Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_12-cv-02002/USCOURTS-casd-3_12-cv-02002-0/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1331 Fed. Question: Breach of Contract

---

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

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

VICENTE A. ROCHE,

Plaintiff,

CASE NO: 12-CV-2002 W (WVG)

 

ORDER DENYING

DEFENDANT’S MOTION TO

DISMISS PLAINTIFF’S

COMPLAINT [DOC. 6-1]

v.

BANK OF AMERICA, NATIONAL

ASSOCIATION, a national banking

association; and DOES 1 through 100,

inclusive,

Defendants.

Pending before the Court is Defendant Bank of America, N.A.’s (“BANA”)

motion to dismiss Plaintiff VicenteA. Roche’s (“Roche”) complaint under Federal Rule

of Civil Procedure 12(b)(6). (MTD [Doc. 6-1].) Roche opposes. (Pl.’s Opp’n [Doc.

8].) The Court decides the matter on the papers submitted and without oral argument. 

See Civ. L. R. 7.1(d.1). For the reasons discussed below, the Court DENIES Defendant

BANA’s motion. 

\\

\\

- 1 - 12-CV-2002W

Case 3:12-cv-02002-W-WVG Document 10 Filed 07/09/13 Page 1 of 16
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

I. BACKGROUND

On July 2, 2004, Roche entered into a written promissory note agreement with

Countrywide Home Loans, Inc. (“Countrywide”) and secured a deed of trust

(collectively referred to as the “Loan”) in order to finance the purchase of a

condominium located at 830 South Sierra Avenue, Solana Beach, California (the

“Residence”). (Compl. [Doc. 1], ¶ 9.) Roche agreed to pay a principal sum of

$460,000.00, in monthly installments of $2,795.01, to Countrywide. (Id. at ¶ 10.) 

However, prior to March 16, 2012, and without Roche’s knowledge, Countrywide sold

1

and/or transferred all of its rights, titles, and interests to BANA. (Id. at ¶ 11.) Thus,

BANA assumed all of Countrywide’s rights and obligations of the Loan, and Roche

dealt solely with BANA regarding the Loan. (Id. at ¶¶ 12-13). 

In May 2011, Roche failed to pay the property tax assessment on the Residence

due to an inadvertent oversight. (Id. at ¶ 15.) BANA paid the assessment and

established an escrow account for both he property tax it paid and for the payment of

future property tax assessments. (Id. at ¶ 16.) BANA charged Roche $7,600.39 to fund

the escrow account: $2,600.39 for the escrowed taxes and $5,000.00 for projected

unfunded tax payments. (Id.) As of July 2011, BANA increased Roche’s monthly

payments to $4,183.15. (Id.) Roche learned of this increase when he received a letter

from BANA dated August 16, 2011, which informed him that the July 2011 payment

was insufficient. (Id. at ¶ 17.) The letter advised Roche that he still owed $4,460.31

to bring his loan up to date. (Id.) 

On August 16, 2011, Roche’s attorneys sent two checks to BANA for Roche’s

July and August payments, each in the amount of $4,500.00. (Id. at ¶ 19.) Upon

discovering that BANA did not credit one check toward the August payment, Roche

requested a correction of BANA’s misallocations and information as to how he could

satisfy and eliminate the escrow account. (Id. at ¶¶ 20-21.) Shortly thereafter, on or

Roche does not know on what date Countrywide sold and/or transferred its interest to 1

BANA, but the transfer to BANA was recorded on March 16, 2012. (Id. at ¶ 11.)

- 2 - 12-CV-2002W

Case 3:12-cv-02002-W-WVG Document 10 Filed 07/09/13 Page 2 of 16
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

about September 6, 2011, a BANA employee, Sharon, stated that if Roche paid

$11,291.00, the escrow would be removed. (Id. at ¶¶ 22-23.) Sharon also told Roche 2

he needed to send a letter to BANA’s payment research department requesting

correction of the loan account. (Id. at ¶ 24.)

Roche sent BANA a letter, stating that BANA was not crediting Roche’s

payments toward the Loan and requesting a correction of the account and the return

of his original payment amount. (Id. at ¶ 26.) Roche also sent BANA two checks

totaling $11,291.30. (Id. at ¶ 27.) BANA did not credit Roche’s September payment,

remove the escrow account, or return Roche’s payments to their original amount. (Id.

at ¶ 29.)

