Green v. Alliance Title et al

Filing 52

ORDER and FINDINGS and RECOMMENDATIONS signed by Magistrate Judge Edmund F. Brennan on 9/2/2010 ORDERING the status conference currently set for 9/29/2010 is vacated; and motion 19 Motion to Remand and 19 Motion for Sanctions is denied. IT IS FU RTHER RECOMMENDED that Defendant SPS's motion to dismiss plaintiff's complaint, Dckt. No. 9, be granted; Defendant CMG's motion to dismiss plaintiff's complaint, Dckt. No. 26, be granted; Plaintiff's complaint be dismissed in its entirety, with leave to amend; Plaintiff's motions to amend and for joinder, Dckt. Nos. 28, 44, and 46, be granted inpart and denied in part; Defendant SPS's motion to expunge a lis pendens recorded by or on behalf of plaintiff, Dckt. No. 16, be denied without prejudice; and Plaintiff be granted 30 days from the date of service of any order adopting these findings and recommendations to file an amended complaint. Objections to the findings and recommendations due w/in 14 days.(Matson, R)

(PS) Green v. Alliance Title et al

Doc. 52

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 vs. ALLIANCE TITLE; CMG MORTGAGE, INC.; SELECT PORTFOLIO SERVICING, INC.; NATIONAL DEFAULT SERVICING, CORP.; and DOES 1 through 100, inclusive, Defendants. / KWANZA GREEN, Plaintiff, No. CIV S-10-0242 MCE EFB PS IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF CALIFORNIA

ORDER AND FINDINGS AND RECOMMENDATIONS

This case is before the undersigned pursuant to Eastern District of California Local Rule 302(c)(21). See 28 U.S.C. § 636(b)(1). Defendants Select Portfolio Servicing, Inc. ("SPS") and National Default Servicing Corp. ("NDSC") removed the action from Solano County Superior Court on January 29, 2010 on the basis of federal question jurisdiction. Dckt. No. 1 (citing 28 U.S.C. §§ 1441(b), 1446(b), and 1331). Currently pending are (1) defendant SPS's motion to dismiss plaintiff's complaint, Dckt. No. 9; (2) defendant SPS's motion to expunge a lis pendens recorded by or on behalf of plaintiff, Dckt. No. 16; (3) plaintiff's motion to remand this action to state court and request for sanctions, Dckt. No. 19; (4) defendant CMG Mortgage, Inc.'s ("CMG") motion to dismiss plaintiff's complaint, Dckt. No. 26; (5) plaintiff's motion to add Angelo Webb as a co-plaintiff in this 1
Dockets.Justia.com

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action and U.S. Bank National Association as a co-defendant in this action, Dckt. No. 28; (6) plaintiff's motion for leave to file an amended complaint, Dckt. No. 46; and (7) plaintiff's motion for permissive joinder to add Mortgage Electronic Registration Systems ("MERS") as a co-defendant, Dckt. No. 44. I. Background Plaintiff challenges the foreclosure sale of her home and the validity of a $295,000 refinance loan agreement, and the resulting Note and Deed of Trust, between defendant CMG and Angelo Webb on August 18, 2006. See generally Compl., Dckt. No. 1; see also Def. SPS's Req. for Judicial Notice, Dckt. No. 10, Ex. 1.1 At the time the Note and Deed of Trust at issue were executed, Angelo Webb was the only borrower on the title; CMG was the lender; Alliance Title was the Trustee; and MERS was designated a nominee for the lender and the beneficiary under the Deed of Trust. Id. Thereafter, on July 27, 2009, Webb transferred his interest in the property at issue to himself and to plaintiff as joint tenants, and a Grant Deed reflecting that transfer was recorded on August 17, 2009. Def. SPS's Req. for Judicial Notice, Dckt. No. 10, Ex. 3.2 On August 7, 2009, SPS, through NDSC, recorded a Notice of Default, and on August 28, 2009, MERS executed a Corporate Assignment of Deed of Trust, wherein it assigned its beneficial interest in the Note and Deed of Trust to U.S. Bank National Association, as Trustee, on Behalf of the Holders of the CSMC Mortgage-Backed Pass-Through Certificate, Series 200701 ("U.S. Bank). Id., Exs. 2, 4.3

SPS's request for judicial notice of this exhibit, the Note and Deed of Trust at issue herein which was recorded on August 25, 2006 in the Solano County Recorder's Office, is granted. Judicial notice may be taken of "adjudicative facts" (e.g., court records, pleadings, etc.) and other facts not subject to reasonable dispute and either "generally known" in the community or "capable of accurate and ready determination by resort to sources whose accuracy cannot be reasonably questioned." Fed. R. Evid. 201(b).
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SPS's request for judicial notice of the Grant Deed is granted. See n.1.

SPS's request for judicial notice of the Notice of Default and Corporate Assignment of Deed of Trust is granted. See n.1. 2

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SPS, as servicing agent for U.S. Bank then executed a Substitution of Trustee, wherein it substituted NDSC as trustee in place of Alliance Title. Id., Ex. 5.4 Thereafter, on December 14, 2009, NDSC recorded a Notice of Trustee's Sale setting the sale of the property at issue for January 4, 2010. Id., Ex. 6.5 Finally, on January 4, 2010, the sale occurred, and the property at issue reverted back to the beneficiary, U.S. Bank, as the highest bidder at the sale. Id., Ex. 7.6 Plaintiff's complaint, which was filed in state court on December 17, 2009, alleges that on August 18, 2006, plaintiff "was led to believe she was entering into a loan agreement with Defendant CMG Mortgage, Inc. for $295,000," and that "immediately after closing the refinance loan, Plaintiff was instructed by Select Portfolio Servicing to make all her payments on the loan to Select Portfolio Servicing." Compl., Dckt. No. 1, ¶¶ 14, 15. She asserts that all of the defendants "are attempting to initiate an illegal non-judicial foreclosure sale proceeding under an alleged power of sale to foreclose contained in an alleged note allegedly secured against the property located at 980 Aster Street, Vallejo, Ca. 94589 [hereinafter "the subject property"]," which plaintiff owns. Id., ¶¶ 16, 19. Plaintiff contends that the "alleged promissory note was never executed by Plaintiff, or if it was executed, has long since been lost or intentionally destroyed, or paid in full, or assigned to a third party, such that [defendants] lacked standing to initiate a foreclosure proceeding against the subject property," even though they did initiate such proceedings. Id., ¶¶ 17-22. Plaintiff alleges that defendants misled her, made material misrepresentations and omissions, and defrauded her, in violation of various laws. Id., ¶¶ 62-84. Specifically, plaintiff alleges the following claims for relief: (1) violations of the Home Ownership Equity Protection Act ("HOEPA"), 15 U.S.C. §§ 1639 et seq.; (2) violations of the Real Estate Settlement

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SPS's request for judicial notice of the Substitution of Trustee is granted. See n.1. SPS's request for judicial notice of the Notice of Trustee's Sale is granted. See n.1. SPS's request for judicial notice of the Trustee's Deed Upon Sale is granted. See n.1. 3

