Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_16-cv-00610/USCOURTS-cand-4_16-cv-00610-6/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

DOUGLAS K. IVEY,

Plaintiff,

v.

JP MORGAN CHASE BANK N.A., et al.,

Defendants.

Case No. 16-cv-00610-HSG 

ORDER GRANTING MOTION TO 

DISMISS SECOND AMENDED 

COMPLAINT

Re: Dkt. Nos. 40, 44

Pending before the Court is a motion to dismiss Plaintiff Douglas K. Ivey’s second 

amended complaint (“SAC”) brought by Defendant JP Morgan Chase, N.A. (“Chase”).

1

 Dkt. No. 

40. Having considered Defendants’ motion, Plaintiff’s opposition, and all related papers, the 

Court finds the matter appropriate for decision without oral argument. See Civil L.R. 7-1(b). For 

the reasons below, the Court GRANTS the motion to dismiss.

I. BACKGROUND

In this foreclosure action, Plaintiff seeks to prevent the trustee’s sale noticed against his 

property located at 3330 Paradise Drive, Tiburon, County of Marin, CA. Plaintiff asserts four 

claims under California state law: (1) violation of California’s Homeowners’ Bill of Rights, Cal. 

Civ. Code § 2920 et seq., (“HBOR”) (against Chase and Quality); (2) negligence (against Chase); 

(3) intentional infliction of emotional distress (“IIED”) (against Chase); and (4) violation of 

California Business and Professions Code § 17200 et seq. (“UCL”) (against Chase).

On August 29, 2016, the Court dismissed Plaintiff’s first amended complaint (“FAC”) in 

 

1 Defendant Quality Loan Service Company has moved to join Chase’s motion to dismiss. Dkt. 

No. 44. The Court GRANTS Quality’s motion.

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its entirety for failure to state a claim.2 Dkt. No. 37 (“Dismissal Order”). In the Dismissal Order, 

the Court held that (i) Plaintiff did not state an HBOR claim because he “defaulted on his first loan 

modification and fail[ed] to adequately allege a material change in financial circumstances that 

was documented and submitted to Chase under § 2923.6(g)”; (ii) Plaintiff’s negligence claim 

failed because “Chase owed Plaintiff no duty of care to timely process his loan modification 

application”; (iii) Plaintiff’s conclusory allegation that Chase “baited” him into applying for a loan 

modification was “insufficient to plausibly suggest that Chase engaged in the ‘extreme and 

outrageous conduct’ necessary to sustain his IIED claim at the pleading stage”; and (iv) Plaintiff 

“failed to adequately allege any unfair, unlawful, or fraudulent conduct by Chase” to sustain his 

UCL claim. Id.

Following the Dismissal Order, Plaintiff filed his SAC on September 19, 2016. Dkt. No. 

39.

II. DISCUSSION

Defendants move to dismiss the SAC for five main reasons: (1) Plaintiff fails to show that 

he submitted a complete loan modification application to Chase as required for his first claim 

under the HBOR; (2) Plaintiff does not adequately plead that he documented and submitted a 

material change in financial circumstances as required under § 2923.6(g) of the HBOR; (3) 

Plaintiff fails to allege a duty of care or damages to sustain his negligence claim; (4) Plaintiff does 

not allege that Chase engaged in “extreme and outrageous conduct” or that Plaintiff sustained 

severe injury or emotional distress to support his IIED claim; and (5) Plaintiff lacks standing to 

assert a UCL claim and does not allege any unlawful, unfair, or fraudulent conduct.3

A. The HBOR (Claim One)

The motion to dismiss Plaintiff’s first claim for relief under the HBOR is GRANTED. 

 

2

The Court discussed the factual background in detail in the Dismissal Order, and incorporates the 

unchanged facts and the legal analysis from the Dismissal Order here. In this order, the Court 

only discusses the facts as necessary to address the new issues raised in the SAC and the renewed 

motion to dismiss.

