Robert Riggins v. Bank of America NA
8:12-cv-00033
| C.D. Cal. | Jan 24, 2013Background
- Plaintiff Robert Riggins entered into a December 21, 2006 loan with Countrywide (later Bank of America) secured by a deed of trust with ReconTrust as trustee and MERS as beneficiary.
- Countrywide allegedly inflated Plaintiff's income on the loan application; Plaintiff contends he had little to no income at the time.
- Countrywide entered into a 2008 stipulated judgment with the California Attorney General related to subprime loan origination practices; the CWABS trust later acquired the beneficial interest.
- Notice of Default was filed by ReconTrust in November 2009; a 2010 assignment of beneficial interest to Bank of New York Mellon was recorded (notarized January 2010).
- Plaintiff alleges forged/altered documents were recorded to fill gaps in the chain of title and that TILA disclosures regarding the assignment were not provided.
- Plaintiff asserted seven claims, including fraud, TILA, UCL, breach of fiduciary duty, cancellation of the written instrument, equitable estoppel, and breach of the implied covenant of good faith and fair dealing.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Fraud claim: reliance and pleading adequacy | Riggins relied on Countrywide’s misrepresentation of qualification based on inflated income. | Reliance on misrepresentation was unjustifiable and not adequately pled with specificity. | Fraud claim dismissed with prejudice |
| UCL claims accrued at loan origination; timeliness | Unfair practices under UCL based on loan origination are actionable. | Origination-based UCL claims are time-barred under four-year statute of limitations. | UCL claims accrued at origination dismissed with prejudice |
| UCL unlawful prong and forged documents; standing | Defendants recorded allegedly fraudulent documents in violation of Penal Code sections 115.5 and 532(f)(a)(4). | Plaintiff lacks standing and causation; timing and pleading defects. | UCL unlawful-prong claim based on recording dismissed with prejudice |
| Fiduciary duty by Countrywide | Countrywide acted as an active participant with fiduciary duties to Plaintiff. | No active-participant basis shown; no fiduciary duty owed. | Breach of fiduciary duty claim dismissed with prejudice |
| Cancellation of written instrument; unconscionability; tender | Loan contract void from inception; seeks rescission under Civil Code sections 3412, 1689, 1670.5; unconscionability. | Allegations are conclusory; Plaintiff failed to offer restoration and tender; unconscionability inadequately pled. | Cancellation/unconscionability claims dismissed with prejudice |
| Equitable estoppel and implied covenant to good faith | Defendants should be barred from enforcing rights due to misrepresentations and unfair dealing. | Plaintiff pleads no factual basis for estoppel or breach of implied covenant beyond boilerplate recitation. | Equitable estoppel and implied covenant claims dismissed with prejudice |
Key Cases Cited
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (U.S. 2007) (claims must be plausible, not merely speculative)
- Ashcroft v. Iqbal, 556 U.S. 662 (U.S. 2009) (pleading must have factual content raising plausible entitlement to relief)
- Cel-Tech Comms., Inc. v. Los Angeles Cellular Telephone Co., 20 Cal.4th 163 (Cal. 1999) (unlawful prong borrows predicates from other laws)
- Kwikset Corp. v. Superior Court, 51 Cal.4th 310 (Cal. 2011) (standing under UCL requires economic injury caused by unfair competition)
- Perlas v. GMAC Mortg., LLC, 187 Cal.App.4th 429 (Cal. App. 2010) (inLoan qualification versus affordability; misrepresentation not always actionable)
- Estillore v. Countrywide Bank FSB, 2011 WL (N.D. Cal. 2011) (unconscionability pleading requirements for loan agreements)
- Armendariz v. Foundation Health PsychCare Servs., Inc., 24 Cal.4th 83 (Cal. 2000) (procedural and substantive unconscionability framework)
- Lazar v. Superior Court, 12 Cal.4th 631 (Cal. 1996) (elements of California fraud claim)
- Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097 (9th Cir. 2003) (Rule 9(b) specificity requirements for fraud)
- Guz v. Bechtel Nat’l, Inc., 24 Cal.4th 317 (Cal. 2000) (implied covenant scope and limitations)