Christopher Hart v. Select Portfolio Servicing, Inc. et al
Filing
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ORDER GRANTING DEFENDANTS' MOTION TO DISMISS by Judge Manuel L. Real: IT IS HEREBY ORDERED that Defendants' Motion to Dismiss 10 is GRANTED. IT IS FURTHER ORDERED that Plaintiff's Motion to Remand 14 is DENIED. ( MD JS-6. Case Terminated ) (gk)
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UNITED STATES DISTRICT COURT
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CENTRAL DISTRICT OF CALIFORNIA
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CHRISTOPHER HART,
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Plaintiff,
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v.
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SELECT PORTFOLIO SERVICING, INC.;
et al.,
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Defendants.
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) CASE NO. CV 15-7953-R
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) ORDER GRANTING DEFENDANTS’
) MOTION TO DISMISS
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Before the Court is Defendants’ Motion to Dismiss, which was filed on October 16, 2015.
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Having been thoroughly briefed, this Court took the matter under submission on November 30,
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2015.
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On a motion to dismiss, the trial court takes all well-pleaded facts in the Complaint to be
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true and determines whether, based upon those facts, the Complaint states a claim upon which
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relief may be granted. Fed. R. Civ. P. 12(b)(6). See Alperin v. Vatican Bank, 410 F.3d 532, 541
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(9th Cir. 2005). To state a claim, the Complaint must contain factual assertions which make the
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claimed relief not merely possible, but “plausible.” Ashcroft v. Iqbal, 556 U.S. 662, 663 (2009);
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Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007). Although factual assertions are taken
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as true, the court does not accept legal conclusions as true. Id.
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Dismissal under Federal Rule of Civil Procedure 12(b)(6) is proper only when a complaint
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exhibits either a “(1) lack of a cognizable legal theory or (2) the absence of sufficient facts alleged
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under a cognizable legal theory.” Balistreri v. Pacifica Police Dept., 901 F.2d 696, 699 (9th Cir.
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1988). Under the heightened pleading standards of Twombly and Iqbal, a plaintiff must allege
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“enough facts to state a claim to relief that is plausible on its face,” so that the defendant receives
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“fair notice of what the…claim is and the grounds upon which it rests.” Twombly, 550 U.S. at 570.
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The Plaintiff must plead factual content that allows the court to draw the reasonable inference that
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the defendant is liable for the misconduct alleged. Iqbal, 556 U.S. at 678. The court will not
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accept “threadbare recitals of the elements of a cause of action, supported by mere conclusory
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statements. . . .” Id.
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Plaintiff’s first cause of action is for violation of the California Homeowners Bill of
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Rights (“HBOR”) sections 2923.5, 2923.7 and 2934(a). Under section 2923.5, before a lender can
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record a notice of default, they are required to either “contact the borrower in person or by
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telephone in order to assess the borrower’s financial situation and explore options for the borrower
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to avoid foreclosure,” or the lender can still satisfy this requirement if such “failure to contact the
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borrower occurred despite the due diligence of the mortgage servicer.” Cal. Civ. Code § 2923.5.
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Further, a plaintiff must also allege that they suffered prejudice as a result of the defendant’s
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failure to provide the requisite notice. See Pantoja v. Countrywide Home Loans, Inc., 640 F. Supp.
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2d 1177, 1186-87 (N.D. Cal. 2009).
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Plaintiff’s Complaint alleges a total absence of such notices from Defendants. Defendants
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on the other hand have provided the Court with a copy of the recorded Notice of Default, which
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contains a broad statement of compliance with Cal. Civ. Code § 2923.55. While factual allegations
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are taken in favor of the non-moving party, Plaintiff’s Complaint does not state any prejudice as a
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result of the alleged lack of notice, nor can it. In the event of a breach, § 2923.5 provides only one
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remedy: delay of a pending foreclosure sale to allow the lender to comply with the statute. Mabry
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v. Superior Court, 185 Cal. App. 4th 208, 214 (2010). Because Plaintiff has failed to allege any
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prejudice and is clearly on notice of the impending foreclosure sale, Plaintiff’s claim for violation
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of § 2923.5 fails as a matter of law.
Plaintiff next alleges a violation of § 2923.7, which requires that “upon request from a
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borrower who requests a foreclosure prevention alternative, the mortgage servicer shall promptly
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establish a single point of contact ….” Cal. Civ. Code § 2923.7(a). As clearly written in the
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statute, the requirement to appoint the contact is triggered only when the borrower makes a
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specific request for a single point of contact. Williams v. Wells Fargo Bank, N.A., 2014 WL
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1568857, *8 (C.D. Cal. Jan. 27, 2014). Plaintiff’s Complaint does not allege any such request that
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would trigger this statute; therefore, Defendants had no obligation under § 2923.7. Accordingly,
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Plaintiff’s claim for violation of § 2923.7 fails.
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Plaintiff’s second cause of action attempts to quiet title to the property as of November 30,
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2007 through adverse possession. It is true that Plaintiff has occupied the property openly and
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notoriously for five uninterrupted years; however, during all those years Plaintiff maintained legal
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possession of the property. “A mortgage does not give the mortgagee the right of possession in the
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absence of a special agreement; hence where a mortgagor stays in possession (as here), the adverse
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possession statute does not begin to run in his favor until foreclosure and, in the instant case, the
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delivery of the trustee's deed.” Harvey v. Nurick, 268 Cal. App. 2d 213, 215 (Ct. App. 1968)
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(citing Comstock v. Finn, 13 Cal. App. 2d 151, 157 (1936)). It would be utterly absurd, as well as
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disastrous, for courts to allow borrowers to obtain title against their lenders through adverse
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possession. Plaintiff’s second cause of action is therefore dismissed.
