1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 NAJIA MASHRIQUE, Case No. 22-cv-07550-JSC

8 Plaintiff,

ORDER RE MOTIONS TO DISMISS

v. 9 Re: Dkt. Nos. 11, 12 10 JPMORGAN CHASE BANK, N.A., et al., Defendants. 11

12 13 Najia Mashrique, representing herself without the benefit of an attorney, seeks to challenge 14 foreclosure proceedings following her 2019 default on her 2007 home loan. Plaintiff sues 15 Defendants JPMorgan Chase Bank, N.A. (“Chase”) and Select Portfolio Services (“SPS”), 16 alleging breach of contract, breach of covenant of good faith and fair dealing, negligence, 17 fraudulent misrepresentation, negligent misrepresentation, fraudulent concealment, declaratory 18 relief, violation of California Business and Professions Code section 17200 et seq., and a second 19 claim for fraudulent misrepresentation. (Dkt. No. 1-1 at 10-24.)1 Defendants each move to 20 dismiss Plaintiff’s second amended complaint (“SAC”) on the grounds of claim preclusion and 21 failure to state a claim. (Dkt. Nos. 11, 12.) Having reviewed the parties’ briefing, the Court 22 concludes oral argument is unnecessary. See N.D. Cal. Civ. L.R. 7-1(b). Defendants’ motions to 23 dismiss are GRANTED with leave to amend. 24 25 26 27 1 BACKGROUND 2 The following facts are based on the complaint allegations and documents of which the 3 Court takes judicial notice.2 4 Plaintiff is the owner of real property located at 3244 Oakes Drive, Hayward, CA 94542 5 (the “Property”).3 (Dkt. No. 1-1 at 24.) In May 2007, Plaintiff obtained a $800,822 mortgage to 6 purchase the Property secured by a Deed of Trust. (Dkt. No. 1-1 at 29.) Plaintiff states she made 7 her last mortgage payment in July 2019. (Dkt. No. 1-1 at 8.) Chase serviced the loan until 8 transfer to SPS in October 2019. (Dkt. No. 12 at 11.) 9 In February 2020, Plaintiff filed a complaint against Chase and SPS in California state 10 court. (Dkt. No. 13-1; see also Dkt. No. 14-1.) She alleged Chase and SPS’s actions relating to 11 her 2019 default on her 2007 home loan constituted breach of contract, breach of covenant of good 12 faith and fair dealing, negligence, fraudulent misrepresentation, negligent misrepresentation, 13 fraudulent concealment, declaratory relief, and violations of California Business and Professions 14 Code section 17200 et seq. (Dkt. No. 13-1 at 10-24.) 15 Plaintiff alleged Defendants failed to provide loss mitigation alternatives to foreclosure, 16 provide a single point of contact, and correctly assess the value of the Property. (Dkt. No. 13-1 at 17

18 2 Defendants request judicial notice of two documents related to Plaintiff’s prior state court action. Exhibit A is Plaintiff’s 2020 complaint. (Dkt. Nos. 13-1, 14-1.) Exhibit B is Plaintiff’s voluntary 19 dismissal of the same. (Dkt. Nos. 13-2, 14-2.) Judicial notice is appropriate for matters of public record, but not to credit the truth of the allegations or facts within those public records. Khoja v. 20 Orexigen Therapeutics, Inc., 899 F.3d 988, 999 (9th Cir. 2018); see Fed. R. Evid. 201. Plaintiff does not oppose the request. The Court therefore GRANTS Defendants’ requests for judicial 21 notice.

22 Plaintiff appears to request judicial notice of a settlement agreement and a forensic audit report. (Dkt. No. 26 at 34-41; Dkt. No. 27.) It is not appropriate for this Court to take judicial notice of 23 nor incorporate by reference into the complaint the settlement agreement because the SAC does not mention the settlement even once and parties may dispute its provisions in future litigation. 24 Khoja, 899 F.3d at 999-1000, 1003. This Court cannot readily ascertain the forensic audit report’s accuracy “from sources whose accuracy cannot reasonably be questioned.” Id. at 999. 25 Defendants argue that similarly titled documents have been deemed a scam by the Federal Trade Commission. (Dkt. No. 30 at 4 n.2; Dkt. No. 31 at 13.) To the extent Plaintiff requests judicial 26 notice or incorporation by reference of these documents, it is DENIED.

