Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_18-cv-02520/USCOURTS-casd-3_18-cv-02520-0/pdf.json

Nature of Suit Code: 220
Nature of Suit: Foreclosure
Cause of Action: 28:1332fc Diversity - Foreclosure

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

DEAN RAIKEN; and CHERYL 

RAIKEN,

Plaintiffs,

v.

WELLS FARGO BANK, N.A.; and 

DOES 1 through 25,

Defendants.

Case No.: 3:18-cv-02520-H-BGS

ORDER GRANTING DEFENDANT’S

MOTION TO DISMISS WITH LEAVE 

TO AMEND

[Doc. No. 10]

On December 21, 2019, Defendant Wells Fargo Bank, N.A. filed a motion to 

dismiss Plaintiffs Dean and Cheryl Raiken’s (collectively, “Plaintiffs”) first amended 

complaint. (Doc. No. 10.) On February 5, 2019, Plaintiffs filed their opposition. (Doc. 

No. 12.) Defendant replied on February 11, 2019. (Doc. No. 14.) For the following 

reasons, the Court grants Defendant’s motion to dismiss.

Background

In January 2004, Plaintiffs obtained from Defendant a Home Equity Line of Credit

for their home. (Doc. Nos. 9 ¶ 8; 11, Request for Judicial Notice (“RJN”) Exh. B.)1

 

1 Along with its motion to dismiss, Defendant filed a request for judicial notice. (Doc. No. 11.) The 

Court takes judicial notice of Defendant’s exhibits, pursuant to Federal Rule of Evidence 201(b), as all 

of the documents were either publically recorded or filed in Plaintiffs’ 2012 bankruptcy case. See Lee v. 

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Plaintiffs made payments on the loan until December 2012. (Doc. No. 9 ¶ 9.) In 

December 2012, Plaintiffs filed for bankruptcy. (Id. ¶ 10; RJN Exh. C.) In 2013, 

Plaintiffs emerged from the bankruptcy in 2013 and resumed payments on the loan. (Doc. 

No. 9 ¶ 10.) In November 2013, Defendant informed Plaintiffs that a balloon payment on 

their loan would be due February 20, 2014. (Id. ¶ 11.) Plaintiffs allege that they were 

surprised by the balloon payment. (Id. ¶ 12.)

Plaintiffs were unable to pay the balloon payment. (Id. ¶ 13.) In letters to Plaintiffs, 

Defendant referred to options to keep their home, leading Plaintiffs to contact Defendant 

to request a loan modification in January 2014. (Id. ¶¶ 25, 28.) In April 2014, Plaintiffs 

were informed that they did not meet requirements for the “Principal Forgiveness” 

modification. (Id. ¶ 25.) On July 10, 2014, Plaintiffs were informed by one of 

Defendant’s employees that letters threatening foreclosure and demanding balloon 

payment were automatically generated, and Defendant would not take action as long as 

Plaintiffs were working with a “Home Preservation Specialist.” (Id. ¶ 19.) Thus, 

believing that it would prevent foreclosure, Plaintiffs maintained contact with a “Home 

Preservation Specialist” and continued to make monthly payments. (Id. ¶¶ 17, 20.)

Between August 2014 and July 2017, Plaintiffs made five more requests for 

modifications, which were all denied as incomplete or for failure to meet Defendant’s 

program requirements. (Id. ¶ 25.)

Between November 2013 and October 2017, Plaintiffs reduced their balance from 

$70,000 to $53,158.70. (Id. ¶ 21.) Then, on October 30, 2017, Defendant recorded a 

“Notice of Default” as to Plaintiffs’ loan. (Id. ¶ 30; RJN Exh. F.) After the notice of 

default, Defendant still sent Plaintiffs another statement of account, to which Plaintiffs 

responded by sending a payment that Defendant accepted, but then refunded. (Doc. No. 9

¶¶ 32–33.) In January 2018, Plaintiffs spoke to and wrote emails to two of Defendant’s 

employees regarding their situation. (Id. ¶ 37.) Defendant proceeded with foreclosure. 

 

City of Los Angeles, 250 F.3d 668, 688–89 (9th Cir. 2001) (“[U]nder Fed. R. Evid. 201, a court may 

take judicial notice of ‘matters of public record.’”).

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(Id. ¶ 40.) Plaintiffs then sold their home in early 2018. (Id. ¶ 41; RJN Exh. G.) 

Accordingly, Plaintiffs commenced this action in San Diego Superior Court on 

September 27, 2018. (Doc. No. 1 at 8.) Defendant then removed to this Court based on 

diversity jurisdiction on November 2, 2018. (Id. at 1.) Plaintiffs filed the first amended 

complaint on December 7, 2018. (Doc. No. 9.) Plaintiffs allege claims for: (1) slander of 

title; (2) violations of the Real Estate Settlement Procedures Act (“RESPA”); (3) breach 

of contract; (4) fraud; (5) intentional infliction of emotional distress; (6) violations of 

California’s Unfair Competition Law, Business and Professions Code §§ 17200, et seq. 