In October, Roche attempted to make a payment at a BANA branch in the

amount of $2,795.01, his original payment amount. (Id. at ¶ 30.) The branch did not

accept the payment, and Roche learned that BANA still had not reduced the payment

amount, but also had assessed additional penalties. (Id.) Roche then contacted

BANA’s customer service and spoke with John, who stated that Sharon’s directions

were incorrect and that she had no authority to make the statements. (Id. at ¶ 31.) 

Roche asked John for BANA to provide an accounting on the Loan account, but

BANA never responded to the request. (Id.)

In December, Roche again contacted customer service and spoke with Kristen,

who advised that the escrow account could not be removed as suggested by Sharon. 

(Id. at ¶ 32.) Kristen told Roche that $3,198.22 was needed to bring the Loan current

as of October 2011 and that subsequent monthly payments, inclusive of the escrow

payments, would be $3,433.03. (Id. at ¶¶ 33-34.) Accordingly, Roche paid $3,198.22

for October and $3,433.03 for November. (Id. at ¶ 35.) BANA, however, still did not

correct Roche’s account or accept the agreed-upon payment amount of $3,433.03 and

continued to report Roche as delinquent to national credit bureaus. (Id. at ¶¶ 36-37.)

$7,425.00 would go toward the escrow account, and $3,866.00 would cover the 2

September 2011 payment. (Id. at ¶ 23.)

- 3 - 12-CV-2002W

Case 3:12-cv-02002-W-WVG Document 10 Filed 07/09/13 Page 3 of 16
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 or about December 6, 2011, Roche sent BANA another letter, detailing the

errors in his account and requesting immediate correction of the account and the credit

reports. (Id. at ¶ 38.) BANA did not correct the account or respond to Roche’s 3

request. (Id.) On May 23, 2012, counsel for Roche sent a letter to BANA disputing

the accounting of the Loan and demanding its correction. (Id. at ¶ 40.) Counsel also

demanded retraction of BANA’s negative credit reports and restoration of the original

payment amount. (Id.) BANA responded to counsel’s letter on August 2, 2012,

admitting it misapplied Roche’s August 2011 payment. (Id. at ¶ 41.) BANA did not

mention or respond to Roche’s remaining requests. (Id.)

On August 13, 2012, Roche filed the instant action alleging (1) breach of written

contract, (2) breach of oral contract, (3) negligent misrepresentation, (4) fraud, (5)

violation of the Rosenthal Fair Debt Collection Practices Act, (6) violation of the Real

Estate Settlement Procedures Act, (7) violation of the California Business and

Professions Code, and (8) violation of the California Consumer Credit Reporting

Agencies Act. The Complaint also requests an accounting and injunctive relief. On

September 20, 2012, BANA moved to dismiss the Complaint in its entirety. 

II. LEGAL STANDARD

The Court must dismiss a cause of action for failure to state a claim upon which

relief can be granted. Fed. R. Civ. P. 12(b)(6). A motion to dismiss under Rule

12(b)(6) tests the complaint’s sufficiency. See Parks Sch. of Bus., Inc. v. Symington,

51 F.3d 1480, 1484 (9th Cir. 1995). A complaint may be dismissed as a matter of law

either for lack of a cognizable legal theory or for insufficient facts under a cognizable

theory. Balisteri v. Pacifica Police Dep’t., 901 F.2d 696, 699 (9th Cir. 1990). In ruling

on the motion, a court must“accept all material allegations of fact as true and construe

the complaint in a light most favorable to the non-moving party.” Vasquez v. L.A.

Cnty., 487 F.3d 1246, 1249 (9th Cir. 2007).

Roche asserts his credit score dropped from 790 to 625. (Id. at ¶ 46.) 3

- 4 - 12-CV-2002W

Case 3:12-cv-02002-W-WVG Document 10 Filed 07/09/13 Page 4 of 16
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

However, the Court is not “required to accept as true allegations that are merely

conclusory, unwarranted deductions of fact, or unreasonable inferences.” Sprewell v.

Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 2001). “While a complaint

attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual

allegations, a plaintiff’s obligation to provide the grounds of his entitlement to relief

requires more than labels and conclusions, and a formulaic recitation of the elements

of a cause of action will not do.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555

(2007) (internal citations omitted). Instead, the allegations in the complaint must

“contain sufficient factual matter, accepted as true, to state a claim to relief that is

plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly, 550

U.S. at 570). “The plausibility standard is not akin to a ‘probability requirement,’ but

rather asks for more than a sheer possibility that a defendant has acted unlawfully.” Id.

Generally, the court may not consider material outside the complaint when

ruling on a motion to dismiss. Hal Roach Studios, Inc. v. Richard Feiner & Co., 896

F.2d 1542, 1555 n.19 (9th Cir. 1990). However, the court may consider any documents

specifically identified in the complaint whose authenticity is not questioned by the

parties. Fecht v. Price Co., 70 F.3d 1078, 1080 n.1 (9th Cir. 1995) (superceded by

statute on other grounds). Moreover, the court may consider the full text of those

documents, even when the complaint quotes only selected portions. Id. The court may

also consider material properly subject to judicial notice without converting the motion

into a motion for summary judgment. Barron v. Reich, 13 F.3d 1370, 1377 (9th Cir.

1994) (citing Mack v. South Bay Beer Distribs., Inc., 798 F.2d 1279, 1282 (9th Cir.

1986) abrogated on other grounds by Astoria Federal Savings and Loan Ass’n v. Solimino,

501 U.S. 104 (1991)).

III. DISCUSSION

A. Breach of Written Contract

BANA moves to dismiss Roche’s first claim for breach of written contract for

failure to allege a breach of contract or damages. (MTD 4.) Roche counters, arguing

- 5 - 12-CV-2002W

Case 3:12-cv-02002-W-WVG Document 10 Filed 07/09/13 Page 5 of 16
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

that his complaint “alleges all necessary elements and facts to support [his] breach of

contract claim.” (Opp’n 6.)

In California, “[a] cause of action for breach of contract requires proof of the

following elements:(1) existence of a contract;(2) plaintiff’s performance or excuse for

nonperformance; (3) defendant’s breach; and (4) damages to plaintiff as a result of the

breach.” CDF Firefighters v. Maldonado, 158 Cal. App. 4 1226, 1239 (2008). th

“Resolution of contractual claims on a motion to dismiss is proper if the terms of the

contract are unambiguous.” Monaco v. Bear Stearns Residential Mortgage Corp., 554

F. Supp. 2d 1034, 1040 (C.D. Cal. 2008). “A contract provision will be considered

ambiguous when it is capable of two or more reasonable interpretations.” Id. (citing Bay

Cities Paving & Grading, Inc. V. Lawyers’ Mut. Ins. Co., 5 Cal. 4th 854, 867 (1993). 

“[T]he language of a contract should be interpreted most strongly against the party

who caused the uncertainty to exist.” Cal. Civ. Code § 1654.

1. Roche has properly plead a breach of written contract. 

BANA first argues that Roche’s failure to timely pay his property taxes triggered

a series of BANA actions that were all authorized by the Loan. (MTD 4.) These

actions included (1) creating and funding an escrow account, (2) increasing Roche’s

monthly payments to payoff this escrow account, and (3) charging late fees in light of

Roche’s partial payments on his newly increased monthly payments. (Id.) According

to BANA, because these actions were authorized by the Loan, Roche cannot claim that

they constitute a breach of contract. (Id.) BANA’s argument is flawed, as it

oversimplifies Roche’s claims. 

There is no debate that Loan “explicitly authorizes BANA to create and fund an

escrow account subsequent to a borrower’s failure to pay insurance or taxes.” (MTD

4.) Indeed, the parties do not dispute that Roche’s admitted failure to timely pay

property taxes triggered this escrow account clause. (Compl. ¶ 15; MTD 4.) However,

Roche’s breach of written contract claims are more numerous than BANA suggests. 

Apart from the challenged actions listed above, Roche also claims that BANA refused

- 6 - 12-CV-2002W

Case 3:12-cv-02002-W-WVG Document 10 Filed 07/09/13 Page 6 of 16
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 accept payments, failed to credit payments, and assessed late charges and penalties

in violation of the Loan. (Compl. ¶¶ 41, 45.) Such actions are not authorized by the

Loan and therefore constitute properly pled breaches of contract. 

