Dyan Hill v. Ocwen Loan Servicing, Llc et al

NOTICE OF MOTION AND MOTION to Dismiss Case Complaint

C.D. Cal.September 13, 2016

CASE NO.: 2:16-CV-06701-R-SK NOTICE OF MOTION AND MOTION TO DISMISS COMPLAINT 750419.1 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) Dhruv M. Sharma (SBN 279545) 18201 Von Karman Avenue, Suite 350 Irvine, California 92612 Telephone: (949) 381-5900 Facsimile: (949) 271-4040 Email: bpaino@mcglinchey.com dsharma@mcglinchey.com Attorneys for Defendant OCWEN LOAN SERVICING, LLC UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA - WESTERN DIVISION DYAN HILL, an individual; Plaintiff, v. OCWEN LOAN SERVICING, LLC, a Delaware limited liability company; -and- DOES 1-1,000, Defendants. Case No.: 2:16-cv-06701-R-SK Hon. District Judge Manuel L. Real DEFENDANT OCWEN LOAN SERVICING, LLC’S MOTION TO DISMISS PLAINTIFF’S COMPLAINT; MEMORANDUM OF POINTS AND AUTHORITIES Hearing: Date: October 17, 2016 Time: 10:00 a.m. Ctrm: 8, 2nd Floor Superior Court Case No.: BC622061 Action Filed: May 31, 2016 Trial Date: N/A TO ALL INTERESTED PARTIES: PLEASE TAKE NOTICE that, on October 17, 2016, at 10:00 a.m., or as soon thereafter as the matter may be heard, in Courtroom 8 of the above-entitled court, located at 312 N. Spring St., Los Angeles, California 90012, defendant Ocwen Loan Servicing, LLC (“Ocwen”) will, and hereby does, move the Court to dismiss this action pursuant to Federal Rule of Civil Procedure 12(b)(6). As set forth more fully in the accompanying Memorandum of Points and Authorities (the “Memorandum”), this motion seeks a dismissal of this action with prejudice on the ground that plaintiff Dyan Hill’s (“Plaintiff”) complaint (the Case 2:16-cv-06701-R-SK Document 10 Filed 09/13/16 Page 1 of 22 Page ID #:159 CASE NO.: 2:16-CV-06701-R-SK NOTICE OF MOTION AND MOTION TO DISMISS COMPLAINT 750419.1 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 “Complaint”) fails to state a claim against Defendants upon which relief can be granted. This motion is based on the accompanying Memorandum, the Request for Judicial Notice and [Proposed] Order 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: September 13, 2016 McGLINCHEY STAFFORD By: /s/ Brian A. Paino BRIAN A. PAINO DHRUV M. SHARMA Attorneys for Defendant OCWEN LOAN SERVICING, LLC LOCAL CIVIL RULE 7-3 CERTIFICATION This motion is made following the attempt of the undersigned to confer with the above-captioned plaintiff’s counsel of record pursuant to L.R. 7-3. In particular, the undersigned detailed to opposing counsel the deficiencies with each of the plaintiff’s claims and requested a dismissal of this action, but has yet to receive any response. As a result, the parties have not resolved any of the issues that necessitate this motion. Case 2:16-cv-06701-R-SK Document 10 Filed 09/13/16 Page 2 of 22 Page ID #:160 i CASE NO.: 2:16-CV-06701-R-SK TABLE OF CONTENTS 750419.1 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. The Foreclosure Proceedings ..................................................................... 2 C. The First Prior Lawsuit .............................................................................. 2 D. The Second Prior Lawsuit .......................................................................... 3 E. The Current Lawsuit .................................................................................. 4 III. LEGAL STANDARD .......................................................................................... 4 IV. ANALYSIS .......................................................................................................... 5 A. PLAINTIFF FAILS TO STATE A CLAIM FOR VIOLATION OF SECTIONS 2923.7 AND 2943 OF THE CALIFORNIA CIVIL CODE ......................................................................................................... 5 1. Section 2923.7 ................................................................................. 5 a. Plaintiff’s Claim is Time-Barred ........................................... 6 b. The Claim is Also Insufficiently Pled ................................... 6 c. Lack of Materiality ................................................................ 7 2. Section 2943 .................................................................................... 8 B. PLAINTIFF FAILS TO STATE A CLAIM FOR BREACH OF CONTRACT .............................................................................................. 9 C. PLAINTIFF FAILS TO STATE A CLAIM FOR UNFAIR COMPETITION ....................................................................................... 10 1. Plaintiffs Lack Standing................................................................. 10 2. Unlawful ........................................................................................ 11 3. Unfair ............................................................................................. 12 4. Fraudulent ...................................................................................... 12 V. CONCLUSION .................................................................................................. 14 Case 2:16-cv-06701-R-SK Document 10 Filed 09/13/16 Page 3 of 22 Page ID #:161 ii CASE NO.: 2:16-CV-06701-R-SK TABLE OF AUTHORITIES 750419.1 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 Page(s) Federal Cases Ashcroft v. Iqbal, 556 U.S. 662 (2009)................................................................................................... 