Hoggan v. Specialized Loan Servicing, LLC et al

Filing 22

ORDER signed by District Judge Troy L. Nunley on 9/15/22 GRANTING IN PART AND DENYING IN PART 3 Motion to Dismiss. Plaintiff may file an amended complaint within thirty (30) days of the electronic filing date of this Order. Defendant's responsive pleading is due within twenty-one (21) days of the electronic filing date of the amended complaint. (Kaminski, H)

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UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF CALIFORNIA

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PATRICK W. HOGGAN,

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No. 2:21-cv-01862-TLN-CKD

Plaintiff,

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v.

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ORDER

SPECIALIZED LOAN SERVICING,
LLC; AFFINIA DEFAULT SERVICES,
LLC; and DOES 1–100, inclusive,

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Defendants.

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This matter is before the Court on Defendant Specialized Loan Servicing, LLC’s

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(“Defendant” or “SLS”)1 Motion to Dismiss. (ECF No. 3.) Plaintiff Patrick W. Hoggan

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(“Plaintiff”) filed an opposition. (ECF No. 17.) Defendant filed a reply. (ECF No. 21.) For the

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reasons set forth below, Defendant’s motion is GRANTED in part and DENIED in part.

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Affinia Default Services, LLC (“Affinia”) is also a named Defendant in this action, but
does not join in the instant motion. The Court will refer to SLS and Affinia collectively as
“Defendants.”
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I.

FACTUAL AND PROCEDURAL BACKGROUND

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The instant action arises from Defendants’ alleged mishandling of Plaintiff’s home equity

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line of credit (“HELOC”) for his property located at 6544 Arcade Creek Way, Orangevale, CA

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95662 (the “Property”). (See ECF No. 1-1 at 5–16.) Plaintiff purchased the Property in 1998 and

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entered into an agreement to refinance with Quicken Loans, Inc. (“Quicken”) on July 6, 2005.

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(Id. at 7.) Quicken loaned Plaintiff $52,500.000 (the “Loan”) secured by the Property — then and

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now Plaintiff and his family’s primary residence and home — through a second position Deed of

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Trust. (Id.) Mortgage Electronic Registration Systems, Inc. (“MERS”) was the named

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beneficiary and Orange Coast Title Company was the named trustee. (Id. at 7–8.)

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Plaintiff maintained his payments on the Loan until 2008, when he had a business failure

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that ultimately resulted in a bankruptcy in 2010. (Id. at 8.) Plaintiff subsequently began to fall

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behind on his payments and believed the second position Deed of Trust was extinguished during

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bankruptcy proceedings. (Id.) Plaintiff entered into a modification with his first position Deed of

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Trust through Ocwen Loan Servicing and believed his second position Deed of Trust was

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extinguished with this refinance if it was not extinguished in the bankruptcy proceedings. (Id.)

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On May 20, 2021, Affinia, on behalf of SLS, recorded a Notice of Default and Election to Sell

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Under Deed of Trust (“Notice of Default”) on the Property. (Id.) Plaintiff maintains he was

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never provided with notice or a recording to inform him the previous trustee — First American

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Title — had assigned, transferred, or sold its rights as the trustee under Deed of Trustee to

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Affinia. (Id.)

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Plaintiff contacted SLS to confirm the debt and called SLS to request documents

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authenticating the loan, but SLS did not respond. (Id.) On September 9, 2021, Affinia, on behalf

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of SLS, recorded a Notice of Trustee’s Sale (“NOTS”) on the Property. (ECF No. 7 at 4.)

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Plaintiff argues a controversy has arisen between himself and Defendants “because of

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Defendant’s negligent misrepresentations preventing Plaintiff from curing [his] default and

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extinguishing the transaction by operation of law.” (Id.) Plaintiff maintains Defendants acted in

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concert to deprive him of his civil rights by taking the Property without due process of law. (Id.

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at 4–5.)
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On August 25, 2021, Plaintiff filed a Complaint in Sacramento County Superior Court

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alleging claims for: (1) a violation of the Truth in Lending Act (“TILA”); (2) violations of the

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Rosenthal Act and Federal Fair Debt Collection Practices Act (“FDCPA”); (3) promissory

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estoppel; (4) wrongful foreclosure; (5) negligent misrepresentation; (6) unfair competition in

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violation of Cal. Bus. & Prof. Code §§ 17200–17210; and (7) violation of Cal. Civ. Code §

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2924.17. (ECF No. 1-1 at 9–16.) On October 8, 2021, Defendants removed the action to this

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Court. (ECF No. 1.) On October 15, 2021, Defendant filed the instant motion to dismiss. (ECF

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No. 3.) On December 2, 2021, Plaintiff filed an opposition.2 (ECF No. 17.) On December 9,

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2021, Defendant filed a reply. (ECF No. 21.)

