Rahbarian v. JP Morgan Chase

Filing 17

ORDER signed by Judge John A. Mendez on 11/10/2014. The Court is DENYING defendants #5 Motion to Dismiss as it relates to plaintiff's first cause of action for violation of California Civil Code section 2923.55. The Court is GRANTING leave to amend defendant's Motion as to remainder of First Cause of Action and as to Third Cause of Action as it relates to failing to provide a single point of contact. Finally, the Court GRANTS without leave to amend plaintiffs Second Cause of Action and remainder of the Third Cause of Action.Plaintiff must file his Amended Complaint within 20 days from date of Order. Defendant's responsive pleading due within 20 days thereafter. (Marciel, M)

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UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF CALIFORNIA

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PAIMAN RAHBARIAN,

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2:14-cv-01488 JAM-KJN

Plaintiff,

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No.

v.
JP MORGAN CHASE; and DOES 1
through 20 inclusive,

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ORDER GRANTING IN PART AND
DENYING IN PART DEFENDANT’S
MOTION TO DISMISS AND DENYING
DEFENDANT’S REQUEST TO EXPUNGE
LIS PENDENS

Defendant.
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Before the Court is Defendant JPMorgan Chase Bank’s

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(“Defendant”) motion to dismiss Plaintiff Paiman Rahbarian’s

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(“Plaintiff”) complaint that alleges chain-of-title defects and

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procedural irregularities in Defendant’s servicing of the

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mortgage on his home.

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motion is GRANTED in part and DENIED in part. 1

For the following reasons, Defendant’s

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I.

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FACTUAL ALLEGATIONS AND PROCEDURAL BACKGROUND

Attar Fakhri, Plaintiff’s mother, took out a mortgage on her

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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 15, 2014.
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home in 2007.

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California Reconveyance (“CRC”) as trustee and Washington Mutual

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as lender and beneficiary.

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information and belief,” that Washington Mutual transferred the

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mortgage to “WaMu Mortgage Pass-Through Certificate Series 2007-

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OA4.”

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SEC and was dissolved.”

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assets,” including Plaintiff’s mother’s mortgage, to be

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distributed to the certificate holders.

Compl. ¶¶ 14, 19.

Compl. ¶ 15.

The Deed of Trust named

Compl. ¶ 14.

Plaintiff states, “on

This entity then “filed a Form 10-K with the
Compl. ¶ 16.

Dissolution caused “the

Id.

Washington Mutual

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then itself dissolved, conveying its assets to Defendant.

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¶ 17.

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these assets now owned by Defendant, because it was previously

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transferred to the certificate holders.

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Compl.

Plaintiff alleges that his mother’s mortgage was not among

Compl. ¶ 38.

Following his mother’s death in 2011, Plaintiff took

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possession of the mortgaged home.

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soon defaulted on the mortgage, and CRC issued a Notice of

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Default and Election to sell, dated March 12, 2013.

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On that same day, CRC recorded a “Corporate Assignment of Deed of

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Trust,” signed by Colleen Irby as Vice President of JPMorgan

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Chase.

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belief that Colleen Irby is an employee of CRC, not JP Morgan

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Chase and is, in face [sic], a ‘robo-signer.’”

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later sent to Plaintiff a Notice of Trustee Sale.

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But as of the date of filing the complaint, no sale had occurred.

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See Compl. ¶ 27; id. at 9 ¶ 1.

Compl. ¶ 21.

Compl. ¶¶ 4, 19-20.

Plaintiff

Compl. ¶ 22.

Plaintiff “alleges on information and

Compl. ¶ 21.

CRC

Compl. ¶ 26.

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Plaintiff brought this action in Placer County Superior

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Court on May 16, 2014, alleging (1) violations of the California

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Homeowner Bill of Rights (“HBOR”), (2) wrongful foreclosure, and
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(3) violations of California’s Unfair Competition Law (“UCL”)

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(Cal. Bus. & Prof. Code § 17200 et seq.).

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motion for a temporary restraining order, which the state court

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tentatively denied on the basis that Plaintiff failed to file

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proof of service.

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Pendency of Action (lis pendens).

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removing the case to this Court, Defendant now moves to dismiss

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all causes of action for failure to state a claim (Doc. #5).

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Plaintiff opposes the motion (Doc. #14) and Defendant has replied

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RJN Exh. 10, at 7.

Plaintiff then filed a

He also filed a Notice of

See RJN Exh. 11.

After

(Doc. #15).

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II.

OPINION

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A.

Legal Standard

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To survive a motion to dismiss, a plaintiff must plead

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“enough facts to state a claim to relief that is plausible on

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its face.”

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(2007).

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must accept all the allegations in the complaint as true and

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draw all reasonable inferences in favor of the plaintiff.

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Scheuer v. Rhodes, 416 U.S. 232, 236 (1974), overruled on other

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grounds by Davis v. Scherer, 468 U.S. 183 (1984); Cruz v. Beto,

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405 U.S. 319, 322 (1972).

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taken as true must plausibly suggest an entitlement to relief,

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such that it is not unfair to require the opposing party to be

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subjected to the expense of discovery and continued litigation.”

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Starr v. Baca, 652 F.3d 1202, 1216 (9th Cir. 2011).