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Procedures Act ("RESPA"), 12 U.S.C. §§ 2601 et seq.; (3) violations of the Truth in Lending Act ("TILA"), 15 U.S.C. §§ 1605 et seq.; (4) violation of the Fair Credit Reporting Act ("FCRA"), 15 U.S.C. § 1681; (5) fraudulent misrepresentation; (6) breach of fiduciary duty; (7) unjust enrichment; (8) civil conspiracy; (9) civil RICO; (10) set aside illegal trustee sale; (11) quiet title; (12) violation of California Business and Professions Code section 17200; (13) wrongful foreclosure ­ violation of California Civil Code sections 2924, 2923.5, and 2923.6(a); (14) usury; (15) predatory lending ­ violation of California Financial Code sections 49704979.8; (16) unfair debt collection practices; and (17) slander of title. Id., ¶¶ 90-177. II. Motion to Remand Plaintiff moves to remand this action back to Solano County Superior Court and seeks sanctions against defendants for the alleged improper removal of the case. Dckt. No. 19. Plaintiff argues that the notice of removal was frivolous and was filed "on the eve of a multimillion dollar trial." Id. at 1, 2. She contends that the removal notice misrepresents her claims and "focuses on a (federal question) to which the plaintiff has not expressed is an essential cause of action on the face of the complaint." Id. at 2. Plaintiff argues that "[b]ecause no essential element on the face of the complaint raises questions of federal law, there is no federal jurisdiction here." Id. at 3. Plaintiff is mistaken. Defendants may remove to federal court "any civil action brought in a State court of which the district courts of the United States have original jurisdiction." City of Chicago v. Int'l College of Surgeons, 522 U.S. 156, 163 (1997) (quoting 28 U.S.C. § 1441(a)). Pursuant to 28 U.S.C. § 1331, the district courts are vested with original jurisdiction over cases "arising under the constitution, laws, or treaties of the United States." 28 U.S.C. § 1331. Here, plaintiff's complaint alleges several claims arising under federal statutes. Specifically, she asserts claims for violations of HOEPA, 15 U.S.C. §§ 1639 et seq.; RESPA, 12 U.S.C. §§ 2601 et seq.; TILA, 15 U.S.C. §§ 1605 et seq.; FCRA, 15 U.S.C. § 1681; and the federal Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. §§ 1692 et seq. Removal of 4

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those claims was proper pursuant to 28 U.S.C. § 1441(a). Additionally, removal of plaintiff's supplemental state law claims was proper under 28 U.S.C. § 1441(c), which provides that "[w]henever a separate and independent claim or cause of action within the jurisdiction conferred by section 1331 of this title is joined with one or more otherwise non-removable claims . . . , the entire case may be removed and the district court may determine all issues therein. . . ." Moreover, although plaintiff contends that the removal was improper because not all of the defendants consented to the removal, it appears that neither Alliance Title nor CMG had been served with process at the time of removal and thus did not need to join in or consent to the removal. See generally Emrich v. Touche Ross & Co., 846 F.2d 1190, 1193 n.1 (9th Cir. 1988) (noting that all defendants must join in the notice of removal); but see Salveson v. W. States Bankcard Ass'n, 731 F2.d 1423, 1429 (9th Cir. 1984) (superseded in irrelevant part by statute); Cmty. Bldg. Co. v. Maryland Cas. Co., 8 F.2d 678, 678-79 (9th Cir. 1925) (holding that defendants who have not yet been served in the state court action need not join in the notice of removal). Here, the proof of service filed in the state court action on January 5, 2010 only demonstrated service on SPS and NDSC. There is no indication that either Alliance Title or CMG had been served as of the time of removal. Dckt. No. 31 at 4-5; see also Dckt. No. 1 at 4, 57. Further, although plaintiff contends that this case was removed "on the eve of trial," it does not appear that a trial has ever been scheduled in the state court action. The April 13, 2010 hearing date that plaintiff references was for a case management conference, not a trial. Dckt. No. 32, Def. SPS's Req. for Jud. Notice in Opp'n to Pl.'s Mot. to Remand, Ex. 1.7 Therefore, plaintiff's motion to remand and related request for sanctions are denied.

SPS's request for judicial notice of this exhibit is granted. A court may take judicial notice of court records. See MGIC Indem. Co. v. Weisman, 803 F.2d 500, 505 (9th Cir. 1986); United States v. Wilson, 631 F.2d 118, 119 (9th Cir. 1980). 5

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III.

Motions to Dismiss Plaintiff's Complaint SPS moves to dismiss plaintiff's complaint for failure to state a claim or, in the

alternative, for a more definite statement and/or to strike.8 Dckt. No. 9. Additionally, CMG moves to dismiss plaintiff's complaint for failure to state a claim. Dckt. No. 26. A. Standards To survive dismissal for failure to state a claim pursuant to Rule 12(b)(6), a complaint must contain more than a "formulaic recitation of the elements of a cause of action"; it must contain factual allegations sufficient to "raise a right to relief above the speculative level." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). "The pleading must contain something more . . . than . . . a statement of facts that merely creates a suspicion [of] a legally cognizable right of action." Id. (quoting 5 C. Wright & A. Miller, Federal Practice and Procedure § 1216, pp. 235236 (3d ed. 2004)). "[A] complaint must contain sufficient factual matter, accepted as true, to `state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009) (quoting Twombly, 550 U.S. at 570). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. Dismissal is appropriate based either on the lack of cognizable legal theories or the lack of pleading sufficient facts to support cognizable legal theories. Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1990). In considering a motion to dismiss, the court must accept as true the allegations of the complaint in question, Hospital Bldg. Co. v. Rex Hosp. Trs., 425 U.S. 738, 740 (1976), construe the pleading in the light most favorable to the party opposing the motion, and resolve all doubts in the pleader's favor. Jenkins v. McKeithen, 395 U.S. 411, 421, reh'g denied, 396 U.S. 869 (1969). The court will "`presume that general allegations embrace those specific facts that are

Although defendant NDSC joined in the removal of this action, is represented by the same counsel as SPS, and is referenced throughout SPS's reply brief in support of its motion to dismiss, NDSC does not appear to have joined in the motion to dismiss. See Dckt. Nos. 9, 14. 6

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necessary to support the claim.'" Nat'l Org. for Women, Inc. v. Scheidler, 510 U.S. 249, 256 (1994) (quoting Lujan v. Defenders of Wildlife, 504 U.S. 555, 561 (1992)). Pro se pleadings are held to a less stringent standard than those drafted by lawyers. Haines v. Kerner, 404 U.S. 519, 520 (1972); Bretz v. Kelman, 773 F.2d 1026, 1027 n.1 (9th Cir. 1985). However, the court's liberal interpretation of a pro se litigant's pleading may not supply essential elements of a claim that are not plead. Pena v. Gardner, 976 F.2d 469, 471 (9th Cir. 1992); Ivey v. Bd. of Regents of Univ. of Alaska, 673 F.2d 266, 268 (9th Cir. 1982). Furthermore, "[t]he court is not required to accept legal conclusions cast in the form of factual allegations if those conclusions cannot reasonably be drawn from the facts alleged." Clegg v. Cult Awareness Network, 18 F.3d 752, 754-55 (9th Cir. 1994). Neither need the court accept unreasonable inferences, or unwarranted deductions of fact. W. Mining Council v. Watt, 643 F.2d 618, 624 (9th Cir. 1981). The court may consider facts established by exhibits attached to the complaint. Durning v. First Boston Corp., 815 F.2d 1265, 1267 (9th Cir. 1987). The court may also consider facts which may be judicially noticed, Mullis v. U.S. Bankr. Ct., 828 F.2d at 1388, and matters of public record, including pleadings, orders, and other papers filed with the court. Mack v. South Bay Beer Distribs., 798 F.2d 1279, 1282 (9th Cir. 1986). A pro se litigant is entitled to notice of the deficiencies in the complaint and an opportunity to amend, unless the complaint's deficiencies could not be cured by amendment. See Noll v. Carlson, 809 F.2d 1446, 1448 (9th Cir. 1987). B. Plaintiff's Claims 1. HOEPA