4 Balistreri v. Pacifica Police Dep’t, 901 F.2d 696 (9th Cir. 1990) ..................................................................................... 5 Becker v. Bank of New York Mellon, 2016 WL 2743497 (E.D. Cal. 2016) ..................................................................... 8, 9 Bell Atlantic v. Twombly, 550 U.S. 544 (2007)............................................................................................... 4, 5 Bly-Magee v. California, 236 F.3d 1014 (9th Cir. 2001) ................................................................................. 13 Cornejo v. Ocwen Loan Servicing, LLC, 151 F.Supp.3d 1102, 1113 (E.D. Cal. 2015) ............................................................. 8 Daghlian v. DeVry Univ., Inc., 461 F.Supp.2d 1121 (C.D. Cal. 2006) ....................................................................... 6 Diamos v. Specialized Loan Servicing LLC, 2014 WL 5810453 (N.D. Cal. 2014) ......................................................................... 7 Emrich v. Touche Ross & Company, 846 F.2d 1190 (9th Cir. 1988) ................................................................................... 5 In re Facebook PPC Advertising Litigation, 2010 WL 3341062 (N.D. Cal. 2010) ....................................................................... 13 Jelsing v. MIT Lending, 2010 WL 2731470 (S.D. Cal. 2010) .......................................................................... 8 Johnson v. Select Portfolio Servicing, Inc., 2016 WL 837895 (C.D. Cal. 2016) ........................................................................... 7 Kearns v. Ford Motor Co., 567 F.3d 1120 (9th Cir. 2009) ................................................................................. 12 Case 2:16-cv-06701-R-SK Document 10 Filed 09/13/16 Page 4 of 22 Page ID #:162 iii CASE NO.: 2:16-CV-06701-R-SK TABLE OF AUTHORITIES 750419.1 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 Lazy Y Ranch Ltd. v. Behrens, 546 F.3d 580 (9th Cir. 2008) ..................................................................................... 5 Love v. United States, 915 F.2d 1242 (9th Cir. 1990) ................................................................................... 5 Moore v. Kayport Package Express, Inc., 885 F.2d 531 (9th Cir. 1989) ................................................................................... 13 Morales v. Chase Home Fin. LLC, 2011 WL 1670045 (N.D. Cal. 2011) ......................................................................... 9 Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097 (9th Cir. 2003) ................................................................................. 13 Williams v. Wells Fargo Bank, N.A., 2014 WL 1568857 (C.D. Cal. 2014) ......................................................................... 7 State Cases Berryman v. Merit Prop. Mgmt., Inc., 152 Cal.App.4th 1544 (2007) .................................................................................. 11 Cel-Tech Comms., Inc. v. Los Angeles Cellular Telephone Co., 20 Cal.4th 163 (1999) ........................................................................................ 10, 11 Daro v. Superior Court, 151 Cal.App.4th 1079 (2007) ............................................................................ 10, 11 Krantz v. BT Visual Images, 89 Cal.App.4th 164 (2001) ...................................................................................... 11 Kwikset Corp. v. Superior Court, 51 Cal.4th 310 (2011) .............................................................................................. 10 Lakin v. Watkins Associated Industries, 6 Cal.4th 644 (1993) .................................................................................................. 6 Lavie v. Procter & Gamble Co., 105 Cal.App.4th 496 (2003) .................................................................................... 12 Mass. Mutual Life Ins. Co. v. Super. Ct., 97 Cal.App.4th 1282 (2002) .................................................................................... 12 Case 2:16-cv-06701-R-SK Document 10 Filed 09/13/16 Page 5 of 22 Page ID #:163 iv CASE NO.: 2:16-CV-06701-R-SK TABLE OF AUTHORITIES 750419.1 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 McKell v. Washington Mutual, Inc., 142 Cal.App.4th 1457 (2006) .................................................................................. 12 In re Parker, 60 Cal.App.4th 1453 (1998) ...................................................................................... 7 Samura v. Kaiser Found. Health Plan, 17 Cal.App.4th 1284 (1993) .................................................................................... 12 Scripps Clinic v. Superior Court, 108 Cal.App.4th 917 (2003) .................................................................................... 12 Thomas v. Gilliland, 95 Cal.App.4th 427 (2002) ........................................................................................ 6 State Statutes Cal. Bus. & Prof. Code § 17200 ............................................................................. 