In its reply, BANA argues that “plaintiff’s checks were credited to his account,

but the checks were insufficient to satisfy the principal and interest due under the note

in addition to the escrow allocation, and thus BANA charged plaintiff late fees for the

amount due and unpaid.” (Reply 2.) BANA points to the payment history Roche

attached to his complaint to support this theory. (Id.) However, the payment history

is unclear as presented, and BANA has failed to clarify it in any meaningful way.

For example, Roche deposited two $4,500 checks on August 16, 2011. (Tab 2

[Doc. 1-2] 61, 62. ) Yet, only $4,500 was credited to the account on August 16, 2011. 4

(Id. 59, 60.) Even more confusing is the fact that the $4,500 deposit was split into a

“regular payment” of $4,183.15 and a “misc. posting” of $316.85. (Id. 59.) Then,

curiously, less than a month later that“misc. posting” of $316.85 was removed from the

account. (Id.) A similar split occurred when Roche deposited $11,221.30 on

September 21, 2011. (Id. 60.) The reasons behind these splits is unclear from the

account statement and BANA has provided no explanation as to why these splits

occurred. Due to this lack of clarity, the Court is unwilling to accept BANA’s claims

that Roche’s “checks were credited to his account” but were “insufficient” to avoid late

fees. 

2. Roche has properly plead damages.

BANA next argues that Plaintiff has failed to properly allege damages because

his monthly payment increases, late fees, and negatively impacted credit scores were all

due to his failures under the Loan. (MTD 4.) In essence, BANA suggests that because

Roche has failed to plead a breach of the Loan, he has failed to plead damages.

The exhibit is not consecutively paginated, so the Court refers to the page numbers

4

assigned by the Court’s electronic filing system.

- 7 - 12-CV-2002W

Case 3:12-cv-02002-W-WVG Document 10 Filed 07/09/13 Page 7 of 16
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

However, as explained above, BANA has properly plead numerous breaches of the

Loan. 

In light of the foregoing, BANA’s motion to dismiss Roche’s written contract

claims is DENIED. 

B. Breach of Oral Contract

BANA moves to dismiss Roche’s breach of oral contract claim as well. It claims

that the alleged modification is barred by the statute of frauds. (MTD 4.) Roche claims

that the alleged oral modification falls within an exception to the statute of frauds. 

(Opp’n 7.)

Under California law, “(b) [a] contract in writing may be modified by an oral

agreement to the extent that the oral agreement is executed by the parties.” Cal. Civ.

Code § 1698(b). “If there exists sufficient consideration for an oral modification

agreement, then full performance by the promisee alone would suffice to render the

agreement ‘executed’ within the meaning of section 1698.” Raedeke v. Gibraltar Sav.

& Loan Assn., 10 Cal. 3d 665, 698 (1974). 

Here, Roche’s allegations satisfy the requirements of Cal. Civ. Code § 1698(b). 

First, Roche has alleged sufficient consideration: he claims that the oral modification

was reached after “Mr. Roche expended significant time and energy to negotiate and

arrange for payment of the requested amount in full performance of his obligations.” 

(Compl. ¶ 51); see Ansanelli v. JP Morgan Chase Bank, N.A., C 10-3892 WHA, 2011

WL 1134451, at *4 (N.D. Cal. March 28, 2011). Second, he has alleged an oral

modification of the Loan. (Compl. ¶ 49.) Third, he has alleged that he fully performed

his obligations under the agreement. (Compl. ¶¶ 50-52.) 

Both parties attempt to apply Cal. Civ. Code § 1698(c) to the case at bar. 

However, application of subdivision (c) is unnecessary because the oral modification,

as plead, satisfies § 1698(b). “The introductory clause of subdivision (c) recognizes that

the parties may prevent enforcement of executory oral modifications by providing in the

written contract that it may only be modified in writing.” Cal. Civ. Code § 1698, law

- 8 - 12-CV-2002W

Case 3:12-cv-02002-W-WVG Document 10 Filed 07/09/13 Page 8 of 16
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

revision commission comments. However, the law revision commission explained that

subdivision (c) is inapplicable to an alleged oral modification if it were otherwise valid

under subdivision (b). As explained above, Roche has plead a valid oral modification

under subdivision (b), and thus subdivision (c) is irrelevant here. 

