Josefina Galindo v. Select Portfolio Servicing Inc et al

Filing 49

MINUTES (IN CHAMBERS) by Judge Christina A. Snyder RE: Defendants Select Portfolio Services, Inc. ("SPS"), National Default Servicing Corp. ("NDS"), and U.S. Bank, N.A., Successor Trustee to LaSalle Bank National Association, on b ehalf of Bear Stearns Asset Backed Securities I Trust 2007-HE7, Asset-Backed Certificates Series 2007-HE7's ("Trustee") motion to dismiss plaintiff's complaint pursuant to Federal Rule of Civil Procedure 12(b)(6) 37 ; and defenda nt-attorney Randall Naiman's motion to dismiss plaintiff's complaint pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6) 39 . Plaintiff's FAC is hereby DISMISSED. Specifically, all of plaintiff's claims against def endant-attorney Randall Naiman are hereby DISMISSED WITH PREJUDICE. Plaintiff's claims against defendants SPS, NDS, and Trustee for violations of the FDCPA and the Rosenthal Act, as well as her claim in equity for quiet title and/or to set aside the trustee's sale for wrongful foreclosure, are hereby DISMISSED WITH PREJUDICE as to SPS, NDS, and Trustee. All of plaintiff's additional claims asserted in the FAC as to all defendants are hereby DISMISSED without prejudice, as plaintiff did not have leave of Court or consent of the parties to file an amended complaint asserting these additional claims or adding additional defendants not named in the original complaint. Court Reporter: N/A. (gk)

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL

‘O’

Case No.

CV15-3582-CAS(AGRx)

Title

JOSEFINA GALINDO v. SELECT PORTFOLIO SERVICING, INC., ET
AL.

Present: The Honorable

Date

December 15, 2015

CHRISTINA A. SNYDER, U.S. DISTRICT JUDGE

CONNIE LEE
Deputy Clerk

N/A
Court Reporter / Recorder

N/A
Tape No.

Attorneys Present for Plaintiffs:

Attorneys Present for Defendants:

N/A

N/A

Proceedings:

(IN CHAMBERS) - MOTION TO DISMISS PLAINTIFF’S
COMPLAINT PURSUANT TO FRCP 12(b)(6) (Dkt. 37, filed
November 11, 2015,)
(IN CHAMBERS) - MOTION TO DISMISS PLAINTIFF’S
COMPLAINT PURSUANT TO FRCP 12(b)(1) & 12(b)(6) (Dkt.
39, filed November 16, 2015)

I.

INTRODUCTION

On May 13, 2015, pro se plaintiff Josefina Galindo filed this action against
defendants Select Portfolio Services, Inc. (“SPS”); National Default Servicing Corp.
(“NDS”); Randall Naiman (“Naiman”), an attorney; and U.S. Bank, N.A., Successor
Trustee to LaSalle Bank National Association, on behalf of Bear Stearns Asset Backed
Securities I Trust 2007-HE7, Asset-Backed Certificates Series 2007-HE7 (“Trustee”);
and Does 1-50, inclusive. Plaintiff’s initial complaint asserted claims for (1) various
violations of the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692, et
seq.; (2) violation of the Rosenthal Fair Debt Collection Act (“Rosenthal Act”), Cal. Civil
Code § 1788, et seq.; and (3) “failure to satisfy a condition precedent,” which the Court
construed as a claim in equity to set aside a wrongful foreclosure sale. See Dkt. 35. On
September 25, 2015, the Court granted without prejudice defendants’ motion to dismiss
the original complaint, and granted plaintiff leave to file a first amended complaint
“addressing the deficiencies identified” in the Court’s order. Id.

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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL

‘O’

Case No.

CV15-3582-CAS(AGRx)

Date

December 15, 2015

Title

JOSEFINA GALINDO v. SELECT PORTFOLIO SERVICING, INC., ET
AL.