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that are mere “legal conclusions” are therefore not entitled to

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the presumption of truth.

Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 547

In considering a motion to dismiss, a district court

“[T]he factual allegations that are

Assertions

Ashcroft v. Iqbal, 556 U.S. 662, 678
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(2009) (citing Twombly, 550 U.S. at 555).
Upon granting a motion to dismiss for failure to state a

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claim, a district court has discretion to allow leave to amend

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the complaint pursuant to Federal Rule of Civil Procedure 15(a).

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A court should freely grant leave to amend.

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15(a)(2).

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leave to amend, even if no request to amend the pleading was

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made, unless amendment would be futile.”

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Inc. v. N. Cal. Collection Serv. Inc., 911 F.2d 242, 246-47 (9th

Fed. R. Civ. Proc.

A court “is generally required to grant the plaintiff

Cook, Perkiss & Liehe,

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Cir. 1990).

Amendment is not futile if the plaintiff could

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“cure the defect requiring dismissal ‘without contradicting any

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of the allegations of [the] original complaint.’”

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Lending 1st Mortgage, 583 F. Supp. 2d 1090, 1095 (N.D. Cal.

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2008) (quoting Reddy v. Litton Indus., Inc., 912 F.2d 291, 296

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(9th Cir. 1990)) (alteration in original).

Plascencia v.

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B.

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Generally, the Court may not consider material beyond the

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pleadings in ruling on a motion to dismiss. However, the Court

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may take judicial notice of matters of public record, provided

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that they are not subject to reasonable dispute.

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201; see Santa Monica Food Not Bombs v. City of Santa Monica,

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450 F.3d 1022, 1025 n.2 (9th Cir. 2006); Lee v. City of Los

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Angeles, 250 F.3d 662, 689 (9th Cir. 2001).

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Judicial Notice

Fed. R. Evid.

Defendant here requests that the Court judicially notice

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eleven documents, to which Plaintiff makes no objection.

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eleven, six were recorded with the Placer County Recorder and

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four were filed in state court: (1) Deed of Trust (RJN Exh. 1);

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(2) Assignment of the Deed of Trust (RJN Exh. 2); (3) Notice of
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Of the

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Default (RJN Exh. 4); (4) Notice of Trustee’s Sale recorded on

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August 23, 2013 (RJN Exh. 5); (5) Substitution of Trustee (RJN

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Exh. 6); (6) Notice of Trustee’s Sale recorded on February 26,

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2014 (RJN Exh. 7); (7) Plaintiff’s application for a temporary

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restraining order (RJN Exh. 8); (8) Plaintiff’s declaration

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filed as part of his application for a temporary restraining

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order (RJN Exh. 9); (9) Tentative ruling of the Placer County

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Superior Court regarding the temporary restraining order (RJN

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Exh. 10); and (10) Notice of pendency of action filed by

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plaintiff in Superior Court (RJN Exh. 11).

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documents are in the public record, the Court takes judicial

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notice of them. However, as to the four documents filed in state

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court, this Court only takes judicial notice of the fact that

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they were filed and any facts contained in these court filings

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which are disputed may not be judicially noticed.

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Since these

The final document, a Purchase and Assumption Agreement

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between Defendant and the Federal Deposit Insurance Corporation

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(“FDIC”) is publicly available on a government website

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(www.fdic.gov), so it too is the proper subject of judicial

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notice.

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LEXIS 7803, at *9 (N.D. Cal. Jan. 21, 2014) (noticing a document

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on the same website); Paralyzed Veterans of Am. v. McPherson,

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2008 U.S. Dist. LEXIS 69542, at *7 (N.D. Cal. Sept. 9, 2008)

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(collecting cases in which a court judicially noticed material

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on government websites).

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C.

See Mitchell v. Wells Fargo Bank, N.A., 2014 U.S. Dist.

Discussion
1.

First Cause of Action: Homeowner Bill of Rights

Plaintiff’s first cause of action alleges violations of the
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Homeowner Bill of Rights (“HBOR”) on the grounds that Defendant

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(1) failed to “provide notice to Plaintiff that he could request

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certain information from Defendant”; (2) failed to establish a

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single point of contact and “[i]nstead[] [] used multiple points

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of contact”; and (3) “ha[d] Colleen Irby, a CRC employee,

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robosign the Corporate Assignment of the Deed of Trust.”

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¶¶ 32-34.

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a.

Compl.

Failure to provide notice under California
Civil Code § 2923.55

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Defendant argues that Plaintiff’s allegation that it failed

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to provide notice is insufficient, because the Notice of Default

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“[was] accompanied by a declaration of compliance[,] which

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demonstrates that Chase did in fact comply with the requirements

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of § 2923.55.”

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Defendant as RJN Exhibit 4, states, “The mortgagee, beneficiary

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or authorized agent was not required to comply with Cal. Civ.

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Code Section 2923.55 because:

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occupied residential property as defined by the statute.”

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Exh. 4, at 4.

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Mot. at 6:20-21.

That declaration, submitted by

The real property is not ownerRJN

Defendant relies on Maguca v. Aurora Loan Servs., 2009 U.S.

