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Bradley v. Jp Morgan Chase Bank

United States District Court, Ninth Circuit

June 11, 2013

Randy E. Bradley; Joanne C. Bradley, Plaintiffs,
v.
JP Morgan Chase Bank, National Association; All Persons Claiming Any Legal Or Equitable Right, Title, Lien To Property Commonly Known As; 4815 East Moonlight Way Paradise Valley AZ, 85253, Defendants.

ORDER

DAVID G. CAMPBELL, District Judge.

Defendant JP Morgan Chase Bank ("Chase") has filed a motion to dismiss the complaint of pro se Plaintiffs Randy and Joanne Bradley. Doc. 7. The motion is fully briefed. Docs. 11, 12. For the reasons discussed below, the Court will dismiss the complaint with leave to amend.

I. Background.

Plaintiffs obtained a loan from Washington Mutual Bank, F.A. ("WAMU") in August 2007, secured by property at 4815 East Moonlight Way, Paradise Valley, Arizona. In 2008, Plaintiffs received notice that Defendant had acquired WAMU and would thereafter be servicing Plaintiffs' loan. Upon viewing a customer service notice from Defendant entitled "Help for Homeowners" that detailed refinance and loan modification options for eligible customers, Plaintiffs applied for a loan modification. Plaintiffs allege that Defendant's consideration and subsequent denial of their application violated the terms of a Pooling and Servicing Agreement that governed the loan.

Plaintiffs commenced this action by filing a complaint in Maricopa County Superior Court alleging breach of contract, misrepresentation, breach of the covenant of good faith and fair dealing, and breach of fiduciary duty. Defendant removed the case to this Court and moved to dismiss the complaint under Rule 12(b)(6). Doc. 7. Plaintiffs responded to the motion eight days after the time to file a response had expired.[1] Doc. 11.

II. Legal Standard.

When analyzing a complaint for failure to state a claim to relief under Rule 12(b)(6), the well-pled factual allegations are taken as true and construed in the light most favorable to the nonmoving party. Cousins v. Lockyer, 568 F.3d 1063, 1067 (9th Cir. 2009). Legal conclusions couched as factual allegations are not entitled to the assumption of truth, Ashcroft v. Iqbal, 556 U.S. 662, 680 (2009), and they are insufficient to defeat a motion to dismiss for failure to state a claim, In re Cutera Sec. Litig., 610 F.3d 1103, 1108 (9th Cir. 2010). To avoid a Rule 12(b)(6) dismissal, the complaint must plead enough facts to state a claim to relief that is plausible on its face. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). The Court must construe the complaint liberally because Plaintiffs are proceeding pro se. See Hughes v. Rowe, 449 U.S. 5, 9 (1980).

The Court generally will not consider evidence or documents beyond the complaint when ruling on a Rule 12(b)(6) motion. "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, 908 (citations omitted); see also Knievel v. ESPN, 393 F.3d 1068, 1076 (9th Cir. 2005) (noting that the court may take into account documents "whose contents are alleged in a complaint and whose authenticity no party questions, but which are not physically attached to the [plaintiff's] pleading.").

Defendant attached the Pooling and Servicing Agreement ("PSA") to its motion to dismiss. Plaintiffs did not physically attach this document to the complaint, but the complaint alleges its content and the document is central to Plaintiffs' claims. Plaintiffs' response does not contest the authenticity of the document. Accordingly, the Court will consider the PSA in this decision.

III. Analysis.

A. Breach of Contract.

To state a breach of contract claim, "the complaint must allege an agreement, the right to seek relief, and breach by the defendant." Commercial Cornice & Millwork, Inc. v. Camel Constr. Servs. Corp., 739 P.2d 1351, 1355 (Ariz. 1987) (citing City of Tucson v. Superior Ct., 569 P.2d 264 (Ariz. 1977)). Although Plaintiffs did not list a breach of contract claim in the caption of their complaint, nor in the introductory summary of their causes of action, (Compl. [Doc. 1-1 at 3-11] at ¶ 1), it appears from the substance of their claims that they intended to bring a claim for breach of contract. Because Defendant also made this assumption and responded to the claim, the Court will address it here.

Plaintiffs claim that Defendant breached the terms of the PSA existing between WAMU and themselves. Defendant argues that it did not become a successor in interest to this contract when it acquired WAMU, but the Court need not assess the validity of this argument because the claim fails regardless. Thus, for purposes of this motion only, the Court will construe the facts in favor of Plaintiffs and assume that Defendant became a party to the PSA when it purchased WAMU.[2]

Plaintiffs' theory of the breach rests on an unspecified clause in the PSA which states in relevant part that "the servicer shall not permit any modification with respect to any Mortgage loan." Compl. at ¶ 21. The complaint clearly states that Defendant denied Plaintiffs' application for modification. Compl. at ¶ 17. Thus, Defendant could not have breached the contract on the facts alleged because it did not modify the loan. Given the facts as pled by Plaintiffs, Defendant complied with the ...


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