Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_12-cv-01059/USCOURTS-azd-2_12-cv-01059-0/pdf.json

Nature of Suit Code: 360
Nature of Suit: Other Personal Injury
Cause of Action: 28:1332 Diversity-Breach of Fiduciary Duty

---

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

WO 

IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF ARIZONA 

Ronald Davis, et al., 

Plaintiffs, 

vs. 

Bank of America Corporation, et al., 

Defendants.

No. CV 12-01059-PHX-NVW

ORDER 

Before the Court is a Motion to Dismiss by Defendants Bank of America 

Corporation and Bank of America, N.A., individually and as successor by merger to BAC 

Home Loans Servicing LP (“B of A Defendants”). (Doc. 10.) 

I. LEGAL STANDARD 

On a motion to dismiss under Federal Rule of Civil Procedure 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). 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 need contain only “enough facts to state a claim for relief that is 

plausible on its face.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 

1955, 167 L.Ed.2d 929 (2007). The principle that a court accepts as true all of the 

Case 2:12-cv-01059-NVW Document 13 Filed 08/23/12 Page 1 of 14
- 2 - 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

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

allegations. Ashcroft v. Iqbal, 566 U.S. 662, 678 (2009). “Threadbare recitals of the 

elements of a cause of action, supported by mere conclusory statements, do not suffice.” 

Id. “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.” Id. “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. To 

show that the plaintiff is entitled to relief, the complaint must permit the court to infer 

more than the mere possibility of misconduct. Id. 

Certain elements of fraud claims must satisfy a higher standard of pleading under 

the Federal Rules of Civil Procedure. In alleging fraud or mistake, malice, intent, 

knowledge, and other conditions of a person’s mind may be alleged generally, but the 

circumstances must be alleged with particularity. 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 

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). Plaintiffs alleging fraud “must state the 

time, place, and specific content of the false representations as well as the identities of the 

parties to the misrepresentations.” Schreiber Distrib. Co. v. Serv-Well Furniture Co., 806 

F.2d 1393, 1401 (9th Cir. 1986); accord Odom v. Microsoft Corp., 486 F.3d 541, 553 

(9th Cir. 2007). 

Generally, material beyond the pleadings may not be considered in deciding a 

Rule 12(b)(6) motion. However, material properly submitted as part of the complaint and 

documents not physically attached to the complaint whose contents are alleged in a 

complaint and whose authenticity no party questions may be considered. Branch v. 

Tunnell, 14 F.3d 449, 454 (9th Cir. 1994), overruled on other grounds by Galbraith v. 

County of Santa Clara, 307 F.3d 1119 (9th Cir. 2002). 

Case 2:12-cv-01059-NVW Document 13 Filed 08/23/12 Page 2 of 14
- 3 - 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

II. FACTS ASSUMED TO BE TRUE 

In April 2000 Plaintiffs purchased a home at 1086 E. Santa Cruz Lane, Apache 

Junction, AZ 85219-7254, with a loan from Venture Financial Services, Inc. In early 

2007, Mr. Davis began having various symptoms, including dizziness and involuntary 

shaking of his hands. In April 2007, Plaintiffs refinanced their outstanding mortgage 

debt and executed a promissory note and Deed of Trust in favor of Countrywide Home 

Loans for approximately $158,449.00. In early 2008, Mr. Davis was unable to continue 

working because of what was eventually diagnosed as Huntington’s disease. In July 

2008, Bank of America Corporation purchased and merged with Countrywide Financial 

Corporation, including Countrywide Home Loans, Inc., and Countrywide Home Loans 

Servicing, LP. In December 2009, Mr. Davis signed a general power of attorney giving 

his wife, Mrs. Davis, control over real estate transactions, banking transactions, and all 

other matters. In 2010, Mr. Davis was admitted to a long term care facility, and Plaintiffs 

could no longer afford their mortgage payments. 

