Castorina v. Bank of America, N.A. ( 2022 )

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 ----oo0oo---- 11 12 JOHN CASTORINA, individually and No. 2:21-cv-02004 WBS KJN on behalf of all others 13 similarly situated, 14 Plaintiff, MEMORANDUM AND ORDER RE: DEFENDANTS’ MOTIONS TO 15 v. DISMISS 16 BANK OF AMERICA, N.A., and INTEGON NATIONAL INSURANCE 17 COMPANY, 18 Defendants. 19 20 ----oo0oo---- 21 Plaintiff John Castorina (“plaintiff”) has filed this 22 putative class action against Defendant Bank of America, N.A. 23 (“Bank of America”) and Integon National Insurance Company 24 (“Integon”) alleging various violations of federal and California 25 state laws relating to defendants’ practices surrounding the 26 purchasing and placing of insurance, and the conducting of 27 inspections, on borrowers’ properties. (Compl. (Docket No. 1).) 28 Bank of America and Integon now move to dismiss plaintiff’s 1 complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). 2 (Docket Nos. 15, 20.) 3 I. Factual and Procedural Background 4 Plaintiff purchased the property at issue at 2110 5 Forestlake Drive, Rancho Cordova, California 95670 (“the 6 property”) in 1995. (Compl. ¶ 7, 131.) After a series of 7 transactions and transfers, on or about April 25, 2003, plaintiff 8 entered into a “mortgage” agreement on the property with 9 Countrywide Home Loans.1 (Id.) In 2008, Bank of America 10 purchased the mortgage and became the mortgage lender and 11 servicer. (Id.) 12 The deed of trust at issue contained a provision that 13 required plaintiff to secure and pay for adequate property 14 insurance that protected the property against loss due to 15 hazards. (Id. ¶ 132; Id., Ex. A., Deed of Trust (“Deed of 16 Trust”) ¶ 4 (Docket No. 1-1).) It also contained a provision 17 allowing Bank of America to inspect and safeguard the property if 18 it is “vacant or abandoned or the loan is in default.” (Compl. ¶ 19 133; Deed of Trust ¶ 5.) 20 Plaintiff alleges that in 2019 he applied for a loan 21 modification and received correspondence from Bank of America 22 denying his application because of its inability to confirm 23 plaintiff actually owned the property. (Compl. ¶ 134.) Plaintiff 24 responded to the denial with a copy of his deed to confirm 25 26 1 In their pleadings, the parties refer to the deed of trust and promissory note collectively as the “mortgage,” 27 “mortgage agreement” or “agreement.” The contractual terms which are at issue in this case are those set forth in the deed of 28 trust. 1 ownership. (Id.) At that time, Bank of America began refusing 2 to accept monthly payments on the loan. (Id.) 3 On or about September 1, 2019, Bank of America put 4 plaintiff’s loan account into delinquency. (Id. ¶ 135.) 5 Plaintiff alleges he provided the requested documentation and 6 obtained assistance of counsel to prove ownership over the 7 property. (Id. ¶¶ 135, 138.) Bank of America nevertheless 8 continued to refuse to accept payments or acknowledge plaintiff’s 9 ownership of the property for twenty-two months. (Id. ¶¶ 136, 10 142.) 11 Plaintiff alleges that on July 24, 2019, Bank of 12 America began charging his account for property inspections. 13 (Id. ¶ 137.) He alleges Bank of America conducted fifteen 14 property inspections, some of which were to check if the property 15 was vacant, though plaintiff alleges Bank of America knew he was 16 occupying it. (Id. ¶ 139.) Seven of those inspections were 17 charged to plaintiff’s account on the same day, June 10, 2021, 18 after plaintiff had made multiple payments to bring his account 19 out of default. (Id.; Compl., Ex. C, June 10, 2021 Account 20 Statement (“June 10, 2021 Account Statement”) (Docket No. 1-1).) 21 In or around November 2019, plaintiff’s voluntary 22 hazard insurance policy lapsed, and Bank of America then 23 purchased a hazard insurance policy through Integon, and placed 24 it onto plaintiff’s property. (Id. ¶ 143.)2 The lender-placed 25 insurance remains on plaintiff’s property and plaintiff has paid 26 2 An insurance policy that is placed on borrowers’ 27 properties in this manner is referred to by the parties both as “force-placed insurance” and “lender-placed insurance.” The 28 court will refer to it as “lender-placed insurance.” 