On October 26, 2015, plaintiff filed the operative First Amended Complaint
(“FAC”). Dkt. 36. Plaintiff’s FAC added two new defendants: (1) “Encore Credit” (the
original lender) and (2) “all persons or entities unknown claiming any legal or equitable
right, title, estate, lien or interest in the property described in this Complaint adverse to
Plaintiff’s title, or any cloud upon Plaintiff's Title thereto.” See FAC (caption page).
Plaintiff’s FAC asserts the following twelve claims, at least eleven of which were not
previously asserted in plaintiff’s original complaint: (1) fraud by the original lender and
all others associated with the loan; (2) breach of the implied covenant of good faith and
fair dealing by the original lender and all others associated with the loan; (3) quiet title;
(4) slander of title by the original lender and doe defendants; (5) a claim “to void and/or
cancel ab initio the deed of trust and the promissory note instrument”; (6) a claim seeking
an “accounting” by the original lender and doe defendants; (7) breach of fiduciary duty
by all of the defendants; (8) a claim “to void and/or cancel ab initio the deed of trust and
the promissory note instrument” based on fraud in the execution of these instruments; (9)
a claim seeking cancellation of the deed of trust, pursuant to sections 23304.1, 23304.1(b)
and 23305(a) of the United States Tax Code; (10) violations of the California
Corporations Code at section 191(c)(7) by the original lender; (11) violation of California
Business and Professions Code §17200, et seq., by the original lender; and (12)
declaratory relief clarifying the rights of the parties in this case to the property and in
relation to the loan at issue. The FAC does not reassert plaintiff’s previously-dismissed
claims for “failure to satisfy a condition precedent” or for violations of the FDCPA and
Rosenthal Act.
On November 11, 2015, defendants SPS, NDS, and Trustee filed a motion to
dismiss plaintiff’s complaint pursuant to Federal Rule of Civil Procedure 12(b)(6), dkt.
37 (“Motion”), as well as a request for judicial notice, dkt. 38.1 On November 16, 2015,

1

Defendants SPS, NDS, and Trustee filed a request for judicial notice of the Deed
of Trust, dated July 6, 2007, and recorded in the Official Records of the County of Los
Angeles as document number 20071755925 on July 25, 2007. Plaintiff’s FAC refers
extensively to the Deed of Trust with lender Encore Credit, and thus incorporates this
document by reference. Branch v. Tunnell, 14 F.3d 449, 454 (9th Cir.1994), overruled
on other grounds by Galbraith v. County of Santa Clara, 307 F.3d 1119 (9th Cir. 2002).
Because the Deed of Trust is incorporated by reference in the pleading, the Court need
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL

‘O’

Case No.

CV15-3582-CAS(AGRx)

Date

December 15, 2015

Title

JOSEFINA GALINDO v. SELECT PORTFOLIO SERVICING, INC., ET
AL.

defendant-attorney Naiman filed a separate motion to dismiss plaintiff’s complaint
pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6), dkt. 39 (“Naiman
Motion”), as well as a request for judicial notice, dkt. 39-1.2 On December 1, 2015,
plaintiff filed an untimely opposition to the 12(b)(6) motion filed by defendants SPS,
NDS, and Trustee. Dkt. 40. On December 7, 2015, defendants SPS, NDS, and Trustee
filed a reply to plaintiff’s untimely opposition. Dkt. 41. Also on December 7, 2015,
defendant Naiman filed a reply and a notice of plaintiff’s failure to file an opposition to
the Naiman Motion. Dkt. 42. On December 8, 2015, plaintiff filed a request to enlarge
time to respond to the Naiman Motion, dkt. 43, and defendant Naiman opposed plaintiff’s
request in a response filed on December 10, 2015, dkt. 44. The Court denied plaintiff’s
request to enlarge time in an order dated December 11, 2015. Dkt. 45.
The Court held oral argument on December 14, 2015. Having carefully
considered the parties’ arguments, the Court finds and concludes as follows.
II.

