Bonita Nelson v. Ocwen Loan Servicing, Llc et al

NOTICE OF MOTION AND MOTION to Dismiss Case

C.D. Cal.April 26, 2017

1 Case No. 5:17-cv-00630-JBT-DTB NOTICE OF MOTION AND MOTION TO DISMISS COMPLAINT 892096.1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 McGLINCHEY STAFFORD Brian A. Paino (SBN 251243) Mike Aleali (SBN 285874) 18201 Von Karman Avenue, Suite 350 Irvine, California 92612 Telephone: (949) 381-5900 Facsimile: (949) 271-4040 Email: bpaino@mcglinchey.com maleali@mcglinchey.com Attorneys for Defendant OCWEN LOAN SERVICING, LLC UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA - EASTERN DIVISION BONITA NELSON, an individual, Plaintiff, v. OCWEN LOAN SERVICING, LLC; PDQ INVESTMENTS LLC AS TRUSTEE FOR PASEO VIDA TRUST #1565 and DOES 1 through 100, inclusive, Defendants. Case No.: 5:17-cv-00630-JGB-DTB Hon. Jesus G. Bernal DEFENDANT OCWEN LOAN SERVICING, LLC’S NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFF’S COMPLAINT PURSUANT TO FRCP 12(b)(6)); MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF [Filed concurrently with Request for Judicial Notice and [Proposed] Order] Hearing: Date: June 5, 2017 Time: 9:00 a.m. Ctrm. 1 Action Filed: April 3, 2017 Trial Date: None TO THE COURT AND ALL INTERESTED PARTIES: PLEASE TAKE NOTICE that, on June 5, 2017, at 9:00 a.m., or as soon thereafter as the matter may be heard, in Courtroom 1 of the above-entitled court, located at 3470 Twelfth Street, Riverside, California 92501, defendant Ocwen Loan Servicing, LLC (“Ocwen”) will, and hereby does, move the Court to dismiss all Case 5:17-cv-00630-JGB-DTB Document 12 Filed 04/26/17 Page 1 of 20 Page ID #:62 2 Case No. 5:17-cv-00630-JBT-DTB NOTICE OF MOTION AND MOTION TO DISMISS COMPLAINT 892096.1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 claims against it pursuant to Federal Rule of Civil Procedure (“FRCP”) 12(b)(6). As set forth more fully in the accompanying Memorandum of Points and Authorities (the “Memorandum”), this motion is made on the grounds that the Complaint, in its entirety, fails to state a claim against Ocwen upon which relief can be granted. This motion is based on this Notice, the attached Memorandum, the Request for Judicial Notice filed concurrently herewith, the pleadings and papers on file herein, and upon such oral and documentary evidence as may be presented by the parties at the hearing. DATED: April 26, 2017 McGLINCHEY STAFFORD By: /s/ Mike Aleali MIKE ALEALI BRIAN A. PAINO Attorneys for Defendant OCWEN LOAN SERVICING, LLC Local Civil Rule 7-3 Certification Ocwen’s counsel has attempted to comply with L.R. 7-3, but the pro se Plaintiff has failed to return counsel’s calls. Case 5:17-cv-00630-JGB-DTB Document 12 Filed 04/26/17 Page 2 of 20 Page ID #:63 i Case No. 5:17-cv-00630-JBT-DTB TABLE OF CONTENTS 892096.1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 TABLE OF CONTENTS I. INTRODUCTION ................................................................................................ 1 II. STATEMENT OF FACTS ................................................................................... 1 A. The Loan .................................................................................................... 1 B. Plaintiff’s Prior Defaults ............................................................................ 2 C. Plaintiff’s Current Default ......................................................................... 3 III. LEGAL STANDARD .......................................................................................... 3 IV. ARGUMENT........................................................................................................ 4 A. Plaintiff’s Entire Complaint Fails for Lack of Tender ............................... 4 B. Plaintiff’s Causes of Action for Misrepresentation and Fraud Fail to State a Claim .......................................................................................... 6 1. The Complaint Fails to Satisfy FRCP 9 .......................................... 6 2. Plaintiff Fails to Allege Reliance Upon a Purported Misrepresentation ............................................................................. 7 C. Plaintiff’s Claim for Violation of Cal. Civ. Code § 2923.7 Fails .............. 7 D. Plaintiff’s Claim for Violation of Cal. Civ. Code § 2923.6 Fails .............. 8 1. Plaintiff Fails to Establish Her Application Was Complete ............ 9 2. Ocwen Was Not Obligated to Review Plaintiff’s Application ...... 10 3. Lack of Materiality ........................................................................ 10 E. Plaintiff’s Claim for Violation of Cal. Civ. Code 2924f Fails ................. 11 V. CONCLUSION .................................................................................................. 12 Case 5:17-cv-00630-JGB-DTB Document 12 Filed 04/26/17 Page 3 of 20 Page ID #:64 ii Case No. 5:17-cv-00630-JBT-DTB TABLE OF AUTHORITIES 892096.1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 TABLE OF AUTHORITIES FEDERAL CASES Alicea v. GE Money Bank, 2009 WL 2136969 (N.D. Cal. 2009) .......................................................................... 5 Anaya v. Advisors Lending Group, 2009 WL 2424037 (E.D. Cal. 2009) ........................................................................... 5 Ashcroft v. Iqbal, 556 U.S. 662 (2009) .................................................................................................... 3 Balistreri v. Pacifica Police Dep’t, 901 F.2d 696 (9th Cir. 1990) ...................................................................................... 