(“UCL”); (7) violations of California’s False Advertising Law, Business and Professions 

Code §§ 17500, et seq. (“FAL”); and (8) financial elder abuse. (Id.)

Discussion

I. Legal Standard for Rule 12(b)(6)

A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) tests the legal 

sufficiency of the pleadings and allows a court to dismiss a complaint if the plaintiff has 

failed to state a claim upon which relief can be granted. See Conservation Force v. 

Salazar, 646 F.3d 1240, 1241 (9th Cir. 2011). The Federal Rule of Civil Procedure 

8(a)(2)’s plausibility standard governs a plaintiff’s claims. The Supreme Court has 

explained Rule 8(a)(2) as follows:

Under Federal Rule of Civil Procedure 8(a)(2), a pleading must contain a 

short and plain statement of the claim showing that the pleader is entitled to relief. As the Court held in [Bell Atlantic Corp. v. Twombly, 550 U.S. 544 

(2007)], the pleading standard Rule 8 announces does not require detailed factual allegations, but it demands more than an unadorned, the-defendant- unlawfully-harmed-me accusation. 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, 556 U.S. 662, 677–78 (2009) (citations, quotation marks, and brackets 

omitted).

In reviewing a Rule 12(b)(6) motion to dismiss, “[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, 556 U.S. at 678. 

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“Factual allegations must be enough to raise a right to relief above the speculative level.”

Twombly, 550 U.S. at 555 (citation omitted). In addition, a court need not accept legal 

conclusions as true. Iqbal, 556 U.S. at 678. Further, it is improper for a court to assume 

that the plaintiff “can prove facts which it has not alleged or that the defendants have 

violated the . . . laws in ways that have not been alleged.” Assoc. Gen. Contractors of 

Cal., Inc. v. Cal. State Council of Carpenters, 459 U.S. 519, 526 (1983). Finally, a court 

may consider documents incorporated into the complaint by reference and items that are 

proper subjects of judicial notice. See Coto Settlement, 593 F.3d at 1038.

If the court dismisses a complaint for failure to state a claim, it must then 

determine whether to grant leave to amend. See Doe v. United States, 58 F.3d 494, 497 

(9th Cir. 1995). “A district court may deny a plaintiff leave to amend if it determines that 

allegation of other facts consistent with the challenged pleading could not possibly cure 

the deficiency, or if the plaintiff had several opportunities to amend its complaint and 

repeatedly failed to cure deficiencies.” Telesaurus VPC, LLC v. Power, 623 F.3d 998, 

1003 (9th Cir. 2010) (internal quotation marks and citations omitted).

II. Analysis

Plaintiffs allege claims for: (1) slander of title; (2) violations of RESPA; (3) breach 

of contract; (4) fraud; (5) intentional infliction of emotional distress; (6) financial elder 

abuse; and (7) violations of California’s UCL and FAL. (Doc. No. 9.) Defendant argues 

that Plaintiffs’ complaint should be dismissed because each of Plaintiffs claims fails to 

meet the pleading requirements. (Doc. No. 10-1.) After considering the parties’ 

arguments, the Court concludes that Plaintiffs have failed to state a claim under Rule 

12(b)(6) and therefore Plaintiffs’ complaint should be dismissed.

A. Slander of Title

Plaintiffs’ claim for slander of title alleges that Defendant’s recording of the notice 

of default and initiation of foreclosure proceedings were false and malicious. (Doc. No. 9 

¶¶ 55–64.) The elements of a cause of action for slander of title are: “(1) a publication, 

(2) which is without privilege or justification, (3) which is false, and (4) which causes 

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direct and immediate pecuniary loss.” Manhattan Loft, LLC v. Mercury Liquors, Inc., 

173 Cal. App. 4th 1040, 1050 (2009). A privilege, either absolute or qualified, is a 

defense to a charge of slander of title. Smith v. Commonwealth Land Title Ins. Co., 177 

Cal. App. 3d 625, 630 (1986). Under California law, publications made in judicial or 

quasi-judicial proceedings are privileged. See Cal. Civ. Code § 47. Specifically, 

nonjudicial foreclosure documents are subject to this privilege. See id. § 2924(d); 

Kachlon v. Markowitz, 168 Cal. App. 4th 316, 333–34 (2008). However, this privilege is 

not absolute, and a defendant may still be liable for slander of title if he acted with 

malice. See Kachlon, 168 Cal. App. 4th at 343–44. Malice requires “that the publication 

was motivated by hatred or ill will towards the plaintiff or by a showing that the 

defendant lacked reasonable ground for belief in the truth of the publication and therefore 

acted in reckless disregard of the plaintiff’s rights.” Id. at 336.

