Robert K Smith v. Nationstar Mortgage LLC et al
Filing
38
MINUTES (IN CHAMBERS) Order GRANTING Defendant Nationstar Mortgage LLC's Motion to Dismiss (Dkt. No. 30) by Judge Dale S. Fischer: Nationstar's Motion to Dismiss is GRANTED. The claims against Nationstar are DISMISSED WITH PREJUDICE. See Memorandum for Specifics. (bp)
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
MEMORANDUM
Case No.
Title
Date
CV 15-02498 DSF (MRWx)
August 4, 2015
Robert K. Smith v. Nationstar Mortgage LLC, et al.
Present: The
Honorable
DALE S. FISCHER, United States District Judge
Debra Plato
Deputy Clerk
Not Present
Court Reporter
Attorneys Present for Plaintiff:
Attorneys Present for Defendants:
Not Present
Not Present
Proceedings:
(In Chambers) Order GRANTING Defendant Nationstar Mortgage
LLC’s Motion to Dismiss (Dkt. No. 30)
Plaintiff Robert K. Smith brings ten federal and state law claims against
Defendants Nationstar Mortgage LLC (“Nationstar”) and Homecomings Financial
Network, Inc. (“Homecomings”) in connection with his default on a home refinancing
loan. (FAC, Dkt. No. 21.) Nationstar, the servicer of the loan, has filed a Motion to
Dismiss. (Mot., Dkt. No. 30.) Homecomings, the lender, has not moved to dismiss. The
Court deems the matter appropriate for decision without oral argument. See Fed. R. Civ.
P. 78, Local Rule 7-15. For the reasons stated below, the Court grants the Motion
without leave to amend.
I. INTRODUCTION
On September 18, 2006, Plaintiff Robert K. Smith executed a deed of trust
(“DOT”) in favor of Homecomings to secure a $500,000 loan refinancing his home.
(FAC ¶ 26; RJN, Ex. 1 at 4.1) The DOT listed Mortgage Electronic Registration Systems,
1
The Court grants Nationstar’s Request for Judicial Notice with regard to: Exhibit 1, the Deed
of Trust (“DOT”); Exhibit 2, the First Notice of Substitution of Trustee; Exhibit 3, the Second
Notice of Substitution of Trustee; Exhibit 6, the First DOT Assignment; Exhibit 7, the Second
DOT Assignment; Exhibit 8, the Notice of Default; and Exhibit 9, the Notice of Trustee’s Sale.
These exhibits are public records, the authenticity of which is capable of accurate and ready
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Inc. (“MERS”) as the beneficiary. On November 18, 2010, MERS assigned its interest to
Aurora Loan Services LLC (“Aurora”). (RJN, Ex. 6.) On August 28, 2012, Aurora
assigned its interest to Nationstar. (RJN, Ex. 7.)
Plaintiff asserts that in June 2011, he asked for a modification of his loan, and
Aurora promised “to provide a permanent modification after [his] performance of making
3 payments in the amount of $1,752.00 for a total of $5,256.00.” (FAC ¶¶ 68-69.) On
June 23, 2011, he made all three payments in one lump sum “in hopes of speeding up
Aurora’s promise of a permanent modification plan.” (Id. ¶ 69.) However, Aurora never
gave him a permanent loan modification. (Id. ¶ 70.)
Aurora was purchased by Nationstar. Plaintiff contends that Nationstar stated that
it “would not honor anything Aurora had promised,” that “anything he did with Aurora
was null and void,” and that he “would have to start all over again with a new application
to modify his loan.” He also claims that he “was so delinquent in his monthly payments
that he was not able to bring himself current,” and that Nationstar “refused to assist him
with obtaining a permanent loan modification.” (Id. ¶¶ 70-71.)
