Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_10-cv-00164/USCOURTS-casd-3_10-cv-00164-0/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 15:1601 Truth in Lending

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

EUGENIO BELTRAME,

Plaintiff,

CASE NO. 10-CV-164 JLS (AJB)

ORDER: (1) GRANTING

REQUEST FOR JUDICIAL

NOTICE AND (2) GRANTING

MOTION TO DISMISS

(Doc. No. 22)

vs.

JPMORGAN CHASE BANK,

WASHINGTON MUTUAL BANK, et al.,

Defendants.

Presently before the Court are Defendant JPMorgan Chase Bank, N.A.’s motion to dismiss and

request for judicial notice. (Doc. Nos. 22-1& 22-2.) The Court has also received Plaintiff’s

opposition and Defendant’s reply. (Doc. Nos. 25 & 26.) Both the request for judicial notice and

motion to dismiss are GRANTED. 

BACKGROUND

Plaintiff Eugenio Beltrame owns the property located at 45600 Rainbow Canyon Road,

Temecula, California. (Doc. No. 21 (FAC) ¶ 2.) On “July 17, 2007, Plaintiff applied for a loan with

Defendant WASHINGTON MUTUAL BANK.” (Id.) This loan, amounting to $372,000, was

approved the next day and secured by a deed of trust on the property. (Id. ¶ 3.) In April 2009,

“Plaintiff began to suspect that Defendant JPMORGAN CHASE BANK was overcharging Plaintiff

for his mortgage payment.” (Id. ¶ 4.) He alleges that he subsequently sent Defendant two Qualified

Written Requests (QWRs), and that Defendant only responded to one. (Id. ¶¶ 5–9.)

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 The legal standard for Rule 12(b)(6) motions in Plaintiff’s Opposition brief is deeply flawed

and hints at a lack of thoroughness and thoughtfulness in its composition. For example, Plaintiff cites

only cases out of the Fifth Circuit and district courts in Texas. (Opp. at 5–6.) These cases are neither

binding nor helpful. There are several recent United States Supreme Court cases directly on point and

innumerable Ninth Circuit and California district court orders dealing with precisely this issue.

Moreover, the cases cited in the opposition were largely superceded by the Supreme Court’s opinions

in Ashcroft v. Iqbal, – US — , 129 S. Ct. 1937 (2009), and Bell Atl. Corp. v. Twombly, 550 U.S. 544

(2007).

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LEGAL STANDARD

Federal Rule of Civil Procedure 12(b)(6) permits a party to raise by motion the defense that

the complaint “fail[s] to state a claim upon which relief can be granted,” generally referred to as a

motion to dismiss. The Court evaluates whether a complaint states a cognizable legal theory and

sufficient facts in light of Federal Rule of Civil Procedure 8(a), which requires a “short and plain

statement of the claim showing that the pleader is entitled to relief.” Although Rule 8 “does not

require ‘detailed factual allegations,’ . . . it [does] demand[] more than an unadorned, the-defendantunlawfully-harmed-me accusation.”1

 Ashcroft v. Iqbal, – US — , 129 S. Ct. 1937, 1949 (2009)

(quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). In other words, “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.” Twombly,

550 U.S. at 555 (citing Papasan v. Allain, 478 U.S. 265, 286 (1986)). “Nor does a complaint suffice

if it tenders ‘naked assertion[s]’ devoid of ‘further factual enhancement.’” Iqbal, 129 S. Ct. at 1949

(citing Twombly, 550 U.S. at 557).

“To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted

as true, to ‘state a claim to relief that is plausible on its face.’” Id. (quoting Twombly, 550 U.S. at

570); see also Fed. R. Civ. P. 12(b)(6). A claim is facially plausible when the facts pled “allow[] the

court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal,

129 S. Ct. at 1949 (citing Twombly, 550 U.S. at 556). That is not to say that the claim must be

probable, but there must be “more than a sheer possibility that a defendant has acted unlawfully.” Id.

Facts “‘merely consistent with’ a defendant’s liability” fall short of a plausible entitlement to relief.

Id. (quoting Twombly, 550 U.S. at 557). Further, the Court need not accept as true “legal

conclusions” contained in the complaint. Id. This review requires context-specific analysis involving

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the Court’s “judicial experience and common sense.” Id. at 1950 (citation omitted). “[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.

ANALYSIS

I. DEFENDANT’S REQUEST FOR JUDICIAL NOTICE

Defendant moves the Court to take judicial notice of three documents. (Doc. No. 22-2 (RJN).)

