Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-5_14-cv-03470/USCOURTS-cand-5_14-cv-03470-1/pdf.json

Nature of Suit Code: 220
Nature of Suit: Foreclosure
Cause of Action: 28:1444 Petition for Removal- Foreclosure

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Case No.: 5:14-cv-03470 EJD

ORDER GRANTING DEFENDANTS’ MOTION TO DISMISS; DENYING AS MOOT 

DEFENDANTS’ MOTION TO STRIKE

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United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

SAN JOSE DIVISION

SANDRA L. SKILLICORN, et al.,

Plaintiffs,

v.

CITIMORTGAGE, INC., et al.,

Defendants.

Case No. 5:14-cv-03470 EJD 

ORDER GRANTING DEFENDANTS’

MOTION TO DISMISS; DENYING AS 

MOOT DEFENDANTS’ MOTION TO 

STRIKE

Re: Dkt. Nos. 24, 25

On November 12, 2014, this court granted a Motion to Dismiss filed by Defendants 

CitiMortgage, Inc. (“CitiMortgage”) and Merscorp Holdings, Inc. (“MERS”) and dismissed the 

Complaint filed by Plaintiffs Sandra L. Skillicorn and Jack Skillicorn (collectively, “Plaintiffs”). 

See Docket Item No. 22. In doing so, the court found that Plaintiffs had not alleged any facts to 

support a claim against MERS. The court also found the allegations insufficient to state claims for 

negligence, declaratory relief and violation of the Unfair Competition Law (“UCL”), California 

Business and Professions Code § 17200. The claim for declaratory relief was dismissed without 

leave to amend, but Plaintiffs were permitted to amend all other claims against CitiMortgage and 

MERS. 

Plaintiffs filed a First Amended Complaint (“FAC”) on December 3, 2014. See Docket 

Item No. 23. They now assert one claim for negligence and one claim for violation of the UCL 

Case 5:14-cv-03470-EJD Document 32 Filed 01/12/15 Page 1 of 4
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Case No.: 5:14-cv-03470 EJD

ORDER GRANTING DEFENDANTS’ MOTION TO DISMISS; DENYING AS MOOT 

DEFENDANTS’ MOTION TO STRIKE

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against both defendants. Presently at issue are motions filed by CitiMortgage and MERS

(collectively, “Defendants”), one to dismiss the FAC and one to strike portions of it. See Docket 

Item Nos. 24, 25. Plaintiffs have not filed a timely opposition to either motion. See Docket Item 

Nos. 27, 28. 

These matters are suitable for decision without oral argument pursuant to Civil Local Rule 

7-1(b). Accordingly, the hearing scheduled for April 30, 2015, is VACATED. Having carefully 

considered the pleadings filed by the parties, the court finds, concludes and orders as follows:

1. A motion under Federal Rule of Civil Procedure 12(b)(6) can be granted if a 

plaintiff fails to plead each claim with sufficient specificity 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) (internal quotations omitted). The factual allegations “must be enough to raise a 

right to relief above the speculative level” such that the claim “is plausible on its face.” Id. at 556-

57. “Well-pleaded factual allegations” are considered true (Ashcroft v. Iqbal, 556 U.S. 662, 664 

(2009)), and the court construes the alleged facts in the light most favorable to the plaintiff (Love 

v. United States, 915 F.2d 1242, 1245 (9th Cir. 1988)). The court may also consider material 

submitted as part of the complaint or relied upon in the complaint, and may also consider material 

subject to judicial notice. See Lee v. City of Los Angeles, 250 F.3d 668, 688-69 (9th Cir. 2001). 

“Dismissal under Rule 12(b)(6) is appropriate only where the complaint lacks a cognizable legal 

theory or sufficient facts to support a cognizable legal theory.” Mendiondo v. Centinela Hosp. 

Med. Ctr., 521 F.3d 1097, 1104 (9th Cir. 2008).

2. Fraud-based claims are subject to a heightened pleading standard. Fed. R. Civ. 

Proc. 9(b) (“In alleging fraud or mistake, a party must state with particularity the circumstances 

constituting fraud or mistake.”). The allegations must 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.” Semegen v. 

Weidner, 780 F.2d 727, 731 (9th Cir. 1985). To that end, there must be “an account of the time, 

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Case No.: 5:14-cv-03470 EJD

ORDER GRANTING DEFENDANTS’ MOTION TO DISMISS; DENYING AS MOOT 

DEFENDANTS’ MOTION TO STRIKE

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

misrepresentations.” Swartz v. KPMG LLP, 476 F.3d 756, 764 (9th Cir. 2007); see also Spencer 

v. DHI Mortg. Co., 642 F. Supp. 2d 1153, 1164 (E.D. Cal. 2009).