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II.

STANDARD OF LAW

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A motion to dismiss for failure to state a claim upon which relief can be granted under

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Federal Rule of Civil Procedure (“Rule”) 12(b)(6) tests the legal sufficiency of a complaint.

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Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). Rule 8(a) requires that a pleading contain

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“a short and plain statement of the claim showing that the pleader is entitled to relief.” See

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Ashcroft v. Iqbal, 556 U.S. 662, 678–79 (2009). Under notice pleading in federal court, the

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complaint must “give the defendant fair notice of what the claim . . . is and the grounds upon

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which it rests.” Bell Atlantic v. Twombly, 550 U.S. 544, 555 (2007) (internal quotations omitted).

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“This simplified notice pleading standard relies on liberal discovery rules and summary judgment

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motions to define disputed facts and issues and to dispose of unmeritorious claims.” Swierkiewicz

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v. Sorema N.A., 534 U.S. 506, 512 (2002).

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On a motion to dismiss, the factual allegations of the complaint must be accepted as true.

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Cruz v. Beto, 405 U.S. 319, 322 (1972). A court is bound to give the plaintiff the benefit of every

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reasonable inference to be drawn from the “well-pleaded” allegations of the complaint. Retail

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Clerks Int’l Ass’n v. Schermerhorn, 373 U.S. 746, 753 n.6 (1963). A plaintiff need not allege

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“‘specific facts’ beyond those necessary to state his claim and the grounds showing entitlement to

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Plaintiff’s opposition contains arguments regarding a claim for breach of the implied
covenant of good faith and fair dealing. (ECF No. 17 at 12–13.) Because Plaintiff’s Complaint
does not allege a claim for breach of the implied covenant of good faith and fair dealing, the
Court need not and does not address this argument.
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relief.” Twombly, 550 U.S. at 570.
Nevertheless, a court “need not assume the truth of legal conclusions cast in the form of

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factual allegations.” U.S. ex rel. Chunie v. Ringrose, 788 F.2d 638, 643 n.2 (9th Cir. 1986).

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While Rule 8(a) does not require detailed factual allegations, “it demands more than an

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unadorned, the defendant-unlawfully-harmed-me accusation.” Iqbal, 556 U.S. at 678. A

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pleading is insufficient if it offers mere “labels and conclusions” or “a formulaic recitation of the

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elements of a cause of action.” Twombly, 550 U.S. at 555; see also Iqbal, 556 U.S. at 678

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(“Threadbare recitals of the elements of a cause of action, supported by mere conclusory

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statements, do not suffice.”). Moreover, it is inappropriate to assume the plaintiff “can prove

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facts that it has not alleged or that the defendants have violated the . . . laws in ways that have not

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been alleged.” Associated Gen. Contractors of Cal., Inc. v. Cal. State Council of Carpenters, 459

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U.S. 519, 526 (1983).

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Ultimately, a court may not dismiss a complaint in which the plaintiff has alleged “enough

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facts to state a claim to relief that is plausible on its face.” Iqbal, 556 U.S. at 697 (quoting

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Twombly, 550 U.S. at 570). “A claim has facial plausibility when the plaintiff pleads factual

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content that allows the court to draw the reasonable inference that the defendant is liable for the

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misconduct alleged.” Id. at 680. While the plausibility requirement is not akin to a probability

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requirement, it demands more than “a sheer possibility that a defendant has acted unlawfully.”

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Id. at 678. This plausibility inquiry is “a context-specific task that requires the reviewing court to

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draw on its judicial experience and common sense.” Id. at 679.

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In ruling on a motion to dismiss, a court may only consider the complaint, any exhibits

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thereto, and matters which may be judicially noticed pursuant to Federal Rule of Evidence 201.

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See Mir v. Little Co. of Mary Hosp., 844 F.2d 646, 649 (9th Cir. 1988); Isuzu Motors Ltd. v.

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Consumers Union of U.S., Inc., 12 F. Supp. 2d 1035, 1042 (C.D. Cal. 1998).