Here, Plaintiffs base their slander of title claim on Defendant’s recording of notice 

of default. (Doc. No. 9 ¶¶ 55–64.) However, Plaintiffs’ claim fails because they have 

failed to show that the notice of default was false. The loan contract balloon payment 

provision provides that “[t]he maturity date of the Secured Debt is 2/20/2014 . . . .” (RJN 

Exh. B ¶ 3.) The loan contract also provides as remedies for default: “At the option of 

Lender, all or any part of the agreed fees and charges, accrued interest and principal shall 

become immediately due and payable, after giving notice if required by law, upon the 

occurrence of a default or anytime thereafter.” (Id. ¶ 15.) The contract defines default as: 

“Grantor will be in default if any party obligated on the Secured Debt fails to make 

payment when due.” (Id. ¶ 14.) Defendant’s notice of default is consistent with the facts 

alleged in Plaintiffs’ complaint and the loan contract. In November 2013, Defendant

informed Plaintiffs that a balloon payment on their loan would be due on February 20, 

2014. (Doc. No. 9 ¶¶ 11–12.) The notice of default also states that the balance of 

principal and interest became due on February 20, 2014, (RJN Exh. G at 3.), the same 

date provided in loan contract, (RJN Exh. B ¶ 3). Plaintiffs do not dispute that they did 

not pay the amount due by this deadline, (Doc. No. 9 ¶ 13), and Plaintiffs therefore were 

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in default under the terms of the loan contract, (RJN Exh. B ¶¶ 3, 14). The notice of 

default states that as of October 27, 2017, Plaintiffs owed $53,576.70, (RJN Exh. G at 1), 

which is the same as what is alleged in Plaintiffs’ complaint, (Doc. No. 9 ¶ 21). 

Therefore, Plaintiffs were in default, and Defendant acted within its rights under the loan 

contract in recording the notice of default and instituting foreclosure proceedings.

Plaintiffs contend that their loan contract was modified when an employee of

Defendant told them to disregard letters threatening foreclosure and demanding final 

payment because such letters are generated automatically, and that Defendant would not 

take action as long as Plaintiffs were working with a Home Preservation Specialist. (Id.

¶ 19.) This led Plaintiffs to believe “as long as they kept making payments and working 

with the ‘Home Preservation Specialist’, Wells Fargo would not attempt to avail itself of 

the surprise ‘balloon payment’ provision of the loan agreement . . . .” (Id. ¶ 20.) But, such 

oral communications are insufficient to modify the parties’ loan agreement. Under the 

statute of frauds, an agreement “for the sale of real property, or of an interest therein” 

must be in writing signed by the party to be charged in order to be valid. Cal. Civ. Code. 

§ 1624(a)(3). Further, “[a] mortgage or deed of trust also comes within the statute of 

frauds.” Secrest v. Sec. Nat’l Mortg. Loan Tr. 2002-2, 167 Cal. App. 4th 544, 552 (2008), 

as modified on denial of reh’g (Nov. 3, 2008). An agreement modifying a contract is 

subject to the statute of frauds if the underlying contract is governed by the statute of 

frauds. Id. at 553 (citing Cal. Civ. Code § 1698(a)). In addition, the loan contract itself 

prohibits amendment by oral agreement. (RJN Exh. B ¶ 23.)

Plaintiffs argue that the statute of frauds does not apply when the lender accepts 

partial performance and the borrower makes a serious change in position in reliance on an 

oral contract. (Doc. No. 12 at 9–12.) Plaintiffs allege that they performed by continuing 

to make regular payments after the balloon payment became due and by refraining from 

suing Defendant for “loan origination fraud after they discovered the balloon payment 

term.” (Id. at 9.) In support of this, Plaintiffs rely on Secrest; Johnson v. Nationstar 

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Mortg., LLC, No. 3:17-CV-03676-WHO, 2018 WL 807370 (N.D. Cal. Feb. 9, 2018); and 

Chavez v. Indymac Mortg. Servs., 219 Cal. App. 4th 1052, 1055 (2013). 

However, Plaintiffs’ allegations are insufficient to exempt any modification to the 

loan agreement from complying with the statute of frauds. Secrest states that “[t]he 

payment of money is not sufficient part performance to take an oral agreement out of the 

statute of frauds . . . .” 167 Cal. App. 4th at 555 (citations omitted). Further, “forbearance 

agreements altering a mortgage are covered by the statute of frauds.” Newgent v. Wells 

