Cenorina Guerrero v. JPMorgan Chase Bank, N.A.

• Court: District Court, C.D. California
• Decided: March 3, 2023
• Docket: 2:22-cv-04684
• Status: Unknown

Opinion

Case 2:22-cv-04684-RSWL-SK Document 22 Filed 03/03/23 Pagelof14 Page ID #:94

1 JS-6 "O!' 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA 10 11 12 | CENORINA GUERRERO, CV 22-cv-04684-RSWL-SKx . , i riaincise, | ORDER se: DEPEDANTY 14 Vv. hs JPMORGAN CHASE BANK, N.A., re Defendant. 17 18° □□□□□□□□□□□□□□□□□□□□□□□ 19 Plaintiff Cenorina Guerrero (“Plaintiff”) brings 50 this Action against Defendant JPMorgan Chase Bank, N.A. 54 (“Defendant”) alleging 1) fraud, 2) breach of contract, 59 3) breach of the covenant of good faith and fair 53 dealing, 4) unjust enrichment, and 5) money had and DA received. Currently before the Court is Defendant’s 55 Motion to Dismiss Plaintiff’s Complaint (“Motion”) [15]. 26 Having reviewed all papers submitted pertaining to 27 the Motion, the Court NOW FINDS AND RULES AS FOLLOWS: 9 the Court GRANTS Defendant’s Motion to Dismiss WITHOUT

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1 LEAVE TO AMEND. 2 I. BACKGROUND

3 A. Factual Background 4 The Complaint alleges: 5 Plaintiff is an individual owning real property and 6 living in Pomona, California. Compl. ¶ 1, ECF No. 1. 7 Defendant is a corporation doing business in California. 8 Id. ¶ 2. In 2008, Plaintiff applied for a Home Equity 9 Line of Credit (the “HELOC”) at Washington Mutual Bank. 10 Id. ¶ 7. Plaintiff withdrew $70,000 from the HELOC and 11 converted the funds to a conventional loan. Id. 12 Plaintiff paid the loan off and maintained $250,000 in 13 credit. Id. ¶ 8. 14 In 2012, the HELOC was assigned to Defendant. Id. 15 ¶ 9. Even though Plaintiff never withdrew or received 16 funds from the HELOC after her initial $70,000 17 withdrawal, Plaintiff received notice of default on a 18 loan from the HELOC in the amount of $250,000. Id. 19 ¶ 10. When Plaintiff received the notice, Plaintiff 20 paid the amount in default. Id. ¶ 11. Plaintiff 21 initially paid $9,259 and since then has continuously 22 paid $650 monthly. Id. ¶ 22. Plaintiff has suffered 23 harm in being forced to make payments on a loan she 24 never withdrew or received funds from. Id. 25 B. Procedural Background 26 On August 5, 2021, Plaintiff filed her Complaint in 27 the Superior Court of California, County of Los Angeles. 28 On June 10, 2022, Defendant was served. On July 8, 2 Case 2:22-cv-04684-RSWL-SK Document 22 Filed 03/03/23 Page 3 of 14 Page ID #:96

1 2022, Defendant filed a notice of removal [1]. 2 On November 14, 2022, Defendant filed the instant

3 Motion [15]. Plaintiff did not file any opposition. 4 II. DISCUSSION 5 A. Legal Standard 6 Federal Rule of Civil Procedure (“Rule”) 12(b)(6) 7 allows a party to move for dismissal on one or more 8 claims if a pleading fails to state a claim upon which 9 relief can be granted. Fed. R. Civ. P. 12(b)(6). Under 10 Rule 8(a), a complaint must contain “a short and plain 11 statement of the claim showing that the pleader is 12 entitled to relief” to give the defendant “fair notice 13 of what the . . . claim is and the grounds upon which it 14 rests.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 15 (2007); see also Fed. R. Civ. P. 8(a). Dismissal is 16 proper “where the complaint lacks a cognizable legal 17 theory or sufficient facts to support a cognizable legal 18 theory.” Mendiondo v. Centinela Hosp. Med. Ctr., 521 19 F.3d 1097, 1104 (9th Cir. 2008) (citing Balistreri v. 20 Pacifica Police Dep’t, 901 F.2d 696, 699 (9th Cir. 21 1988)). 22 “To survive a motion to dismiss, a complaint must 23 contain sufficient factual matter, accepted as true, to 24 ‘state a claim to relief that is plausible on its 25 face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) 26 (quoting Twombly, 550 U.S. at 570). While a complaint 27 need not contain detailed factual allegations, it must 28 provide more than mere “labels and conclusions” or “a 3 Case 2:22-cv-04684-RSWL-SK Document 22 Filed 03/03/23 Page 4 of 14 Page ID #:97

