United States District Court, W.D. Washington, Seattle
ORDER DENYING SPECIALIZED LOAN SERVICING LLC'S
MOTION FOR JUDGMENT ON THE PLEADINGS
S. Lasnik, United States District Judge.
matter comes before the Court on defendant Specialized Loan
Servicing's (“SLS”) motion for judgment on
the pleadings. Dkt. #54.
Court has previously laid out the facts and allegations of
this case, see Dkts. #44-46, and will not recite
them here in depth. To summarize, in May 2007, plaintiffs
Larry and Pamela Pifer obtained a loan of $393, 750 from
Countrywide Home Loans Inc. dba America's Wholesale
Lender (“AWL”), with interest in the amount of
7.6% (“the Loan”). Ex. C, Dkt. #21-2 at 18-22.
This was secured by a Deed of Trust dated May 7, 2007. Ex. A,
Dkt. #21-1 at 2-3. On July 5, 2011, Bank of America
(“BANA”) sent plaintiffs a letter with a proposed
Loan Modification Agreement (“LMA”). Ex. D, Dkt.
#21-2 at 24-29. BANA listed an unpaid principal amount of
$434, 710.30 and a new interest rate of 2%. Id. at
24. It stated that the interest rate would increase to 3% in
the fourth year, 4% in the fifth year and 4.875% in the sixth
year. Id. BANA stated that the LMA “[would]
not be binding or effective unless and until it [had] been
signed by both [plaintiffs] and [BANA].” Id.
Plaintiffs signed the LMA and made some payments pursuant to
it, but they did not receive a copy of the fully executed LMA
from BANA. Dkt. #3 (First Amended Complaint
(“FAC”)) at ¶ 12. They eventually stopped
making payments after September 2011. Id. at ¶
54. In 2013, the Loan was transferred to SLS for servicing.
Id. at ¶ 23.
issued its first mortgage statement to plaintiffs on January
20, 2014. This reflected an outstanding principal of $432,
572.88. Ex. J, Dkt. #21-1 at 46. Plaintiffs allege that this
amount was “inexplicably less than the new principal
stated on BANA's [LMA].” SLS's statements also
showed interest rates of 3% and 4%. FAC at ¶ 18. The
interest rate increased to 4.875% in August 2016
“without any notice or explanation to [plaintiffs] for
the increase.” Id. at ¶ 19. SLS continued
to issue statements between January 20, 2014 and November 18,
2016. Ex. J, Dkt. #21-1 at 46-68; Ex. K, Dkt. #21-2 at 1-13.
In 2016, the Loan was transferred again, to Shellpoint
Mortgage Servicing. FAC at ¶ 23.
brought three causes of action against SLS. Two of these were
dismissed. See Dkt. #45. All that remains is
plaintiffs' claim for negligent misrepresentation. SLS
now seeks dismissal of that claim pursuant to Federal Rule of
Civil Procedure 12(c).
may move for judgment on the pleadings after the pleadings
are closed. Fed.R.Civ.P. 12(c). “The same legal
standard applies to a motion for judgment on the pleadings as
to a motion to dismiss for failure to state a claim.”
Dacumos v. Toyota Motor Credit Corp., 287 F.Supp.3d
1152, 1154 (W.D. Wash. 2017) (citing Cafasso v. Gen.
Dynamics C4 Sys., Inc., 637 F.3d 1047, 1055 n.4 (9th
Cir. 2011)). The Court accepts “as true all material
facts alleged in the pleadings and draw[s] all reasonable
inferences in favor of the nonmoving party.”
Id. (citing Fleming v. Pickard, 581 F.3d
922, 925 (9th Cir. 2009)). “Judgment on the pleadings
is proper when the moving party clearly establishes on the
face of the pleadings that no material issue of fact remains
to be resolved and that it is entitled to judgment as a
matter of law.” Id. (quoting Hal Roach
Studios v. Richard Feiner & Co., 896 F.2d 1542, 1550
(9th Cir. 1990)).
survive a motion to dismiss, a complaint must contain
sufficient factual matter, accepted as true, to ‘state
a claim to relief that is plausible on its face.'”