27 3 Plaintiff alleges the Property is located at both 3224 and 3244 Oakes Drive in the SAC. (See 1 5-9.) Plaintiff voluntarily dismissed her complaint against Chase and SPS with prejudice in April 2 2020. (Dkt. Nos. 13-2, 14-2.) 3 In October 2022, Plaintiff filed a new complaint in California state court. (See Dkt. No. 1- 4 3.) A day later, Plaintiff filed the at-issue SAC. (See Dkt. No. 1-1.) Chase timely removed this 5 action to federal court on the basis of diversity jurisdiction under 28 U.S.C. § 1332 with SPS’s 6 consent. (Dkt. No. 1.) In the SAC, Plaintiff alleges the same eight causes of action as her 2020 7 complaint and adds a ninth cause of action for fraudulent misrepresentation. (See Dkt. No. 1-1 at 8 10-24; Dkt. No. 13-1 at 10-24.) For the most part, Plaintiff copied and pasted her 2020 complaint 9 into the SAC. (See Dkt. Nos. 1-1, 13-1.) Plaintiff changed, removed, and added facts into the 10 SAC. 11 Specifically, in both the 2020 complaint and the SAC, Plaintiff alleges Defendants refused 12 to accept lower payments based on the claim that the Property is worth over a million dollars. 13 (See Dkt. No. 1-1 at 5; Dkt. No. 13-1 at 5.) In the SAC, Plaintiff adds Defendants improperly 14 assessed the Property at over 1 and 1.5 million dollars in 2022. (See Dkt. No. 1-1 at 5-6, 24.) In 15 the 2020 complaint, Plaintiff stated her payments increased from “4,020 to $4,347,” whereas in 16 the SAC, Plaintiff alleges Defendants increased her monthly payments from $3,757 to $7,514. 17 (See Dkt. No. 1-1 at 5, 6, 24; Dkt. No. 13-1 at 11.) In the SAC, she mentions a fabricated 18 homeowner assistant program or home retention plan and “a forbearance plan [from] July 2020 19 [to] 2022” after she lost a job due to COVID-19 in July 2020 during which time SPS was 20 accepting monthly payments of $3,757. (See Dkt. No. 1-1 at 6, 24.) 21 In the 2020 complaint and the SAC, Plaintiff alleges Chase improperly reported Plaintiff’s 22 account as 90 days late and Chase knew that the monthly payment increase would prevent Plaintiff 23 from making those payments. (See Dkt. No. 1-1 at 20; Dkt. No. 13-1 at 20.) In the SAC, Plaintiff 24 adds that Chase reported her 90 days late from 2019 to 2022. (See Dkt. No. 1-1 at 12, 24.) Due to 25 Chase’s actions, Plaintiff states she “lost a career opportunity in January 2022 with Farmers’ 26 Insurance [with] potential earnings of [$]150,000.” (Id. at 24.) In both her 2020 complaint and 27 the SAC, Plaintiff seeks general damages, compensatory and special damages, including 1 consequential and incidental damages, attorneys’ fees and costs, punitive damages, interest, and 2 any other legal or equitable relief. (Dkt. No. 1-1 at 24; Dkt. No. 13-1 at 24.)4 3 SPS argues the SAC should be dismissed because all claims are barred by claim preclusion 4 and because her complaint fails to state a claim. (Dkt. No. 11.) Chase argues the SAC should be 5 dismissed because all claims are barred by claim and issue preclusion, her complaint fails to state 6 a claim, her negligence and fraud claims are time-barred, and regardless claims should be 7 dismissed against Chase because this action was initiated after Chase transferred the loan in 2019. 8 (Dkt. No. 12; see Dkt. No. 1-1 at 5.) 9 DISCUSSION5 10 A motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) challenges the 11 sufficiency of the complaint. See Bell Atl. Corp. v. Twombly, 550 U.S. 544, 557 (2007). A 12 complaint must plead enough “factual content that allows [a] court to draw the reasonable 13 inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 14 678 (2009). In assessing a motion to dismiss, “[r]eview is limited to the complaint.” Lee v. City 15 of Los Angeles, 250 F.3d 668, 688 (9th Cir. 2001). But a court may also consider “documents 16 attached to the complaint, documents incorporated by reference in the complaint, or matters of 17 judicial notice.” United States v. Ritchie, 342 F.3d 903, 908 (9th Cir. 2003); see also Khoja v. 18 Orexigen Therapeutics, Inc., 899 F.3d 988, 998 (9th Cir. 2018). A defendant may bring the 19 affirmative defense of claim preclusion under a Rule 12(b)(6) motion. See Scott v. Kuhlman, 20 746 F.2d 1377, 1378 (9th Cir. 1984). 21 I. CLAIM PRECLUSION 22 California law applies when considering claim preclusion arising from a state court 23