Defendants move to dismiss all of plaintiff's loan origination claims, including plaintiff's claim that defendants violated HOEPA, 15 U.S.C. §§ 1639 et seq., by failing to make certain disclosures prior to closing the refinance loan at issue on August 18, 2006. Compl., Dckt. No. 1 at 32. They argue that plaintiff's claims are premised on alleged misconduct at the loan 7

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origination stage (in August 2006) and that plaintiff lacked any interest in the subject property. Accordingly, defendants argue, plaintiff is not the real party in interest and lacks standing to bring those claims. Dckt. No. 9 at 15-16; Dckt. No. 22 at 3-5; see also Def. SPS's Req. for Judicial Notice, Dckt. No. 10, Ex. 1. Defendants contend that Angelo Webb was the owner of the subject property and the only borrower on title at the time the Note and Deed of Trust were originated, and that plaintiff did not have any ownership interest in the property until August 17, 2009, when a grant deed was filed making her a joint tenant with Webb. Id. Thus, they argue, plaintiff cannot sue for injuries that only Webb could have suffered, noting that the substantive law protects the borrower from fraudulent or wrongful conduct of the lender at origination. Id. According to defendants, since plaintiff did not obtain the loan or own the home at the time the loan was obtained, she has no standing to allege a HOEPA claim based on disclosures defendants allegedly failed to make at the time of the loan origination. Dckt. No. 22 at 4. The court agrees. Plaintiff acknowledges that she was not the owner of the subject property at the time of the loan origination at issue nor did she obtain the loan at issue. See Dckt. Nos. 28, 37 (acknowledging that the loan originated with Angelo Webb and not plaintiff). Therefore, she is not the real party in interest on this HOEPA claim and does not have standing to support her HOEPA claim since she cannot allege an injury based on defendants' purported failures to make certain disclosures prior to closing the refinance loan at issue. See Fed. R. Civ. P. 17(a)(1) ("An action must be prosecuted in the name of the real party in interest."). Therefore, plaintiff's HOEPA claim must be dismissed without leave to amend. Plaintiff seeks leave to add Angelo Webb as a plaintiff, who did obtain the loan at issue. Accordingly, the court will address defendants' other arguments in support of dismissal.9 As SPS argues, since SPS was "not in any way involved in the loan origination process" and instead

9

Plaintiff's motion to add Angelo Webb as a plaintiff is addressed below in Section IV. 8

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"is merely the servicer to the Subject Loan," Dckt. No. 9 at 16, plaintiff has not and cannot state a HOEPA claim against SPS for failure to provide disclosures prior to the closing of the refinance loan. Moreover, plaintiff's HOEPA claim is barred by the statute of limitations. See Dckt. No. 9 at 16; Dckt. No. 22 at 5. The loan at issue closed on August 18, 2006, but this action was not filed until December 17, 2009. Compl., Dckt. No. 1 at 11. The statute of limitations for violations of HOEPA based on failures to provide disclosures prior to the loan closing is one year for affirmative relief and three years for a right to rescind. 15 U.S.C. §§ 1640(e), 1635(f); In re Cmty. Bank of N. Va., 418 F.3d 277, 304-05 (3d Cir. 2005) ("[T]he Court notes that HOEPA is simply a component of TILA, and thus, it is governed by the same statute of limitations."). Since plaintiff has not alleged any facts suggesting that the statutes of limitation should be equitably tolled, plaintiff's HOEPA claim is time barred. 2. RESPA

Defendants also move to dismiss plaintiff's second claim for relief, which alleges that defendants violated RESPA, 12 U.S.C. § 2607, by accepting charges "for the rendering of real estate services which were in fact charges for services other than the services actually performed." Dckt. No. 1 at 34. Defendants argue that plaintiff is not the real party in interest and lacks standing to bring her RESPA claim since, as discussed above, the claim is premised on alleged misconduct at the origination stage of the loan at issue. Plaintiff did not have an interest in the subject property at the time the loan at issue originated (in August 2006). Dckt. No. 9 at 15-16; Dckt. No. 22 at 3-5; see also Def. SPS's Req. for Judicial Notice, Dckt. No. 10, Ex. 1. Specifically, defendants argue that since plaintiff was not a party to the loan transaction, she cannot state a RESPA claim that the cost of the loan was higher as a result of kickbacks between real estate providers related to the loan. Dckt. No. 22 at 4. As discussed above, plaintiff acknowledges that she was not the owner of the subject property at the time of the loan origination at issue nor did she obtain the loan at issue. Since 9

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plaintiff's RESPA claim is based on allegations surrounding the loan origination, that claim must be dismissed without leave to amend for lack of standing. Further, as SPS argues, since SPS was "not in any way involved in the loan origination process" and instead "is merely the servicer to the Subject Loan," Dckt. No. 9 at 16, plaintiff has not and cannot state a RESPA claim against SPS. Moreover, plaintiff's RESPA claim is barred by the statute of limitations. See Dckt. No. 9 at 17; Dckt. No. 22 at 5. The statute of limitations for violation of Section 8 of RESPA,12 U.S.C. § 2607, is one year. 12 U.S.C. § 2614. Since the loan at issue closed on August 18, 2006, but this action was not filed until December 17, 2009, and since plaintiff has not alleged any facts suggesting that the statute of limitations should be equitably tolled, plaintiff's RESPA claim is barred by the statute of limitations.10 3. TILA

Defendants move to dismiss plaintiff's third claim for relief, which alleges that defendants violated TILA, 15 U.S.C. §§ 1601 et seq., by failing to make certain disclosures and improperly calculating the annual percentage rate at the time the refinance loan at issue closed in August 2006. Dckt. No. 1 at 34-35. Again, defendants argue that plaintiff is not the real party in interest and lacks standing. As discussed above, the claim is premised on alleged misconduct at the origination stage of the loan at issue but plaintiff did not have an interest in the subject property at the time the loan originated (in August 2006). Dckt. No. 9 at 15-16; Dckt. No. 22 at 3-5; see also Def. SPS's Req. for Judicial Notice, Dckt. No. 10, Ex. 1.