4 Bell Atlantic v. Twombly, 550 U.S. 544 (2007) ................................................................................................ 3, 4 Cornejo v. Ocwen Loan Servicing, LLC, 151 F.Supp.3d 1102 (E.D. Cal. 2015) .............................................................. 8, 9, 10 Diamos v. Specialized Loan Servicing LLC, 2014 WL 5810453 (N.D. Cal. 2014) .......................................................................... 8 Dick v. Am. Home Mortgage Servicing, Inc., 2014 WL 172537 (E.D. Cal. 2014) ............................................................................. 7 Emrich v. Touche Ross & Company, 846 F.2d 1190 (9th Cir. 1988) .................................................................................... 4 Farren v. Select Portfolio Servicing, Inc., 2017 WL 1063891 (E.D. Cal. 2017) ......................................................................... 10 Ibay v. Manufacturers & Traders Trust Co., 2013 WL 12130562 (C.D. Cal. 2013) ...................................................................... 12 Lazy Y Ranch Ltd. v. Behrens, 546 F.3d 580 (9th Cir. 2008) ...................................................................................... 4 Love v. United States, 915 F.2d 1242 (9th Cir. 1990) .................................................................................... 4 Luis v. Metro. Life Ins. Co., 142 F.Supp.3d 873 (N.D. Cal. 2015) ...................................................................... 2, 3 Montoya v. Countrywide Bank, 2009 WL 1813973 (N.D. Cal. 2009) .......................................................................... 5 Moore v. Kayport Package Exp., Inc., 885 F.2d 531 (9th Cir. 1989) ...................................................................................... 6 Quinteros v. Aurora Loan Servs., 740 F.Supp.2d 1163 (E.D. Cal. 2010) ...................................................................... 11 Case 5:17-cv-00630-JGB-DTB Document 12 Filed 04/26/17 Page 4 of 20 Page ID #:65 iii Case No. 5:17-cv-00630-JBT-DTB TABLE OF AUTHORITIES 892096.1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Salazar v. U.S. Bank Nat. Ass’n, 2015 WL 1542908 (C.D. Cal. 2015) ........................................................................ 10 Saldate v. Wilshire Credit Corp., 268 F.R.D. 87 (E.D. Cal. 2010) .................................................................................. 6 Stokes v. CitiMortgage, Inc., 2014 WL 4359193 (C.D. Cal. 2014) .......................................................................... 9 Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097 (9th Cir. 2003) .................................................................................... 4 Williams v. Wells Fargo Bank, N.A., 2014 WL 1568857 (C.D. Cal. 2014) .......................................................................... 7 Yamauchi v. Cotterman, 84 F.Supp.3d 993 (N.D. Cal. 2015) ............................................................................ 6 STATE CASES Karlsen v. Am. Sav. & Loan Ass’n., 15 Cal.App.3d 112 (1971) .......................................................................................... 5 Moradi-Shalal v. Fireman’s Fund Ins. Companies, 46 Cal.3d 287 (1988) ................................................................................................ 12 Multani v. Witkin & Neal, 215 Cal.App.4th 1428 (2013) ..................................................................................... 5 Nguyen v. Calhoun, 105 Cal.App.4th 428 (2003) ....................................................................................... 5 Orcilla v. Big Sur, Inc., 244 Cal.App.4th 982 (2016) ..................................................................................... 12 STATE STATUTES Cal. Civ. Code § 2923.6 .............................................................................. 1, 8, 9, 10, 11 Cal. Civ. Code § 2923.6(c) ............................................................................................. 8 Cal. Civ. Code § 2923.6(g) ....................................................................................... 8, 10 Cal. Civ. Code § 2923.6(h) ......................................................................................... 8, 9 Cal. Civ. Code § 2923.7 .................................................................................... 1, 7, 8, 10 Cal. Civ. Code § 2923.7(a) ............................................................................................. 7 Cal. Civ. Code § 2923.7(e) ............................................................................................. 7 Cal. Civ. Code 2924f ................................................................................................ 1, 11 Cal. Civ. Code § 2924f(b)(1) .................................................................................. 11, 12 Case 5:17-cv-00630-JGB-DTB Document 12 Filed 04/26/17 Page 5 of 20 Page ID #:66 iv Case No. 5:17-cv-00630-JBT-DTB TABLE OF AUTHORITIES 892096.1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Cal. Civ. Code § 2924.3(a) ........................................................................................... 11 Cal. Civ. Code § 2924.12(a) ................................................................................. 7, 8, 10 Cal. Civ. Code § 2924.12(b) ........................................................................................... 7 Cal. Civ. Code § 2924.12(e) ........................................................................................... 