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If a complaint fails to state a plausible claim, “‘[a] district court should grant leave to

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amend even if no request to amend the pleading was made, unless it determines that the pleading

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could not possibly be cured by the allegation of other facts.’” Lopez v. Smith, 203 F.3d 1122,

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1130 (9th Cir. 2000) (en banc) (quoting Doe v. United States, 58 F.3d 494, 497 (9th Cir. 1995)).
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III.

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Defendant argues that Plaintiff’s claims are not adequately pleaded or that they fail to

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state cognizable legal theories. (ECF No. 3 at 4.) The Court will address each claim in turn,

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starting with Defendant’s request for judicial notice.

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ANALYSIS

A.

Defendant’s Request for Judicial Notice

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Defendant requests judicial notice of Exhibits 1 through 4. (ECF No. 5 at 2.) Exhibit 1 is

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the docket for Plaintiff’s Chapter 13 Bankruptcy Petition. (ECF No. 5-1. ) Exhibit 2 is Plaintiff’s

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Chapter 7 Voluntary Petition. (ECF No. 5-2. ) Exhibit 3 is the Substitution of Trustee recorded

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April 8, 2021, as document number 202104082104. (ECF No. 5-3.) Exhibit 4 is the Deed of

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Trust recorded July 11, 2005 at book 20050711, at page 0098. (ECF No. 5-4.) Plaintiff does not

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oppose this request. (ECF No. 17.)

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This Court may take judicial notice of facts that can be “accurately and readily determined

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from sources whose accuracy cannot reasonably be questioned.” Fed. R. Evid. 201(b)(2). The

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Ninth Circuit has held that the proceedings and determinations of the courts are a matter of public

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record suitable for judicial notice. Emrich v. Touche Ross & Co., 846 F.2d 1190, 1198 (9th Cir.

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1988). Deeds of Trust and similarly recorded public documents are also widely held as proper

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subjects of judicial notice. See, e.g., In the Matter of Manges, 29 F.3d 1034, 1042 (5th Cir. 1994)

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(taking judicial notice of deeds and assignments).

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Exhibits 1 through 4 are either court documents of public record or publicly recorded
documents. Therefore, the request for judicial notice is GRANTED.
B.

Claim One: Violation of the TILA

Defendant argues that Plaintiff cannot state a claim under 12 C.F.R. § 1026.41 (“§

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1026.41”) because his HELOC was an open-credit transaction, and § 1026.41 applies to “a

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closed-end consumer credit transaction.” (ECF No. 3 at 5.) Defendant argues in the alternative

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that Plaintiff has failed to state with specificity who told him the HELOC was charged off and

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when he was told the HELOC was charged off. (Id.) In opposition, Plaintiff argues that federal

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law requires a lender/servicer to provide monthly statements unless a loan is in active bankruptcy

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and he has not received any statements on his loan serviced by SLS, he has not opted out of his
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right to receive such statements, nor is SLS exempt from the requirement to send such statements.

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(ECF No. 17 at 9–10.) In reply, Defendant maintains § 1026.41 does not apply because it does

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not apply to open-end credit transactions. (ECF No. 21 at 2.)

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Section 1026.41 requires servicers of mortgage loans to “provide the consumer, for each

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billing cycle, a periodic statement meeting the requirements of paragraphs (b), (c), and (d) of this

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section.” 12 C.F.R. § 1026.41. Paragraphs (b), (c), and (d) set forth the timing, form, and content

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requirements of the periodic statement. Id. Section 1026.41 also provides that it “applies to a

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closed-end consumer credit transaction secured by a dwelling,” unless a specific exemption under

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subsection (e) applies. Id. TILA defines “closed-end credit” as “consumer credit other than

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‘open-end credit.’” Id. § 1026(a)(10). TILA defines “open-end credit” as “consumer credit

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extended by a creditor under a plan in which: (i) the creditor reasonably contemplates repeated

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transactions; (ii) the creditor may impose a finance charge from time to time on an outstanding

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unpaid balance; and (iii) the amount of credit that may be extended to the consumer during the

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term of the plan (up to any limit set by the creditor) is generally made available to the extent that

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any outstanding balance is repaid.” Id. § 1026(a)(20). Other courts have also found that

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HELOCs are open-end lines of credit. See Hofstetter v. Chase Home Finance, LLC, 751 F. Supp.