In light of the foregoing, BANA’s motion to dismiss Roche’s oral modification

claims is DENIED. 

C. Rosenthal Fair Debt Collection Practices Act

BANA also moves to dismiss Roche’s claims under the RFDCPA. It argues that

it is not a “debt collector” as defined by the RFDCPA. (MTD 5.) It further argues that

Plaintiff’s mortgage is not a “debt” under the RFDCPA. (Id. 6.)

First, Defendant is a “debt collector” under the RFDCPA. The definition of the

“debt collector” under the RFDCPA includes any person who, “in the ordinary course

of business, regularly, on behalf of himself or herself or others, engages in debt

collection.” See Cal. Civ. Code § 1788.2(c). In this case, because Defendant is

collecting a debt that it originated, and because it does so “in the ordinary course of

business,” it is a “debt collector” under the RFDCPA. See id.

BANA cites a number of cases for the proposition that BANA, as a loan servicer,

is not considered a “debt collector” under the RFDCPA. First and foremost, this

argument directly contradicts the language of the RFDCPA. Nowhere does the

RFDCPA indicate that“loan servicers” are outside the purview of the statute. Second,

the Court disagrees with the reasoning of the courts in the cases upon which Defendant

relies. 

A review of BANA’s authority reveals that each case bases its conclusion that

loan servicers are not governed by the RFDCPA on the faulty premise that the Fair

Debt Collection Practices Act (“FDCPA”), which explicitly excludes loan servicers

from its purview, is co-extensive with the RFDCPA. Lal v. Am. Home Servicing, Inc.,

680 F. Supp. 2d 1218, 1224 (E.D. Cal. 2010); Nool v. Home Servicing, 653 F. Supp. 2d

1047, 1052-53 (E.D. Cal. 2009); Olivier v. NDEX West, LLC, No. 9-cv-0099-OWW-

- 9 - 12-CV-2002W

Case 3:12-cv-02002-W-WVG Document 10 Filed 07/09/13 Page 9 of 16
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

GSA, 2009 WL 2486314, at *3 (E.D. Cal. Aug. 10, 2009); Cordova v. America’s

Servicing Co., No. C-08-05728 SI, 2009 WL 1814592, at *2, (N.D. Cal. June 24, 2009). 

However, this is not the case. 

Under the FDCPA, the term “debt collector” does not include:

[A]ny person collecting or attempting to collect any debt owed or due or

asserted to be owed or due another to the extent such activity ... (ii)

concerns a debt which was originated by such person [or] (iii) concerns a

debt which was not in default at the time it was obtained by such person.

15 U.S.C. § 1692a(6)(G). “The legislative history of section § 1692a(6) indicates

conclusively that a debt collector does notinclude the consumer’s creditors, a mortgage

servicing company, or an assignee of a debt, as long as the debt was not in default at the

time it was assigned.” Perry v. Stewart Title Co., 756 F.2d 1197, 1208 (5th Cir. 1985). 

The RFDCPA includes no such exclusion for loan servicers. Specifically, the RFDCPA

does not exclude banks which collect debts owed on debts which they originated. Thus,

this Court concludes that the “debt collector” in the state statute is broader than the

definition in the federal statute, and includes BANA in this case. See Cal. Civ. Code

§ 1788.2(c).

Second, Roche’s mortgage is a “debt” as defined by the RFDCPA. The definition

of “debt” under the RFDCPA is “money, property or their equivalent which is due or

owing or alleged to be due or owing from a natural person to another person.” Cal. Civ.

Code § 1788.2(d). Nothing in the plain meaning of this statutory definition suggests

that a mortgage, which is money owing to a person (defined as “a natural person,

partnership, corporation, limited liability company, trust, estate, cooperative,

association or other similar entity”), is outside the purview of the RFDCPA. Id. at

§1788(g).

