Opinion
For Julia Gerard, Plaintiff: Steven W O'Reilly, Law Office of Steven W O'Reilly, Los Angeles, CA.
For Wells Fargo Bank N.A., Regional Trustee Services Corporation, Defendant: Jeremy E Shulman, Anglin Flewelling Rasmussen Campbell and Trytten LLP, Pasadena, CA.
ORDER GRANTING DEFENDANTS' MOTION TO DISMISS
MARGARET M. MORROW, UNITED STATES DISTRICT JUDGE.
Julia Gerard filed this action against Wells Fargo Bank, N.A. (" Wells Fargo") and Regional Trustee Service Corporation (" Regional") (collectively, " defendants") on January 30, 2014. Gerard alleged claims for violation of the California Homeowner's Bill of Rights (" HBOR"), California Civil Code § 2920, et seq., promissory estoppel, intentional misrepresentation, declaratory relief, wrongful foreclosure, and quiet title. On May 28, 2014, Wells Fargo filed a motion to dismiss the complaint under Rule 12(b)(6) of the Federal Rules of Civil Procedure, which the court granted on September 11, 2014; it dismissed each of Gerard's claims with leave to amend. On October 3, 2014, Gerard timely filed a first amended complaint. The first amended complaint pled a single cause of action for intentional misrepresentation. On October 20, 2014, Wells Fargo moved to dismiss the amended complaint. The court granted Well Fargo's motion on January 22, 2015.
Notice of Removal (" Removal"), Docket No. 1 (Apr. 21, 2014), Exh. A (" Complaint").
Id.
Motion to Dismiss Complaint, Docket No. 7 (May 28, 2014).
Order Granting Defendant Wells Fargo's Motion to Dismiss, Docket No. 27 (Sept. 11, 2014); see id. at 28-29.
First Amended Complaint (" FAR"), Docket No. 29 (Oct. 3, 2014).
In the first amended complaint, Gerard abandoned her claims for violation of the HBOR, promissory estoppel, declaratory relief, wrongful foreclosure, and quiet title.
Notice of Motion and Motion to Dismiss Case/First Amended Complaint, Docket No. 31 (Oct. 20, 2014).
Order Granting Defendant's Motion to Dismiss (" Order"), Docket No. 38 (Jan. 22, 2015).
On February 11, 2015, Gerard filed a second amended complaint. Wells Fargo filed a motion to dismiss the complaint on February 26, 2015. Gerard opposes the motion.
Second Amended Complaint (" SAC"), Docket No. 43 (Feb. 11, 2015).
Notice of Motion and Motion to Dismiss Second Amended Complaint (" Motion"), Docket No. 46 (Feb. 26, 2015). See also Reply in Support of Motion to Dismiss Second Amended Complaint (" Reply"), Docket No. 61 (May 4, 2015).
Memorandum in Opposition to Motion to Dismiss Second Amended Complaint (" Opposition"), Docket No. 50 (Apr. 28, 2015).
I. FACTUAL BACKGROUND
A. Facts Alleged in First Amended Complaint
1. The Property
Gerard alleges that she is the owner of real property located at 519 N. Harper Avenue, Los Angeles, California 90048 (the " property"). She purportedly purchased the property on August 1, 1994; a deed of trust securing the loan she obtained to buy the property was recorded on August 9, 1994. Gerard alleges that she financed the purchase by procuring a loan from World Savings and Loan Association; she purportedly obtained the loan under a program designed to provide financing to first-time homeowners for owner-occupied properties. This was purportedly the first real property Gerard had ever purchased; she asserts that, as reflected in the deed of trust, it was an owner-occupied property. Paragraph 32 of the deed of trust states:
SAC, ¶ 1.
Id., ¶ 2.
Id., ¶ ¶ 2, 5.
Id., ¶ 3.
" Owner Occupancy - Lender has relied upon statements of fact which [Gerard] ha[s] made to qualify for this loan. [She] ha[s] stated and confirmed that:
(A) the Property is [Gerard's] personal and primary residence;
(B) [Gerard] will occupy the Property not later than 30 days after this Security Instrument is recorded; and
(C) [Gerard] will use the Property as [her] residence for at least 12 months from the date this Security Instrument is recorded."
Id.
Gerard contends she subsequently acquired adjacent properties at 515 North Harper Avenue, Los Angeles California 90048 (the " 515 property"); 514 North Sweetzer Avenue, Los Angeles, California 90048 (the " 514 property"); and 516-518 North Sweetzer Avenue, Los Angeles, California, 90048 (the " 516 property"). She purchased the 515 property on June 19, 1996; the 516 property on July 23, 1998; and the 514 property on February 24, 2005. Each of these properties was purportedly purchased as an investment.
Id., ¶ 5.
Id., ¶ ¶ 5-9.
Id.
2. Gerard's Default, Refinancing, and Subsequent Foreclosure of the Property
On June 7, 2007, Gerard refinanced the 1994 loan securing the property; she obtained another mortgage loan from World Savings Bank, FSB, that like the first, was secured by a deed of trust on the property. Gerard contends that, despite the fact she resided at the property when she refinanced, World Savings Bank, FSB failed to state on the deed of trust that the property was owner-occupied. The deed of trust was executed on June 7, 2007, and recorded in the Los Angeles County Recorder's Office on June 15, 2007.
Id., ¶ ¶ 10, 26-27.
Id.
Id.
Sometime after she refinanced, Gerard was allegedly informed by one Sevek, a mortgage department manager at the West Hollywood branch of Wells Fargo, that she should apply for a loan modification to help manage her current loan payments. Purportedly relying on Sevek's recommendations, Gerard sought information regarding a loan modification on September 2012. Gerard asserts that, while she sought a loan modification, she continued making monthly payments on each of her loans. She contends that on January 9, 2013, when she made a telephonic payment on the loans, a Wells Fargo representative told her that Wells Fargo was much less likely to modify the loan of a borrower who was still making payments.
Id., ¶ 28.
Id.
Id., ¶ 30.
Id.
Gerard purportedly entered into loan modification negotiations with Wells Fargo. She asserts she submitted a " Request for Mortgage Assistance" (" RMA"), i.e., an application for a first lien loan modification, to Wells Fargo sometime after January 1, 2013. Gerard allegedly provided the final document Wells Fargo required to complete her RMA on February 13, 2013. During the negotiations, she purportedly had numerous interactions with Raul Medellin, a Wells Fargo employee who was allegedly her " single point of contact." Gerard asserts that on January 18, 2013, Medellin told her orally she might qualify for a loan modification. The same day, and purportedly for some time thereafter, Medellin allegedly advised Gerard that her loan modification application was under active review. Gerard asserts that sometime after accepting her completed loan modification application, Wells Fargo concluded that the property was not her primary residence for purposes of California's Homeowners Bill of Rights, and thus that she did not qualify for a loan modification. Gerard asserts that Wells Fargo did not disclose this belief to her, however. Rather, it allegedly allowed her to believe that the loan modification application was under active review, when in fact it was not, and at a time when Regional had initiated foreclosure proceedings against the property. Gerard contends that, despite the fact that she and Wells Fargo were engaged in loan modification negotiations, Regional filed a notice of default with respect to the property on March 20, 2013, and sold it at a trustee's sale on January 21, 2014. Had she known that Wells Fargo did not intend to provide her with a loan modification, Gerard purportedly would have sought other methods of foreclosure avoidance, including filing for Chapter 11 bankruptcy protection.
Id., ¶ 10.
Id., ¶ 33.
Id., ¶ 10.
Id., ¶ 19.
Id., ¶ 31.
Id., ¶ ¶ 19, 21, 49.
Id., ¶ ¶ 10-11.
Id.
Id., ¶ ¶ 19, 21, 31, 49.
Id., ¶ 31.
Id., ¶ 24.
Id., ¶ ¶ 20-21.
3. Wells Fargo's Alleged Misrepresentations Regarding Gerard's Income
Gerard asserts that during their telephone conversation on January 18, 2013, Medellin purportedly told her that she had foreign income of $271,757.67 for the 2010 tax year, and requested an explanation of the income. He also allegedly said that Gerard's RMA could not move through the underwriting process until the foreign income was explained.
Id., ¶ 12.
Id., ¶ 13.
Gerard purportedly responded in a January 23, 2013 letter, which stated that she had received no foreign income in 2010:
Id., ¶ 12.
" I am writing this letter to implore you to review my tax documents that were given to you in regards to the foreign income that you stated I claimed in 2010 in the amount of $271,751.67. I have checked my taxes numerous times and have asked my accountant who prepared my taxes for me. He also states that he does not know what the number could be because I did not receive any foreign income nor was there a declaration of any foreign income on my tax documents. I've left you a voicemail regarding this. Is it at all possible for you to either e-mail or fax a copy of the document showing that amount? The e-mail address that it can be sent to is igerard5@pacbell.net or it can be faxed to my attention at 310.657.2385. I am trying my hardest to get you all the information that you have requested as soon as possible. I must say that I'm totally stumped on the foreign income."
Gerard asserts that Wells Fargo falsely represented that she had reported foreign income so it could foreclose on the property. She asserts that she reasonably relied on Medellin's representation that she had foreign income to her detriment, leading her to expend weeks of time trying to resolve the discrepancy by contacting her accountant and faxing documents to Wells Fargo. She alleges that Wells Fargo's claim that she had foreign income delayed consideration of her RMA; during that delay, Wells Fargo purportedly recorded a notice of default and election to sell under the deed of trust on March 20, 2013.
