale 

has not been recorded, a borrower may bring an action for injunctive relief to enjoin a material 

violation” whereas subsection (b) authorizes “actual economic damages” if a “trustee’s deed upon 

sale has been recorded.” Cal. Civ. Code § 2924.12. Plaintiff concedes that as no actual trustee 

sale has taken place she is not eligible for actual damages. Thus, the inquiry turns on whether 

Plaintiff has adequately pled entitlement to injunctive relief. 

Plaintiff contends that because of Defendant’s violation of the statute she has never been 

considered for a loan modification which has “resulted in Plaintiff’s home being placed in active 

foreclosure, with active trustee sale dates, and resulted in Plaintiff having to file bankruptcy in 

order to prevent Defendant from selling her property before she had been reviewed for a 

modification.” (Dkt. No. 15 at 13:23-26 (citing Complaint at ¶¶ 23, 27).) Defendant, for its part, 

has not cited any authority interpreting the term “material” for purposes of Section 2924.12.2 

From a Rule 12(b)(6) viewpoint, “[f]actual allegations must be enough to raise a right to relief 

above the speculative level....” Twombly, 550 U.S. at 555. “Had [Plaintiff] obtained a 

modification, [she] may have been able to keep [her] house and lower [her] mortgage payments. 

 

2 Defendant’s reliance on Johnson v. PNC Mortgage, No. C 14-02976, 2014 WL 6629585, at *8 

(N.D. Cal. Nov. 21, 2014), is misplaced. In Johnson, the court declined to consider whether 

Plaintiff had alleged a material violation under section 2924.12 because the plaintiff lacked 

standing to pursue the claim as a violation of California Business and Professions § 17200. Id. 

Likewise, the language Defendant relies on from Major v. Wells Fargo Bank, N.A., No. 14-CV998-LAB-RBB, 2014 WL 4103936, at *6 (S.D. Cal. Aug. 18, 2014), regarding the plaintiffs’ 

ineligibility for damages in light of their default, was in reference to another provision of the 

HBOR, and fails to provide any guidance as to what the legislature meant by “material” in Section 

2924.12

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At this stage, the Court cannot say that this alleged violation was not material...Plaintiffs’

damages may turn out to be minimal, but that is not something that the Court can determine on a 

Motion to Dismiss.” Segura v. Wells Fargo Bank, N.A., No. 14-04195, 2014 WL 4798890, at *7 

(C.D. Cal. Sept. 26, 2014).

The Court concludes that Plaintiff has adequately pled a claim for relief under Section 

2923.7. The motion to dismiss is therefore denied as to Plaintiff’s injunctive relief claims, but 

granted as to Plaintiff’s claim for damages as Plaintiff did not oppose the motion to dismiss on this 

ground.

C. Plaintiff’s Claim for Fraud by Misrepresentation

Plaintiff brings a claim for fraud by misrepresentation. To state a claim for fraudulent 

misrepresentation, the plaintiff must allege: 1) a misrepresentation; 2) knowledge of falsity; (3) 

intent to defraud, i.e., to induce reliance; 4) justifiable reliance; and 5) resulting damage. Lazar v. 

Superior Court, 49 Cal.Rptr.2d 377 (1996). Defendant argues that Plaintiff’s claim does not 

satisfy the pleading standards of Rule 9(b) of the Federal Rules of Civil Procedure because 

Plaintiff has not alleged the misrepresentations or damages with sufficient specificity. 

Rule 9(b) states: “[i]n alleging fraud or mistake, a party must state with particularity the 

circumstances constituting fraud or mistake. Malice, intent, knowledge, and other conditions of a 

person’s mind may be alleged generally.” Fed. R. Civ. P. 9. Thus, the Ninth Circuit has held that, 

“while a federal court will examine state law to determine whether the elements of fraud have 

been pled sufficiently to state a cause of action, the Rule 9(b) requirement that the circumstances 

of the fraud must be stated with particularity is a federally imposed rule.” Vess v. Ciba–Geigy 

Corp. USA, 317 F.3d 1097, 1103 (9th Cir. 2003). In other words, “[a]verments of fraud must be 

accompanied by ‘the who, what, when, where, and how’ of the misconduct charged.” Kearns v. 