5 FEDERAL RULES Fed. R. Civ. P. 8 .............................................................................................................. 3 Fed. R. Civ. P. 8(a) ......................................................................................................... 3 Fed. R. Civ. P. 9 .......................................................................................................... 1, 6 Fed. R. Civ. P. 9(b) ..................................................................................................... 4, 6 Fed. R. Civ. P. 12(b)(6) .............................................................................................. 1, 4 Case 5:17-cv-00630-JGB-DTB Document 12 Filed 04/26/17 Page 6 of 20 Page ID #:67 1 Case No. 5:17-cv-00630-JBT-DTB MEMORANDUM OF POINTS AND AUTHORITIES 794637.1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 MEMORANDUM OF POINTS AND AUTHORITIES I. INTRODUCTION Despite being in perpetual default under her mortgage loan, Bonita Nelson (“Plaintiff”) brings this action to dispute the foreclosure sale of her property. Fundamentally, the Complaint challenges whether Plaintiff has been properly considered for foreclosure prevention alternatives, notwithstanding the fact that she has received three previous loan modifications. In total, Plaintiff brings five causes of action based on the purported mishandling of her request for loss mitigation assistance. None of these causes of action have merit. Indeed, Plaintiff’s claims for fraud and misrepresentation fall woefully short of satisfying the pleading standard under FRCP 9. Further, Plaintiff cannot establish how her purported reliance on a rejection of her loan modification application was justifiable or caused her any harm. Since Plaintiff does not allege that she specifically requested a single point of contact (“SPOC”), her claim under Cal. Civ. Code § 2923.7 necessarily fails. The Complaint does not otherwise contain sufficient facts to establish that any alleged violation of section 2923.7 was material. Moreover, Plaintiff has not plausibly established that Ocwen violated Cal. Civ. Code § 2923.6 as the Complaint contains insufficient facts to demonstrate that Plaintiff properly invoked the protections of the statute. Finally, Plaintiff’s Cal. Civ. Code. § 2924f claim fails as she has not alleged tender or materiality associated with this purported violation. For these reasons, as explained more fully herein, the Complaint should be dismissed. II. STATEMENT OF FACTS A. The Loan On or about November 20, 2006, Plaintiff executed a Promissory Note (“Note”) in the amount of $432,000 in favor of WMC Mortgage Corp. (the “Loan”). The Note is secured by a Deed of Trust (the “Deed of Trust”) on the real property located at 1565 Paseo Vida, Palm Springs, CA 92264 (the “Property.”) A true and correct copy Case 5:17-cv-00630-JGB-DTB Document 12 Filed 04/26/17 Page 7 of 20 Page ID #:68 2 Case No. 5:17-cv-00630-JBT-DTB MEMORANDUM OF POINTS AND AUTHORITIES 794637.1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 of the recorded Deed of Trust is attached to Ocwen’s Request for Judicial Notice (“RJN”) as Exhibit “1.” On or about June 8, 2012 a Substitution of Trustee was recorded against the Property which substituted Western Progressive as the trustee under the Deed of Trust. See RJN, Exhibit “2”. B. Plaintiff’s Prior Defaults In November 2008, Ocwen and Plaintiff entered into a Loan Modification Agreement (the “First Modification”).1 See RJN, Exhibit “3”. Notwithstanding the First Modification, Plaintiff defaulted under the Loan by failing to make her February 1, 2009 mortgage payment and every payment thereafter, thereby resulting in the recordation of a Notice of Default (the “First NOD”). See RJN, Exhibit “4”. At the time the First NOD was recorded, Plaintiff was $36,458.35 in arrears under the Loan. See id. To further assist Plaintiff with her default, Ocwen offered her a second loan modification on September 13, 2010 (the “Second Modification”). See id., Exhibit “5.” As a result of the Second Modification, a Notice of Rescission of Notice of Default was recorded on March 31, 2011. See id., Exhibit “6”. Less than one year after receiving the Second Modification, Plaintiff defaulted again by failing to make her April 1, 2011 mortgage payment and every payment thereafter, which resulted in the recording of a new Notice of Default (the “Second NOD”) on February 21, 2012. See RJN, Exhibit “7”. As Plaintiff was unable to cure the default, a Notice of Trustee’s Sale was recorded on June 8, 2012 (“the “First NOS”). RJN, Exhibit “8”. The First NOS indicated that Plaintiff owed $329,222.33 on the Loan as of July 3, 2012. However, in another attempt to assist Plaintiff, Ocwen offered her a third loan modification on June 25, 2012 (the “Third Modification”).2 1 Although the First Modification and subsequent modifications referenced below were not incorporated into the Complaint, the Court may consider these documents in ruling on this motion as they are crucial to Plaintiff’s claims. See Luis v. Metro. Life Ins. Co., 142 F.Supp.3d 873, 877 n. 2 (N.D. Cal. 2015). 