1 the amounts for the lender-placed insurance charges to Bank of 2 America. (Id.) Plaintiff alleges that charges for the lender- 3 placed insurance made to plaintiff were higher than the cost of 4 the lender-placed insurance that Bank of America paid to Integon. 5 (Id. ¶ 145.) Plaintiff also alleges that the cost of the lender- 6 placed insurance is twelve times more expensive than his prior 7 voluntary policy due to a “kickback scheme” between the 8 defendants. (Id.) 9 Plaintiff alleges the “kickback scheme” between 10 defendants works as follows: Integon monitors Bank of America’s 11 loan portfolio, and once a lapse in insurance coverage is 12 identified, a notice, purporting to come from Bank of America, is 13 sent to the borrower regarding lender-placed insurance. (Id. ¶ 14 114.) Bank of America pays Integon for the certificate for 15 insurance, which issues from an already existing master policy 16 that Bank of America has with Integon. (Id. ¶ 116.) Bank of 17 America charges the borrower the full amount it initially pays 18 Integon for the insurance. (Id. ¶ 120.) 19 However, once coverage begins, Bank of America receives 20 a set percentage back of its initial payment to Integon 21 “disguised as ‘commissions,’ ‘reinsurance payments,’ or ‘expense 22 reimbursements,’” which lowers the cost of coverage that Bank of 23 America pays to Integon. (Id. ¶ 117.) Bank of America does not 24 pass on these “kickbacks” to borrowers. Plaintiff alleges that 25 Integon performs the insurance monitoring services on Bank of 26 America’s loans to maintain the exclusive right to place 27 insurance on Bank of America’s borrowers. (Id. ¶ 122.) 28 On October 21, 2021, plaintiff initiated this action by 1 filing a proposed class action complaint alleging nine claims: 2 (1) breach of contract; (2) breach of the implied covenant of 3 good faith and fair dealing; (3) violations of the Fair Debt 4 Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692; (4) 5 violations of the Truth in Lending Act (“TILA”), 15 U.S.C. § 6 1601; (5) violations of the Racketeer Influenced and Corrupt 7 Organizations Act (“RICO”), 18 U.S.C. § 1962(c); (6) conspiracy 8 under RICO, 18 U.S.C. § 1962(d); (7) violations of the Rosenthal 9 Fair Debt Collection Practices Act (“Rosenthal Act”), Cal. Civ. 10 Code § 1788; (8) unjust enrichment; and (9) violations of 11 California Unfair Competition Law, Cal. Bus. & Pro. Code § 17200. 12 Plaintiff alleges all nine claims against Bank of America, and 13 only the two RICO claims against Integon. 14 II. Discussion 15 Federal Rule 12(b)(6) allows for dismissal when the 16 plaintiff’s complaint fails “to state a claim upon which relief 17 can be granted.” Fed. R. Civ. Pro. 12(b)(6). The inquiry before 18 the court is whether, accepting the allegations in the complaint 19 as true and drawing all reasonable inferences in the plaintiff’s 20 favor, the plaintiff has stated a claim to relief that is 21 plausible on its face. See Ashcroft v. Iqbal, 556 U.S. 662, 678 22 (2009). “The plausibility standard is not akin to a ‘probability 23 requirement,’ but it asks for more than a sheer possibility that 24 a defendant has acted unlawfully.” Id. “Threadbare recitals of 25 the elements of a cause of action, supported by mere conclusory 26 statements, do not suffice.” Id. 27 A. Breach of Contract 28 To state a breach of contract claim under California 1 law, plaintiffs must allege (1) the existence of a contract; (2) 2 plaintiff’s performance or excuse for nonperformance of the 3 contract; (3) defendant’s breach of the contract; and (4) 4 resulting damages. First Com. Mortg. Co. v. Reece, 89 Cal. App. 5 4th 731, 745 (2d Dist. 2001). Plaintiff alleges Bank of America 6 breached the terms of the deed of trust by charging plaintiff for 7 “excessive and unfair property inspections,” charging plaintiff 8 for lender-placed insurance that was “unnecessary and excessive,” 9 and not passing on the kickbacks on the cost of coverage. 