10, 12 Cal. Bus. & Prof. Code § 17204 ................................................................................... 10 Cal. Civ. Code § 2923.4 .................................................................................................. 8 Cal. Civ. Code § 2923.7 ................................................................ 3, 5, 6, 7, 8, 11, 13, 14 Cal. Civ. Code § 2924.12 ................................................................................................ 8 Cal. Civ. Code § 2943 ................................................................................... 1, 5, 8, 9, 13 Cal. Code Civ. Proc. § 338 ......................................................................................... 6, 9 Rules Fed. R. Civ. P. 8 .............................................................................................................. 4 Fed. R. Civ. P. 9 ...................................................................................................... 12, 13 Fed. R. Civ. P. 12 ........................................................................................................ 4, 5 Case 2:16-cv-06701-R-SK Document 10 Filed 09/13/16 Page 6 of 22 Page ID #:164 1 CASE NO.: 2:16-CV-06701-R-SK MEMORANDUM OF POINTS AND AUTHORITIES 750419.1 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 Plaintiff filed this lawsuit less than a week before Ocwen’s unopposed Motion for Summary Judgment was scheduled to be heard in her prior state court action. In a clear dilatory tactic, Plaintiff voluntarily dismissed the prior action to avoid the inevitable entry of summary judgment against her. The current lawsuit is based on the same unsupportable legal theories as the prior suit. More specifically, Plaintiff contends that she was not provided with a single point of contact and, therefore, was not properly considered for foreclosure prevention alternatives. None of the allegations in the Complaint are sufficient to state a cognizable claim. To start, Plaintiff’s claim for violation of section 2923.7 of the California Civil Code is barred by the applicable statute of limitations. The claim is otherwise deficient as Plaintiff fails to establish that she properly invoked the statute by requesting a single point of contact. Judicially noticeable facts and Plaintiff’s own admissions in the Complaint demonstrate that she did not submit a timely payoff request pursuant to section 2943 of the California Civil Code. As a consequence, her claim under section 2943 fails as a matter of fact. It is also time-barred. Plaintiff’s claim for breach of contract fails because she does not have standing under the applicable servicer participation agreement (defined below). Finally, Plaintiff lacks standing to bring a claim for statutory unfair competition. Even if she had standing, she cannot demonstrate that Ocwen engaged in unfair business practices. For these reasons, as explained more fully herein, the Complaint should be dismissed. II. STATEMENT OF FACTS A. The Loan On or about November 18, 2005, John Domeka Hill (“Borrower”) obtained a mortgage loan (the “Loan”) from Option One Mortgage Corporation in the original principal sum of $588,000.00, which was reflected in a promissory note secured by a trust deed (the “Deed of Trust”) encumbering the real property located at 1231 N. Case 2:16-cv-06701-R-SK Document 10 Filed 09/13/16 Page 7 of 22 Page ID #:165 2 CASE NO.: 2:16-CV-06701-R-SK MEMORANDUM OF POINTS AND AUTHORITIES 750419.1 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 Everett St., Glendale, California 91207-1428 (the “Property”). (See Compl., ¶ 7; Request for Judicial Notice (“RJN”), Exhibit A). Plaintiff, a co-owner of the Property, signed the Deed of Trust together with Borrower. (See Compl., ¶ 9; RJN, Exhibit A). On December 9, 2010, an Assignment of Deed of Trust was recorded against the Property which evidences that the beneficial interest under the Deed of Trust was transferred to Deutsche Bank National Trust Company (“Deutsche Bank”), as Trustee for HSI Asset Securitization Corporation Trust 2006 OPT 4. (See RJN, Exhibit B). B. The Foreclosure Proceedings On December 28, 2012, a Notice of Default and Election to Sell (“NOD”) was recorded against the Property. (See RJN, Exhibit C). The NOD put interested parties on notice that Borrower was in default on over $79,000 worth of payments due under the Loan. (See id.) Following the recordation of the NOD, the servicing of the Loan was transferred to Ocwen. (See Compl., ¶ 20). As a result of Borrower’s failure to cure the default on the Loan, on May 3, 2013, a Notice of Trustee’s Sale (“NOS”) was recorded against the Property. (See RJN, Exhibit D). The NOS put interested parties on notice that the Property would be sold at a public auction on May 28, 2013. (See id.) Martingale Investments, LLC was the successful bidder at the noticed sale. (See Compl., ¶ 25; RJN, Exhibit E). C. The First Prior Lawsuit Prior to the recording of the NOD, on June 17, 2011, Plaintiff commenced a civil action against Deutsche Bank, American Home Mortgage Servicing, Inc. (“AHMSI”), Power Default Servicing, Inc., and T.D. Service Financial Corporation in the Los Angeles County Superior Court (the “Superior Court”). (See RJN, Exhibit F). Upon the motion of Deutsche Bank, the Superior Court entered an Order Granting Motion for Summary