Fargo Bank, N.A., No. 09CV1525 WQH, 2010 WL 761236, at *5 (S.D. Cal. Mar. 2, 

2010) (citing Secrest, 167 Cal. App. 4th at 553). Both Johnson and Chavez are unlike the 

present case because the plaintiffs in each of those cases alleged the existence of a written 

document confirming oral assurances. In Johnson, the court concluded that the defendant 

could not assert a statute of frauds defense where the plaintiff received an oral assurance 

of an adjusted pay schedule and alleged “the existence of a letter from Nationstar 

documenting some terms of the offer . . . .” 2018 WL 807370 at *4. The court there 

clarified that the statute of frauds does not require a written contract, rather, a note or 

memorandum subscribed by the party to be charged is adequate “if it identifies the 

subject of the parties’ agreement, shows that they made a contract, and states the essential 

contract terms with reasonable certainty.” Id. (citing Sterling v. Taylor, 40 Cal. 4th 757, 

765–66 (2007)). In Chavez the defendant was estopped from asserting a statute of frauds 

defense where the defendant sent the plaintiff a loan modification agreement on which 

the plaintiff detrimentally relied, although the agreement did not meet the statute of 

frauds because the plaintiff executed the document, but the defendant did not. 219 Cal. 

App. 4th at 1057–1062.

Here, Plaintiffs do not allege the existence of any such memorandum or other 

written correspondence from Defendant stating the essential contract terms with 

reasonable certainty. Rather, Plaintiffs merely allege that Defendant’s employee told 

them that Defendant would not foreclosure as long as Plaintiffs worked with a Home 

Preservation Specialist. (Doc. No. 9 ¶ 9.) Plaintiffs do not allege that they received any 

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document memorializing or corroborating the employee’s assurances, nor do they even 

allege the existence of any such document. And again, the loan contract itself prohibits 

amendment by oral agreement. (RJN Exh. B ¶ 23.)

Plaintiffs further argue that Defendant’s written correspondences modified the 

contract and meet the statute of frauds. (Doc. No. 12 at 12–13.) However, such 

communications, which consist of statements of account and information on Defendant’s 

loan modification programs, in no way modified their existing contract. Such 

communications did not identify “the subject of the parties’ agreement, show[] that they 

made a contract, and state[] the essential contract terms with reasonable certainty.” 

Johnson, 2018 WL 807370 at *4 (citing Sterling, 40 Cal. 4th at 766). The statements of 

account merely showed Plaintiff’s outstanding balance and did not absolve Plaintiffs of 

their responsibility to pay the balloon payment, which they failed to do by the due date, 

subsequently causing their default. Defendant’s letters advertising their loan modification

were not guarantees of loan modification, but rather invitations to apply for the programs. 

Plaintiffs in fact followed up by applying for such loan modification programs, but were 

ultimately denied by Defendant. (Doc. No. 9 ¶ 25.) Accordingly, the Court concludes that 

Plaintiffs have failed to plead a claim for slander of title. 

B. RESPA Violations

Plaintiffs allege that Defendant violated 12 U.S.C. § 2605(e)(2)(A)–(B) of RESPA

by failing to reasonably investigate and adequately respond to Plaintiffs’ inquiries (Doc. 

No. 9 ¶¶ 65–74.) Under RESPA, the servicer of a loan has an obligation to respond to 

borrower inquiries. 12 U.S.C. § 2605(e). In the relevant part, RESPA states:

If any servicer of a federally related mortgage loan receives a qualified 

written request from the borrower (or an agent of the borrower) for 

information relating to the servicing of such loan, the servicer shall provide a 

written response acknowledging receipt of the correspondence within 5 days 

(excluding legal public holidays, Saturdays, and Sundays) unless the action 

requested is taken within such period.

Id. § 2605(e)(1)(A). “[A] borrower’s written inquiry requires a response as long as it (1) 

reasonably identifies the borrower's name and account, (2) either states the borrower's 

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“reasons for the belief . . . that the account is in error” or “provides sufficient detail to the 

servicer regarding other information sought by the borrower,” and (3) seeks “information 

relating to the servicing of the loan.” Medrano v. Flagstar Bank, FSB, 704 F.3d 661, 666 

(9th Cir. 2012) (quoting 12 U.S.C. § 2605(e)(1)(A)–(B)). Within 30 days of receipt of a 

qualified written request, the servicer must: (1) make appropriate corrections with written 

notification to the borrower; (2) after investigation, provide the borrower with a written 

explanation including the statement of reasons for which the servicer believes the account 

is correct and contact information for assistance; or (3) after investigation, provide the 

borrower with a written explanation explaining why the information requested is 

unavailable and contact information for assistance. Id. § 2605(e)(2). For RESPA 

violations, 12 U.S.C. § 2605(f) provides that “[w]hoever fails to comply with any 

provision of this section shall be liable to the borrower for each such failure . . . .” 12 

U.S.C. § 2605(f)(1).

