Scherbak v. Wolf Law Firm, et al

Filing 33

ORDER signed by District Judge John A. Mendez on 9/27/2018 GRANTING 29 Without Leave to Amend Defendants' Motion to Dismiss. CASE CLOSED (Reader, L)

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UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF CALIFORNIA

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MARY K. SCHERBAK,

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2:17-cv-01521-JAM-CKD

Plaintiff,

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No.

v.
THE WOLF LAW FIRM, a
California partnership;
SELECT PORTFOLIO SERVICING, a
Utah corporation; WELLS FARGO
BANK, a nationally banking
association; BANK OF AMERICA,
a nationally banking
association; BLACK AND WHITE
INDIVIDUAL DOE DEFENDANTS 110; BLACK AND WHITE CORPORATE
DOE DEFENDANTS 1-10,

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ORDER GRANTING DEFENDANT SELECT
PORTFOLIO SERVICING INC. AND
WELLS FARGO BANK, N.A.’S MOTION
TO DISMISS

Defendants.

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This matter is before the Court on Defendants Select

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Portfolio Servicing, Inc. and Wells Fargo Bank, N.A.’s

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(collectively, “Defendants”) Motion to Dismiss for failure to

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state a claim upon which relief can be granted.

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29.

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Defendants’ motion, Opp’n, ECF No. 30, to which Defendants

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replied, Reply, ECF No. 31.

Mot., ECF No.

Mary K. Scherbak (“Plaintiff”) filed an opposition to

For the reasons discussed below
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the Court grants Defendants’ Motion to Dismiss.1

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I.

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BACKGROUND

On July 23, 2004, joint tenants William Scherbak and Mary K.

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Scherbak (“Borrowers”) borrowed $255,000.00 from Argent Mortgage

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Company, LLC (“Lender”), secured by the property at 403 Pleasant

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Valley Road, Markleville, CA 96120 (“the Property”).

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Judicial Notice (“RJN”), Ex. 1, ECF No. 29-1, pp. 4–20.

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appointed Town and Country Title Services, LLC (“Trustee”) as the

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original trustee.

Id. at 6.

Request for
Lender

Under the Deed of Trust, Borrowers

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“promised to pay this debt in regular Periodic Payments and to

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pay the debt in full not later than August 1, 2034.

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reserved the right to appoint a successor trustee to succeed all

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title, powers, and duties conferred upon the original trustee.

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Id. at 17.

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Deed of Trust to Ameriquest Mortgage Company on July 31, 2004.

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RJN, Ex. 2, ECF No. 29-2, pp. 21–23.

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transferred all beneficial interest in the Deed of Trust to Wells

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Fargo Bank, N.A., as Trustee, for the Certificate Holders of

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Asset-Backed Pass-Through Certificates, Series 2004-WCW2 (“the

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Trust”), courtesy of Select Portfolio.

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pp. 24–27.

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Id.

Lender

Lender transferred all beneficial interest in the

That same day, Ameriquest

RJN, Ex. 3, ECF No. 29-2,

On May 26, 2016, an agent for the beneficiary filed and

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recorded a Notice of Default and Election to Sell Under Deed of

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Trust at the Alpine County Recorder’s Office.

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No. 29-2, pp. 28–43.

RJN, Ex. 4, ECF

Attached to the Notice of Default was a

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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 August 21, 2018.
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California Declaration of Compliance signed by Select Portfolio

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agent Toon Hobbs.

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Id. at 32.

Plaintiff filed a lawsuit in Alpine County on July 6, 2017,

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seeking a temporary restraining order, as well as preliminary and

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permanent injunctions against foreclosure.

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Ex. A, ECF No. 1, pp. 5–25.

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included a legal advertisement from Newport Law offering a free

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consultation on foreclosure.

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titled “IMPORTANT INFORMATION REGARDING YOUR MORTGAGE WITH: The

Notice of Removal,

Along with the complaint, Plaintiff

Id. at 10–11.

The letter was

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Wolf Firm A Law Corporation” and stated that Newport Law was “not

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an affiliated nor associated with the lender listed above or any

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Government agency.”

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concluded her foreclosure had been suspended.

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Plaintiff’s request for a restraining order was accompanied by

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her unsigned declaration.

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judge granted Plaintiff a restraining order and scheduled a show

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cause hearing for July 21, 2017.

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Id.

Based on that advertisement, Plaintiff

Id. at 17–18.

Compl. at 3 ¶ 9.

The Superior Court

Id. at 13–14.

