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)

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UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF CALIFORNIA

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GORDON MCMAHON, an
individual;

No.

2:16-cv-1459-JAM-KJN

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Plaintiff,
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ORDER DENYING PLAINTIFF’S MOTION
FOR RECONSIDERATION

v.
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JPMORGAN CHASE BANK, N.A.;
SELECT PORTFOLIO SERVICING,
INC.; and DOES 1 through 10
inclusive,

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Defendants.

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This Court issued an order on April 26, 2017 granting in

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part and denying in part Defendant Select Portfolio Servicing’s

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(“SPS”) motion to dismiss Plaintiff Gordon McMahon’s (“McMahon”)

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First Amended Complaint (“FAC”).

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McMahon now asks the Court to reconsider its 4/26/2017 Order.

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Mot. for Recons. (“Mot.”), ECF No. 52.

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Opp’n, ECF No. 59. 1

4/26/2017 Order, ECF No. 44.

SPS opposes the motion.

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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 July 11, 2017.
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I.

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FACTS AND PROCEDURAL BACKGROUND

McMahon sued SPS and JPMorgan Chase Bank (“Chase”) seeking

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to save his home from foreclosure.

McMahon alleges seven causes

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of action in his FAC: (1) violation of the Homeowners Bill of

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Rights (“HBOR”) at California Civil Code 2 Section 2924.12, (2)

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violation of the Equal Credit Opportunity Act (“ECOA”) at 15

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U.S.C. § 1691(d)(1), (3) violation of the Real Estate Settlement

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Procedures Act (“RESPA”) at 12 U.S.C. § 2605(e), (4) violation of

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Regulation X at 12 C.F.R. Section 1024.41, (5) violation of

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Regulation X at 12 C.F.R. Sections 1024.35, 1024.36, (6)

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negligence, and (7) violation of California Business and

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Professions Code Section 17200.

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brought his third claim against only Chase.

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Court dismissed McMahon’s case against Chase entirely.

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Order at 12, ECF No. 54.

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first, second, and fourth claims against SPS with prejudice.

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4/26/2017 Order at 13.

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its 4/26/2017 Order and denied SPS’s motion to dismiss McMahon’s

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second claim.

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asks the Court to reconsider its dismissal of McMahon’s first and

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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

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Unless otherwise indicated, all section references are to the
California Civil Code.
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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.
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II.

OPINION

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A.

Legal Standard

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A court should not revisit its own decisions unless

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extraordinary circumstances show a prior decision was wrong.

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States Ins. Co. v. Ins. Co. of Penn., No. 2:12-cv-01489-MCE-AC,

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2017 WL 1174726, at *1 (E.D. Cal. Mar. 28, 2017).

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principle, a court may revise an order at any time before a final

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entry of judgment.

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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

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order, the court has inherent jurisdiction to modify, alter, or

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revoke it.

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States v. Martin, 226 F.3d 1042, 1048–49 (9th Cir. 2000)).

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court should reconsider a ruling when (1) there has been an

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intervening change in controlling law, (2) new evidence has

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become available, or (3) it is necessary to correct clear error

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or prevent manifest injustice.

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for reconsideration to relitigate old matters or raise arguments

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he could have asserted earlier in the litigation.

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CashCall, Inc., 56 F. Supp. 3d 1105, 1107 (N.D. Cal. 2014).

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succeed, a party must set forth facts or law of a strongly

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convincing nature to induce the court to reverse its prior

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decision.”

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5200906, at *2 (E.D. Cal. Dec. 15, 2010).

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B.

Am. States, 2017 WL 1174726, at *1 (citing United

Id.

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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

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was brought under Sections 2923.55, 2924.17, and 2923.6.

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4/26/2017 Order at 4.

McMahon does not ask the Court to
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reconsider its dismissal of this claim based on Sections

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2923.55, 2924.17, and 2923.6(c).

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requests the Court reconsider its dismissal of his claim based

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on Section 2923.6(f).

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Mot. at 6.

McMahon only

Id.

Section 2923.6(f)(2) states that “[f]ollowing the denial of

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a first lien loan modification application, the mortgage

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servicer shall send a written notice to the borrower identifying

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the reasons for the denial, including . . . [i]f the denial was

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based on investor disallowance, the specific reasons for the

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investor disallowance.”

Cal. Civ. Code § 2923.6(f)(2).

The Court dismissed McMahon’s Section 2923.6(f)(2) claim

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for two reasons.

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respond to SPS’s argument that Section 2923.6 did not apply

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because SPS recorded the Notice of Trustee’s Sale before McMahon

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sent in his loan application.

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expressly indicate “in the FAC when the alleged § 2923.6

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violation occurred,” and failed to “clarify whether any § 2923.6

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violation occurred in the context of the June 6, 2016 Notice of

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Trustee’s Sale or at some other point.”

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4/26/2017 Order at 5.

Id.

First, McMahon did not

Second, McMahon did not

Id.

McMahon asserts the Court should reconsider this ruling

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because (1) there has been an intervening change in controlling

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law, and (2) reconsideration is necessary to prevent manifest

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injustice.

Mot. at 6-9.

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McMahon first contends that Berman v. HSBC Bank USA, N.A.,

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11 Cal. App. 5th 465, 473 (Cal. Ct. App. Apr. 11, 2017)—decided

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by a California appellate court about a week after the hearing

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date for SPS’s motion to dismiss—constitutes an intervening

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change in controlling law.