In addition, the cases cited by BANA are inapplicable as they all stand for the

proposition that foreclosure on a mortgage is not “debt collection” and a foreclosed

mortgage is not “debt” under the RFDCPA. Pittman v. Barclays Capital Real Estate,

Inc., No. 09-CV-241-JM (AJB), 2009 WL 1108889, at *3 (S.D. Cal. April 24,

- 10 - 12-CV-2002W

Case 3:12-cv-02002-W-WVG Document 10 Filed 07/09/13 Page 10 of 16
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

2009)(holding that “foreclosing on a deed of trust does not invoke the statutory

protections” of the RFDCPA); Izenberg v. ETS Services, LLC, 589 F. Supp. 2d 1193,

1199 (C.D. Cal. 2008)(holding that “foreclosure does not constitute debt collection

under the RFDCPA”); Keen v. Am. Home Mortgage Servicing, 664 F. Supp. 2d 1086, 

1095 (E.D. Cal. 2009). Because the subject loan has not been foreclosed upon, this

authority is inapposite. 

In light of the foregoing, BANA’s motion to dismiss Roche’s RFDCPA claims is

DENIED. 

D. California Consumer Credit Reporting Agencies Act

BANA next moves to dismiss Roche’s claims under the California Consumer

Credit Reporting Agencies Act (“CCCRAA”). It argues that Roche has not alleged,

and cannot allege “a falsity” as required under the CCCRAA. (MTD 6.)

As an initial matter, a review of the CCCRAA section at issue reveals no

requirement that a putative plaintiff allege a “falsity.” See § 1785.25(a). Instead, §

1785.25(a) statesthat “[a] person shall notfurnish information on a specific transaction

or experience to any consumer credit reporting agency if the person knows or should

know the information is incomplete orinaccurate.” Roche alleges that BANA has done

precisely what the statute forbids. Specifically, Roche alleges that BANA, “[o]n

multiple occasions . . . furnished information to third party credit bureaus it knew or

should have known was incomplete orinaccurate regarding specific transactions and/or

experiences [BANA] had with Mr. Roche in relation to Mr. Roche’s Loan with

[BANA].” (Compl. ¶ 115.) These allegations are sufficient to survive a motion to

dismiss.

BANA’s argument that it did not report incomplete or inaccurate information

to credit bureaus because the Loan authorized BANA to advance funds for taxes,

demand repayment from Roche, and assess late fees is incomplete. (MTD 7.) While

it is true that such activity was authorized by the Loan, Roche also claims that BANA

refused to accept payments, failed to credit payments, and assessed late charges and

- 11 - 12-CV-2002W

Case 3:12-cv-02002-W-WVG Document 10 Filed 07/09/13 Page 11 of 16
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

penalties in violation of the Loan. (Compl. ¶ 45.) Moreover, Roche has alleged that

BANA should not have reported that he was delinquent on his mortgage payments

because “Mr. Roche took all steps requested by [BANA] to bring his Loan current and

that [BANA] continually failed to correct its own errors to Mr. Roche’s Loan account,

and reported Mr. Roche as delinquent . . . because of [BANA]’s own errors after being

informed” of these errors. (Compl. ¶ 92.) These allegations directly contradict BANA’s

claim that Roche’s delinquencies were all his own fault and instead suggested that

BANA is partly to blame. (See, e.g., MTD 6-7.) 

In light of the foregoing, BANA’s motion to dismiss Roche’s CCCRAA claims

is DENIED. 

E. Negligent Misrepresentation and Fraud

BANA also moves to dismiss Roche’s fifth and sixth causes of action for negligent

misrepresentation and fraud. According to BANA, Roche has failed to allege

inducement, reliance, or damages. (MTD 7.) BANA also argues that Roche’s

negligent misrepresentation claims fail because it owes no duty of care to Roche. (Id.

8.)

A claim for fraud or intentional misrepresentation requires (1) a representation,

(2) falsity, (3) knowledge of falsity, (4) intent to deceive, and (5) reliance and resulting

damages. Cooper v. Equity Gen. Ins. Co., 219 Cal. App. 3d 1252, 1262 (1990). A

claim for negligent misrepresentation is identical except plaintiff need not show

defendant knew its representations were false, only that defendant lacked reasonable

grounds to believe the representation was true. Neilson v. Union Bank of California,

N.A., 290 F. Supp. 2d 1101, 1141 (C.D. Cal. 2003). 

