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Kramer v. Ocwen Loan Servicing LLC

United States District Court, D. Arizona

May 8, 2014

James Kramer, Plaintiff,
Ocwen Loan Servicing LLC, et al., Defendants.


DAVID G. CAMPBELL, District Judge.

Defendants Ocwen Loan Servicing, LLC ("Ocwen") and Litton Loan Servicing, LP ("Litton") (collectively, "Defendants") have filed a motion to dismiss. Doc. 13. The motion is fully briefed and no party has requested oral argument. For the reasons set forth below, the Court will grant the motion.

I. Background.

On June 24, 2013, Plaintiff James Kramer instituted this action in Maricopa County Superior Court asserting thirteen counts, including (1) violation of A.R.S. § 44-1522 by conduct, (2) violation of A.R.S. § 44-1522 by omission, (3) breach of contract, (4) violation of A.R.S. Title 31, Chapter 6.1, (5) negligent misrepresentation, (6) fraudulent concealment, (7) failure to hire, train or supervise employees, (8) breach of Consent Judgment, (9) constructive fraud, (10) equitable estoppel, (11) promissory estoppel, (12) violation of the duty of good faith and fair dealing, and (13) common law fraud. Defendants removed the case to federal court pursuant to 28 U.S.C. § 1441(b) on July 15, 2013.

On or about July 11, 2005, Kramer obtained an interest-only variable-rate first and second lien mortgage loan in the amount of $352, 000, secured by a Deed of Trust recorded against real property located at 2678 North 133rd Drive, Phoenix, Arizona (the "Property"). Kramer alleges that Litton solicited him to engage in a loan modification sometime in March 2009. Doc. 1 at 13. Litton allegedly knew the loan as modified was unattainable and designed to fail. Kramer asserts that Litton made misrepresentations and concealed material facts, including that Kramer would relinquish rights against the entity that originally helped him obtain a subprime mortgage. Id. Without notice to Kramer, the first lien mortgage servicing was transferred to Ocwen in March 2009. Id. at 14.

In December 2011, Kramer alleges that he was attracted to Ocwen's website, which offered rapid loan modifications. Id. After completing the online application, Kramer eventually received a phone call from Ocwen declining his application because Ocwen did not believe that Kramer's business generated only $3, 500 in personal income per month. Id. Kramer received no assistance in preparing documents, was never offered assistance of counsel, and his application was declined because Ocwen explained that he "didn't need [the modification]." Id. On June 12, 2012, Kramer alleges that he again applied to Ocwen for a loan modification and was again refused without written documentation. Id. at 15.

Kramer missed payments on the mortgage and was served with foreclosure notices. Id. He alleges that he was not provided any alternative options. Id. With the help of a real estate agent, Kramer put the property on the market, seeking to mitigate his loss in a short sale. Id. He was forced to disclose severe structural damage and settling due to subsurface weakness. Id. Nevertheless, Kramer asserts that he was able to find a buyer willing to pay fair market value. Id. On May 1, 2013, Ocwen refused to permit the sale, explaining that the offer "was not sufficient." Id.

On May 15, 203, Ocwen hired a third party to perform a Broker's Price Option ("BPO"). Id. at 16. As a result of the BPO, Ocwen stated that it would only approve an offer between $250, 000 and $255, 000. Id. On May 22, 2013, Kramer and his agent negotiated a higher offer at $233, 000 from a prospective buyer, but Ocwen refused to consider it. On June 10, 2013, Ocwen advised Kramer that the requirement for a short sale had risen to $260, 000, which was "far above fair market value." Id.

Kramer alleges that despite his efforts to pursue his rights under state and federal law, Defendants now threaten to foreclose on the property. Id.

The Court notes that Kramer's counsel has established a pattern of submitting near identical complaints on behalf of his clients in state and federal court. Through this method of "template pleading, " counsel drafts complaints that assert the same claims, make the same arguments, and reflect minimal adjustments based on factual differences between each client's case. See, e.g., Raup v. Wells Fargo Bank, NA, No. CV-13-00137-PHX-GMS, Doc. 1; Ripa v. Fed. Nat'l Mortg. Ass'n, No. CV-13-01612-PHX-DGC, Doc. 1. Almost all of the claims asserted using counsel's templates have been dismissed.

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 therefore 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). This plausibility standard "is not akin to a probability requirement, ' but it asks for more than a sheer possibility that a defendant has acted unlawfully." Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 556). "[W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged - but it has not show[n]' - that the pleader is entitled to relief.'" Id. at 679 (quoting Fed.R.Civ.P. 8(a)(2)).

III. Analysis.

A. Claims Relying on Consent ...

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