Plaintiff states in her opposition that SPS violated RESPA by reporting negative information to the Credit Bureau without responding correctly to four qualified written request (QWR) attempts. Dckt. No. 37 at 6. Since plaintiff provides no additional facts in support of that allegation, the allegation, which is not in plaintiff's complaint, is insufficient to state a claim under RESPA, which provides that "[i]f any servicer of a federally related mortgage loan receives a qualified written request from the borrower (or an agent of the borrower) for information relating to the servicing of such loan, the servicer shall provide a written response acknowledging receipt of the correspondence within 20 days . . . unless the action requested is taken within such period." 12 U.S.C. § 2605(e)(1)(A). 10

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As discussed above, plaintiff acknowledges that she was not the owner of the subject property at the time of the loan origination at issue nor did she obtain the loan at issue. Since plaintiff's TILA claim is based on defendants' alleged failures to make disclosures and improper calculations of the annual percentage rate for the loan, plaintiff's TILA claim must be dismissed without leave to amend for lack of standing and because plaintiff is not the real party in interest. Additionally, as SPS argues, since SPS was "not in any way involved in the loan origination process" and instead "is merely the servicer to the Subject Loan," Dckt. No. 9 at 16, plaintiff has not and cannot state a TILA claim against SPS. See Marks v. Ocwen Loan Servicing, 2008 WL 344210, at *2 (N.D. Cal. Feb.6, 2008) (dismissing TILA claim with prejudice because "loan servicers are not liable under TILA . . . unless the loan servicer owned the loan obligation"); id. at *3 ("a TILA claim may be asserted against an assignee only for `violations that a reasonable person can spot on the face of the disclosure statement or other assigned documents'"). Moreover, plaintiff's TILA claim is barred by the statute of limitations. See Dckt. No. 9 at 17; Dckt. No. 22 at 5. TILA is intended to protect consumers in credit transactions by requiring "meaningful disclosure of credit terms." 15 U.S.C. § 1601(a). A lender's violation of TILA allows the borrower to seek damages or to rescind a consumer loan secured by the borrower's primary dwelling. Copeland v. Lehman Brothers Bank, FSB, 2010 WL 2817173, at *5 (S.D. Cal. July 15, 2010). However, a plaintiff's damage claims relating to improper disclosures under TILA are subject to a one-year statute of limitations, 15 U.S.C. § 1640(e), which runs from the time the loan transaction is consummated. King v. State of Cal., 784 F.2d 910, 915 (9th Cir.1986); see also Meyer v. Ameriquest Mortgage Co., 342 F.3d 899, 902 (9th Cir. 2003) (failure to make the required disclosures under TILA occurs at the time the loan documents were signed). Rescission claims under TILA "shall expire three years after the date of the consummation of the transaction or upon the sale of the property, whichever occurs first,"15 U.S.C. § 1635(f). The right to rescission under TILA expires three days after the 11

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necessary disclosures are provided to the borrower. 15 U.S.C. § 1635(a). Although equitable tolling of TILA claims may be appropriate "in certain circumstances," and can operate to "suspend the limitations period until the borrower discovers or had reasonable opportunity to discover the fraud or non-disclosures that form the basis of the TILA action," King, 784 F.2d at 914-15, when a plaintiff fails to allege facts demonstrating that she could not have discovered the alleged violations by exercising reasonable diligence, dismissal is appropriate. Meyer, 342 F.3d at 902-03 (refusing to apply equitable tolling to TILA claim because the plaintiff was in full possession of all loan documents and did not allege any concealment of loan documents or other action that would have prevented discovery of the alleged TILA violations); see also Hubbard v. Fid. Fed. Bank, 91 F.3d 75, 79 (9th Cir.1996) (finding that plaintiff was not entitled to equitable tolling of her TILA claim because "nothing prevented [plaintiff] from comparing the loan contract, [the lender's] initial disclosures, and TILA's statutory and regulatory requirements"). Plaintiff alleges no such facts here. Since the loan at issue closed on August 18, 2006, but this action was not filed until December 17, 2009, and plaintiff has not alleged any facts supporting equitable tolling of the statute of limitations, plaintiff's TILA claim is barred by the statute of limitations. 4. FCRA

Defendants also move to dismiss plaintiff's fourth claim for relief, which alleges that defendants violated FCRA, 15 U.S.C. § 1681(s)(2)(b), when they "wrongfully, improperly, and illegally reported negative information as to the Plaintiff[] to one or more Credit Reporting Agencies, resulting in Plaintiff[] having negative information on their credit reports and the lowering of their FICO scores." Dckt. No. 1 at 35. SPS argues that plaintiff is not the real party in interest and lacks standing to bring her FCRA claim since, as discussed above, the claim is premised on alleged misconduct at the origination stage of the loan at issue but plaintiff did not have an interest in the subject property at the time the loan at issue originated (in August 2006). Dckt. No. 9 at 15-16; see also Def. SPS's Req. for Judicial Notice, Dckt. No. 10, Ex. 1. SPS also 12

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argues that since SPS was "not in any way involved in the loan origination process" and instead "is merely the servicer to the Subject Loan, . . . Plaintiff has not and cannot allege facts to state any claim stemming from the origination of the Subject Loan against SPS." Dckt. No. 9 at 16. As discussed above, plaintiff acknowledges that she did not own the property at issue at the time of the loan origination and that she did not obtain the loan at issue. However, because it is not clear what plaintiff's FCRA claim is based on, it is not clear whether it is based on the loan origination.11 Therefore, it is not clear whether plaintiff has standing to bring the claim or whether SPS could have any liability for plaintiff's FCRA claim. Regardless, plaintiff's FCRA claim should be dismissed because the complaint fails to allege any facts demonstrating a breach of any duty under the FCRA. See Dckt. No. 9 at 18. Specifically, plaintiff fails to allege that defendants sent plaintiff a notice of dispute, that defendants failed to furnish notices of dispute from plaintiff to the credit reporting agencies, and/or that defendants failed to investigate or correct errors. Id. at 18-19. Instead, plaintiff has only alleged that defendants provided "negative information on [plaintiff's] credit report" and the lowering of plaintiff's FICO score. Id. at 19. Accordingly, plaintiff's FCRA claim should be dismissed with leave to amend. 5. Fraudulent Misrepresentation

Defendants also move to dismiss plaintiff's fifth claim for relief, for fraudulent misrepresentation, which alleges that defendants knowingly and intentionally concealed material information from plaintiff and misrepresented material information to plaintiff. Dckt. No. 1 at 36. As with the other claims, defendants argue that plaintiff is not the real party in interest and lacks standing to bring her fraudulent misrepresentation claim since, as discussed above, the claim is premised on alleged misconduct at the origination stage of the loan at issue yet plaintiff did not have an interest in the subject property at the time the loan at issue originated. Dckt. No. Although plaintiff states in her opposition that SPS and NDSC violated the FCRA for their non-disclosure of this continued dispute to the credit bureau agency and that SPS or NDSC have continued to report false information related to the loan at issue, Dckt. No. 37 at 6, the complaint just states that defendants provided negative information to credit reporting agencies. 13
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9 at 15-16; Dckt. No. 22 at 3-5; see also Def. SPS's Req. for Judicial Notice, Dckt. No. 10, Ex. 1. Defendants argue that the only fraud plaintiff alleges relates to the fraudulent inducement to get plaintiff to agree to the loan, but since plaintiff did not agree to the loan, she was not defrauded. Dckt. No. 22 at 5. As discussed above, plaintiff acknowledges that she was not the owner at the time of the loan origination nor did she obtain the loan at issue. Since plaintiff's fraudulent misrepresentation claim is based on defendants' alleged misrepresentations and concealment of material information relating to the origination of that loan, plaintiff's fraudulent misrepresentation claim must be dismissed without leave to amend for lack of standing. Further, as SPS argues, since SPS was "not in any way involved in the loan origination process" and instead "is merely the servicer to the Subject Loan," Dckt. No. 9 at 16, plaintiff has not and cannot state a fraudulent misrepresentation claim against SPS. Moreover, plaintiff's fraudulent misrepresentation claim appears to be barred by the three year statute of limitations for fraud under California Code of Civil Procedure section 338(d). See Dckt. No. 22 at 6. "[A]s a general rule the limitations period starts at the consummation of the transaction." King, 784 F.2d at 915. Here, the alleged fraud relates to misrepresentations intended to induce plaintiff to accept the loan, but the loan was accepted more than three years prior to the inception of the lawsuit. Since plaintiff does not allege when she discovered the fraud, or that the statute of limitations should be equitably tolled, the fraud claim should be dismissed as barred by the statute of limitations. See Cal. Civ. Proc. Code § 338(d) (providing that the statute of limitations begins to run when plaintiff discovers the fraud). Additionally, plaintiff's fraudulent misrepresentation claim fails to state a claim under Federal Rule of Civil Procedure 9(b), which requires fraud claims to be pled with particularity. Dckt. No. 9 at 19. To state a claim for fraud, a plaintiff must plead "`(a) misrepresentation; (b) knowledge of falsity (or scienter); (c) intent to defraud, i.e., to induce reliance; (d) justifiable reliance; and (e) resulting damage.'" In re Napster, Inc. Copyright Litig., 479 F.3d 1078, 1096 14