In the fall of 2010, Mrs. Davis contacted BAC Home Loans Servicing, LP 

(“BACHL”) regarding a loan modification and was informed that a loan modification 

application would be sent to her. She was instructed to begin the loan modification 

process through the Home Affordable Modification Program (“HAMP”) through 

BACHL and Home Retention Services Incorporated (“HRS”). On December 10, 2010, a 

Notice of Trustee’s Sale of the property at 1086 E. Santa Cruz Lane, Apache Junction, 

AZ 85219-7254, to be held on March 18, 2011, was recorded. It identified the current 

trustee as Recontrust Company, N.A., and the current beneficiary as BACHL. 

A loan modification application with a letter dated February 25, 2011, was sent to 

Mr. Davis from BACHL. Mrs. Davis quickly completed and returned the application to 

BACHL. Over the next several months, Mrs. Davis called to inquire regarding the status 

of their loan modification application and was told several times that BACHL had not 

received the paperwork she had previously sent and that she would have to resend it, 

Case 2:12-cv-01059-NVW Document 13 Filed 08/23/12 Page 3 of 14
- 4 - 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

which she did each time. Numerous times, Mrs. Davis was told that Plaintiffs would not 

lose their home during the loan modification process. 

The letter from BACHL dated February 25, 2011, stated: 

If your loan has been previously referred to foreclosure, we 

will continue the foreclosure process while we evaluate your 

loan for the Home Affordable Modification Program. 

However, no foreclosure sale will be conducted and you will 

not lose your home during the Home Affordable Modification 

Program evaluation. 

. . . . 

If your loan does not qualify for the Home Affordable 

Modification Program, or if you fail to comply with the terms 

of the Trial Period Plan, we will send you a letter explaining 

the reason why you do not qualify for the program. In most 

cases, you will have 30 days to review the reason and contact 

us to discuss any concerns you may have. During this 30-day 

review period, we may continue with the pending foreclosure 

action, but no foreclosure sale will be conducted and you will 

not lose your home. 

The Home Affordable Modification Program evaluation and 

the process of foreclosure may proceed at the same time. 

You may receive foreclosure/eviction notices – delivered by 

mail or in person – or you may see steps being taken to 

proceed with a foreclosure sale of you home. While you will 

not lose your home during the Home Affordable Modification 

Program evaluation, to protect your rights under applicable 

foreclosure law, you may need to respond to these foreclosure 

notices or take other actions. . . . 

Plaintiffs believed that if they submitted the requested paperwork and followed the 

exact instructions of Defendants, they would not lose their home to foreclosure during the 

evaluation process. Based on that belief, Plaintiffs never looked into other foreclosure 

avoidance options, such as short sale. 

A letter dated May 10, 2011, was sent to Mr. Davis from BACHL. It stated that 

BACHL had not received all of the documents it needed to complete its review of 

Case 2:12-cv-01059-NVW Document 13 Filed 08/23/12 Page 4 of 14
- 5 - 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

Plaintiffs’ eligibility for the HAMP. It directed Plaintiffs to fax or use an enclosed FedEx 

envelope to send a copy of their two most recent pay stubs not more than 90 days old 

indicating year-to-date earnings and a copy of their most recent bank statements for two 

consecutive months. The letter stated in bold, “We want you to know that if we do not 

receive the requested information by June 09, 2011, you will no longer be eligible for the 

Home Affordable Modification Program and we will resume normal activities for 

collecting past due loan payments.” It also stated: 

If your loan has been previously referred to foreclosure, we 

will continue the foreclosure process while we evaluate your 

loan for the Home Affordable Modification Program. 

However, no foreclosure sale will be conducted and you will 

not lose your home during the Home Affordable Modification 

Program. If we do not receive your documents by June 09, 

2011 the hold on a foreclosure sale will be released and 

foreclosure proceedings will resume. 

Important—Do not ignore any foreclosure notices. 