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Dist. LEXIS 104251 (C.D. Cal. Oct. 28, 2009) and Dorado v. Shea

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Homes Ltd. P’ship, 2011 U.S. Dist. LEXIS 97672 (E.D. Cal. Aug.

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31, 2011), holding them out as examples of cases in which

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“allegations of non-compliance fail[ed] in the presence of [] a

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declaration [of compliance].”

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case is relevant here.

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decided before HBOR’s effective date (January 1, 2013),

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considered California Civil Code section 2923.5 — a different

Mot. at 6:21-27.

But neither

Maguca and Dorado, which were both

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statutory provision from the one at issue here: California Civil

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Code section 2923.55.

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*49; Maguca, 2009 U.S. Dist. LEXIS 104251, at *5.

Dorado, 2011 U.S. Dist. LEXIS 97672, at

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Section 2923.5 requires merely that a notice of default

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“include a declaration” stating that an authorized agent has

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contacted (or attempted to contact) the borrower.

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Code § 2923.5(b).

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that it failed to comply with that section by submitting a

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judicially noticed notice of default showing that the required

Cal. Civ.

Therefore, a defendant may defeat allegations

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declaration was attached.

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97672, at *49; Maguca, 2009 U.S. Dist. LEXIS 104251, at *5.

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See Dorado, 2011 U.S. Dist. LEXIS

In contrast, section 2923.55 requires that the loan

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servicer provide “[a] statement that the borrower may request”

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certain information, including a copies of the promissory note,

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the deed of trust, “any assignment . . . demonstrat[ing] the

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right of the mortgage servicer to foreclose[,]” and the

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borrower’s payment history.

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provision is not satisfied by a “declaration”; it is only

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satisfied by a writing containing the proper information.

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Cal. Civ. Code § 2923.55(b).

This

Id.

The “declaration of compliance” Defendant submitted does

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not contain any such writing.

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a writing was provided to Plaintiff.

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Defendant “was not required to comply with [] Section

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2923.55[.]”

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to comply is a legal question that is not resolved by

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Defendant’s own determination that it was exempt from the terms

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of the statute.

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— if any — it does not preclude Plaintiff’s claim that Defendant

RJN Exh. 4, at 4.

Nor does it even state that such
Instead, it proclaims that

Whether Defendant was required

Whatever evidentiary value this declaration has

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never provided the written notice required by section 2923.55.

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In fact, it corroborates Plaintiff’s claim that he did not

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receive notice, since Defendant apparently considered itself

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exempt.

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To the extent that Defendant urges dismissal based on a

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theory that it was exempt, 2 the Court also rejects that argument.

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Defendant states, Ҥ 2923.55 only applies to mortgages . . . as

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described in § 2924.15.

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§ 2924.15 defines ‘owner-occupied’ property as property that is

[citation omitted]

In relevant part,

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‘the principal residence of the borrower and is security for a

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loan . . . .’”

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that Plaintiff’s property was not “owner-occupied.”

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Exh. 4, at 4.

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contention.

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“Plaintiff’s principal and family residence”).

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Court must take the allegations in the complaint as true,

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Defendant’s motion to dismiss Plaintiff’s first cause of action

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is DENIED as it relates to a violation of California Civil Code

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section 2923.55.

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Mot. at 6:16-19.

Defendant appears to suggest
See RJN

However, the complaint directly contradicts this
See Compl. ¶ 4 (stating that the property is

b.

Because the

Failure to create a single point of contact
under California Civil Code § 2923.7

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Defendant urges this Court to dismiss Plaintiff’s claim that

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it failed to provide a single point of contact, arguing that

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Plaintiff’s allegation “lacks factual support” and is precluded

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by his “admission that he was assigned a ‘designated point of

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Defendant’s brief leaves unclear whether it is advancing this
argument or merely noting that its employee previously made the
determination that it need not comply.
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contact[.]’”

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not address these arguments, but simply reiterates his claim that

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Defendant violated HBOR by “shuffl[ing] multiple points of

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contact[.]”

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Mot. at 6:8-9 (citing RJN Exh. 9).

Plaintiff does

Opp. at 5:22-23 (citing Compl. ¶ 33).

Section 2923.7 requires loan servicers to “promptly

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establish a single point of contact and provide to the borrower

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one or more direct means of communication with the single point

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of contact.”

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provision if it assigns a single point of contact, but then

Cal. Civ. Code § 2923.7(a).

A bank violates this

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changes that point of contact multiple times.

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of Am., N.A., 2014 U.S. Dist. LEXIS 15111, at *12-*14 (C.D. Cal.

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Feb. 3, 2014).

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See Mann v. Bank

Plaintiff here has alleged that Defendant “used multiple

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points of contact.”

Compl. ¶ 33.

This statement is the only

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allegation contained in the complaint relating to Plaintiff’s

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section 2923.7 claim.

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were, how many different points of contact Defendant assigned, or

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the circumstances or timing of such reassignments.

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2014 U.S. Dist. LEXIS 15111, at *12-*13 (denying motion to

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dismiss where plaintiffs described six reassignments to different

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points of contact over three months).

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support, the allegation that Defendant violated section 2923.7 by

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“us[ing] multiple points of contact” is insufficient.

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Lawrence v. Wells Fargo Bank, N.A., 2014 WL 2705425, at *12 (N.D.