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(9th Cir. 2007) (quoting Small v. Fritz Cos., Inc., 30 Cal. 4th 167, 173 (2003)); see generally Cal. Civ. Code §§ 1709-10. "In all averments of fraud . . . , the circumstances constituting fraud . . . shall be stated with particularity." Fed. R. Civ. P. 9(b). The allegations must be "specific enough to give defendants notice of the particular misconduct which is alleged to constitute the fraud charged so that they can defend against the charge and not just deny that they have done anything wrong." Semegen v. Weidner, 780 F.2d 727, 731 (9th Cir. 1985). Here, plaintiff does not identify specific representations or any factual detail about those representations. Indeed, the complaint makes no distinction between "defendants" and otherwise fails to reference who allegedly made fraudulent representations, how the alleged misrepresentations were made, whether or not the "defendants" had the authority to speak, the content of their statements, or any facts necessary to state a fraud claim. In other words, the complaint does not identify "`the who, what, when, where, and how'" of the alleged fraud. Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1106 (9th Cir. 2003) (quoting Cooper v. Pickett, 137 F.3d 616, 627 (9th Cir. 1997)). Although plaintiff states in her opposition that "SPS and NDSC misrepresented themselves on the foreclosure documents and others; that SPS represented itself as beneficiary and NDSC as Agent for beneficiary on the Notice of Default document; that NDSC misrepresented itself on the Notice of Default by stating it was the trustee, substituted trustee or the agent for the trustee; and that SPS also stated it was the servicing agent at the same time on the Substitution of Trustee document," Dckt. No. 37 at 6, these allegations are not in plaintiff's complaint and still are insufficient to state a fraud claim under Rule 9(g). 6. Breach of Fiduciary Duty

Defendants also move to dismiss plaintiff's sixth claim for relief, which alleges that defendants breached fiduciary duties they owed to plaintiff by fraudulently inducing plaintiff to enter into a mortgage transaction which was contrary to plaintiff's stated intentions, contrary to plaintiff's interests, and contrary to plaintiff's preservation of her home. Dckt. No. 1 at 37. As with the other claims, defendants argue that plaintiff is not the real party in interest and lacks 15

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standing to bring her breach of fiduciary duty claim since. As discussed previously, the claim is premised on alleged misconduct at the origination stage of the loan at issue. However, plaintiff acknowledges that she was not the owner of the subject property at the time of the loan origination at issue nor did she obtain the loan at issue. The did not have an interest in the subject property at the time the loan at issue originated in August 2006 and she did not obtain the loan. Since plaintiff's breach of fiduciary duty claim is premised on her allegation that defendants induced her into the mortgage transaction which she elsewhere concedes she was not a part of, the claim fails and must be dismissed without leave to amend for lack of standing. Additionally, as SPS argues, since SPS was "not in any way involved in the loan origination process" and instead "is merely the servicer to the Subject Loan, . . . Plaintiff has not and cannot allege facts to state any claim stemming from the origination of the Subject Loan against SPS." Dckt. No. 9 at 16. Moreover, plaintiff's breach of fiduciary duty claim fails because defendants did not owe plaintiff any fiduciary duties. Dckt. No. 9 at 20; Dckt. No. 22 at 6. "In order to plead a cause of action for breach of fiduciary duty, there must be shown the existence of a fiduciary relationship, its breach, and damage proximately caused by that breach. The absence of any one of these elements is fatal to the cause of action." Pierce v. Lyman, 1 Cal. App.4th 1093, 1101 (1991). "[A]s 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." Nymark v. Heart Fed. Savings & Loan Ass'n, 231 Cal. App.3d 1089, 1096 (1991). Plaintiff has not alleged facts suggesting defendants stepped beyond the traditional role of a money lender or servicer, and therefore, has not sufficiently pled a claim for breach of fiduciary duty. For this additional reason, plaintiff's claim for breach of fiduciary duty should be dismissed without leave to amend. 7. Unjust Enrichment

Defendants move to dismiss plaintiff's seventh claim for relief, which alleges that 16

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defendants had an implied contract with plaintiff to ensure that plaintiff understood all fees which would be paid to defendants and to not charge any fees which were not related to the settlement of the loan, that defendants had "full knowledge that a `bait and switch' adjustable rate predatory mortgage with an increase in the interest rate due to the [Yield Spread Premium] paid to the Broker for the `up sell' was not in the plaintiff's best interest," and that defendants were unjustly enriched as a result. Dckt. No. 1 at 38. Again, defendants noted that plaintiff is not the real party in interest and argue that she lacks standing to bring her unjust enrichment claim since, as discussed above, the claim is premised on alleged misconduct at the origination stage of the loan at issue when plaintiff had no interest in the subject property. Dckt. No. 9 at 15-16; Dckt. No. 22 at 3-5; see also Def. SPS's Req. for Judicial Notice, Dckt. No. 10, Ex. 1. The gist of the argument is that plaintiff did not own the property at issue and was not a party to the loan and, therefore, any unjust enrichment was not at her expense. Dckt. No. 22 at 5. As discussed above, plaintiff acknowledges that she was not the owner of the subject property at the time of the loan origination at issue nor did she obtain the loan at issue. Her unjust enrichment claim is based on allegations surrounding the origination of the loan at issue, yet she concedes that she was not involved in that transaction and could not have relied on any representations made during the loan origination. Accordingly, plaintiff's unjust enrichment claim should be dismissed without leave to amend for lack of standing and because plaintiff is not the real party in interest. Moreover, as SPS argues, SPS was likewise "not in any way involved in the loan origination process." Dckt. No. 9 at 16. Instead it "is merely the servicer to the Subject Loan, . . . Plaintiff has not and cannot allege facts to state any claim stemming from the origination of the Subject Loan against SPS." Id. Additionally, as SPS argues, plaintiff's unjust enrichment claim against SPS fails because plaintiff has failed to allege any wrongdoing by SPS or any benefit

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received by SPS.12 See id. at 20. 8. Civil Conspiracy