On May 25, 2011, Mrs. Davis received a knock on the door of their home and was 

handed a 5 Day Notice to Vacate from a representative of a third-party purchaser who 

claimed to have just purchased Plaintiffs’ home at a trustee sale conducted earlier that 

day. After receiving this notice, Mrs. Davis immediately contacted BACHL/HRS and 

was told to immediately fax the paperwork requested in the May 10, 2011 letter and not 

to worry about the 5 Day Notice to Vacate. Mrs. Davis faxed the requested 

documentation as instructed in the letter dated May 10, 2011. She contacted the 

foreclosure department of BACHL and was told that Plaintiffs’ home had been sold to a 

third-party purchaser at a trustee’s sale conducted earlier that day. 

Although Mrs. Davis was unable to find a home for her family to move into before 

having to move out of their home, a friend allowed the Davis family to stay with her for a 

short time while they continued their search for a suitable place to live. Mrs. Davis had 

to pay for people to help her family move and to rent storage space to store the 

Case 2:12-cv-01059-NVW Document 13 Filed 08/23/12 Page 5 of 14
- 6 - 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

belongings they were able to take with them. Plaintiffs were forced to leave many of 

their possessions behind. Each of the family members has suffered stress and emotional 

distress as a result of being forced to leave their home. 

On May 21, 2012, Plaintiffs filed a Verified Complaint alleging seven causes of 

action: (1) False Advertising/Consumer Fraud in Violation of A.R.S. § 44-1522, (2) 

Constructive Fraud, (3) Breach of Fiduciary Duty, (4) Promissory Estoppel, (5) Negligent 

Infliction of Emotional Distress, (6) Intentional Infliction of Emotional Distress, and (7) 

Negligent Misrepresentation. All of the counts are alleged against Bank of America 

Corporation, Bank of America, N.A., and BACHL. Counts Two, Six, and Seven are 

alleged against Home Retention Services, Inc., also. 

III. ANALYSIS 

A. Plaintiffs Have Not Pled Any Claim Against Bank of America 

Corporation. 

The Verified Complaint does not allege any wrongful actions by Bank of America 

Corporation, only that other entities acted as its agent. Plaintiffs concede that holding 

companies such as Bank of America Corporation generally cannot be liable for the acts of 

their subsidiaries. The Verified Complaint does not allege facts to support their 

contention that an exception to the general rule applies here. 

B. Count One: False Advertising/Consumer Fraud in Violation of A.R.S. 

§ 44-1522 

A.R.S. § 44-1522(A) defines what constitutes an unlawful practice under the 

Arizona Consumer Fraud Act: 

The act, use or employment by any person of any deception, 

deceptive act or practice, fraud, false pretense, false promise, 

misrepresentation, or concealment, suppression or omission 

of any material fact with intent that others rely upon such 

concealment, suppression or omission, in connection with the 

sale or advertisement of any merchandise whether or not any 

person has in fact been misled, deceived or damaged thereby, 

is declared to be an unlawful practice. 

Case 2:12-cv-01059-NVW Document 13 Filed 08/23/12 Page 6 of 14
- 7 - 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

To succeed on a claim brought under the Arizona Consumer Fraud Act, a plaintiff must 

show: (1) a false promise or misrepresentation made in connection with the sale or 

advertisement of merchandise with the intent that others rely on it, (2) the plaintiff relied 

on the false promise or misrepresentation, and (3) injury resulting from the false promise 

or misrepresentation. Kuehn v. Stanley, 208 Ariz. 124, 129, 91 P.3d 346, 351 (Ct. App. 

2004). “[T]he misled consumer must have suffered some damage as a result of the 

misrepresentation.” Nataros v. Fine Arts Gallery of Scottsdale, Inc., 126 Ariz. 44, 48, 

612 P.2d 500, 504 (Ct. App. 1980). 

“‘Advertisement’ includes the attempt by publication, dissemination, solicitation 

or circulation, oral or written, to induce directly or indirectly any person to enter into any 

obligation or acquire title or interest in any merchandise.” A.R.S. § 44-1521(1). “‘Sale’ 

means any sale, offer for sale, or attempt to sell any merchandise for any consideration, 

including sales, leases and rentals of any real estate subject to any form of deed 

restriction imposed as part of a previous sale.” A.R.S. § 44-1521(7). “‘Merchandise’ 

means any objects, wares, goods, commodities, intangibles, real estate, or services.” 