BACKGROUND

While plaintiff devoted much of her original complaint to alleged violations of the
FDCPA and Rosenthal Act, the gravamen of her original complaint was that defendants
SPS, NDS, and Trustee conducted an unlawful foreclosure sale of her home, located at
7459 Jamieson Avenue, Reseda, CA 913335 (the “Property”). Specifically, plaintiff first

not affirmatively take judicial notice of the document. Branch, 14 F.3d at 454. However,
courts routinely take judicial notice of these types of documents. See, e.g., Liebelt v.
Quality Loan Serv. Corp., 2011 WL 741056, at *6 n.2 (N.D. Cal. Feb.24, 2011);
Reynolds v. Applegate, 2011 WL 560757, at *1 n.2 (N.D. Cal. Feb.14, 2011); Giordano
v. Wachovia Mortg., 2010 WL 5148428, at *1 n.2 (N.D. Cal. Dec. 14, 2011).
Accordingly, the Court grants defendants’ request for judicial notice because the Deed of
Trust is in the public record and is “capable of accurate and ready determination by resort
to sources whose accuracy cannot reasonably be questioned.” Fed. R. Evid. 201(b).
2

The Court finds the Naiman Motion appropriate for decision without oral
argument. See Fed. R. Civ. P. 78; C.D. Cal. Local Rule 7-15. Accordingly, the hearing
date of December 21, 2015, is vacated, and the matter is hereby taken under submission.
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL

‘O’

Case No.

CV15-3582-CAS(AGRx)

Date

December 15, 2015

Title

JOSEFINA GALINDO v. SELECT PORTFOLIO SERVICING, INC., ET
AL.

alleged in her original complaint that any alleged loan she might have had with respect to
the Property “ha[d] been charged off/paid off, as evidenced by” what plaintiff called “a
Verification of Mortgage from Chase Bank, the original loan Servicer, showing
‘Principal Balance - $0.00’”; second, plaintiff also alleged that the foreclosure sale of the
Property, which took place on September 16, 2014, occurred without plaintiff having
ever received an “Acceleration Notice,” which plaintiff contended was a requirement of
the Deed of Trust. Original Complaint ¶¶ 18, 40.
Plaintiff appears to have signed the operative Deed of Trust on or about July 6,
2007, pledging the Property as security for payment of a $384,000 loan (“the Encore
Loan”) from a lender listed on the Deed of Trust as “ENCORE CREDIT.” See Defs.’
SDS, et al.’s Request for Judicial Notice, Ex. 1, at 4, 6, 24 (Deed of Trust); FAC ¶ 14.
“ENCORE CREDIT” is described on the Deed of Trust as a “DELAWARE
CORPORATION organized and existing under the laws of DELAWARE,” with its
address listed as 1833 Alton Parkway, Irvine, California 92606. Id., Ex. 1, at 1. A Notice
of Default, recorded in the Office of the County on June 28, 2010, states that as of June
25, 2010, plaintiff was $72,346.29 behind in payments on the Property. See Id., Ex. 2
(Notice of Default).3

3

In its September 25, 2015 order, dkt. 35, the Court granted defendants SPS, NDS,
and Trustee’s supplemental request for judicial notice, dkt. 30, as well as defendant
Naiman’s request for judicial notice, dkt. 15-2. Specifically, the Court took judicial
notice of (1) a “Notice of Default and Election to Sell Under Deed of Trust” (NDSC File
No. 10-31837-EM-CA and Title Order No. 100375736), recorded in the Office of the
County on Jun 28, 2010 as document number 20100880718; and (2) the Summons and
Unlawful Detainer Complaint filed in U.S. Bank, N.A. v. Josefina Galindo, Los Angeles
Superior Court Case No. 15R00018, which includes, inter alia, a time- and date-stamped
“Trustee’s Deed Upon Sale” (NDSC File No. 10-31837-EM-CA and Title Order No.
100375736), filed in the Office of the County on June 28, 2010. For reasons explained
supra at n.1, the Court grants defendants’ request because these documents are in the
public record and are “capable of accurate and ready determination by resort to sources
whose accuracy cannot reasonably be questioned.” Fed. R. Evid. 201(b).
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL

‘O’

Case No.

CV15-3582-CAS(AGRx)

Date

December 15, 2015

Title

JOSEFINA GALINDO v. SELECT PORTFOLIO SERVICING, INC., ET
AL.