Defendants removed the case to the Eastern District of

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California based on federal question jurisdiction on July 21,

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2017.

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August 12, 2017, First Am. Compl., ECF No. 6, and again on

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February 23, 2018.

Notice of Removal.

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Plaintiff amended her complaint on

Second Am. Compl. (“SAC”), ECF No. 23.
II.

OPINION

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A.

Requests for Judicial Notice

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Defendants’ request that the Court take judicial notice of

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the four documents related to the foreclosure of the Property.

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RJN at 1–3.

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Alpine County Recorder: a July 23, 2004 Deed of Trust for the

All four documents are publicly recorded with the

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Property, recorded August 19, 2004; two July 31, 2004

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Corporation Assignments of the Deed of Trust, recorded on

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February 10, 2016; and a May 26, 2016 Notice of Default and

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Election to Sell Under the Deed of Trust, recorded on June 2,

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2016.

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for judicial notice, claiming it converts the motion to dismiss

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into a motion for summary judgment and “disput[ing] the

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truthfulness of the contents of all of the recorded documents.”

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Opp’n at 5, 12.

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RJN, Exs. 1–4.

Plaintiff objects to Defendants’ request

“Although, as a general rule, a district court may not

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consider materials not originally included in the pleadings in

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deciding a Rule 12 motion . . . it ‘may take judicial notice of

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matters of public record’ and consider them without converting a

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Rule 12 motion into one for summary judgment.”

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14.02 Acres of Land, 547 F.3d 943, 955 (9th Cir. 2008) (quoting

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Lee v. City of Los Angeles, 250 F.3d 668, 688 (9th Cir. 2001)).

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United States v.

Federal courts apply the Federal Rules of Evidence and thus

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Plaintiff’s reliance on state law is unpersuasive.

See Primiano

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v. Cook, 598 F.3d 558, 563 (9th Cir. 2010), as amended (Apr. 27,

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2010) (instructing that the Federal Rules of Evidence govern all

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proceedings in the courts of the United States); Opp’n at 10–11

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(citing to Herrera v. Deutsche National Bank, 196 Cal. App 4th

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1366 (Ct. App. 2011)).

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fact must be either “generally known within the trial court’s

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territorial jurisdiction” or able to be “accurately and readily

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determined from sources whose accuracy cannot reasonably be

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questioned.”

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notice of matters of public record, they may not take judicial

To take judicial notice of a fact, the

Fed. R. Evid. 201.

While courts may take judicial

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notice of “disputed facts stated in public records.”

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250 F.3d at 690.

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See Lee,

The Court grants Defendants’ request for judicial notice in

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part.

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their recording with the Alpine County Recorder.

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not take judicial notice of the disputed fact in the California

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Declaration of Compliance of Exhibit 4, i.e.,whether Toon Hobbs

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made contact with Borrowers on September 16, 2015 regarding

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their financial situation and explored options for the Borrowers

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The Court notices the existence of the four documents and

to avoid foreclosure.

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B.

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The Court does

ECF No. 29-1, p. 32.

Defendants’ Motion to Dismiss
1. Count I: Fair Debt Collection Practices Act (FDCPA)

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Plaintiff brings her first claim under the FDCPA, 15 U.S.C.

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§ 1692c(a)(2), against Defendant Select Portfolio and former

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Defendant Bank of America.2

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p. 4.

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(1) Plaintiff’s claim is barred by the statute of limitations

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based on the date alleged; and (2) Plaintiff failed to allege

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specific facts that Select Portfolio is a “debt collector.”

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Mot. at 5–7.

Defendants move to dismiss this claim for two reasons:

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a.

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Sec. Am. Compl. (“SAC”), ECF No. 23,

Statute of Limitations

FDCPA claims are subject to a one-year statute of

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limitations.

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violations preceding July 6, 2016—one year before Plaintiff

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filed her Complaint—are time-barred.

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15 U.S.C. § 1692k(d).

It follows that any

Plaintiff’s Complaint does

Bank of America was dismissed per the parties’ stipulation in
October 2017. See ECF Nos. 10, 13. Plaintiff filed her Second
Amended Complaint in February 2018, still naming Bank of America
as a Defendant in this claim. ECF No. 23.
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not clearly state the dates when her allegations under 15 U.S.C.

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§ 1692c(2)(a) occurred, instead alleging merely that Defendant

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was placed on notice that she had counsel in “early 2015” and

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“[m]any of [the allegedly violative calls and letters] occurred

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within 1 (one) year of filing this complaint.”