Judgment or Summary Adjudication wherein it granted summary judgment against Plaintiff. (See id.) /// Case 2:16-cv-06701-R-SK Document 10 Filed 09/13/16 Page 8 of 22 Page ID #:166 3 CASE NO.: 2:16-CV-06701-R-SK MEMORANDUM OF POINTS AND AUTHORITIES 750419.1 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 D. The Second Prior Lawsuit On May 1, 2014, Plaintiff commenced a second lawsuit (the “Second Prior Action”) related to the Loan by filing a complaint against Ocwen, among others, in the Superior Court. (See RJN, Exhibit G). She later filed a First Amended Complaint (“Amended Complaint”) on September 30, 2014, which the Court dismissed upon Ocwen’s demurrer. (See id.) Following the dismissal of the Amended Complaint, on December 29, 2014, Plaintiff filed a Second Amended Complaint (“SAC”). (See id.) Like the Amended Complaint, the Court dismissed the SAC on the basis that it failed to state cognizable claims. (See id.) Not to be deterred, on March 9, 2015, Plaintiff filed a Third Amended Complaint (“TAC”). (See id.) The TAC was dismissed, in part, and on May 26, 2015, Plaintiff filed a Fourth Amended Complaint.1 (See RJN, Exhibit H). Following Plaintiff’s failure to respond to Ocwen’s discovery requests in the Second Prior Action, the Superior Court, upon Ocwen’s motion, awarded Ocwen monetary sanctions, which Plaintiff has yet to pay. (See RJN, Exhibit I). On January 29, 2016, Ocwen, together with the other remaining defendants, filed a Joint Motion for Judgment on the Pleadings (the “MJOP”) as to Plaintiff’s quiet title claim. (See RJN, Exhibit G). The Court granted the MJOP on February 25, 2016. (See id.) This left Plaintiff with only one remaining cause of action: a claim against Ocwen for violation of California Civil Code § 2923.7. (See id.) On March 21, 2016, Ocwen filed a Motion for Summary Judgment (“MSJ”) in the Second Prior Action, which was scheduled to be heard on June 6, 2016. (See RJN, Exhibit J). Plaintiff did not file any opposition to the MSJ. (See RJN, Exhibit G). She instead filed a voluntary dismissal of the Second Prior Action (the “Dismissal”) on May 31, 2016, six days before the scheduled hearing on the motion. (See id.) /// 1 Rather than actually filing a formal Fourth Amended Complaint, Plaintiff filed an “amendment” to her Third Amended Complaint. Case 2:16-cv-06701-R-SK Document 10 Filed 09/13/16 Page 9 of 22 Page ID #:167 4 CASE NO.: 2:16-CV-06701-R-SK MEMORANDUM OF POINTS AND AUTHORITIES 750419.1 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 E. The Current Lawsuit On the same date she filed the Dismissal, Plaintiff commenced this action by filing a Complaint against Defendants. (See RJN, Exhibit K). Subsequently, on September 6, 2016, Defendants removed the action to this court on the basis of diversity jurisdiction. (See id.) III. LEGAL STANDARD Pursuant to Federal Rule of Civil Procedure 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)(2). 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). The Supreme Court has held that: The plausibility standard is not akin to a “probability requirement,” but it asks for more than a sheer possibility that a defendant has acted unlawfully. Where a complaint pleads facts that are “merely consistent with” a defendant’s liability, it “stops short of the line between possibility and plausibility of ‘entitlement to relief.’” Id. (citations 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 Case 2:16-cv-06701-R-SK Document 10 Filed 09/13/16 Page 10 of 22 Page ID #:168 5 CASE NO.: 2:16-CV-06701-R-SK MEMORANDUM OF POINTS AND AUTHORITIES 750419.1 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 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); see also 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. See 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). See Twombly, 550 U.S. at 555. IV. ANALYSIS A. PLAINTIFF FAILS TO STATE A CLAIM FOR VIOLATION OF SECTIONS 2923.7 AND 2943 OF THE CALIFORNIA CIVIL CODE Pursuant to the Complaint, Plaintiff alleges that Ocwen violated section 2923.7 of the California Civil Code. She contends that Ocwen violated the statute by failing to establish a single point of contact. (See Compl., ¶ 34). In addition, she alleges that Ocwen violated section 2943 of the California Civil Code by not sending her a statement of the amounts due on the Loan. (See Compl., ¶ 30). Ocwen addresses each of these contentions in turn. 1. Section 2923.7 Section 2923.7 of the California Civil Code provides that, “[u]pon request from a borrower who requests a foreclosure prevention alternative, the mortgage servicer shall promptly establish a single point of contact.” Cal. Civ. Code § 2923.7(a) (emphasis added). The single point of contact is generally responsible for communicating with the borrower, coordinating receipt of any documents needed to consider the borrower for a foreclosure prevention alternative, and ensuring that the Case 2:16-cv-06701-R-SK Document 10 Filed 09/13/16 Page 11 of 22 Page ID #:169 6 CASE NO.: 2:16-CV-06701-R-SK MEMORANDUM OF POINTS AND AUTHORITIES 750419.1 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 borrower is considered for all foreclosure prevention alternatives. See Cal. Civ. Code §§ 2923.7(b)(1) - (5). A single point of contact may be comprised of a team of