A.R.S. § 44-1521(5). A loan of money may be a “sale of merchandise” because “it is the 

sale of the present use of money on a promise to repay in the future.” Villegas v. 

Transamerica Fin’l Servs., 147 Ariz. 100, 102, 708 P.2d 781, 783 (Ct. App. 1985) 

(consumer loan held to be subject to the Arizona Consumer Fraud Act). 

The Verified Complaint sufficiently alleges that BACHL made false statements. 

The letter from BACHL dated February 25, 2011, stated that during the HAMP 

evaluation no foreclosure sale would be conducted and Plaintiffs would not lose their 

home. It also said that if they did not qualify for a loan modification, “in most cases,” 

they would be given thirty days for review of the decision. The letter from BACHL 

dated May 10, 2011, stated that during the HAMP evaluation no foreclosure sale would 

be conducted and Plaintiffs would not lose their home if they submitted certain 

documents by June 9, 2011. Plaintiffs allege Mrs. Davis faxed the requested documents 

Case 2:12-cv-01059-NVW Document 13 Filed 08/23/12 Page 7 of 14
- 8 - 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

on May 25, 2011, the same day Plaintiffs’ home was sold at a trustee’s sale—before the 

HAMP evaluation was completed. Therefore, BACHL’s statements that no foreclosure 

sale would be conducted during the HAMP evaluation were false. 

However, A.R.S. § 44-1522(A) requires that the false statement be made “in 

connection with the sale or advertisement of any merchandise.” In Villegas, the plaintiffs 

obtained a loan with an annual interest rate of 18 percent in the form of a revolving loan 

agreement; the loan was secured by a deed of trust on the plaintiffs’ house. 147 Ariz. at 

101, 708 P.2d at 782. Although the term of the loan was indefinite, if the plaintiffs made 

monthly payments of $353 and did not borrow any more money, the loan would be paid 

off in ten years. Id. at 102, 708 P.2d at 783. When the plaintiffs became unable to make 

the payments a year later, the lender told the plaintiffs that it would foreclose on its deed 

of trust if the plaintiffs did not accept a new loan at an annual interest rate of 19.9 percent 

with a loan finance fee of 9 “points” and monthly payments of $420 for a period of 

fifteen years. The lender did not tell the plaintiffs that the existing loan would be paid off 

in ten years. The Arizona Court of Appeals held that money is “merchandise,” and “the 

transaction in this case involved a ‘sale’” and an “advertisement.” Id. It found that 

“[t]here is no question that plaintiffs were induced to enter into an obligation whether or 

not they were acquiring title or interest in the merchandise.” Id. But it did not identify 

the specific characteristics of “the transaction in this case” necessary to bring it within the 

scope of the Arizona Consumer Fraud Act. 

Here, the Verified Complaint alleges that Bank of America, N.A., agreed to be 

bound by certain provisions of HAMP, which include that a participating lending 

institution not refer any loan to foreclosure or conduct a foreclosure until a borrower is 

evaluated for HAMP and determined to be ineligible. As alleged, the false statements 

were made because of HAMP requirements, not to induce Plaintiffs to borrow more 

money. BACHL did not promise to postpone foreclosure during the HAMP evaluation to 

induce Plaintiffs to seek a loan modification. Rather, it responded to Plaintiffs’ request 

Case 2:12-cv-01059-NVW Document 13 Filed 08/23/12 Page 8 of 14
- 9 - 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

for HAMP application forms and stated the HAMP requirement that no foreclosure sale 

would be conducted during the HAMP evaluation. BACHL’s subsequent failure to 

comply with the HAMP requirement does not convert its actions into making false 

statements “in connection with the sale or advertisement of any merchandise.” 