Defendants move to dismiss plaintiff's eighth claim for relief, for civil conspiracy, which alleges that in connection with the application for and consummation of the refinance loan at issue, defendants agreed to engage in a conspiracy to defraud plaintiff. Dckt. No. 1 at 38. Dismissal is sought for similar reasons; SPS argues that plaintiff is not the real party in interest and lacks standing to bring her conspiracy claim since the claim is premised on alleged misconduct at the origination stage of the loan at issue when plaintiff lacked any interest in the subject property. Dckt. No. 9 at 15-16; see also Def. SPS's Req. for Judicial Notice, Dckt. No. 10, Ex. 1. As plaintiff has acknowledged that she was not the owner of the subject property at the time of the loan origination at issue nor did she obtain the loan at issue, this claim, too, necessarily fails. Like the other claims, her civil conspiracy claim is based on defendants' alleged conduct in connection with the application for and consummation of the refinance loan which simply did not involve plaintiff. Accordingly, she has not alleged facts sufficient to establish that she has standing to pursue this claim. Additionally, as SPS argues, it was "not in any way involved in the loan origination process." Dckt. No. 9 at 16. Instead it "is merely the servicer to the Subject Loan, . . . [and] Plaintiff has not and cannot allege facts to state any claim stemming from the origination of the Subject Loan against SPS." Id. Moreover, plaintiff offers no specific allegations regarding what types of wrongful acts were allegedly committed or by which defendants, and she provides no facts in support of her allegation that there was an agreement among the defendants. Dckt. No. 9 Although plaintiff states in her opposition that "CMG was unjustly enriched by selling the servicing rights of this loan that they paid the mortgage broker ($738) (YSP) a yield spread premium bonus for, to inflate the interest rate which made the final loan amount inaccurate. . . ."; that "SPS was also unjustly enriched by their being paid by USBNA to service this fraudulent loan"; and that "NDSC was also unjustly enriched by their monetary payment for their part in the foreclosure process," Dckt. No. 37 at 7, those allegations are not in plaintiff's complaint. 18
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at 21-22. A conspiracy is not an independent cause of action, but is instead "a legal doctrine that imposes liability on persons who, although not actually committing a tort themselves, share with the immediate tortfeasors a common plan or design in its perpetration." Applied Equip. Corp. v. Litton Saudi Arabia Ltd., 7 Cal. 4th 503, 510-11 (1994). Liability for civil conspiracy generally requires three elements: (1) formation of a conspiracy (an agreement to commit wrongful acts); (2) operation of a conspiracy (commission of the wrongful acts); and (3) damage resulting from operation of a conspiracy. Id. at 511. A civil conspiracy is therefore activated by the commission of an underlying wrongful act. Id. Plaintiff's bare allegations that defendants conspired to defraud plaintiff are insufficient to state a claim for civil conspiracy. Plaintiff must allege facts showing the role each defendant allegedly played in the conspiracy, which she has not done. 9. Civil RICO

Defendants also move to dismiss plaintiff's ninth claim for relief, for civil RICO, 18 U.S.C. § 1962(a)-(d), which alleges that "Defendants' actions and use of multiple corporate entities, multiple parties, and concerted predetermined acts and conduct specifically designed to defraud Plaintiff[] constitutes an `enterprise,' with the aim and objective of the enterprise being to perpetrate a fraud upon the Plaintiff[] through the use of intentional nondisclosure, material misrepresentation, and creation of fraudulent loan documents." Dckt. No. 1 at 39. Here, too, SPS argues that plaintiff is not the real party in interest and lacks standing to bring a civil RICO claim. As with her other claims, the RICO claim is premised on alleged misconduct at the loan origination stage. Plaintiff did not have an interest in the subject property at the time the loan at issue originated. Dckt. No. 9 at 15-16; SPS's Req. for Judicial Notice, Dckt.No. 10, Ex. 1. Her civil RICO claim is also predicated on defendants' alleged conduct in connection with the application for and consummation of the refinance loan, a process that simply did not involve plaintiff. As with her other claims, plaintiff's acknowledgment that she was not the owner of the subject property at the time of the loan origination at issue and that she did not 19

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obtain the loan at issue is fatal to this claim. She was not the loan applicant, did not have an interest in the property, and she lacks standing to pursue the claim. Further, as SPS argues, since it was "not in any way involved in the loan origination process" and instead "is merely the servicer to the Subject Loan, . . . Plaintiff has not and cannot allege facts to state any claim stemming from the origination of the Subject Loan against SPS." Dckt. No. 9 at 16. Additionally, plaintiff's civil RICO claim must be dismissed because the complaint does not allege the predicate acts that RICO requires to be pled, and no pattern of racketeering activity is or can be alleged. Dckt. No. 9 at 22; Dckt. No. 22 at 6-7. RICO makes it unlawful for any person to: (a) use or invest income from a pattern of racketeering activity to acquire an interest in, establish, or operate an enterprise; (b) acquire or maintain an interest in an enterprise through a pattern of racketeering activity; (c) conduct or participate in the affairs of an enterprise through a pattern of racketeering activity; or (d) conspire to do any of the above. 18 U.S.C. § 1962(a)-(d). Although plaintiff's complaint does not specify which subsection of RICO was allegedly violated by defendants, the allegations in the complaint do not support a claim under any of the subsections. Because plaintiff has not alleged, and does not appear to be able to allege, any pattern of racketeering activity by defendants, and instead only alleges that she was defrauded on one mortgage transaction, this claim is insufficient to withstand a motion to dismiss. 10. Claim to Set Aside Illegal Trustee Sale

Plaintiff's tenth claim for relief seeks to set aside the trustee sale. Plaintiff asserts in this claim that defendants "lack standing to bring about foreclosure proceedings on plaintiff's home because none of them are the holder in due course of Plaintiff's original promissory note at the time they commenced foreclosure proceedings." Dckt. No. 1 at 40. Defendants move to dismiss this claim, arguing that plaintiff has not alleged a tender of a sum sufficient to cure the default, which is a condition precedent to any action challenging a foreclosure. Dckt. No. 9 at 25. SPS also argues that plaintiff's argument that defendants must be a holder of the note in order to 20

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foreclose is without merit. Id. at 26. A plaintiff seeking to set aside a foreclosure sale must first allege tender of the amount of the secured indebtedness. Abdallah v. United Sav. Bank, 43 Cal. App. 4th 1101, 1109 (1996) (citing FPCI RE-HAB 01 v. E & G Inv., Ltd., 207 Cal. App.3d 1018, 1021-22 (1989)); Smith v. Wachovia, 2009 WL 1948829, at *3 (N.D. Cal. July 6, 2009). Without pleading tender or the ability to offer tender, a plaintiff cannot state a cause of action to set aside a foreclosure sale. Karlsen v. Am. Sav. & Loan Ass'n, 15 Cal. App. 3d 112, 117 (1971) (citing Copsey v. Sacramento Bank, 133 Cal. 659, 662 (1901)); Smith, 2009 WL 1948829, at *3; Anaya v. Advisors Lending Group, 2009 WL 2424037, at *10 (E.D. Cal. Aug. 5, 2009) ("An action to set aside a foreclosure sale, unaccompanied by an offer to redeem, does not state a cause of action which a court of equity recognizes."); Pantoja v. Countrywide Home Loans, Inc., 640 F. Supp. 2d 1177, 1183-84 (N.D. Cal. July 9, 2009) ("Under California law, in an action to set aside a trustee's sale, a plaintiff must demonstrate that he has made a `valid and viable tender [offer] of payment of the indebtedness.'"). Plaintiff has not alleged facts that warrant setting aside the foreclosure sale. Even if she had, however, she does not allege tender or the ability to offer tender. Although plaintiff states in her opposition that she wants the court to determine the amount she needs to tender, dckt. No. 37 at 12, her failure to allege in the complaint that she has the ability to tender the amount of the indebtedness is fatal to her claim to set aside the trustee's sale. This claim should therefore be dismissed with leave to amend. The court notes, however, that to the extent plaintiff contends that the foreclosure was invalid because defendants do not possess the original promissory note, the a claim is not cognizable and that part of her claim is dismissed without leave to amend. California law "does not require possession of the note as a precondition to non-judicial foreclosure under a Deed of Trust." Alicea v. GE Money Bank, 2009 WL 2136969 at *2 (N.D. Cal. July 16, 2009); see also De Valle v. Mortgage Bank of Cal., 2010 WL 1813505, at *1-2 (E.D. Cal. May 5, 2010); Nool v. HomeQ Servicing, 653 F. Supp. 2d 1047, 1053 (E.D. Cal. 21