On June 13, 2013, however, Nationstar sent Plaintiff a letter that denied his request
for a modification “because [he] did not provide [it] with the documents [it] requested”
despite “[t]wo [previous] notices which listed the specific documents [it] needed and the
time frames required to provide them.” (Yap Decl., Mot., Ex. A, at 1.)2
determination by sources whose accuracy cannot reasonably be questioned. See Lee v. City of
Los Angeles, 250 F.3d 668, 689 (9th Cir. 2001); Castaneda v. Saxon Mortg. Servs., Inc., 687
F. Supp. 2d 1191, 1196 (E.D. Cal. 2009).
The Court also grants the Request for Judicial Notice with respect to: Exhibit 4, Plaintiff’s
second amended complaint in Smith v. Aurora Loan Services LLC et al., Los Angeles County
Superior Court Case No. VC060378 (“Prior Action”); Exhibit 5, the notice of ruling in the
Prior Action; Exhibit 10, the register of actions in the Prior Action, and Exhibit 11, the notice
of entry of dismissal in the Prior Action. These exhibits are proceedings in another court that
directly relate to matters at issue. United States ex rel. Robinson Rancheria Citizens Council v.
Borneo, Inc., 971 F.2d 244, 248 (9th Cir. 1992); Biggs v. Terhune, 334 F.3d 910, 915 n.3 (9th
Cir. 2003).
2
The Court may consider the contents of the letter without converting the Motion to Dismiss
into a motion for summary judgment. See United States v. Ritchie, 342 F.3d 903, 908 (9th Cir.
2003) (holding that a court may, at the pleading stage, consider “documents attached to the
complaint, documents incorporated by reference in the complaint, or matters of judicial
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On September 26, 2014, Nationstar issued a Notice of Default. (RJN, Ex. 8.) On
January 5, 2015, it issued a Notice of Trustee’s Sale. (RJN, Ex. 9.) However, Nationstar
has allegedly not sold the property, and Plaintiff remains in residence without making
payments. (Mot. at 22-23.)3
II. LEGAL STANDARD
“Federal Rule of Civil Procedure 8(a)(2) requires only a short and plain statement
of the claim showing that the pleader is entitled to relief. Specific facts are not necessary;
the statement need only give the defendant fair notice of what the . . . claim is and the
grounds upon which it rests.” Erickson v. Pardus, 551 U.S. 89, 93, 127 S. Ct. 2197, 167
L. Ed. 2d 1081 (2007) (ellipsis in original; internal quotation marks omitted). But Rule 8
“requires more than labels and conclusions, and a formulaic recitation of the elements of
a cause of action will not do.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555, 127
S. Ct. 1955, 167 L. Ed. 2d 929 (2007).
Federal Rule of Civil Procedure 12(b)(6) allows an attack on the pleadings for
failure to state a claim upon which relief can be granted. “[W]hen ruling on a defendant’s
motion to dismiss, a judge must accept as true all of the factual allegations contained in
the complaint.” Erickson, 551 U.S. at 94. However, allegations contradicted by matters
properly subject to judicial notice or by exhibit need not be accepted as true, Sprewell v.
Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 2001), and a court is “not bound to
accept as true a legal conclusion couched as a factual allegation,” Ashcroft v. Iqbal, 556
U.S. 662, 678, 129 S. Ct. 1937, 173 L. Ed. 2d 868 (2009) (internal quotation marks
omitted). “Nor does a complaint suffice if it tenders naked assertion[s] devoid of further
factual enhancement.” Id. (alteration in original; citation and internal quotation marks
omitted).
notice”); Knievel v. ESPN, 393 F.3d 1068, 1076 (9th Cir. 2005) (holding that the Ninth Circuit
has “extended the ‘incorporation by reference’ doctrine to situations in which the plaintiff’s
claim depends on the contents of a document, the defendant attaches the document to its
motion to dismiss, and the parties do not dispute the authenticity of the document, even though
the plaintiff does not explicitly allege the contents of that document in the complaint.”).
Plaintiff does not dispute Nationstar’s statement that his first claim for violation of the
Homeowner Bill of Rights “implicitly references [its] correspondence . . . notifying him that
his loan modification application was denied.” (Mot. at 15.)
3
Plaintiff does not dispute these allegations.