1 formulaic recitation of the elements of a cause of

2 action.” Twombly, 550 U.S. at 555. The plaintiff must

3 allege enough facts “to raise a right to relief above 4 the speculative level.” Id. In evaluating a 5 Rule 12(b)(6) motion, a court must take all well-pleaded 6 allegations of material fact as true and construe them 7 in the light most favorable to the nonmovant. Great 8 Minds v. Off. Depot, Inc., 945 F.3d 1106, 1109 (9th Cir. 9 2019). A court may generally consider only “the 10 complaint itself and its attached exhibits, documents 11 incorporated by reference, and matters properly subject 12 to judicial notice.” In re NVIDIA Corp. Sec. Litig., 13 768 F.3d 1046, 1051 (9th Cir. 2014). 14 “When the running of the statute [of limitations] 15 is apparent from the face of the complaint . . . the 16 defense may be raised by a motion to dismiss.” Conerly 17 v. Westinghouse Elec. Corp., 623 F.2d 117, 119 (9th Cir. 18 1980). 19 B. Discussion 20 Defendant seeks to dismiss Plaintiff’s five claims: 21 1) fraud; 2) money had and received; 3) unjust 22 enrichment; 4) breach of contract; and 5) breach of the 23 covenant of good faith and fair dealing. 24 See generally Def.’s Mot. to Dismiss (“Mot.”), 25 ECF No. 15. 26 /// 27 /// 28 /// 4 Case 2:22-cv-04684-RSWL-SK Document 22 Filed 03/03/23 Page 5 of 14 Page ID #:98

1 1. Plaintiff’s Fraud, Money Had and Received, and 2 Unjust Enrichment Claims Are Barred by the

3 Statute of Limitations1 4 To determine the applicable statute of limitations, 5 a court does not look to the form the action takes, but 6 instead the substance and the nature of the right that 7 has been violated. Ponti v. Farrell, 194 Cal. App. 2d 8 676, 683 (1961). A plaintiff must bring an action for 9 relief on the ground of fraud or mistake within three 10 years from the date of when a plaintiff discovers the 11 facts constituting fraud or mistake. Cal. Code Civ. 12 Proc. § 338(d). Furthermore, the limitations period for 13 section 338, subdivision (d) begins to run when the 14 aggrieved party could have discovered the fraud or 15 mistake through the exercise of reasonable diligence. 16 Sun ‘n Sand, Inc. v. United Cal. Bank, 21 Cal. 3d 671, 17 701 (1978). 18 Here, Plaintiff discovered the facts constituting 19 her fraud claim when, in September 2012, Defendant sent 20 Plaintiff “notice of default on a loan for $250,000 from 21 the HELOC.” Compl. ¶ 10. Defendant’s only alleged 22 misrepresentation occurred in 2012, which is about nine 23 years before Plaintiff filed her Complaint on August 5, 24 2021. Id. ¶ 13. Given that Plaintiff did not file her 25 1 Defendant argues Plaintiff’s fraud claim should also be 26 dismissed for lacking particularity. See Mot. at 11:6-12:6. Given that the Court dismisses the fraud claim on statue of 27 limitation grounds, the Court does not consider whether the fraud 28 claim was pled with particularity. 5 Case 2:22-cv-04684-RSWL-SK Document 22 Filed 03/03/23 Page 6 of 14 Page ID #:99

1 Complaint within three years of discovering the facts

2 constituting her fraud claim, Plaintiff’s fraud claim is

3 time barred. 4 If the claim pled is money had and received, but 5 the substance of the claim is for fraud or mistake then 6 the statute of limitations that controls is section 338, 7 subdivision (d). Creditors Collection Serv. v. 8 Castaldi, 38 Cal. App. 4th 1039, 1043 (1995). “The 9 section 338, subdivision (d), three-year statute of 10 limitations applies to an unjust enrichment cause of 11 action based on mistake” or fraud. Fed. Deposit Ins. 12 Corp. v. Dintino, 167 Cal. App. 4th 333, 348 (2008). 13 Here, fraud or mistake is the basis for the legal 14 injury of Plaintiff’s money had and received and unjust 15 enrichment claims. See Compl. ¶¶ 31-37. The substance 16 of the two claims is Defendant’s alleged mistake or 17 fraud in sending Plaintiff a notice of default in 2012. 18 See id. Given that the substance of the two claims is 19 based in fraud or mistake, the controlling statute of 20 limitations is Code of Civil Procedure section 338, 21 subdivision (d). See Creditors Collection Serv., 22 38 Cal. App. 4th at 1043. Similar to the fraud claim, 23 given that the alleged fraud or mistake occurred in 2012 24 but the Complaint was not filed until 2021, the money 25 had and received and unjust enrichment claims are time 26 barred by section 338, subdivision (d). 27 Accordingly, the Court GRANTS Defendant’s Motion to 28 Dismiss on Plaintiff’s fraud, money had and received, 6 Case 2:22-cv-04684-RSWL-SK Document 22 Filed 03/03/23 Page 7 of 14 Page ID #:100