Id., ¶ 13.
Id.
Id., ¶ ¶ 13-16.
4. Wells Fargo's Actions During this Litigation
Gerard's second amended complaint also alleges that Wells Fargo has made several fraudulent misrepresentations and been guilty of several fraudulent omissions during the pendency of this litigation. First, she asserts that Wells Fargo has made false claims to the court. Specifically, she contends that Wells Fargo has represented that the property is not her primary residence when it knows that it is. She also contends that Wells Fargo concealed the following materials facts from her during the course of the litigation: (1) " [t]hat Plaintiff Julia Gerard is the owner of the [property]" and (2) " [t]hat Defendant Wells Fargo Bank National Association and its attorney of record [are] misleading the court in that they 'argue, ' without any supporting facts, that Plaintiff Julia Gerard's land is not Plaintiff Julia Gerard's princip[al] place of residence."
Id., ¶ ¶ 9, 23-24, 31.
Id., ¶ ¶ 43, 48
B. Wells Fargo's Request for Judicial Notice
Wells Fargo asks that the court take judicial notice of various documents related to Gerard's claims: (1) a fixed rate mortgage note dated June 7, 2007, and signed by Gerard; (2) a deed of trust executed by Gerard on June 7, 2007, and recorded by the Los Angeles County Recorder's Office on June 15, 2007; (3) a certificate of corporate existence dated April 21, 2006, issued by the Office of Thrift Supervision, certifying that World Savings Bank, FSB, is a federal savings bank; (4) a letter from the Office of Thrift Supervision dated November 19, 2007, indicating that World Savings Bank, FSB, changed its name to Wachovia Mortgage, FSB; (5) the charter of Wachovia Mortgage, FSB, dated December 31, 2007; (6) an official certificate stating that effective November 1, 2009, Wachovia Mortgage, FSB, became Wells Fargo Bank Southwest, N.A., which then merged into Wells Fargo Bank, N.A.; (7) a printout from the Federal Deposit Insurance Corporation dated December 15, 2010, which details the history of Wachovia Mortgage, FSB; (7) a notice of default and election to sell under deed of trust dated March 18, 2013, and recorded by the Los Angeles County Recorder's Office on March 20, 2013; (8) a notice of trustee's sale dated June 6, 2013, and recorded by the Los Angeles County Recorder's Office on June 19, 2013; and (9) a trustee's deed, dated January 13, 2014, and recorded by the Los Angeles County Recorder's Office on January 21, 2014. Gerard does not oppose the request.
Request for Judicial Notice Re: Motion to Dismiss Second Amended Complaint (" RJN"), Docket No. 47 (Feb. 26, 2015), Exh. A.
RJN, Exh. B.
RJN, Exh. C.
RJN, Exh. D.
RJN, Exh. E.
RJN, Exh. F.
RJN, Exh. G.
RJN, Exh. H.
RJN, Exh. I.
RJN, Exh. J.
In deciding a Rule 12(b)(6) motion, the court generally looks only to the face of the complaint and documents attached thereto. Van Buskirk v. Cable News Network, Inc., 284 F.3d 977, 980 (9th Cir. 2002); Hal Roach Studios, Inc. v. Richard Feiner & Co., Inc., 896 F.2d 1542, 1555 n. 19 (9th Cir. 1990). A court must normally convert a Rule 12(b)(6) motion into a Rule 56 motion for summary judgment if it " considers evidence outside the pleadings. . . . A court may, however, consider certain materials - documents attached to the complaint, documents incorporated by reference in the complaint, or matters of judicial notice - without converting the motion to dismiss into a motion for summary judgment." United States v. Ritchie, 342 F.3d 903, 907-08 (9th Cir. 2003). See Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 322, 127 S.Ct. 2499, 168 L.Ed.2d 179 (2007) (a court may consider " other sources courts ordinarily examine when ruling on Rule 12(b)(6) motions to dismiss, in particular, documents incorporated into the complaint by reference, and matters of which a court may take judicial notice"); Branch v. Tunnell, 14 F.3d 449, 453 (9th Cir. 1994) (noting that a court may consider a document whose contents are alleged in a complaint so long as no party disputes its authenticity), overruled on other grounds by Galbraith v. County of Santa Clara, 307 F.3d 1119 (9th Cir. 2002).
Thus, in ruling on a motion to dismiss, the court can consider material that can be judicially noticed under Rule 201 of the Federal Rules of Evidence. Fed.R.Evid. 201. Under Rule 201, the court can take judicial notice of " [o]fficial acts of the legislative, executive, and judicial departments of the United States, " and " [f]acts and propositions that are not reasonably subject to dispute and are capable of immediate and accurate determination by resort to sources of reasonably indisputable accuracy."
Courts have held that " [j]udicial notice is appropriate for records and 'reports of administrative bodies.'" United States v. 14.02 Acres of Land More or Less in Fresno County, 547 F.3d 943, 955 (9th Cir. 2008) (quoting Interstate Natural Gas Co. v. Southern California Gas Co., 209 F.2d 380, 385 (9th Cir. 1954)). The deed of trust, notice of default, notice of trustee's sale, and trustee's deed upon sale have all been filed in the county recorder's office. They are time and date stamped, and have record numbers. Other courts have taken judicial notice of such documents as public filings. See Velazquez v. GMAC Mortgage Corp., 605 F.Supp.2d 1049, 1057-58 (C.D. Cal. 2008) (taking judicial notice of documents recorded by the Los Angeles County Recorder's Office, including deeds of trust); see also Krug v. Wells Fargo Bank, N.A., No. 11-CV-5190 YGR, 2012 WL 1980860, *2 (N.D. Cal. June 1, 2012) (public records are judicially noticeable under Rule 201); Grant v. Aurora Loan Services, Inc., 736 F.Supp.2d 1257, 1264 (C.D. Cal. 2010) (noting that a " [party] provided a reference number for the document, showing that it was in fact recorded; this demonstrates that it is a public record"); Fimbres v. Chapel Mortgage Corp., No. 09-CV-0886-IEG (POR), 2009 WL 4163332, *3 (S.D. Cal. Nov. 20, 2009) (taking judicial notice of a deed of trust, notice of default, notice of trustee's sale, assignment of deed of trust, and substitution of trustee as each was a public record); Angulo v. Countrywide Home Loans, Inc., No. 1:09-CV-877-AWI-SMS, 2009 WL 3427179, *3 n. 3 (E.D. Cal. Oct. 26, 2009) (" The Deed of Trust and Notice of Default are matters of public record. As such, this court may consider these foreclosure documents"); Distor v. U.S. Bank NA, No. C 09-02086 SI, 2009 WL 3429700, *2 (N.D. Cal. Oct. 22, 2009) (finding that a deed of trust, notice of default and election to sell under deed of trust, and notice of trustee's sale were matters of public record and thus proper subjects of judicial notice). The court therefore takes judicial notice of these documents.
As respects the fixed rate mortgage note, contrary to defendants' assertion, it is not a proper subject of judicial notice. The court can consider the document under the incorporation by reference doctrine, however, because Gerard references the note in her second amended complaint. See Gammel v. Hewlett-Packard Co., 905 F.Supp.2d 1052, 1061 (C.D. Cal. 2012) (" Although often conflated, the doctrine of incorporation by reference is distinct from judicial notice. 'That doctrine permits a district court to consider documents whose contents are alleged in a complaint and whose authenticity no party questions, but which are not physically attached to the . . . pleadings, '" citing In re Silicon Graphics Securities Litig., 183 F.3d 970, 986 (9th Cir. 1999); Branch, 14 F.3d at 454); In re American Apparel, Inc. Shareholder Litig., 855 F.Supp.2d 1043, 1061 (C.D. Cal. 2012) (" [C]ourts may consider documents that are referenced in the complaint under the 'incorporation by reference' doctrine, " citing In re Stac Electronics Securities Litig., 89 F.3d 1399, 1405 n. 4 (9th Cir. 1996); Fecht v. Price Co., 70 F.3d 1078, 1080 n. 1 (9th Cir. 1995)).
RJN at 3.
Wells Fargo contends the court can take judicial notice of the remaining documents because they are true and correct copies of documents reflecting official acts of the executive branch, and that certain of the documents can be found on government websites. Wells Fargo, however, does not ask that the court consider any of these documents in conjunction with its motion to dismiss, and the court cannot itself identify a need to consider them. Accordingly, it declines to take judicial notice of these documents.
RJN at 4.
II. DISCUSSION
A. Legal Standard Governing Motions to Dismiss Under Rule 12(b)(6)
A Rule 12(b)(6) motion tests the legal sufficiency of the claims asserted in the complaint. A Rule 12(b)(6) dismissal is proper only where there is either a " lack of a cognizable legal theory, " or " the absence of sufficient facts alleged under a cognizable legal theory." Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1988). The court must accept all factual allegations pleaded in the complaint as true, and construe them and draw all reasonable inferences from them in favor of the nonmoving party. Cahill v. Liberty Mutual Ins. Co., 80 F.3d 336, 337-38 (9th Cir. 1996); Mier v. Owens, 57 F.3d 747, 750 (9th Cir. 1995).
