Saber v. JPMorgan Chase Bank National Association et al

Filing 31

MINUTES (IN CHAMBERS): ORDER by Judge David O. Carter: granting in part and denying in part 26 Motion to Dismiss. (twdb)

O

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

Date: January 23, 2014

Case No. SACV 13-00812-DOC (JCGx)
Title: SAM SABER V. JPMORGAN CHASE BANK, N.A., ET. AL.

PRESENT:
THE HONORABLE DAVID O. CARTER, JUDGE
Julie Barrera
Courtroom Clerk

Not Present
Court Reporter

ATTORNEYS PRESENT FOR PLAINTIFF:

ATTORNEYS PRESENT FOR DEFENDANT:

None Present

None Present

PROCEEDINGS (IN CHAMBERS): ORDER GRANTING IN PART AND DENYING
IN PART DEFENDANT’S MOTION TO DISMISS
Before the Court is Defendant JPMorgan Chase Bank, N.A.’s (“Defendant”) Motion to Dismiss
the Second Amended Complaint (Dkt. 26) of Plaintiff Sam Saber (“Plaintiff”). The Court finds this
matter appropriate for decision without oral argument. Fed. R. Civ. P. 78; L.R. 7-15. The Court has
considered the moving papers and supporting documents and hereby GRANTS Defendant’s Motion to
Dismiss as to Counts One and Two, but DENIES the Motion as to Count 3.
I.

BACKGROUND

The facts alleged by Plaintiff are as follows:
On or about March 28, 2005, Plaintiff purchased a single residential property which he has since
occupied as his principal residence. SAC ¶ 8. On or about October 12, 2007, Plaintiff refinanced his
home with Washington Mutual Bank, FA (“WaMu”) in the amount of $2,693,500. SAC ¶ 9. On
September 25, 2008, WaMu entered receivership with the FDIC as appointed receiver. SAC ¶ 27. On
that same day, Defendant entered into a Purchase and Assumption Agreement with the FDIC whereby
certain assets and liabilities were transferred to Defendant. Id.
On or about February 3, 2012, the Trustee executed a Notice of Default and Election to Sell on
behalf of Defendant as purported successor to WaMu, and the Notice was subsequently recorded on

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No. SACV 13-00812-DOC (JCGx)

Date: January 23, 2014
Page 2

February 6, 2012. SAC ¶ 11. On January 15, 2013, Plaintiff submitted an application to Defendant for
a loan modification and requested information regarding possible foreclosure prevention alternatives.
SAC ¶¶ 13, 21. Defendant previously denied a loan modification Plaintiff requested in 2009. Req. for
Judicial Notice (“RJN”), Ex. 8 ¶¶ 52, 54. Defendant never approved or denied the January loan
modification application. SAC ¶ 14. On or about February 1, 2013, Defendant recorded a Notice of
Trustee’s Sale which indicated that Defendant intended to conduct a trustee’s sale of Plaintiff’s home
on March, 1, 2013. SAC ¶ 12.
On or about April 22, 2013, Plaintiff re-submitted the loan modification application package
with updated financial information (balance sheet, income statement and bank statements from Chase
Bank). ¶ 15. Defendant has not yet approved or denied the pending loan modification applications.
SAC ¶ 16.
Based on this conduct, Plaintiff brings three causes of actions against Defendant: (1) violation
of California Civil Code § 2923.6; (2) violation of California Civil Code § 2923.7; and (3) unfair
business practices under California’s Unfair Competition Law (“UCL”).
II.

LEGAL STANDARD

Under Federal Rule of Civil Procedure 12(b)(6), a complaint must be dismissed when a
plaintiff’s allegations fail to set forth a set of facts which, if true, would entitle the complainant to
relief. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007); Ashcroft v. Iqbal, 556 U.S. 662, 679
(2009) (holding that a claim must be facially plausible in order to survive a motion to dismiss). The
pleadings must raise the right to relief beyond the speculative level; a plaintiff must provide “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 (citing Papasan v. Allain, 478 U.S. 265, 286 (1986)). On a motion to
dismiss, this court accepts as true a plaintiff’s well-pled factual allegations and construes all factual
inferences in the light most favorable to the plaintiff. Manzarek v. St. Paul Fire & Marine Ins. Co.,
519 F.3d 1025, 1031 (9th Cir. 2008). The court is not required to accept as true legal conclusions
couched as factual allegations. Iqbal, 556 U.S. at 678.
Federal Rule of Evidence 201 allows the court to take judicial notice of certain items without
converting the motion to dismiss into one for summary judgment. Barron v. Reich, 13 F.3d 1370, 1377
(9th Cir. 1994). The court may take judicial notice of facts “not subject to reasonable dispute” because
they are either: “(1) generally known within the territorial jurisdiction of the trial court or (2) capable of
accurate and ready determination by resort to sources whose accuracy cannot reasonably be
questioned.” Fed. R. Evid. 201; see also Lee v. City of Los Angeles, 250 F.3d 668, 689 (9th Cir. 2001)
(noting that the court may take judicial notice of undisputed “matters of public record”), overruled on
other grounds by 307 F.3d 1119, 1125-26 (9th Cir. 2002). The court may disregard allegations in a