Therefore, Count One of the Verified Complaint fails to state a claim upon which 

relief can be granted. 

C. Count Two: Constructive Fraud; 

Count Three: Breach of Fiduciary Duty 

Counts Two and Three of the Verified Complaint consist of “threadbare recitals of 

the elements of a cause of action,” which are insufficient under Ashcroft v. Iqbal, 566 

U.S. 662, 678 (2009). Moreover, a claim for constructive fraud must allege a fiduciary or 

confidential relationship, a breach of duty by the person in the fiduciary or confidential 

relationship, and that the person in breach induced justifiable reliance by the other to his 

detriment. Green v. Lisa Frank, Inc., 221 Ariz. 138, 156, 211 P.3d 16, 34 (Ct. App. 

2009). Count Two attempts only to plead actual fraud, not constructive fraud. 

Further, the Verified Complaint does not allege facts to support its conclusion in 

Count Three that “Defendants owed a fiduciary duty [to] Plaintiffs.” A fiduciary 

relationship is a confidential relationship involving great intimacy, disclosure of secrets, 

or “peculiar reliance in the trustworthiness of another.” Standard Chartered PLC v. 

Price Waterhouse, 190 Ariz. 6, 24, 945 P.2d 317, 335 (Ct. App. 1996). Under Arizona 

law, without a special agreement, a debtor-creditor relationship does not create a 

fiduciary duty. See McAlister v. Citibank, 171 Ariz. 207, 212, 829 P.2d 1253, 1258 (Ct. 

App. 1992). Without more, submitting personal financial information regarding 

eligibility for a federal loan modification program does not create a fiduciary 

relationship. 

Therefore, Counts Two and Three fail to state a claim upon which relief can be 

granted. 

Case 2:12-cv-01059-NVW Document 13 Filed 08/23/12 Page 9 of 14
- 10 - 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

D. Count Four: Promissory Estoppel 

To allege a claim for promissory estoppel, a plaintiff must allege that the 

defendant made a promise, the defendant should have reasonably foreseen that the 

plaintiff would rely on that promise, and the plaintiff actually relied on that promise to his 

detriment. State ex rel. Romley v. Gaines, 205 Ariz. 138, 143, 67 P.3d 734, 739 (Ct. App. 

2003). Arizona courts have adopted Restatement (Second) of Contracts § 90 (1981): 

A promise which the promisor should reasonably expect to 

induce action or forbearance on the part of the promisee or a 

third person and which does induce such action or 

forbearance is binding if injustice can be avoided only by 

enforcement of the promise. 

Id.; see also Weiner v. Romley, 94 Ariz. 40, 44-45, 381 P.2d 581, 584 (1963). The 

promisee’s action or forbearance must be a substantial or material change of position; the 

injury or prejudice must be “actual and substantial, and not merely technical or formal.” 

Weiner, 94 Ariz. At 44, 381 P.2d at 583. 

It is undisputed that BACHL made a promise not to foreclose during the HAMP 

evaluation process. Because this promise is a HAMP requirement made by a lending 

institution, the lender should have reasonably foreseen that a borrower would rely on the 

promise. The Verified Complaint alleges that Plaintiffs did not investigate other 

foreclosure avoidance options because they relied on BACHL’s promise not to foreclose 

during the HAMP evaluation process. It also alleges that Plaintiffs incurred additional 

expenses because they were required to leave their home with only five days’ notice to 

vacate. 

Therefore, Count Four states a claim upon which relief can be granted. 

E. Count Five: Negligent Infliction of Emotional Distress 

The Verified Complaint alleges that “Defendants had a duty not to cause 

Plaintiffs’ emotional distress,” “Defendants breached their duty,” and Plaintiffs have 

suffered damages, “including extreme emotional distress,” as a result of the breach. As 

found above, the Verified Complaint alleges Plaintiffs experienced emotional distress 

Case 2:12-cv-01059-NVW Document 13 Filed 08/23/12 Page 10 of 14
- 11 - 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

caused by being forced to move out of their home because they failed to make their 

mortgage payments and caused by the third-party purchaser notifying them to vacate the 

premises within five days. Regarding actions by any of the B of A Defendants that 

caused Plaintiffs emotional distress, the Verified Complaint alleges only two letters 

saying the foreclosure sale would not occur as soon as it did. In their response to the 

motion to dismiss, Plaintiffs state they “are claiming direct injuries, not injuries from 

witnessing harm to another third person.” 