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2d 1116, 1124 (N.D. Cal. 2010); Johnston v. Lindaur, No. 2:07-cv-280-GEB-EFB, 2010 WL

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147939, at *3 (E.D. Cal. Jan. 12, 2010).

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In the instant case, Plaintiff’s HELOC is an “open-end credit” transaction because the

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Loan provided for repeated extensions of credit. (See ECF No. 5-4 at 1 (“The Note provides for

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loan advances to be made by the Lender to the Borrower from time to time, and for a period not

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to exceed 10 years (the ‘Draw Period’), during which loan advances may be repaid and

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reborrowed for up to an amount not to exceed the sum of US $52,500.00.”).) Plaintiff’s HELOC

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is an “open-credit” transaction and § 1026.41 only applies to “closed-end consumer credit

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transactions.” Plaintiff also specifically states in his opposition that all the exemptions listed in

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subsection (e) do not apply to him, with the exception of subsection (e)(5), which applies to

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certain consumers in bankruptcy. (See ECF No. 17 at 10); 12 C.F.R. § 1026.41(e)(5). Plaintiff is

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therefore currently unable to state a claim under 12 C.F.R. § 1026.41. Because the Court cannot
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determine “that the pleading could not be cured by the allegation of other facts” — specifically

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whether the exemption in § 1026.41(e)(5) applies to him — the Court will grant leave to amend.

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See Lopez, 203 F.3d at 1130. Accordingly, Defendant’s motion to dismiss this claim is

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GRANTED with leave to amend.

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C.

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Claim Two: Violations of the Rosenthal Act and the FDCPA

Defendant argues that Plaintiff fails to cite which section of the FDCPA it allegedly

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violated, “merely alleges that [Defendant] misrepresented the amount of debt by including

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interest and fees,” and does not provide calculations of interest or fees. (ECF No. 3 at 6.)

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Defendant further argues that to the extent this claim is based on a violation of 12 C.F.R. §

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1026.41, because that regulation does not apply, this claim fails as well. (Id.) In opposition,

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Plaintiff cites to 15 U.S.C. § 1692 and asserts Defendant violated that provision by

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“misrepresent[ing] the amount of the debt by including interest and fees that it is federally

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prohibited from collecting on Plaintiff[’s] Second Loan . . . .” (ECF No. 17 at 11.) Plaintiff

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further asserts that Defendants failed to satisfy the notice and due diligence requirements of

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California Civil Code § 2923.5, failed to follow TILA, as well as the FDCPA and Rosenthal Act.

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(Id.) In reply, Defendant maintains that Plaintiff has not sufficiently pleaded facts to establish

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that it violated the FDCPA and the Rosenthal Act. (ECF No. 21 at 2–3.)

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In the instant case, the Court finds that Defendant is correct that Plaintiff does not

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adequately allege in his Complaint what provision of the FDCPA or Rosenthal Act Defendant

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violated. (See ECF No. 1-1 at 5–16.) Without identifying which statute has been violated,

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Defendant does not have “fair notice of what the claim . . . is and the grounds upon which it

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rests.” Twombly, 550 U.S. at 555. Accordingly, Defendant’s motion to dismiss this claim is

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GRANTED with leave to amend.

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D.

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Claim Three: Promissory Estoppel

Defendant argues that Plaintiff has not pleaded a clear promise sufficient to support this

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claim, and instead he has pleaded that Defendant “never responded to [him],” which precludes a

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clear promise. (ECF No. 3 at 6 (citing ECF No. 1-1 ¶ 21).) Defendant notes that “Plaintiff has

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not set forth specific details of the promises, who made the promises or when they were made,” or
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“that he would have been able to secure alternative loans and refinancing for the Property to show

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detrimental reliance.” (Id. at 7.) In opposition, Plaintiff asserts that Defendant agreed “to send

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[him] documentation confirming and verifying the amount of the debt and providing [him] with

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loss mitigation options,” but instead he did not receive anything, relied upon those promises (and

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the lack of monthly mortgage statements), thought the loan was “charged off,” and gave up

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alternative loans and refinancing for the Property and to the underlying loans secured by the

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Property in reliance upon Defendant’s promises. (ECF No. 17 at 13.) In reply, Defendant

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maintains that Plaintiff has not pleaded “who he spoke to, when he spoke to them, whether it was

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by telephone, what telephone number he called, what exactly he asked for[,] and what was