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Plaintiff has not provided any argument or evidence that she was

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unable to discover the alleged violations at the time they

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occurred.

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were factual allegations of prohibited calls or correspondence

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from Defendants in the period of July 6, 2016 to July 6, 2017.

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No such allegations exist in Plaintiff’s SAC.

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SAC at 3–4.

Plaintiff could only pursue her FDCPA claim if there

b.

Sufficiency of the Allegations

The FDCPA prohibits “debt collectors” from communicating

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with a consumer in connection with the collection of a debt if

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the collector knows an attorney represents the consumer, unless

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the attorney fails to respond within a reasonable period of time

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or the attorney consents to communication with the consumer.

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U.S.C. § 1692c(a)(2).

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Defendants dispute whether Plaintiff alleged sufficient

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facts to qualify Select Portfolio as a “debt collector,” as

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defined by the FDCPA.

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Plaintiff’s SAC alleges that Select Portfolio is a debt

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collector, citing two unpublished cases from other district

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courts.

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Servicing, Inc., No. 1:16-CV-310, 2017 WL 663139 (E.D. Tenn.

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Feb. 16, 2017); Wright v. Select Portfolio Servicing, Inc., No.

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8:14-CV-2298-T-30TGW, 2015 WL 419618 (M.D. Fla. Feb. 2, 2015)).

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Neither Reed nor Wright arose in California and applied Ninth

Mot. at 5–6; 15 U.S.C. § 1692a(6).

See SAC at 2–3 (citing Reed v. Select Portfolio

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Circuit law.

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value to the Court in adjudicating the matters in this case.

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Accordingly, these cases have no precedential

The factual allegations supporting Plaintiff’s FDCPA claim
are as follows:

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In early 2015 SPS was placed on notice that William D.
McCann, Esq., a licensed Nevada counsel was Plaintiff’s
attorney of record. Nonetheless, during the years 20152016 SPS attempted numerous contacts with Plaintiff
without notifying her counsel, made numerous harassing
telephone calls to Plaintiff without leaving contact
information where representatives could be reached, and
send her harassing correspondence all in violation of 15
U.S.C. 1692(c)(a)(2) [sic] and Rosenthal. Many of these
occurred within 1 (one) year of filing of this complaint.

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SAC at 3–4.

These allegations do not provide sufficient

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information about the manner, method, and content of the notice

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that McCann, an attorney whom Defendants contend is “delicensed”

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to practice law in California,3 provided Select Portfolio to put

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the servicer on notice regarding his representation of

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Plaintiff.

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The Ninth Circuit has determined that the information
contained on the California State Bar website is subject to
judicial notice. White v. Martel, 601 F.3d 882, 885 (9th Cir.
2010). Here, attorney William D. McCann’s California State Bar
records indicate that he was suspended in 2005 following a
conviction for filing a false tax return and tendered his
resignation from the California Bar in February 2007, with
disciplinary charges pending. See Attorney Search: William
Denis McCann—#51902, THE STATE BAR OF CALIFORNIA,
http://members.calbar.ca.gov/fal/Licensee/Detail/51902 (last
visited August 22, 2018). The Property is located in
California and the state court complaint that initiated these
proceedings was filed in a California state court. See Compl.,
ECF No. 1. California prohibits individuals from practicing
law in state courts unless they are active members of the bar.
Cal. Bus. & Prof. Code § 6125; Birbrower, Montalbano, Condon &
Frank v. Superior Court, 949 P.2d 1, 5 (Cal. 1998), as modified
(Feb. 25, 1998) (interpreting what it means to “practice law in
California”).
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The allegations also fail to detail the subject of Select

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Portfolio’s calls.

An entity is not a debt collector if its

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“only role in the debt collection process is the enforcement of

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a security interest” or if it was providing notice of the non-

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judicial foreclosure of the mortgagor’s property.

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Thi Ho v. ReconTrust Co., NA, 858 F.3d 568, 572–74 (9th Cir.),

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cert. denied sub nom. Ho v. ReconTrust Co., 138 S. Ct. 504

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(2017) (“[A]ctions taken to facilitate a non-judicial

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foreclosure . . . are not attempts to collect ‘debt’ as that

Vien-Phuong

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term is defined by the FDCPA.”).

Accordingly, Plaintiff has

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failed to plead sufficient facts necessary to maintain an

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actionable claim under the FDCPA.

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In sum, Plaintiff has not provided the requisite

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information to “give the defendant fair notice of what the

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plaintiff’s claim is and the grounds upon which it rests.”