10 (Compl. ¶¶ 175-79.) 11 Bank of America argues that plaintiff has failed to 12 allege a breach because the deed of trust allows it to conduct 13 property inspections and charge plaintiff related fees. (Bank of 14 America’s Mot. (“BOA Mot.”) at 5.) The deed of trust states that 15 Bank of America “may do and pay whatever is necessary to protect 16 the value of the [p]roperty and [its] rights in the [p]roperty” 17 if plaintiff fails to perform under the agreement or there is a 18 legal proceeding. (Deed of Trust ¶ 7.) Specifically, Bank of 19 America may inspect the property if it is “vacant or abandoned or 20 the loan is in default.” (Id. ¶ 5.) 21 Plaintiff does not dispute that these provisions are in 22 the deed of trust. However, plaintiff alleges that he was 23 charged for inspections that were “drive-by or fabricated.” 24 (Compl. ¶ 174.) The deed of trust does not allow Bank of America 25 to charge for inspections that never actually happened. 26 Plaintiff also alleges that the inspections occurred when 27 plaintiff was occupying the property and that Bank of America 28 knew he was occupying it. (Id. ¶ 175.) The parties also 1 disagree on whether plaintiff was in default when the inspections 2 began. At the pleading stage, the court cannot decide whether 3 plaintiff actually was in default in order to determine if his 4 claim may proceed. Therefore, based on these factual 5 allegations, plaintiff states a breach of contract claim that is 6 “plausible on its face” as Bank of America was allegedly 7 conducting property inspections even when the property was not 8 “vacant or abandoned or the loan [was not] in default.” See 9 Ashcroft, 556 U.S. at 678; (Deed of Trust ¶ 5.) 10 Plaintiff’s allegations regarding the frequency of the 11 property inspections also sufficiently state a claim for breach 12 of contract. Plaintiff pleads inspections were occurring “in 13 excess of once every 30 days.” (Compl. ¶ 174.) Bank of America 14 contends that fifteen property inspections in a 22-month period 15 is not excessive given that courts analyzing similar claims have 16 held inspections once a month were allowed. (BOA Mot. at 5-6 17 (citing Walker v. Countrywide Home Loans, Inc., 98 Cal. App. 4th 18 1158 (2d Dist. 2002) (holding that charging the borrower for 12 19 inspections that happened approximately every 30 days was not in 20 violation of the California Unfair Competition Law).) However, 21 plaintiff was charged for seven inspections on a single day, 22 which raises an inference that the inspections were excessive or 23 fabricated, and not done per the contract as “is necessary to 24 protect the value of the property” or Bank of America’s rights in 25 it. (June 10, 2021 Account Statement; Deed of Trust ¶ 7.) 26 In regard to the lender-placed insurance, the agreement 27 states that any amounts “disbursed by” Bank of America for the 28 lender-placed insurance will “become an additional debt of the 1 borrower.” (Deed of Trust ¶ 7.) Here, plaintiff alleges that 2 Bank of America did not actually pay the amount it charged 3 plaintiff for lender-placed insurance, and therefore, the amount 4 “disbursed by” Bank of America is less than what “becomes an 5 additional debt” for plaintiff. (See id.) Therefore, plaintiff 6 sufficiently alleges that he was charged beyond what the deed of 7 trust permits. 8 Bank of America notes that it disclosed to plaintiff 9 that lender-placed insurance “may be significantly more expensive 10 than insurance [plaintiff] can buy [himself].” (BOA Mot. at 8; 11 Compl., Ex. B, Lender-Placed Insurance Notice (“Insurance 12 Notice”) (Docket No. 1-1).) However, the deed of trust could be 13 interpreted as restricting Bank of America’s discretion because 14 it states that Bank of America may pay whatever is “necessary.” 15 (Deed of Trust ¶ 7.) 