1 and unjust enrichment claims. 2 2. Plaintiff’s Breach of Contract and Breach

3 of the Covenant of Good Faith and Fair 4 Dealing Claims Are Barred by the Statute 5 of Limitations 6 In determining the controlling limitations period, 7 a court looks to the nature of the claims. Krieger v. 8 Nick Alexander Imps., Inc., 234 Cal. App. 3d 205, 220 9 (1991). Contracts as well as obligations or liabilities 10 founded upon a written instrument, are governed by a 11 four-year statute of limitations period. Cal. Code Civ. 12 Proc. § 337. Likewise, an action for breach of implied 13 covenant of good faith and fair dealing is controlled by 14 the four-year limitations period for an action arising 15 on a written contract. Krieger, 234 Cal. App. 3d at 16 220. 17 Here, Plaintiff had a contract with Washington 18 Mutual Bank in 2008 for a HELOC. Compl. ¶ 7. The 19 contract was assigned from Washington Mutual Bank to 20 Defendant. Id. ¶ 9. Plaintiff’s breach of contract and 21 breach of the covenant of good faith and fair dealing 22 claims are based on the notice of default received in 23 2012. Id. ¶ 17-30. Looking at the nature of the 24 claims, Plaintiff’s breach of contract and breach of the 25 covenant of good faith and fair dealing are governed by 26 a four-year statute of limitations. Cal. Code Civ. 27 Proc. § 337; see Krieger, 234 Cal. App. 3d at 220. 28 Ordinarily in both tort and contract cases, “the 7 Case 2:22-cv-04684-RSWL-SK Document 22 Filed 03/03/23 Page 8 of 14 Page ID #:101

1 statute of limitations begins to run upon the occurrence

2 of the last element necessary to the cause of action.”

3 Id. at 221. In a contract action, the claim generally 4 accrues at the time of breach. Whorton v. Dillingham, 5 202 Cal. App. 3d 447, 456 (1988). The discovery rule 6 provides that the claim does not accrue until the 7 plaintiff discovers or reasonably should discover the 8 existence of the claim. Neel v. Magana, Olney, Levy, 9 Cathcart & Gelfand, 6 Cal. 3d 176, 194 (1971). 10 As seen in the Complaint, Plaintiff was not in 11 breach when Defendant sent Plaintiff notice of default. 12 Id. ¶ 8, 10. In 2012, Plaintiff became aware of 13 Defendant’s breach when Plaintiff received the notice of 14 default. Given that a claim generally accrues at the 15 time of breach, Plaintiff’s breach of contract and 16 breach of the covenant of good faith and fair dealing 17 claims accrued in 2012. Since the breach occurred in 18 2012, but the Complaint was not filed until 2021, 19 Plaintiff missed the four-year statute of limitations 20 period. See Cal. Code Civ. Proc. § 337. Therefore, the 21 breach of contract and breach of the covenant of good 22 faith and fair dealing claims are time barred by 23 California Code of Civil Procedure § 337. 24 Accordingly, the Court GRANTS Defendant’s Motion to 25 Dismiss on Plaintiff’s breach of contract and breach of 26 the covenant of good faith and fair dealing claims.2 27 2 The continuous accrual doctrine does not prevent 28 Plaintiff’s claims from being time barred. The doctrine applies 8 Case 2:22-cv-04684-RSWL-SK Document 22 Filed 03/03/23 Page 9 of 14 Page ID #:102