Ford Motor Co., 567 F.3d 1120, 1124 (9th Cir. 2009). “The requirement of specificity in a fraud 

action against a corporation requires the plaintiff to allege the names of the persons who made the 

allegedly fraudulent representations, their authority to speak, to whom they spoke, what they said 

or wrote, and when it was said or written.” Tarmann v. State Farm Mut. Auto. Ins. Co., 2 

Cal.App.4th 153, 157, 2 Cal.Rptr.2d 861 (1991).

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Plaintiff has sufficiently pled the circumstances of the fraud for purposes of Rule 9(b). 

Plaintiff has alleged that on five different occasions she was told by named Bank of America 

representatives that her loan modification application was complete. (Complaint ¶¶ 13, 15, 17, 19, 

23, 24.) Nonetheless, after each such representation, Plaintiff was told either that she had no loan 

modification pending, or that her application had been denied for failure to submit the required 

paperwork. (Id. at ¶¶ 14, 16, 18, 21, 25, 26.) Thus, Plaintiff has pled that she submitted a 

complete loan modification application on multiple occasions only to be told that her application 

either did not exist or was incomplete. This is sufficient to allege misrepresentation. The 

misrepresentation was material because it directly impacted her ability to obtain a loan 

modification. Further, Plaintiff has adequately alleged reliance because she alleges that did not 

pursue another foreclosure alternative because she believed Defendant was considering her 

application for a loan modification. (Id. at ¶ 51.)

Finally, Defendant argues that Plaintiff has not adequately alleged damages because the 

amount in default is owed to Defendant under the terms of the contract. In her opposition brief, 

Plaintiff expanded on her damages claim suggesting that “but for Defendant’s conduct from June 

2012 to present, Plaintiff would have sought other alternatives to foreclosure, such as refinancing, 

reinstatement, or a short-sale.” (Dkt. No. 15 at 16:28-17:2.) However, these allegations are not in 

the Complaint. The Complaint alleges damages, in part, of “imminent loss of her Property, loss of 

money including but not limited to losses through overcharges, incurred attorneys’ fees and costs 

to save her home, the accumulation of excessive arrears which could have been avoided through 

other foreclosure prevention alternatives, a loss of reputation and goodwill, destruction of credit.” 

(Id. at ¶ 55.) These allegations of damages are independent of Plaintiff’s obligation to meet her

mortgage payments. See Peterson v. Wells Fargo Bank, N.A., No. 13-03392, 2014 WL 3418870, 

at *5 (N.D. Cal. July 11, 2014) (finding in accordance with other courts that unwarranted late fees 

and attorney’s fees were sufficient allegations of damages); Izsak v. Wells Fargo Bank, N.A., No. 

C 13-05362, 2014 WL 1478711, at *4 (N.D. Cal. Apr. 14, 2014) (holding that the plaintiff’s 

allegations that he had been charged with unwarranted late fees, attorneys fees, and that his credit 

has been damaged were sufficient to allege damages based on fraud.) To the extent that Plaintiff 

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seeks damages based on not pursuing other foreclosure alternatives of refinancing, reinstatement, 

or a short-sale because she thought she her loan modification application was pending, Plaintiff 

has failed to adequately allege this basis for relief. 

Accordingly, Defendant’s motion to dismiss Plaintiff’s fraud claim is granted solely with 

respect to the adequacy of her damages allegations and Plaintiff shall be granted leave to amend 

her damages claims to include claims regarding her ability to pursue other alternatives to 

foreclosure.

CONCLUSION

For the reasons set forth above, Defendant’s Motion to Dismiss (Dkt. No. 8) is GRANTED 

in part and DENIED in part. The motion is GRANTED with prejudice as to Plaintiff’s damages 

claims under California Civil Code Section 2923.7, and is granted as to Plaintiff’s Fraud claim for 

failure to sufficiently allege damage with leave to amend. The motion is DENIED as to Plaintiff’s 

remaining claims under the Homeowner’s Bill of Rights.

Plaintiff shall file an amended complaint within 14 days.

IT IS SO ORDERED.

Dated: January 23, 2015

______________________________________

JACQUELINE SCOTT CORLEY

United States Magistrate Judge

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