“Numerous courts have read Section 2605 as requiring a showing of pecuniary 

damages to state a claim.” Molina v. Wash. Mut. Bank, No. 09cv894, 2010 WL 431439, 

at *7 (S.D. Cal. Jan. 29, 2010) (collecting cases); see also Eronini v. JP Morgan Chase 

Bank NA, No. 08–55929, 2010 WL 737841, at *1 (9th Cir. Mar. 3, 2010) (“The district 

court properly dismissed the action because Eronini suffered no damages as a result of 

the alleged RESPA violation.”), Copeland v. Lehman Bros. Bank, FSB, No. 09cv1774, 

2011 WL 9503, at *3–4 (S.D. Cal. Jan. 3, 2011), Espinoza v. Reconstruct Co., N.A ., No. 

09cv1687, 2010 WL 2775753, at *4 (S.D. Cal. Jul. 13, 2010). “This pleading requirement 

has the effect of limiting the cause of action to circumstances in which plaintiff can show 

that a failure to respond or give notice has caused them actual harm.” Shepherd v. Am. 

Home Mortg. Servs., Inc., No. 09–1916, 2009 WL 4505925, at *3 (E.D. Cal. Nov. 20, 

2009) (citation omitted). Courts “have interpreted this requirement liberally.” Yulaeva v. 

Greenpoint Mortg. Funding, Inc., No. 09–1504, 2009 WL 2880393, at *15 (E.D. Cal. 

Sept. 9, 2009).

/ / /

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After considering the parties arguments, the Court concludes that Plaintiffs have 

failed to state a claim under RESPA. First, Plaintiffs allege a violation under 12 U.S.C. § 

2605(e)(2)(B) for failure to reasonably investigate in response to Plaintiffs’ inquiries. 

(Doc. No. 9 ¶¶ 68–69.) Plaintiffs allege that Defendant “failed to reasonably evaluate the 

Raikens for a loan modification.” (Doc. No. 9 ¶ 70.) However, this is not a valid claim 

under RESPA. Plaintiffs allege that they applied for a home loan modification six times. 

(Id. ¶ 25.) Plaintiffs allege that each of these applications was denied either as incomplete 

or for failure to meet the program requirements. (Id.) Based on the complaint, Defendant 

provided Plaintiffs with the reasoning for the denials. (Id.) Plaintiffs here had no right to 

a loan modification, either under the loan contract or by law. See Mabry v. Superior 

Court, 185 Cal. App. 4th 208, 223 (2010) (California Civil Code § 2923.6 does not 

require lenders to provide loan modifications, but instead “merely expresses the hope that 

lenders will offer loan modifications on certain terms.”). The Court is not in a position to 

evaluate Defendant’s underwriting decisions, but rather, must evaluate the sufficiency of 

Plaintiffs’ RESPA claims with regards to Defendant’s responses to qualified written 

requests.

Plaintiffs allege two instances in which Cheryl Raiken provided written 

correspondence to Defendant, which were both via email to Defendant’s employees. (Id.

¶¶ 37–39.) The emails, dated January 18 and 25, 2018, both state: “I hereby request you 

to provide me with the following documents as part of your inquiry into my HELOC

Loan [number] with Wells Fargo. As per our conversations, I understand you are doing 

research into my complaints, which include improper actions and servicing of the loan. I 

request that Wells Fargo halt the action of foreclosure during this time of review.” (Id.

¶¶ 37–39.) In these emails, Plaintiffs requested documents and that Defendant halt 

foreclosure proceedings. (Id.) However, Plaintiffs fail to allege whether Defendant 

responded to these emails and the extent of any such response, leaving the Court unable 

to analyze the sufficiency of any response. Plaintiffs only state that “[d]espite the 

Raikens’ repeated requests for documents and complaints that Wells Fargo was 

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erroneously foreclosing on their home, Wells Fargo pressed ahead with the foreclosure.” 

(Id. ¶ 40.) However, allegations that Defendant refused to halt foreclosure proceedings 

are insufficient to support a RESPA claim, especially considering that Defendant was 

acting within its rights under the loan contract. Further, Plaintiffs allege that if Defendant 

had reasonably investigated, it would “have discovered the underlying loan origination 

fraud.” (Id. ¶ 69.) However, the Ninth Circuit has held that “letters challenging only a 

loan’s validity or its terms are not qualified written requests that give rise to a duty to 

respond under § 2605(e).” Medrano, 704 F. 3d at 667. 

Second, Plaintiffs allege a violation under 12 U.S.C. § 2605(e)(2)(A) for 

Defendant’s failure to correct errors on Plaintiffs’ account. (Doc. No. 9 ¶ 71.) This 

section requires that following a borrower’s qualified written request, the servicer must 

make appropriate corrections and provide the borrower written notification of the 

corrections. 12 U.S.C. § 2605(e)(2)(A). But, Defendant was not in error—in recording 

the notice of default and beginning foreclosure proceedings, Defendant was acting within 

its rights under the loan contract because Plaintiffs were in default for failure to pay the 

balloon payment. Thus, there was no error for Defendant to correct. Accordingly, the 

Court concludes that Plaintiffs’ claim for RESPA violations should be dismissed.

