Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_09-cv-02361/USCOURTS-azd-2_09-cv-02361-0/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1441 Petition for Removal- Contract Default

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WO

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

Salvador Rodriguez, 

Plaintiff, 

vs.

OneWest Bank; et al., 

Defendants. 

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No. CV09-2361-PHX-NVW

ORDER

Before the Court is Defendant OneWest Bank, FSB’s Motion to Dismiss First

Amended Complaint (doc. # 19). Defendant seeks dismissal under Fed. R. Civ. P. 8, 9(b),

and 12(b)(6). 

I. Background

On a motion to dismiss under Fed. R. Civ. P. 12(b)(6), all allegations of material

fact are assumed to be true and construed in the light most favorable to the nonmoving

party. Cousins v. Lockyer, 568 F.3d 1063, 1067 (9th Cir. 2009). In July 2007, Plaintiff

Salvador Rodriguez financed the purchase of his residence at 5225 North 373rd Avenue,

Tonopah, Arizona 85354 (the “Property”) with a loan from Defendant IndyMac Bank,

FSB (“IndyMac”). The loan was secured by a promissory note and deed of trust. In May

2009, after falling behind in his payments, Plaintiff contacted Defendant OneWest Bank

(“OneWest”), successor to IndyMac, to arrange payment terms and/or to reach a loan

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modification agreement. OneWest did not respond to Plaintiff’s inquiries and scheduled

the Property for trustee sale.

Plaintiff hired a loan modification company that made no progress. Therefore, on

August 31, 2009, Plaintiff contacted the law firm of Mueller, Drury & Lawrence to work

with OneWest to delay the scheduled trustee sale and consider his loan modification

request. On the same day, Plaintiff and a paralegal employed by the law firm called

OneWest and spoke to an agent of OneWest. The agent indicated that OneWest would

postpone the sale for one week and, if during that week Plaintiff could submit his loan

modification package, OneWest would postpone the sale again and consider his loan

modification request. Plaintiff then retained Mueller, Drury & Lawrence to complete his

loan modification package, which was sent to OneWest on August 31, 2009. 

Thereafter, Plaintiff’s counsel and other representatives of the law firm attempted

to confirm with OneWest that the sale would be postponed while the loan modification

package was considered. However, OneWest refused to further postpone the sale. On

September 8, 2009, the Property was sold at a trustee sale to a third party. Plaintiff

immediately demanded that OneWest vacate the sale and reinstate Plaintiff’s title to the

Property. The third party buyer demanded that Plaintiff vacate the Property, and Plaintiff

has done so.

On October 7, 2009, Plaintiff filed his complaint against OneWest and IndyMac in

the Maricopa County Superior Court. On November 11, 2009, OneWest removed the

case to this Court. On December 14, 2009, Plaintiff filed an Amended Complaint. 

II. Dismissal of Counts I, II, and III Under Rules 8 and 12(b)(6), Federal Rules of

Civil Procedure

A. Fed. R. Civ. P. 8

Fed. R. Civ. P. 8(a)(2) requires only “‘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.’” Bell Atl. Corp. v. Twombly,

550 U.S. 544, 555 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47, 78 S. Ct. 99

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(1957)). A claim must be stated clearly enough to provide each defendant fair

opportunity to frame a responsive pleading. McHenry v. Renne, 84 F.3d 1172, 1176 (9th

Cir. 1996). “Something labeled a complaint . . ., yet without simplicity, conciseness and

clarity as to whom plaintiffs are suing for what wrongs, fails to perform the essential

functions of a complaint.” Id. at 1180. In addition, the complaint must also have “a short

and plain statement of the grounds for the court’s jurisdiction.” Fed. R. Civ. P. 8(a)(1).

B. Fed. R. Civ. P. 12(b)(6)

Dismissal under Rule 12(b)(6) can be based on “the lack of a cognizable legal

theory” or “the absence of sufficient facts alleged under a cognizable legal theory.” 

Balistreri v. Pacifica Police Dep’t, 901 F.2d 696, 699 (9th Cir. 1990). To avoid dismissal,

a complaint must contain “only enough facts to state a claim for relief that is plausible on

its face.” Twombly, 550 U.S. at 570. “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.” Ashcroft v. Iqbal, __ U.S. __, 129 S. Ct.