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Cal. June 13, 2014) (finding that plaintiff had “not pled any

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facts in support of [his UCL] claim” where plaintiff alleged that

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the bank “failed to provide a Single Point of Contact who was

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prepared to dismiss [sic] foreclosure prevention alternatives

No facts explain who the points of contact

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See Mann,

Without any such factual

Cf.

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2

with Plaintiff”).
Although this claim is insufficient as pled, the Court must

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grant leave to amend.

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Plaintiff’s section 2923.7 claim is not fatally contradicted by

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judicially noticed documents.

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that Plaintiff’s claim “is belied by” a declaration (filed in

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support of Plaintiff’s application for a temporary restraining

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order in state court) in which Plaintiff stated, “Shane Gowitt is

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my designated point of contact.”

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Contrary to Defendant’s representations,

In particular, Defendant argues

Reply at 2:27; RJN Exh. 9 ¶ 8.

First of all, the Court may not judicially notice the

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purported fact that Defendant properly appointed Shane Gowitt as

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Plaintiff’s single point of contact, as Defendant urges.

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v. City of Los Angeles, 250 F.3d 668, 689 (9th Cir. 2001)

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(reiterating that a court “may not take judicial notice of

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disputed facts stated in public records”) (emphasis in original).

See Lee

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Even if the Court could notice it, that fact does not

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fatally contradict Plaintiff’s allegation that he was shuffled

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between different points of contact in violation of section

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2923.7.

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Plaintiff’s point of contact, it still could have violated

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section 2923.7 by "us[ing] multiple points of contact[,]” as

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Plaintiff alleges.

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previously) reassigned the point of contact.

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2014 U.S. Dist. LEXIS 15111, at *12-*14.

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other individuals improperly interact with Plaintiff instead of

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Shane Gowitt.

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2508090, at *3, *10 (N.D. Cal. June 3, 2014) (denying motion to

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dismiss section 2923.7 claim where plaintiff alleged that “[w]hen

Namely, even if Defendant assigned Shane Gowitt as

For instance, it could have subsequently (or
See, e.g., Mann,

Or it could have had

See, e.g., Mungai v. Wells Fargo Bank, 2014 WL

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[she] attempted to contact Goode[,] [her designated point of

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contact], she was referred to other Wells Fargo representatives,

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none of which [sic] could apprise Plaintiff of the status of her

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loan modification application and all of whom referred Plaintiff

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to Goode”).

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section 2923.7 pleadings “without contradicting any of the

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allegations of [his] original complaint.”

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Supp. 2d at 1095.

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Plaintiff could therefore cure the defects in his

Plascencia, 583 F.

Accordingly, the Court GRANTS WITH LEAVE TO AMEND

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Defendant’s motion to dismiss the first cause of action as it

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relates to California Civil Code section 2923.7.

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c.

“Robosigning” in violation of California
Civil Code § 2924.17

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Defendant seeks to dismiss Plaintiff’s claim that Colleen

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Irby “robosign[ed]” the assignment of Plaintiff’s deed of trust

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on the basis that he has not pled “harm[].”

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Mot. at 6.

HBOR directs that “[b]efore recording or filing [certain

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documents including the assignment of a deed of trust], a

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mortgage servicer shall ensure that it has reviewed competent

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and reliable evidence to substantiate the borrower’s default and

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the right to foreclose, including the borrower’s loan status and

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loan information.”

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conduct such review before signing is known as “robo-signing.”

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Michael J. Weber Living Trust v. Wells Fargo Bank, N.A., 2013

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U.S. Dist. LEXIS 41797, at *10 (N.D. Cal. Mar. 25, 2013).

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borrower may bring a cause of action for injunctive relief based

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on robosigning allegations prior to foreclosure sale.

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Code § 2924.12(a).

Cal. Civ. Code § 2924.17.

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Failing to

A

Cal. Civ.

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To support its argument for dismissal for failure to plead

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harm, Defendant cites Nastrom v. New Century Mortg. Corp., 2012

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U.S. Dist. LEXIS 79929 (E.D. Cal. June 8, 2012).

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has failed to persuade this Court that the harm requirement

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discussed in Nastrom applies to claims under section 2924.17.

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But Defendant

The whole of the relevant reasoning in Nastrom states,

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“Plaintiffs offer no factual allegations (or legal theory)

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indicating how the alleged robo-signing of documents which

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assigned the subject loans harmed Plaintiffs.

The robo-signing

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allegations do not relate to any notice of default or otherwise

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demonstrate that Plaintiffs were somehow defrauded or harmed by

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the loan assignments.”

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any cases and leaves unclear the origin of this harm

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requirement.

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Id. at *15-*16.

Nastrom does not cite

Defendant is correct in the sense that prior to HBOR,

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plaintiffs were required to show harm or prejudice to proceed on

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a robosigning claim.

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228 Cal.App.4th 1020, 1037 (2014), rev. filed (Sept. 23, 2014)

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(noting the “prevailing view” that a plaintiff generally “lacks

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standing to contest the validity of a robo-signature, because

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his foreclosure was the result of not making payments and

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entering default, such that he did not suffer an injury as a

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result of the assignment of deed of trust”) (quoting Bennett v.