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promised.” (ECF No. 21 at 3.) Defendant also notes that Plaintiff’s opposition does not show

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how his Complaint adequately establishes that he gave up alternative loans and refinancing. (Id.)
“The elements of a promissory estoppel claim are as follows: (1) a promise clear and

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unambiguous in its terms; (2) reliance by the party to whom the promise is made; (3)[the] reliance

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must be both reasonable and foreseeable; and (4) the party asserting the estoppel must be injured

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by his reliance.” U.S. Ecology Inc. v. State of California, 129 Cal. App. 4th 887, 901 (2005).
With respect to the first element, Plaintiff alleges that Defendant “agreed to send [him]

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documentation confirming the debt and providing Plaintiff with loss mitigation options.” (ECF

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No. 1-1 at 10.) With respect to the second element, Plaintiff alleges that he “relied on the

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promises made by [Defendant]” and gave up “alternative loans and refinancing for the Property

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and to the underlying Loans secured by the Property.” (Id.) With respect to the third element,

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Plaintiff alleges his “reliance upon Defendant’s promises were reasonable and foreseeable, as

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[Defendant] was the successor beneficiary under the Deed of Trust.” (Id.) With respect to the

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fourth element, Plaintiff alleges he has been injured by relying on Defendant’s promises and

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“now faces the imminent loss of title and possession to his Property.” (Id. at 11.) Plaintiff need

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not allege “‘specific facts’ beyond those necessary to state his claim and the grounds showing

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entitlement to relief.” Twombly, 550 U.S. at 570. Accordingly, Defendant’s motion to dismiss

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this claim is DENIED.

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E.

Claim Four: Wrongful Foreclosure

Defendant argues Plaintiff alleges it “violated California Civil Code §[§] 2924[,] et seq.

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without any specificity of how it was purportedly violated,” which “is insufficient to put

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[Defendant] on notice of the allegations against it and insufficient to state a claim.” (ECF No. 3

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at 7 (emphasis omitted).) Defendant states Plaintiff also fails to allege a sale has occurred, that he

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tendered the amount of the secured indebtedness, or that he was excused from tender. (Id. at 8.)

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In opposition, Plaintiff asserts Defendant has failed to comply with California Civil Code §§

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2924, et seq. because it has failed to comply with the requirements of the Notice of Default

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provisions within this section. (ECF No. 17 at 13–14.) Plaintiff also notes that there is no

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“incidental right to enforce any deed of trust and proceed with a non-judicial foreclosure.” (Id. at

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14.) In reply, Defendant argues Plaintiff’s opposition does not show a single fact was pleaded in

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support of this claim, but only states that Defendant failed to comply with the requirements of

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California Civil Code §§ 2924, et seq. (ECF No. 21 at 4.)

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In the instant case, the Court finds that Plaintiff does not adequately allege in his

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Complaint what provision of California Civil Code §§ 2924, et seq. was violated, other than

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stating that Defendant “failed to comply with the requirements of the Notice of Default

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provisions” within this section. (See ECF No. 1-1 at 11.) Without identifying which statute has

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been violated, Defendant does not have “fair notice of what the claim . . . is and the grounds upon

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which it rests.” Twombly, 550 U.S. at 555. In the alternative, if Plaintiff were trying to allege a

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common law claim for wrongful foreclosure, it would also fail because Plaintiff does not allege

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that Defendant actually caused a sale of the Property. See Rockridge Tr. v. Wells Fargo, N.A.,

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985 F. Supp. 2d 1110, 1145 (N.D. Cal. Sept. 25, 2013) (to state a claim for wrongful foreclosure,

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a plaintiff must allege: “(1) the trustee or mortgagee caused an illegal, fraudulent, or willfully

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oppressive sale of real property pursuant to a power of sale in a mortgage or deed of trust; (2) the

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party attacking the sale . . . was prejudiced or harmed; and (3) . . . the trustor or mortgagor

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tendered the amount of the secured indebtedness or was excused from tendering.”). Accordingly,

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Defendant’s motion to dismiss this claim is GRANTED with leave to amend.

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F.

Claim Five: Negligent Misrepresentation

Defendant argues Plaintiff fails to allege what representations were made, when they were

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made, or who made them. (ECF No. 3 at 8.) Defendant notes that this claim is not pleaded with

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particularity, and negligent misrepresentation claims must include “the time, place, and specific

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content of the false representations as well as . . . the names of the persons who made the

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allegedly fraudulent representations, their authority to speak, to whom they spoke, what they said

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or wrote, and when it was said or written.” (Id. (quoting Santana v. BSI Fin. Servs., Inc., 495 F.