2 The First Modification, Second Modification, and Third Modification are collectively referred to herein as the “Modifications.” Case 5:17-cv-00630-JGB-DTB Document 12 Filed 04/26/17 Page 8 of 20 Page ID #:69 3 Case No. 5:17-cv-00630-JBT-DTB MEMORANDUM OF POINTS AND AUTHORITIES 794637.1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 See id., Exhibit “9”. As a result of the Third Modification, the Second NOD was rescinded. See id., Exhibit “10”. C. Plaintiff’s Current Default Notwithstanding the three Modifications, Plaintiff again defaulted under the terms of the Loan by failing to make her April 1, 2014 mortgage payment and every payment thereafter, thereby resulting in a third Notice of Default (the “Current NOD”) being recorded against the Property on March 29, 2016. RJN, Exhibit “11”. At the time the Current NOD was recorded, Plaintiff was $49,000.17 in arrears under the Loan. See id. Following Plaintiff’s failure to cure the default, on July 29, 2016, a new Notice of Trustee’s Sale (the “Current NOS”) was recorded against the Property, indicating that Plaintiff owed $279,645.06 on the Loan as of September 6, 2016. See RJN Exhibit “12”. Because Plaintiff could not cure the default, the Property was sold at a foreclosure sale on December 15, 2016, to co-defendant PDQ Investments LLC, as Trustee for Paseo Vida Trust #1565 (“PDQ”). RJN, Exhibit “13”. III. LEGAL STANDARD Pursuant to FRCP 8, a complaint “must contain a short and plain statement of the claim showing that the pleader is entitled to relief…” Fed. R. Civ. P. 8(a). While the Federal Rules adopt a flexible pleading policy, every complaint must, at a minimum, “give the defendant fair notice of what the…claim is and the grounds upon which it rests.” Bell Atlantic v. Twombly, 550 U.S. 544, 555 (2007) (citations omitted). Although a complaint does not need detailed factual allegations, “a plaintiff’s obligation to provide the ‘grounds’ for his ‘entitlement’ to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Twombly, 550 U.S. at 555 (citation omitted). Indeed, 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) (citing Twombly, 550 U.S. at 570). Likewise, a complaint that offers only “naked assertion[s]” devoid of “further factual enhancement” will not suffice. Id. Case 5:17-cv-00630-JGB-DTB Document 12 Filed 04/26/17 Page 9 of 20 Page ID #:70 4 Case No. 5:17-cv-00630-JBT-DTB MEMORANDUM OF POINTS AND AUTHORITIES 794637.1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Additionally, FRCP 9(b) requires a party to “state with particularity the circumstances constituting fraud.” Fed. R Civ. P. 9(b). To comply with Rule 9(b), allegations of fraud must be specific enough to give defendants notice of the particular misconduct which is alleged to constitute the fraud charged so that they can defend against the charge and not just deny that they have done anything wrong. See Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1106 (9th Cir. 2003). “Averments of fraud must be accompanied by ‘the who, what, when, where, and how’ of the misconduct charged.” See id. (citation omitted). Under Federal Rule of Civil Procedure 12(b)(6), a party may move to dismiss a complaint for “failure to state a claim upon which relief can be granted.” See Fed. R. Civ. P. 12(b)(6). A complaint may be dismissed as a matter of law for failure to state a claim for two reasons: (1) lack of a cognizable legal theory; or (2) insufficient facts under a cognizable legal theory. See Balistreri v. Pacifica Police Dep’t, 901 F.2d 696, 699 (9th Cir. 1990). In determining whether the complaint states a claim on which relief may be granted, its allegations of material fact must be taken as true and construed in the light most favorable to plaintiffs. See Love v. United States, 915 F.2d 1242, 1245 (9th Cir. 1990); Lazy Y Ranch Ltd. v. Behrens, 546 F.3d 580, 588 (9th Cir. 2008). The court may properly look beyond the complaint only to items in the record of the case or to matters of general public record. Emrich v. Touche Ross & Company, 846 F.2d 1190, 1198 (9th Cir. 1988). If the factual allegations in a complaint dot not raise the “right to relief above the speculative level,” the complaint may be dismissed for failure to state a claim under Rule 12(b)(6). Twombly, 550 U.S. at 555. IV. ARGUMENT A. Plaintiff’s Entire Complaint Fails for Lack of Tender “When a debtor is in default of a home mortgage loan, and a foreclosure is either pending or has taken place, the debtor must allege a credible tender of the amount of the secured debt to maintain any cause of action for wrongful foreclosure.” Case 5:17-cv-00630-JGB-DTB Document 12 Filed 04/26/17 Page 10 of 20 Page ID #:71 5 Case No. 5:17-cv-00630-JBT-DTB MEMORANDUM OF POINTS AND AUTHORITIES 794637.1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Alicea v. GE Money Bank 2009 WL 2136969, at *3 (N.D. Cal. 2009); Montoya v. Countrywide Bank , 2009 WL 1813973, at 11-12 (N.D. Cal. 2009) (“the ‘tender rule’ requires that as a precondition to challenging a foreclosure sale, or any cause of action implicitly integrated to the sale, the borrower must make a valid and viable tender of payment of the debt”). The rules governing tenders are strictly applied. See Nguyen v. Calhoun, 105 Cal.App.4th 428, 439 (2003). Absent an alleged and actual tender, a complaint for wrongful foreclosure fails to state a cause of action. See Karlsen v. Am. Sav. & Loan Ass’n. 15 Cal.App.3d 112, 117-118 (1971). Indeed, if a plaintiff fails to allege the element of tender, there is nothing to warrant disruption of a non-judicial foreclosure. See Anaya v. Advisors Lending Group 2009 WL 2424037, at 10 (E.D. Cal. 2009). Significantly, Plaintiff fails to allege tender, an attempt at tender, or even her ability to tender any amount of the arrears, let alone the entire amount due on the Loan. See generally Complaint (“Compl.”). Admittedly, California courts have recognized exceptions to the tender rule. See Multani v. Witkin & Neal, 215 Cal.App.4th 1428, 1454-55 (2013) (identifying four exceptions to tender requirement). None of these recognized exceptions apply in this case. On the contrary, Plaintiff does not dispute the validity of the Loan, thereby making the first exception inapplicable. The second exception does not apply as there are no allegations in the Complaint to even suggest that Plaintiff has a counter-claim or setoff against Ocwen. Next, Plaintiff has not alleged how the trustee’s deed is void on its face.3 Finally, the Complaint does not demonstrate that it would be inequitable to apply the tender rule. Thus, Plaintiff lacks standing to pursue equitable relief since she cannot seek equity without having done equity. Therefore, Ocwen’s Motion should be granted without leave to amend. 