24 4 On a motion to dismiss, review is limited to the complaint, “documents attached to the complaint, documents incorporated by reference in the complaint, or matters of judicial notice.” 25 United States v. Ritchie, 342 F.3d 903, 908 (9th Cir. 2003); Lee v. City of Los Angeles, 250 F.3d 668, 688 (9th Cir. 2001). But a court may consider a party’s possible amendments suggested 26 outside of the complaint when deciding whether to grant dismissal with or without prejudice. See Orion Tire Corp. v. Goodyear Tire & Rubber Co., Inc., 268 F.3d 1133, 1137-38 (9th Cir. 2001). 27 5 This Court will liberally construe Plaintiff’s pleadings because she is proceeding without 1 judgment. White v. City of Pasadena, 671 F.3d 918, 926-27 (9th Cir. 2012) (stating 28 U.S.C. 2 § 1738 extends effect of Full Faith and Credit Clause to federal courts) (citing Migra v. Warren 3 City Sch. Dist. Bd. of Ed., 465 U.S. 75, 81 (1984)). “[Claim preclusion] bars a cause of action that 4 was or could have been litigated in a prior proceeding if: (1) the present action is on the same 5 cause of action as the prior proceeding; (2) the prior proceeding resulted in a final judgment on the 6 merits; and (3) the parties in the present action or parties in privity with them were parties to the 7 prior proceeding.” Fed. Home Loan Bank of San Francisco v. Countrywide Fin. Corp., 214 Cal. 8 App. 4th 1520, 1527 (2013) (internal quotation marks and citation omitted). 9 A. First Element: Same Causes of Action 10 A cause of action is defined as “a primary right and a breach of the corresponding duty.” 11 Boeken v. Philip Morris USA, Inc., 48 Cal. 4th 788, 792 (2010). It is based on the harm suffered 12 rather than any legal theory asserted by the litigant. Fed. Home. Loan Bank of San Francisco, 13 214 Cal. App. 4th at 1530-31. “[I]f two actions involve the same injury to the plaintiff and the 14 same wrong by the defendant then the same primary right is at stake even if in the second suit the 15 plaintiff pleads different theories of recovery, seeks different forms of relief and/or adds new facts 16 supporting recovery.” Furnace v. Giurbino, 838 F.3d 1019, 1024 (9th Cir. 2016) (quoting San 17 Diego Police Officers’ Ass’n v. San Diego City Emps. Ret. Sys., 568 F.3d 725, 734 (9th Cir. 18 2009)). Liberally construed, Plaintiff asserts eight theories under the same cause of action and a 19 ninth theory that includes facts alluding to one or more new causes of action. (See Dkt. No. 1-1; 20 Dkt. Nos. 13-1, 14-1.); Erickson v. Pardus, 551 U.S. 89, 94 (2007). 21 1. Identical Causes of Action 22 Plaintiff copied and pasted most of the 2020 complaint into the SAC, alleging breach of 23 contract, breach of covenant of good faith and fair dealing, negligence, fraudulent 24 misrepresentation, negligent misrepresentation, fraudulent concealment, declaratory relief, and 25 violation of California Business and Professions Code section 17200 et seq. (See Dkt. No. 1-1 at 26 10-23; Dkt. No. 13-1 at 10-24.) However, “the phrase ‘cause of action’ is often used 27 indiscriminately . . . to mean counts which state [according to different legal theories] the same 1 omitted). In both the 2020 complaint and the SAC, Plaintiff indiscriminately uses the same 2 theories to frame her cause of action. Specifically, in her 2020 complaint, Plaintiff sought to 3 redress alleged harms following her 2019 default on her 2007 home loan. For a large majority of 4 the SAC, Plaintiff seeks to redress these same harms, notwithstanding different requests for relief, 5 legal theories, or new facts. Furnace, 838 F.3d at 1024; Boeken, 48 Cal. 4th at 814. But Plaintiff 6 cannot divide her claim for relief merely because she is now experiencing additional negative 7 consequences, including a lost career opportunity, from the same harms arising from her default, 8 such as negative credit reporting. See Boeken, 48 Cal. 4th at 814-15. Plaintiff has already pled 9 these theories and could have obtained economic relief for alleged harms arising out Defendants’ 10 actions relating to Plaintiff’s 2019 default on her 2007 home loan that Plaintiff sought relief for in 11 her first suit. Id. at 813. 12 2. Causes of Action Based on New Facts 13 Plaintiff’s ninth claim alleging negligent misrepresentation includes additional facts 14 suggesting Plaintiff’s monthly payment increases may be related to a homeowner assistant 15 program or home retention plan that occurred later in time after the dismissal of Plaintiff’s 2020 16 complaint. (See Dkt. No. 1-1 at 24.) Claim preclusion does not apply where “[e]ach action [is] 17 based on a breach of a separate covenant at different times.” Mycogen Corp. v. Monsanto Co., 18 28 Cal. 4th 888, 908 (2002). To the extent Plaintiff’s complaint includes facts relating to other 19 agreements at different times, Defendants have not met their burden to show these causes of action 20 are barred by claim preclusion. Mycogen Corp., 28 Cal. 4th at 908. 21 B. Second Element: Final Judgment on the Merits 22 For purposes of claim preclusion, a plaintiff’s dismissal of his or her own action “is the 23 equivalent of a final judgment on the merits, barring the entire cause of action.” Boeken, 48 Cal. 24 4th at 793. Therefore, Plaintiff’s voluntary dismissal of her 2020 complaint with prejudice acts as 25 a final judgment on the merits. Plaintiff does not dispute this element of claim preclusion. 26 C. Third Element: Identical Parties 27 For claim preclusion to apply, the parties must be in privity with each other. Fed. Home 1 are the same parties in Plaintiff’s 2020 complaint, this element is met. Id.; (see Dkt. Nos. 1-1, 13- 2 1, 14-1). Plaintiff’s assertion that she only released claims against SPS is not persuasive given 3 Plaintiff sued both Chase and SPS in 2020 and then dismissed the entire action with prejudice. 4 *** 5 As Plaintiff’s dismissal of her 2020 complaint with prejudice against the same Defendants 6 as are sued here operates as a judgment on the merits, Defendants have met their burden of 7 showing Plaintiff’s causes of action are barred by claim preclusion to the extent they seek 8 damages for harms arising from her 2019 default on her 2007 home loan. 9 II. FAILURE TO STATE A CLAIM 10 While Defendants have not shown Plaintiffs’ causes of action related to a homeowner 11 assistant program or home retention plan to be barred, Plaintiff nevertheless fails to state any claim 12 for relief arising from those causes of action. To the extent Plaintiff is stating claims based on 13 these or other covenants or agreements, she must provide a short and plain statement showing she 14 is entitled to relief and that Defendants may be liable for any alleged misconduct. Fed. R. Civ. 15 P. 8(a)(2); Iqbal, 552 U.S. at 678; see Twombly, 550 U.S. at 555. 16 Plaintiff fails to show that Chase could be liable for the alleged conduct because Chase 17 stopped servicing the home loan in October 2019. Plaintiff has not provided any facts to suggest 18 Chase was involved with a homeowner assistant program or home retention plan for Plaintiff after 19 Chase transferred service of the loan to SPS. Iqbal, 552 U.S. at 678; see Twombly, 550 U.S. at 20 555. Therefore, Plaintiff has failed to state a claim against Chase. 21 To the extent Plaintiff asserts negligent misrepresentation against SPS, Plaintiff fails to 22 state what misrepresentations SPS may have made to Plaintiff. Fed. R. Civ. P. 8(a)(2). To the 23 extent Plaintiff is alleging claims based in fraud, those require “the who, what, when, where, and 24 how of the misconduct alleged.” Kearns v. Ford Motor Co., 567 F.3d 1120, 1126 (9th Cir. 2009). 25 Plaintiff has not shown that SPS may be liable for any alleged misconduct regarding those or other 26 separate programs, plans, or agreements. Id.; Iqbal, 552 U.S. at 678; see Twombly, 550 U.S. at 27 555. Thus, Plaintiff’s remaining causes of action not barred by claim preclusion do not survive