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Supp. 3d 926, 947 (S.D. Cal. 2020)).) In opposition, Plaintiff contends this claim is adequately

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pleaded because Defendant was required under law “to send Plaintiff documentation confirming

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and verifying the amount of the debt and providing Plaintiff with loss mitigation options,” but

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Plaintiff did not receive anything. (ECF No. 17 at 14.) Plaintiff notes that he relied upon the

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promises, the lack of statements, thought the loan was “charged off,” and gave up alternative

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loans and refinancing for the Property and to the underlying loans secured by the Property in

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reliance on Defendant’s promises. (Id.)

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The elements of negligent misrepresentation are: (1) misrepresentation (false

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representation, concealment, or nondisclosure); (2) knowledge of the falsity; (3) justifiable

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reliance; and (4) resulting damage. Saldate v. Wilshire Credit Corp., 268 F.R.D. 87, 101 (E.D.

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Cal. 2010) (citing Cadlo v. Owens-Illionis, Inc., 125 Cal. App. 4th 513, 519 (2004)). A negligent

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misrepresentation claim must also comply with the heightened pleading standards of Rule

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9(b). Id. Specifically, Rule 9(b) requires that “[i]n alleging fraud or mistake, a party must state

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with particularity the circumstances constituting fraud or mistake. Malice, intent, knowledge, and

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other conditions of a person’s mind may be alleged generally.” Fed. R. Civ. P. 9(b). The

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allegations underlying a fraud claim must be “specific enough to give defendants notice of the

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particular misconduct . . . so that they can defend against the charge.” Vess v. Ciba-Geigy Corp.

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USA, 317 F.3d 1097, 1106 (9th Cir. 2003) (internal quotation marks omitted). “Averments of

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fraud must be accompanied by ‘the who, what, when, where, and how’ of the misconduct

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charged.” Id. (citing Cooper v. Pickett, 137 F.3d 616, 627 (9th Cir. 1997)). “[A] plaintiff must

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set forth more than the neutral facts necessary to identify the transaction. The plaintiff must set
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forth what is false or misleading about a statement, and why it is false.” Id. (internal citation

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omitted).

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With respect to the first and second elements, Plaintiff alleges that Defendant, “through

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[its] agents and employees, made representations to Plaintiff that they knew or should have

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known were false, or had no reasonable grounds to believe were true.” (ECF No. 1-1 at 11.)

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With respect to the third element, Plaintiff alleges he “actually and reasonably relied on the

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representations made by [Defendant] and [its] agents and employees.” (Id. at 12.) With respect

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to the fourth element, Plaintiff alleges that as a result of the misrepresentations, he “has been and

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continue[s] to be damaged in an amount to be proven at trial” and “will seek leave of [this] Court

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to amend this Complaint once the full amount of [his] damages has been ascertained.” (Id.) The

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Court finds the foregoing allegations fail to adequately allege “‘the who, what, when, where, and

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how’ of the misconduct charged.” Vess, 317 F.3d at 1106. The claim is not pleaded with the

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specificity required by Rule 9(b). Accordingly, Defendant’s motion to dismiss this claim is

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GRANTED with leave to amend.

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G.

Claim Six: Unfair Competition

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Defendant argues this claim is duplicative of Plaintiff’s other failed claims and that this

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claim requires “an allegation of an underlying violation of law.” (ECF No. 3 at 9.) Defendant

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also argues Plaintiff does not have standing under this claim because he has not pleaded a loss of

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money or property caused by the alleged wrongful conduct. (Id.) In opposition, Plaintiff

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maintains Defendant’s business practices were unlawful, unfair, and fraudulent. (ECF No. 17 at

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15–16.) Plaintiff asserts he has pleaded Defendant’s practices were unlawful “with the requisite

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specificity that Defendant[’s] actions and failures . . . constitute a pattern and practice of behavior

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in conscious disregard for [his] rights under TILA, and specifically 12 C.F.R. § 1026.41.” (Id. at

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15.) Plaintiff asserts Defendant’s practices were unfair because they “were fraudulent and

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violated public polic[y].” (Id. at 16.) Plaintiff asserts Defendant’s practices were fraudulent