In her FAC, plaintiff is still seeking to have the Court rescind the foreclosure sale
of the Property and to quiet title to the Property in her name. Previously, however, the
gravamen of plaintiff’s complaint was that her debt had been “charged off/paid off” by a
prior servicer before the sale and that defendants SPS, NDS, and Trustee failed to
validate her debt. Plaintiff’s FAC makes no mention of such allegations and instead
focuses almost exclusively on the allegedly fraudulent activities of the original lender,
newly-added defendant “Encore Credit” (which has not joined the instant motions).
Specifically, plaintiff alleges that no corporation named “Encore Credit” was registered
with the Delaware Secretary of State at the time the loan documents were signed. FAC ¶
18, Ex. 2. Instead, plaintiff alleges that an entity named “Encore Credit Corp.” was
registered both as a “foreign corporation in Delaware” and as a “domestic corporation in
California.” Id. ¶¶ 19-20 (emphasis added). In addition, plaintiff alleges that “Encore
Credit Corp.” changed its name to “Performance Credit Corp.” on February 9, 2007, as to
the California entity, and on March 1, 2007, as to the Delaware entity. Id. ¶¶ 23-24.
These alleged name changes occurred roughly five months before the lender, under the
name “Encore Credit,” made the loan to plaintiff. Thus, plaintiff alleges that “when the
[Deed of Trust] was created, Plaintiff was fraudulently induced to endorse the [Deed of
Trust and Promissory Note] to a non-existent company, Encore Credit.” Id. ¶ 16. Based
upon these allegations, plaintiff seeks, inter alia, “an order of the Court that voids and/or
cancels ab initio the Deed of Trust and the Promissory Note and quieting title to Plaintiff
Josefina Galindo alone.” Id. ¶ 25.
III.

LEGAL STANDARD

A motion pursuant to Federal Rule of Civil Procedure 12(b)(6) tests the legal
sufficiency of the claims asserted in a complaint. Under this Rule, a district court
properly dismisses a claim if “there is a ‘lack of a cognizable legal theory or the absence
of sufficient facts alleged under a cognizable legal theory.’” Conservation Force v.
Salazar, 646 F.3d 1240, 1242 (9th Cir. 2011) (quoting Balisteri v. Pacifica Police Dep’t,
901 F.2d 696, 699 (9th Cir. 1988)). “While a complaint attacked by a Rule 12(b)(6)
motion to dismiss does not need detailed factual allegations, a plaintiff’s obligation to
provide the ‘grounds’ of 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.”
Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007) (internal citations omitted).
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL

‘O’

Case No.

CV15-3582-CAS(AGRx)

Date

December 15, 2015

Title

JOSEFINA GALINDO v. SELECT PORTFOLIO SERVICING, INC., ET
AL.

“Factual allegations must be enough to raise a right to relief above the speculative level.”
Id. (internal citations omitted).
In considering a motion pursuant to Rule 12(b)(6), a court must accept as true all
material allegations in the complaint, as well as all reasonable inferences to be drawn
from them. Pareto v. FDIC, 139 F.3d 696, 699 (9th Cir. 1998). The complaint must be
read in the light most favorable to the nonmoving party. Sprewell v. Golden State
Warriors, 266 F.3d 979, 988 (9th Cir. 2001). However, “a court considering a motion to
dismiss can choose to begin by identifying pleadings that, because they are no more than
conclusions, are not entitled to the assumption of truth. While legal conclusions can
provide the framework of a complaint, they must be supported by factual allegations.”
Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009); see Moss v. United States Secret Service,
572 F.3d 962, 969 (9th Cir. 2009) (“[F]or a complaint to survive a motion to dismiss, the
non-conclusory ‘factual content,’ and reasonable inferences from that content, must be
plausibly suggestive of a claim entitling the plaintiff to relief.”). Ultimately,
“[d]etermining whether a complaint states a plausible claim for relief will . . . be a
context-specific task that requires the reviewing court to draw on its judicial experience
and common sense.” Iqbal, 556 U.S. at 679.
Unless a court converts a Rule 12(b)(6) motion into a motion for summary
judgment, a court cannot consider material outside of the complaint (e.g., facts presented
in briefs, affidavits, or discovery materials). In re American Cont’l Corp./Lincoln Sav. &
Loan Sec. Litig., 102 F.3d 1524, 1537 (9th Cir. 1996), rev’d on other grounds sub nom
Lexecon, Inc. v. Milberg Weiss Bershad Hynes & Lerach, 523 U.S. 26 (1998). A court
may, however, consider exhibits submitted with or alleged in the complaint and matters
that may be judicially noticed pursuant to Federal Rule of Evidence 201. In re Silicon
Graphics Inc. Sec. Litig., 183 F.3d 970, 986 (9th Cir. 1999); Lee v. City of Los Angeles,
250 F.3d 668, 689 (9th Cir. 2001).
As a general rule, leave to amend a complaint which has been dismissed should be
freely granted. Fed. R. Civ. P. 15(a). However, leave to amend may be denied when “the
court determines that the allegation of other facts consistent with the challenged pleading
could not possibly cure the deficiency.” Schreiber Distrib. Co. v. Serv-Well Furniture
Co., 806 F.2d 1393, 1401 (9th Cir. 1986); see Lopez v. Smith, 203 F.3d 1122, 1127 (9th
Cir. 2000).
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL

‘O’

Case No.

CV15-3582-CAS(AGRx)

Title

JOSEFINA GALINDO v. SELECT PORTFOLIO SERVICING, INC., ET
AL.

IV.

Date

December 15, 2015

DISCUSSION
A.

New Claims Asserted in the FAC
1.

New Claims Asserted Without Proper Leave Must be Dismissed

Under Rule 15 of the Federal Rules of Civil Procedure, a party may amend her
pleading once as a matter of course within twenty-one days after serving it, or within
twenty-one days after a responsive pleading or Rule 12(b), (e), or (f) motion has been
filed, whichever is earlier. Fed. R. Civ. P. 15(a)(1). In all other cases, a party may amend
his or her pleading only with the opposing party’s written consent or with the court’s
leave. Fed. R. Civ. P. 15(a)(2).
In the Court’s September 25, 2015 order, the Court granted without prejudice
defendants SPS, NDS, and Trustee’s motion to dismiss plaintiff’s claim in equity for
wrongful foreclosure (identified in the complaint as “failure to satisfy a condition
precedent”), as well as her claims for violations of the FDCPA and the Rosenthal Act.
See Dkt. 35. In dismissing plaintiff’s complaint, the Court granted plaintiff leave to file a
first amended complaint “addressing the deficiencies identified [within the Court’s
order].” Id. at 15. The Court did not grant plaintiff leave to file entirely new claims or to
add additional, previously unnamed defendants to the action.
Therefore, pursuant to Rule 15(a)(2), plaintiff was required to seek leave of the
Court or defendants’ written consent to file an amended complaint asserting entirely new
claims, including the eleven new claims now asserted in the operative First Amended
Complaint; the absence of such leave provides an independent basis for dismissal of
plaintiffs’ additional claims. Benton v. Baker Hughes, No. CV 12-07735-MMM-MRW,
2013 WL 3353636, at *3 (C.D. Cal. June 30, 2013) aff’d sub nom. Benton v. Hughes,
No. 13-56356, 2015 WL 7732183 (9th Cir. Dec. 1, 2015) (noting that “[t]he addition of
[plaintiff’s] new claims . . . exceed[ed] the scope of the leave to amend granted [in the
court’s order dismissing plaintiff’s complaint]” and therefore “it is appropriate to strike
the newly added claims on this basis”); see also Yau v. Duetsche Bank Nat. Trust Co.
Americas, No. SACV 11-00006-JVS, 2011 WL 8326579, at *2 (C.D. Cal. Aug. 31, 2011)
(“In order to assert claims [in the second amended complaint] that were not asserted in
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL

‘O’

Case No.

CV15-3582-CAS(AGRx)

Date

December 15, 2015

Title

JOSEFINA GALINDO v. SELECT PORTFOLIO SERVICING, INC., ET
AL.