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Echlin v. PeaceHealth, 887 F.3d 967, 977 (9th Cir. 2018) (citing

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Fed. R. Civ. P. 8(a)(2)).

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Plaintiff’s FDCPA claim.

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2.

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The Court therefore dismisses

Count III: The Rosenthal Fair Debt Collection
Practices Act (“Rosenthal Act”)4

Plaintiff’s second claim arises under California’s

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Rosenthal Act, Cal. Civ. Code § 1788.14(c), against Defendants.

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SAC at 4–5.

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Select Portfolio contacted her after she retained counsel,

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causing her “great emotional damage.”

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conclusory assertion that both Defendants are debt collectors

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Plaintiff’s Rosenthal Act claim alleges Defendant

Id.

The claim makes the

Plaintiff’s SAC does not include a second cause of action,
going directly from “Count I” to “Count III.”
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under the Rosenthal Act.

Id.

Defendants argue that this claim fails for similar reasons

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to Plaintiff’s first claim: that they do not qualify as debt

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collectors under the Rosenthal Act.

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Lal v. American Home Servicing, Inc. for the proposition that

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California’s Rosenthal Act mirrors the FDCPA.

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Lal, 680 F. Supp. 2d 1218, 1224 (E.D. Cal. 2010)).

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counters that the California Court of Appeals recently held in

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Davidson v. Seterus, Inc., that “the Rosenthal Act’s definition

Mot. at 7–8.

They cite to

Mot. at 7 (citing
Plaintiff

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of ‘debt collector’ applies to a mortgage servicer who engages

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in debt collection practices in attempting to obtain repayment

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of mortgage debt[.]” 21 Cal. App. 5th 283, 304–05 (Ct. App.

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2018), review denied (June 13, 2018).

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Here, Plaintiff has not alleged specific facts

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demonstrating that Defendants engaged in debt collection

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practices in violation of the Rosenthal Act.

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the legal conclusion that Select Portfolio violated section

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1788.14(c) of the Rosenthal Act, without stating any specific

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instances or dates.

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claim, Plaintiff’s claim is too vague and conclusory to properly

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put Defendants on notice of her Rosenthal Act claim.

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Accordingly, the Court grants Defendants’ Motion to Dismiss

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Plaintiff’s Rosenthal Act claim.

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3.

She alleges only

Just as the Court found regarding her FDCPA

Count IV: 12 U.S.C. § 2605(K)

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Plaintiff’s third claim alleges a violation of the Real

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Estate Settlement Procedures Act (RESPA), 12 U.S.C. 2605(k), for

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Defendants’ failure to respond to a Qualified Written Request for

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information “[b]eginning in 2015.”
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SAC at 5.

She alleges that

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she suffered “severe emotional injury” as a result of Defendants’

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failure to respond to her requests within five business days and

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is entitled to her attorneys’ fees.

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Id.

Plaintiff brings this claim against former Defendant Bank of

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America, as well as Select Portfolio and Wells Fargo.

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plain language of the section, titled “Servicer prohibitions,”

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make it abundantly clear that this section can only apply to

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servicers.

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claim against a trustee, such as Wells Fargo, who is not alleged

12 U.S.C. § 2605(k)(1).

Id.

The

Plaintiff cannot bring this

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to have been her mortgage servicer. (Similarly, she may not bring

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it against the Defendant she previously dismissed from this

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action, Bank of America.)

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Plaintiff can only recover (1) “any actual damages”

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resulting from Select Portfolio’s failure to timely respond, and

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(2) an amount not to exceed $2,000 if Select Portfolio engaged in

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a pattern or practice of noncompliance.

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Plaintiff’s vague and conclusory allegation that she “suffered

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severe emotional injury as a result of the violation” does not

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contain sufficient facts to establish whether there was a causal

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link between the servicer’s noncompliance with RESPA and

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Plaintiff’s alleged damages.

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Am., N.A, No. 13CV2719-WQH-JMA, 2015 WL 461852, at *14 (S.D. Cal.

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Feb. 4, 2015) (allowing a claim of emotional damages resulting

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from RESPA violation to go forward where the plaintiff detailed

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how the violation caused his harm).

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dismissed as to Defendants.

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///

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///

12 U.S.C. § 2605(k)(1).

See, e.g., Marquette v. Bank of

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This claim fails and is

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4.

