Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_09-cv-02676/USCOURTS-caed-2_09-cv-02676-2/pdf.json

Nature of Suit Code: 290
Nature of Suit: Other Real Property Actions
Cause of Action: 15:1601 Truth in Lending

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28 This matter is deemed suitable for decision without oral *

argument. E.D. Cal. R. 230(g).

1

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF CALIFORNIA

CHARLES DAY, )

)

Plaintiff, ) 2:09-cv-02676-GEB-KJM

)

v. ) ORDER GRANTING DEFENDANT’S

) MOTION TO DISMISS*

AMERICAN HOME MORTGAGE SERVICING, )

INC., and DOES 1-50, inclusive, )

)

Defendants. )

) 

Defendant American Home Mortgage Servicing, Inc. (“AHMSI”)

filed a motion to dismiss Plaintiff’s complaint under Federal Rule of

Civil Procedure 12(b)(6) for failure to state claim upon which relief

can be granted; and a motion for a more definite statement under

Federal Rule of Civil Procedure 12(e). For the following reasons,

AHMSI’s motion to dismiss is granted and AHMSI’s motion for a more

definite statement is dismissed as moot. 

Plaintiff alleges five claims in his complaint 

against AHMSI, all of which concern a mortgage loan Plaintiff

obtained: (1) violation of the California Rosenthal Act; (2) breach of

the covenant of good faith and fair dealing; (3) breach of fiduciary

duty; (4) violation of California Business and Professions Code

section 17200; and (5) breach of statutory duties.

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I. Legal Standard

A Rule 12(b)(6) motion “challenges a complaint’s compliance 

with . . . pleading requirements.” Champlaie v. BAC Home Loans

Servicing, LP, No. S-09-1316 LKK-DAD, 2009 WL 3429622, at *1 (E.D.

Cal. Oct. 22, 2009). A pleading must contain “a short and plain

statement of the claim showing that the pleader is entitled to relief

. . . .” Fed. R. Civ. P. 8(a)(2). The complaint must “give the

defendant fair notice of what the [plaintiff’s] claim is and the

grounds upon which relief rests . . . .” Bell Atlantic Corp. v.

Twombly, 550 U.S. 544, 555 (2007). Further, “[a] pleading that offers

labels and conclusions or a formulaic recitation of the elements of a

cause of action will not do. Nor does a complaint suffice if it

tenders naked assertions devoid of further factual enhancement.” 

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

To avoid dismissal, the plaintiff must allege “only enough

facts to state a claim to relief that is plausible on its face.” 

Twombly, 550 U.S. at 547. “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.” Iqbal, 129 S. Ct. at 1949. Plausibility, however, requires

more than “a sheer possibility that a defendant has acted unlawfully.” 

Id. “When a complaint pleads facts that are merely consistent with a

defendant’s liability, it stops short of the line between possibility

and plausibility of entitlement to relief.” Id. (quotations and

citation omitted).

In evaluating a dismissal motion under Rule 12(b)(6), the

court “accept[s] as true all facts alleged in the complaint, and

draw[s] all reasonable inferences in favor of the plaintiff.” Al-Kidd

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v. Ashcroft, 580 F.3d 949, 956 (9th Cir. 2009). However, neither

conclusory statements nor legal conclusions are entitled to a

presumption of truth. See Iqbal, 129 S. Ct. at 1949-50.

II. Analysis

A. Rosenthal Act Claim

AHMSI seeks dismissal of Plaintiff’s first claim for 

violation of the Rosenthal Act, arguing Plaintiff “makes conclusory

allegations” without alleging any “specific acts or omissions of any

of the Defendants.” (Mot. 3:17, 23.) Plaintiff responds, arguing he

has satisfied the requirements of Federal Rule of Civil Procedure 8. 

(Opp’n 3:10-25.) 

California’s Rosenthal Act “serves to ‘prohibit debt 

collectors from engaging in unfair or deceptive acts or practices in

the collection of consumer debts and to require debtors to act fairly

in entering into and honoring such debts.’” Arikat v. JP Morgan Chase

& Co., 430 F. Supp. 2d 1013, 1026 (N.D. Cal. 2006) (citing Cal. Civ.

Code § 1788.1) (emphasis omitted). However, the Act only governs the

conduct of a “debt collector,” which under the statute is defined as

“any person who, in the ordinary course of business, regularly, and on

behalf of himself or herself . . . engages in debt collection.” Cal

Civ. Code. § 1788.2. 

Plaintiff alleges in his complaint:

Defendants’ actions constitute a violation of the

Rosenthal Act in that they threatened to take

actions not permitted by law, including . . .:

foreclosing upon a void security interest;

foreclosing upon a note of which they were not in

possession nor otherwise entitled to payment;

falsely stating the amount of a debt; increasing

the amount of a debt by including amounts that are

not permitted by law or contract; and using unfair

and unconscionable means in an attempt to collect a

debt.

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(Compl. ¶ 9.) Plaintiff’s allegations fail to “give [AHMSI] fair

notice of what the [Plaintiff’s] claim is and the grounds upon which

relief rests . . . .” Twombly, 550 U.S. at 555. Plaintiff has not

alleged that AHMSI is a “debt collector” subject to the statute; nor

has Plaintiff identified which provision of the Rosenthal Act was

allegedly violated or on which loan AHMSI allegedly attempted to

collect from Plaintiff. See Molina v. Washington Mutual Bank, No. 09-

cv-0094-IEG-AJB, 2010 WL 431439, at *6 (S.D. Cal. Jan. 29, 2010)

(dismissing Rosenthal Act claim for failure to identify the provisions

allegedly violated and for failure to allege that Defendants were debt

collectors). Moreover, Plaintiff’s allegations do not show that

“foreclosing on a property pursuant to a deed of trust is . . . 

collection of a debt within the meaning of the [Rosenthal Act].” 