16 “[W]here the language [of a contract] is ambiguous, 17 such that it is capable of two or more reasonable interpretations 18 and therefore leaves doubt as to the parties’ intent, a motion to 19 dismiss must be denied.” Maloney v. Indymac Mortg. Servs., No. 20 CV-13-04781 DDP, 2014 WL 6453777, at *6 (C.D. Cal. Nov. 17, 21 2014); see Consul Ltd. V. Solide Enters., 802 F.2d 1143, 1149 22 (9th Cir. 1986) (holding that the district court erred in 23 dismissing for failure to state a claim where the conflict in 24 language of an agreement “leaves doubt as to the parties’ 25 intent”). Though the deed of trust allows Bank of America to 26 institute lender-placed insurance, whether the amount it paid was 27 “necessary” creates ambiguities regarding the authorized level of 28 insurance. 1 The conduct alleged in this case, including the 2 language in the deed of trust itself, is strikingly similar to 3 that in McNeary-Calloway v. JP Morgan Chase Bank, N.A., 863 F. 4 Supp. 2d 928 (N.D. Cal. Mar. 26, 2012). In McNeary, the 5 plaintiffs’ agreements included the same language about the 6 lender’s right to “do and pay whatever is necessary to protect 7 the value of the property and Lender’s rights in the property, 8 including payment of . . . hazard insurance.” McNeary, 863 F. 9 Supp. 2d at 956. The court in McNeary, determined that the 10 defendants could only place insurance “to the extent such 11 insurance ‘is necessary,’” which did not give defendants 12 “unlimited discretion,” and therefore the court denied 13 defendants’ motion to dismiss the breach of contract claim. Id.; 14 see also Longest v. Green Tree Servicing LLC, 74 F. Supp. 3d 15 1289, 1298 (C.D. Cal. Feb. 9, 2015) (finding there to be 16 ambiguity in the mortgage agreement due to the tension between 17 the allowance of lender-placed insurance but the discretionary 18 function of the lender being able to do “whatever is reasonable 19 and appropriate”). 20 Plaintiff has sufficiently alleged a breach of contract 21 claim against Bank of America based on the property inspections 22 and lender-placed insurance. Accordingly, Bank of America’s 23 motion to dismiss plaintiff’s breach of contract claim will be 24 denied. 25 B. Implied Covenant of Good Faith and Fair Dealing 26 Under California law, all contracts contain an implied 27 covenant of good faith and fair dealing. See San Jose Prod. 28 Credit Ass’n v. Old Republic Life Ins. Co., 723 F.2d 700, 703 1 (9th Cir. 1984). The covenant “requires each contracting party 2 to refrain from doing anything to injure the right of the other 3 to receive the benefits of the agreement.” Id. (quotations and 4 citation omitted). 5 Bank of America argues that plaintiff’s implied 6 covenant of good faith and fair dealing claim avers only a 7 contractual violation and is therefore duplicative of plaintiff’s 8 claim for breach of the deed of trust. (BOA Mot. at 9.) 9 “[W]here breach of an actual term is alleged, a separate implied 10 covenant claim, based on the same breach, is superfluous.” Guz 11 v. Bechtel Nat. Inc, 24 Cal. 4th 317, 327 (2000); see also Env’t 12 Furniture, Inc. v. Bina, No. CV 09-7978 PSG, 2010 WL 5060381, *3 13 (C.D. Cal. Dec. 6, 2010) (quotations omitted) (“California law 14 requires that a claim for breach of the implied covenant of good 15 faith and fair dealing go beyond the statement of a mere contract 16 breach and not rely on the same alleged acts or simply seek the 17 same damages” as the breach of contract claim). 18 Plaintiff’s implied covenant of good faith and fair 19 dealing claim alleges the same conduct alleged in his breach of 20 contract claim. (Compare compl. ¶¶ 174-79, with id. ¶¶ 188a-h.) 21 Notably, plaintiff alleges that Bank of America breached its duty 22 of good faith and fair dealing “in violation of the applicable 23 [deed of trust] provisions.” (Id. ¶¶ 188c, 188f.) As alleged, 24 plaintiff’s implied covenant of good faith and fair dealing claim 25 is superfluous. Therefore, that claim will be dismissed. 26 C. Fair Debt Collection Practices Act and Rosenthal Act 27 The FDCPA and the Rosenthal Act prohibit false, 28 deceptive, or misleading representations or means in connection 1 with the collection of any debt, and using unfair and 2 unconscionable means to collect or attempt to collect any debt. 3 15 U.S.C. § 1692e-f; Cal. Civ. Code § 1788.1(b). 