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2009). 11. Quiet Title

Defendants move to dismiss plaintiff's eleventh claim for relief, for quiet title, in which plaintiff seeks a declaration that the title to the property at issue is vested in plaintiff alone and a declaration that the defendants are enjoined from asserting any estate, right, title, or interest in the property. Dckt. No. 1 at 41. SPS argues that this claim fails because it is dependent upon plaintiff's defective complaint. Dckt. No. 9 at 28. SPS also argues that plaintiff fails to specify which defendant claims an interest in the property and fails to specify a date as to which quiet title is sought. Id. To establish a claim for quiet title, plaintiff must file a verified complaint that alleges: (a) a description of the property; (b) plaintiff's title as to which a determination is sought; (c) the adverse claims to the title; (d) the date as to which the determination is sought; and (e) a prayer for the determination of title. Cal. Civ. Proc. Code § 761.020. Here, plaintiff fails to explain the grounds on which her claim is based, as required by section 761.020(c), other than a conclusory allegation that defendants are not the holders in due course of the promissory note or deed of trust for the property. Nor has plaintiff alleged tender or the ability to offer tender. See Kelley v. Mortg. Elec. Registration, 642 F. Supp. 2d 1048, 1057 (N.D. Cal. 2009) ("Plaintiffs have not alleged . . . that they have satisfied their obligation under the Deed of Trust. As such, they have not stated a claim to quiet title."); see also Distor v. U.S. Bank, NA, 2009 WL 3429700, at *6 (N.D. Cal. Oct. 22, 2009) ("plaintiff has no basis to quiet title without first discharging her debt, and ... she has not alleged that she has done so and is therefore the rightful owner of the property"). Therefore, plaintiff's quiet title claim is insufficient to withstand a motion to dismiss under Twombly, 550 U.S. at 555 and should be dismissed with leave to amend. 12. California Business and Professions Code Section 17200

Defendants move to dismiss plaintiff's twelfth claim for relief, which alleges only that defendants violated California Business and Professions Code section 17200 by "engag[ing] in 22

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unfair business practices, causing injury and damages to plaintiff." Dckt. No. 1 at 41. SPS argues that plaintiff is not the real party in interest and lacks standing to bring her section 17200 claim since, as discussed above, the claim is premised on alleged misconduct at the origination stage of the loan at issue but plaintiff did not have an interest in the subject property at the time. Dckt. No. 9 at 15-16; see also SPS's Req. for Judicial Notice, Dckt. No. 10, Ex. 1. SPS again also argues that since it was "not in any way involved in the loan origination process" and instead "is merely the servicer to the Subject Loan, . . . Plaintiff has not and cannot allege facts to state any claim stemming from the origination of the Subject Loan against SPS." Dckt. No. 9 at 16. As with the other claims discussed above, plaintiff acknowledges that she did not own the property at issue at the time of the loan origination and that she did not obtain the loan at issue. However, because it is not clear what plaintiff's section 17200 claim is based on, it is not clear whether it is based on the loan origination.13 Therefore, it is not clear whether plaintiff has standing to bring the claim or whether SPS could have any liability for the claim. Regardless, plaintiff's section 17200 claim must be dismissed because the complaint fails to allege sufficient facts demonstrating a violation of section 17200. See Dckt. No. 9 at 18. California's Unfair Competition Law, section 17200, prohibits any "unlawful, unfair or fraudulent business act or practice." Cal. Bus. & Prof. Code § 17200. Section 17200 incorporates other laws and treats violations of those laws as unlawful business practices independently actionable under state law. Chabner v. United Omaha Life Ins. Co., 225 F.3d 1042, 1048 (9th Cir. 2000). Violation of almost any federal, state or local law may serve as the basis for a section 17200 claim. Saunders v. Superior Court, 27 Cal. App.4th 832, 838-39 (1994). In addition, a business practice may be "unfair or fraudulent in violation of [section Although plaintiff states in her opposition that SPS and NDSC violated the FCRA for their non-disclosure of this continued dispute to the credit bureau agency and that SPS or NDSC have continued to report false information related to the loan at issue, Dckt. No. 37 at 6, the complaint just states that defendants provided negative information to credit reporting agencies. 23
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17200] even if the practice does not violate any law." Olszewski v. Scripps Health, 30 Cal. 4th 798, 827 (2003). Here, plaintiff alleges that defendants engaged in unfair business practiced under section 17200. To state a claim for unfair business practices, a plaintiff must plead that "(1) the consumer injury is substantial, (2) the injury is not outweighed by any countervailing benefits to consumers or competition, and (3) the injury is one that consumers themselves could not reasonably have avoided." Morgan v. AT & T Wireless Svcs., Inc., 177 Cal. App. 4th 1235, 1254-55 (2009) (citation omitted). Plaintiff does not make any such allegations. Instead, she lumps all of the defendants together and simply alleges that they have all engaged in "unfair business practices." That allegation is insufficient to withstand a motion to dismiss under Twombly, 550 U.S. at 555. Accordingly, plaintiff's section 17200 claim should be dismissed with leave to amend. 13. Wrongful Foreclosure

Defendants move to dismiss plaintiff's thirteenth claim for relief, which alleges that defendants failed to comply with California Civil Code sections 2923.5 and 2923.6. Dckt. No. 1 at 42. SPS argues that there is no private right of action under section 2923.5 or 2923.6. Dckt. No. 9 at 27. SPS also argues that plaintiff's wrongful foreclosure claim fails because plaintiff has not alleged a tender of a sum sufficient to cure the default, which is a condition precedent to any action challenging a foreclosure, and that plaintiff's argument that defendants must be a holder of the note in order to foreclose is without merit. Dckt. No. 9 at 25, 26. California Civil Code section 2923.5(a) provides that "a mortgagee, trustee, beneficiary, or authorized agent may not file a notice of default pursuant to Section 2924 until 30 days after initial contact is made" to the borrower in order to assess the borrower's financial situation and explore options for the borrower to avoid foreclosure. Cal. Civ. Code § 2923.5(a)(1), (2). Section 2923.5(b) requires "a notice of default filed pursuant to Section 2924 [to] include a declaration that the mortgagee, beneficiary, or authorized agent has contacted the borrower, [or] 24

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has tried with due diligence to contact the borrower as required by this section . . . ." Id. § 2923.5(b). Plaintiff's complaint alleges only that defendants failed to comply with section 2923.5. It does not include any factual allegations, that if taken as true, constitute such a failure. Dckt. No. 1 at 42. This is insufficient to state a claim.14 Moreover, a California Court of Appeal recently held that section 2923.5 provides a pre-sale remedy only and that the only available remedy is a postponement of the foreclosure sale. Mabry v. Superior Court, 185 Cal. App. 4th 208, 225 (Cal. Ct. App. June 2, 2010). Once the sale is held, as it was here, the statute is no longer applicable. Id. Finally, California Civil Code section 2923.6 does not create a private right of action. Mabry, 185 Cal. App. 4th at 223 (stating that section 2923.6 "does not operate substantively" and instead "merely expresses the hope that lenders will offer loan modifications on certain terms"); see also Aguilera v. Hilltop Lending Corp., 2010 WL 3340566, at *5 (N.D. Cal. Aug. 25, 2010) ("Nor does Plaintiff have any recourse under section 2923.6, which the court in Mabry confirmed is, contrary to section 2923.5, not privately-enforceable."). Therefore, plaintiff's wrongful foreclosure claims under California Civil Code sections 2923.5 and 2923.6 must be dismissed without leave to amend. 14. Usury

Defendants move to dismiss plaintiff's fourteenth claim for relief, which alleges that defendants charged an interest rate that was greater than state law permitted. Dckt. No. 1 at 42. Defendants again argue that plaintiff is not the real party in interest and lacks standing. As discussed above, this claim, like her others, is premised on alleged misconduct at the origination stage of the loan and plaintiff did not have any interest in the subject property at that time. Dckt.