The court need not, however, accept as true unreasonable inferences or conclusory legal allegations cast in the form of factual allegations. See Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) (" 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 'entitle[ment] to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do"). Thus, a plaintiff's complaint must " contain sufficient factual matter, accepted as true, to 'state a claim for relief that is plausible on its face.' . . . 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." Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009); see also Twombly, 550 U.S. at 555 (" Factual allegations must be enough to raise a right to relief above the speculative level, on the assumption that all the allegations in the complaint are true (even if doubtful in fact)" (citations omitted)); Moss v. United States Secret Service, 572 F.3d 962, 969 (9th Cir. 2009) (" [F]or a complaint to survive a motion to dismiss, the non-conclusory 'factual content, ' and reasonable inferences from that content, must be plausibly suggestive of a claim entitling the plaintiff to relief, " citing Iqbal and Twombly ).
B. Whether Gerard's Intentional Misrepresentation Claim Must Be Dismissed
1. Legal Standard Governing Intentional Misrepresentation Claims
To plead a fraud claim, a party must allege (1) a knowingly false representation or fraudulent omission by the defendant; (2) an intent to deceive or induce reliance; (3) justifiable reliance by the plaintiff; and (4) resulting damages. Croeni v. Goldstein, 21 Cal.App.4th 754, 758, 26 Cal.Rptr.2d 412 (1994).
Where plaintiff's claim is based on an affirmatively false representation, she must plead and prove that " (1) the defendant misrepresent[ed] material facts; (2) with knowledge of the falsity of the representations . . .; (3) with intent to defraud or induce reliance; (4) [and] which induce[d] justifiable reliance by the plaintiff; (5) to his or her detriment." Terra Ins. Co. v. New York Life Inv. Management LLC, 717 F.Supp.2d 883, 890 (N.D. Cal. 2010) (citing Hahn v. Mirda, 147 Cal.App.4th 740, 748, 54 Cal.Rptr.3d 527 (2007)); see Conroy v. Regents of University of California, 45 Cal.4th 1244, 1255, 91 Cal.Rptr.3d 532, 203 P.3d 1127 (2009) (noting that the elements of a fraudulent misrepresentation claim are " (1) a misrepresentation, (2) with knowledge of its falsity, (3) with the intent to induce another's reliance on the misrepresentation, (4) justifiable reliance, and (5) resulting damage").
When plaintiff contends that the defendant fraudulently concealed material facts, she must plead and prove that: " (1) the defendant [ ] concealed or suppressed a material fact, (2) the defendant [was] under a duty to disclose the fact to the plaintiff, (3) the defendant [ ] intentionally concealed or suppressed the fact with the intent to defraud the plaintiff, (4) the plaintiff [was] unaware of the fact and would not have acted as [s]he did if [s]he had known of the concealed or suppressed fact, and (5) as a result of the concealment or suppression of the fact, the plaintiff [ ] sustained damage." Terra Ins. Co., 717 F.Supp.2d at 890 (quoting Lovejoy v. AT& T Corp., 119 Cal.App.4th 151, 157-58, 14 Cal.Rptr.3d 117 (2004)); Sawaya v. Coldwell Banker Residential Brokerage Co., No. B215551, 2010 WL 3387507, *4 (Cal.App. Aug. 30, 2010) (" Concealment is a species of fraud or deceit. '[T]he elements of an action for fraud and deceit based on concealment are: (1) the defendant must have concealed or suppressed a material fact, (2) the defendant must have been under a duty to disclose the fact to the plaintiff, (3) the defendant must have intentionally concealed or suppressed the fact with the intent to defraud the plaintiff, (4) the plaintiff must have been unaware of the fact and would not have acted as he did if he had known of the concealed or suppressed fact, and (5) as a result of the concealment or suppression of fact, the plaintiff must have sustained damage, '" quoting Marketing West, Inc. v. Sanyo Fisher (USA) Corp., 6 Cal.App.4th 603, 612-13, 7 Cal.Rptr.2d 859 (1992)).
" Although the court is not bound by unpublished decisions of intermediate state courts, unpublished opinions that are supported by reasoned analysis may be treated as persuasive authority." Scottsdale Ins. Co. v. OU Interests, Inc., No. C 05-313 VRW, 2005 WL 2893865, *3 (N.D. Cal. Nov. 2, 2005) (citing Employers Ins. of Wausau v. Granite State Ins. Co., 330 F.3d 1214, 1220 n. 8 (9th Cir. 2003) (" [W]e may consider unpublished state decisions, even though such opinions have no precedential value")).
" Claims for fraud and negligent misrepresentation must meet the heightened pleading requirements of Rule 9(b)." Glen Holly Entertainment, Inc. v. Tektronix, Inc., 100 F.Supp.2d 1086, 1093 (C.D. Cal. 1999); see also U.S. Concord, Inc. v. Harris Graphics Corp., 757 F.Supp. 1053, 1058 (N.D. Cal. 1991). Under Rule 9(b), " a party must state with particularity the circumstances constituting fraud or mistake." Fed.R.Civ.Proc. 9(b). " Rule 9(b) demands that, when averments of fraud are made, the circumstances constituting the alleged fraud be specific enough to give defendants notice of the particular misconduct so that they can defend against the charge[.]" Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1106 (9th Cir. 2003) (emphasis added and internal citations omitted). Thus, Rule 9(b) requires that fraud allegations include the " time, place, and specific content of the false representations as well as the identities of the parties to the misrepresentations." See Swartz v. KPMG LLP, 476 F.3d 756, 764 (9th Cir, 2007) (citing Edwards v. Marin Park, Inc., 356 F.3d 1058, 1066 (9th Cir. 2004)); see also Schreiber Distributing Co. v. Serv-Well Furniture Co., Inc., 806 F.2d 1393, 1401 (9th Cir. 1986) (" [T]he pleader must state the time, place, and specific content of the false representations as well as the identities of the parties to the misrepresentation"); Miscellaneous Serv. Workers Local #427 v. Philco-Ford Corp., 661 F.2d 776, 782 (9th Cir. 1981) (holding that Rule 9(b) requires a pleader to set forth the " time, place and specific content of the false representations as well as the identities of the parties to the misrepresentations").
Conclusory allegations are insufficient, and the facts constituting the fraud must be alleged with specificity. See Moore v. Kayport Package Exp., Inc., 885 F.2d 531, 540 (9th Cir. 1989) (" A pleading is sufficient under Rule 9(b) if it identifies the circumstances constituting fraud so that a defendant can prepare an adequate answer to the allegations. While statements of the time, place and nature of the alleged fraudulent activities are sufficient, mere conclusory allegations of fraud are insufficient" (citation omitted)); see also Swartz, 476 F.3d at 764 (" Federal Rule of Civil Procedure 9(b) requires more specificity including an account of the " time, place, and specific content of the false representations as well as the identities of the parties to the misrepresentations.' 'To comply with Rule 9(b), allegations of fraud 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, '" citing Edwards, 356 F.3d at 1066, and Bly-Magee v. California, 236 F.3d 1014, 1019 (9th Cir. 2001)); Cooper v. Pickett, 137 F.3d 616, 627 (9th Cir. 1997) (to satisfy Rule 9(b), " the complaint [must] identif[y] the circumstances of the alleged fraud so that defendants can prepare an adequate answer" (internal quotation marks omitted)); Flowers v. Wells Fargo Bank, N.A., No. C 11-1315 PJH, 2011 WL 2748650, *5 (N.D. Cal. July 13, 2011) (explaining that " [f]raud allegations must be specific enough to give defendants notice of the particular misconduct that is alleged to constitute the fraud so that they can defend against the claim. For corporate defendants, a plaintiff must allege the names of the persons who made the allegedly fraudulent representations, their authority to speak, to whom they spoke, what they said or wrote, and when it was said or written" (citations omitted)).
2. Whether Gerard Adequately Alleges an Intentional Misrepresentation Claim Against Wells Fargo
As noted, Gerard's second amended complaint pleads a single claim for intentional misrepresentation against Wells Fargo. As with the first amended complaint, it appears the claim is based on several different misrepresentations and/or omissions by Wells Fargo. Accordingly, the court considers each in turn.
SAC, ¶ ¶ 40-51.
a. Wells Fargo's Purported Misrepresentations Regarding Gerard's Loan Modification
Gerard alleges first that Wells Fargo made various misrepresentations after she submitted a loan modification application. Although her allegations are unclear, Gerard's opposition clarifies that Medellin purportedly made the misrepresentations during a telephone call with Gerard on January 18, 2013, and follow-up conversations in early 2013. Gerard asserts that Medellin said her RMA application was being reviewed and might be approved and that, in reliance on his statements, she " wait[ed] and suspend[ed] making her monthly payments." Had she known that Wells Fargo was not considering her application and would not grant her a loan modification, Gerard alleges, she would have sought other foreclosure alternatives, such as filing a petition for Chapter 11 bankruptcy protection.
Opposition at 3.
Id. (" The plaintiff, Julia Gerard, claims that Wells Fargo Bank told her on January 18, 2013, and in subsequent conversations, that her application for loan modification was being reviewed and may get approved, causing her to wait and suspend making her monthly payments. She delayed just long enough for the bank to record a notice of default"); see also id. at 5 (" The plaintiff contends that an identifiable employee of the bank, with authority to speak, has misrepresented to the plaintiff, that her application for modification of her home loan, may get approved, and since it was still being reviewed, she should just continue on with the status quo, which was to suspend her next monthly payment while awaiting approval"); id. at 7 (" Based on [Medellin's] representation of January 18, 2013, that her application was being reviewed and that she may get the approval, [Gerard] was content in waiting, and not paying").
SAC, ¶ ¶ 20-21.