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Wells Fargo Bank, N.A., 2013 WL 4104076, at *5-*6 (N.D. Cal.

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Aug. 9, 2013)) (quotation marks omitted).

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included a provision specifically granting a private cause of

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action to borrowers in cases where loan servicers engaged in

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robosigning and certain other violations of sections 2923 and

See Mendoza v. JPMorgan Chase Bank, N.A.,

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However, HBOR

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2924.

This provision reads:
(1) . . . [A] borrower may bring an action for
injunctive relief to enjoin a material violation of
[various statutes including section 2924.17].
(2) Any injunction shall remain in place and any
trustee's sale shall be enjoined until the court
determines that the mortgage servicer, mortgagee,
trustee, beneficiary, or authorized agent has
corrected and remedied the violation or violations
giving rise to the action for injunctive relief. An
enjoined entity may move to dissolve an injunction
based on a showing that the material violation has
been corrected and remedied.

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9
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Cal. Civ. Code § 2924.12(a).
Notably, this language does not include a requirement that

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a plaintiff demonstrate harm or injury.

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indicates that no showing of harm is required.

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The plain meaning thus

The parties have also failed to cite any cases indicating

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that section 2924.12 incorporates the pre-HBOR harm requirement.

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To the contrary, the legislature intended HBOR to alter the

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nonjudicial foreclosure process and increase enforcement

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opportunities.

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economic health of this state to mitigate the negative effects

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on the state and local economies and the housing market that are

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the result of continued foreclosures by modifying the

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foreclosure process to ensure that borrowers who may qualify for

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a foreclosure alternative are considered for, and have a

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meaningful opportunity to obtain, available loss mitigation

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options.”); Vasquez v. Bank of Am., N.A., 2013 WL 6001924, at *7

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(N.D. Cal. Nov. 12, 2013) (“[The] pre-HBOR cases cited by

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Defendants discussing the defunct version of 2923.6 have little,

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if any, applicability to . . . the now-applicable law.

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even more importantly, HBOR also added Section 2924.12 . . . .

See Cal. SB 900 § 1 (“It is essential to the

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Perhaps

1

Section 2924.12 expressly provides that borrowers may bring an

2

action based on a violation of the new Section 2923.6[.]”).

3

The Court holds therefore that Plaintiff need not plead

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harm to make a claim under section 2924.12(a) for a violation of

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section 2924.17.

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includes no such requirement and the Court declines to read one

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in.

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they have not required a showing of harm.

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Bank Nat’l Ass’n, 2014 WL 1648619, at *7 (N.D. Cal. Apr. 24,

The plain language of section 2924.12(a)

To the extent that other courts have addressed the issue,
See Rothman v. U.S.

10

2014) (denying motion to dismiss section 2924.17 claim, but

11

granting motion to dismiss other claims because plaintiff did

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not plead harm); Copeland v. Ocwen Loan Servicing, LLC, 2014 WL

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304976, at *5 (C.D. Cal. Jan. 3, 2014) (“Defendants also argue

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that [plaintiff] has no claim under [HBOR] because he has

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suffered no damages . . . .

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that he incurred damages.

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statutory damages in the event of a violation.”) (citing Cal.

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Civ. Code § 2924.12) (citations to the record omitted).

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Court therefore declines to dismiss Plaintiff’s claim on this

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basis.

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However, [plaintiff] does claim
And what's more, [HBOR] provides for

The

The Court notes that although section 2924.12(a) does not

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have a “harm” requirement, it only allows actions for “material”

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violations of 2924.17.

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Defendant has not argued that the alleged violations were not

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material.

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materiality requirement: Johnson v. PNC Mortgage, 2014 WL

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3962662, at *13 (N.D. Cal. Aug. 12, 2014).

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cites this case only in its reply, and for a different

See Cal. Civ. Code § 2924.12(a)(1).

Defendant does cite one case that discusses the

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However, Defendant

1

proposition.

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that allegations similar to Plaintiff’s were conclusory).

3

Defendant’s brief does not mention materiality or section

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2924.12, but it then states, “Furthermore, the [Johnson] court

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noted that even if plaintiffs’ [robosigning] theory were

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correct, ‘the assignment would not have changed their payment

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obligations.

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future encumbrancers and purchasers (but not Pliantiffs).’”

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Reply at 2:15-18 (quoting Johnson, 2014 3962662, at *13).

10

See Reply at 2:12-19 (arguing that Johnson held

It would have affected the lender and notice to

Even if Defendant’s discussion of Johnson were enough to

11

raise the materiality issue, the Court need not reach it and

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declines to do so here.

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(9th Cir. 2007) (“The district court need not consider arguments

14

raised for the first time in a reply brief.”) (citing Koerner v.

15

Grigas, 328 F.3d 1039, 1048 (9th Cir. 2003)).

16

See Zamani v. Carnes, 491 F.3d 990, 997

Moving to Defendant’s other arguments for dismissal,

17

Defendant contends that the section 2924.17 allegations are

18

conclusory and lack factual support.

19

agrees.

Mot. at 4-5.

The Court

20

The complaint states that Defendant violated section

21

2924.17 “by having, Colleen Irby, a CRC employee, robosign the

22

Corporate Assignment of the Deed of Trust.”

