Schneider v. Bank of America N.A et al

Filing 240

ORDER signed by Judge John A. Mendez on 12/10/2015 ORDERING the Court GRANTS 231 Quality's Loan Service Corp. Motion for Summary Judgment; Because Plaintiff no longer has any claim against this defendant, Quality is hereby DISMISSED from the action. (Reader, L)

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UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF CALIFORNIA

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CHRISTOPHER D. SCHNEIDER,

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2:11-cv-02953-JAM-EFB

Plaintiff,

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No.

v.
BANK OF AMERICA N.A.; BANK OF
AMERICA MORTGAGE; BANK OF
AMERICA HOME LOANS SERVICING
LP; BALBOA INSURANCE COMPANY;
HOME RETENTION GROUP; QUALITY
LOAN SERVICE CORPORATION;
CLIFF COLER; and DOES 1-100,
inclusive,

ORDER GRANTING DEFENDANT QUALITY
LOAN SERVICE CORPORATION’S
MOTION FOR SUMMARY JUDGMENT

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Defendants.
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Plaintiff Christopher Schneider’s (“Plaintiff”) home

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entered foreclosure after a dispute between Plaintiff and the

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beneficiary on his mortgage.

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entities involved with the loan, including the trustee for the

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foreclosure sale, Defendant Quality Loan Service Corporation

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(“Defendant” or “Quality”), which now moves for summary

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judgment.

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///

Plaintiff sued multiple financial

For the reasons that follow, the Court grants

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Quality’s motion as to all claims. 1

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I.

FACTUAL ALLEGATIONS AND PROCEDURAL BACKGROUND

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Plaintiff took out a mortgage on his home in 2001.

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Defendant’s Request for Judicial Notice (“RJN”) Exh. A.

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America, the beneficiary, later substituted Defendant Quality as

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trustee.

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2010, Bank of America for the first time requested proof of

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Plaintiff’s insurance policy on the property, which was required

See RJN Exh. B; Louvan Decl. ¶ 4, Exh. 2.

See
Bank of

In May

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under the terms of the loan.

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154:24-155:2.

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but spent the next several months attempting to secure a policy.

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See id. at 155:9-15.

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2010.

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Schneider Depo. at 150:4-9,

Plaintiff did not have insurance at that time,

He eventually obtained one in December

Id. at 159:14-20.
In the meantime, Bank of America obtained a Lender Placed

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Policy (“LPP”) on the property, effective May 2010.

See id. at

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163:7-164:3.

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monthly payments.

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cancelled the LPP after Plaintiff obtained his own policy, but

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Plaintiff believes he was improperly billed for the policy for

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months after December 2010.

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Plaintiff also contested the cost of the policy, when and

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whether the policy existed, and the means of notice about the

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policy provided by Bank of America.

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He requested a copy of the policy, but states that Bank of

The presence of this policy increased Plaintiff’s
See id. at 166:16-18.

Bank of America

Id. at 166:22-167:11; 188:18-189:1.

See id. at 166:7-167:15.

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This motion was determined to be suitable for decision without
oral argument. E.D. Cal. L.R. 230(g). The hearing was
scheduled for October 21, 2015.
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America never provided one.

Id. at 176:17-23.

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In the ensuing dispute over the LPP and the proper billing

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amounts, Bank of America determined (possibly incorrectly) that

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Plaintiff had defaulted on the mortgage, and directed Defendant

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Quality to initiate nonjudicial foreclosure proceedings.

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id. at 183:17-184:25; RJN Exh. C; Louvan Decl. ¶ 5.

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so, by issuing a Notice of Default and later, a Notice of Sale.

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Louvan Decl. ¶ 5.

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See

Quality did

A few days after Quality issued the Notice of Sale,

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Plaintiff called Quality to inquire about reinstatement figures

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for his loan and how to postpone the sale.

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¶¶ 6-8, 11.

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would need to agree to postpone the sale.

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Exh. 3; Schneider Depo. at 236:10-15.

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Plaintiff, Quality also contacted Bank of America to request

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reinstatement figures, although Bank of America never provided

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the figures.

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Quality knew about the LPP dispute between Plaintiff and Bank of

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America.

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Plaintiff never informed Quality about the dispute).

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See Louvan Decl.

Quality advised Plaintiff that Bank of America

Louvan Decl. ¶ 12.

See Learned Decl.

After speaking with

There is no evidence that

See, e.g., Schneider Depo. at 232:8-10 (stating that

Two days before the call with Quality, Plaintiff filed this

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suit against Bank of America, Quality, and others (Doc. #1).

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Shortly afterward, the Court granted a temporary restraining

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order to prevent foreclosure (Docs. ##9, 12).

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has not occurred.

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Foreclosure still

Louvan Decl. ¶ 13.

The defendants then filed multiple motions to dismiss.