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A complaint must “state a claim to relief that is plausible on its face.” Twombly,
550 U.S. at 570. This means that the complaint must plead “factual content that allows
the court to draw the reasonable inference that the defendant is liable for the misconduct
alleged.” Iqbal, 556 U.S. at 678. “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.” Id. Ruling on a motion to dismiss will be “a context-specific task that
requires the reviewing court to draw on its judicial experience and common sense. But
where the well-pleaded facts do not permit the court to infer more than the mere
possibility of misconduct, the complaint has alleged — but it has not show[n] — that the
pleader is entitled to relief.” Id. at 679 (alteration in original; internal quotation marks
and citation omitted).
III. ANALYSIS
The majority of Plaintiff’s claims arise from his theory that, because of defects in
the securitization of his loan and assignments of his DOT, Nationstar lacked authority to
collect mortgage payments and institute foreclosure proceedings. He asserts claims for:
(1) violation of the California Homeowner Bill of Rights (“HBOR”), Cal. Civ. Code §§
2920.5(a), 2923.4(a), 2923.55, 2924.17, and 2924(a)(6); (2) negligence; (3) quasicontract; (4) slander of title; (5) cancellation of instrument; (6) violation of Cal. Civ.
Code § 2934(a)(1)(A); (7) violation of the Federal Fair Debt Collection Practices Act
(“FDCPA”), 15 U.S.C. § 1692, et seq.; (8) violation of the Unfair Competition Law
(“UCL”), Cal. Bus. & Prof. Code § 17200, et seq.; (9) accounting; and (10) fraud. (FAC
¶¶ 101-160.) Every claim suffers from multiple fatal deficiencies.
A.
Fourth, Fifth, Sixth, Eighth, and Tenth Claims: Res Judicata
Portions of the fourth, fifth, sixth, eighth, and tenth claims are barred by res
judicata. “Res judicata, also known as claim preclusion, bars litigation in a subsequent
action of any claims that were raised or could have been raised in the prior action.”
Owens v. Kaiser Found. Health Plan, Inc., 244 F.3d 708, 713 (9th Cir. 2001) (internal
citations omitted). “The application of [res judicata] is central to the purpose for which
civil courts have been established, the conclusive resolution of disputes within their
jurisdiction.” In re Schimmels, 127 F.3d 875, 881 (9th Cir. 1997) (internal citations
omitted). “[A] rule precluding parties from the contestation of matters already fully and
fairly litigated conserves judicial resources and fosters reliance on judicial action by
minimizing the possibility of inconsistent decisions.” Id. (internal citations omitted).
Res judicata applies where there exists: “(1) an identity of claims, (2) a final
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judgment on the merits, and (3) identity or privity between the parties.” Owens, 244 F.3d
at 713 (internal citations omitted). Nationstar has established the last two prongs. First,
Plaintiff admits that the FAC asserts claims “against the same parties” as the Prior
Action. (Opp., Dkt. No. 32, at 11-12.) Further, the state court dismissed “with prejudice
. . . [the] entire action of all parties and all causes of action.” (RJN, Ex, 11, at 1.) While
Plaintiff cites People v. Sims, 32 Cal. 3d 468, 486 (1982), to argue that the Prior Action
“was not based on a final judgment on the merits” because “[o]nly judgments that are free
from direct attack are final and may not be relitigated” (Opp. at 12), Sims holds that a
decision becomes final once the deadline to petition for review has expired. Id. at 486.
The state court entered its judgment on April 2, 2013. (RJN, Ex. 10.) Therefore, the
appeal deadline has long passed.
The first prong requires closer review. “The central criterion in determining
whether there is an identity of claims between the first and second adjudications is
whether the two suits arise out of the same transactional nucleus of facts.” Owens, 244
F.3d at 714 (internal citations omitted). The Prior Action and this action both address the
same DOT, the same loan, and the same property. Thus, at the time Plaintiff filed his
October 9, 2012 SAC in the Prior Action, he could have addressed numerous events later
re-alleged in this action, including the securitization of his DOT on September 18, 2006,
its assignment to Aurora on November 18, 2010, the substitution of the trustee on
November 18, 2010, the modification negotiated in June 2011, the payments tendered on
June 23, 2011, and the assignment to Nationstar on August 28, 2012. However, Plaintiff
could not have addressed the issuance of Notices of Default and Trustee’s Sale on
September 26, 2014 and January 5, 2015.
