McMahon v. JPMorgan Chase Bank, N.A. et al

Filing 64

ORDER denying 52 Motion for Reconsideration signed by District Judge John A. Mendez on 8/23/17. (Kaminski, H)

Download PDF
1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 11 GORDON MCMAHON, an individual; No. 2:16-cv-1459-JAM-KJN 12 Plaintiff, 13 ORDER DENYING PLAINTIFF’S MOTION FOR RECONSIDERATION v. 14 15 16 JPMORGAN CHASE BANK, N.A.; SELECT PORTFOLIO SERVICING, INC.; and DOES 1 through 10 inclusive, 17 Defendants. 18 This Court issued an order on April 26, 2017 granting in 19 20 part and denying in part Defendant Select Portfolio Servicing’s 21 (“SPS”) motion to dismiss Plaintiff Gordon McMahon’s (“McMahon”) 22 First Amended Complaint (“FAC”). 23 McMahon now asks the Court to reconsider its 4/26/2017 Order. 24 Mot. for Recons. (“Mot.”), ECF No. 52. 25 Opp’n, ECF No. 59. 1 4/26/2017 Order, ECF No. 44. SPS opposes the motion. 26 27 28 1 This motion was determined to be suitable for decision without oral argument. E.D. Cal. L.R. 230(g). The hearing was scheduled for July 11, 2017. 1 1 I. 2 FACTS AND PROCEDURAL BACKGROUND McMahon sued SPS and JPMorgan Chase Bank (“Chase”) seeking 3 to save his home from foreclosure. McMahon alleges seven causes 4 of action in his FAC: (1) violation of the Homeowners Bill of 5 Rights (“HBOR”) at California Civil Code 2 Section 2924.12, (2) 6 violation of the Equal Credit Opportunity Act (“ECOA”) at 15 7 U.S.C. § 1691(d)(1), (3) violation of the Real Estate Settlement 8 Procedures Act (“RESPA”) at 12 U.S.C. § 2605(e), (4) violation of 9 Regulation X at 12 C.F.R. Section 1024.41, (5) violation of 10 Regulation X at 12 C.F.R. Sections 1024.35, 1024.36, (6) 11 negligence, and (7) violation of California Business and 12 Professions Code Section 17200. 13 brought his third claim against only Chase. 14 Court dismissed McMahon’s case against Chase entirely. 15 Order at 12, ECF No. 54. 16 first, second, and fourth claims against SPS with prejudice. 17 4/26/2017 Order at 13. 18 its 4/26/2017 Order and denied SPS’s motion to dismiss McMahon’s 19 second claim. 20 asks the Court to reconsider its dismissal of McMahon’s first and 21 fourth claims against SPS. 3 FAC at 1, ECF No. 26. FAC at 21. McMahon The 5/31/2017 The Court also dismissed McMahon’s About a month later, the Court revised 5/25/2017 Order at 4, ECF No. 53. Now, McMahon 22 23 /// 24 /// 25 2 26 27 28 Unless otherwise indicated, all section references are to the California Civil Code. 3 McMahon also asked the Court to reconsider its dismissal of his second claim, but that request became moot after the Court issued its 5/25/2017 Order. 2 1 II. OPINION 2 A. Legal Standard 3 A court should not revisit its own decisions unless 4 extraordinary circumstances show a prior decision was wrong. 5 States Ins. Co. v. Ins. Co. of Penn., No. 2:12-cv-01489-MCE-AC, 6 2017 WL 1174726, at *1 (E.D. Cal. Mar. 28, 2017). 7 principle, a court may revise an order at any time before a final 8 entry of judgment. 9 L.R. 230(j). Am. Despite this Fed. R. Civ. P. 54(b); see also E.D. Cal. Where a party seeks reconsideration of a non-final 10 order, the court has inherent jurisdiction to modify, alter, or 11 revoke it. 12 States v. Martin, 226 F.3d 1042, 1048–49 (9th Cir. 2000)). 13 court should reconsider a ruling when (1) there has been an 14 intervening change in controlling law, (2) new evidence has 15 become available, or (3) it is necessary to correct clear error 16 or prevent manifest injustice. 17 for reconsideration to relitigate old matters or raise arguments 18 he could have asserted earlier in the litigation. 19 CashCall, Inc., 56 F. Supp. 3d 1105, 1107 (N.D. Cal. 2014). 20 succeed, a party must set forth facts or law of a strongly 21 convincing nature to induce the court to reverse its prior 22 decision.” 23 5200906, at *2 (E.D. Cal. Dec. 15, 2010). 24 25 26 B. Am. States, 2017 WL 1174726, at *1 (citing United Id. A A party may not use a motion De La Torre v. “To Knight v. Rios, No. 1:09-cv-00823-AWI-JLT, 2010 WL Analysis 1. First Cause of Action The Court dismissed McMahon’s first claim to the extent it 27 was brought under Sections 2923.55, 2924.17, and 2923.6. 