Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_14-cv-03745/USCOURTS-cand-4_14-cv-03745-11/pdf.json

Nature of Suit Code: 290
Nature of Suit: Other Real Property Actions
Cause of Action: 28:1441 Petition for Removal

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United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

CHARLES CHAPPELLE, ET AL.,

Plaintiffs,

v.

SUNTRUST MORTGAGE, INC.,

Defendant.

Case No. 14-cv-03745-YGR 

ORDER GRANTING MOTION TO DISMISS 

WITH LEAVE TO AMEND

Re: Dkt. No. 17

On December 2, 2014, defendant Suntrust Mortgage, Inc. filed a motion to dismiss 

pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim. (Dkt. No. 17

(“Mot.”).)1 Plaintiffs Charles and Melne Chappelle opposed the motion. (Dkt. No. 22 (“Oppo.”).) 

Thereafter, the Court referred the case to the alternative dispute resolution unit. (Dkt. No. 23.) On 

June 30, 2015, the parties informed the Court that they were unable to reach a settlement. (Dkt. 

No. 53.) The Court thereafter informed the parties that it would take the motion to dismiss under 

submission.2

Having reviewed the papers submitted and the pleadings, and good cause shown, the Court 

hereby GRANTS defendant’s motion to dismiss WITH LEAVE TO AMEND.

The complaint, initially filed in state court, stems from plaintiffs’ purchase of the subject 

property at 145 Pearce Street, Hercules, California. (Dkt. No. 2-1 (“Complaint”).) The property 

 

1 Defendant filed a request for judicial notice of publicly recorded documents in 

connection with its motion. (Dkt. No. 18.) The Court GRANTS the request pursuant to Federal 

Rule of Evidence 201. “[A] court may take judicial notice of ‘matters of public record.’” Lee v. 

City of Los Angeles, 250 F.3d 668, 689 (9th Cir. 2001).

2 Having reviewed the papers submitted, the Court has determined that the motion is 

appropriate for decision without oral argument, as permitted by Civil Local Rule 7-1(b) and 

Federal Rule of Civil Procedure 78. See also Lake at Las Vegas Investors Group, Inc. v. Pacific 

Malibu Dev. Corp., 933 F.2d 724, 729 (9th Cir. 1991).

Case 4:14-cv-03745-YGR Document 55 Filed 09/02/15 Page 1 of 3
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United States District Court

Northern District of California

was purchased with an adjustable rate mortgage issued by defendant. (Id. ¶ 4-5.) Around 

November 2011, plaintiffs allegedly entered into a loan modification agreement with defendant, 

during which time defendant “failed to advise the [plaintiffs] with any information regarding any 

increase in payment amount or any separate payments that would be due on the modified loan.” 

(Id. ¶ 7.) Plaintiffs continued to “tender[] payment to defendant for his [sic] monthly mortgage 

bill” through the filing of the complaint on July 11, 2014. (Id. ¶ 8.) In April 2012, defendant 

purportedly notified plaintiffs, “without explanation,” that the mortgage payment tendered that 

month could not be accepted. (Id. ¶ 10.) Various communications followed regarding the 

purportedly insufficient payments. (Id. ¶ 11-12.) On November 13, 2013, plaintiffs purportedly

received a letter from defendant noting defendant “will be completing system changes to show that 

[plaintiffs’] mortgage loan is now current.” (Id. ¶ 13.) In April 2014, plaintiffs received a Notice 

of Delinquency, indicating the subject property was scheduled for foreclosure as a result of a 

$77,917.96 shortfall in payments. (Id. ¶ 14.) Plaintiffs allege causes of action for: (i) breach of 

contract; (ii) intentional misrepresentation; and (iii) wrongful foreclosure.3 (Id. ¶¶ 19-46.)

Defendant challenges the sufficiency of the pleadings as to each cause of action, and seeks 

dismissal without leave to amend. In opposing the motion, plaintiffs effectively concede the 

current pleadings are insufficient, but seek leave to amend to correct certain of the deficiencies. 

For example:

1. As to their breach of contract claim, plaintiffs “acknowledge that a copy of the 

contract was inadvertently not attached to the original complaint” and, because the 

“defects in the complaint can be easily cured by attaching a copy of the 

modification contract,” plaintiffs “respectfully request leave to amend the 

Complaint as to the first cause of action.” (Oppo. at 3-4.)

2. As to the intentional misrepresentation claim, plaintiffs “acknowledge that, as this 

cause of action is pleaded against a corporation, the complaint must allege ‘the 

 

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The third cause of action is referred to in the complaint as the “fourth cause of action,” 

apparently a typographical error.

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names of the person 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.’” (Id. at 4.) As such, plaintiffs “request leave to amend so that 

investigation can be conducted to ensure the required information can be included 

in future pleadings.” (Id.)

3. As to the wrongful foreclosure cause of action, plaintiffs “acknowledge that a cause 

of action for wrongful foreclosure is inappropriate at this time,” as defendant has 

“not yet initiated foreclosure proceedings on the subject property,” and has

rescinded the Notice of Default. (Id. at 5.)

In light of these concessions, the Court GRANTS the motion WITH LEAVE TO AMEND. 

Leave to amend is liberally granted where doing so would not be an act of futility. See Foman v. 

Davis, 371 U.S. 178, 182 (1962); Chodos v. West Pub. Co., 292 F.3d 992, 1003 (9th Cir. 2002). 

Accordingly, plaintiffs shall file an amended complaint within fourteen (14) days from the date of 

this Order. Allegations of fraud or fraudulent conduct must satisfy Rule 9(b)’s heightened 

pleading standard. Fed. R. Civ. P. 9(b) (“In 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.”); see also Cooper v. Pickett, 137 F.3d 

616, 627 (9th Cir. 1997) (To be alleged with particularity under Rule 9(b), a plaintiff must allege

“the ‘who, what, when, where, and how’” of the alleged fraudulent conduct.) Plaintiffs’ counsel is 

reminded of the obligations prescribed by Rule 11. Unless a plausible claim is alleged, the 

complaint will be dismissed without leave to amend. Defendant shall file its response to the 

amended complaint within twenty-one (21) days from when the amended complaint is filed.

This Order terminates Docket Number 17.

IT IS SO ORDERED.

Dated: September 2, 2015

______________________________________

YVONNE GONZALEZ ROGERS

UNITED STATES DISTRICT COURT JUDGE

Case 4:14-cv-03745-YGR Document 55 Filed 09/02/15 Page 3 of 3