C. Breach of Contract

Plaintiffs allege that Defendant breached an implied contract when it recorded the 

notice of default. (Doc. No. 9 ¶¶ 75–84.) Under California law, the elements of a claim 

for breach of contract are: (1) the existence of a contract, (2) plaintiff’s performance or 

excuse for nonperformance, (3) defendant’s breach, and (4) resulting damages to the 

plaintiff. Oasis W. Realty, LLC v. Goldman, 51 Cal. 4th 811, 821 (2011). “The essential 

elements of a contract are: [1] parties capable of contracting; [2] the parties’ consent; [3] 

a lawful object; and [4] sufficient cause or consideration.” Lopez v. Charles Schwab & 

Co., 118 Cal. App. 4th 1224, 1230 (2004) (citing Cal. Civ. Code § 1550). Further, “[a]n 

essential element of any contract is the consent of the parties, or mutual assent.” Donovan 

v. RRL Corp., 26 Cal. 4th 261, 270 (2001). “A court may resolve contractual claims on a 

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motion to dismiss if the terms of the contract are unambiguous.” Alta Devices, Inc. v. LG 

Elecs., Inc., 343 F. Supp. 3d 868, 878–79 (N.D. Cal. 2018) (citing Bedrosian v. Tenet 

Healthcare Corp., 208 F.3d 220 (9th Cir. 2000)).

Here, Plaintiffs have failed to demonstrate any contractual breach by Defendant. 

As with Plaintiffs’ claim for slander of title, Plaintiffs’ breach of contract claim fails 

because Defendant’s action were consistent with its rights under the loan contract. 

Alleged oral agreements to modify the contract are not enforceable because modification 

to the loan contract must comport with the statute of frauds. See Secrest, 167 Cal. App. 

4th at 552–53. Plaintiffs argue that the contract was implicitly modified because 

Plaintiffs’ partially performed or alternatively, based on written correspondence that 

Plaintiffs received from Defendant. (Doc. No. 12 at 8–13.) Plaintiffs’ continued payments 

following their failure to pay the balloon payment in reliance on Defendant’s employee’s 

statements did not override the statute of frauds because Plaintiffs do not allege that they 

received any memorandum stating the essential contract terms with reasonable certainty.

See Johnson, 2018 WL 807370 at *4. Additionally, written communications from 

Defendant in the form of account statements and letters inviting Plaintiffs to apply for 

Defendant’s home preservation programs in no way modified the parties’ existing 

contract. Finally, the loan contract itself prohibits amendment by oral agreement. (RJN 

Exh. B ¶ 23.) Therefore, the Court concludes that Plaintiffs’ claim for breach of contract 

should be dismissed.

D. Fraud

Plaintiffs assert a claim for fraud, alleging that Defendant maliciously recorded the 

notice of default when Plaintiffs were not in default and concealed the fact that Plaintiffs 

were making monthly payments in order to initiate foreclosure proceedings. (Doc. No. 9 

¶¶ 85–93.) Under California law, “[t]he elements of intentional misrepresentation, or 

actual fraud, are: ‘(1) misrepresentation (false representation, concealment, or 

nondisclosure); (2) knowledge of falsity (scienter); (3) intent to defraud (i.e., to induce 

reliance); (4) justifiable reliance; and (5) resulting damage.’” Anderson v. Deloitte & 

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Touche, 56 Cal. App. 4th 1468, 1474 (1997). Under Federal Rule of Civil Procedure 9, a 

plaintiff must plead fraud with particularity. “Rule 9(b)'s particularity requirement applies 

to state-law causes of action.” Vess v. Ciba–Geigy Corp. USA, 317 F.3d 1097, 1103 (9th 

Cir. 2003). “Averments of fraud must be accompanied by ‘the who, what, when, where, 

and how’ of the misconduct charged.” Id. at 1106 (quoting Cooper v. Pickett, 137 F.3d 

616, 627 (9th Cir. 1997)). “‘[A] plaintiff must set forth more than the neutral facts 

necessary to identify the transaction. The plaintiff must set forth what is false or 

misleading about a statement, and why it is false.’” Id. at 1106 (quoting Decker v. 

GlenFed, Inc. (In re GlenFed, Inc. Sec. Litig.), 42 F.3d 1541, 1548 (9th Cir. 1994)). 

“While statements of the time, place and nature of the alleged fraudulent activities are 

sufficient, mere conclusory allegations of fraud” are not. Moore v. Kayport Package 

Express, Inc., 885 F.2d 531, 540 (9th Cir. 1989).