personnel. See Cal. Civ. Code § 2923.7(e). a. Plaintiff’s Claim is Time-Barred Under California law, the statute of limitations for a claim based on a statute is three years. See Cal. Code Civ. Proc. § 338(a). This statutory period is not tolled during the pendency of a lawsuit that is voluntarily dismissed. See Thomas v. Gilliland, 95 Cal.App.4th 427 (2002). Applying this limitations period to this case, there can be no dispute that Plaintiff’s claim under section 2923.7 is time-barred. Indeed, Plaintiff alleges that she “asked multiple representatives for foreclosure prevention alternatives” between January 1, 2013, and May 27, 2013. (See Compl., ¶ 29). It was during this time period that Ocwen allegedly violated section 2923.7. (See Compl., ¶¶ 29-32). Because more than three years passed between May 27, 2013, and the date Plaintiff filed her Complaint, her claim under section 2923.7 is time-barred. b. The Claim is Also Insufficiently Pled Plaintiff’s claim under section 2923.7 is also insufficiently pled. She contends that she was not provided with a single point of contact upon her request for a foreclosure prevention alternative. (See Compl., ¶¶ 29-32). However, she does not allege that she requested a single point of contact. (See id.). Such a request is a prerequisite under section 2923.7. Reaching this conclusion requires an analysis of the statute. It is well settled that statutes are to be construed in a manner that gives meaning to the statute as a whole and to each word contained in that statute.2 See Lakin v. Watkins Associated Industries, 6 Cal.4th 644, 659 (1993). Courts “must give effect to the usual, ordinary import of the words used in the statute, giving significance to each word, phrase and sentence in context with the purpose of the 2 Federal courts sitting in diversity interpret a state statute using state rules of statutory construction. See Daghlian v. DeVry Univ., Inc., 461 F.Supp.2d 1121, 1140 (C.D. Cal. 2006). Case 2:16-cv-06701-R-SK Document 10 Filed 09/13/16 Page 12 of 22 Page ID #:170 7 CASE NO.: 2:16-CV-06701-R-SK MEMORANDUM OF POINTS AND AUTHORITIES 750419.1 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 statute and avoiding a construction which would make some words surplusage.” In re Parker, 60 Cal.App.4th 1453, 1464 (1998). In accordance with these principles, each word in section 2923.7 must be given significance. While the statute clearly applies to a borrower who “requests a foreclosure prevention alternative,” it is only triggered “[u]pon request from a borrower.” See Cal. Civ. Code § 2923.7(a). To hold otherwise would violate the rules of statutory construction as it would fail to give significance to the conditional language “upon request from a borrower,” thereby rendering it surplusage. Because Plaintiff does not allege that she requested a single point of contact, she is not entitled to relief for a violation of section 2923.7. 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 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); Johnson v. Select Portfolio Servicing, Inc., 2016 WL 837895, at * 3 (C.D. Cal. 2016) (same). c. Lack of Materiality Even if Plaintiff had specifically requested a single point of contact, her claim is nevertheless deficient. Indeed, the record reflects that Borrower defaulted on nearly $80,000 worth of payments. It was this default that led to the commencement of foreclosure proceedings against the Property before Ocwen even acquired the servicing rights to the Loan. Nothing in the Complaint plausibly establishes how Plaintiff would have avoided the foreclosure had she been provided a single point of contact. Instead, Plaintiff conclusorily alleges that she “would have been able to avoid foreclosure on the property, either - for example - by curing the arrears, obtaining a loan modification, or selling the property in a short sale.” (See Compl., ¶ 28). Aside from this conclusory allegation, there are no facts alleged in the Complaint establishing how Plaintiff would have cured the arrears on the Loan, obtained a loan Case 2:16-cv-06701-R-SK Document 10 Filed 09/13/16 Page 13 of 22 Page ID #:171 8 CASE NO.: 2:16-CV-06701-R-SK MEMORANDUM OF POINTS AND AUTHORITIES 750419.1 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 modification, or been approved for a short sale. This defect is incurable as California law recognizes that Plaintiff was not entitled to any specific loss mitigation alternative. See Cal. Civ. Code § 2923.4 (“Nothing in this act…shall be interpreted to require a particular result…”). In short, the Complaint contains insufficient allegations to establish that the violation of section 2923.7, if any, was material, as is required to obtain relief for a violation of the statute. See Cal. Civ. Code § 2924.12(b); see also Cornejo v. Ocwen Loan Servicing, LLC, 151 F.Supp.3d 1102, 1113 (E.D. Cal. 2015) (discussing materiality requirement under section 2924.12). 