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now-operative complaint – the Second Amended Complaint –

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contains fifteen causes of action (Doc. #91).

The

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Of those fifteen,

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ten allege claims against Defendant Quality.

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another round of motions to dismiss (Doc. #132), only four

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claims remain against Quality: 2 (1) Violations of the Fair Debt

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Collection Practices Act (“FDCPA”) and California’s Rosenthal

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Fair Debt Collection Practices Act (“RFDCPA”); (2) Wrongful

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foreclosure; (3) Negligence; and (4) Violation of California’s

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Unfair Competition Law, Business and Professions Code § 17200 et

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seq. (“UCL”).

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Following yet

Defendant Quality now moves for summary judgment as to all

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four remaining causes of action (Doc. #231).

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his opposition eight days late (Doc. #237), but the Court

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accepted the filing (Doc. #238) and has considered the

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opposition as well as Defendant’s reply (Doc. #239).

Plaintiff filed

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II.

OPINION

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A.

Judicial Notice

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Defendant requests judicial notice of four documents, each

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of which was recorded in the Amador County Recorder’s Office

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(Doc. #232): (1) the Deed of Trust recorded on February 6, 2001;

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(2) Substitution of Trustee recorded on July 21, 2011; (3) the

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Notice of Default and Election to Sell Under Deed of Trust

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recorded on July 21, 2011; and (4) the Notice of Trustee Sale

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recorded on October 26, 2011.

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public record and is not subject to reasonable dispute, so the

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Court takes judicial notice of them.

Each of these documents is in the

Fed. R. Evid. 201; see

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Other claims remain against other defendants, but those
defendants do not move for summary judgment at this time so those
claims are not addressed in this order.
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Santa Monica Food Not Bombs v. City of Santa Monica, 450 F.3d

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1022, 1025 n.2 (9th Cir. 2006); Lee v. City of Los Angeles, 250

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F.3d 662, 689 (9th Cir. 2001).

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B.

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Analysis
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Immunity from Liability Under All Claims

Defendant Quality first argues that the Court must dismiss

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all claims against it “because Quality’s authority was limited

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to its role as the trustee advancing the nonjudicial foreclosure

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against Plaintiff’s property and is immune from liability.”

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Mot. at 3:4-6.

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not support the sweeping proposition that a trustee is

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automatically immune from liability under any statute.

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e.g., Hamilton v. Bank of Blue Valley, 746 F. Supp. 2d 1160,

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1174 (E.D. Cal. 2010); Gardner v. Am. Home Mortg. Servicing,

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Inc., 691 F. Supp. 2d 1192, 1201 (E.D. Cal. 2010).

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therefore analyzes Defendant’s motion for summary judgment as to

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each outstanding cause of action individually.

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2.

The Court disagrees, because the case law does

See,

The Court

FDCPA and RFDCPA

The parties contest whether Defendant Quality is a “debt

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collector” within the meaning of the FDCPA or the RFDCPA.

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Defendant argues that a trustee engaged in foreclosure

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activities is not a debt collector under these statutes.

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at 7; Reply at 3.

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Bank of N.Y. Mellon Trust Co. N.A., 2015 WL 4573890 (C.D. Cal.

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July 29, 2015), for the proposition that a trustee engaged in

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foreclosure activities is not a debt collector under either act.

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Mot. at 7.

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attempting to persuade the Court not to follow Cochran, and

Mot.

Defendant accurately cites Cochran v. The

Plaintiff attacks the argument in two ways, first

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second asserting that Quality went beyond its role as trustee.

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Opp. at 10-12.

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Plaintiff acknowledges Cochran’s holding, but contends that

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Cochran “is hardly established case law.”

Opp. at 12:3.

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Plaintiff is correct in the sense that the Ninth Circuit has not

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ruled on these issues.

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proceeding, the magistrate judge rejected Defendant’s argument

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that it was not a “debt collector” on the basis that the law was

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not settled in this regard.

And in an earlier phase of this

Schneider v. Bank of Am. N.A., 2013

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WL 1281902, at *17 (E.D. Cal. Mar. 26, 2013) (“[W]hile the Ninth

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Circuit has not specifically addressed the issue, several other

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courts have concluded that foreclosing on a property pursuant to

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a deed of trust or some other lien does constitute debt

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collection under the FDCPA.”) report and recommendation adopted

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in part, rejected in part, 2014 WL 2118327 (E.D. Cal. May 21,

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2014).

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However, since then, federal and California courts have

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reached further consistency and clarity on this issue.

See

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Cochran, 2015 WL 4573890, at *3 (“The majority of courts in the

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Ninth Circuit have concluded that legally-mandated actions

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required for mortgage foreclosure are not debt collection under

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the FDCPA.”) (collecting cases) (citations, quotation marks, and

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alteration omitted); Moriarity v. Nationstar Mortg., LLC, 2013

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WL 3354448, at *5 (E.D. Cal. July 3, 2013) (“California courts

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are now in consensus . . . that foreclosure is not a debt

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collection under the RFDCPA.”).