As a result, the fourth, sixth, and tenth claims are entirely identical to the claims
brought in the Prior Action. The fourth claim for slander of title and tenth claim for fraud
both challenge the assignments of the DOT (FAC ¶¶ 119, 158), and the sixth claim for
violation of Cal. Civ. Code § 2934(a)(1)(A) concerns the substitution of the trustee. (Id.
¶ 130.) Further, the fifth and eighth claims are partially identical to the claims raised in
the Prior Action. In addition to attacking the Notices of Default and Trustee’s Sale, the
fifth claim for cancellation of instrument addresses the assignments of the DOT and the
substitution of the trustee. (Id. ¶ 125.) Likewise, the eighth claim for violation of the
Unfair Competition Law arises from the execution and recording of the various
documents involved in this action. (Id. ¶ 139.) Thus, Nationstar has established all three
prongs of res judicata for the entirety of the fourth, sixth, and tenth claims and a portion
of the fifth and eighth claims.
Plaintiff argues that he could not have included several of the claims in the Prior
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Action “due to new law that came into effect on January 1, 2014.” Opp. at 12. Plaintiff
seemingly refers to the Homeowner’s Bill of Rights, which took effect on January 1,
2013. (See FAC ¶ 72.) “Under controlling precedent from the Supreme Court and the
Ninth Circuit, the fact that a judgment may have been wrong, or have rested on a
since-repudiated legal principle, does not alter the claim preclusive effect of a final
judgment.” Roche Palo Alto LLC v. Apotex, Inc., 526 F. Supp. 2d 985, 999 (N.D. Cal.
2007) (citing Fed’d Dep’t Stores, Inc. v. Moitie, 452 U.S. 394, 398, 101 S. Ct. 2424, 69
L. Ed. 2d 103 (1981); Chicot Cnty. Drainage Dist. v. Baxter State Bank, 308 U.S. 371,
374-75, 60 S. Ct. 317, 84 L. Ed. 329 (1940); Clifton v. Atty. Gen. of State of Cal., 997
F.2d 660, 663 (9th Cir. 1993); Gov’t of Guam v. Cruz, 869 F.2d 1326, 1327 (9th Cir.
1989)).4 The change in law does not allow Plaintiff to re-litigate claims from the Prior
Action.
B.
Second and Tenth Claims: Statutes of Limitations
The second and tenth claims are barred by the statutes of limitations. The second
claim for negligence and tenth claim for fraud both arise from the failure of
Homecomings to assign the DOT to the 2006-Q08 Trust by September 18, 2006. (FAC
¶¶ 111, 155.) Plaintiff argues that, as a result of this failure, Nationstar has no valid
interests under the DOT. (See id.). A claim for negligence is controlled by a two-year
statute of limitations. Cal. Code Civ. Proc. § 335. A claim for fraud is covered by a
three-year statute of limitations. Cal. Code Civ. Proc. § 338(d). The filing period begins
to run when Plaintiff has “a reasonable way of detecting the breach.” Freeman Invs., L.P.
v. Pac. Life Ins. Co., 704 F.3d 1110, 1116 (9th Cir. 2013). Plaintiff filed his Complaint
on February 24, 2015. (Compl., Dkt. No. 1, Ex. A.). His briefing does not address the
time bar or explain why he could not have discovered the alleged wrongdoing earlier.
The second claim expired in 2008, and the tenth claim expired in 2009.
4
See also Roche Palo Alto, 526 F. Supp. 2d at 999 n.9 (N.D. Cal. 2007) (quoting
Moore’s Federal Practice § 131.12[3] (Matthew Bender 3d ed.)) (“The doctrine of claim
preclusion is not concerned with whether a prior judgment was right or wrong or
whether subsequent changes in the law, the discovery of additional facts, or
considerations of fairness should merit a different result in the subsequent litigation”);
Mauro v. Fed. Exp. Corp., No. CV 08-8526DSF(PJWx), 2009 WL 1905036, at *2 n.1
(C.D. Cal. June 18, 2009) (“Future developments in California law . . . do not affect the
inquiry over whether [the prior action] and this suit arise out of the same transactional
nucleus of facts.”).