1 3. Local Rule 7-12 2 Local Rule 7-12 reinforces the conclusion that

3 Plaintiff has not sufficiently alleged that her claims 4 are timely brought. Local Rule 7-12 states in pertinent 5 part: “failure to file any required document, or the 6 failure to file it within the deadline, may be deemed 7 consent to the granting or denial of the motion.” 8 C.D. Cal. Local Civ. R. 7-12. In assessing whether this 9 rule applies and a court should grant an unopposed 10 motion, the Ninth Circuit considers the following five 11 factors: (1) the public’s interest in expeditious 12 resolution in litigation; (2) the court’s need to manage 13 its docket; (3) the risk of prejudice to the defendants; 14 (4) the public policy favoring disposition of cases on 15 their merits; and (5) the availability of less drastic 16 sanctions. Pagtalunan v. Galaza, 291 F.3d 639, 642 (9th 17 Cir. 2002). This test for dismissal is “a disjunctive 18 when “a series of wrongs or injuries may be viewed as each 19 triggering its own limitations period, such that a suit for relief may be partially time barred as to older events but timely 20 as to those within the applicable limitations period.” Aryeh v. Canon Bus. Sols., Inc., 55 Cal. 4th 1185, 1192 (2013). Here, 21 some of Plaintiff’s monthly loan payments have been made within the applicable limitations period. However, “if the alleged 22 recurring injuries during the limitations period ‘arose out of a single transaction’ that occurred before the limitations period, 23 the continuous accrual doctrine does not apply.” Ryan v. 24 Microsoft Corp., 147 F. Supp.3d 868, 895-96 (N.D. Cal. 2015). Here, the continuous accrual doctrine does not apply because all 25 of Plaintiff’s claims stem from a single transaction, the notice of default sent in 2012. See Ramos v. Wells Fargo Bank, N.A., 26 No. 18-cv-00762-VKD, 2018 U.S. Dist. LEXIS 103491, at *10 (N.D. Cal. June 19, 2018) (holding that the continuous accrual doctrine 27 did not apply to time barred claims because the claims stemmed 28 from a single loan with a definitive dollar value). 9 Case 2:22-cv-04684-RSWL-SK Document 22 Filed 03/03/23 Page 10 of 14 Page ID #:103

1 balancing test, so not all five factors must support

2 dismissal.” Sowinski v. Cal. Air Res. Board, No. SACV

3 15-2123-JLS (JCGx), 2016 WL 5886902 (C.D. Cal. Aug. 18, 4 2016) (citing Valley Eng’rs Inc. v. Elec. Eng’g Co., 158 5 F.3d 1051, 1057 (9th Cir. 1998)). 6 a. The Public’s Interest in Expeditious 7 Resolution of Litigation 8 Here, as to the first factor, the public’s interest 9 in expeditious resolution of litigation always favors 10 dismissal. Yourish v. Cal. Amplifier, 191 F.3d 983, 990 11 (9th Cir. 1999). Thus, this factor weighs in favor of 12 dismissal. 13 b. The Court’s Need to Manage Its Docket 14 Second, the Court’s need to manage its docket 15 depends on whether the delay in a particular case 16 interferes with docket management and the public 17 interest. Pagtalunan, 291 F.3d at 642. Here, 18 Plaintiff’s failure to file a response or request an 19 extension indicates that the Plaintiff does not intend 20 to prosecute the action against Defendant. See Balsin 21 v. Equable Ascent Fin., LLC, CV 11-01113 MMM (FMOx), 22 2011 WL 13218018 at *2 (C.D. Cal. May 12, 2011) (finding 23 in favor of dismissal where plaintiff’s inattention and 24 nonresponsive behavior suggests further litigation would 25 waste the court’s valuable resources). Thus, this 26 factor weighs in favor of dismissal. 27 c. The Risk of Prejudice to Defendant 28 Next, to prove risk of prejudice, a defendant must 10 Case 2:22-cv-04684-RSWL-SK Document 22 Filed 03/03/23 Page 11 of 14 Page ID #:104

1 establish that a plaintiff’s actions impaired a

2 defendant’s ability to proceed to trial or threatened to

3 interfere with the rightful decision of the case. 4 Pagtalunan, 291 F.3d at 642 (citing Malone v. U.S. 5 Postal Serv., 833 F.2d 129, 131 (9th Cir. 1987)). Here, 6 Plaintiff neither provides an explanation for its 7 failure to file an opposition nor requests an extension 8 to do so. See, e.g., Foster v. Jacquez, No. CV 09-01406 9 JFW, 2009 WL 1559586, *3 (C.D. Cal. May 28, 2009) 10 (“Where a party offers a poor excuse for failing to 11 comply with a court’s order, the prejudice to the 12 opposing party is sufficient to favor dismissal.”); 13 Grubb v. Hernandez, No. ED CV 06-00807SJOAJW, 2009 WL 14 1357411 at *2 (C.D. Cal. May 1, 2009) (“In the absence 15 of a showing to the contrary, prejudice to defendants or 16 respondents is presumed from unreasonable delay [for the 17 purpose of Local Rule 7-12].”). Therefore, this factor 18 weighs in favor of dismissal. 19 d. The Public Policy Favoring Disposition of 20 Cases on Their Merits 21 Fourth, public policy favors disposition of cases 22 on the merits, and therefore, this factor generally 23 weighs against dismissal. Hernandez v. City of El 24 Monte, 138 F.3d 393, 399 (9th Cir. 1998). This 25 presumes, however, that the plaintiff “has manifested a 26 diligent desire to prosecute his or her claims.” Ewing 27 v. Ruano, No. CV 09-08471 VAP, 2012 WL 2138159 at *2 28 (C.D. Cal. June 12, 2012). Here, Plaintiff has neither 11 Case 2:22-cv-04684-RSWL-SK Document 22 Filed 03/03/23 Page 12 of 14 Page ID #:105