Benham v. Aurora Loan Servs., 2009 WL 2880232, at *2 (N.D. Cal. Sept.

1, 2009). Therefore, Plaintiff’s first claim is dismissed.

B. Breach of the Implied Covenant of Good Faith and Fair Dealing Claim

AHMSI also seeks dismissal of Plaintiff’s second claim for 

breach of the implied covenant of good faith and fair dealing, arguing

“no contract between Plaintiff and AHMSI has been identified or exists

since AHMSI is just the loan servicer on this loan.” (Mot. 5:1-2.) 

Plaintiff responds, arguing “while Plaintiff admits that this cause of

action probably does not survive in tort, it should survive in its

derivative nature in contract . . . .” (Opp’n 4:7-9.) 

“The prerequisite for any action for breach of implied 

covenant of good faith and fair dealing is the existence of a

contractual relationship between the parties.” Castaneda v. Saxon

Mortg. Serv., Inc., 2:09-cv-1124-WBS-DAD, 2010 WL 726903, at *5 (E.D.

Cal. Feb. 26, 2010). “A good faith claim sounds in tort only when

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there is a ‘special relationship’ between the contracting parties,

such as the relationship between an insurer and an insured in an

insurance contract.” Baldain v. Am. Home Mortg. Serv., Inc., 2010 WL

56143, at *12 (E.D. Cal. Jan. 5, 2010). 

Plaintiff alleges in this claim that “[a] duty of good 

faith and fair dealing was implied by law into the contract of

insurance that is at issue in this action.” (Compl. ¶ 12.) However,

Plaintiff does not allege the existence of a contractual relationship

with AHMSI. Nor does Plaintiff allege the existence or terms of a

contract of insurance. Further, Plaintiff has not alleged the

existence of any facts which, if true, would demonstrate the existence

of a “special relationship.” Therefore, Plaintiff’s second claim is

dismissed.

C. Breach of Fiduciary Duty Claim

AHMSI also seeks dismissal of Plaintiff’s third claim for 

breach of fiduciary duty, arguing “there is no fiduciary duty between

a borrower and a lender.” (Mot. 7:11-12.) Plaintiff does not oppose

this dismissal request and states only that he “will dismiss this

cause of action.” (Opp’n 4:11.) Therefore, Plaintiff’s third claim

is dismissed.

D. California Unfair Competition Law Claim

AHMSI also seeks dismissal of Plaintiff’s fourth claim 

in which Plaintiff alleges violation of California Business and

Professions Code section 17200, arguing Plaintiff’s allegations are

“insufficient to satisfy the minimum pleading standard of describing

facts with reasonable particularity.” (Mot. 10:17-18.) This claim is

entirely derivative of the previous claims in the complaint. Since

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all of Plaintiff’s previous claims have been dismissed, this

derivative claim is also dismissed. 

E. Breach of Statutory Duties Claim

AHMSI also seeks dismissal of Plaintiff’s fifth claim for 

“breach of statutory duties,” arguing “the complaint is silent as to

which statutes imposed the duty, what such statutory duties are, if

any, and what acts or omissions [on] the part of Defendant allegedly

constituted such a breach.” (Mot. 11:7-10.) Plaintiff responds,

arguing “Plaintiffs [sic] believe they have pled sufficient facts to

support the cause of action. Plaintiffs [sic] have specified each

statute and how it was violated. However, if the court believes that

further facts are required, Plaintiffs [sic] will amend the complaint

to state such facts.” (Opp’n 5:7-11.)

Plaintiff’s complaint fails to state under which statute he 

seeks relief. No statutes are listed in Plaintiff’s fifth claim. 

Further, although Plaintiff lists the Truth in Lending Act, 15 U.S.C.

§§ 1601 et seq., and the Real Estate Settlement Procedures Act, 12

U.S.C. §§ 2601 et seq., in his third claim for breach of fiduciary

duty, Plaintiff previously argued in a motion to remand this case to

state court that “there is no federal question raised in the

complaint. Not one cause of action relies on a federal statute.” 

(Reply to AHMSI’s Opp’n to Plt.’s Mot. to Remand 3:6-7.) Further,

Plaintiff’s fifth claim contains no factual allegations which would

provide AHMSI with “fair notice of what . . . [Plaintiff’s] claim is

and the grounds upon which relief rests . . . .” Twombly, 550 U.S. at

555. Thus, it is unclear which statutes Plaintiff alleges AHMSI

violated or what AHMSI did that allegedly violated the unnamed

statutes. Therefore, Plaintiff’s fifth claim is dismissed.

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III. Conclusion

For the stated reasons, AHMSI’s motion to dismiss 

Plaintiff’s complaint is granted. AHMSI’s motion for a more definite

statement is denied as moot. Plaintiff is granted ten (10) days from

the date on which this order is filed to file a first amended

complaint amending the claims that have been dismissed.

Dated: March 25, 2010

 

GARLAND E. BURRELL, JR.

United States District Judge

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