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No. SACV 13-00812-DOC (JCGx)

Date: January 23, 2014
Page 3

complaint that are contradicted by matters properly subject to judicial notice. Daniels-Hall v. Nat’l
Educ. Ass’n, 629 F.3d 992, 998 (9th Cir. 2010).
Dismissal without leave to amend is appropriate only when the court is satisfied that the
deficiencies in the complaint could not possibly be cured by amendment. Jackson v. Carey, 353 F.3d
750, 758 (9th Cir. 2003); Lopez v. Smith, 203 F.3d 1122, 1127 (9th Cir. 2000) (holding that dismissal
with leave to amend should be granted even if no request to amend was made). Rule 15(a)(2) of the
Federal Rules of Civil Procedure states that leave to amend should be freely given “when justice so
requires.” This policy is applied with “extreme liberality.” Morongo Band of Mission Indians v. Rose,
893 F.2d 1074, 1079 (9th Cir. 1990).
III.

DISCUSSION
A.

VIOLATION OF CALIFORNIA CIVIL CODE SECTION 2923.6

Plaintiff argues that California Civil Code section 2923.6(c) 1 prohibits a trustee’s sale of his
property while his loan modification application is pending. SAC ¶ 17. Section 2923.6(c) states that if
a borrower submits a complete application for a first lien loan modification through the borrower’s
mortgage servicer, the mortgage servicer is prohibited from recording a notice of default or notice of
sale while the loan modification application is pending. See Cal. Civ. Code § 2923.6(c).
Defendant argues that the statute does not apply because Plaintiff previously applied for a loan
modification in 2009. Mot. at 7; RJN Ex. 8 ¶ 54. The Court agrees. Section 2923.6(g) exempts loan
servicers from evaluating a modification application if the borrower has been evaluated for a loan
modification prior to January 1, 2013. See Cal. Civ. Code § 2923.6(g). There is, however, an
exception when the borrower’s financial circumstances have materially changed since the date of the
borrower’s previous application. Id. The change must be documented by the borrower and submitted
to the mortgage servicer. Id.
This Court previously dismissed this cause of action because Plaintiff failed to allege he
submitted proper documentation. See Order, October 8, 2013 (Dkt. 24), at 4. In that order, this Court
held that “[a]lthough the precise nature of the documentation required under this code section is not
clear, the plaintiff must do more than submit a new loan modification with different financial
information.” Id.
Plaintiff argues both that his financial circumstances have materially changed since Defendant
evaluated his previous loan modification and that he documented and submitted those changes with the
application. SAC ¶ 15. Although the Plaintiff sufficiently alleges that he submitted documentation for
1

All statutory references in this Order are to the California Civil Code unless otherwise noted.

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No. SACV 13-00812-DOC (JCGx)

Date: January 23, 2014
Page 4

the April 2013 application, there is no such allegation for the January application. SAC ¶¶ 13, 15.
Plaintiff does not claim any violation with respect to his April application. Opp’n (Dkt. 27) at 4. In
fact, Plaintiff concedes he failed to plead he submitted appropriate documentation with his January
application. Id.
Even though this Court previously dismissed this cause of action for failure to plead that
Plaintiff submitted the required documentation, the SAC fails to address this deficiency. In fact, as far
as the Court can tell, the SAC appears unchanged. Order at 4. Plaintiff requests leave to amend to
address this deficiency again. Opp’n at 4. Although leave to amend is given liberally, the court may
deny leave for the “repeated failure to cure deficiencies by amendments previously” granted.
Leadsinger, Inc. v. BMG Music Pub., 512 F.3d 522, 532 (9th Cir. 2008) (citing Foman v. Davis, 371
U.S. 178, 182 (1962)). Plaintiff has already filed two amended complaints in this Court. Furthermore,
the record shows that Plaintiff filed multiple complaints in Orange County Superior Court prior to
removal. RJN, Ex. 8, 10. Accordingly, Plaintiff’s section 2923.6 claims are DISMISSED WITH
PREJUDICE.
B.

VIOLATION OF CALIFORNIA CIVIL CODE SECTION 2923.7

Plaintiff claims that Defendant failed to provide him with information regarding foreclosure
prevention alternatives and failed to provide him with a single point of contact in violation of § 2923.7.
SAC ¶¶ 20-21. When a borrower requests a foreclosure prevention alternative, § 2923.7 states that a
mortgage servicer will promptly establish a single point of contact and provide the borrower with one
or more direct means of communication with the single point of contact. See Cal. Civ. Code §
2923.7(a). Section 2923.7 defines “single point of contact” as an individual or team of personnel, each
of whom has the ability and authority to perform the responsibilities stated § 2923.7(b). See Cal. Civ.
Code § 2923.7(e). Those responsibilities are: to communicate the process for available foreclosure
prevention alternatives; to coordinate receipt of all documents necessary to apply for the alternatives; to
have access to current information and inform the borrower of the current status; and to ensure that the
borrower is considered for foreclosure prevention alternatives offered by the mortgage servicer. See
Cal Civ. Code §§ 2923.7(b)(1)-(4).
This Court previously dismissed this cause of action because the complaint provided only a
formulaic recitation of the elements. Order at 5. This Court is not required to accept as true legal
conclusions couched as factual allegations. Iqbal, 556 U.S. at 678. The SAC repeats the same mistake.
Plaintiff alleges that he wrote to Defendant on January 15, 2013 and February 3, 2013 for information
regarding foreclosure alternatives. SAC ¶ 21. Plaintiff’s SAC states only that Defendant failed to
provide him with a single point of contact, and lists a series of statutory responsibilities. Id. Plaintiff
again does not allege any additional facts to support the conclusion Defendant violated § 2923.7. Id.