1 filed a timely opposition nor applied for an extension

2 to file an opposition. See id. (finding this factor

3 favored dismissal where plaintiff failed to file a 4 timely opposition or apply for an extension). Thus, 5 this factor weighs in favor of dismissal. 6 e. The Availability of Less Drastic Sanctions 7 Finally, this factor “ordinarily counsels against 8 dismissal” unless the court gave plaintiff an 9 opportunity to avoid dismissal, in which case no lesser 10 sanctions are available. Sperow v. Ponce, No. CV 19- 11 10525-KS, 2020 WL 3100645 at *2 (C.D. Cal. June 11, 12 2020). Here, the Court did not offer Plaintiff an 13 opportunity to avoid dismissal, nor did it find it 14 necessary to consider the availability of other less 15 drastic alternatives. See Pagtalunan, 291 F.3d at 643 16 (finding this factor weighed against dismissal because 17 the court did not consider the lesser alternative of 18 imposing sanctions). Therefore, this factor weighs 19 against dismissal. 20 Of the five factors, four factors weigh in favor of 21 dismissal. Thus, the Court dismisses the Complaint 22 against Defendant pursuant to Local Rule 7-12. 23 4. Leave to Amend 24 “The court should give leave [to amend] freely when 25 justice so requires.” Fed. R. Civ. P. 15(a)(2). In the 26 Ninth Circuit, “Rule 15’s policy of favoring amendments 27 to pleadings should be applied with ‘extreme 28 liberality.’” United States v. Webb, 655 F.2d 977, 979 12 Case 2:22-cv-04684-RSWL-SK Document 22 Filed 03/03/23 Page 13 of 14 Page ID #:106

1 (9th Cir. 1981). Against this liberal standard, the

2 Court may consider “the presence of any of four factors:

3 bad faith, undue delay, prejudice to the opposing party, 4 and/or futility.” Owens v. Kaiser Found. Health Plan, 5 Inc., 244 F.3d 708, 712 (9th Cir. 2001). While the 6 Ninth Circuit has “stressed Rule 15’s policy of favoring 7 amendments,” leave need not be granted where amendment 8 would be “an exercise in futility.” Ascon Props., Inc. 9 v. Mobil Oil Co., 866 F.2d 1149, 1160 (9th Cir. 1989). 10 Here, allowing Plaintiff to amend her Complaint 11 would be futile because Plaintiff has not indicated the 12 existence of any additional facts that would avoid her 13 claims being time barred. See Austin v. Medicis, 14 21 Cal. App. 5th 577, 597 (2018) (holding that claims 15 were properly dismissed without leave to amend because 16 they were “time barred” and there was no “reasonable 17 possibility amendment would cure the problem.”). Given 18 that Plaintiff’s claims against Defendant all arise from 19 an alleged fraudulent act by Defendant in 2012, 20 Plaintiff’s claims cannot be cured through amendment. 21 Accordingly, leave to amend would be futile. See Nat’l 22 Funding, Inc. v. Com. Credit Counseling Servs., Inc., 23 817 F. App’x 380, 385 (9th Cir. 2020) (affirming 24 district court’s denial of leave to amend because no 25 additional facts are available that would support 26 plaintiff’s claim to cure its deficiencies). Therefore, 27 the Court GRANTS Defendant’s Motion to Dismiss WITHOUT 28 LEAVE TO AMEND. 13 Case 2:22-cv-04684-RSWL-SK Document 22 Filed 03/03/23 Page 14 of 14 Page ID #:107

1 III. CONCLUSION 2 Based on the foregoing, the Court GRANTS

3 Defendant’s Motion to Dismiss WITHOUT LEAVE TO AMEND. 4 5 IT IS SO ORDERED. 6 7 DATED: March 3, 2023 /s/Ronald S.W. Lew HONORABLE RONALD S.W. LEW 8 Senior U.S. District Judge 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 14