Here, Plaintiffs fail to show any fraud by Defendant, which acted in accordance 

with the parties’ loan contract and Plaintiffs’ outstanding debt. The parties are in 

agreement that the loan contract provides a balloon payment provision and Plaintiffs did 

not pay the balloon payment due February 20, 2014. (Doc. Nos. 9 ¶¶ 11–13, 45; 10-1 at 

11; RJN Exh. B. ¶ 3.) Therefore, under the loan contract, Plaintiffs were in default for 

failure to make this payment, and Defendant acted within its rights to issue the notice of 

default and initiate foreclosure proceedings. (RJN Exh. B ¶¶ 14–15.) Plaintiffs argue that 

the notice of default was fraudulent because Defendant concealed that Plaintiffs had 

continued to make their monthly payments. (Doc. No. 9 ¶¶ 85–93.) However, these 

monthly payments do not remedy Plaintiffs’ default for failure to pay the balloon 

payment due on February 20, 2014 under the loan contract. Plaintiffs also argue that the 

amount due on the notice of default should be zero. (Doc. No. 12 at 23.) But, in their 

complaint, Plaintiffs state that as of October 2017, they owed $53,158.70, (Doc. No. 9 

¶ 21), which is entirely consistent with the amount owed from the notice of default, (RJN 

Exh. G at 1). Accordingly, the Court concludes that Plaintiffs’ claim for fraud should be 

dismissed.

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E. Intentional Infliction of Emotional Distress

Plaintiffs assert a claim for intentional infliction of emotional distress concerning 

their interactions with Defendant. (Doc. No. 9 ¶¶ 94–101.) The elements of a cause of 

action for intentional infliction of emotional distress are: (1) extreme and outrageous 

conduct by defendant; (2) intention to cause or reckless disregard of the probability of 

causing emotional distress; (3) severe emotional suffering; and (4) actual and proximate 

causation of the emotional distress. Cole v. Fair Oaks Fire Protection Dist., 43 Cal. 3d 

148, 155 n.7 (1970). For conduct to be extreme and outrageous it must be “so extreme as 

to exceed all bounds of that usually tolerated in a civilized community.” Cervantez v. J.C. 

Penney Co., 24 Cal. 3d 579, 593 (1979). “Liability ‘does not extend to mere insults, 

indignities, threats, annoyances, petty oppressions, or other trivialities.’” Molko v. Holy 

Spirit Assn., 46 Cal. 3d 1092, 1122 (1988). “Whether a defendant’s conduct can 

reasonably be found to be outrageous is a question of law that must initially be 

determined by the court; if reasonable persons may differ, it is for the jury to determine 

whether the conduct was, in fact, outrageous.” Berkley v. Dowds, 152 Cal. App. 4th 518, 

534 (2007).

Here, Plaintiffs’ claim for intentional infliction of emotional distress fails because 

Defendant’s actions were not extreme and outrageous. “An assertion of legal rights in

pursuit of one's own economic interests does not qualify as ‘outrageous’ under this 

standard.” Yu v. Signet Bank/Va., 69 Cal. App. 4th 1377, 1398 (1999) (citations 

omitted). Defendant was acting consistent with its rights the loan contract—Plaintiffs 

were in default for failure to pay the balloon payment, and Defendant acted in accordance 

by recording the notice of default and instituting foreclosure proceedings. Defendant’s 

actions with regards to the home preservation programs also were not outrageous—

Defendant invited Plaintiffs to apply for such programs, Plaintiffs applied, and Defendant 

denied such applications as incomplete or for failure to qualify for the programs’ 

requirements. Additionally, Plaintiffs have not alleged facts that show that Defendant 

intended to cause or disregarded the possibility of causing emotional distress. See Mehta 

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v. Wells Fargo Bank, N.A., 737 F. Supp. 2d 1185, 1204 (S.D. Cal. 2010). Plaintiffs’

claim fails because Plaintiffs do not allege any conduct by Defendant that falls “outside 

that generally accepted in loan servicing and/or foreclosure . . . .” Dougherty v. Bank of 

Am., N.A., No. 2:15-CV-01226-TLN-DB, 2018 WL 1518574, at *9 (E.D. Cal. Mar. 28, 

2018) (citing Flores v. EMC Mortg. Co., 997 F. Supp. 2d 1088, 1124 (E.D. Cal. Feb. 18, 

2014)). Thus, the Court concludes that Plaintiffs claim for intentional infliction of 

emotional distress should be dismissed.

F. Financial Elder Abuse

Plaintiff Cheryl Raiken brings a claim for financial elder abuse. (Doc. No. 9 

¶¶ 117–134.) California Welfare & Institutions Code § 15610.30 imposes liability on 

anyone who “[t]akes, secretes, appropriates, obtains, or retains real or personal property 

of an elder or dependent adult for a wrongful use or with intent to defraud, or both” or 

who assists in such action. The statute provides for recovery of compensatory damages as 

well as attorney fees and costs. Id. § 15657.5.