3. As to MERS, Plaintiffs have not remedied the deficiency previously identified by 

the court. Much like the original Complaint, the FAC does not describe MERS’ participation in 

Plaintiffs’ failed attempt to obtain a loan modification, particularly since all of the active conduct 

alleged in the FAC is attributable to CitiMortgage and its employees. Accordingly, Plaintiffs have 

not satisfied Rule 8(a)(2) with respect to any claims against MERS, and all claims asserted against 

it are DISMISSED WITHOUT LEAVE TO AMEND because allowing for further amendment 

would be futile at this point. Kendall v. Visa U.S.A., Inc., 518 F.3d 1042, 1051 (9th Cir. 2008) 

(“Dismissal without leave to amend is proper if it is clear that the complaint could not be saved by 

amendment.”). 

4. Plaintiffs have not stated a claim for negligence against CitiMortgage in the FAC. 

The elements of negligence are: (1) that the defendant owed a legal duty to the plaintiff; (2) that 

the defendant breached that duty; and (3) that the breach was the proximate and actual cause of the 

plaintiff’s injury. Sohal v. Fed. Home Loan Mortg. Corp., No. 11-01941, 2011 U.S. Dist. LEXIS 

97355, at *24, 2011 WL 3842195 (N.D. Cal. Aug. 30, 2011); Ladd v. Cnty. of San Mateo, 12 Cal. 

4th 913 (1996). As the court previously explained, “a financial institution owes no duty of care to 

a borrower when the institution’s involvement in the loan transaction does not exceed the scope of 

its conventional role as a mere lender of money.” Nymark v. Heart Fed. Savings & Loan Assn., 

231 Cal. App. 3d 1089, 1096 (1991); see also Resolution Trust Corp. v. BVS Dev., 42 F.3d 1206, 

1214 (9th Cir. 1994). Similarly, loan servicers do not owe a duty of care to borrowers when, as 

here, the loan modification process did not progress past an initial stage. See Banks v. JPMorgan 

Chase Bank, N.A., No. LA CV14-06429 JAK (FFMx), 2014 U.S. Dist. LEXIS 164565, at *31, 

2014 WL 6476139 (C.D. Cal. Nov. 19, 2014) (citing California cases to conclude that loan 

modification is generally deemed a traditional money-lending activity unless a special relationship

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Case No.: 5:14-cv-03470 EJD

ORDER GRANTING DEFENDANTS’ MOTION TO DISMISS; DENYING AS MOOT 

DEFENDANTS’ MOTION TO STRIKE

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is formed by the process). Moreover, there is no right to a loan modification, let alone one that is 

entirely favorable to the borrower. See Mabry v. Super. Ct., 185 Cal. App. 4th 208, 232 (2010). 

The negligence claim is DISMISSED WITHOUT LEAVE TO AMEND since allowing for 

further amendment under these circumstances would be futile. Kendall, 518 F.3d at 1042. 

5. Finally, the UCL claim is still deficiently plead. Since it is “tethered” solely to the 

dismissed negligence claim, any claim under the unlawful prong must also be dismissed. 

Franczak v. Suntrust Mortg. Inc., No. 5:12-cv-01453 EJD, 2013 U.S. Dist. LEXIS 126977, at *19, 

2013 WL 4764327 (N.D. Cal. Sept. 5, 2013). In addition, the allegations do not sufficiently 

identify a fraudulent or unfair business practice. See Varela v. Wells Fargo Home Mortg., No. C12-3502 KAW, 2012 U.S. Dist. LEXIS 181323, at *20, 2012 WL 6680261 (N.D. Cal. Dec. 21, 

2012) (“[A]llegations pertaining to loan modification cannot be recast under a § 17200 cause of 

action, because Plaintiffs have not pled an underlying violation of law stemming from Defendant’s 

conduct during the loan modification negotiations.”). Therefore, the UCL claim is DISMISSED 

WITHOUT LEAVE TO AMEND since permitting further amendment would be futile. Kendall, 

518 F.3d at 1042. 

Based on the foregoing, Defendants’ Motion to Dismiss (Docket Item No. 24) is 

GRANTED and the Motion to Strike (Docket Item No. 25) is DENIED AS MOOT. As noted, all 

claims are DISMISSED WITHOUT LEAVE TO AMEND. Since this order effectively resolves 

the action, judgment will be entered in favor of Defendants. All other matters are VACATED and 

the Clerk shall close this file.

IT IS SO ORDERED.

Dated: January 12, 2015

______________________________________

EDWARD J. DAVILA

United States District Judge

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