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because “defendant is misleading its customers who have put their trust in Defendant to act fairly

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and honestly and not violate any laws or regulations.” (Id. at 17.) In reply, Defendant maintains

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the only violation Plaintiff uses to support this claim is the alleged violation of 12 C.F.R. §
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1026.41, which does not apply to Plaintiff’s Loan. (ECF No. 21 at 5.)
The UCL defines “unfair competition” as “any unlawful, unfair or fraudulent business act

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or practice and unfair, deceptive, untrue or misleading advertising.” Cal. Bus. & Prof. Code

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§ 17200. “Because Business and Professions Code [§] 17200 is written in the disjunctive, it

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establishes three varieties of unfair competition – actions or practices which are unlawful,

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or unfair, or fraudulent.” Cel-Tech Commc’ns, Inc. v. Los Angeles Cellular Tel. Co., 20 Cal. 4th

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163, 180 (1999) (quoting Podolsky v. First Healthcare Corp., 50 Cal. App. 4th 632, 647

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(1996)). Plaintiff may therefore state a violation of the UCL based on conduct that

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is unfair or fraudulent, even if that conduct is not unlawful. Id.

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Because Plaintiff appears to assert a UCL claim based on all three prongs, the Court will

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address the three prongs below. However, the Court will first address whether Plaintiff

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adequately alleges UCL standing.

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i.

UCL Standing

Standing under the UCL requires that a party “(1) establish a loss or deprivation of money

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or property sufficient to qualify as injury in fact, i.e. economic injury, and (2) show that that

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economic injury was the result of i.e., caused by, the unfair business practice or false advertising

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that is the gravamen of the claim.” Kwikset Corp. v. Superior Ct., 51 Cal. 4th 310, 322 (2011)

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(emphasis in original). With respect to the first element, Plaintiff indeed alleges monetary

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damages as he alleges that he “has been and continue[s] to be damaged in an amount to be proven

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at trial” and that he has “a substantial, ascertainable loss.” (ECF No. 1-1 at 12, 14.) With respect

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to the second element, Plaintiff alleges he “reasonably relied” on Defendant’s “misrepresentations

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and failure to make accurate representations” and failure “to provide material information about”

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his Loan. (Id. at 13–14.) The Court finds the reasonable inference from these allegations is that

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this alleged unlawful, unfair, or fraudulent conduct caused Plaintiff’s damages. Accordingly, the

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Court finds that Plaintiff adequately establishes standing.

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ii.

Unlawful

Under its “unlawful” prong, “the UCL borrows violations of other laws ... and makes
those unlawful practices actionable under the UCL.” Prakashpalan v. Engstrom, Lipscomb &
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Lack, 223 Cal. App. 4th 1105, 1133 (2014) (internal citations omitted). Thus, “[t]o state a cause

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of action based on an unlawful business act or practice under the UCL, a plaintiff must allege

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facts sufficient to show a violation of some underlying law.” Id. In the instant case, the only

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claim which the Court finds Plaintiff has adequately pleaded is a claim for promissory estoppel.

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A remaining claim for promissory estoppel is insufficient to serve as the foundation for violation

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of the UCL. Helmer v. Bank of Am., N.A., No. CIV S-12-0733 KJM-GGH, 2013 WL 1192634, at

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*7 (E.D. Cal. Mar. 22, 2013). Accordingly, Defendant’s motion to dismiss this claim based on

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the unlawful prong is GRANTED with leave to amend.

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iii.

Unfair

An “unfair” business practices is “conduct that threatens an incipient violation of an

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antitrust law, or violates the policy or spirit of one of those laws because its effects are

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comparable to or the same as a violation of the law, or otherwise significantly threatens or harms

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competition.” Cel-Tech Commc’ns, Inc., 20 Cal. 4th at 187. In the instant case, Plaintiff only

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states in a conclusory fashion that Defendant’s “business acts and practices . . . constitute ‘unfair’

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business practices under the UCL in that said acts and practices offend public policy and are

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substantially injurious to Plaintiff and all consumers.” (ECF No. 1-1 at 13.) Plaintiff identifies

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those “business acts and practices” as “fail[ing] to provide Plaintiff with any periodic mortgage

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statements” and “systematically violating the provision of California Civil Code [§§] 2924, et

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seq., as it pertains to their obligations under the Deed of Trust and proceeding with a non-judicial

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foreclosure.” (Id. at 13–14.) As previously noted, Plaintiff has failed to adequately allege claims

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for a violation of TILA or for wrongful foreclosure. Therefore, Plaintiff does not plead any facts

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to suggest Defendant is engaging in conduct that “threatens an incipient violation of antitrust

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law,” “violates the policy or spirit of one of those laws,” or “otherwise significantly threatens or

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harms competition.” (See id. at 5–16.) Accordingly, Defendant’s motion to dismiss this claim

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based on the unlawful prong is GRANTED with leave to amend.

