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Bermudez v. DHI Mortgage Company Ltd.

United States District Court, D. Arizona

April 27, 2018

Baltazar Jacuinde Bermudez, Plaintiff,
DHI Mortgage Company Ltd., et al., Defendants.


          Honorable Steven P. Logan United States District Judge

         Before the Court is Defendants DiTech Financial LLC and Mortgage Electronic Registration Systems, Inc.'s Motion to Dismiss (Doc. 10). For the reasons set forth below, the motion is granted.

         I. Background

         On May 23, 2017, pro se Plaintiff Baltazar Jacuinde Bermudez filed suit against Defendants DHI Mortgage Company Limited (“DHI”), DiTech Financial LLC, (“DiTech”), and Mortgage Electronic Registration Systems Incorporated (“MERS”) for the following claims related to the foreclosure of his home in Buckeye, Arizona: (1) unconscionable contracts; (2) breach of fiduciary duty; (3) intentional infliction of emotional distress; (4) declaratory relief; (5) wrongful foreclosure; (6) slander; and (7) negligence. (Doc. 1-1.) Defendants DiTech and MERS have moved to dismiss the claims against them. (Doc. 10.)

         II. Standard of Review

         To survive a motion to dismiss, a complaint must contain “a short and plain statement of the claim showing that the pleader is entitled to relief” such that the defendant is given “fair notice of what the . . . claim is and the grounds upon which it rests.” Bell Atl. Corp. v. Twombly, 550 U.S. 554, 555 (2007) (quoting Fed.R.Civ.P. 8(a)(2); Conley v. Gibson, 355 U.S. 41, 47 (1957)). The Court may dismiss a complaint for failure to state a claim under Federal Rule 12(b)(6) for two reasons: (1) lack of a cognizable legal theory, and (2) insufficient facts alleged under a cognizable legal theory. Balistreri v. Pacificia Police Dep't, 901 F.2d 696, 699 (9th Cir. 1990).

         A complaint must “state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal citation omitted). Facial plausibility requires the plaintiff to plead “factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. “Where a complaint pleads facts that are ‘merely consistent with' a defendant's liability, it ‘stops short of the line between possibility and plausibility of entitlement to relief.'” Id. (quoting Twombly, 550 U.S. at 557). Although a complaint “does not need detailed factual allegations, ” a plaintiff must “raise a right to relief above the speculative level.” Twombly, 550 U.S. at 555. This requires “more than labels and conclusions, and a formulaic recitation of the elements of a cause of action.” Id.

         In deciding a motion to dismiss the Court must “accept as true all well-pleaded allegations of material fact, and construe them in the light most favorable to the non-moving party.” Daniels-Hall v. Nat'l Educ. Ass'n, 629 F.3d 992, 998 (9th Cir. 2010). In comparison, “allegations that are merely conclusory, unwarranted deductions of fact, or unreasonable inferences” are not entitled to the assumption of truth, id., and “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) (internal citation omitted). A plaintiff need not prove the case on the pleadings to survive a motion to dismiss. OSU Student All. v. Ray, 699 F.3d 1053, 1078 (9th Cir. 2012).

         III. Discussion

         A. Unconscionable contract

         In Arizona, a contract may be either procedural or substantively unconscionable. Maxwell v. Fid. Fin. Servs., Inc., 184 Ariz. 82, 89-90, 902 P.2d 51, 58 (Ariz. 1995). The former refers to the unconscionability of contractual process, while the latter “concerns that actual terms of the contract and examines the relative fairness of the obligations assumed.” Id. Here, Plaintiff has not alleged any facts that would allow the Court to find that it is facially plausible that Plaintiff's contract with Defendants DiTech and MERS is unconscionable either procedurally or substantively. Plaintiff's allegations focus on the securitization of mortgage by Defendant DHI. (Doc. 1-1 at 6-7.) Securitization of a mortgage alone, however, is an insufficient basis to bring an unconscionable contract claim. Because the only allegations supporting his unconscionable contract claim is-in fact-permissible, Plaintiff fails to state a claim for unconscionable contract against Defendants DiTech and MERS.

         B. Breach of fiduciary duty

         “[I]t is well-settled in Arizona that a mortgage lender does not owe a fiduciary duty to a borrower.” Gould v. M & I Marshall & Isley Bank, 860 F.Supp.2d 985, 989 (D. Ariz. 2012) (internal citations omitted). Plaintiff has not pleaded any factual allegations to suggest that there was a fiduciary relationship between himself and Defendant DiTech or Defendant MERS. See Badger v. Mortg. Elec. Registration Sys., No. CV-11-08094-PCT-NVW, 2011 WL 3156325, at *5 (D. Ariz. July 27, 2011) (“Absent a special agreement, a debtor-creditor relationship in Arizona is not a fiduciary relationship.”). Accordingly, Plaintiff's claim for breach of fiduciary duty against Defendants Ditech and MERS is dismissed.

         C. Intentional infliction of ...

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