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C.
Third, Fourth, Tenth Claims: Absence of Standing
The third, fourth, and tenth claims fail because Plaintiff is a non-party to the
pooling and servicing agreement and therefore lacks standing to challenge the
securitization of his loan or assignments of his DOT. “[C]ourts have uniformly rejected
the argument that securitization of a mortgage loan provides the mortgagor a cause of
action.” Rodenhurst v. Bank of Am., 773 F. Supp. 2d 886, 899-90 (D. Haw. Feb. 23,
2011). “[I]f [a defendant] had breached the [pooling and servicing agreement], then
perhaps [the plaintiff] would have a claim against [the defendant]. But it is an
unsupported leap of logic that would allow [the plaintiff] to use these breaches to
challenge [the defendant’s] right to initiate a judicial foreclosure.” Arabia v. BAC Home
Loans Serv., L.P., 208 Cal. App. 4th 462 (2012). “As an unrelated third party to the
alleged securitization, and any other subsequent transfers of the beneficial interest under
the promissory note, [a plaintiff] lacks standing to enforce any agreements, including the
investment trust’s pooling and servicing agreement, relating to such transactions.”
Jenkins v. JPMorgan Chase Bank, N.A., 216 Cal. App. 4th 497, 515 (2013).
Plaintiff claims standing to challenge the allegedly fraudulent securitization of his
loan based on Glaski v. Bank of Am., N.A., 218 Cal. App. 4th 1079 (2013). In Glaski,
the appeals court allowed the plaintiff to maintain such a claim where he “asserted that [a
defendant’s] signature was forged and the assignment [to a securitized trust] bearing that
forgery was void.” Id. at 456-57. Here, Plaintiff does not contend that the assignment is
void ab initio due to forgery. More importantly, the Ninth Circuit has twice rejected the
Glaski holding. See Hunt v. U.S. Bank N.A., 593 F. App’x 730, 731 (9th Cir. 2015)
(“Under the majority rule in California, borrowers lack standing to challenge the
authority of the foreclosing entity. The contrary holding in Glaski has been widely
rejected.”) (citations omitted); In re Davies, 565 F. App’x 630, 633 (9th Cir. 2014)
(“[T]he weight of authority holds that debtors . . . who are not parties to the pooling and
servicing agreements . . . cannot challenge them. We believe the California Supreme
Court, if confronted with this issue, would so hold.”) (citations omitted). The third,
fourth, and tenth claims fail because Plaintiff lacks standing.
D.
Third, Fourth, and Tenth Claims: Insufficient Facts
The third, fourth, and tenth claims fail because Plaintiff does not show that the
assignments of his DOT were unlawful or prejudicial. To challenge the assignment of a
mortgage in the context of a non-judicial foreclosure, a plaintiff must allege that the
assignee “did not receive a valid assignment of the debt in any manner.” Fontenot v.
Wells Fargo Bank, N.A., 198 Cal. App. 4th 256, 271-72 (2011) (emphasis in original).
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“A recorded assignment of note and deed of trust vests in the assignee all of the rights,
interests of the beneficiary including authority to exercise any power of sale given the
beneficiary.” Strike v. Trans-West Disc. Corp., 92 Cal. App. 3d 735, 744 (1979)
(citations omitted). “[A] trustor who agreed under the terms of the deed of trust that
MERS, as the lender’s nominee, has the authority to exercise all of the rights and interests
of the lender.” Siliga v. Mortg. Elec. Registration Sys., Inc., 219 Cal. App. 4th 75, 83-84
(2013). The Complaint and RJN are devoid of facts to show that the assignments were
illegal. The DOT provided that it could “be sold one or more times without prior notice
to [Plaintiff].” (FAC, Ex. A, ¶ 26.) Both the assignment by MERS to Aurora and the
assignment by Aurora to Nationstar were executed and recorded. (RJN, Ex. 6; RJN, Ex.