Wells Fargo argues that the claim is implausible and must be dismissed under Rule 8(a). As noted, to plead a fraud claim, a party must allege (1) a knowingly false representation or fraudulent omission by the defendant; (2) an intent to deceive or induce reliance; (3) justifiable reliance by the plaintiff; and (4) resulting damages. Croeni, 21 Cal.App.4th at 758. Wells Fargo asserts that none of Medellin's purported misrepresentations are actionable representations of fact. The court agrees. The first purported misrepresentation - that Gerard's RMA " [might] get approved" - is a statement of opinion, rather than of fact, and cannot serve as the predicate for an intentional misrepresentation claim as a result. See, e.g., Becker v. Wells Fargo Bank, N.A., Inc., No. 2:10-cv-02799 LKK KJN PS, 2011 WL 1103439, *11 (E.D. Cal. Mar. 22, 2011) (" In alleging fraud, there is an obvious difference between a statement that loan modification 'could' happen, and, on the other hand, representing that loan modification 'would' happen. The first is a statement of opinion, the second is a statement of fact that is capable of being fraudulently misrepresented" (citation omitted)); DeLeon v. Wells Fargo Bank, N.A., No. 10-CV-01390-LHK, 2011 WL 311376, *8 (N.D. Cal. Jan. 28, 2011) (" To determine if the elements of fraud have been pleaded to state a cause of action the Court looks to state law. In California, the elements of fraud are: (1) misrepresentation; (2) knowledge of falsity (scienter); (3) intent to defraud (i.e., intent to induce reliance); (4) justifiable reliance; and (5) resulting damage. With regard to Plaintiff's claim that Wells Fargo 'expressed its confidence that the modification would be approved, ' the Court agrees with Defendants that an expression of confidence is a statement of opinion that does not support a claim of fraud, " citing Neu-Visions Sports, Inc. v. Soren/McAdam/Bartells, 86 Cal.App.4th 303, 308, 103 Cal.Rptr.2d 159 (2000) (" The law is quite clear that expressions of opinion are not generally treated as representations of fact, and thus are not grounds for a misrepresentation cause of action")); see also Avila v. Wells Fargo Bank, No. C 12-01237 WHA, 2012 WL 2953117, *14 (N.D. Cal. July 19, 2012) (" The only specific statement plaintiff attributes to Wells Fargo is that a representative said " the loan modification looks good, " despite allegedly not intending to give a satisfactory modification. This was an expression of that representative's opinion, not fact, " citing Neu-Visions Sports, Inc., 86 Cal.App.4th at 308).
Motion at 4-5; Reply at 1-3.
Motion at 4-5.
Opposition at 1, 5; see also SAC, ¶ 31.
" The Ninth Circuit has 'concluded that the determination of whether an alleged misrepresentation is a statement of fact or is instead mere puffery is a legal question that may be resolved on a Rule 12(b)(6) motion.'" Malmen v. World Savings Inc., No. CV 10-9009 AHM (JEMx), 2011 WL 1464587, *5 (C.D. Cal. Apr. 18, 2011) (citing Newcal Indus., Inc. v. Ikon Office Solution, 513 F.3d 1038, 1053 (9th Cir. 2008)).
Moreover, even if Medellin's statement were considered a statement of fact, the purported misrepresentation - i.e., that Gerard's RMA application might be approved - is a statement concerning future events. Because the purported misrepresentation " does not involve the misrepresentation of a past or existing material fact, " it cannot form the basis for a fraudulent misrepresentation claim. See, e.g., Ventimiglia v. Wells Fargo Bank, N.A., No. CIV 2:13-00953 WBS CMK, 2013 WL 3367330, *4-5 (E.D. Cal. July 5, 2013) (" Here, plaintiff alleges that he requested a loan modification from Wells Fargo and that he was assigned to the 'home preservation specialists' Juan Silva and Natalie Rodriguez. Silva and Rodriguez requested various financial documents which plaintiff 'provided as best he could.' During the loan modification process, Wells Fargo allegedly 'made multiple statements that the loan would be modified, causing [plaintiff] to justifiably rely on those statements to [his] detriment.' Despite these alleged misrepresentations, plaintiff received a notice of foreclosure. Plaintiff's negligent misrepresentation claim does not involve the misrepresentation of a past or existing material fact, but instead alleges 'promises regarding future events.' . . . The court will accordingly grant Wells Fargo's motion to dismiss plaintiff's negligent misrepresentation and UCL claims based upon alleged misrepresentations during the loan modification process" (citation omitted)); Garcia v. Ocwen Loan Servicing, LLC, No. C 10-0290 PVT, 2010 WL 1881098, *2 (N.D. Cal. May 10, 2010) (" In the present case, Plaintiff has not alleged any misrepresentation of a past or existing material fact. The only allegations of 'untrue' facts appear to be those in Paragraphs 36 through 42 that 'Defendant and or its agents agreed to continue working for a loan modification that would be approved, which would allow Plaintiff to keep and save his home, ' and various other representations regarding approval of his loan modification, lower interest rate, monthly payments and repayment plan. However, all of the alleged misrepresentations involve promises regarding future events rather than representations of past or existing facts. Because Plaintiff has not alleged any misrepresentation of a past or existing material fact, dismissal of his cause of action for negligent misrepresentation is warranted"); see also Aguinaldo v. Ocwen Loan Servicing, LLC, No. 5:12-CV-01393-EJD, 2012 WL 3835080, *5-6 (N.D. Cal. Sept. 4, 2012) (" The Aguinaldos contend that Ocwen's assurance that their home would not be foreclosed was in fact false and thus gives rise to their three fraud-based claims. The Aguinaldos further contend that Ocwen knew that these statements were untrue and nevertheless made them with the intent to deceive the Aguinaldos and induce them into acting in reliance on those statements. Statements that are predictions of future events or commitments to take or refrain from taking action in the future are not actionable fraud. . . . [The Aguinaldos] have merely alleged that Ocwen made promises regarding future events rather than made representations of past or existing facts. . . . Because the Aguinaldos have not alleged any misrepresentation of past or existing material fact and have failed to meet the fraud-based pleading standard, their causes of action for intentional misrepresentation and negligent misrepresentation are dismissed, " citing Tarmann v. State Farm Mut. Auto. Ins. Co., 2 Cal.App.4th 153, 158, 2 Cal.Rptr.2d 861 (1991)).
Under California law, " [t]he essential elements of a claim for negligent misrepresentation are the same as for intentional misrepresentations, except that it does not require knowledge of falsity, but instead requires a misrepresentation of fact by a person who has no reasonable grounds for believing it to be true." Cisco Systems, Inc. v. STMicroelectronics, Inc., F.Supp.3d, 2014 WL 7387962, *4 (N.D. Cal. Dec. 29, 2014) (citing West v. JPMorgan Chase Bank, N.A., 214 Cal.App.4th 780, 792, 154 Cal.Rptr.3d 285 (2013)). As a result, cases addressing the adequacy of allegations of the " misrepresentation" element of negligent misrepresentation claims are instructive as the court considers the adequacy of Gerard's allegations supporting her intentional misrepresentation claim.
With respect to the second purported misrepresentation - that Gerard's RMA application was being actively reviewed - Gerard fails to allege facts that plausibly support an inference the statement was not true. The complaint asserts, in conclusory fashion, that " [t]his representation was false." This allegation amounts to nothing " more than labels and conclusions, " however, and is insufficient under Twombly and Iqbal . Twombly, 550 U.S. at 555 (" [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").
SAC, ¶ ¶ 19, 21, 49.
Id., ¶ 19; see also id., ¶ 21 (characterizing the statement as a " misrepresentation").
Additionally, even had Gerard plausibly alleged an actionable misrepresentation, the second amended complaint would nonetheless be subject to dismissal, as she fails adequately to allege causation, i.e., reliance and resulting damage. Gerard argues that " based on [Medellin's] representation of January 18, 2013, that her application was being reviewed and that she [might be approved], she was content [to] wait[ ], and not pay[ ]" her monthly statement. She does not explain how Medellin's purported representation that her loan modification application was being reviewed and might be approved induced her to suspend payments she was contractually obligated to make, however.
Opposition at 7.
It appears rather that Gerard may intend to plead that she relied on a statement purportedly made by an unidentified Wells Fargo employee on January 9, 2013; this individual allegedly said that " Wells Fargo would be much less likely to grant a modification to a borrower that was still making mortgage payments." To the extent Gerard seeks to plead reliance on this statement, the claim fails because, as Wells Fargo notes, Gerard does not allege the statement is false. Because she does not plead falsity, but only that the statement caused her to default on her loans, she has not adequately alleged a fraudulent misrepresentation claim. See Siqueiros v. Federal Nat. Mortg. Ass'n, No. EDCV 13-01789 VAP (DTBx), 2014 WL 3015734, *8 (C.D. Cal. June 27, 2014) (" Once again, the SAC does not plead fraud with sufficient particularity. Notably, Siqueiros has not adequately alleged that the statements made by Ivan and Lewis were false. The SAC only states that 'Janet Ivan told Plaintiff that BOA would not consider a loan modification for Plaintiff, and would not grant a loan modification to Plaintiff, unless Plaintiff was in default on her monthly payments on the Note.' This representation may not have been false; it may be true that BOA would only consider loan modifications for persons in default, but this in no way obligated BOA to actually process the loan modification, " citing Roussel v. Wells Fargo Bank, No. C 12-04057 CRB, 2013 WL 146370, *6 (N.D. Cal. Jan. 14, 2013) (" Plaintiff does not explain what about the representation/instruction was false. Did Defendant in fact offer loan workout options to borrowers who were current on their mortgages? Plaintiff does not allege that. Did defendant tell Plaintiff that if he defaulted, then he would be given a modification? Plaintiff does not allege that either'").