Indeed, it appears unlikely plaintiff can allege such a claim in light of the declarations submitted by SPS indicating that SPS and NDSC complied with section 2923.5. See Def. SPS's Req. for Judicial Notice, Dckt. No. 10, Exs. 2, 6. Nonetheless, this motion is before the court under Rule 12(b) and the court confines itself to the allegations of the complaint for purposes of ruling on the motion. 25

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No. 9 at 15-16; Dckt. No. 22 at 3-5; see also Def. SPS's Req. for Judicial Notice, Dckt. No. 10, Ex. 1. Specifically, defendants argue that since plaintiff was not a party to the loan, the allegedly usurious terms do not affect her. Dckt. No. 22 at 5. Again, plaintiff acknowledges that she was not the owner of the subject property at the time of the loan origination. Nor did she obtain the loan at issue. The usury claim is based on an interest rate charged on a loan that plaintiff did not obtain. Therefore plaintiff lacks standing and the usury claim must be dismissed without leave to amend. Moreover, plaintiff's claim for usury fails for the additional reason that she does not allege that the loan's interest rate is in excess of the statutory maximum rate. Dckt. No. 9 at 24; Dckt. No. 22 at 8. Nor can she. The interest rate as stated on the loan documents is fixed at 6.625%. See Def. SPS's Req. for Judicial Notice, Dckt. No. 10, Ex. 1, at 22. The California Constitution provides, "No person, association, copartnership or corporation shall by charging any fee, bonus, commission, discount or other compensation receive from a borrower more than the interest authorized by this section upon any loan or forbearance of any money, goods or things in action." Cal. Const. art. XV, § 1. "The essential elements of usury are: (1) The transaction must be a loan or forbearance; (2) the interest to be paid must exceed the statutory maximum; (3) the loan and interest must be absolutely repayable by the borrower; and (4) the lender must have a willful intent to enter into a usurious transaction." Ghirardo v. Antonioli, 8 Cal. 4th 791, 798 (1994) (citations omitted). The California Constitution caps interest rates on secured loans at ten percent per year, or five percent over the amount charged by the Federal Reserve, whichever is greater. Cal. Const. art. XV, § 1(2); see also 321 Henderson Receivables Origination LLC v. Sioteco, 173 Cal. App. 4th 1059, 1076 (2009) ("Under current California law, a loan that charges an interest rate greater than 10 percent per annum is usurious."). Here, the amount charged by the Federal Reserve was 6.25% on the 25th day of the month preceding the loan consummation (July 25, 2007). Cal. Const. art. XV, § 1(2); CMG's Req. for Judicial

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Notice, Dckt. No. 23, Ex. A.15 The interest rate of 6.625% on the loan documents is therefore not usurious. Accordingly, plaintiff's claim for usury should be dismissed without leave to amend. 15. Predatory Lending

Defendants also move to dismiss plaintiff's fifteenth claim for relief, which alleges that defendants engaged in predatory lending practices, in violation of California Financial Code sections 4970 through 4979.8. Dckt. No. 1 at 43-44. This claim, too, is predicated on conduct that allegedly occurred at the time of the loan origination and involved a loan that plaintiff did not obtain. Thus, defendants argue that plaintiff standing as to this claim as well. Dckt. No. 9 at 15-16; Dckt. No. 22 at 3-5; see also Def. SPS's Req. for Judicial Notice, Dckt. No. 10, Ex. 1. Given plaintiff's acknowledgement that she was not the owner of the subject property at the time of the loan origination at issue and that she did not obtain the loan at issue, she lacks standing to assert a claim under these statutory provisions. Moreover, given that plaintiff was never a party to the loan, this predatory lending claim could not relate to any activity after the loan was consummated. Nor does the complaint include any allegation related to activity by defendant after the loan closed. Additionally, plaintiff has not alleged facts showing that the loan obtained falls within the scope of California's predatory lending laws. See Cal. Fin. Code § 4970(b), (d). She also fails to plead how these laws were violated. Nor has she alleged facts to show that SPS, which was not the original lender, could be held liable for predatory lending. See Cal. Fin. Code § 4979 .8 (prohibiting application of predatory lending laws "on an assignee that is a holder in due course"). For all of these reasons, this claim must be dismissed without leave to amend.

The court grants CMG's request for judicial notice of this exhibit, which is a statement from the Federal Reserve Bank of San Francisco's website regarding discount rates . 27

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16.

Unfair Debt Collection

Defendants move to dismiss plaintiff's sixteenth claim for relief, which alleges that defendants violated the FDCPA and California's Rosenthal Fair Debt Collections Act ("RFDCPA"). Dckt. No. 1 at 44-45. SPS argues that although it is unclear from plaintiff's complaint, any alleged violation of the FDCPA or RFDCPA is grounded upon the foreclosure, and these statutes are inapplicable to foreclosure claims. Dckt. No. 9 at 29-30. Plaintiff's claims for violation of the FDCPA and RFDCPA fail to allege any facts that could support a finding that the defendants violated either statute. Moreover, as defendants argue, the claims fail for the additional reasons that the FDCPA and RFDCPA do not apply to lenders or mortgage servicers. The FDCPA applies only to a "debt collector," defined as "a 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. § 1692a. The definition explicitly excludes creditors as well as loan originators or assignees who obtained the right to collect on loan when it was not in default. 15 U.S.C. § 1692a(4), § 1692a(6)(A) or (B), § 1692a(ii) and (iii). Additionally, to be liable under the RFDCPA, a defendant must be a "debt collector." Izenberg v. ETS Services, LLC, 589 F. Supp. 2d 1193, 1199 (C.D. Cal. 2008) (citing Heintz v. Jenkins, 514 U.S. 291, 294 (1995)). A "debt collector" under the RFDCPA is defined as "any person who, in the ordinary course of business, regularly, on behalf of himself or herself or others, engages in debt collection." Cal. Civ. Code § 1788.2(c). Plaintiff does not allege that defendants are debt collectors; rather, she alleges that defendants are creditors and servicers of the loan at issue. Accordingly, plaintiff's claim for violations of the FDCPA and RFDCPA should be dismissed without leave to amend. 17. Slander of Title

Finally, defendants move to dismiss plaintiff's seventeenth claim for relief, for slander of 28

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title, which alleges that defendants "made a false and malicious written or spoken public statement disparaging her title to property." Dckt. No. 1 at 45. SPS argues that all of the acts done by defendants in furtherance of the foreclosure sale were privileged acts under the California Civil Code and that plaintiff does not specify what statements were made but instead makes conclusory