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No. SACV 13-00812-DOC (JCGx)

Date: January 23, 2014
Page 5

Listing the obligations for which the single point of contact is responsible does not allege any new facts
to support the conclusion espoused by Plaintiff.
This Court dismissed Plaintiff’s § 2923.7 claims previously for failing to plead facts sufficient to
show Defendant violated this section. Order at 5. Other than reciting other portions of § 2923.7, the
complaint is unchanged. Like the previous cause of action, Plaintiff failed to sufficiently plead this
claim after multiple attempts. Therefore, Plaintiff’s section 2923.7 claim is DISMISSED WITH
PREJUDICE.
C.

UNFAIR BUSINESS PRACTICES

Plaintiff alleges that Defendant engaged in unfair and deceptive business practices in violation
of California’s Unfair Competition Law (“UCL”), codified at California Business & Professions Code
Sections 17200-209. SAC ¶ 34. Plaintiff’s UCL claims are partly based on Defendant’s violations of
§§ 2923.6 and 2923.7. SAC ¶ 24. Because those causes of actions were dismissed, they cannot be the
basis for UCL violations. Plaintiff also claims that Defendant violated the UCL by falsely representing
itself to Plaintiff as the owner of loans originated by WaMu. SAC ¶ 28. Plaintiff claims this harmed
him because it made it impossible for him to communicate with the actual owner of the loan about
foreclosure alternatives. Id.
Although the Court finds both of Plaintiff’s alleged bases for standing specious, some California
district courts have held that the initiation of foreclosure proceedings sufficiently jeopardizes a
plaintiff’s property interest to satisfy the standing requirement. See Sullivan v. Washington Mut. Bank,
FA, No. 09-2161, 2009 WL 3458300 (N.D. Cal. Oct. 23, 2009); Rabb v. BNC Mortg., Inc., No. 09–
4740, 2009 WL 3045812 (C.D. Cal. Sept. 21, 2009);. The Court therefore declines to dismiss the case
for a lack of standing.
The Court struggles, however, to divine a causal connection between Plaintiff’s allegations and
the harm he claims to have suffered. The allegations are broad and general, claiming that Chase misled
the public and Plaintiff about who owned Plaintiff’s loan. It is unclear to the Court how knowing the
actual owner would have prevented Plaintiff’s harm; there are no facts alleging that access to additional
information might change Plaintiff’s situation. For the purposes of a motion to dismiss, Plaintiff has
alleged sufficient facts to go forward with his UCL claim. The Court is gravely concerned, however,
that Plaintiff will be unable to prove that the alleged actions, even if true, actually caused him harm.
IV.

LEAVE TO AMEND

As previously stated, Rule 15(a)(2) of the Federal Rules of Civil Procedure states that leave to
amend should be freely given “when justice so requires.” Fed. R. Civ. P. 5(a)(2). However, the

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No. SACV 13-00812-DOC (JCGx)

Date: January 23, 2014
Page 6

decision remains within the discretion of the court, which “may deny leave to amend ‘due to undue
delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by
amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the
amendment, [and] futility of amendment.’” Leadsinger, 512 F.3d at 532 (quoting Foman, 371 U.S. at
182). The court’s “discretion to deny leave to amend is particularly broad where plaintiff has
previously amended the complaint.” Metzler Inv. GMBH v. Corinthian Colls. Inc., 540 F.3d 1049,
1072 (9th Cir. 2008) (citing In re Read-Rite Corp., 335 F.3d 843, 845 (9th Cir. 2003)).
The Court has already dismissed these claims for the same reasons listed above, and granted
Plaintiff leave to amend. Order at 6. The Court now dismisses the First and Second causes of action
on the same grounds. Before removal, Plaintiff filed multiple versions of this complaint in Superior
Court. RJN, Ex. 8, 10. Plaintiff has not managed to allege sufficient facts despite multiple attempts in
state and federal court. Accordingly, this Court DENIES Plaintiff’s request for leave to amend the
complaint.
V.

DISPOSITION

For the foregoing reasons, the Court GRANTS Defendant’s Motion to Dismiss as to counts one
and two, which are DISMISSED WITH PREJUDICE and thus STRICKEN from the SAC.
Plaintiff is directed to file an amended complaint conforming with this order on or before
January 31, 2014.
The Clerk shall serve this minute order on the parties.
MINUTES FORM 11
CIVIL-GEN

Initials of Deputy Clerk: jcb