2. Section 2943 Section 2943 of the California Civil Code entitles a trustor or mortgagor to request, among other things, a statement of indebtedness from the beneficiary of their mortgage or trust deed. See generally Cal. Civ. Code § 2943 (2012).3 To state a claim based on a violation of section 2943, a plaintiff must generally allege that he was an entitled person, that the defendant was a beneficiary or its authorized agent, that a written demand for a payoff demand statement was made pursuant to the statute, that the defendant failed to deliver a payoff demand statement within 21 days of receiving the demand, and that the defendant’s failure was willful. See Becker v. Bank of New York Mellon, 2016 WL 2743497, at * 4 (E.D. Cal. 2016). Notably, a request under section 2943 must be made within two months of the recording of a notice of default, or more than thirty days before entry of the decree of foreclosure. See Cal. Civ. Code § 2943(b)(2) (2012); see also Jelsing v. MIT Lending, 2010 WL 2731470, at *3 (S.D. Cal. 2010). A beneficiary is not obligated to prepare and deliver a statement unless the written demand is received prior to the first publication of a notice of sale. See Cal. Civ. Code § 2943(c) (2012). Like her claim under section 2923.7, Plaintiff’s claim under section 2943 is time-barred as more than three years have passed since Ocwen’s alleged violation of 3 As stated above, the NOD was recorded in December of 2012. Thus, the 2012 version of Cal. Civ. Code § 2943 controls in this case. Case 2:16-cv-06701-R-SK Document 10 Filed 09/13/16 Page 14 of 22 Page ID #:172 9 CASE NO.: 2:16-CV-06701-R-SK MEMORANDUM OF POINTS AND AUTHORITIES 750419.1 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 the statute. See Cal. Code Civ. Proc. § 338(a). The claim is otherwise factually unsupportable.4 It is premised on Plaintiff’s contention that she was not provided with a payoff quote for the Loan prior to the foreclosure sale of the Property. (See Compl., ¶ 34). She contends that she requested a “statement of the arrears” on the loan on May 14, 2013.5 (See Compl., ¶ 31). Because this request was not made within two months of the recording of the NOD and before the recording of the NOS, it was untimely. See Cal. Civ. Code § 2943(b)(2) (2012). More critically, Plaintiff alleges that she made the request orally, not in writing as required by the statute. As a consequence, the request was improper. Finally, there are no allegations in the Complaint establishing that Ocwen willfully violated the statute. Absent a showing of willfulness, Plaintiff is not entitled to any recourse. See Becker, 2016 WL 2743497, at * 4. In light of the foregoing, Plaintiff fails to state a claim under section 2943. B. PLAINTIFF FAILS TO STATE A CLAIM FOR BREACH OF CONTRACT Plaintiff’s second claim is for breach of contract. It is based on Ocwen’s purported breach of the Amended and Restated Commitment to Purchase Financial Instrument and Servicer Participation Agreement (the “SPA”). (See Compl., ¶ 38). According to Plaintiff, Ocwen breached the SPA by failing to assist her in obtaining a modification under the Home Affordable Modification Program (“HAMP”). This claim can be dealt with swiftly. Indeed, courts have routinely held that borrowers lack standing to bring a claim based on a breach of the SPA. See Morales v. Chase Home Fin. LLC, 2011 WL 1670045, at *9 (N.D. Cal. 2011). The Complaint otherwise acknowledges that Ocwen complied with the SPA by approving Borrower for a 4 Notably, Plaintiff asserted a claim under section 2943 in the Second Prior Action and it was dismissed with prejudice. She should therefore be precluded from asserting the claim herein. 5 The Complaint actually alleges that the Plaintiff made the request during a May 14, 2014 call with an Ocwen representative. (See Compl., ¶ 31). Read in the context of the other allegations in the Complaint, it appears that Plaintiff intended to refer to this date as May 14, 2013. By May 14, 2014, the Property had already been sold for more than a year. Thus, Plaintiff’s claim is implausible to the extent it is based on a May 14, 2014 call with Ocwen. Case 2:16-cv-06701-R-SK Document 10 Filed 09/13/16 Page 15 of 22 Page ID #:173 10 CASE NO.: 2:16-CV-06701-R-SK MEMORANDUM OF POINTS AND AUTHORITIES 750419.1 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 modification under HAMP. (See Compl., ¶ 11). It follows that Plaintiff’s breach of contract claim fails to plausibly establish an entitlement to relief. C. PLAINTIFF FAILS TO STATE A CLAIM FOR UNFAIR COMPETITION California’s Unfair Competition Law (“UCL”), Cal. Bus. & Prof. Code §§ 17200, et seq., prohibits any unlawful, unfair or fraudulent business act or practice. See Cal. Bus. & Prof. Code § 17200. Under the UCL, “unfair competition” means “any unlawful, unfair or fraudulent business act or practice and unfair, deceptive, untrue or misleading advertising.” Cal. Bus. & Prof. Code § 17200. When analyzing a UCL claim, courts consider each of the three prongs to determine whether a practice is unlawful, unfair, or fraudulent. See Cel-Tech Comms., Inc. v. Los Angeles Cellular Telephone Co., 20 Cal.4th 163, 180 (1999). Pursuant to the Complaint, Plaintiff alleges that Ocwen violated the UCL by failing to provide her with a single point of contact and a payoff quote. Aside from a recitation of the general elements of a UCL claim, the Complaint contains little to no factual enhancement. As explained below, Plaintiff has not stated a viable claim under the UCL. 1. Plaintiffs Lack Standing A claim for unfair competition under the UCL may be brought “by a person who has suffered injury in fact and has