the FAC, Plaintiffs would have had to obtain Defendants’ consent or the Court’s leave . .
. Plaintiffs did not do so. Accordingly, the [additional] claims are dismissed without
prejudice.”); Kennedy v. Full Tilt Poker, No. CV 09–07964 MMM (AGRx), 2010 WL
3984749, * 1 (C.D.Cal. Oct.12, 2010) (noting that the court had stricken a third amended
complaint because plaintiffs’ new claims and the addition of new defendants “exceeded
the authorization to amend the court granted” and plaintiffs had not sought leave to add
new claims or defendants as required by Rule 15).
Accordingly, plaintiff’s claims for fraud; breach of the implied covenant of good
faith and fair dealing; slander of title; the claim “to void and/or cancel ab initio the deed
of trust and the promissory note instrument”; “accounting”; breach of fiduciary duty; the
claim “to void and/or cancel ab initio the deed of trust and the promissory note
instrument” based on fraud in the execution of the instruments; the claim seeking
cancellation of the deed of trust, pursuant to sections 23304.1, 23304.1(b) and 23305(a)
of the United States Tax Code; the claim for violations of the California Corporations
Code at section 191(c)(7); the claim for violation of California Business and Professions
Code §17200, et seq.; and (12) the claim for declaratory relief clarifying the rights of the
parties in this case to the property and in relation to the loan at issue; are hereby
DISMISSED without prejudice. See Yau, 2011 WL 8326579, at *2.
The Court construes plaintiff’s claim in equity for quiet title as an attempt to replead her previously-dismissed claim in equity to set aside the non-judicial foreclosure
sale. Accordingly, plaintiff’s quiet title claim is discussed below. The FAC does not
reassert plaintiff’s previously-dismissed claims for violations of the FDCPA and
Rosenthal Act. These claims are accordingly DISMISSED WITH PREJUDICE.

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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL

‘O’

Case No.

CV15-3582-CAS(AGRx)

Title

JOSEFINA GALINDO v. SELECT PORTFOLIO SERVICING, INC., ET
AL.
B.

Date

December 15, 2015

Plaintiff’s Claim in Equity to Quiet Title / Set Aside a Foreclosure Sale
Must be Dismissed

Plaintiff’s original complaint alleged that defendants “failed to perform certain
actions prior to enforcing an alleged right to effect dispossession or disablement of
Plaintiff’s property.” Original Complaint ¶ 40 (emphasis in original). More specifically,
plaintiff previously alleged that defendants could not legally foreclose on her property
when they did because she never received an “Acceleration Notice,” which she
maintained was a “condition precedent” under paragraph 22 of the Deed of Trust. Id.
(outlining claim 2 for “failure to satisfy a condition precedent”). In addition, plaintiff’s
prayer for relief included a request that the court “declare (‘declaratory relief’) that
defendants did not acquire any interest in the alleged debt and/or real property.” Id. at
page 9 (Prayer ¶ 1). Although plaintiff’s original complaint did not expressly assert a
claim for declaratory relief, to the extent to which plaintiff was attempting to set aside the
sale of the Property on account of irregularities in the sale, including defendants’ alleged
failure to satisfy a condition precedent of the Deed of Trust, the Court construed
plaintiff’s claim for “failure to satisfy a condition precedent” and related request for
declaratory relief as an action in equity for wrongful foreclosure. See Lona v. Citibank,
N.A., 202 Cal.App. 4th 89, 103 (2011) (“After a nonjudicial foreclosure sale has been
completed, the traditional method by which the sale is challenged is a suit in equity to set
aside the trustee’s sale.”); see also Hebbe v. Pliler, 627 F.3d 338, 342 (9th Cir. 2010)
(“[W]e continue to construe pro se filings liberally when evaluating them under Iqbal.”)
As the Court noted in its previous order, under California law, “[t]he elements of
an equitable cause of action to set aside a foreclosure sale are as follows: (1) the trustee or
mortgagee caused an illegal, fraudulent, or willfully oppressive sale of real property
pursuant to a power of sale in a mortgage or deed of trust; (2) the party attacking the sale
(usually but not always the trustor or mortgagor) was prejudiced or harmed; and (3) in
cases where the trustor or mortgagor challenges the sale, the trustor or mortgagor
tendered the amount of the secured indebtedness or was excused from tendering.” Lona
v. Citibank, N.A., 202 Cal. App. 4th 89, 104 (2011) (collecting cases). Accord In re
Mortgage Elec. Registration Sys., Inc., 754 F.3d 772, 784 (9th Cir. 2014). The Court
previously dismissed plaintiff’s claim in equity to set aside the foreclosure sale because
plaintiff “failed to sufficiently plead that she has tendered the amount of her
indebtedness, as required for her to maintain a claim.” Dkt. 35 at 8; see Stebley v. Litton
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL

‘O’

Case No.