Count VI: Quiet Title5

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Plaintiff’s quiet title claim alleges that the “first deed of

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trust burdening the PROPERTY is an illegal security interest for

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the reasons set forth, supra,” and “Plaintiff therefore requests

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an order quieting her title in the subject property, and striking

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the deed of trust from the recorded liens against the property.”

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SAC at 6.

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Defendants assert that Plaintiff has failed to state a quiet
title claim.

Mot. At 9.

Under California law, to state a claim

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for quiet title the plaintiff must include the following in a

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verified complaint: (1) a description of the property, both legal

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description and street address; (2) the title of the plaintiff,

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and the basis for that title; (3) the adverse claims to the

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plaintiff’s title; (4) the date as of which the determination is

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sought; and (5) a prayer for the determination of the plaintiff’s

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title against the adverse claims.

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948 F. Supp. 2d 1069, 1079 (S.D. Cal. 2013) (citing Cal. Civ.

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Proc. Code § 761.020).

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plaintiff seeking to quiet title in the face of a foreclosure

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must allege tender or an offer of tender of the amount borrowed.”

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Mangindin v. Washington Mut. Bank, 637 F. Supp. 2d 700, 712 (N.D.

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Cal. 2009).

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Monreal v. GMAC Mortg., LLC,

“In addition, under California law, a

Plaintiff argues that “[i]t does not take Cardozo-like legal

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skills to plead a cause of action for quiet title.”

Opp’n at 14.

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While that reasoning is correct, it does take more than

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Plaintiff withdrew “Count V,” alleging a claim for damages
pursuant to California Civil Code § 1750 against Defendants.
Mot. at 9.
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“[t]hreadbare recitals of the elements of a cause of action,

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supported by mere conclusory statements” to plead a cause of

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action.

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SAC falls short yet again.

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Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). Plaintiff’s

Plaintiff concludes that she has properly asserted a quiet

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title claim because she alleged that Defendants wrongfully

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foreclosed upon the Property.

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allegation is not sufficient to state a claim for quiet title and

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this claim is dismissed.

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Opp’n at 14.

Such a conclusory

Count VII: California Civil Code § 2920

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In her final claim, Plaintiff alleges that Defendants

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violated the California Civil Code providing the definition of

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“mortgage.”

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advertisement for a free legal consultation, sent by an unrelated

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third-party, led her to believe the foreclosure sale was

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suspended.6

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supporting factual allegations, that Defendants violated

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“California Civil Code 2924.11(a)(b), 2923.7, or 2925B(2)e,

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2924(11) a through g inclusive.”

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several of these code sections do not actually exist.

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11.

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SAC at 6.

Id. at 7.

She reiterates her allegations that an

The claim goes on to conclude, without

As Defendants point out,
Mot. at

In her Opposition, Plaintiff reframes her final claim as

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Plaintiff alleges this advertisement was “purportedly from the
Wolf Law Firm” and similarly questions whether Wells Fargo sent
the advertisement. SAC at 7 ¶ 34. The clear and unambiguous
sender of this advertisement was a third-party law firm, as
stated explicitly within the advertisement. Compl., Ex. B.
(“This information was obtained through public records. We are
not an [sic] affiliated nor associated with the lender listed
above or any Government agency.”).
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arising under California Civil Code § 2923.55, rather than what

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she stated in the SAC.

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This new theory appears to allege Select Portfolio committed

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fraud.

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specificity the law requires.

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completely lacking in specificity and are legally insufficient.

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For these reasons, the Court dismisses Plaintiff’s “Civil Code

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2920” claim.

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C.

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Compare Opp’n at 15 with SAC at 6–7.

Allegations of fraud must be pled with the requisite
Plaintiff’s allegations are

Leave to Amend

Courts dismissing claims under Federal Rule of Civil

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Procedure 12(b)(6) have discretion to permit amendment, and there

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is a strong presumption in favor of leave to amend.

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Cap., LLC v. Aspeon, Inc., 316 F.3d 1048, 1051-52 (9th Cir.

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2003).

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not appropriate unless it is clear . . . that the complaint could

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not be saved by amendment.”

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omitted). Plaintiff has had multiple opportunities to properly

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plead her claims against Defendants and this Court is convinced

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that further amendment would be futile. Accordingly, Defendants’

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Motion to Dismiss is granted with prejudice.

“Dismissal with prejudice and without leave to amend is

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Eminence

Id. at 1052 (internal citation

III.

ORDER

For the reasons set forth above, the Court GRANTS WITHOUT
LEAVE TO AMEND Defendants’ Motion to Dismiss.
IT IS SO ORDERED.
Dated: September 27, 2018

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