lost money or property as a result of the unfair competition.” Cal. Bus. & Prof. Code § 17204. Accordingly, to establish standing under the UCL, a plaintiff must: (1) establish a loss or deprivation of money or property sufficient to qualify as injury in fact (i.e., economic injury); and (2) show that that economic injury was the result of (i.e., caused by) the unfair business practice that is the gravamen of the claim. See Kwikset Corp. v. Superior Court, 51 Cal.4th 310, 337 (2011). There is no causation “when a complaining party would suffer the same harm whether or not a defendant complied with the law.” Daro v. Superior Court, 151 Cal.App.4th 1079, 1099 (2007). Case 2:16-cv-06701-R-SK Document 10 Filed 09/13/16 Page 16 of 22 Page ID #:174 11 CASE NO.: 2:16-CV-06701-R-SK MEMORANDUM OF POINTS AND AUTHORITIES 750419.1 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 As an initial matter, Plaintiff lacks standing to assert a claim under the UCL because she has not suffered an economic injury. Indeed, Plaintiff alleges that she suffered damages through the loss of the Property. (See Compl., ¶ 61). However, the Complaint ignores altogether the fact that it was Borrower’s default that led to the lawful foreclosure sale of the Property, not any conduct on the part of Ocwen. This fact prevents Plaintiff from establishing the necessary causation element for standing under the UCL. See Daro, 151 Cal.App.4th at 1099. While Plaintiff also contends that she “suffered compensatory damages in the amount of $5,000,000,” this conclusory allegation is insufficient to plausibly establish standing under the UCL. In short, Plaintiff lacks standing under the UCL because she has not established a sufficient causal connection between her alleged damages and an unlawful, unfair, or fraudulent business practice on the part of Ocwen. 2. Unlawful Under the UCL’s “unlawful” prong, violations of other laws are “borrowed” and made independently actionable under the UCL. See Cel-Tech Comms., 20 Cal.4th at 180. Thus, a violation of another law is a predicate for stating a cause of action under the UCL’s unlawful prong. See Berryman v. Merit Prop. Mgmt., Inc., 152 Cal.App.4th 1544, 1554 (2007). A claim for violation of the UCL stands or falls depending on the fate of antecedent substantive causes of action. See Krantz v. BT Visual Images, 89 Cal.App.4th 164, 178 (2001). Plaintiff’s claim under the “unlawful” prong of the UCL fails for the simple reason that she has not stated a viable antecedent claim against Ocwen. As previously discussed, the Complaint fails to establish a cognizable claim under section 2923.7 or 2943 of the California Civil Code. Likewise, Plaintiff fails to state a claim for breach of contract. Absent a viable antecedent claim, Plaintiff cannot state a claim under the unlawful prong of the UCL. /// /// Case 2:16-cv-06701-R-SK Document 10 Filed 09/13/16 Page 17 of 22 Page ID #:175 12 CASE NO.: 2:16-CV-06701-R-SK MEMORANDUM OF POINTS AND AUTHORITIES 750419.1 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 3. Unfair “Unfair” conduct has been defined as conduct that “offends an established public policy or…is immoral, unethical, oppressive, unscrupulous or substantially injurious to consumers.” Scripps Clinic v. Superior Court, 108 Cal.App.4th 917, 939 (2003). When “determining whether the challenged conduct is unfair within the meaning of the unfair competition law[,] courts may not apply purely subjective notions of fairness.” Id. at 941. The “unfairness” prong “does not give the courts a general license to review the fairness of contracts.” Samura v. Kaiser Found. Health Plan, 17 Cal.App.4th 1284, 1299 & n. 6 (1993). Plaintiff has not alleged sufficient facts to establish that Ocwen acted “unfairly.” This defect is incurable as the record reflects that Ocwen merely sought to enforce its contractual rights under the Deed of Trust. It was entitled to pursue these rights as a result of Borrower’s undisputed default under the terms of the Loan. Certainly, this conduct does not rise to the level of being immoral, unethical, oppressive, unscrupulous, or substantially injurious to consumers. Accordingly, Ocwen is not liable under the “unfair” prong of the UCL. 4. Fraudulent A business practice is “fraudulent” within the meaning of section 17200 if it is “likely to deceive the public.” McKell v. Washington Mutual, Inc., 142 Cal.App.4th 1457, 1471 (2006). Deception can be “based on representations to the public [that] are untrue, and also those which may be accurate on some level, but will nonetheless tend to mislead or deceive.” Mass. Mutual Life Ins. Co. v. Super. Ct., 97 Cal.App.4th 1282, 1289-90 (2002). The determination as to whether a business practice is deceptive is based on the likely effect such practice would have on a reasonable consumer. See Lavie v. Procter & Gamble Co., 105 Cal.App.4th 496, 507 (2003). Claims under the fraudulent prong of the UCL must be pleaded with particularity under Federal Rule of Civil Procedure 9(b). See Kearns v. Ford Motor Co., 567 F.3d 1120, 1127 (9th Cir. 2009). Therefore, a plaintiff “must include a Case 2:16-cv-06701-R-SK Document 10 Filed 09/13/16 Page 18 of 22 Page ID #:176 13 CASE NO.: 2:16-CV-06701-R-SK MEMORANDUM OF POINTS AND AUTHORITIES 750419.1 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 description of the ‘time, place, and specific content of the false representations as well as the parties to the misrepresentations.’” In re Facebook PPC Advertising Litigation, 2010 WL 3341062, at *9 (N.D. Cal. 2010) (quoting Swartz v. KPMG LLP, 476 F.3d 756, 764 (9th Cir. 2007)). 