3 Even if Plaintiff had a valid claim under the California Homeowner Bill of Rights (“HBOR”), such a claim would not affect the sale of the Property to PDQ. See Cal. Civ. Code § 2924.12(e). Case 5:17-cv-00630-JGB-DTB Document 12 Filed 04/26/17 Page 11 of 20 Page ID #:72 6 Case No. 5:17-cv-00630-JBT-DTB MEMORANDUM OF POINTS AND AUTHORITIES 794637.1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 B. Plaintiff’s Causes of Action for Misrepresentation and Fraud Fail to State a Claim In California, “[t]he general elements of a cause of action for fraudulent misrepresentation are (1) misrepresentation (false representation, concealment, or nondisclosure); (2) knowledge of falsity (scienter); (3) intent to induce reliance; (4) justifiable reliance; and (5) resulting damage.” Yamauchi v. Cotterman, 84 F.Supp.3d 993, 1018 (N.D. Cal. 2015) (citations and internal quotations omitted). These are the same elements as a claim for fraud. See id. As discussed above, FRCP 9 imposes a heightened pleading requirement for allegations of fraud. See Fed. R. Civ. P. 9(b). “While statements of the time, place and nature of the alleged fraudulent activities are sufficient, mere conclusory allegations of fraud are insufficient.” Moore v. Kayport Package Exp., Inc., 885 F.2d 531, 540 (9th Cir. 1989). 1. The Complaint Fails to Satisfy FRCP 9 Even a cursory review of Plaintiff’s Complaint demonstrates that she has failed to assert a viable cause of action for fraud against Ocwen. Specifically, Plaintiff’s Complaint does not contain sufficient allegations to plausibly establish the requisite elements of a claim for fraud. At bottom, Plaintiff’s claims appears to be based on Ocwen: (1) failing to provide the Notice of Sale to Plaintiff; (2) sending correspondence to Plaintiff acknowledging her loss mitigation request; and (3) not advising Plaintiff that the Property was sold during a phone conversation. Compl. ¶ 32. Because Plaintiff’s claims are asserted against a corporate defendant, Plaintiff is required to “allege the names of the persons who made the allegedly fraudulent representations, their authority to speak, to whom they spoke, what they said or wrote, and when it was said or written.” See Saldate v. Wilshire Credit Corp., 268 F.R.D. 87, 102 (E.D. Cal. 2010). Aside from a reference to an individual named “Acharya,” Plaintiff fails to clearly identify the persons who made the purported misrepresentations, much less their authority to speak. Case 5:17-cv-00630-JGB-DTB Document 12 Filed 04/26/17 Page 12 of 20 Page ID #:73 7 Case No. 5:17-cv-00630-JBT-DTB MEMORANDUM OF POINTS AND AUTHORITIES 794637.1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 2. Plaintiff Fails to Allege Reliance Upon a Purported Misrepresentation The Complaint is also devoid of sufficient facts plausibly establishing that Plaintiff justifiably relied on the representations at issue. Instead, Plaintiff conclusorily alleges that she forewent foreclosure alternatives. Compl., ¶ 34. This contention is insufficient to establish the reliance element of Plaintiff’s claim. See e.g., Dick v. Am. Home Mortgage Servicing, Inc., 2014 WL 172537, at *4 (E.D. Cal. 2014). Indeed, per the Plaintiff’s own admission she was already pursuing loss mitigation. Compl., ¶ 13. Therefore, she cannot allege that she changed her position in reliance upon Ocwen’s purported misrepresentation. More critically, Ocwen affirmatively advised Plaintiff that she was not eligible for another loan modification because her application was not timely submitted. See RJN, Exhibit “14”. Finally, Plaintiff fails to plead with the requisite particularity how the misrepresentations caused her damage. Based upon the foregoing, Plaintiff’s claims for fraud and misrepresentation should be dismissed. C. Plaintiff’s Claim for Violation of Cal. Civ. Code § 2923.7 Fails California Civil Code section 2923.7 provides that, “upon request from a borrower who requests a foreclosure prevention alternative, the mortgage servicer shall promptly establish a single point of contact and provide to the borrower one or more direct means of communication” with that point of contact. Cal. Civ. Code § 2923.7(a). A single point of contact may be comprised of a team of personnel, rather than a single person. See Cal. Civ. Code § 2923.7(e). Only material violations of section 2923.7 are actionable. See Cal. Civ. Code §§ 2924.12(a)-(b). Plaintiff claims that Ocwen violated section 2923.7 by failing to establish a SPOC. As a threshold matter, this claim fails due to Plaintiff’s failure to plead that she actually requested a SPOC. See Williams v. Wells Fargo Bank, N.A., 2014 WL 1568857, * 1 (C.D. Cal. 2014) (concluding that claim predicated on violation of section 2923.7 was deficient because the plaintiffs never alleged they requested a Case 5:17-cv-00630-JGB-DTB Document 12 Filed 