SAC, ¶ 30.
Motion at 4.
The Siquerios court, in fact, noted that " district courts in this circuit have concluded that 'the allegation that a borrower was induced to fall behind on payments [is] implausible as a matter of law, '" and will not support a fraudulent misrepresentation claim. Id. at *9 (quoting Bennett v. Wells Fargo Bank, N.A., No. CV 13-01693-KAW, 2013 WL 4104076, *7 (N.D. Cal. Aug. 9, 2013)); see also id. (dismissing a fraudulent misrepresentation claim where plaintiff alleged that defendant induced him to default on his loan obligations by representing that it would only consider a loan modification if the borrower were in default).
Moreover, the reliance and damages Gerard does allege - i.e., not seeking Chapter 11 bankruptcy protection - are insufficient to allege detrimental reliance plausibly absent the pleading of additional facts. See Nguyen v. PennyMac Loan Servs., LLC, No. SACV 12-01574 CJC (ANx), 2012 WL 6062742, *8 (C.D. Cal. Dec. 5, 2012) (" [P]laintiff does not sufficiently allege detrimental reliance. The Complaint contains only conclusory statements that Plaintiff failed to file for bankruptcy or 'investigate' other 'possible scenarios to stave off impending foreclosure.' Such general allegations of detrimental reliance are insufficient to plead promissory estoppel, and fail to meet even the basic pleading standard of Rule 8 and Twombly . Plaintiff does not allege that he was induced to take some specific action, that he actually changed his position in reliance on Defendants' purported promises, or that other possible workout options he might have pursued would have been successful"); Mehta v. Wells Fargo Bank, N.A., No. 10CV944 JLS, 2011 WL 1157861, *2 (S.D. Cal. Mar. 29, 2011) (" Plaintiff attempts to plead reliance by alleging that he would have pursued other means to avoid foreclosure had Wells Fargo not promised to delay the sale. In support, Plaintiff identifies several means - tendering funds to cure the default, obtaining a temporary restraining order, and seeking bankruptcy protection. What Plaintiff has not alleged, however, is whether he realistically could have pursued these options three business days before the sale. The SAC does not allege any facts suggesting that Plaintiff would have been successful in taking legal action"); Newgent v. Wells Fargo Bank, N.A., No. 09cv1525 WQH (WMC), 2010 WL 761236, *7 (S.D. Cal. Mar. 2, 2010) (" Plaintiff alleged[ ] she failed to take legal action to delay the trustee's sale because she believed Wells Fargo had already agreed to delay the sale in exchange for her $2,500.77 payment. Plaintiff does not, however, allege facts that could establish that Plaintiff would have been successful in delaying the foreclosure sale, renegotiating her loan, and retaining possession of the home").
For all these reasons, the court concludes that Gerard has failed plausibly to allege a claim based on Wells Fargo's purported misrepresentations concerning her loan modification.
At the hearing, Gerard clarified that the only misrepresentation on which her fraud claim was based was Medellin's statement that her loan modification application was being actively reviewed. She argued she relied on this statement by failing to make mortgage payments while the application was pending. The second amended complaint does not allege that Gerard relied on Medellin's statement by not making payments. Gerard's only allegation concerning reliance is that she did not seek to pursue foreclosure prevention alternatives, such as Chapter 11 bankruptcy protection, based on Medellin's representation that her application was being actively reviewed. (See SAC, ¶ ¶ 20-21.) As noted, this allegation is insufficient plausibly to allege detrimental reliance. Moreover, even had Gerard plausibly alleged that Medellin's statement was false - which, as noted, she failed to do - and that she relied on the statement by withholding loan payments, her allegations would be insufficient to state a claim under Rule 8. This is because Gerard has not plausibly alleged that such reliance was the cause of her harm. Although Gerard appears to argue that she suffered damages because Wells Fargo sold her property at foreclosure due to her failure to make payments (see generally Complaint at 18-19), the notice of default indicates that Gerard had not made a payment since October 1, 2012 - almost four months prior to the date Medellin purportedly misrepresented that Wells Fargo was actively reviewing Gerard's RMA application. (See RJN, Exh. H at 3.) " As such, it was not the alleged misrepresentation that plausibly led to [Gerard's] damages; it was h[er] own default." McReynolds v. HSBC Bank USA, No. 5:11-cv-05245 EJD, 2012 WL 5868945, *4 (N.D. Cal. Nov. 19, 2012) (" In the FAR, Plaintiff alleges that Defendant's misrepresentations or omissions concerning the processing of his loan modification materials caused him to refrain from taking other action in relation to the loan, such as submitting documentation earlier and commencing legal action. Plaintiff also describes his damages as the 'loss of the subject property, future use and enjoyment of that property, and his severe emotional and physical distress, pain and suffering.' The problem with these allegations is that, by the time Plaintiff was told he could submit documentation on or before June 7, 2011, he had already been in default on his loan payments for many months according to the Notice of Default recorded on February 7, 2011. As such, it was not the alleged misrepresentation that plausibly led to Plaintiff's damages; it was his own default. Similarly, it was not justifiable for Plaintiff to rely on the statement that Defendants would review his modification application as a way to postpone the foreclosure sale because that statement, even if false, would not have changed the fact that Plaintiff was already far behind on his mortgage payments, entitling Defendants to foreclose" (citation omitted)); see, e.g., Taylor v. Wells Fargo Bank, N.A., No. 2:14-cv-02007-JAM-CMK, 2014 WL 6390304, *4 (E.D. Cal. Nov. 14, 2014) (" Plaintiffs' negligent misrepresentation and fraud claims rely on two alleged misrepresentations: (1) Defendants told them that while a HAMP modification application was being processed, no foreclosure sale would take place; and (2) Defendants told Plaintiffs that if Plaintiffs appealed a loan modification denial, no foreclosure sale would take place during the appeal period. The Court finds that these allegations are insufficient to maintain these causes of action because Plaintiffs have failed to adequately allege that they were damaged as a result of these misrepresentations. There are no allegations that either Defendant ever promised Plaintiffs that they would receive a loan modification or that their failure to pay on the loan was excused. By their own allegations, Plaintiffs had the ability to cure their arrearage but failed to do so. Plaintiffs were already contractually obligated to make loan payments and were aware of the consequences of failing to do so - default and foreclosure. 'In the context of mortgage foreclosures, courts applying California law have generally been reluctant to permit borrowers to assert claims arising out of forbearance agreements . .., whether styled as claims for breach of contract, conversion or fraud.' Applying these cases to the instant case, the Court is compelled to grant Defendants' motion to dismiss Plaintiffs' second cause of action for negligent misrepresentation and third cause of action for fraud based on Plaintiffs' failure to adequately allege damages as a result of the misrepresentations, a necessary element of each claim" (citations omitted)); Plastino v. Wells Fargo Bank, 873 F.Supp.2d 1179, 1190-91 (N.D. Cal. 2012) (" The Complaint alleges that 'Plaintiff relied on the [unspecified] assertions by not making further payments on the loan[ ]'[; ] that she 'was induced to not make payments to her detriment[; that] [h]ad Plaintiff known the actual facts, [she] would not have taken such action[ ]'; and that '[a]s a proximate result of the fraudulent conduct of the Defendant as herein alleged, Plaintiff suffered damages in the form of the . . . [lost] property, loss of attorney's fees and expended costs' as well as other 'damage[s] in a sum to be determined at trial.' In sum, Plaintiff argues that she relied on Defendant's misrepresentations, did not make further payments on her loan, and was therefore damaged. But, as discussed above as to Plaintiff's UCL claim, the Notice of Default and Election to Sell Under Deed of Trust shows that Plaintiff was already $33,417.51 behind on her mortgage payments by December 28, 2010, and had not made a payment since April 2010. The first alleged misrepresentation in the Complaint was in March 2011, but at that point Plaintiff had not paid her mortgage for over ten months. Accepting the truth of Plaintiff's allegation that the March 2011 misrepresentation led her to 'not [make] further payments on the loan, ' the failure to make further payments is not plausibly the cause of Plaintiff's harm. Because Plaintiff has failed to plausibly allege detrimental reliance and damages, the Court dismisses the intentional misrepresentation cause of action, " citing Rumbaua v. Wells Fargo Bank, N.A., No. 11-1998 SC, 2011 WL 3740828, *4 (N.D. Cal. Aug. 25, 2011); DeLeon v. Wells Fargo Bank, N.A., No. 10-CV-01390-LHK, 2011 WL 311376, *9 (N.D. Cal. Jan. 28, 2011)); Argueta v. J.P. Morgan Chase, No. CIV 2:11-441 WBS GGH, 2011 WL 6012323, *5 (E.D. Cal. Dec. 1, 2011) (" Nor is it clear how defendants' representations regarding the status of her loan modification application caused plaintiff to fall further behind on her mortgage as plaintiff does not allege that defendants told her that she had to stop making mortgage payments while her application was under review. It would seem likely that plaintiff fell further behind on her mortgage for the same reason she likely went into default and sought a loan modification - because she was unable to afford such payments. . . . Accordingly, the court will dismiss plaintiff's claim for negligent misrepresentation" (citation omitted)).
b. Wells Fargo's Purported Misrepresentations Regarding Gerard's Income
Gerard next alleges that Wells Fargo purportedly misrepresented she had received $271,757.67 in foreign income during the 2010 tax year when she had not. Specifically, she contends that, during a telephone conversation with Medellin on January 18, 2013, he purportedly said that Gerard had foreign income; she alleges that, in a letter dated January 23, 2013, she told him she did not, and repeatedly asked that Wells Fargo review her income tax return to confirm that no such income was reported. Gerard asserts Wells Fargo made this misrepresentation to delay consideration of her RMA application so that it could foreclose on the property. Gerard contends that in reliance on Medellin's representation that she had foreign income, she purportedly spent " weeks trying to sort out the misrepresentation by contacting her accountant and faxing documents to [ ] Medellin in her efforts to resolve the discrepancy."