7.)
Assuming that Plaintiff could allege facts showing that the assignment of the DOT
was void, “under Fontenot, [he] must also show [that he was] prejudiced.” Herrera v.
Fed. Nat’l Mortg. Ass’n, 205 Cal. App. 4th 1495, 1507 (2012). Where Plaintiff “do[es]
not dispute that [he is] in default,” “[t]he assignment . . . d[oes] not change [his]
obligations,” and “there is no reason to believe that . . . the original lender would have
refrained from foreclosure in these circumstances,” he “fail[s] to allege any facts showing
that [he] suffered prejudice as a result of any lack of authority of the parties participating
in the foreclosure process.” Siliga, 219 Cal. App. 4th at 85. “If MERS lacked authority
to assign the DOT and note to [the initial transferee] and, in turn, [the intial transferee]
lacked authority to assign the DOT and note to [the subsequent transferee], the true
victim[] [was] not [Plaintiff] but the lender.” Herrera, 205 Cal. App. 4th at 1508 (citing
Fontenot, 198 Cal. App. 4th at 272). Here, Plaintiff is admittedly in default, his
obligations remain identical, and there is no indication that Aurora would have decided
against foreclosure where Plaintiff did not furnish the lender with the documents it
requested to support his request for a modification. (See Yap Decl., Mot., Ex. A, at 1.)
The third, fourth, and tenth claims fail because Plaintiff supplies no facts to suggest that
the assignments of his DOT were unlawful or prejudicial.
E.
First Claim: Contrary Facts
Plaintiff’s first claim fails because matters subject to judicial notice demonstrate
that Nationstar did not run afoul of the Homeowner Bill of Rights. First, Plaintiff does
not show that Nationstar violated Cal. Civ. Code § 2923.55(b)(2) by failing to contact
him in person or by telephone at least 30 days prior to filing a notice of default “in order
to assess [his] financial situation and explore options for [him] to avoid foreclosure.”
Section 2923.55(b)(2) only “contemplates contact and some analysis of the borrower’s
financial situation.” Davenport v. Litton Loan Servicing, LP, 725 F. Supp. 2d 862, 877
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(N.D. Cal. 2010). Plaintiff admits that he communicated with Nationstar about his
request for a modification. (FAC ¶¶ 70-71.) Although Nationstar denied the request on
June 13, 2013 (Yap Decl., Mot., Ex. A, at 1), it did not record the Notices of Default and
Trustee’s Sale until September 26, 2014 and January 5, 2015. (RJN, Ex. 8; RJN, Ex. 9).
Therefore, it conformed with § 2923.55(b)(2).
Likewise, Plaintiff does not show that Nationstar “dual-tracked” his request for a
modification. Under Cal. Civ. Code §§ 2923.6(c) and (e), a mortgage servicer cannot
record notices of default or sale while an application for a modification is pending;
instead, it must wait until 31 days after it notifies the borrower in writing that the
application has been denied. “This provision is only triggered . . . if the borrower has
submitted ‘a complete application for a first loan modification.’” Greene v. Wells Fargo
Bank, N.A., No. C 15-00048 JSW, 2015 WL 972991, at *2 (N.D. Cal. Mar. 3, 2015).
Nationstar recorded Notices of Default and Trustee’s Sale more than one year after
sending a letter informing Plaintiff of the denial. Further, Plaintiff does not dispute
Nationstar’s statement that it denied his request because he failed to supply the
documents it requested. (Yap Decl., Mot., Ex. A, at 1; RJN, Ex. 8; RJN, Ex. 9.). Thus, it
complied with §§ 2923.6(c) and (e).
Finally, Plaintiff does not show that Nationstar rejected his request for a single
point of contact to discuss his application for a modification. Cal. Civ. Code § 2923.7(a)
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 and
provide to the borrower one or more direct means of communication with the single point
of contact.” “This provision is only triggered if the borrower has both requested a
foreclosure prevention alternative, and has requested that a single point of contact be
provided.” Greene, 2015 WL 972991, at *3. Plaintiff does not allege that he asked
Nationstar to designate a single point of contact. Therefore, he fails to state a claim under
§ 2923.7.