28 4/26/2017 Order at 4. McMahon does not ask the Court to 3 1 reconsider its dismissal of this claim based on Sections 2 2923.55, 2924.17, and 2923.6(c). 3 requests the Court reconsider its dismissal of his claim based 4 on Section 2923.6(f). 5 Mot. at 6. McMahon only Id. Section 2923.6(f)(2) states that “[f]ollowing the denial of 6 a first lien loan modification application, the mortgage 7 servicer shall send a written notice to the borrower identifying 8 the reasons for the denial, including . . . [i]f the denial was 9 based on investor disallowance, the specific reasons for the 10 11 investor disallowance.” Cal. Civ. Code § 2923.6(f)(2). The Court dismissed McMahon’s Section 2923.6(f)(2) claim 12 for two reasons. 13 respond to SPS’s argument that Section 2923.6 did not apply 14 because SPS recorded the Notice of Trustee’s Sale before McMahon 15 sent in his loan application. 16 expressly indicate “in the FAC when the alleged § 2923.6 17 violation occurred,” and failed to “clarify whether any § 2923.6 18 violation occurred in the context of the June 6, 2016 Notice of 19 Trustee’s Sale or at some other point.” 20 4/26/2017 Order at 5. Id. First, McMahon did not Second, McMahon did not Id. McMahon asserts the Court should reconsider this ruling 21 because (1) there has been an intervening change in controlling 22 law, and (2) reconsideration is necessary to prevent manifest 23 injustice. Mot. at 6-9. 24 McMahon first contends that Berman v. HSBC Bank USA, N.A., 25 11 Cal. App. 5th 465, 473 (Cal. Ct. App. Apr. 11, 2017)—decided 26 by a California appellate court about a week after the hearing 27 date for SPS’s motion to dismiss—constitutes an intervening 28 change in controlling law. Mot. at 6-7. 4 McMahon argues Berman 1 shows “that a failure to provide a denial letter containing 2 proper information is a violation of Section 2923.6(f) and is, 3 by itself, sufficient to support a cause of action.” 4 3. 5 servicer’s error in telling the borrower he had fifteen days to 6 appeal, rather than thirty days. 7 Berman neither “reference[s] . . . subsection (f)(2) of Section 8 2923.6, nor . . . discuss[es] investor disallowance as a reason 9 for denial.” 10 Reply at SPS argues in opposition that Berman discusses only the Opp’n at 4. SPS contends Id. The Court finds SPS’s argument more convincing. Berman 11 concerned a servicer misinforming a borrower regarding the 12 number of days he had to appeal a denial of a loan modification. 13 Berman, 11 Cal. App. 5th at 467. 14 subsection (f)(2) at all, and the Court does not find Berman to 15 constitute a sufficient “intervening change in controlling law” 16 to warrant reconsideration of its dismissal of McMahon’s Section 17 2923.6(f) claim. 18 Berman did not address Next, McMahon argues the Court’s dismissal of his Section 19 2923.6(f)(2) claim was manifestly unjust because “the FAC 20 contains allegations that indicate when SPS and Chase failed to 21 comply with section 2923.6(f)(2)”. 22 that even if McMahon does identify precisely when SPS allegedly 23 failed to comply with Section 2923.6(f)(2), McMahon cannot 24 succeed on the claim because any violation of Section 25 2923.6(f)(2) was immaterial. 26 alleged Section 2923.6(f)(2) violation is “material because 27 based on the U.S. Treasury online NPV calculator, Plaintiff 28 qualifies for a HAMP modification.” Mot. at 8-9. Opp’n at 4. 5 SPS responds McMahon asserts SPS’s Reply at 3. But the U.S. 1 Treasury’s website cautions that “it is important to understand 2 that provides only an estimate of a mortgage 3 servicer’s NPV evaluation.” 4 Questions,, 5 (last 6 visited Aug. 22, 2017). 7 that its website provides “only an estimate,” this Court 8 declines to find that any output from this website can support 9 the sole basis for alleging that a violation of Section 10 11 Frequently Asked Given the U.S. Treasury’s indication 2923.6(f)(2) was material. Because McMahon cannot show any violation of Section 12 2923.6(f)(2) was material or that dismissing this claim is 13 “manifestly unjust,” the Court declines to reconsider its 14 dismissal of McMahon’s Section 2923.6(f)(2) claim. 