23

only factual allegation supporting this claim is that “on

24

information and belief[,] [] Colleen Irby is an employee of CRC,

25

not JP Morgan Chase and is, in face [sic], a ‘robo-signer.’”

26

Compl. ¶ 21.

27
28

Compl. ¶ 34.

Such “bare assertion[s]” are insufficient.

The

See Johnson,

2014 WL 3962662, at *13 (dismissing section 2924.17 claim that
15

1

alleged that a document was “robosigned without reliance on

2

competent or reliable evidence to substantiate the right to

3

foreclose” in part because “the critical allegations — that

4

Commonwealth never assigned its interest to any party to the

5

assignment and that PNC ‘robosigned’ the assignment — are made

6

entirely on information and belief”); Baldoza v. Bank of Am.,

7

N.A., 2013 U.S. Dist. LEXIS 34323, at *37 (N.D. Cal. Mar. 12,

8

2013) (dismissing robosigning claim where plaintiff alleged, “on

9

information and belief, [that] Muradyan, a known robo-signer,

10

was not an employee of MERS but instead was employed by

11

Defendant BOA”); Sohal v. Federal Home Loan Mortg. Corp., 2011

12

WL 3842195, at *5 (N.D. Cal. Aug. 30, 2011) (granting motion to

13

dismiss in part because “Plaintiffs [did] not allege[] facts

14

setting forth the basis on which they [were] informed and

15

believe [the robosigning] allegations [were] true”).

16

Plaintiff argues that his allegations do suffice, citing

17

Mena v. JP Morgan Chase Bank, N.A., 2012 U.S. Dist LEXIS 128585

18

(N.D. Cal. Sept. 7, 2012).

19

involved “facts identical to the case at bar.”

20

But the Court finds Mena distinguishable in multiple ways.

21

According to Plaintiff, Mena
Opp. at 4:21.

First, Mena involved allegations of robosigning in support

22

of a slander of title claim, not a claim related to section

23

2924.17 or other statutorily-required due diligence.

24

*13.

25

Id. at

Second, the Mena plaintiffs’ allegations were more

26

thoroughly pled than the complaint here.

27

asserted that “the signatures on the relevant documents [were]

28

of ‘robo-signers’ who lacked the legal capacity to sign . . . .
16

The Mena plaintiffs

1

For example, "Deborah Brignac" [was] a ‘robo-signer’ whose name

2

appear[ed] on documents for different companies.”

3

*14 (citing complaint alleging instances where Brignac signed as

4

“Vice President” of two different companies).

5

Id. at *13-

In contrast, the complaint here does not allege that

6

Colleen Irby did not have authority to sign, nor that she failed

7

to conduct the due diligence required by section 2924.17.

8

Although this Court must take as true Plaintiff’s allegation

9

that Colleen Irby was an “employee of CRC, not JP Morgan Chase,”

10

Compl. ¶ 21, the Court need not infer that Irby therefore had no

11

authority to sign or that she did not conduct statutorily-

12

required due diligence.

13

Trust Co., 2013 WL 593671, at *6 (E.D. Cal. Feb. 14, 2013)

14

(“‘The mere fact that Derborah Brignac was not an employee of

15

JPMorgan and Colleen Irby was not an employee of CRC does not

16

give rise to a reasonable inference that they did not have the

17

authority to sign documents on behalf of those companies.’”)

18

(quoting Couch v. JPMorgan Chase Bank, N.A., No. CV 11-8710-GHK,

19

at *5 (C.D. Cal May 14, 2012)).

20

See Halajian v. Deutsche Bank Nat.

Plaintiff attempts to elaborate on his robosigning

21

allegations in his opposition.

See Opp. at 4 (citing Glaski v.

22

Bank of Am., N.A., 218 Cal.App.4th 1079, 1086 n.8 (2013) for the

23

proposition that Colleen Irby previously signed a document as

24

“assistant secretary” for another company).

25

consider only the complaint and judicially noticed documents in

26

evaluating the sufficiency of a claim upon a motion to dismiss.

27

See Mayer v. Wedgewood Neighborhood Coal., 707 F.2d 1020, 1021

28

(9th Cir. 1983).
17

But the Court may

1

In sum, Plaintiff is correct that section 2924.17 was

2

intended to address “robosigning.”

See Michael J. Weber Living

3

Trust, 2013 U.S. Dist. LEXIS 41797, at *10.

4

allegations are insufficient.

But as pled, his

5

For these reasons, the Court GRANTS WITH LEAVE TO AMEND

6

Defendant’s motion to dismiss Plaintiff’s claim under California

7

Civil Code section 2924.17.

8

2.

9

Second Cause of Action: Wrongful Foreclosure

Plaintiff’s second claim alleges wrongful foreclosure on

10

the basis of California Civil Code section 2924(a)(6).

11

Defendant argues that the Court should dismiss this claim

12

because a foreclosure sale has not yet occurred.

13

Indeed, Plaintiff’s claim fails because there has been no

14

sale.

“In at least some circumstances, California courts have

15

allowed wrongful foreclosure claims to proceed even when there

16

was not actual foreclosure.”