First, BANA argues that Roche “did not rely on the alleged misrepresentations

regarding his monthly loan payment because he paid more than he was allegedly told

he was owed.” (MTD 7.) However, a closer examination of the payment history

contradicts this claim. Roche alleged that on September 6, 2011, BANA told him that

a payment of $11,291.00 would return him to status quo on his mortgage payments. 

- 12 - 12-CV-2002W

Case 3:12-cv-02002-W-WVG Document 10 Filed 07/09/13 Page 12 of 16
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

(Compl. ¶66.) Later that month, he appears to have deposited $11,291.30. (Tab 2 60.) 

Although this deposit is 30 cents higher than allegedly owed, it seems that Roche was

attempting to comply with the alleged representations BANA made on the September

6 phone call. Therefore, the Court finds this argument unpersuasive.

Second, BANA argues that Roche “cannot allege detrimental reliance on any

alleged statement regarding removal of the escrow account” because he was “always

obligated tomakemonthly payments regardless of the existence of the escrowaccount.”

(MTD 8.) This argument is misguided; although Roche was obligated to make monthly

payments, he was not obligated to make monthly payments that exceed what BANA

was due under the Loan. Again, BANA oversimplifies Roche’s claims by assuming that

they only attack the creation of the escrowaccount when in reality they attack BANA’s

alleged refusal to accept payments, failure to credit payments, and assessment of late

charges and penalties in violation of the Loan. 

Third, BANA argues that Roche cannot allege reliance on BANA’s alleged

statement that “all negative reports to the credit bureaus would be corrected if Mr.

Roche made the [October 2011 and November 2011] payments” because he was always

obligated to make monthly loan payments and repay the property taxes. (Compl. ¶ 71;

MTD 8.) However, as explained above, Roche was never obligated to pay BANA

overages caused by BANA’s alleged failures.

BANA next maintains that it cannot be liable for negligent misrepresentation

“because it owes plaintiff no duty of care” because the loan transaction between BANA

and Roche does not exceed the scope of its conventional role as a money lender. 

(MTD 8-9.) Roche states that BANA exceeded its conventional role as lender when

it offered Roche an opportunity to modify the escrow and payment terms of the loan. 

(Compl. ¶ 72.) 

“The rule that a lender does not have a duty to a borrower is only a ‘general rule,’

and only applies to situations where a lender plays its conventional role. Johnson v.

HSBC Bank USA, Nat. Ass’n, No. 11-CV-2091-JM-WVG, 2012 WL 928433, at *4

(S.D. Cal. March 19, 2012). In Johnson, the court found that a lender went beyond its

- 13 - 12-CV-2002W

Case 3:12-cv-02002-W-WVG Document 10 Filed 07/09/13 Page 13 of 16
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

conventional role when it “established a loan modification plan with Plaintiff, made

excessive interest charges and made ‘derogatory credit reports to credit bureaus.’” Id.

Here, Roche has alleged that BANA went beyond its conventional role in a

manner very similar to the defendant in Johnson. First, Roche alleges that BANA

offered him an opportunity to modify the escrow account and payment terms of the

loan. (Compl. ¶ 72.) Second, he alleges that BANA charged excessive unauthorized

interest based on its own errors. (Compl. ¶ 75.) Third, he alleges that BANA made

derogatory credit reports to credit bureaus. (Id.) Contrary to BANA’s argument, this

is precisely “beyond the domain of a usual money lender.” Ansanelli, 2011 WL

1134451, at *7; Johnson, 2012 WL 928433, at *4. Roche’s allegations constitute

“sufficient active participation to create a duty of care to plaintiffs to support a claim

for negligence.” Id. 

In light of the foregoing, BANA’s motion to dismiss Roche’s negligent

misrepresentation and fraud claims is DENIED. 

F. Real Estate Settlement Procedures Act

BANA moves to dismiss Roche’s claims for violations of the Real Estate

Settlement Procedures Act (“RESPA”). BANAargues thatRoche “has not alleged any

damages as a result of the alleged failure to properly respond to the purported QWRs

[“Qualified Written Requests”].” (MTD 9.) BANA also argues that the alleged

damages were caused by Roche’s failure to pay his taxes and loan on time. (MTD 10.) 