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courts’ holdings that “legally-mandated actions required for

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mortgage foreclosure are not debt collection[.]”

The Court agrees with those

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Cochran, 2015

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WL 4573890, at *3; see Moriarity, 2013 WL 3354448, at *5

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(“Foreclosures on mortgages are not debt collection because they

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do not represent ‘enforcement of the obligation’ or ‘an attempt

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to collect funds from the debtor.’”) (emphasis omitted) (citing

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Hulse v. Ocwen Fed. Bank, FSB, 195 F. Supp. 2d 1188, 1204 (D.

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Or. 2002)).

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false statements contained in the Notice of Sale and Notice of

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Default were not cognizable under the FDCPA or RFDCPA.

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The Court therefore concludes that any allegedly

Plaintiff has also argued that Defendant made false

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statements outside of these notices – specifically, that Quality

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told Plaintiff over the phone that “only [Bank of America] could

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give Plaintiff any information on his loan” including providing

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a reinstatement quote and postponement of the sale.

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10:23.

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Defendant actually made this statement.

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evidence, the Court is not persuaded that the fact that

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Plaintiff called Defendant and asked questions about his loan

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brings Defendant outside its role as a trustee.

Opp. at

To begin, there does not appear to be evidence that
Even if there were

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Plaintiff further states in his opposition that Quality

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“had a great deal of power” beyond that of a normal trustee.

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Opp. at 11:18-19.

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other “power” Quality allegedly had, and regardless, Plaintiff

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has pointed to no evidence.

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Plaintiff “may not rest upon the mere allegations or denials of

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the adverse party’s pleading,” but must provide affidavits or

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other sources of evidence that “set forth specific facts showing

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that there is a genuine issue for trial.”

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263 F.3d 1070, 1076 (9th Cir. 2001) (quoting Fed. R. Civ. P.

But Plaintiff’s argument leaves unclear what

In opposing summary judgment,

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Devereaux v. Abbey,

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56(e)).

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position; the opposition contains no citation to evidence, and

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Plaintiff’s responses to the statement of facts simply cites to

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allegations in the complaint.

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Facts ¶ 10.

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the Court grants summary judgment as to the FDCPA and RFDCPA

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cause of action.

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See Opp. at 11; Statement of

Because Plaintiff has failed to meet his burden,

Given this conclusion, the Court does not reach the
parties’ arguments as to whether reliance on Bank of America’s
information precludes Quality’s liability.

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Plaintiff here identified no evidence to support his

3.

Wrongful Foreclosure

Plaintiff’s wrongful foreclosure claim against Quality is

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based on inaccurate information in the Notice of Sale and Notice

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of Default.

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inaccuracies, the notices were allegedly invalid because they

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were “undated[] and unsigned.”

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acknowledges that the notices contained inaccurate information

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and were not signed or dated, but argues that these “procedural

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irregularit[ies]” were not prejudicial to Plaintiff.

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16-17.

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See Opp. at 13-14.

In addition to factual

Opp. at 14.

Defendant Quality

Mot. at

Prejudice is indeed an element of a wrongful foreclosure

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claim.

Rockridge Trust v. Wells Fargo, N.A., 985 F. Supp. 2d

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1110, 1146 (N.D. Cal. 2013).

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plaintiff must show “(1) the trustee . . . caused an illegal,

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fraudulent, or willfully oppressive sale of real property

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pursuant to a power of sale in a mortgage or deed of trust;

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(2) the party attacking the sale . . . was prejudiced or harmed;

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and (3) [that party] tendered the amount of the secured

To prove wrongful foreclosure, a

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indebtedness or was excused from tendering.”

Id. at 1145.

The Court agrees with Defendant Quality that its actions

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related to the notices were not prejudicial to Plaintiff, in

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that they did not cause the default here.

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that the property went into foreclosure because of a dispute

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with Bank of America about the LPP and Bank of America’s refusal

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to provide a copy of the policy to Plaintiff.

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Schneider Depo. at 179:25-180:2 (“Here is the situation.

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fighting with Bank of America.”).

Plaintiff’s theory is

Opp. at 4-5; see
I’m

The default therefore was

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allegedly caused by Bank of America’s actions and the LPP

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dispute - not any misinformation in the notices Quality sent or

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Quality’s failure to sign and date them.

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grants summary judgement for Quality as to the wrongful

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foreclosure claim.

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4.

The Court therefore

Negligence

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Quality seeks summary judgment as to Plaintiff’s negligence

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claim, arguing that it had no common law duty towards Plaintiff.

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Mot. at 18-19.