I. LEAVE TO AMEND

Plaintiff has requested leave to amend based on information submitted in her opposition 2 papers. (Dkt. No. 32 at 2.) Plaintiff has presented possible amendments consistent with the 3 complaint that could possibly state a claim for relief against both Defendants. (Dkt. No. 32; see 4 Dkt. Nos. 26, 29, 35.)° The Court cannot say that leave to amend would be futile. See Orion Tire 5 Corp., 268 F.3d at 1137-38; Carvalho v. Equifax Info. Servs. LLC, 629 F.3d 876, 892 (9th Cir. 6 2010) (“[L]eave to amend shall be freely given when justice so requires.”); Fed. R. Civ. P. 15(a). 7 Plaintiffs request for leave is GRANTED. 8

CONCLUSION

9 For the reasons stated above, Defendants’ separate motions to dismiss are GRANTED. 10 Plaintiff may file a third amended complaint by June 12, 2023. Failure to file an amended 1] complaint by that date may result in a dismissal with prejudice. Plaintiff is reminded that she can 3s 12 contact the Legal Help Center for free assistance by calling 415-782-8982 or emailing 13 fedpro@sfbar.org.

© IT IS SO ORDERED.

Dated: May 9, 2023 16 , ie a 18 /ACQWELINE SCOTT CORLE 19 United States District Judge 20 21 22 23 24 25 ° Plaintiff filed four oppositions after the Court’s final deadline extension of March 16, 2023. (See Dkt. Nos. 25, 26, 29, 32, 35.) Plaintiff is bound by the Federal Rules and the Local Rules of this 97 || District. See N.D. Cal. Civ. L.R. 3-9(a). Due to Plaintiff's unrepresented status and the Court’s preference for resolving matters on the merits, the Court will consider Plaintiffs opposition papers 28 in connection with whether to grant Plaintiff leave to amend, but warns Plaintiff the Court may not do so in the future.