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iv.

Fraudulent

“To state a claim under the fraudulent prong of the UCL, plaintiffs must prove ‘actual
reliance on the allegedly deceptive or misleading statements,’ . . . and that ‘the misrepresentation
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was an immediate cause of the injury-producing conduct.’” Swafford v. Int’l Bus. Machines

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Corp., 408 F. Supp. 3d 1131, 1152 (N.D. Cal. 2019) (quoting Kwikset Corp., 51 Cal. 4th at 326;

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In re Tobacco II Cases, 46 Cal. 4th 298, 326 (2009)). If a UCL claim is grounded in fraud, the

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entire claim must meet the heightened pleading requirement of Rule 9(b). Kearns v. Ford Motor

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Co., 567 F.3d 1120, 1127 (2009).

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In the instant case, Plaintiff alleges that Defendant engaged in fraudulent business

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practices as the “said acts and practices are likely to deceive the public and affect[] consumers’

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legal rights and obligations.” (ECF No. 1-1 at 14.) The “acts and practices” Plaintiff refers to are

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the same “acts and practices” detailed above — “fail[ing] to provide Plaintiff with any periodic

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mortgage statements” and “systematically violating the provision of California Civil Code [§§]

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2924, et seq., as it pertains to their obligations under the Deed of Trust and proceeding with a

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non-judicial foreclosure.” (Id. at 13–14.) The Court finds the foregoing allegations fail to

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adequately allege “‘the who, what, when, where, and how’ of the misconduct charged.” Vess,

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317 F.3d at 1106. The claim is not pleaded with the specificity required by Rule 9(b).

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Accordingly, Defendant’s motion to dismiss this claim based on the fraudulent prong is

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GRANTED with leave to amend.

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H.

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Claim Seven: Violation of Cal. Civ. Code § 2924.17

Defendant argues Plaintiff fails to allege what fees and interest were illegal with respect to

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this claim, namely “what the debt actually is or what particular charges were improper.” (ECF

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No. 3 at 10.) Defendant notes Plaintiff also has not pleaded “his HELOC was actually charged

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off, . . . the particulars of who told him that, . . . [and] a basis [for] prohibiting any of the fees or

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interest claimed to be improper.” (Id.) Plaintiff does not address this claim in opposition. (See

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ECF No. 17.) In reply, Defendant notes that “when a plaintiff simply fails to address a particular

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claim in its opposition to a motion to dismiss that claim, [the] court generally dismisses it with

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prejudice” and therefore this claim should be dismissed. (ECF No. 21 at 4–5 (citing Moore v.

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Apple, Inc., 73 F. Supp. 3d 1191, 1205 (N.D. Cal. 2014)).)

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Other courts have construed a plaintiff’s failure to address a claim in opposition to a
defendant’s motion to dismiss as “abandonment of the claim.” Moore, 73 F. Supp. 3d at 1205
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(citing cases). Plaintiff has not opposed Defendant’s motion to dismiss this claim. Accordingly,

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Defendant’s motion to dismiss this claim is GRANTED without leave to amend.

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IV.

CONCLUSION

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Based on the foregoing, the Court hereby GRANTS in part and DENIES in part

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Defendant’s Motion to Dismiss (ECF No. 3) as follows: (1) Defendant’s Motion to Dismiss

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Claims One, Two, and Four through Six is GRANTED with leave to amend; (2) Defendant’s

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Motion to Dismiss Claim Three is DENIED; and (3) Defendant’s Motion to Dismiss Claim Seven

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is GRANTED without leave to amend. Plaintiff may file an amended complaint within thirty

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(30) days of the electronic filing date of this Order. Defendant’s responsive pleading is due

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within twenty-one (21) days of the electronic filing date of the amended complaint.
IT IS SO ORDERED.
DATED: September 15, 2022

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Troy L. Nunley
United States District Judge

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