17

Servicing, Inc., 2010 U.S. Dist. LEXIS 5671, at *40 (E.D. Cal.

18

Jan. 5, 2010) (citing Garretson v. Post, 156 Cal.App.4th 1508,

19

1514 (2007)); see, e.g., Pfiefer v. Countrywide Home Loans,

20

Inc., 211 Cal.App.4th 1250, 1281 (2012) (allowing foreclosure

21

action prior to sale where plaintiff alleged violations of HUD

22

servicing requirements).

23

based on chain of title defects are premature if brought before

24

sale.

25

Dist. LEXIS 151873, at *8-*9 (E.D. Cal. Oct. 22, 2013); Manzano

26

v. MetLife Bank N.A., 2011 U.S. Dist LEXIS 56316, at *20 (E.D.

27

Cal. May 24, 2011); Rosenfeld v. JPMorgan Chase Bank, N.A., 732

28

F. Supp. 2d 952, 961 (N.D. Cal 2010); Rossberg v. Bank of Am.,

Baldain v. Am. Home Mortg.

But most courts hold that such claims

See, e.g., Pugh v. JPMorgan Chase Bank, N.A., 2013 U.S.

18

1

N.A., 219 Cal.App.4th 1481, 1493 (2013), rev. denied (Nov. 26,

2

2013) (citing Jenkins v. JP Morgan Chase Bank, N.A., 216

3

Cal.App.4th 497, 511-513 (2013); Gomes v. Countrywide Home

4

Loans, Inc., 192 Cal.App.4th 1149, 1154-56 (2011)).

5

Plaintiff has not pled that Defendant has already

6

instituted a foreclosure sale.

Therefore, Plaintiff’s wrongful

7

foreclosure claim is premature and the Court must dismiss it.

8

Furthermore, amendment would be futile, because the complaint

9

acknowledges that no sale has occurred.

See Compl. at 9 ¶ 1

10

(seeking an injunction from this court prohibiting such sale).

11

Accordingly, the Court GRANTS WITHOUT LEAVE TO AMEND

12

Plaintiff’s second cause of action.

13

the second claim on this basis, the Court does not reach the

14

other issues presented by the parties, including Plaintiff’s

15

ability to tender outstanding debt, whether Defendant in fact

16

had authority to foreclose and to what extent it was required to

17

verify such authority.

18

3.

19

Resolving this motion as to

Third Cause of Action: Violation of UCL

Plaintiff’s third claim asserts that Defendant engaged in

20

unlawful and unfair business practices under the UCL by

21

“violat[ing] [] HBOR” and “fail[ing] to ensure it ha[d] a

22

beneficial interest in the Subject Property prior to initiating

23

foreclosure proceedings.”

24

Compl. ¶¶ 43-44.

Defendant argues that Plaintiff does not have standing to

25

raise this UCL claim.

26

fails to demonstrate standing.

27
28

Defendant is correct that the complaint

A plaintiff may bring an action under the UCL only if he
has “suffered injury in fact and has lost money or property as a
19

1

result of the unfair competition.”

2

§ 17204.

3

preserved standing for those who had had business dealings with

4

a defendant and had lost money or property as a result of the

5

defendant’s unfair business practices.”

6

Inc., 49 Cal.4th 748, 788 (2010) (emphasis omitted).

7

standing, a plaintiff must “(1) establish a loss or deprivation

8

of money or property sufficient to qualify as injury in fact,

9

i.e., economic injury, and (2) show that that economic injury

Cal. Bus. & Prof. Code

The amendment adding this language to the UCL “plainly

Clayworth v. Pfizer,
To show

10

was the result of, i.e., caused by, the unfair business practice

11

or false advertising that is the gravamen of the claim.”

12

Kwikset Corp. v. Superior Court, 51 Cal.4th 310, 322 (2011)

13

(emphasis in original).

14

Plaintiff cites three cases to support his contention that

15

he has standing, Opp. at 10, however all three were decided

16

before Kwikset and none acknowledges or applies the causation

17

requirement.

18

Mortg., Inc., 2009 WL 3045812, at *2 (C.D. Cal. Sept. 21, 2009);

19

Sullivan v. Wash. Mutual Bank, FA, 2009 WL 3458300, at *5 (N.D.

20

Cal. Oct. 23, 2009).

21

home to foreclosure constitutes an injury, and for this

22

proposition the Court agrees with Plaintiff.

23

these cases consider whether defendants’ actions — rather than

24

the plaintiffs’ own failures to keep current on their loans —

25

was the cause of the loss.

26

See Rosenfeld, 732 F. Supp. 2d at 973; Rabb v. BNC

Each reiterates that imminent loss of a

However, none of

The Court relies instead on a post-Kwikset case involving

27

similar allegations to those advanced in this case, including

28

lack of authority to foreclose, defects in the chain of title,
20

1

and robosigning.

2

Jenkins, the plaintiff’s home was in foreclosure proceedings,

3

but there had been no sale.

4

that “[i]f such proceedings [were] pursued to their completion,

5

[the plaintiff’s] interest in her property [would] be

6

extinguished.”

7

interest in her home, the plaintiff met her “minimal” burden in

8

pleading Kwikset’s first prong.

9

See Jenkins, 216 Cal.App.4th at 510, 519.

