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Edwards v. PHH Mortgage Corporation

United States District Court, D. Arizona

April 30, 2019

Stephen S. Edwards, Plaintiff,
v.
PHH Mortgage Corporation, et al., Defendants.

          ORDER

          Steven P. Logan United States District Judge

         Before the Court are four motions to dismiss, (i) Defendant PHH Mortgage Corporation's (“PHH”) Motion to Dismiss First Amended Complaint with Prejudice (Doc. 28); (ii) Defendant Clear Recon Corporation's (“CRC”) Motion to Dismiss First Amended Complaint for Failure to State a Claim Upon Which Relief Can Be Granted (Doc. 42); (iii) Defendant Kate Benveniste's Motion to Dismiss First Amended Complaint with Prejudice (Doc. 39); and (iv) Defendant Laura Sixkiller's Motion to Dismiss First Amended Complaint with Prejudice (Doc. 26) (together, the “Motions to Dismiss”), and PHH's Motion to Declare Stephen S. Edwards A Vexatious Litigant and Enter a Pre-Filing Order (Doc. 83). For the reasons that follow, all of the motions are granted.

         I. Motions to Dismiss

          The Plaintiff originally filed this action in Maricopa County Superior Court on July 17, 2018 (Doc. 1-4 at 2), and the case was removed to this Court on November 12, 2018 (Doc. 1). Plaintiff alleges that Defendants PHH and CRC wrongfully foreclosed on his property. (Doc. 1-4 at 7) PHH, CRC, Kate Benveniste, Robert Crowl, [1] and Laura Sixkiller (together, the “Defendants”) filed the Motions to Dismiss arguing that the first amended complaint (Doc. 22) (the “FAC”) fails under Rule 12(b)(6) of the Federal Rules of Civil Procedure.

         A. Legal Standard

         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).

         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, and “are insufficient to defeat a motion to dismiss for failure to state a claim.” Id.; In re Cutera Sec. Litig., 610 F.3d 1103, 1108 (9th Cir. 2010). 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).

         B. Analysis

         First, the Court notes its earlier Order (Doc. 99) dismissing the Plaintiff's original complaint against PHH and CRC on the basis of res judicata (the “Res Judicata Order”). The Court incorporates its analysis under the Res Judicata Order here. Furthermore, the Court finds that the facts pleaded against PHH and CRC for the Plaintiff's claims of “breech of Contract, ” mortgage fraud, fraud and misrepresentation, negligent misrepresentation, civil conspiracy, and quiet title are identical to the facts pleaded in the original complaint that was dismissed by the Court's Order. (Doc. 99) Accordingly, counts 1, 2, 4, 5, 6, and 7 of the FAC will be dismissed as they pertain to PHH and CRC.[2]

         The Court finds that the remainder of the FAC fails to provide any of the Defendants with fair notice of the facts giving rise to the Plaintiff's claims against them. To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face. Hannan v. Maxim Integrated Prod., Inc., 394 Fed.Appx. 434 (9th Cir. 2010). 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. Id. For Count 1, the Plaintiff's claim for “breech of Contract, ” the Plaintiff fails to plead sufficient facts to identify a valid contract between the Remaining Defendants or state how the Remaining Defendants breached any such contract. (Doc. 22 at 3-4); Graham v. Asbury, 540 P.2d 656, 657 (1975) (stating “[t]o bring an action for the breach of the contract, the plaintiff has the burden of proving the existence of the contract, its breach and the resulting damages.”); see also Double J Inv., LLC v. Automation Control & Info. Sys. Corp., 2013 WL 12190460, at 1 (D. Ariz. 2013).

         For Count 2, the Plaintiff's claim for mortgage fraud and injunctive relief, the Plaintiff fails to demonstrate that the Remaining Defendants knowingly provided him with fraudulent information, and the Plaintiff only uses conclusory allegations to support his claim. Wilkinson v. Wells Fargo Bank, N.A., 2012 WL 1880610, at 4 (D. Ariz. 2012) (stating “[t]o prove fraud in Arizona, nine elements must be established: (1) a representation, (2) its falsity, (3) its materiality, (4) the speaker's knowledge of its falsity or ignorance of its truth, (5) the speaker's intent that the information should be acted upon by the hearer and in a manner reasonably contemplated, (6) the hearer's ignorance of the information's falsity, (7) the hearer's reliance on its truth, (8) the hearer's right to rely thereon, and (9) the hearer's consequent and proximate injury, ” and “[m]ere conclusory allegations of fraud will not suffice; the complaint must contain statements of the time, place, and nature of the alleged fraudulent activities.”) For Count 3, the Plaintiff's claim for bad faith, the Plaintiff fails to set forth any specific allegations to support this cause of action. (Doc. 22 at 10)