Here, Plaintiffs have failed to demonstrate that Defendant took any property of 

Cheryl Raiken for wrongful use or with intent to defraud. “It is simply not tortious for a 

commercial lender to lend money, take collateral, or to foreclose on collateral when a 

debt is not paid. . . . [A] commercial lender is privileged to pursue its own economic 

interests and may properly assert its contractual rights.” Stebley v. Litton Loan Servicing, 

LLP, 202 Cal. App. 4th 522, 528 (2011) (quoting Sierra–Bay Fed. Land Bank Assn. v. 

Superior Court, 227 Cal. App. 3d 318, 334–335 (1991)). In recording the notice of 

default and initiating foreclosure proceedings, Defendant was acting within its rights 

under the loan contract. “Foreclosing on a home is not actionable merely because it 

requires the former owner to move out.” Stebley, 202 Cal. App. 4th at 528 (citations 

omitted). Further, Plaintiffs fail to show how their alleged unpleasant experiences 

navigating Defendant’s loan modification application process would constitute Defendant

taking property for wrongful use or with intent to defraud. Finally, Defendant never took 

or obtained Plaintiffs’ real property because Plaintiffs sold the home prior to foreclosure. 

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(See Doc. No. 9 ¶ 41; RJN Exh. G.) Therefore, the Court dismisses Plaintiff Cheryl 

Raiken’s claim for financial elder abuse.

G. Violations of California’s FAL and UCL

Plaintiffs’ cause of action under California’s FAL alleges that Defendant’s letters 

regarding its loan modification and home preservation programs were fraudulent because 

Plaintiffs were unable to access such programs. (Doc. No. 9 ¶¶ 102–111.) Plaintiffs’ UCL 

claim is derivative of its other claims. (Id. ¶¶ 112–116.) California’s FAL prohibits any 

“unfair, deceptive, untrue or misleading advertising.” Cal. Bus. & Prof. Code § 17500.

The UCL prohibits “any unlawful, unfair or fraudulent business act or practice and 

unfair, deceptive, untrue or misleading advertising.” Id. § 17200. Under these California 

statutes, conduct is deceptive or misleading if it is likely to deceive an ordinary 

consumer. Williams v. Gerber Products Co., 552 F.3d 934, 938 (9th Cir. 2008). 

“California courts . . . have recognized that whether a business practice is deceptive will 

usually be a question of fact not appropriate for decision on demurrer.” Id. at 939; accord

Linear Tech. Corp. v. Applied Materials, Inc., 152 Cal. App. 4th 115, 134–35 (2007).

However, dismissal is appropriate if a court determines that as a matter of law, members 

of the public are not likely to be deceived. Pelayo v. Nestle USA, Inc., 989 F. Supp. 2d 

973, 978 (C.D. Cal. Oct. 25, 2013). A plaintiff must show “more than a mere possibility 

that the advertisement might conceivably be misunderstood by some few consumers 

viewing it in an unreasonable manner. Rather, the phrase indicates that the ad is such that 

it is probable that a significant portion of the general consuming public or of targeted 

consumers, acting reasonably in the circumstances, could be misled.” Lavie v. Procter & 

Gamble Co., 105 Cal. App. 4th 496, 508 (2003).

Here, Plaintiffs’ FAL claim fails because Plaintiffs have failed to show unfair, 

deceptive, or misleading letters from Defendant regarding its loan modification and home 

preservation programs. See Cal. Bus. & Prof. Code § 17500. No reasonable consumer 

could interpret Defendant’s letters inviting Plaintiffs to apply for its loan modification 

and home preservation programs as a guarantee of admittance to such programs or 

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modification of the existing loan contract. Defendant’s letters merely described the 

programs and instructed Plaintiffs to call Defendant in order to “determine what option is 

best to help overcome the home equity challenges.” (Doc. No. 9 ¶¶ 106–108.) Upon 

receiving these letters, Plaintiffs in fact applied for the programs and were denied because 

their applications were incomplete or they did not qualify for the programs. (Id. ¶ 25.)

Therefore, Plaintiffs have failed to show “that it is probable that a significant portion of 

the general consuming public or of targeted consumers, acting reasonably in the 

circumstances, could be misled.” Lavie, 105 Cal. App. 4th at 508.

Plaintiffs’ UCL claim is derivative of Plaintiffs’ other claims and therefore, 

similarly fails for failure to show any fraudulent, unfair, or unlawful conduct by 

Defendant. Accordingly, the Court concludes that Plaintiffs have failed to plead causes of 

action under California’s UCL and FAL.

Conclusion

For the foregoing reasons, the Court grants Defendant’s motion to dismiss, and the 

Court dismisses Plaintiffs’ complaint without prejudice. The Court grants Plaintiffs leave

to amend, if they can do so to cure the deficiencies noted in this order, on or before 

March 20, 2019. 

 IT IS SO ORDERED.

DATED: February 20, 2019

 

MARILYN L. HUFF, District Judge

UNITED STATES DISTRICT COURT

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