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555
(2007)). There must be more than a sheer possibility that a
defendant has acted unlawfully. Id. (citing
Twombly, 550 U.S. at 556).
Plaintiffs' Claim of Negligent Misrepresentation
negligent misrepresentation claim has six elements: (1) the
defendant supplied false information that guided the
plaintiff's business transaction, (2) the defendant knew
or should have known that the information was offered to
advise the plaintiff's business transaction, (3) the
defendant obtained or communicated the false information
negligently, (4) the plaintiff relied on the false
information, (5) the plaintiff's reliance was reasonable,
and (6) the false information proximately caused the
plaintiff's damages. Childs v. Microsoft Corp.,
No. C10-1916RAJ, 2011 WL 6330141, at *5 (W.D. Wash. Dec. 16,
2011), aff'd, 489 Fed.Appx. 224
(9thCir. 2012) (citing Ross v. Kirner,
162 Wn.2d 493, 499 (2007) (en banc)). Plaintiffs claim that
SLS committed negligent misrepresentation in making demands
for payments based on interest rates consistent with the
terms of the LMA rather than the original promissory note
without specifying the basis for the amounts. FAC at
¶¶ 40-41, 43-45.
SLS argues that part of plaintiffs' claim is time-barred.
“Claims for negligent misrepresentation are subject to
the three[-]year statute of limitations for fraud under RCW
4.16.080(4).” Davidheiser v. Pierce Cty., 92
Wn.App. 146, 156 (1998) (citing Western Lumber, Inc. v.
City of Aberdeen, 10 Wn.App. 325, 327 (1973)).
“The cause of action must be commenced within three
years of discovery of the misrepresentation.”
Id. (internal citation omitted). Plaintiffs
commenced this action on April 25, 2018. Dkt. #1. SLS
contends that plaintiffs cannot pursue a negligent
misrepresentation claim for the statements dated January 20,
2014 to April 20, 2015. Dkt. #54 at 5. “[T]he statute
of limitations does not begin to run until a plaintiff
discovers or reasonably could have discovered all the
essential elements of the cause of action.” Putz v.
Golden, 847 F.Supp.2d 1273, 1281 (W.D. Wash. 2012)
(internal citation omitted). SLS argues that plaintiffs could
reasonably have discovered their cause of action at the time
of the first statement on January 20, 2014. Dkt. #54 at 6.
Plaintiffs do not appear to deny this, see Dkt. #57
at 5-6, and the Court agrees.
plaintiffs argue that SLS has committed a continuing tort
that is not time-barred. Id.; see Flowers v.
Carville, 310 F.3d 1118, 1126 (9th Cir. 2002)
(“When a tort involves continuing wrongful conduct, the
statute of limitations doesn't begin to run until that
conduct ends.”) (citing Page v. United States,
729 F.2d 818, 821 (D.C. Cir. 1984)). The continuing tort
doctrine “applies where there is ‘no single
incident' that can ‘fairly or realistically be
identified as the cause of significant harm.'”
Id. (quoting Page, 729 F.2d at 821-22). SLS
responds that Washington law has not recognized the
continuing tort doctrine for a negligent misrepresentation
claim. Dkt. #59 at 3. The Court cannot locate any case in
which the doctrine has been so applied. SLS's statements
are not an “ongoing [allegedly] negligent act, ”
but several acts. McCoy v. Foss Mar. Co., No.
C04-2233L, 2006 WL 829109, at *2 (W.D. Wash. Mar. 24, 2006);
see Diamond Concrete, LLC v. Pac. Nw. Reg'l Council
of Carpenters, No. C11-5360BHS, 2011 WL 3206906, at *2
(W.D. Wash. July 26, 2011) (“[T]he [Supreme Court of
Washington] did not apply the doctrine of continuing torts to
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