CV15-3582-CAS(AGRx)

Date

December 15, 2015

Title

JOSEFINA GALINDO v. SELECT PORTFOLIO SERVICING, INC., ET
AL.

Loan Servicing, LLP, 202 Cal. App. 4th 522, 526 (2011) (“A full tender must be made to
set aside a foreclosure sale, based on equitable principles.”); see also Hernandez v. Select
Portfolio, Inc., 2015 WL 3914741, at *11 (C.D. Cal. June 25, 2015) (“Allegations
concerning tender must go beyond mere conclusory assertions that plaintiff has offered to
tender the amount of his or her indebtedness.”).
1.

Plaintiff Again Fails to Plead Tender

With respect to pleading tender, plaintiff’s First Amended Complaint suffers from
the same infirmities as her original complaint. In her FAC, plaintiff seeks to quiet title
against the claims on the Property asserted by defendants SPS, NDS, and Trustee. FAC ¶
55. Specifically, plaintiff alleges that these defendants “had no right to title or interest in
the [Property] and no right to entertain any rights of ownership including the right to
foreclosure, offering the [Property] for sale, demanding possession or filing cases for
unlawful detainer.” Id. Despite this purported lack of any right, plaintiff alleges that
these defendants “proceeded with a non-judicial foreclosure sale, illegally and with
unclean hands.” Id.
A quiet title claim requires (1) a description of the property at issue; (2) a statement
of plaintiff’s title to the property; (3) the adverse claims to the title for which
determination is sought; (4) the date for which the determination of rights is sought; and
(5) a prayer for determination of plaintiff's title against adverse claims. Cal. Code Civ.
Proc. § 761.020. A mortgagor cannot quiet title against a mortgagee without first
tendering the amount owed on the mortgage. Miller v. Provost, 26 Cal. App. 4th 1703,
1707 (1994). Indeed, “[q]uiet title is an equitable remedy, and ‘a court of equity will not
aid a person in avoiding the payment of his or her debts.’” Nationwide Ins. Co. of Am. v.
Bank of Am., N.A., No. CV1402244DDPAGRX, 2015 WL 5050510, at *4 (C.D. Cal.
Aug. 26, 2015) (quoting Mix v. Sodd, 126 Cal. App. 3d 386, 390 (4th Dist. 1981)).
Again, plaintiff fails to plead that she actually tendered the full amount due on her loan at
any time before, during, or after the non-judicial foreclosure sale on the Property.
Indeed, plaintiff states in her opposition to the instant motion that she “does not dispute
the fact that someone is owed something,” but she insists that “it is not these
Defendants.” Opp’n at 7.

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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL

‘O’

Case No.

CV15-3582-CAS(AGRx)

Date

December 15, 2015

Title

JOSEFINA GALINDO v. SELECT PORTFOLIO SERVICING, INC., ET
AL.

Under California law, “‘[a] valid and viable tender of payment of the indebtedness
owing is essential to an action to cancel a voidable sale under a deed of trust.’”
Agbabiaka v. HSBC Bank USA Nat. Association, 2010 WL 1609974, *6 (N.D. Cal. Apr.
20, 2010) (quoting Karlsen v. American Savings and Loan Assoc., 15 Cal.App.3d 112,
117-18 (1971)); see also Lester v. J.P. Morgan Chase Bank, 926 F.Supp.2d 1081, 1092
(N.D. Cal.2013) (“Generally, the ‘tender rule’ applies to claims to set aside a trustee’s
sale for procedural irregularities or alleged deficiencies in the sale notice”). “The
rationale behind the rule is that if [the borrower] could not have redeemed the property
had the sale procedures been proper, any irregularities in the sale did not result in
damages to the [borrower].” Lona, 202 Cal. App. 4th at 112. Accordingly, the tender
rule prevents “a court from uselessly setting aside a foreclosure sale on a technical
ground when the party making the challenge has not established his ability to purchase
the property.” Williams v. Countrywide Home Loans, 1999 WL 740375, *2 (N.D. Cal.
Sept.15, 1999).
Here, as defendants rightly note, plaintiff acknowledges (1) signing the Deed of
Trust and Promissory Note, (2) receiving funds pursuant to the loan contract, (3)
purchasing the Property with the funds, and (4) possessing and laying claim to the
Property, but she does not claim to have tendered amounts owed on the loan or to have
paid the loan off. Motion at 10-11. Accordingly, plaintiff’s quiet title claim and claim in
equity to set aside the non-judicial foreclosure sale of the Property are hereby
DISMISSED WITH PREJUDICE.
C.