4 1. “Debt Collector” Requirement for FDCPA 5 In order to be liable under both the FDCPA and the 6 Rosenthal Act, Bank of America must qualify as a “debt 7 collector.” The definition of “debt collector” is broader under 8 the Rosenthal Act than it is under the FDCPA, as the latter 9 excludes creditors collecting on their own debts or a debt that 10 was not in default when it was obtained by a creditor. See 15 11 U.S.C. § 1692a(6)(F); Herrera v. LCS Fin. Servs. Corp., No. C09- 12 02843 TEH, 2009 WL 5062192, at *2 n.1 (N.D. Cal. Dec. 22, 13 2009) (“[t]he federal definition [of debt collectors] excludes 14 creditors collecting on their own debts, 15 U.S.C. § 1692a(6), an 15 exclusion that does not appear in the state statute, Cal. Civ. 16 Code § 1788.2(c)”). 17 Plaintiff stipulated at oral argument to dropping his 18 FDCPA claim as the parties agree that Bank of America is not a 19 “debt collector” under the FDCPA. Bank of America is the lender 20 on the loan, and therefore, is “collecting on its own debt” and 21 the loan was not in default when Bank of America obtained it. 22 Accordingly, plaintiff’s FDCPA claim will be dismissed. 23 2. Rosenthal Act Claim 24 Plaintiff alleges that Bank of America violated the 25 Rosenthal Act by representing to him that he “must make payments 26 for Escrow Account Advances (which contained illegal fees for 27 excessive and improper [lender-placed insurance]), and the fees 28 for property inspections that were not conducted, excessive, and 1 not permitted, when . . . [Bank of America] knew that the fees . 2 . . were not legitimate debts.” (See compl. ¶¶ 253-55.) 3 The heightened pleading standard of Federal Rule of 4 Civil Procedure 9(b) applies to claims under the Rosenthal Act 5 when premised on allegations of fraud, and here plaintiff’s 6 Rosenthal Act claim is premised on Bank of America allegedly 7 making false, deceptive, and misleading statements. See Brown v. 8 CitiMortgage, Inc., SACV 16-00048-CJC, 2016 WL 7507762, at *4 9 (C.D. Cal. Feb. 17, 2016) (applying heightened Rule 9(b) pleading 10 standard for Rosenthal Act claim); Day v. Am. Home Mortg. 11 Servicing, Inc., No. 2:09-CV-02676-GEB-KJM, 2010 WL 2231988, at 12 *2 (E.D. Cal. June 2, 2010) (same). 13 The Ninth Circuit has held that “to avoid dismissal for 14 inadequacy under Rule 9(b), [the] complaint would need to ‘state 15 the time, place, and specific content of the false 16 representations as well as the identities of the parties to the 17 misrepresentation.’” Edwards v. Marin Park, Inc., 356 F.3d 1058, 18 1066 (9th Cir. 2004) (quoting Alan Neuman Prods., Inc. v. 19 Albright, 862 F.2d 1388, 1393 (9th Cir. 1988)). Further, Rule 20 9(b) requires that a plaintiff “must set forth what is false or 21 misleading about a statement, and why it is false.” Rubke v. 22 Capitol Bancorp Ltd., 551 F.3d 1156, 1161 (9th Cir. 2009) 23 (quotations omitted). 24 Here, the complaint states that Bank of America “made 25 demands for payments after delinquency and/or default by sending 26 letters, making telephone calls, and other attempts to collect 27 mortgage payments.” (Compl. ¶ 250.) Beyond this, the complaint 28 does not include any other factual allegations about the “time, 1 place, and specific content” of the “letters, telephone calls, or 2 other attempts.” Edwards, 356 F.3d at 1066; (Id.) Accordingly, 3 plaintiff’s Rosenthal Act claim will be dismissed. 4 D. Truth in Lending Act 5 TILA is a consumer protection statute that aims to 6 “avoid the uninformed use of credit.” 15 U.S.C. § 1601(a). The 7 statute “requires creditors to provide borrowers with clear and 8 accurate disclosures of terms dealing with things like finance 9 charges, annual percentage rates of interest, and the borrower’s 10 rights.” Beach v. Ocwen Fed. Bank, 523 U.S. 410, 412 (1998) 11 (citing 15 U.S.C. §§ 1631, 1632, 1635 & 1638). 