3 On October 4, 2016, Chase filed a request for judicial notice in support of its motion. Dkt. No. 

41. Because the allegations in the SAC are sufficient for the purpose of ruling on the motion, the 

Court DENIES AS MOOT Defendant’s request for judicial notice.

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Defendants move to dismiss Plaintiff’s HBOR claim because (i) Plaintiff’s complaint fails to show 

he submitted a complete loan modification application to Chase and (ii) Plaintiff does not 

sufficiently plead that he documented and submitted a material change in financial circumstances 

to Chase as required under § 2923.6(g) of the HBOR.

First, Defendants argue that Plaintiff’s HBOR claim should be dismissed because Plaintiff

must not only plead that he submitted a complete loan modification application to Chase, but also 

provide “factual support to substantiate” his claim that he submitted a complete application. See

Dkt. No. 40 at 5-6. However, Defendants’ only cited authority for this proposition comes from the 

Central District of California, see id., and this Court declines to impose a heightened pleading 

burden on Plaintiff based on non-binding authority from outside of this jurisdiction. Accordingly, 

the Court holds that Plaintiff’s SAC sufficiently alleges that he submitted “a complete loan 

modification package to Chase in the form of and with all the documents required by Chase” to 

sustain his HBOR claim at the pleading stage. 

Next, Defendants contend that Plaintiff fails to adequately allege that he documented and 

submitted a material change in financial circumstances to Chase. See id. at 7-9. As the Court held 

in its Dismissal Order, § 2923.6(g) provides that even if a borrower accepts and then defaults on a 

prior modification, he may still be protected under the HBOR if he is able to allege a material 

change in financial circumstances that is documented and submitted to the mortgage servicer. Ivey 

v. JP Morgan Chase Bank, N.A., No. 16-CV-00610-HSG, 2016 WL 4502587, at *3 (N.D. Cal. 

Aug. 29, 2016); see also Ivey v. Chase Bank, Case No. 14-CV-02289-NC, 2015 WL 294371, at *3 

(N.D. Cal. Jan. 22, 2015); Dias v. JP Morgan Chase, N.A., Case No. 5:13-CV-05327-EJD, 2014 

WL 2890255, at *4 (N.D. Cal. June 25, 2014); Shaw v. Specialized Loan Servicing, LLC, Case No. 

CV 14-00783 MMM MRWX, 2014 WL 3362359, at *6 (C.D. Cal. July 9, 2014). In the SAC, 

Plaintiff adds allegations that 

[T]he 2014 application stated income of $23,000 monthly and 

expenses of $19,558.83, and total assets of $3,020,000 and 

additional living expenses of $3,975 monthly. The September 2013 

application stated $25,000 monthly income, $15,413.12 monthly 

expenses, [and] assets of $4,005,000. The changes between the two 

constitute “material changes.” 

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SAC ¶ 23. However, Plaintiff’s additional allegations still fall short of the HBOR’s clear 

requirement that a plaintiff allege that his material change in financial circumstances was 

“documented . . . and submitted to the mortgage servicer.” See Cal. Civ. Code § 2923.6(g)

(emphasis added). Nothing in Plaintiff’s SAC can be read to plausibly indicate that Plaintiff 

submitted documentation of his alleged changes in income and monthly expenses to Chase. 

Accordingly, the Court GRANTS the motion to dismiss Plaintiff’s first claim for relief under the 

HBOR.

B. Negligence (Claim Two)

The motion to dismiss Plaintiff’s second claim for negligence is GRANTED. As the Court 

found in its Dismissal Order, the Ninth Circuit has unambiguously held that application of the 

Biakanja factors leads to the conclusion that lenders do not owe borrowers a duty of care to 

process loan modification applications within a particular time frame. Ivey, 2016 WL 4502587, at 

*5 (N.D. Cal. Aug. 29, 2016) (citing Anderson v. Deutsche Bank Nat. Trust Co. Americas, Case 

No. 14–55822, 2016 WL 2343248, at *1 (9th Cir. May 4, 2016)).