Contrary to BANA’s suggestions, the complaint states that due to BANA’s failure to

respond to Roche’s QWRs on at least three separate occasions, Roche suffered damages

including higher monthly payments, unauthorized charges, negative impacts on his

credit, and severe emotional distress. (Compl. ¶¶ 95-105, 108.) These allegations of

damages are sufficient under RESPA at this stage.

In light of the foregoing, BANA’s motion to dismiss Roche’s RESPA claims is

DENIED. 

- 14 - 12-CV-2002W

Case 3:12-cv-02002-W-WVG Document 10 Filed 07/09/13 Page 14 of 16
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

G. Business and Professions Code

BANA next moves to dismiss Plaintiff’s Business & Professions Code § 17200

claim. First, BANA argues that Roche’s claim is “derivative of the many other failed

causes of action in the complaint,” and therefore fails because the entire “complaint is

baseless.” (MTD 10-11.) In essence, BANA is arguing that for the same reasons stated

in its arguments for dismissal of Roche’s other claims, the § 17200 claim should be

dismissed as dependent on those claims. This argument fails as Roche’s other claims

survive BANA’s motion.

Second, BANA again argues that Roche’s claim is deficient because Roche was

obligated to make loan payments and tax payments in a timely matter, and his failure

to do so was the sole cause of his alleged injuries. (MTD 11.) As explained in detail

above, Roche does not dispute that he was obligated to pay his taxes and mortgage in

a timely manner, but instead that BANA breached the Loan in a variety of ways when

Roche was trying to bring his payments back to status quo.

In light of the foregoing, BANA’s motion to dismiss Roche’s § 17200 claim is

DENIED. 

H. Accounting

 Roche asks this Court to perform an accounting to determine the amount of

money he owes BANA. (Compl.¶¶ 60–64.) Under California law, a plaintiff may assert

a claim for accounting if a fiduciary relationship between the plaintiff and defendant

exists, or if “‘the accounts are so complicated that an ordinary legal action demanding

a fixed sum is impracticable.’” Wolf v. Super. Ct., 106 Cal. App. 4th 625, 34–35

(2003); Civic W. Corp. v. Zila Indus. Inc., 66 Cal. App. 3d 1, 14 (1977) (quoting 3

Witkin, Cal. Proc. 2d (1971) Plead, § 674, p. 2300–01).

While Roche’s claim for accounting does not expressly allege a fiduciary

relationship exists between the parties, it does explain that due to “a number of

accounting errors . . . Roche is unable to determine the principal owed on the Loan.” 

(Compl. ¶¶ 60-62.) Not only does Roche claim that he is unable to determine the

- 15 - 12-CV-2002W

Case 3:12-cv-02002-W-WVG Document 10 Filed 07/09/13 Page 15 of 16
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

principal owed on the loan, he also claims that numerous accounting errors committed

by BANA necessitate the accounting. (Id. ¶¶ 62-63.) Moreover, as explained in detail

above, the account history is unclear at best. Accordingly, the Court finds the

allegations in the Complaint sufficient to establish that the account is “complicated”

at this stage of litigation. See Civic W. Corp., 66 Cal. App. 3d at 14. 

BANA’s argument that Roche’s accounting claim does not arise from relevant

actionable claims fails as well, since the Court has not dismissed any of Roche’s claims. 

(MTD 11; Reply 8.) In light of the foregoing, BANA’s motion to dismiss Roche’s

accounting claim is DENIED. 

 

I. Declaratory Relief

Finally, BANA moves to dismiss Roche’s declaratory relief claim. However,

BANA’s argument that Roche’s declaratory relief claim does not arise from “any

potentially valid claim” fails, since the Court has not dismissed any of his claims. (MTD

11.) In light of the foregoing, BANA’s motion to dismiss Roche’s declaratory relief

claim is DENIED. 

IV. CONCLUSION

For the foregoing reasons, the Court DENIES Defendant BANA’s motion [Doc.

6-1]. 

IT IS SO ORDERED.

DATED: July 9, 2013

Hon. Thomas J. Whelan

United States District Judge

- 16 - 12-CV-2002W

Case 3:12-cv-02002-W-WVG Document 10 Filed 07/09/13 Page 16 of 16