F.
Second Claim: No Duty of Care
The second claim for negligence fails because Plaintiff cannot show that Nationstar
owed him a duty of care. “The existence of a duty of care owed by a defendant to a
plaintiff is a prerequisite to establishing a claim for negligence.” Nymarkv. Heart Fed.
Sav. & Loan Ass’n, 231 Cal. App. 3d 1089 (1991). “However, as a general rule, a
financial institution owes no duty of care to a borrower when the institution’s
involvement in the loan transaction does not exceed the scope of its conventional role as a
mere lender of money.” Id. at 1096. Plaintiff has not alleged facts showing that
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Nationstar’s involvement exceeded the role of a typical loan servicer. His responsive
briefing does not address the negligence claim’s deficiencies. Thus, he has not shown
that Nationstar owed him a duty of care.
G.
Third Claim: Valid Express Contract
The third claim for quasi-contract fails because the parties had an explicit contract
foreclosing the existence of any implied contract to return Plaintiff’s earlier mortgage
payments. “[A] quasi-contract action for unjust enrichment does not lie where . . .
express binding agreements exist and define the parties’ rights.” Cal. Med. Ass’n, Inc. v.
Aetna U.S. Healthcare of Cal., Inc., 94 Cal. App. 4th 151, 172 (2001). The express DOT
precludes an unjust enrichment award under an implied contract theory.
H.
Fourth Claim: Common Interest Privilege
The fourth claim for slander of title fails because Nationstar’s foreclosure
documents are privileged. Cal. Civ. Code § 2924 “deems the statutorily required mailing,
publication, and delivery of notices in nonjudicial foreclosure, and the performance of
statutory nonjudicial foreclosure procedures, to be privileged communications under the
qualified common interest privilege of [Cal. Civ. Code § 47(c)(1)],” which applies to
communications made “without malice, to a person interested therein, . . . by one who is
also interested.” Kachlon v. Markowitz, 168 Cal. App. 4th 316, 333 (2008). “Malice”
means that “the publication was motivated by hatred or ill will towards the plaintiff” or
that “the defendant lacked reasonable grounds for belief in the truth of the publication
and therefore acted in reckless disregard of the plaintiff’s rights.” Id. at 336 (citations
omitted). Plaintiff cannot establish malice because he admits that he is in default on his
loan. (FAC ¶ 71.)
I.
Fifth Claim: Insufficient Facts
The fifth claim for cancellation of instrument fails because Plaintiff does not show
that the foreclosure documents were void or voidable. “A written instrument, in respect
to which there is a reasonable apprehension that if left outstanding it may cause serious
injury to a person against whom it is void or voidable, may, upon his application, be so
adjudged, and ordered to be delivered up or canceled.” Cal. Civ. Code § 3412. Plaintiff
has alleged no facts to suggest that the foreclosure documents were void or voidable. He
argues only that, “due to the sale of [his] mortgage to the[Q08] Trust, none of the
Defendants is a real party in interest having the power of sale or the authority to collect
mortgage payments from Plaintiff.” Opp. at 21. Even if this statement were true, it
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would not amount to a showing that the foreclosure documents are void or voidable.
J.
Seventh Claim: No Debt Collection Activity
The seventh claim fails because the FDCPA does not apply. “To be held liable for
violation of the FDCPA, a defendant must – as a threshold requirement – fall within the
Act’s definition of ‘debt collector.’” Izenberg v. ETS Servs., LLC, 589 F. Supp. 2d 1193,
1198 (C.D. Cal. 2008) (internal citations omitted). A “debt collector” is “any person who
uses any instrumentality of interstate commerce or the mails in any business the principal
purpose of which is the collection of any debts, or who regularly collects or attempts to
collect, directly or indirectly, debts owed or due or asserted to be owed or due another.”