04/26/17 Page 13 of 20 Page ID #:74 8 Case No. 5:17-cv-00630-JBT-DTB MEMORANDUM OF POINTS AND AUTHORITIES 794637.1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 single point of contact); see also Diamos v. Specialized Loan Servicing LLC, 2014 WL 5810453, at *4 (N.D. Cal. 2014) (requiring specific request for a single point of contact). Even if Plaintiff had requested a SPOC, she was not entitled to one under the circumstances. This is because, as discussed below, Ocwen was not required to review Plaintiff’s foreclosure prevention request given the previous Modifications. See Cal. Civ. Code § 2923.6(g). Absent an obligation to review Plaintiff’s application, Ocwen was not required to appoint a SPOC for purposes of facilitating such a review. In addition, Plaintiff’s bare allegations do not explain why the denial of a SPOC was “material,” as is required to state a viable claim for violation of section 2923.7. See Cal. Civ. Code § 2924.12(a); see also Cornejo v. Ocwen Loan Servicing, LLC, 151 F.Supp.3d 1102, 1113 (E.D. Cal. 2015) (“Courts have interpreted the term ‘material’ to refer to whether the alleged violation affected a plaintiff’s loan obligations or the modification process.”). For all the foregoing reasons, Plaintiff’s claim under section 2923.7 should be dismissed. D. Plaintiff’s Claim for Violation of Cal. Civ. Code § 2923.6 Fails Section 2923.6 of the California Civil Code prohibits a servicer from recording a notice of default or notice of sale, or conducting a foreclosure sale, while “a complete application for a first lien loan modification” is pending. See Cal. Civ. Code § 2923.6(c). An application is “complete” within the meaning of section 2923.6 “when a borrower has supplied the mortgage servicer with all documents required by the mortgage servicer within the reasonable timeframes specified by the [] servicer.” See Cal. Civ. Code § 2923.6(h). Notably, section 2923.6 recognizes an exception to the general dual-tracking prohibitions where a borrower has already been afforded a fair opportunity to be evaluated for a modification. See Cal. Civ. Code § 2923.6(g). Under these circumstances, a servicer has no obligation to review an application unless the borrower has: (1) encountered a material change in their financial Case 5:17-cv-00630-JGB-DTB Document 12 Filed 04/26/17 Page 14 of 20 Page ID #:75 9 Case No. 5:17-cv-00630-JBT-DTB MEMORANDUM OF POINTS AND AUTHORITIES 794637.1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 circumstances since the prior opportunity; and (2) documented this change to the servicer. See id. Plaintiff’s third cause of action seeks recourse for Ocwen’s purported violation of section 2923.6. She asserts this claim without clearly identifying when she submitted her allegedly complete application. See generally Compl. Ultimately, Plaintiff contends that Ocwen violated section 2923.6 by selling the property without providing a Notice of Sale. See Compl., ¶ 49. None of the allegations in the Complaint are sufficient to state a claim under section 2923.6, as explained below. 1. Plaintiff Fails to Establish Her Application Was Complete To plead a claim under section 2923.6, Plaintiff was required to allege that she had a complete first lien loan modification application under review at the time the foreclosure sale was conducted. Indeed, section 2923.6(h) defines what it means for an application to be “complete.” First, the application must be supported by all of the documents that a mortgage servicer requires. See Cal. Civ. Code § 2923.6(h). Second, the application must be submitted within the timeframes specified by the servicer. See id. Plaintiff alleges that “Ocwen sent Plaintiff a written communication indicating that it had a complete package with respect to Plaintiff’s modification application.” See Compl., ¶ 48. Curiously, Plaintiff fails to attach this correspondence as an exhibit to her Complaint. See generally Compl. Upon review, the correspondence cited by Plaintiff is a loan modification rejection notice based on untimeliness. See RJN Exhibit “14”. Per the correspondence, a complete loan modification package must be received at least seven business days before a scheduled foreclosure sale. Id. Here, Plaintiff submitted her application only three days prior to the foreclosure sale. Simply stated, Plaintiff’s threadbare statement that her application was complete is an impermissible legal conclusion. Ultimately, in analyzing claims under section 2923.6, “courts typically uphold the sufficiency of such claims only upon the submission of robust factual allegations demonstrating that the application was complete.” Stokes v. CitiMortgage, Inc., 2014 WL 4359193, at *7 (C.D. Cal. 2014); Case 5:17-cv-00630-JGB-DTB Document 12 Filed 04/26/17 Page 15 of 20 Page ID #:76 10 Case No. 5:17-cv-00630-JBT-DTB MEMORANDUM OF POINTS AND AUTHORITIES 794637.1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 see also Farren v. Select Portfolio Servicing, Inc., 2017 WL 1063891, at *3 (E.D. Cal. 2017). Plaintiff falls well short of satisfying this standard. 