SAC, ¶ ¶ 12-13.
Id.
Id., ¶ ¶ 13-16.
Id., ¶ 13.
The court earlier dismissed Gerard's claim based on this purported misrepresentation because she failed to plead the alleged fraud with particularity as required by Rule 9(b). In its motion to dismiss the second amended complaint, Wells Fargo does not argue that Gerard has failed to satisfy Rule 9(b); rather, it asserts Gerard has failed to allege a plausible claim under Rule 8(a).
See Order at 24-26.
Motion at 6-7.
Gerard's opposition does not respond substantively to Wells Fargo's arguments concerning this purported misrepresentation. This failure alone warrants dismissal of the claim. See, e.g., Garcia v. Wachovia Mortgage Corp., 676 F.Supp.2d 895, 909 (C.D. Cal. 2009) (" Plaintiff has not addressed in her opposition the arguments made in the Motion to Dismiss, but has essentially pasted in the same allegations and improper legal arguments from the FAR. This appears to be a consent to the granting of the Motion on this issue" (citation omitted)); Connors v. Home Loan Corp., No. 08cv1134-L (LSP), 2009 WL 1615989, *8 (S.D. Cal. June 9, 2009) (" The Court notes that plaintiff has not substantively addressed this issue in his response to defendants' motion to dismiss. This lack of a response to defendants' arguments appears to be a consent to dismissing this cause of action for failure to state a claim"); id. (" In his response to defendants' motion, plaintiff does not address this issue in any manner. The Court construes the lack of response to be a waiver of the issue and therefore, dismisses this cause of action with prejudice").
More fundamentally, addressing the merits of the issue, the court agrees that Gerard has failed plausibly to plead a claim based on Medellin's statement under Rule 8(a). Insofar as Gerard asserts that Medellin's representation delayed consideration of her RMA application, which resulted in the denial of a loan modification and the sale of the property at foreclosure, she fails to allege how she justifiably relied on the representation, or how that reliance caused such damage.
SAC, ¶ ¶ 12-16.
As noted, to state a fraudulent misrepresentation claim, a plaintiff must plead that the misrepresentation " induce[d] [her] justifiable reliance . . . to [ ] her detriment." Terra Ins. Co., 717 F.Supp.2d at 890 (citing Hahn, 147 Cal.App.4th at 748). As with similar allegations in her first amended complaint, Gerard does not allege how reliance on Medellin's representation - accepting that his statement concerning foreign income was true - resulted in denial of her loan modification application or in sale at foreclosure fo her property. Although Gerard asserts that consideration of her RMA application was delayed as a result of Medellin's statement concerning purported foreign income and that a notice of default was recorded during this delay, these allegations are unrelated to any kind of reliance by Gerard on the misrepresentation. As the court noted in dismissing Gerard's first amended complaint, although the allegations might support a different claim against Wells Fargo, they do not support an intentional misrepresentation claim, which requires that any damage Gerard suffered have been caused by actions she took in reliance on Medellin's alleged misrepresentation. See Beckwith v. Dahl, 205 Cal.App.4th 1039, 1062, 141 Cal.Rptr.3d 142 (2012) (" 'A plaintiff asserting fraud by misrepresentation is obliged to . . . establish a complete causal relationship between the alleged misrepresentations and the harm claimed to have resulted therefrom.' 'The causation aspect of actions for damage for fraud and deceit involves three distinct elements: (1) actual reliance, (2) damage resulting from such reliance, and (3) right to rely or justifiable reliance, '" citing OCM Principal Opportunities Fund, L.P. v. CIBC World Markets Corp., 157 Cal.App.4th 835, 864, 68 Cal.Rptr.3d 828 (2007), and Younan v. Equifax, Inc., 111 Cal.App.3d 498, 513, 169 Cal.Rptr. 478 (1980)); id. at 1064 (" We acknowledge it is not enough for the complaint to allege damage was suffered. The fraud plaintiff must also allege his damages were caused by the actions he took in reliance on the defendant's misrepresentations, " citing Goehring v. Chapman University, 121 Cal.App.4th 353, 364-65, 17 Cal.Rptr.3d 39 (2004) (emphasis added)).
Indeed, Gerard's allegations indicate that she did not rely on Medellin's statement, as she told him she did not have foreign income and set about to demonstrate that this was the case.
SAC, ¶ 13 (" During [ ] the delay caused by Mr. Raul Medellin, Defendant, Wells Fargo Bank National Association recorded a Notice of Default and Election to Sell Under Deed of Trust on March 20, 2013. Plaintiff, Julia Gerard, was harmed and Plaintiff's reliance on Mr. Raul Medellin's representation was a substantial factor in causing her harm").
Order at 27.
Finally, although Gerard alleges that she suffered damage because she " expended weeks trying to sort out the misrepresentation by contacting her accountant and faxing documents to Mr. Raul Medellin . . . to resolve the discrepancy, " this type of nominal damages, i.e., " [t]ime and effort spent assembling materials" and sending them to Wells Fargo, is not adequate to support a claim. See McFarland v. JP Morgan Chase Bank, No. EDCV 13-01838-JGB (OPx), 2014 WL 4119399, *9 (C.D. Cal. Aug. 21, 2014) (" The only damages allegedly incurred from such a misrepresentation are her 'fruitless hours' spend preparing documents and submitting them to Defendants at least ten times. 'Time and effort spent assembling materials [ . . . ] is the sort of nominal damage subject to the maxim de minimis non curat lex - i.e., the law does not concern itself with trifles' and are not sufficient to state a misrepresentation claim" (citation omitted)). Because Gerard has once again failed to allege facts plausibly demonstrating causation, i.e., reliance and resulting damage, Wells Fargo's motion to dismiss this aspect of the intentional misrepresentation claim must be granted.
SAC, ¶ 13.
See Order at 28.
c. Wells Fargo's Purported Misrepresentations to the Court During the Course of the Litigation
Gerard asserts that " [she] is the owner of the [property], " and that " Wells Fargo Bank National Association and its attorney of record [are] misleading the court" by " 'argu[ing], ' without any supporting facts, that Plaintiff's land is not her princip[al] place of residence." These allegations are identical to allegations in Gerard's first amended complaint; they assert that Wells Fargo has made intentional misrepresentations in pleadings filed in this action. Wells Fargo contends that, to the extent that Gerard's intentional misrepresentation claim is based on such an assertion, it is barred by the litigation privilege. The court agrees.
SAC, ¶ ¶ 9, 23-24, 31. 89 See FAR, ¶ ¶ 9, 11.
See FAR, ¶ ¶ 9, 11.
Motion at 7-8.
As noted in the order dismissing Gerard's first amended complaint, California Civil Code § 47(b), which codifies the litigation privilege, protects " publication[s] or broadcast[s]" made " [i]n any (1) legislative proceeding, (2) judicial proceeding, (3) in any other official proceeding authorized by law, or (4) in the initiation or course of any other proceeding authorized by law. . . ." The California Supreme Court has held that the litigation privilege
Order at 32-33.
" is 'absolute in nature' . . . and [that] its 'principal purpose . . . is to afford litigants and witnesses . . . the utmost freedom of access to the courts without fear of being harassed subsequently by derivative tort actions.' . . . 'Although the litigation privilege was originally limited to shielding litigants, attorneys and witnesses from liability for defamation . .., it has been interpreted to apply to virtually all torts except malicious prosecution.' . . . 'The usual formulation is that the privilege applies to any communication (1) made in judicial or quasi-judicial proceedings; (2) by litigants or other participants authorized by law; (3) to achieve the objects of the litigation; and (4) that ha[s] some connection or logical relation to the action. . . ." Olszewski v. Scripps Health 30 Cal.4th 798, 830, 135 Cal.Rptr.2d 1, 69 P.3d 927 (2003).
" [T]he purpose of the litigation privilege is to ensure free access to the courts, promote complete and truthful testimony, encourage zealous advocacy, give finality to judgments, and avoid unending litigation." Wentland v. Wass, 126 Cal.App.4th 1484, 1492, 25 Cal.Rptr.3d 109 (2005). To achieve these goals, the privilege " applies without regard to malice or evil motives [and is thus] characterized as 'absolute.'" Brown v. Kennard, 94 Cal.App.4th 40, 45, 113 Cal.Rptr.2d 891 (2001); see Silberg v. Anderson, 50 Cal.3d 205, 215, 266 Cal.Rptr. 638, 786 P.2d 365 (1990) (" To effectuate its vital purposes, the litigation privilege is held to be absolute in nature"); see also Monolithic Power Systems, Inc. v. O2 Micro Intern. Ltd., Nos. C 04-2000 CW, C 06-2929 CW, 2007 WL 801886, *4 (N.D. Cal. Mar. 14, 2007) (quoting Brown ).