15 U.S.C. § 1692(a)(6). Although Plaintiff asserts that Nationstar’s “conduct is part of a
fraudulent debt collection scheme” (FAC ¶ 57), he does not allege that Nationstar is a
debt collector. Moreover, “foreclosing on [a] property pursuant to a deed of trust is not
the collection of a debt within the meaning of the FDCPA.” Izenberg, 589 F. Supp. 2d at
1199 (internal citations omitted). Plaintiff’s responsive briefing does not address the
seventh claim’s defects. He fails to show that the FDCPA applies.
K.
Eighth Claim: Absence of Standing
The eighth claim for violation of the Unfair Competition Law fails because
Plaintiff has not shown that Nationstar caused his injuries. UCL standing requires a
showing that plaintiff suffered “a loss or deprivation of money or property sufficient to
qualify as injury in fact, i.e., economic injury,” that “was the result of, i.e., caused by, the
unfair business practice.” Junod v. Mortg. Elec. Registration Sys, Inc.., 584 F. App’x
465, 468-69 (9th Cir. 2014) (emphasis in original) (internal citations omitted). Defendant
persuasively alleges that Plaintiff has not suffered injury because he is delinquent on his
loan, the property has not been sold, and he remains in residence without making
payments. (Mot. at 22-23.) Nevertheless, “some California district courts have held that
the initiation of foreclosure proceedings sufficiently jeopardizes a plaintiff’s property
interest to satisfy the standing requirement.” Saber v. JPMorgan Chase Bank, N.A., No.
SACV 13-00812-DOC (JCGx), 2014 WL 255700, at *4 (C.D. Cal. Jan. 23, 2014).
Assuming Plaintiff suffered an injury in fact, “[a] plaintiff fails to satisfy the
causation prong of the statute if he . . . would have suffered the same harm whether or not
a defendant complied with the law.” Junod, 584 F. App’x at 469 (internal citations
omitted). The UCL claim alleges that because the securitization and assignments of his
loan were invalid, Nationstar did not have the authority to act on his DOT by
commencing foreclosure proceedings. Plaintiff has not demonstrated that he faces
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foreclosure because of Nationstar’s UCL violation, rather than because he did not make
the payments. See id. at 469 (“The flaw in this [UCL] claim is that while the loss of a
home to foreclosure is most likely an injury in fact, causation has not been demonstrated.
The Junods’ default triggered the foreclosure of their home, not the manner in which their
Note and Deed of Trust were transferred to the CSMC Trust.”). Thus, Plaintiff has not
established his standing to sue under the UCL.
L.
Ninth Claim: No Actionable Claims
The ninth claim for an accounting fails because the request is not based on
actionable claims. “An accounting may take the form of a legal remedy or an equitable
claim.” Hafiz v. Greenpoint Mortg. Funding, Inc., 652 F. Supp. 2d 1039, 1043 (2009).
In either case, the request for an accounting “must be tethered to relevant actionable
claims.” Id. To support the request in equity, a plaintiff must ordinarily “demonstrate a
fiduciary relationship between [him] and the defendant” and “refer to a sum owed to
[him] by the defendant.” Id. Plaintiff bases his request on allegations that because the
securitization and assignments of his DOT were invalid, Nationstar had no right to his
mortgage payments. As discussed above, these allegations do not support a cause of
action. Thus, Plaintiff has not alleged facts linking his request to an actionable claim.
M.
Leave to Amend
Plaintiff does not merit leave to amend because such an opportunity would be
futile. “Normally, when a viable case may be pled, a district court should freely grant
leave to amend.” Cafasso v. Gen. Dynamics C4 Sys., Inc., 637 F.3d 1047, 1058 (9th Cir.
2011). However, courts need not grant leave to amend if it would be futile to do so. Id.
Plaintiff’s claims fail for numerous reasons aside from his failure to plead sufficient facts.
Therefore, leave to amend would be futile.
IV. CONCLUSION
For the reasons discussed above, Nationstar’s Motion to Dismiss is GRANTED.
The claims against Nationstar are DISMISSED WITH PREJUDICE.
IT IS SO ORDERED.
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