15 dismissal of McMahon’s Section 2923.6 in its entirety stands. 16 17 2. The Court’s Fourth Cause of Action McMahon also asks the Court to reconsider its dismissal of 18 his fourth claim for violation of 12 C.F.R. § 1024.41 19 (“Regulation X”). 20 Mot. at 11. Regulation X requires a servicer acknowledge receipt of a 21 “loss mitigation application” and indicate whether the 22 application is complete or incomplete within 5 days of receiving 23 the application. 24 dismissed McMahon’s fourth claim because in a previous state 25 court complaint McMahon alleged that SPS acknowledged his 26 submission of documents. 27 28 12 C.F.R. § 1024.41(b)(2)(i). The Court 4/26/2017 Order at 8. McMahon argues “Section 1024.41 requires that the five-day notice both acknowledge receipt of the application and state 6 1 whether the application is complete or incomplete in the same 2 notice.” 3 admission from the state court complaint states that the 4 servicer acknowledged receipt of the application within five 5 days but did not tell McMahon whether the application was 6 complete until several weeks later. 7 the Court erred in taking judicial notice of McMahon’s admission 8 in his state court complaint. 9 Mot. at 11 (emphasis in original). Id. McMahon argues the McMahon also argues Id. at 12. SPS substantively opposes McMahon’s arguments, but the 10 Court need not consider those arguments because McMahon cannot 11 use this motion to re-litigate substantive legal issues that the 12 Court has already considered and ruled upon. 13 Nutraceuticals, Inc. v. Mucos Pharma GmbH & Co., 571 F.3d 873, 14 880 (9th Cir. 2009) (“A motion for reconsideration may not be 15 used to raise arguments or present evidence for the first time 16 when they could reasonably have been raised earlier in the 17 litigation.”) (emphasis in original). 18 opportunity to present these same arguments in opposition to 19 SPS’s motion to dismiss. 20 Dismiss at 9-10, ECF No. 36. 21 request for judicial notice with its motion to dismiss, asking 22 the Court to take judicial notice of McMahon’s admission in his 23 state court complaint. 24 No. 31. 25 to SPS’s request for judicial notice. 26 McMahon cannot ask for reconsideration of his fourth claim 27 simply because he failed to make certain arguments earlier in 28 the litigation. He did not. See Marlyn McMahon already had the See Opp’n to Mot. to Additionally, SPS submitted a Req. for Judicial Notice, Exh. 8, ECF McMahon had the opportunity to either oppose or object Again, he did not. The Court denies McMahon’s request for 7 1 reconsideration of his fourth claim. 2 3. Sanctions 3 McMahon’s counsel “requests that the Courty (sic) vacate 4 the order imposing sanctions, though Plaintiff’s counsel does 5 not request return of the $250.” 6 have “considerable latitude in managing the parties’ motion 7 practice and enforcing local rules that place parameters on 8 briefing.” 9 Cir. 2002); see also Green v. Cal. Court Apartments LLC, 321 F. Mot. at 14. District courts Christian v. Mattel, Inc., 286 F.3d 1118, 1129 (9th 10 App’x 589, 591 (9th Cir. 2009) (“The district court did not 11 abuse its discretion by striking appellants’ motion to compel 12 discovery because it exceeded the page limit.”); Snyder v. HSBC 13 Bank, USA, N.A., 913 F. Supp. 2d 755, 766 (D. Ariz. 2012) 14 (reviewing the discretion of federal district courts in 15 enforcing sanctions for violations of page limits and citing 16 several appellate cases upholding district courts’ use of that 17 discretion). 18 denies his request to vacate the sanctions order. The Court has considered counsel’s arguments and 19 20 21 III. ORDER For the reasons set forth above, the Court DENIES McMahon’s 22 motion for reconsideration and request to vacate the sanctions 23 order. 24 IT IS SO ORDERED. 25 Dated: August 23, 2017 26 27 28 8

Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.

Why Is My Information Online?