It requested that this Court take judicial notice of the same three documents for purposes of its

previous motion to dismiss. (Doc. No. 12-2.) The Court granted that request, and finds it proper to

GRANT it here as well. (See Doc. No. 20 (Prior Order) at 3.) Although Plaintiff again objects, his

objections are word-for-word identical to those made in opposition to the documents’ consideration

for the prior motion to dismiss. (Compare Doc. No. 14 at 19–20; with Opp. at 14.) As the Court

observed in its Prior Order, these “broad and generalized allegations of general impropriety with the

mortgage market” are inadequate to merit denial of this motion and do not “offer any actual reasons

for the Court to decline this request for notice.” (Prior Order at 3.) 

II. REAL ESTATE SETTLEMENT PROCEDURE ACT CLAIM

Plaintiff’s first cause of action alleges violations of the Real Estate Settlement Procedure Act

(RESPA). According to Plaintiff “Defendant JPMORGAN CHASE BANK failed to properly respond

to Plaintiff’s inquiry and Qualified Written Request [(QWR)] by not responding in a timely manner

and by not providing all of the requested information. Further, Defendant JPMORGAN CHASE

BANK did not make corrections to Plaintiff’s account, crediting late charges and penalties, or provide

Plaintiff with an explanation as to why it believed the account was correct.” (FAC ¶ 17.) 

Plaintiff’s RESPA complaints arise out of 12 U.S.C. § 2605. Section 2605(e)(1)(A) provides,

in relevant part:

If any servicer of a federally related mortgage loan receives a qualified written request

from the borrower . . . for information relating to the servicing of such loan, the

servicer shall provide a written response acknowledging receipt of the correspondence

within 20 days . . . unless the action requested is taken within such period.

A qualified written request is “a written correspondence, other than notice on a payment coupon or

other payment medium supplied by the servicer that—(i) includes, or otherwise enables the servicer

to identify, the name and account of the borrower; and (ii) includes a statement of the reasons for the

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 Although Defendant appears to suggest that Plaintiff must show both actual damages and

a pattern or practice of non-compliance, that is incorrect. (See Memo. ISO Motion at 5.) The pattern

or practice requirement applies only to an award of “additional damages,” not to an award of actual

damages. See 12 U.S.C. § 2605(f)(1).

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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.” 12 U.S.C. § 2605(e)(1)(B). A

plaintiff suing for violation of this section may recover actual damages, up to $1,000 in statutory

damages where there is “a pattern or practice of noncompliance,” and reasonable costs and attorney’s

fees. 12 U.S.C. § 2605(f).2

This cause of action fails to state a claim for several reasons. First, the FAC assumes but does

not allege facts demonstrating that the documents sent to Defendant were QWRs. (See FAC ¶¶ 5 &

8.) The allegations merely state that “Plaintiff sent Defendant . . . a Qualified Written Request.” (Id.

¶ 5.) This does not show that the alleged QWR “include[d], or otherwise enable[d] the servicer to

identify, the name and account of the borrower.” 12 U.S.C. § 2605(e)(1)(B)(i). Nor are there facts

indicating that the QWR “included a statement of reasons for the belief of the borrower . . . that the

account is in error.” Id. § 2605(e)(1)(B)(ii). Without these allegations the Court cannot find that

Plaintiffs’ recovery is plausible. See Lincoln v. GMAC Mortgage, LLC, 2009 WL 5184413, at *2

(C.D. Cal. 2009).

Although it is true that “[t]here is no requirement for Plaintiff to list specifically word for word

what was contained in the written correspondence in a complaint to sustain the cause of action,” that

does not save this cause of action. (Opp. at 10.) A legal theory is not plausible when the complaint

does not allege facts which would permit recovery. Idqbal, 129 S. Ct. at 1949. That is not to say that

Plaintiff must provide “detailed factual allegations,” but his allegations must be more than mere

“labels and conclusions” or “a formulaic recitation of the elements of a cause of action.” Id.;

Twombly, 550 U.S. at 555 (citing Papasan, 478 U.S. at 286). That is what the FAC presents here,

baldly alleging that the correspondence was a QWR without including sufficient facts to make that

legal conclusion plausible. Plaintiff need not include the text of the alleged QWR word-for-word to

remedy this problem (although he could certainly attach them as exhibits to the complaint if he chose)

but he must present more than what is in the FAC.

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Further, Plaintiff has not adequately pled an injury. At best, the FAC notes the legal

proposition that Plaintiff could recover actual or statutory damages. (FAC ¶ 19.) Although Plaintiff

claims that he “has alleged that Defendant JP MORGAN’s violation of RESPA caused him actual and

pecuniary damages,” he provides no indication of where such an allegation lies. (Opp. at 11.) Nor

can the Court find an allegation of actual damages which result from the alleged failure to respond to

the QWR. RESPA allows recovery only for “actual damages . . . as a result of [Defendant’s] failure”

to respond to the QWR and statutory damages in the event of a pattern or practice of non-compliance.