Courts have held that the filing, prosecution and defense of a legal action are " communicative acts" protected by the litigation privilege. See Action Apartment Ass'n, Inc. v. City of Santa Monica, 41 Cal.4th 1232, 1249, 63 Cal.Rptr.3d 398, 163 P.3d 89 (2007) (" [T]he filing of a legal action [is] by its very nature [ ] a communicative act. . . . We contemplate no communication that is more clearly protected by the litigation privilege than the filing of a legal action"); Rubin v. Green, 4 Cal.4th 1187, 1195, 17 Cal.Rptr.2d 828, 847 P.2d 1044 (1993) (" filing the complaint and subsequent pleadings in the litigation" are protected by the litigation privilege); Abraham v. Lancaster Community Hospital, 217 Cal.App.3d 796, 822, 266 Cal.Rptr. 360 (1990) (" [I]t cannot be disputed that the filing of a lawsuit is a publication in the course of a judicial proceeding"); see also Microsoft Corp v. BEC Computer Co., Inc., 818 F.Supp. 1313, 1319 (C.D. Cal. 1992) (" [T]he filing of improper or meritless pleadings . . . is privileged").
The litigation privilege " is not limited to statements made during a trial or other proceedings, but may extend to steps taken prior thereto, or afterwards." Rusheen v. Cohen, 37 Cal.4th 1048, 1057, 39 Cal.Rptr.3d 516, 128 P.3d 713 (2006). The reach of the litigation privilege extends to fraud claims. See Rubenstein v. Rubenstein, 81 Cal.App.4th 1131, 1147, 97 Cal.Rptr.2d 707 (2000) (" [T]he absolute litigation privilege of Civil Code section 47, subdivision (b), bars derivative tort actions and 'applies to all torts other than malicious prosecution, including fraud, negligence[, ] and negligent misrepresentation, '" citing Harris v. King, 60 Cal.App.4th 1185, 1188, 70 Cal.Rptr.2d 790 (1998); Edwards v. Centex Real Estate Corp., 53 Cal.App.4th 15, 28-29, 61 Cal.Rptr.2d 518 (1997)).
Gerard seeks to assert an intentional misrepresentation claim based on Wells Fargo's alleged misrepresentation in its motion to dismiss her HBOR claim that the property at issue was not Gerard's principal residence. California law is clear that such statements, even if false, are absolutely privileged when included in court filings, as Gerard alleges they were here. See, e.g., Graham-Sult v. Clainos, 756 F.3d 724, 747-48 (9th Cir. 2013) (affirming the district court's decision to strike an intentional misrepresentation claim as barred by the litigation privilege); Johnson v. JP Morgan Chase Bank DBA Chase Manhattan, 536 F.Supp.2d 1207, 1213 (E.D. Cal. 2008) (" Unifund contends that the fourth and fifth causes of action - for fraudulent misrepresentation and negligent misrepresentation - are also barred by the litigation privilege. As with the other claims, Unifund contends that Ms. Johnson's allegations against Unifund relate only to representations in court filings. Regarding her fraudulent misrepresentation claims, Ms. Johnson alleges that Unifund 'made a series of representations in court filings . . . that [Ms. Johnson] owed a sum . . . and that such sum was due and past due. These representations . . . were in fact false.' For her negligent misrepresentation claim, Ms. Johnson incorporates the fraudulent misrepresentation language. . . . To the extent Ms. Johnson bases her fraudulent and negligent misrepresentation claims on the 'representations in court filings, ' the claims are barred by the litigation privilege"). Compare Select Portfolio Servicing v. Valentino, 875 F.Supp.2d 975, 990 (N.D. Cal. 2012) (denying a motion to dismiss a fraud claim on the basis of the litigation privilege " where the allegedly fraudulent communications took place independently from the protected judicial proceedings").
SAC, ¶ ¶ 9, 23-24, 31.
Because any argument Wells Fargo has advanced in its pleadings is absolutely privileged, and cannot serve as the basis for an intentional misrepresentation claim, Gerard's intentional misrepresentation claim must be dismissed to the extent it is based on such statements.
Dismissal is also appropriate because Gerard failed to oppose dismissal of the intentional misrepresentation claim to the extent it is based on purported misrepresentations in pleadings filed in this litigation. She thus waived the issue, and consented to dismissal. See, e.g., Garcia, 676 F.Supp.2d at 909 (" Plaintiff has not addressed in her opposition the arguments made in the Motion to Dismiss, but has essentially pasted in the same allegations and improper legal arguments from the FAR. This appears to be a consent to the granting of the Motion on this issue" (citation omitted)); Connors, 2009 WL 1615989 at *8 (" The Court notes that plaintiff has not substantively addressed this issue in his response to defendants' motion to dismiss. This lack of a response to defendants' arguments appears to be a consent to dismissing this cause of action for failure to state a claim"); id. (" In his response to defendants' motion, plaintiff does not address this issue in any manner. The Court construes the lack of response to be a waiver of the issue and therefore, dismisses this cause of action with prejudice").
d. Wells Fargo's Purported Concealment
Gerard alleges finally that Wells Fargo fraudulently concealed three material facts: (1) that she was the owner of the property; (2) that Wells Fargo and its attorney were misleading the court in arguing that the property was not her principal residence; and (3) that she is entitled to relief under the California Homeowner Bill of Rights. As noted, to state a fraudulent concealment claim, a plaintiff must plead that " (1) the defendant [ ] concealed or suppressed a material fact, (2) the defendant [was] under a duty to disclose the fact to the plaintiff, (3) the defendant [ ] intentionally concealed or suppressed the fact with the intent to defraud the plaintiff, (4) the plaintiff [was] unaware of the fact and would not have acted as [s]he did if [s]he had known of the concealed or suppressed fact, and (5) as a result of the concealment or suppression of the fact, the plaintiff [ ] sustained damage." Terra Ins. Co., 717 F.Supp.2d at 890 (citation omitted).
SAC, ¶ 43.
Id., ¶ 49.
The first two material facts that Wells Fargo purportedly concealed are identical to those pled in Gerard's first amended complaint. As the court noted in dismissing that pleading, it is unclear how these facts could have been concealed by Wells Fargo, and thus how they could support a cause of action for fraudulent concealment:
See FAR, ¶ 27.
" As an initial matter, it is not clear how Wells Fargo could have concealed the material facts that Gerard alleges were not disclosed. The court cannot conceive, for example, how Wells Fargo could have concealed from Gerard the fact that she owned the property. Gerard in fact pleads that she purchased the property in 1994 and refinanced it in 2007, and that she is 'the owner of the land identified and described in paragraph 1 of [the] verified complaint, ' i.e., the property. These allegations make it apparent that Gerard's ownership of the property was not concealed from her. The second alleged concealment - that Wells Fargo is misleading the court by arguing that the property is not Gerard's principal residence - is neither an omission nor a concealment of material fact, and concerns Wells Fargo's communications with the court, not with Gerard. To the extent Gerard intends to assert that Wells Fargo concealed the fact that it was making this representation to the court, moreover, it is once again clear that there has been no concealment, since Gerard has received all pleadings Wells Fargo has filed to date. Finally, as the court has noted, statements to the court in pleadings are absolutely privileged under California law."
Similarly, with respect to the third fact that Wells Fargo purportedly concealed from Gerard - that she is entitled to relief under the California Homeowner Bill of Rights - Gerard alleges that the property is her principal residence, and that she " has always maintained and asserted" that she is entitled to relief under the HBOR. As is apparent from this allegation, Wells Fargo did not conceal from Gerard the fact that she is entitled to protection under the HBOR because she has always understood that she was covered by the legislation.
Id., ¶ 49.
SAC, ¶ 10.
Even assuming these facts could have been concealed from Gerard, she fails to allege a plausible fraudulent concealment claim because she does not plead that Wells Fargo had a duty to disclose the facts to her.
As noted, a plaintiff must plead as an element of a fraudulent concealment claim that defendant had a duty to disclose the information allegedly concealed. Such a duty arises when there is a fiduciary or confidential relationship between the parties, when defendant has exclusive knowledge of material facts that are not known to the plaintiff, when defendant actively conceals a material fact from plaintiff, or when defendant makes partial representations that omit material facts. LiMandri v. Judkins, 52 Cal.App.4th 326, 336, 60 Cal.Rptr.2d 539 (1997) (quoting Heliotis v. Schuman, 181 Cal.App.3d 646, 651, 226 Cal.Rptr. 509 (1986)); see also OCM Principal Opportunities Fund, 157 Cal.App.4th at 859 (same). The complaint alleges no facts indicating that Wells Fargo had exclusive knowledge of facts concerning plaintiff's use of the property, that it actively concealed material facts concerning that subject from plaintiff, or that it made partial representations concerning the subject that omitted material facts. As a result, Gerard must have alleged facts that would support a finding of a fiduciary or confidential relationship to state a viable fraudulent concealment claim.
A confidential relationship is akin to a fiduciary relationship. See Barbara A. v. John G., 145 Cal.App.3d 369, 382-83, 193 Cal.Rptr. 422 (1983) (the essence of a fiduciary or confidential relationship is that the dependent party reposes trust in the integrity of the party in the superior position).