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Plaintiff’s third cause of action is for negligent misrepresentation. Negligent
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misrepresentation requires the existence of a legal duty, imposed by contract or otherwise. Eddy v.
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Sharp, 199 Cal. App. 3d 858, 864 (1988). California courts have repeatedly held, however, that in
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the mortgage loan context, there is no fiduciary duty or duty of care owed to a borrower where an
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institution’s involvement in the loan transaction “does not exceed the scope of its conventional
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role as a mere lender of money.” Nymark v. Heart Fed. Savings & Loan Assoc., 231 Cal. App. 3d
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1089, 1096 (1991). Because the Defendants involvement with the Plaintiff does not exceed the
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scope of a conventional loan of money, there is no legal duty to support Plaintiff’s claim for
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negligent misrepresentation.
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Plaintiff’s fourth claim is for slander of title. “The elements of the cause of action for
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slander of title are: (1) publication, (2) falsity, (3) absence of privilege, and (4) disparagement of
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another’s land which is relied upon by a third party and which results in a pecuniary loss.”
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Fimbres v. Chapel Mortg. Corp., 2009 WL 4163332, at *12 (S.D. Cal. Nov. 20, 2009). Because
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Plaintiff’s Complaint fails to identify any third party, let alone any detriment to Plaintiff,
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Plaintiff’s claim for slander of title is dismissed.
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Plaintiff’s sixth cause of action is for improper foreclosure procedure. Plaintiff alleges that
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Defendants Bank of America, Select Portfolio Servicing, and National Default Servicing
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Corporation have no interest in the note and therefore have no right to foreclosure based on a
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“fraudulent purported [a]ssignment.” Plaintiff has therefore attacked the present foreclosure
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proceeding based on this alleged improper assignment; however, Plaintiff lacks standing to
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challenge the assignment. Under California law, it is well settled that only a party to a contract can
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enforce the contract. Gantman v. United Pac. Ins. Co., 232 Cal. App. 3d 1560, 1566 (1991). In the
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absence of an exception, Plaintiff lacks standing to assert his complaints regarding the purported
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fraudulent assignment; therefore Plaintiff’s claim for improper foreclosure procedure is dismissed.
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Plaintiff’s seventh, eighth, eleventh, and twelfth causes of action for equitable relief
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(cancellation of instrument, rescission in equity, declaratory relief and injunctive relief) likewise
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fail because Plaintiff has not alleged tender of the loan balance. To obtain equitable relief in this
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situation, “as a condition precedent . . . the borrower must offer to pay the full amount of the debt
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for which the property was security.” Lona v. Citibank, N.A., 202 Cal. App. 4th 89, 112 (2011).
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Plaintiff has not alleged that he offered to pay nor that he tendered the balance due on the loan and
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therefore has failed to establish the requisite element of his equitable claims. Plaintiff’s seventh,
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eighth, eleventh, and twelfth causes of action are dismissed.
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Plaintiff’s Complaint also contains a claim for violation of the Equal Credit Opportunity
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Act (“ECOA”), 15 U.S.C. § 1691; however, Plaintiff’s factual allegations are inadequate under
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Federal Rule of Civil Procedure 8(a)(2). Rule 8 requires that a complaint give the defendant fair
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notice of what the plaintiff’s claim is and the grounds upon which it rests. Plaintiff’s Complaint
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does no such thing. Plaintiff does nothing more than assert broad conclusory allegations This is all
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compounded by the fact that Plaintiff simply lumps all the Defendants together and fails to plead
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actual facts that specify which Defendant is allegedly responsible for the wrongful conduct.
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Plaintiff’s claim for violation of EOCA is therefore dismissed.
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Plaintiff’s ninth cause of action is for violation of the Fair Debt Collection Practices Act
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(“FDCPA”), title 15 U.S.C. § 1692a(3). In copy pasting the title’s language, Plaintiff failed to
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include subsection six, which states that a ‘debt collector’ under the Act “does not include the
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consumer’s creditors, a mortgage servicing company, or any assignee of debt,” which is precisely
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what Defendants in this action are. Plaintiff’s ninth cause of action is therefore dismissed.
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Plaintiff’s final claim is for violation of Business and Professions Code § 17200. Section
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17200 requires the plaintiff to allege that the defendant engaged in an “unlawful, unfair, or
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fraudulent business act or practice” as well as injury and lost money or property. Bus. & Prof.
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Code § 17204. A violation of the unlawful prong requires an underlying violation of the law. See
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Krantz v. BT Visual Images, LLC, 89 Cal. App. 4th 164, 178 (2001). Because this Court has
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already dismissed all other causes of actions alleged in Plaintiff’s Complaint, there can be no
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underlying violation of the law. Accordingly, Plaintiff’s claim for violation of § 17200 is
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dismissed.
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A district court may deny a plaintiff leave to amend if it determines that allegation of other
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facts consistent with the challenged pleading could not possibly cure the deficiency. Telesaurus
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VPC, LLC v. Power, 623 F.3d 998, 1003 (9th Cir. 2010). Even if the Complaint is broadly
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construed and the truth of the allegations are assumed, there is no basis for concluding that
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Plaintiff’s claims can be saved by amending the Complaint. Because the Court does not believe
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the deficiencies of Plaintiff’s Complaint can be cured by amendment, no leave to amend will be
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permitted.
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IT IS HEREBY ORDERED that Defendants’ Motion to Dismiss is GRANTED. (Dkt.
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No. 10).
IT IS FURTHER ORDERED that Plaintiff’s Motion to Remand is DENIED. (Dkt. No.
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14).
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Dated: December 9, 2015.
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___________________________________
MANUEL L. REAL
UNITED STATES DISTRICT JUDGE
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