Plaintiff’s Claims Against Defendant-Attorney Naiman Must be
Dismissed

In his own separately-filed motion to dismiss, defendant-attorney Naiman again
argues that plaintiff fails to state a claim against him. In the Court’s previous order
dismissing the claims as to defendant Naiman, the Court explained as follows:
Plaintiff pleads very few facts in the complaint itself with
respect to any alleged conduct by Naiman. Aside from the
complaint’s description of Naiman as “a licensed attorney who
routinely acts as a debt collection attorney and claims to be
appointed as a foreclosure attorney for U.S. Bank,” the
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL

‘O’

Case No.

CV15-3582-CAS(AGRx)

Date

December 15, 2015

Title

JOSEFINA GALINDO v. SELECT PORTFOLIO SERVICING, INC., ET
AL.
complaint’s only other references to Naiman conclusorily state
that he is a “debt collector” under the FDCPA and“purports to
be collecting for another entity, U.S. Bank, N.A.” Compl. ¶ 7,
26, 33. “While legal conclusions can provide the framework of
a complaint, they must be supported by factual allegations.
When there are well-pleaded factual allegations, a court should
assume their veracity and then determine whether they
plausibly give rise to an entitlement to relief.” Iqbal, 556 U.S.
at 679. Here, it is unclear from the face of the complaint what
specific role, if any, Naiman played with respect to the alleged
facts underlying plaintiff’s claims for unlawful foreclosure and
violations of the FDCPA and Rosenthal Act.

Dkt. 35 at 14. Plaintiff’s FAC again pleads only two sentences regarding defendant
Naiman, stating that he “is a licensed attorney who routinely acts as a debt collection
attorney and claims to be appointed as a foreclosure attorney for U.S. BANK, N.A.,” and
that he has his principal place of business in San Diego, California. FAC ¶ 5. Defendant
Naiman accordingly argues, inter alia, that he “is simply named in the case caption,
briefly identified in a single short paragraph, and then completely ignored throughout the
rest of the FAC. As such, the FAC is utterly void of any actual legal claims against
[Naiman], and on this basis alone is subject to dismissal.” Naiman Motion at 16. The
Court agrees, and accordingly DISMISSES all claims against defendant Naiman WITH
PREJUDICE.
V.

CONCLUSION

In accordance with the foregoing, plaintiff’s FAC is hereby DISMISSED.
Specifically, all of plaintiff’s claims against defendant-attorney Randall Naiman are
hereby DISMISSED WITH PREJUDICE. Plaintiff’s claims against defendants SPS,
NDS, and Trustee for violations of the FDCPA and the Rosenthal Act, as well as her
claim in equity for quiet title and/or to set aside the trustee’s sale for wrongful
foreclosure, are hereby DISMISSED WITH PREJUDICE as to SPS, NDS, and Trustee.
All of plaintiff’s additional claims asserted in the FAC as to all defendants are hereby
DISMISSED without prejudice, as plaintiff did not have leave of Court or consent of the
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL

‘O’

Case No.

CV15-3582-CAS(AGRx)

Date

December 15, 2015

Title

JOSEFINA GALINDO v. SELECT PORTFOLIO SERVICING, INC., ET
AL.

parties to file an amended complaint asserting these additional claims or adding
additional defendants not named in the original complaint.4
IT IS SO ORDERED.
00
Initials of
Preparer

:

00

CL

4

At oral argument, plaintiff expressed an interest in seeking leave to file a Second
Amended Complaint. In the interest of maintaining the integrity of the Court’s docket,
the Court instructed plaintiff to file a motion for leave to amend her First Amended
Complaint within 30 days of the entry of this order.
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