2. Ocwen Was Not Obligated to Review Plaintiff’s Application Another critical defect with Plaintiff’s claim under section 2923.6 is that she cannot demonstrate that she was entitled to the protections of the statute. As noted above, section 2923.6 exempts a servicer from complying with its provisions if a borrower has been evaluated or afforded a fair opportunity to be evaluated for a first lien loan modification. See Cal. Civ. Code § 2923.6(g). To overcome this exemption, a borrower must: (1) have a material change in their financial circumstances since any prior application and (2) document that change to the servicer. See id. Documenting a material change requires more than merely submitting a new application with different financial information. See Salazar v. U.S. Bank Nat. Ass’n, 2015 WL 1542908, at *4 (C.D. Cal. 2015) (collecting cases). By virtue of Plaintiff’s receipt of the Modifications, she was not eligible for the dual-tracking protections under section 2923.6 unless she had a material change in her financial circumstances and documented that change to Ocwen. None of the allegations in the Complaint establish either of these elements. 3. Lack of Materiality Like her claim under section 2923.7, Plaintiff’s claim under section 2923.6 fails for the additional reason that she had not established the materiality of the purported violation. Indeed, a claim based on a violation of section 2923.6 is not actionable unless the violation was material. See Cal. Civ. Code § 2924.12(a). Material violations are those violations that affect Plaintiff’s obligations under the Loan or the modification process. See Cornejo, 151 F.Supp.3d at 1113. Plaintiff does not allege how Ocwen’s purported violation of section 2923.6 affected her obligations under the Loan or the modification review process. She instead contends that she was harmed because she “made numerous mortgage payments towards the Loan.” Compl. ¶ 50. Plaintiff making contractual payments against the loan cannot constitute harm as she Case 5:17-cv-00630-JGB-DTB Document 12 Filed 04/26/17 Page 16 of 20 Page ID #:77 11 Case No. 5:17-cv-00630-JBT-DTB MEMORANDUM OF POINTS AND AUTHORITIES 794637.1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 was contractually obligated to make these payments. It is therefore unclear how Ocwen’s conduct has prevented her from being evaluated for a loan modification, especially when considering she received each of the Modifications and was not legally entitled to any further modification. See Cal. Civ. Code § 2924.3(a) (noting that the provisions under the HBOR do not require any particular result from the loss mitigation review process). In short, Plaintiff’s claim under section 2923.6 is wholly deficient. She fails to establish that she properly invoked the statute by submitting a complete application or that Ocwen was even obligated to review the application. Moreover, the Complaint fails to demonstrate how the alleged violation of section 2923.6 was material under the circumstances. As a consequence, Plaintiff’s claim under section 2923.6 should be dismissed. E. Plaintiff’s Claim for Violation of Cal. Civ. Code 2924f Fails Section 2924f of the California Civil Code requires a mortgagee, beneficiary, or authorized agent to post a notice of sale at least 20 days before the sale date. The statute specifically requires a mortgagee, beneficiary, or authorized agent to post the notice, “in one public place in the city where the property is to be sold, if the property is to be sold in a city, or, if not, then in one public place in the judicial district in which the property is to be sold, and publishing a copy once a week for three consecutive calendar weeks.” Cal. Civ. Code § 2924f(b)(1). Plaintiff contends that Ocwen failed to provide her with a copy of the Notice of Sale in accordance with section 2924f(b)(1). In interpreting California’s non-judicial foreclosure statutes, California courts have held that a trustor’s actual receipt of foreclosure notices is not a statutory requirement. See Quinteros v. Aurora Loan Servs., 740 F.Supp.2d 1163, 1168 (E.D. Cal. 2010). Applying this principle to this case, Plaintiff’s claim is deficient because her receipt of the Notice of Sale is immaterial. Case 5:17-cv-00630-JGB-DTB Document 12 Filed 04/26/17 Page 17 of 20 Page ID #:78 12 Case No. 5:17-cv-00630-JBT-DTB MEMORANDUM OF POINTS AND AUTHORITIES 794637.1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Assuming arguendo that Plaintiff could overcome this deficiency, nothing under section 2924f(b)(1) establishes a private right of action. See Moradi-Shalal v. Fireman’s Fund Ins. Companies, 46 Cal.3d 287, 305 (1988) (noting that a statute will only be deemed to contain a private right of action if the Legislature has manifested an intent to create such a right). Even if Plaintiff had a private right of action, she has not demonstrated how Ocwen’s purported noncompliance with section 2924f(b)(1) prejudiced her. Absent prejudice, Plaintiff cannot state a claim under the statute. See e.g., Orcilla v. Big Sur, Inc., 244 Cal.App.4th 982, 1002 (2016). Moreover, courts have recognized that a valid tender is a prerequisite for a claim based on a violation of 2924f. See Ibay v. Manufacturers & Traders Trust Co., 2013 WL 12130562, at *3 (C.D. Cal. 2013). As previously discussed, Plaintiff has not made a valid offer to tender the amounts due on the Loan. Notwithstanding the foregoing, Ocwen complied with the requirements of Cal. Civ. Code section 2924f(b)(1). Indeed, Ocwen published the Notice of Sale in the Desert Sun once a week for three calendar weeks. RJN Exhibit “15”. For all the foregoing reasons, Plaintiff’s claim under section 2924f(b)(1) should be dismissed. V. CONCLUSION Based on the arguments set forth herein, Ocwen respectfully requests that the Court grant its Motion to Dismiss Plaintiff’s Complaint and dismiss the entire Complaint. Since Plaintiff lacks standing to pursue this action due to her failure to tender, amendment would be futile. Thus, the dismissal should be with