For claims of direct unintended emotional distress, Arizona courts have adopted 

the Restatement (Second) of Torts § 313 (1965). Ball v. Prentice, 162 Ariz. 150, 152 n.1, 

781 P.2d 628, 630 n.1 (Ct. App. 1989). Section 313(1) provides: 

If the actor unintentionally causes emotional distress to 

another, he is subject to liability to the other for resulting 

illness or bodily harm if the actor 

 (a) should have realized that his conduct involved an 

unreasonable risk of causing the distress, otherwise than by 

knowledge of the harm or peril of a third person, and 

 (b) from facts known to him should have realized that 

the distress, if it were caused, might result in illness or bodily 

harm. 

Under Arizona law, a claim for negligent infliction of emotional distress requires a 

showing of bodily harm, which may be satisfied by a physical injury or long-term 

physical illness or mental disturbance, but not by “transitory physical phenomena.” 

Monaco v. HealthPartners of Southern Arizona, 196 Ariz. 299, 302-03, 995 P.2d 735, 

738-39 (Ct. App. 1999). Arizona law does not permit recovery for negligent infliction of 

emotional distress from witnessing injury to property. Roman v. Carroll, 127 Ariz. 398, 

399, 621 P.2d 307, 308 (Ct. App. 1980) (plaintiff was not permitted to recover damages 

for emotional distress she suffered from watching defendants’ St. Bernard dog 

dismember her poodle while she walked the poodle near her home). 

Case 2:12-cv-01059-NVW Document 13 Filed 08/23/12 Page 11 of 14
- 12 - 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

The Verified Complaint alleges that on May 25, 2011, Mrs. Davis was shocked 

when she learned that their home had been sold at a trustee’s sale that morning. It alleges 

that all of the family members suffered stress because of the short time they had to find 

somewhere to live, pack, and move. It alleges that because they had to move in with a 

friend, they were not able to take all of their possessions. But it does not allege that any 

of the four Plaintiffs suffered a physical injury, long-term physical illness, or long-term 

mental disturbance as a result of any of the B of A Defendants’ actions. It does not allege 

that any of the four Plaintiffs have sought medical or psychological treatment for bodily 

harm caused by any of the B of A Defendants’ actions. 

Therefore, Count Five fails to state a claim upon which relief can be granted. 

F. Count Six: Intentional Infliction of Emotional Distress 

A claim for intentional infliction of emotional distress must allege (1) extreme and 

outrageous conduct by the defendant, (2) the defendant intended to cause emotional 

distress or recklessly disregarded the near certainty that such distress will result from his 

conduct, and (3) severe emotional distress occurred as a result of the defendant’s conduct. 

Citizen Publ’g Co. v. Miller, 210 Ariz. 513, 516, 115 P.3d 107, 516 (2005). Under 

Arizona law, the trial court decides whether the alleged acts are sufficiently outrageous to 

state a claim for relief; it becomes a jury question only if reasonable minds could differ 

about whether the conduct is sufficiently outrageous. Johnson v. McDonald, 197 Ariz. 

155, 160, 3 P.3d 1075, 1080 (Ct. App. 1999). “To recover for this tort, the plaintiff must 

show that the defendant’s conduct was so outrageous in character, and so extreme in 

degree, as to go beyond all possible bounds of decency, and to be regarded as atrocious 

and utterly intolerable in a civilized community.” Id. (internal quotation marks and 

citations omitted). 