12 1. TILA Claim for Lender-Placed Insurance 13 Under TILA, 12 C.F.R. § 226.18(d), a creditor must 14 disclose a “finance charge” which includes a premium for 15 insurance. Plaintiff cites to cases allowing TILA claims to 16 proceed in which the original mortgage agreement did not 17 contemplate that the borrower was required to have hazard 18 insurance or that Bank of America was authorized to purchase it 19 if the borrower’s policy lapsed. (Pl.’s Opp’n to Bank of America 20 Mot. at 15 (citing Hofstetter v. Chase Home Fin., LLC, 751 F. 21 Supp. 2d 1116, 1125-28 (N.D. Cal. Oct. 29, 2010) (granting leave 22 to amend to add a TILA claim where mandatory flood insurance was 23 not required “at the loan’s consummation and insufficient initial 24 disclosures were made to the borrower that such insurance would 25 have to be purchased in the future”); Travis v. Boulevard Bank 26 N.A., 880 F. Supp. 1226, 1229 (N.D. Ill. Mar. 31, 1995) (emphasis 27 added) (“Defendant’s purchase of the allegedly unauthorized 28 insurance and the subsequent addition of the resulting premiums 1 to plaintiff’s existing indebtedness constituted a new credit 2 transaction” requiring new disclosures under TILA). Here, the 3 deed of trust differs from plaintiff’s cited cases because it 4 required plaintiff to have hazard insurance and authorized Bank 5 of America to institute lender-placed insurance if plaintiff’s 6 policy lapsed. 7 However, the agreement did not authorize Bank of 8 America to receive kickbacks from the lender-placed insurance or 9 charge for inspections that were drive-by or fabricated. See 10 Cannon v. Wells Fargo Bank, N.A., 917 F. Supp. 2d 1025, 1044-46 11 (N.D. Cal. Jan. 9, 2013) (denying motion to dismiss TILA claim 12 where lender-placed insurance was authorized by the mortgage 13 agreement, but the kickbacks were not). Plaintiff sufficiently 14 alleges that Bank of America violated TILA, 12 C.F.R. § 226.17, 15 by failing to disclose the amount and nature of the kickback 16 scheme. (Compl. ¶ 211.) 17 2. TILA Claim for Property-Inspection Fees 18 Plaintiff’s TILA claim also alleges in conclusory terms 19 that Bank of America violated TILA “through the imposition of 20 unauthorized or inflated” property inspections. (Id. ¶ 215.) 21 Beyond this conclusory allegation, the complaint contains no 22 other factual allegations pertaining to property inspections in 23 accordance with the TILA claim. See Ashcroft, 556 U.S. at 678 24 (“Threadbare recitals of the elements of a cause of action, 25 supported by mere conclusory statements, do not suffice.”) 26 Further, plaintiff provides no argument in opposition about the 27 TILA claim to the extent it is based on property-inspection fees. 28 (See Pl.’s Opp’n to Bank of America at 14-16.) Accordingly, the 1 court will grant Bank of America’s motion to dismiss plaintiff’s 2 TILA claim to the extent it is based on property-inspection fees. 3 3. TILA Statute of Limitations 4 Bank of America argues plaintiff’s TILA claim is time- 5 barred to the extent it is premised on conduct before October 29, 6 2020, as TILA has a one-year statute of limitations. See 15 7 U.S.C. 1640(e). In his opposition, plaintiff does not argue that 8 equitable tolling is appropriate, though he attempted to plead as 9 such in the complaint. (See Pl.’s Opp’n to Bank of America at 10 16-17; Compl. ¶¶ 149-154.) Plaintiff merely argues that he has 11 also alleged conduct that occurred within the statute of 12 limitations, because the lender-placed insurance was renewed on 13 April 19, 2021. (Pl.’s Opp’n to Bank of America at 16-17.) 14 Plaintiff provides no explanation of how a claim based on conduct 15 occurring prior to October 29, 2020 would be subject to equitable 16 tolling. Plaintiff also insufficiently alleges how the 17 information upon which he bases his claims was not available to 18 him earlier, since he had been getting charged for the lender- 19 placed insurance as early as 2019. Presumably, plaintiff was 20 made aware of these charges as part of his monthly statements, 21 and if he was not, he fails to allege facts to support that 22 inference. 