prejudice. DATED: April 26, 2017 McGLINCHEY STAFFORD By: /s/ Mike Aleali MIKE ALEALI BRIAN A. PAINO Attorneys for Defendant OCWEN LOAN SERVICING, LLC Case 5:17-cv-00630-JGB-DTB Document 12 Filed 04/26/17 Page 18 of 20 Page ID #:79 892644.1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 PROOF OF SERVICE STATE OF CALIFORNIA ) ) ss. COUNTY OF ORANGE ) I, Marina Hegel, declare: I am employed in the County of Orange, State of California. I am over the age of 18 and not a party to the within action. My business address is 18201 Von Karman Ave., Suite 350, Irvine, California 92612. On April 26, 2017, I served the document(s) described as DEFENDANT OCWEN LOAN SERVICING, LLC’S NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFF’S COMPLAINT PURSUANT TO FRCP 12(b)(6)); MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF as follows: BY MAIL: As follows: FEDERAL - I deposited such envelope in the U.S. mail at Irvine, California, with postage thereon fully prepaid, BY CM/ECF NOTICE OF ELECTRONIC FILING: I caused said document(s) to be served by means of this Court’s Electronic transmission of the Notice of Electronic Filing through the Court’s transmission facilities, to the parties and/or counsel who are registered CM/ECF users set forth in the service list obtained from this Court. Pursuant to Electronic Filing Court Order, I hereby certify that the above documents(s) was uploaded to the website and will be posted on the website by the close of the next business day and the webmaster will give e-mail notification to all parties. FEDERAL: I declare that I employed in the office of a member of the State Bar of this Court at whose direction the service was made. Executed on April 26, 2017, at Irvine, California. Marina Hegel Marina Hegel Case 5:17-cv-00630-JGB-DTB Document 12 Filed 04/26/17 Page 19 of 20 Page ID #:80 892644.1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 SERVICE LIST USDC Central District, Case No. EDCV17-00630-JGB (DTB) File # 104938.PM 2063 Bonita Nelson 1565 Paseo Vida Palm Springs, CA 92264 Plaintiff, In Pro Se Tel: (760) 778-8800 Email: bknelson4@cs.com Case 5:17-cv-00630-JGB-DTB Document 12 Filed 04/26/17 Page 20 of 20 Page ID #:81 1 [PROPOSED] ORDER GRANTING MOTION TO DISMISS PLAINTIFF’S COMPLAINT 892102.1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA - EASTERN DIVISION BONITA NELSON, an individual, Plaintiff, v. OCWEN LOAN SERVICING, LLC; PDQ INVESTMENTS LLC AS TRUSTEE FOR PASEO VIDA TRUST #1565 and DOES 1 through 100, inclusive, Defendants. Case No.: 5:17-cv-00630-JGB-DTB Hon. Jesus G. Bernal [PROPOSED] ORDER GRANTING DEFENDANT’S MOTION TO DISMISS PLAINTIFF’S COMPLAINT Hearing: Date: June 5, 2017 Time: 9:00 a.m. Ctrm. 1 Action Filed: April 3, 2017 Trial Date: None The motion of defendant Ocwen Loan Servicing, LLC (“Ocwen”) to dismiss plaintiff Bonita Nelson’s (“Plaintiff”) Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6) (the “Motion”) came on regularly for hearing before the Honorable Jesus G. Bernal at the date and time set forth above. After having considered the moving papers, opposition papers, reply papers, and oral argument, if any, and GOOD CAUSE APPEARING THEREFORE, IT IS ORDERED THAT the Motion is GRANTED. Case 5:17-cv-00630-JGB-DTB Document 12-1 Filed 04/26/17 Page 1 of 4 Page ID #:82 2 [PROPOSED] ORDER GRANTING MOTION TO DISMISS PLAINTIFF’S COMPLAINT 892102.1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 IT IS FURTHER ORDERED THAT this action is hereby dismissed with prejudice. IT IS SO ORDERED. Dated: _________________________ _________________________________ HON. JESUS G. BERNAL UNITED STATES DISTRICT JUDGE Case 5:17-cv-00630-JGB-DTB Document 12-1 Filed 04/26/17 Page 2 of 4 Page ID #:83 892644.1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 PROOF OF SERVICE STATE OF CALIFORNIA ) ) ss. COUNTY OF ORANGE ) I, Marina Hegel, declare: I am employed in the County of Orange, State of California. I am over the age of 18 and not a party to the within action. My business address is 18201 Von Karman Ave., Suite 350, Irvine, California 92612. On April 26, 2017, I served the document(s) described as [PROPOSED] ORDER GRANTING DEFENDANT’S MOTION TO DISMISS PLAINTIFF’S COMPLAINT as follows: BY MAIL: As follows: FEDERAL - I deposited such envelope in the U.S. mail at Irvine, California, with postage thereon fully prepaid, BY CM/ECF NOTICE OF ELECTRONIC FILING: I caused said document(s) to be served by means of this Court’s Electronic transmission of the Notice of Electronic Filing through the Court’s transmission facilities, to the parties and/or counsel who are registered CM/ECF users set forth in the service list obtained from this Court. Pursuant to Electronic Filing Court Order, I hereby certify that the above documents(s) was uploaded to the website and will be posted on the website by the close of the next business day and the webmaster will give e-mail notification to all parties. FEDERAL: I declare that I employed in the office of a member of the State Bar of this Court at whose direction the service was made. Executed on April 26, 2017, at Irvine, California. Marina Hegel Marina Hegel Case 5:17-cv-00630-JGB-DTB Document 12-1 Filed 04/26/17 Page 3 of 4 Page ID #:84 892644.1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 SERVICE LIST USDC Central District, Case No. EDCV17-00630-JGB (DTB) File # 104938.PM 2063 Bonita Nelson 1565 Paseo Vida Palm Springs, CA 92264 Plaintiff, In Pro Se Tel: (760) 778-8800 Email: bknelson4@cs.com Case 5:17-cv-00630-JGB-DTB Document 12-1 Filed 04/26/17 Page 4 of 4 Page ID #:85