Informing HAMP applicants that no foreclosure sale will be held during the 

evaluation process and then holding the sale during the evaluation process is careless and 

reprehensible, but not extreme and outrageous, especially when the applicants had five 

Case 2:12-cv-01059-NVW Document 13 Filed 08/23/12 Page 12 of 14
- 13 - 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

months to prepare to vacate the property. See id. (given the high standard, public 

allegations of embezzlement against victims of alleged sexual molestation were not 

“beyond all bounds of decency”); Mintz v. Bell Atl. Sys. Leasing Int’l, Inc., 183 Ariz. 550, 

554-55, 905 P.2d 559, 563-64 (Ct. App. 1995) (employer’s actions would not “be 

regarded as atrocious and utterly intolerable in a civilized community” where the 

employer failed to promote an employee, the employee was hospitalized for severe 

emotional and psychological problems for three months, the employer ordered her to 

return to work, she was hospitalized again after one day of work, and the employer handdelivered a letter to her in the hospital informing her that her job duties were reassigned). 

Therefore, Count Six fails to state a claim upon which relief can be granted. 

G. Count Seven: Negligent Misrepresentation 

The Verified Complaint alleges that “Defendants, in the course of business, 

provided Plaintiffs with false information as an inducement for Plaintiffs to comply with 

their demands for documents by stated dates” and “Defendants intended their false 

information to serve as guidance for Plaintiffs and intended that Plaintiffs thereupon 

rely.” Arizona courts recognize the tort of negligent misrepresentation as defined by the 

Restatement (Second) of Torts § 552, which provides in part: 

One who, in the course of his business, profession or 

employment, or in any other transaction in which he has a 

pecuniary interest, supplies false information for the guidance 

of others in their business transactions, is subject to liability 

for pecuniary loss caused to them by their justifiable reliance 

upon the information, if he fails to exercise reasonable care or 

competence in obtaining or communicating the information. 

St. Joseph’s Hosp. & Med. Ctr. v. Reserve Life Ins. Co., 154 Ariz. 307, 312, 742 P.2d 

808, 813 (1987); see also McAlister v. Citibank, 171 Ariz. 207, 215, 829 P.2d 1253, 1261 

(Ct. App. 1992). 

But Arizona law does not recognize a cause of action for negligent 

misrepresentation based on promises of future conduct. McAlister, 171 Ariz. at 215, 829 

Case 2:12-cv-01059-NVW Document 13 Filed 08/23/12 Page 13 of 14
- 14 - 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

P.2d at 1261. The alleged misrepresentation was a promise that no foreclosure sale 

would be conducted during the HAMP evaluation. 

Therefore, Count Seven of the Verified Complaint fails to state a claim upon 

which relief can be granted. 

IV. LEAVE TO AMEND 

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

15(a)(2). Plaintiffs will be given an opportunity to amend their complaint to make clear 

their allegations in short, plain statements that state a plausible claim for relief. Any 

amended complaint must conform to the requirements of Rule 8(a), 8(d)(1), and 9(b) of 

the Federal Rules of Civil Procedure. 

IT IS THEREFORE ORDERED that the Motion to Dismiss by Defendants Bank 

of America Corporation and Bank of America, N.A., individually and as successor by 

merger to BAC Home Loans Servicing LP (Doc. 10) is GRANTED as to Counts One, 

Two, Three, Five, Six, and Seven of the Verified Complaint against Defendants Bank of 

America Corporation and Bank of America, N.A., GRANTED as to Count Four of the 

Verified Complaint against Defendant Bank of America Corporation, and DENIED as to 

Count Four of the Verified Complaint against Defendant Bank of America, N.A. 

IT IS FURTHER ORDERED that Plaintiffs may file an amended complaint by 

September 21, 2012. 

IT IS FURTHER ORDERED that Plaintiffs show cause by September 21, 2012, 

why their complaint against Defendant Home Retention Services, Inc., not be dismissed 

for lack of prosecution. 

Dated this 22nd day of August, 2012. 

Case 2:12-cv-01059-NVW Document 13 Filed 08/23/12 Page 14 of 14