23 Therefore, to the extent plaintiff’s TILA claim is 24 based on alleged violations from prior to October 29, 2020, it is 25 time-barred and will be dismissed. For conduct after October 29, 26 2020, plaintiff’s TILA claim based on lender-placed insurance is 27 sufficiently alleged and Bank of America’s motion will be denied. 28 E. RICO Claims 1 Both defendants move to dismiss plaintiff’s RICO claim 2 which is based on the alleged “kickback scheme” for lender-placed 3 insurance between defendants. To state a claim under RICO, a 4 plaintiff must allege the existence of a RICO enterprise, the 5 existence of a pattern of racketeering activity, a nexus between 6 the defendant and either the pattern of racketeering activity or 7 the RICO enterprise, and a resulting injury to the plaintiff. 8 Occupational–Urgent Care Health Sys., Inc. v. Sutro & Co., 9 Inc., 711 F. Supp. 1016, 1021 (E.D. Cal. 1989). 10 When the alleged racketeering activity sounds in fraud 11 -- and here plaintiff bases his RICO claim upon mail and wire 12 fraud -- the complaint must “state with particularity the 13 circumstances constituting fraud or mistake” to meet the standard 14 under Federal Rule of Civil Procedure 9(b). In re Countrywide 15 Fin. Corp. Mortg. Mktg. & Sales Prac. Lit., 601 F. Supp. 2d 1201, 16 1215 (S.D. Cal. 2009) (quoting Fed. R. Civ. P. 9(b)). To allege 17 a pattern of racketeering activity, a plaintiff must allege two 18 or more predicate acts. Sun Sav. & Loan Ass’n v. Dierdorff, 825 19 F.2d 187, 193 (9th Cir. 1987). 20 Here, the complaint alleges only one predicate act of 21 mail and wire fraud. Plaintiff alleges that he received a 22 lender-placed insurance notice on April 19, 2021 from Bank of 23 America, which he alleges was actually from Integon. (Compl. ¶ 24 144.) Even assuming that the April 19, 2021 letter is a 25 sufficiently alleged predicate act, plaintiff’s RICO claim fails 26 because he has not alleged a second predicate act. Beyond the 27 one letter, plaintiff does not identify any other predicate acts 28 with the required particularity under Rule 9(b). Merely stating 1 that Integon sent letters with approval from Bank of America, 2 without identifying the time, place or specific content of false 3 representations of more than one letter, is insufficient to 4 survive a motion to dismiss under the heightened pleading 5 standard of Rule 9(b). (Id. ¶ 232.) 6 Furthermore, plaintiff’s RICO claim must be dismissed 7 for the independent reason that it is nothing more than a 8 dressed-up attempt to assert a breach of contract claim, which 9 plaintiff already alleges. “A plaintiff cannot state a claim 10 under the Civil RICO statute by simply artfully pleading what is 11 essentially a breach of contract claim.” Manos v. MTC Fin., 12 Inc., No. SACV 16-01142-CJC, 2018 WL 6220051, *7 (C.D. Cal. Apr. 13 2, 2018) (quotations omitted); Vega v. Ocwen Fin. Corp., No 2:14- 14 cv-04408-ODW, 2015 WL 1383241, *12 (C.D. Cal. Mar. 24, 2015) 15 (dismissing RICO claim which alleged that the defendant assessed 16 fees in violation of the borrowers’ mortgage agreement because 17 the claim was premised on a breach of contract). The alleged 18 conduct under plaintiff’s RICO claim, of improperly charging 19 borrowers for lender-placed insurance, is also the alleged 20 conduct upon which plaintiff’s breach of contract claim is 21 premised. (Compare compl. ¶ 243, with id. ¶ 179.) 22 Plaintiff’s opposition to defendants’ motion on this 23 issue only argues that his RICO claim is different than his 24 breach of contract claim for the property-inspection fees. 25 (Pl.’s Opp’n to Bank of America at 9.) However, as pled by 26 plaintiff, his RICO claim is only based on lender-placed 27 insurance. (See compl. ¶ 240-47.) Plaintiff makes no effort to 28 distinguish his breach of contract claim for lender-placed 1 insurance and his RICO claim for lender-placed insurance. 2 Accordingly, defendants’ motions to dismiss plaintiff’s 3 RICO claim will be granted. 4 Because the complaint fails to sufficiently allege a 5 RICO claim under 18 U.S.C. § 1962(c), plaintiff’s claim under § 6 1962(d) for conspiracy to commit a RICO violation also fails. 