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“there is still a duty of reasonable care for agents like

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[Defendant Quality].”

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Defendant.

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Plaintiff counters, without legal citation, that

Opp. at 15:24-25.

The Court agrees with

“The trustee in nonjudicial foreclosure is not a true

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trustee with fiduciary duties, but rather a common agent for the

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trustor and beneficiary.”

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316, 335 (2008).

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trustor, but these duties are “exclusively defined by the deed

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of trust and the governing statutes.

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exist.”

Kachlon v. Markowitz, 168 Cal.App.4th

The trustee does owe some duties to the

No other common law duties

Id. (citing I.E. Assocs. v. Safeco Title Ins. Co., 39
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Cal.3d 281, 287-88 (1985) & Residential Capital v. Cal-Western

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Reconveyance Corp., 108 Cal.App.4th 807, 827 (2003)).

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The duties Plaintiff identifies in his negligence claim

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fall outside these bounds. 3

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is that Quality breached a duty by failing to investigate the

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accuracy of the defaulting loan balance “even after [Plaintiff]

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raised concerns.”

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the amount of unpaid balance is not a duty owed by a trustee.

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See In re Cedano, 470 B.R. 522, 534-35 (9th Cir. B.A.P. 2012)

The thrust of Plaintiff’s argument

See Opp. at 16:11-20.

But investigation of

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(rejecting argument that trustee had a duty to “find out the

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payoff amount” or to “ascertain the validity of the foreclosure

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documents”); Kachlon, 168 Cal.App.4th at 342-44 (affirming

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directed verdict for trustee where plaintiff argued that trustee

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“record[ed] the notice of default without adequate investigation

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and fail[ed] to rescind the notice upon being shown that the

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original [] promissory note had been satisfied”).

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trustee shall incur no liability for any good faith error in

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stating the proper amount, including any amount provided in good

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faith by or on behalf of the beneficiary.”

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§ 2924f(b)(7).

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and Plaintiff offered no evidence to the contrary.

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Rather, “the

Cal. Civ. Code

Defendant’s actions here suggest no bad faith,
The Court

To the extent Plaintiff argues that there was a breach of a
duty related to the statutorily-required notices, see Opp. at 16
(asserting that Quality “issu[ed] false copies of notices” and
“sen[t] a notice of default with a false APN number”), the Court
has already concluded above that these actions did not cause
Plaintiff’s injury. Plaintiff therefore cannot maintain a
negligence claim based on these actions. See Saelzler v.
Advanced Grp. 400, 25 Cal.4th 763, 778 (2001) (“Actual causation
is an entirely separate and independent element of the tort of
negligence.”) (citations omitted).

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therefore grants summary judgment for Quality, and does not

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reach the parties’ further arguments about the other elements of

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negligence.

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5.

UCL

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Finally, Defendant moves for summary judgment as to

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Plaintiff’s UCL cause of action on the basis that its conduct

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did not fall under the prohibitions of this statute.

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argues that Quality violated both the “unlawful” and “unfair”

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prongs of the UCL.

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Plaintiff

Opp. at 18.

As to the unlawful prong, a plaintiff must show that the

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defendant’s business practice violated a law.

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CitiMortgage, Inc., 975 F. Supp. 2d 1127, 1145 (E.D. Cal. 2013)

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(“Where a plaintiff cannot state a claim under the ‘borrowed’

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law, she cannot state a UCL claim either.”) (citation omitted).

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Plaintiff’s claim here fails, because all of his predicate

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claims against Quality have failed.

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Khan v.

As to the unfair prong, a plaintiff must demonstrate that

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the “conduct [] threatens an incipient violation of an antitrust

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law, or violates the policy or spirit of one of those laws

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because its effects are comparable to or the same as a violation

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of the law, or otherwise significantly threatens or harms

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competition.”

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Angeles Cellular Telephone, 20 Cal.4th 163, 187 (1999)).

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Plaintiff argues that “all of the claims offend a public

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policy,” Opp. at 18:10-11, but he declines to identify the

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specific public policy.

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evidence about) how Defendant’s actions significantly threaten

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or harm competition.

Id. (quoting Cel–Tech Communications, Inc. v. Los

He also fails to explain (or point to

Plaintiff therefore has not met his burden
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to demonstrate that there is a genuine issue of material fact as

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to this claim.

See Devereaux, 263 F.3d at 1076.

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The Court accordingly grants summary judgment for Defendant

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Quality. The Court also need not and does not reach the parties’

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other arguments as to the available damages and whether

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Plaintiff suffered economic injury.

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III.

ORDER

For the reasons set forth above, the Court GRANTS Defendant

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Quality’s motion for summary judgment.

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longer has any claim against this defendant, Quality is hereby

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dismissed from the action.

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IT IS SO ORDERED.
Dated: December 10, 2015

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Because Plaintiff no