Id.

Id. at 522.

In

The court reasoned

Based on the prospect of losing a property

Id.

As to the second prong, the court held that the plaintiff

10

failed to plead that the defendant’s behavior caused her injury.

11

Id. at 523.

12

make payments culminating in default — and not any wrongful act

13

by the defendant — had caused the imminent loss of her home.

14

Id.

The court reasoned that the plaintiff’s failure to

Therefore, she could not demonstrate a “causal link.”

Id.

15

Here, as in Jenkins, Plaintiff has pled an economic injury:

16

imminent loss of his property rights in his house if foreclosure

17

proceedings are to proceed.

18

Jenkins, Plaintiff fails to establish a causal link between

19

Defendant’s actions and his property loss.

20

See Compl. ¶¶ 22, 26.

Also as in

Plaintiff argues that he has shown causation because

21

Defendant’s “improper initiation of the foreclosure process . . .

22

harm[ed] Plaintiff.”

23

the foreclosure process was triggered by Plaintiff’s default.

24

See Compl. ¶ 22.

25

“improper initiation” of foreclosure, Plaintiff still would have

26

defaulted, resulting in a lawful foreclosure.

27

Cal.App.4th at 523 (“Jenkins’s default triggered the lawful

28

enforcement of the power of sale clause in the deed of trust, and

Opp. at 10:13-15 (citing Compl. ¶ 44).

But

Even in the absence of Defendant’s alleged

21

See Jenkins, 216

1

it was the triggering of the power of sale clause that subjected

2

Jenkins’s home to nonjudicial foreclosure.”).

3

Nor did the other allegedly unfair practices, as pled,

4

cause Plaintiff’s default.

The complaint contains no facts

5

indicating that robosigning caused the default.

6

complaint eliminates this possibility, as the alleged

7

robosigning appears to have occurred after Plaintiff became

8

unable to pay his mortgage.

9

Colleen Irby robosigned a document on the same day that

In fact, the

See Compl. ¶¶ 21-22 (alleging that

10

Defendant issued a notice of default).

11

violation of failing to provide notice about documents occurred

12

after default.

13

such notice to be sent with the notice of default).

14

Similarly, the alleged

See Cal. Civ. Code § 2923.55(a) & (b) (requiring

Therefore, Plaintiff lacks standing to bring a UCL claim on

15

these bases, and it cannot be remedied upon amendment.

16

Jenkins, 216 Cal.App.4th at 523-24 (denying leave to amend

17

because alleged UCL violations occurred after plaintiff

18

defaulted on her loan, so there was no possibility that she

19

could establish causation upon amendment).

20

accordingly GRANTS WITHOUT LEAVE TO AMEND Defendant’s motion as

21

to these bases for the UCL cause of action.

22

the Court does not reach Defendant’s argument that the “unfair”

23

prong is not satisfied by the robosigning allegations.

24

See

The Court

Given this result,

As to Plaintiff’s final basis for his UCL claim, Plaintiff

25

has not explained how failure to establish a single point of

26

contact could have caused his default.

27

bases discussed above, failure to provide a single point of

28

contact could be an ongoing violation that potentially predated
22

But unlike the other

1

— and potentially contributed to — his default.

2

Wells Fargo Bank, N.A., 2014 WL 2754596, at *12-*13 (N.D. Cal.

3

June 11, 2014).

4

but allows LEAVE TO AMEND as the UCL claim relates to failure to

5

provide a single point of contact.

6

See Penermon v.

Therefore, the Court GRANTS Defendant’s motion,

Defendant’s final argument is that Plaintiff cannot show a

7

violation of a predicate statute.

Mot. at 10.

The Court

8

reaches this issue only as to the UCL claim relating to failure

9

to provide a single point of contact, because the other bases

10

for this claim are dismissed without leave to amend.

11

disagrees with Defendant’s argument, because the predicate HBOR

12

violation of section 2923.7 has survived the motion to dismiss.

13

See supra § II.C.1.a (denying motion to dismiss the first cause

14

of action).

The Court

15
16
17

4.

Defendant’s request to expunge lis pendens

Defendant argues that “if this Court grants Defendant’s

18

Motion to Dismiss, expungement of Plaintiff’s recorded lis

19

pendens is also appropriate.”

20

above, the Court partially grants but partially denies

21

Defendant’s motion to dismiss.

22

request for expungement.

Mot. at 12:4-5.

As discussed

Therefore, it denies Defendant’s

23
24
25

III.

ORDER

The Court DENIES Defendant’s motion to dismiss as it relates

26

to Plaintiff’s first cause of action for violation of California

27

Civil Code section 2923.55.

28

Defendant’s motion as to the remainder of the first cause of

The Court GRANTS WITH LEAVE TO AMEND

23

1

action and as to the third cause of action as it relates to

2

failing to provide a single point of contact.

3

GRANTS WITHOUT LEAVE TO AMEND Plaintiff’s second cause of action

4

and the remainder of the third cause of action.

5

Finally, the Court

Plaintiff must file his amended complaint within twenty (20)

6

days from the date of this order.

7

pleading is due within twenty (20) days thereafter.

8
9

IT IS SO ORDERED.
Dated: November 10, 2014

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Defendant’s responsive