Del Rosario v. Yakte Properties, LLC ( 2022 )

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 FOR THE EASTERN DISTRICT OF CALIFORNIA 10 11 Imelda Del Rosario, No. Case 2:21-cv-01304-KJM-JDP 12 Plaintiff, ORDER 13 v. 14 Yakte Properties, LLC, et al., 1S Defendants. 16 17 Plaintiff Imelda Del Rosario alleges the defendants in this case violated laws and 18 | regulations governing her home equity line of credit. See generally First Am. Compl., ECF 19 | No. 12. This court granted defendant Yakte Properties, LLC’s motion to dismiss plaintiff's 20 | original complaint with leave to amend. See generally Prev. Order, ECF No. 9. Ms. Rosario 21 | amended her complaint, and Yakte now moves again to dismiss. See generally First Am. Compl; 22 | Mot., ECF No. 14; Mem., ECF No. 14-1. The motion is fully briefed and the court submitted it 23 | without oral argument. See Opp’n, ECF No. 16; Reply, ECF No. 17; Min. Order, ECF No. 18. 24 | As explained below, the motion is granted in part. 25 A motion to dismiss for failure to state a claim under Rule 12(b)(6) may be granted if the 26 | complaint’s allegations do not “plausibly give rise to an entitlement to relief.” Ashcroft v. Iqbal, 27 | 556 U.S. 662, 679 (2009). The complaint need contain only a “short and plain statement of the 28 | claim showing that the pleader is entitled to relief,” Fed. R. Civ. P. 8(a)(2), not “detailed factual 1 allegations,” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). But this rule demands more 2 than unadorned accusations; “sufficient factual matter” must make the claim at least plausible. 3 Iqbal, 556 U.S. at 678. Conclusory or formulaic recitations of elements do not alone suffice. Id. 4 (quoting Twombly, 550 U.S. at 555). 5 Ms. Rosario’s first claim rests on federal regulations requiring creditors to send monthly 6 statements to consumers for certain consumer credit accounts. See First Am. Compl. ¶¶ 28–33 7 (citing 12 C.F.R. §§ 1026.5, 1026.7 and 1026.41). Yakte advances three arguments in favor of 8 dismissal. None is persuasive. First, Yakte contends the cited regulations do not apply to 9 plaintiff’s home equity line of credit, see Mem. at 6, but at least one of the regulations in question 10 relates expressly to a home equity plan, see 12 C.F.R. § 1026.7. Second, Yakte argues it was not 11 required to send any statements after delinquency proceedings began in late 2019. See Mem. at 6; 12 Reply at 2. This argument cannot neutralize Ms. Rosario’s claim that Yakte was required to send 13 statements before 2019 as well. See First Am. Compl. ¶¶ 13–21. Third, Yakte contends the first 14 amended complaint does not state a claim because it includes no factual allegations about “the 15 purportedly illegal interest and charges.” Mem. at 6. This position does not account for Ms. 16 Rosario’s alternative theory that Yakte was required to send statements but did not do so. See 17 First Am. Compl. ¶ 32. The motion to dismiss this claim is denied. 18 Ms. Rosario’s second claim rests on the Federal Debt Collection Practice Act and 19 California’s Rosenthal Fair Debt Collections Practices Act. See First Am. Compl. ¶¶ 34–42. She 20 alleges Yakte misrepresented the amount of her debt by including unspecified “interest and fees” 21 that it was “federally prohibited from collecting” under unspecified laws, and she alleges Yakte 22 “made other false statements.” Id. ¶¶ 38–39. These are the same allegations this court rejected in 23 its previous order. See Prev. Order at 4. Because Ms. Rosario did not correct this shortcoming in 24 her amended complaint, the motion to dismiss this claim is granted without leave to amend. See, 25 e.g., Salameh v. Tarsadia Hotel, 726 F.3d 1124, 1133 (9th Cir. 2013) (affirming dismissal 26 without leave to amend because plaintiff had not corrected error district court previously 27 identified). 28 ///// 1 Plaintiff’s third claim is for negligent misrepresentation. See First Am. Compl. ¶¶ 43–54. 2 Ms. Rosario alleges Yakte or an unknown but related third party falsely represented her loan had 3 been “charged off.” Id. ¶ 51. She relied on a similarly generic allegation in her original 4 complaint. See Prev. Order at 2–3. As before, her allegations are too vague to permit an 5 inference of Yakte’s liability. See id. This claim is dismissed without leave to amend. 6 The fourth and final claim in Ms. Rosario’s amended complaint rests on California 7 Business and Professions Code section 17200, the Unfair Competition Law. See First. Am. 8 Compl. ¶¶ 55–75. That section permits lawsuits against “any unlawful” business act or practice. 9 See Cal. Bus. & Prof. Code § 17200. It “borrows violations of other laws and treats them as 10 unlawful practices that the unfair competition law makes independently actionable.” Cel-Tech 11 Commc'ns, Inc. v. L.A. Cellular Tel. Co., 20 Cal. 4th 163, 180 (1999) (citations and quotation 12 marks omitted). As Yakte correctly argues, however, private plaintiffs can pursue claims under 13 section 17200 only if they have lost money or property as a result of the challenged business 14 practice. See Mem. at 11; see also Cal. Bus. & Prof. Code § 17204. Ms. Rosario does not 15 explain in her amended complaint what money or property she lost as a result of Yakte’s 16 allegedly unlawful actions. She alleges only that she was “damaged” and suffered “a substantial 17 ascertainable loss.” First Am. Compl. ¶ 72. In her opposition, she claims she was saddled with 18 “excessive interest, costs and penalties,” among other harms, Opp’n at 9, but a court “may not 19 look beyond the complaint to a plaintiff’s moving papers,” see Schneider v. Cal. Dep’t of Corr., 20 151 F.3d 1194, 1197 n.1 (9th Cir. 1998) (emphasis omitted). This claim is dismissed, but with 21 leave to amend if possible. 22 The motion to dismiss (ECF No. 14) is granted in part and denied in part: the second 23 and third claims are dismissed without leave to amend; the fourth claim is dismissed with leave 24 to amend, and the motion is otherwise denied. Any second amended complaint must be filed 25 within fourteen days. 26 The status (pretrial scheduling) conference currently set for February 24, 2022 at 27 2:30 p.m. before the undersigned remains on calendar, with an updated joint status report due 28 fourteen days prior. 1 The order to show cause (ECF No. 13) is discharged. 2 IT IS SO ORDERED. 3 DATED: January 26, 2022.