4

 Thus, Plaintiff cannot state a 

negligence claim premised solely upon Chase’s delay in processing his loan modification 

application. 

Plaintiff’s negligence claim is not salvaged by the additional conclusory allegations that 

Defendants “encouraged” him to submit a loan modification application and “represent[ed] to him 

that consistent with the timing and the processing of the prior written loan modification that the 

2014 application would be acted upon with[in] a short time period not to exceed a few months.” 

See SAC ¶ 32. In order to sufficiently distinguish this case from Anderson, Plaintiff must plead 

non-conclusory allegations to plausibly support a finding that Chase made explicit promises to 

him or affirmatively discouraged him from seeking other remedies, as in other cases in which 

courts have found dual tracking. See e.g., Smith, 2016 WL 283521, at *1 (plaintiff was told to 

stop making payments to get a better interest rate on a loan modification); Cornejo v. Ocwen Loan 

Servicing, LLC, Case No.: 1:15-cv-00993-JLT, 2015 WL 9268690, at *3 (E.D. Cal. Dec. 21, 

 

4 As an unpublished Ninth Circuit decision, Anderson is considered only for its persuasive value. 

See Fed. R. App. P. 32.1; CTA9 Rule 36-3.

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2015) (plaintiffs were told the foreclosure sale was postponed to allow for review of their 

application, then the lender foreclosed nonetheless).

The Court GRANTS the motion to dismiss Plaintiff’s negligence claim because Chase did 

not owe Plaintiff a duty of care to timely process his loan modification application and Plaintiff 

fails to plead non-conclusory allegations to distinguish this case from Anderson. 

C. Intentional Infliction of Emotional Distress (Claim Three)

The motion to dismiss Plaintiff’s fourth claim for IIED is GRANTED WITH PREJUDICE. 

As the Court held in the Dismissal Order, Plaintiff’s allegations in his FAC were either entirely 

conclusory or insufficient to plead extreme and outrageous conduct as a matter of law. See Ivey, 

2016 WL 4502587, at *6 (citing Aguinaldo v. Ocwen Loan Servicing, LLC, Case No. 5:12-CV01393-EJD, 2012 WL 3835080, at *7 (N.D. Cal. Sept. 4, 2012)). Plaintiff did not attempt to 

bolster his IIED claim with any additional allegations in his SAC, and accordingly, for the reasons 

articulated in the Dismissal Order, the Court GRANTS the motion to dismiss this claim WITH 

PREJUDICE. See Zucco Partners, LLC v. Digimarc Corp., 552 F.3d 981, 1007 (9th Cir. 2009), 

as amended (Feb. 10, 2009) (“where the plaintiff has previously been granted leave to amend and 

has subsequently failed to add the requisite particularity to its claims, the district court’s discretion 

to deny leave to amend is particularly broad”).

D. California’s UCL (Claim Four)

Finally, the Court GRANTS the motion to dismiss Plaintiff’s fifth claim under Cal. 

Business & Professions Code §17200. Plaintiff’s SAC has again failed to adequately allege any 

unfair, unlawful, or fraudulent conduct by Chase that caused the foreclosure. See Ivey, 2016 WL 

4502587, at *6. 

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III. CONCLUSION

For the foregoing reasons, the Court GRANTS Defendants’ motion to dismiss the SAC. 

Plaintiff’s IIED claim is DISMISSED WITH PREJUDICE, and the remainder of Plaintiff’s SAC 

is DISMISSED WITH LEAVE TO AMEND. To the extent Plaintiff is able to state a claim that 

comports with the requirements of Twombly and all other controlling legal standards, Plaintiff may

file one final amended complaint within 21 days of the date of this Order.

IT IS SO ORDERED.

Dated: December 16, 2016

______________________________________

HAYWOOD S. GILLIAM, JR.

United States District Judge

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