7 See Turner v. Cook, 362 F.3d 1219, 1231 n. 17 (9th Cir. 2004) 8 (dismissing conspiracy to commit RICO claim because plaintiffs 9 failed to sufficiently allege RICO claim). 10 F. Unjust Enrichment 11 In the alternative to his claims for breach of contract 12 and implied covenant of good faith and fair dealing, plaintiff 13 brings a separate claim for unjust enrichment against Bank of 14 America. “There is not a standalone cause of action for ‘unjust 15 enrichment’ which is synonymous with restitution.” Astiana v. 16 Hain Celestial Grp., Inc., 783 F.3d 753, 762 (9th Cir. 2015). 17 Rather, it “describe[s] the theory underlying a claim that a 18 defendant has been unjustly conferred a benefit through mistake, 19 coercion, or request” and the “return of that benefit is 20 typically sought in a quasi-contract cause of action.” Id. 21 Here, both parties agree that there is an existing contract which 22 is at issue, the deed of trust, so there is no claim to be made 23 in quasi-contract. Accordingly, the court will grant Bank of 24 America’s motion to dismiss plaintiff’s unjust enrichment 25 “claim.” 26 G. California Unfair Competition Law 27 California’s Unfair Competition Law (“UCL”) “prohibits 28 any unfair competition, which means ‘any unlawful, unfair or 1 fraudulent business act or practice.’” In re Pomona Valley Med. 2 Grp., Inc., 476 F.3d 665, 674 (9th Cir. 2007) (quoting Cal. Bus. 3 & Prof. Code § 17200, et seq.). Plaintiff has alleged that Bank 4 of America was receiving kickbacks for placing insurance on 5 borrowers’ property, without disclosing any such kickbacks to 6 borrowers, and Bank of America was falsifying property 7 inspections and still charging borrowers for them. At the 8 pleading stage, plaintiff sufficiently alleges the UCL claim 9 given plaintiff’s remaining claims in this action and the conduct 10 by Bank of America described within the complaint. 11 IT IS THEREFORE ORDERED that: 12 (1) Bank of America’s motion to dismiss plaintiff’s 13 breach of contract claim be, and the same hereby is, DENIED; 14 (2) Bank of America’s motion to dismiss plaintiff’s 15 claim for breach of the implied covenant of good faith and fair 16 dealing be, and the same hereby is, GRANTED; 17 (3) Bank of America’s motion to dismiss plaintiff’s 18 claim under the Fair Debt Collection Practices Act be, and the 19 same hereby is, GRANTED; 20 (4) Bank of America’s motion to dismiss plaintiff’s 21 claim under the Truth in Lending Act be, and the same hereby is, 22 GRANTED in part with respect to the imposition of property- 23 inspection fees and all alleged violations occurring before 24 October 29, 2020, and DENIED in all other respects; 25 (5) Bank of America’s motion to dismiss and Integon’s 26 motion to dismiss plaintiff’s claim under the Racketeer 27 Influenced and Corrupt Organizations Act, 15 U.S.C. § 1962(c) be, 28 and the same hereby are, GRANTED; eee ee eee eI I ee 1 (6) Bank of America’s motion to dismiss and Integon’s 2 motion to dismiss plaintiff’s conspiracy claim under the 3 Racketeer Influenced and Corrupt Organizations Act, 15 U.S.C. § 4 1962 be, and the same hereby are, GRANTED; 5 (7) Bank of America’s motion to dismiss plaintiff's 6 | claim under the Rosenthal Fair Debt Collection Practices Act be, 7 and the same hereby is, GRANTED; 8 (8) Bank of America’s motion to dismiss plaintiff's 9 unjust enrichment claim be, and the same hereby, is GRANTED; and 10 (9) Bank of America’s motion to dismiss plaintiff's 11 claim for violations of the California Unfair Competition Law, be 12 and the same hereby, is DENIED. 13 Plaintiff has twenty days from the date of this Order 14 to file a second amended complaint, if he can do so consistent 15 | with this Order. In deciding whether to file a second amended 16 complaint, counsel is reminded that the purpose of a complaint is 17 not to see how many claims can be constructed out of a single set 18 of facts, but to plead only such claims as may improve 19 | plaintiff’s prospects of prevailing at trial. 20 | Dated: May 5, 2022 be ak. 1d ke 21 WILLIAM B. SHUBB UNITED STATES DISTRICT JUDGE 23 24 25 26 27 28 20