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); see also Bly-Magee v. California, 236 F.3d 1014, 1019 (9th Cir. 2001). In the context of a fraud suit involving multiple defendants, a plaintiff must, at a minimum, “identif[y] the role of [each] defendant[ ] in the alleged fraudulent scheme.” Moore v. Kayport Package Express, Inc., 885 F.2d 531, 541 (9th Cir. 1989). Plaintiff’s claim under the “fraudulent” prong of the UCL is woefully deficient. She conclusorily alleges that Ocwen acted fraudulently by violating sections 2923.7 and 2943 of the California Civil Code. (See Compl., ¶ 59). This allegation is insufficient to establish with any degree of plausibility, much less particularity, how Ocwen’s conduct had the potential to deceive the public at large. For that matter, Plaintiff does not state with sufficient specificity how Ocwen’s conduct deceived her. Simply put, none of the allegations in the Complaint establish that Ocwen’s actions in connection with the administering of the Loan were undertaken with the intent to mislead Plaintiff. Accordingly, there is no basis for imposing liability against Ocwen under the “fraudulent” prong of the UCL. Because Plaintiff has not established a basis for liability under any of the three prongs under the UCL, her claim necessarily fails. /// /// /// /// /// Case 2:16-cv-06701-R-SK Document 10 Filed 09/13/16 Page 19 of 22 Page ID #:177 14 CASE NO.: 2:16-CV-06701-R-SK MEMORANDUM OF POINTS AND AUTHORITIES 750419.1 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 V. CONCLUSION For the reasons set forth herein, Plaintiff’s Complaint should be dismissed. Since amendment would be futile, the dismissal should be with prejudice. DATED: September 13, 2016 McGLINCHEY STAFFORD By: /s/ Brian A. Paino BRIAN A. PAINO DHRUV M. SHARMA Attorneys for Defendant OCWEN LOAN SERVICING, LLC Case 2:16-cv-06701-R-SK Document 10 Filed 09/13/16 Page 20 of 22 Page ID #:178 1 2 PROOF OF SERVICE 3 STATE OF CALIFORNIA 4 COUNTY OF ORANGE l ss. 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 I, Carol Rico, 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, Irvme, California 92612. On September 13, 2016, I served the document(s) described as: (1) DEFENDANT OCWEN LOAN SERVICING LLC'S MOTION TO DISMISS PLAINTIFF'S COMPLAINT; MEMORANDUM OF POINTS AND AUTHORITIES; (2) REQUEST FOR JUDICIAL NOTICE IN SUPPORT DEFENDANT OCWEN LOAN SERVICING, LLC'S MOTION TO DISMISS PLAINTIFF'S COMPLAINT; and (3) ORDER GRANTING DEFENDANT OCWEN LOAN SERVICING, LLC'S MOTION TO DISMISS COMPLAINT FOR FAILURE TO STATE A CLAIM UPON WHICH RELIEF CAN BE GRANTED as follows: D BY MAIL: As follows: n FEDERAL - I deposited such envelope in the U.S. mail at Irvine, C'alifornia, with postage thereon fully prepaio, 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 CMIECF 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 am employed in the office of a member of the State Bar of this Court at whose direction the service was made. Executed on September 13, 2016, at Irvine, California. ~# _, _ Carol Rico 749935.1 Case 2:16-cv-06701-R-SK Document 10 Filed 09/13/16 Page 21 of 22 Page ID #:179 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. 2:16-cv-06701-R-SK DYAN HILL v. OCWEN LOAN SERVICING, LLC File # 104938.1847 Sean Chandra, Esq. 515 S. Flower St., 36th Floor Los Angeles, CA 90071 749935.1 Attorney for PlaintiffDYAN HILL Tel.: (323) 454-3321 Fax: (323) 281-9666 Email: sean.chandra@gmail.com Case 2:16-cv-06701-R-SK Document 10 Filed 09/13/16 Page 22 of 22 Page ID #:180 1 CASE NO.: 2:16-CV-06701-R-SK ORDER GRANTING DEFENDANT’S MOTION TO DISMISS COMPLAINT 749449.1 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 UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA - WESTERN DIVISION DYAN HILL, an individual; Plaintiff, v. OCWEN LOAN SERVICING, LLC, a Delaware limited liability company; -and- DOES 1-1,000, Defendants. Case No.: 2:16-cv-06701-R-SK Hon. District Judge Manuel L. Real ORDER GRANTING DEFENDANT OCWEN LOAN SERVICING, LLC’S MOTION TO DISMISS COMPLAINT FOR FAILURE TO STATE A CLAIM UPON WHICH RELIEF CAN BE GRANTED Hearing: Date: October 17, 2016 Time: 10:00 a.m. Ctrm: 8, 2nd Floor The motion of defendant Ocwen Loan Servicing, LLC to dismiss plaintiff Dyan Hill’s Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6) (the “Motion”) came on regularly for hearing before the Honorable Manuel L. Real 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 THEREFOR, IT IS ORDERED THAT the Motion is GRANTED. Case 2:16-cv-06701-R-SK Document 10-1 Filed 09/13/16 Page 1 of 2 Page ID #:181 2 CASE NO.: 2:16-CV-06701-R-SK ORDER GRANTING DEFENDANT’S MOTION TO DISMISS COMPLAINT 749449.1 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 IT IS FURTHER ORDERED THAT this action is hereby dismissed with prejudice. IT IS SO ORDERED. Dated: _________________________ _________________________________ HON. MANUEL L. REAL UNITED STATES DISTRICT JUDGE Case 2:16-cv-06701-R-SK Document 10-1 Filed 09/13/16 Page 2 of 2 Page ID #:182