Mot. at 6-7.
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McMahon argues Berman

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shows “that a failure to provide a denial letter containing

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proper information is a violation of Section 2923.6(f) and is,

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by itself, sufficient to support a cause of action.”

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3.

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servicer’s error in telling the borrower he had fifteen days to

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appeal, rather than thirty days.

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Berman neither “reference[s] . . . subsection (f)(2) of Section

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2923.6, nor . . . discuss[es] investor disallowance as a reason

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for denial.”

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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

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concerned a servicer misinforming a borrower regarding the

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number of days he had to appeal a denial of a loan modification.

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Berman, 11 Cal. App. 5th at 467.

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subsection (f)(2) at all, and the Court does not find Berman to

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constitute a sufficient “intervening change in controlling law”

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to warrant reconsideration of its dismissal of McMahon’s Section

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2923.6(f) claim.

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Berman did not address

Next, McMahon argues the Court’s dismissal of his Section

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2923.6(f)(2) claim was manifestly unjust because “the FAC

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contains allegations that indicate when SPS and Chase failed to

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comply with section 2923.6(f)(2)”.

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that even if McMahon does identify precisely when SPS allegedly

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failed to comply with Section 2923.6(f)(2), McMahon cannot

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succeed on the claim because any violation of Section

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2923.6(f)(2) was immaterial.

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alleged Section 2923.6(f)(2) violation is “material because

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based on the U.S. Treasury online NPV calculator, Plaintiff

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qualifies for a HAMP modification.”

Mot. at 8-9.

Opp’n at 4.

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SPS responds

McMahon asserts SPS’s

Reply at 3.

But the U.S.

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Treasury’s website cautions that “it is important to understand

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that CheckMyNPV.com provides only an estimate of a mortgage

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servicer’s NPV evaluation.”

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Questions, MakingHomeAffordable.gov,

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https://www.checkmynpv.com/bnpv-ui/pages/start.xhtml (last

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visited Aug. 22, 2017).

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that its website provides “only an estimate,” this Court

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declines to find that any output from this website can support

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the sole basis for alleging that a violation of Section

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CheckMyNPV.com Frequently Asked

Given the U.S. Treasury’s indication

2923.6(f)(2) was material.
Because McMahon cannot show any violation of Section

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2923.6(f)(2) was material or that dismissing this claim is

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“manifestly unjust,” the Court declines to reconsider its

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dismissal of McMahon’s Section 2923.6(f)(2) claim.

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dismissal of McMahon’s Section 2923.6 in its entirety stands.

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2.

The Court’s

Fourth Cause of Action

McMahon also asks the Court to reconsider its dismissal of

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his fourth claim for violation of 12 C.F.R. § 1024.41

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(“Regulation X”).

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Mot. at 11.

Regulation X requires a servicer acknowledge receipt of a

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“loss mitigation application” and indicate whether the

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application is complete or incomplete within 5 days of receiving

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the application.

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dismissed McMahon’s fourth claim because in a previous state

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court complaint McMahon alleged that SPS acknowledged his

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submission of documents.

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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
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whether the application is complete or incomplete in the same

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notice.”

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admission from the state court complaint states that the

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servicer acknowledged receipt of the application within five

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days but did not tell McMahon whether the application was

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complete until several weeks later.

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the Court erred in taking judicial notice of McMahon’s admission

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in his state court complaint.

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Mot. at 11 (emphasis in original).

Id.

McMahon argues the

McMahon also argues

Id. at 12.

SPS substantively opposes McMahon’s arguments, but the

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Court need not consider those arguments because McMahon cannot

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use this motion to re-litigate substantive legal issues that the

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Court has already considered and ruled upon.

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Nutraceuticals, Inc. v. Mucos Pharma GmbH & Co., 571 F.3d 873,

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880 (9th Cir. 2009) (“A motion for reconsideration may not be

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used to raise arguments or present evidence for the first time

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when they could reasonably have been raised earlier in the

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litigation.”) (emphasis in original).

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opportunity to present these same arguments in opposition to

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SPS’s motion to dismiss.

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Dismiss at 9-10, ECF No. 36.

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request for judicial notice with its motion to dismiss, asking

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the Court to take judicial notice of McMahon’s admission in his

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state court complaint.

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No. 31.

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to SPS’s request for judicial notice.

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McMahon cannot ask for reconsideration of his fourth claim

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simply because he failed to make certain arguments earlier in

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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
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reconsideration of his fourth claim.

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3.

Sanctions

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McMahon’s counsel “requests that the Courty (sic) vacate

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the order imposing sanctions, though Plaintiff’s counsel does

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not request return of the $250.”

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have “considerable latitude in managing the parties’ motion

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practice and enforcing local rules that place parameters on

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briefing.”

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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

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App’x 589, 591 (9th Cir. 2009) (“The district court did not

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abuse its discretion by striking appellants’ motion to compel

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discovery because it exceeded the page limit.”); Snyder v. HSBC

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Bank, USA, N.A., 913 F. Supp. 2d 755, 766 (D. Ariz. 2012)

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(reviewing the discretion of federal district courts in

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enforcing sanctions for violations of page limits and citing

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several appellate cases upholding district courts’ use of that

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discretion).

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denies his request to vacate the sanctions order.

The Court has considered counsel’s arguments and

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III.

ORDER

For the reasons set forth above, the Court DENIES McMahon’s

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motion for reconsideration and request to vacate the sanctions

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order.

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IT IS SO ORDERED.

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Dated: August 23, 2017

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