As a general rule, mortgage lenders do not owe fiduciary duties to mortgagors. See Lyons v. Bank of America, NA, No. 11-01232 CW, 2011 WL 3607608, *7 (N.D. Cal. Aug. 15, 2011) (noting that " the weight of authority is against finding a fiduciary relationship or duty of care" between a lender or servicer offering a loan modification and a borrower); Coppes v. Wachovia Mortg. Corp., No. 2:10-cv-01689-GEB-DAD, 2011 WL 1402878, *5 (E.D. Cal. Apr. 13, 2011) (" Plaintiff fails to allege facts that plausibly suggest a fiduciary relationship was created [during the loan modification process]"); Oaks Management Corp. v. Superior Court, 145 Cal.App.4th 453, 466, 51 Cal.Rptr.3d 561 (2007) (" Absent special circumstances a loan transaction is at arms-length and there is no fiduciary relationship between the borrower and lender"); see also Becker v. Wells Fargo Bank, N.A., Inc., No. 2:10-cv-02799 LKK KJN PS, 2011 WL 1103439, *23 (E.D. Cal. Mar. 22, 2011) (citing Nymark v. Heart Fed. Sav. & Loan Ass'n, 231 Cal.App.3d 1089, 1096, 283 Cal.Rptr. 53, (1991), for the proposition that allegations concerning the loan modification process do not give rise to a duty on the part of the lender).
" A fiduciary duty can nevertheless arise from special circumstances even though there would be no fiduciary duty in the absence of such circumstances." Sencion v. Saxon Mortgage Services, Inc., No. CV 10-03108 PSG, 2011 WL 311383, *3 (N.D. Cal. Jan. 28, 2011) (citing Pension Trust Fund for Operating Engineers v. Federal Ins. Co., 307 F.3d 944, 954 (9th Cir. 2002) (holding that a fiduciary duty exists when the lender exercises dominion and control over the borrower); Los Angeles Sheet Metal Workers' Joint Apprenticeship Training Comm. v. Walter, 139 F.3d 906, 1998 WL 51720, *3 (9th Cir. Feb. 5, 1998) (Unpub. Disp.)). See also Bank of America v. Superior Court, 198 Cal.App.4th 862, 871 n. 7, 130 Cal.Rptr.3d 504 (2011) (" Absent special circumstances, a loan transaction is at arm's length and there is no fiduciary relationship between the borrower and lender").
Gerard does not allege any facts suggesting that Wells Fargo went beyond the typical role of a money lender; rather, she pleads that in the context of loan modification negotiations, Wells Fargo " [was] under a duty to disclose" to her that she was " entitled to relief under the California Homeowner Bill of Rights." She asserts the bank breached this duty by concealing that, when it reviewed her loan modification application, it concluded the property was not her primary residence, and " le[d] [her] to believe that [it] was actively reviewing [her] loan for modification." This does not adequately plead a duty to disclose on Wells Fargo's part. See, e.g., Soriano v. Wells Fargo Bank, N.A., No. 11-00044 SOM, 2012 WL 1536065, *12 (D. Haw. Apr. 30, 2012) (declining to " [i]mpose a fiduciary duty on lenders just because they solicit clients and allegedly make representations regarding possible loan modifications" where plaintiff alleged that defendants lulled her into " [a] false sense of security, and then foreclosed upon her home without her knowledge"); see Peterson Development Co. v. Torrey Pines Bank, 233 Cal.App.3d 103, 119, 284 Cal.Rptr. 367 (1991) (a bank that made a loan to a borrower did not have special relationship of trust or confidence with the borrower despite the borrower's purported reliance on the bank's loan processing procedure); Levavi v. Bank of America, N.A., B234760, 2012 WL 4378178, *3 (Cal.App. Sept. 26, 2012) (Unpub. Disp.) (bank had no duty to disclose its general lending and marketing practices to borrower); Bank of America, 198 Cal.App.4th at 872-73 (bank had no duty to disclose to its borrowers its allegedly fraudulent scheme to inflate property appraisals throughout California, pool its mortgages and sell the pools to unsuspecting investors at inflated prices); Igbene v. Jackson Federal Bank, No. A122757, 2010 WL 2031276, *6 (Cal.App. May 24, 2010) (Unpub. Disp.) (bank was under no duty to disclose the detailed terms of a loan at the time it issued a commitment letter to the potential borrower).
SAC, ¶ 49.
Id.
Gerard's claim must thus be dismissed to the extent it is based on Wells Fargo's purportedly fraudulent concealment of its belief that the property was not her primary residence, that Gerard was entitled to relief under the HBOR, and that she is the owner of the property.
Gerard once again failed to respond to Wells Fargo's arguments regarding dismissal of the claim to the extent it is based on purported concealment of material facts. Gerard's failure to oppose Wells Fargo's request for dismissal on these grounds " appears to be a consent to the granting of the [m]otion on this issue, " and provides an additional ground for dismissal. See, e.g., Garcia, 676 F.Supp.2d at 909 (" Plaintiff has not addressed in her opposition the arguments made in the Motion to Dismiss, but has essentially pasted in the same allegations and improper legal arguments from the FAR. This appears to be a consent to the granting of the Motion on this issue" (citation omitted)); Connors, 2009 WL 1615989 at *8 (" The Court notes that plaintiff has not substantively addressed this issue in his response to defendants' motion to dismiss. This lack of a response to defendants' arguments appears to be a consent to dismissing this cause of action for failure to state a claim"); id. (" In his response to defendants' motion, plaintiff does not address this issue in any manner. The Court construes the lack of response to be a waiver of the issue and therefore, dismisses this cause of action with prejudice").
C. Whether the Court Should Grant Leave to Amend
Gerard asks that the court grant leave to amend in the event it concludes that the second amended complaint fails plausibly to allege an intentional misrepresentation claim. This is the third time the court has passed on the sufficiency of Gerard's allegations and the third time it has found them inadequate. In its order dismissing Gerard's first amended complaint, the court cautioned Gerard that further leave to amend would not be granted. It stated:
Opposition at 9.
" The court cautions Gerard, however, that if any second amended complaint that is filed does not cure the deficiencies in her intentional misrepresentation claim noted in this order, it will conclude that she cannot cure those deficiencies and that granting further leave to amend would be futile."
Order at 39.
The second amended complaint relies on many of the same factual allegations pled in the first amended complaint. Although, as discussed, Gerard has alleged some additional facts regarding the purported misrepresentations to satisfy Rule 9(b)'s particularity requirement, she has once again failed to plead sufficient facts to state a viable fraudulent misrepresentation or fraudulent concealment claim against Wells Fargo. She has once again failed plausibly to allege reliance on Wells Fargo's purported misrepresentations concerning the loan modification process, or damages caused by such reliance. Although Gerard reports that she has retained counsel who " has reviewed evidence and can represent that one more amendment will not be futile, " she fails to indicate what facts she could allege in a third amended complaint that would cure the deficiencies evident in each of the three complaints she has filed to date. Compare Orion Tire Corp. v. Goodyear Tire & Rubber Co., 268 F.3d 1133, 1137 (9th Cir. 2001) (" Where counsel is able to posit possible amendments that would be consistent with the operative complaint and court also possibly state a claim for relief, the complaint should not be dismissed on its face with prejudice").
Having reviewed the allegations in the three complaints, the arguments offered in response to each of Wells Fargo's three motions to dismiss, and the limited new facts pled in the amended complaints, and considering the deficiencies in the complaint that remain, the court concludes that further leave to amend would be futile. Accordingly, it declines to afford Gerard further leave to amend her intentional misrepresentation claim. See 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"); California ex rel. California Department of Toxic Substances Control v. Neville Chemical Co., 358 F.3d 661, 673 (9th Cir. 2004) (" [D]enial of leave to amend is appropriate if the amendment would be futile, " citing Foman v. Davis, 371 U.S. 178, 182, 83 S.Ct. 227, 9 L.Ed.2d 222 (1962)).
At the hearing, Gerard's attorney requested that the court grant leave to amend. Although he asserted that further leave to amend would not be futile, he did not articulate how Gerard would be able to allege facts sufficient to state a plausible fraud claim if given leave to file a third amended complaint. Based on his argument, it appears that any amended complaint would attempt to base a fraud claim on Medellin's purported misrepresentation that the loan application was being actively reviewed. As discussed, such a claim would be deficient because it does not appear Gerard could plausibly allege that: (1) Medellin's statement was false; and (2) she relied on the statement by failing to make payments on her mortgage. Additionally, even if Gerard could make such allegations, the claim would fail because her resulting damages - i.e., the sale of her property at foreclosure - would not be a result of her reliance. As noted, Gerard had not made a payment on her mortgage loan since October 1, 2012, and had defaulted on her obligations under the note long before Medellin made the purported representation. (See supra note 75.) Thus, any further failure to make payments due to Medellin's statement could not plausibly have resulted in Gerard's damages.
III. CONCLUSION
For the reasons stated, the court grants Wells Fargo's motion to dismiss. Having concluded that further amendment would be futile, the dismissal is with prejudice.
JUDGMENT FOR DEFENDANTS
On May 19, 2015, the court entered an order granting Wells Fargo's motion to dismiss Gerard's second amended complaint with prejudice. Accordingly, IT IS ORDERED AND ADJUDGED
1. That plaintiff take nothing by way of her second amended complaint; and
2. That the action be, and hereby is, dismissed.
In sum, Gerard's second amended complaint contains no allegations that Medellin's purported misrepresentation was false or that she relied on it by not making payments. Even had such allegations been made, it does not appear that Gerard could plausibly plead detrimental reliance on the statement because she was in default on the loan for nearly four months before Medellin made the purported misrepresentation. For these reasons, the court concludes that Gerard's claim must be dismissed.