1937, 1949 (2009). “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.” Id. 

First, the Court must identify allegations in the complaint that are not entitled to

the assumption of truth. Id. at 1949, 1951. The principle that a court accepts as true all of

the allegations in a complaint does not apply to legal conclusions or conclusory factual

allegations. Id. at 1949, 1951. “Threadbare recitals of the elements of a cause of action,

supported by mere conclusory statements, do not suffice.” Id. at 1949. “A plaintiff’s

obligation to provide the grounds of his entitlement to relief requires more than labels and

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

Twombly, 550 U.S. at 555. 

 Second, the Court must determine whether the factual allegations plausibly

suggest an entitlement to relief. Iqbal, 129 S. Ct. at 1950, 1951. This determination is “a

context-specific task that requires the reviewing court to draw on its judicial experience

and common sense.” Id. at 1950. To show that the plaintiff is entitled to relief, the

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complaint must permit the court to infer more than the mere possibility of misconduct. 

Id.

C. Analysis

A complaint must identify “whom plaintiffs are suing for what wrongs.” 

McHenry, 84 F.3d at 1180. In numerous places, the Amended Complaint alleges actions

by “Defendants” without identifying whether OneWest or IndyMac allegedly performed

the specific acts. 

Count I (Breach of Contract) of the Amended Complaint does not identify what

contract Defendants allegedly breached and whether the claim is for breach of a written or

oral contract or breach of the covenant of good faith and fair dealing implied in one of the

contracts, or some or all of these. Regarding breach of a written contract, i.e., the Note

and/or the Deed of Trust, Plaintiff admits he had not made payments as he had agreed to

do under the Note and Deed of Trust, and he does not dispute that the Deed of Trust

authorized Defendants to sell the Property at a trustee sale. Regarding breach of the oral

contract to postpone the trustee sale one week, the Amended Complaint does not identify

the parties to the oral agreement or allege that Defendants’ representative was authorized

to make such an agreement. More factual allegations are required to “allow[] the court to

draw the reasonable inference that the defendant is liable for the misconduct alleged.” 

Iqbal, 129 S. Ct. at 1949. 

“The law implies a covenant of good faith and fair dealing in every contract,”

which requires that “neither party will act to impair the right of the other to receive the

benefits which flow from their agreement or contractual relationship.” Rawlings v.

Apodaca, 151 Ariz. 149, 153, 726 P.2d 565, 569 (1986). To state a claim for breach of a

covenant of good faith and fair dealing, a complaint must identify in the contract in which

the covenant is implied in order to determine what benefits were intended to flow from it

before deciding whether a party has acted to impair the right of the other to receive those

benefits. The Amended Complaint alleges only that IndyMac acted in bad faith in

making the loan to Plaintiff and OneWest acted in bad faith by proceeding with the

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pending trustee sale after promising to postpone it one week. Again, more factual

allegations are required to state a plausible claim. See Iqbal, 129 S. Ct. at 1949. 

Count II (Violation of the Real Estate Settlement Procedures Act—RESPA) asserts 

only bare conclusions that Defendants have violated RESPA by not giving proper

disclosures and by making a loan that included improper fees. It does not give fair notice

of which section of RESPA was allegedly violated and the grounds upon which the claim

rests. Moreover, it does not allege a basis for equitable tolling of the one-year limitations

period for RESPA claims, which expired in July 2008.

Count III (Negligent or Intentional Misrepresentation) does not allege any false

representations other than “the representation that OneWest would delay the trustee sale

so long as Plaintiff presented the appropriate paperwork to Defendant.” It alleges, in

essence, that Plaintiff relied on what he anticipated to be a one-week reprieve from the

trustee sale, but it does not allege injury flowing from his reliance other than hiring a law

firm to assist him in preparing his loan modification package, which was submitted the

same day as the promise was made. Count III does not allege that, but for OneWest’s

unfulfilled promise to postpone the trustee sale one week, Plaintiff could have and would

have filed for bankruptcy protection, could have and would have obtained alternate

financing, or would not have submitted a loan modification package and would not have

incurred legal expenses.