12 U.S.C. § 2605(f)(1). As a result, where, as here, the Plaintiff does not allege facts which would

support a finding of actual damages resulting directly from the alleged QWR violation or a pattern or

practice of non–compliance, the right to relief is implausible and the claim must be DISMISSED.

See Garcia v. Wachovia Mortgage Corp., 676 F. Supp. 2d 895, 909 (C.D. Cal. 2009).

III. FRAUD CLAIM

Plaintiff’s second cause of action alleges that JPMorgan defrauded him. (FAC ¶¶ 20–27.)

According to Plaintiff, Defendant “knowingly sent Plaintiff billing statements on his loan with []

fraudulent overcharges with the intent to induce the relieance of Plaintiff and for Plaintiff to pay the

fraudulent overcharges on his mortgage payment.” (Id. ¶ 22.)

“The elements of fraud, which gives rise to the tort action for deceit, are (a) misrepresentation

(false representation, concealment, or nondisclosure); (b) knowledge of falsity (or ‘scienter’); (c)

intent to defraud, i.e., to induce reliance; (d) justifiable reliance; and (e) resulting damage.” Small v.

Frits Cos., Inc., 65 P.3d 1255, 1258 (Cal. 2003) (quoting Lazar v. Superior Court, 909 P.2d 981, 984

(Cal. 1996)). In federal court, Federal Rule of Civil Procedure 9(b) sets the bar for claims alleging

fraud. Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1102–03 (9th Cir. 2003). Rule 9(b) states that

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

or mistake.” These allegations must “be ‘specific enough to give defendants notice of the particular

misconduct . . . so that they can defend against the charge and not just deny that they have done

anything wrong.’ Averments of fraud must be accompanied by ‘the who, what, when, where, and

how’ of the misconduct charged. ‘[A] plaintiff must set forth more than the neutral facts necessary

to identify the transaction. The plaintiff must set forth what is false or misleading about a statement,

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and why it is false.’” Vess, 317 F.3d at 1106 (citations omitted).

Plaintiff has not satisfied the pleading standard set forth by Rule 9(b). Although he claims that

the billing statements were “fraudulent,” he does not provide any real explanation. For example,

Plaintiff fails to “set forth what is false or misleading about [his billing] statement[s], and why [they

are] false.” Id. The mere claim of “overcharging” does not explain what or how these bills claimed

that Plaintiff owed more than his contractual mortgage obligation. Without this adequate specificity

regarding the fundamental element of a misrepresentation, this claim must be DISMISSED.

IV. UNJUST ENRICHMENT CLAIM

The FAC’s third claim alleges unjust enrichment. (FAC ¶¶ 28–34.) Specifically, Plaintiff

believes that the inflated billing statements caused him to pay Defendant JPMorgan money which he

did not owe. (Id. ¶¶ 29–30.) He argues that the acceptance of these payments unjustly enriched

JPMorgan and thus he is entitled to restitution. (Id. ¶¶ 31–32.)

The elements of an unjust enrichment claim are: (1) receipt of a benefit; and (2) the unjust

retention of the benefit at the expense of another. Peterson v. Cellco P’ship, 80 Cal. Rptr. 3d 316, 323

(Cal. Ct. App. 2008). “However, the mere fact that a person benefits another is not of itself sufficient

to require the other to make restitution therefor. Thus, even when a person has received a benefit from

another, he is required to make restitution only if the circumstances of its receipt or retention are such

that, as between the two persons, it is unjust for him to retain it.” Cal. Med. Ass’n, Inc. v. Aetna U.S.

Healthcare of Cal., Inc., 94 Cal. App. 4th 151, 171 n.23 (2001).

The Court finds that Plaintiff’s FAC fails to raise his right to relief for unjust enrichment above

the speculative level. As discussed supra, Plaintiff has not pled facts which would establish that he

actually paid more than he owed on his loan. As Defendant notes, the mere repayment of what was

owed on the loan would almost certainly not state an unjust enrichment claim. (Memo. ISO Motion

at 7.) And at this point, Plaintiff has merely stated the legal conclusion that he was over-billed and

overpaid for his loan. However, without the factual allegations which would support this conclusion,

the third claim must be DISMISSED.

//

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3

 Again, the Court declines to address Defendant’s arguments regarding their liability for

borrower claims pursuant to the Purchase and Assumption Agreement entered into between Defendant

and the FDIC.

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CONCLUSION

For the reasons stated, Defendant’s motion to dismiss is GRANTED and the FAC is

DISMISSED WITHOUT PREJUDICE.

3

 Further, the Court finds that each of the defects identified

could potentially be cured through further amendment. Therefore, the Court GRANTS Plaintiff leave

to amend. Any amended complaint MUST BE FILED within 21 days of the date this Order is

electronically docketed.

IT IS SO ORDERED.

DATED: August 25, 2010

Honorable Janis L. Sammartino

United States District Judge

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