         For Count 4, the Plaintiff's claim for fraud and misrepresentation, the Court finds that the Plaintiff does not provide sufficient facts to establish a claim for fraud and does not identify the misrepresentation made by the Remaining Defendants with particularity. In re Arizona Theranos, Inc., Litig., 256 F.Supp.3d 1009, 1023 (D. Ariz. 2017) (stating that “[u]nder Arizona law, to prevail on a common law fraud claim, a plaintiff must show (1) a representation; (2) its falsity; (3) its materiality; (4) the speaker's knowledge of its falsity or ignorance of its truth; (5) his intent that it should be acted upon by and in the manner reasonably contemplated; (6) the hearer's ignorance of its falsity; (7) his reliance on the truth; (8) his right to rely thereon; and (9) his consequent and proximate injury.”). In the FAC, the Plaintiff merely states that the Defendants made false representations regarding “the pay-off balance” under the Plaintiff's mortgage, but does not set forth any allegations connecting the Remaining Defendants to these allegations or describing how their actions rise to the level of misrepresentation or a violation of A.R.S. 44-1521. (Doc. 22 at 11) For Count 5, the Plaintiff's claim for negligent misrepresentation, the Court finds that the Plaintiff has failed to plead sufficient facts to demonstrate that the Remaining Defendants failed to exercise reasonable care or competence in obtaining the information provided to the Plaintiff. (Doc. 22 at 12); Standard Chartered PLC v. Price Waterhouse, 945 P.2d 317, 341 (Ct. App. 1996), (stating that a claim for negligent misrepresentation requires a plaintiff to plead that the defending party who, in the course of business, profession or employment, or in any other transaction in which it has a pecuniary interest, supplies false information for the guidance of others in its business transactions, is subject to liability for pecuniary loss caused to them by their justifiable reliance upon the information, if it fails to exercise reasonable care or competence in obtaining or communicating the information.)

         For Count 6, the Plaintiff's claim for civil conspiracy, the Court finds that the Plaintiff fails to plead sufficient facts to demonstrate that the Remaining Defendants reached a tacit understanding or agreement to engage in fraudulent misrepresentation. S. Union Co. v. Sw. Gas Corp., 165 F.Supp.2d 1010, 1020 (D. Ariz. 2001) (stating “that a conspiracy to commit fraud be pleaded with the same particularity as the fraud itself.”). In support of this claim, the Plaintiff only offers conclusory allegations. The Plaintiff does not assert Count 7, the Plaintiff's claim to quiet title, against the Remaining Defendants. (Doc. 22 at 13, stating “Plaintiff seeks to quiet title against the claims of Defendant PHH and . . . Clear Recon Corporation.”). For Count 8, the Plaintiff's claim for Real Estate Settlement Procedures Act (12 U.S.C. §§ 2601-2617) violations, the Plaintiff fails to set forth any specific allegations against the Defendants to support this cause of action. (Doc. 22 at 14) For Count 9, the Plaintiff's claim for violations of the Fair Debt Collection Practices Act (15 U.S.C. § 1692), the Plaintiff fails to set forth any specific allegations against the Defendants and relies on conclusory allegations to support this cause of action. (Doc. 22 at 14)

         For Count 10, the Plaintiff's claim for defamation, libel and slander, the Plaintiff fails to identify a defamatory, libelous or slanderous statement made by any of the Defendants. Hosszu v. Barrett, 202 F.Supp.3d 1101, 1105 (D. Ariz. 2016) (stating that a party must . . . establish that the statements about which it complains are reasonably capable of sustaining a defamatory meaning). For Count 11, the Plaintiff's claim for “ARS Title 33 Violations, ” the Plaintiff fails to set forth any specific allegations to support this cause of action. (Doc. 22 at 15) For Count 12, the Plaintiff's request for punitive damages, the Plaintiff fails to set forth any specific allegations to support this cause of action. (Doc. 22 at 15) For Count 13, the Plaintiff's claim ...


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