Therefore, the factual allegations of the Amended Complaint do not plausibly

suggest an entitlement to relief under any of Counts I, II, and III, and do not provide

Defendants with fair opportunity to respond to the claims. See Iqbal, 129 S. Ct. at 1950,

1951; McHenry, 84 F.3d at 1176, 1180. 

III. Dismissal of Count IV Under Rule 9(b), Federal Rules of Civil Procedure

“In alleging fraud or mistake, a party must state with particularity the

circumstances constituting fraud or mistake.” Fed. R. Civ. P. 9(b). Rule 9(b) requires

allegations of fraud to be “specific enough to give defendants notice of the particular

misconduct which is alleged to constitute the fraud charged so that they can defend

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The Amended Complaint does not include a Count VII.

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against the charge and not just deny that they have done anything wrong.” Bly-Magee v.

California, 236 F.3d 1014, 1019 (9th Cir. 2001). “While statements of the time, place and

nature of the alleged fraudulent activities are sufficient, mere conclusory allegations of

fraud are insufficient.” Moore v. Kayport Package Express, Inc., 885 F.2d 531, 540 (9th

Cir. 1989). 

Count IV (Fraud) alleges that OneWest falsely represented it would postpone the

trustee sale upon submission of a loan modification package and it knew its

representations were false, or consciously and wilfully disregarded the fact that the

misrepresentations and omission were false. It includes no factual allegations to support

its conclusions that Plaintiff detrimentally relied on OneWest’s misrepresentations,

Plaintiff’s reliance was reasonable and justified, and Plaintiff has been injured as a result

of these misrepresentations. Thus, the Amended Complaint does not satisfy Rule 9(b).

IV. Dismissal of Counts V, VI, and VIII1

Count V (Declaratory Judgment), Count VI (Quiet Title), and Count VIII

(Rescission) seek relief based on Plaintiff prevailing on one or more of the other claims. 

As currently pled, all of the other claims must be dismissed, and there is therefore no

basis for Counts V, VI, and VIII.

V. Leave to Amend

Leave to amend should be freely given “when justice so requires.” Fed. R. Civ. P.

15(a)(2). But, “[l]eave need not be granted where the amendment of the complaint would

cause the opposing party undue prejudice . . . or creates undue delay.” Ascon

Properties, Inc. v. Mobil Oil Co., 866 F.2d 1149, 1160 (9th Cir. 1989). The district court’s

discretion to deny leave to amend a complaint is “especially broad” where the plaintiff

already has had one or more opportunities to amend his complaint. Id. at 1161. “Leave

to amend need not be given if a complaint, as amended, is subject to dismissal.” Moore,

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885 F.2d at 538. “Futility of amendment can, by itself, justify the denial of a motion for

leave to amend.” Bonin v. Calderon, 59 F.3d 815, 845 (9th Cir. 1995). 

As explained above, Count II of the Amended Complaint appears to be barred by

the one-year limitations period for RESPA claims. In deciding whether justice requires

granting leave to amend, the Court finds that further amendment of Plaintiff’s RESPA

claim, Count II of the Amended Complaint, would be futile and would cause undue

prejudice to the opposing party. See Moore v. Kayport Package Exp., Inc., 885 F.2d 531,

538 (9th Cir. 1989). Therefore, Count II will be dismissed with prejudice for failure to

state a claim upon which relief can be granted.

The remaining Counts, all based on state law, will be dismissed without prejudice

for the reasons stated above. Plaintiff may seek leave to further amend the Amended

Complaint for claims not based on RESPA. If so, the proposed second amended

complaint must allege the basis for federal subject matter jurisdiction. 

IT IS THEREFORE ORDERED that Defendant OneWest Bank, FSB’s Motion to

Dismiss First Amended Complaint (doc. # 19) is granted. 

IT IS FURTHER ORDERED that Count II of Plaintiffs’ Amended Complaint

(doc. # 15) is dismissed with prejudice and the remaining Counts are dismissed for failing

to state a claim upon which relief can be granted and failure to comply with Fed. R. Civ.

P. 8 and 9(b), with leave to file an amended complaint by March 5, 2010. If an amended

complaint is not filed by March 5, 2010, the Clerk shall enter judgment dismissing this

action with prejudice for failure to state a claim upon which relief can be granted.

DATED this 16th day of February, 2010.

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