Malfatti v. Mortgage Electronic Registrations Systems, Inc. et al

Filing 87

Order by Magistrate Judge Laurel Beeler granting 74 Motion for Summary Judgment.(lblc1S, COURT STAFF) (Filed on 6/20/2013)

1
2
3
4
5
6
7
8

UNITED STATES DISTRICT COURT

9

Northern District of California

10

San Francisco Division
ANTHONY MALFATTI,

12
For the Northern District of California

UNITED STATES DISTRICT COURT

11

No. C 11-03142 LB

Plaintiff,

ORDER GRANTING DEFENDANT’S
MOTION FOR SUMMARY
JUDGMENT

v.
13
14

MORTGAGE ELECTRONIC
REGISTRATIONS SYSTEMS, INC.; and
BAC HOME LOANS SERVICING, LP.,

[ECF No. 74]

15
16

Defendants.
_____________________________________/

17

INTRODUCTION

18

The remaining claim in this case is Plaintiff Anthony Malfatti’s claim for unjust enrichment

19

against Defendant Bank of America (“BOA”), which is the successor by merger to BAC Home

20

Loans Servicing (formerly known as Countrywide Bank and referred to herein as “BAC”). Malfatti

21

claimed that he sent $59,495 in mortgage payments to BAC based on BAC’s representations that it

22

was the creditor/owner of his mortgage, and BAC retained the funds even though it was not the

23

creditor. See Complaint, ECF No. 1, at 4.1 Malfatti wants the money back. BOA moves for

24

summary judgment, arguing that Malfatti lacks standing, is judicially estopped from asserting his

25

claim, lacks any factual basis for it, and cannot demonstrate damages. See Motion, ECF No. 74.

26

Malfatti opposes summary judgment, arguing that BOA has not proven its case and is wrong about

27
28

1

Citations are to the Electronic Case File (“ECF”) with pin cites to the electronicallygenerated page number at the top of the document.
C 11-03142 LB (ORDER)

1

the estoppel and standing issues. Opp’n, ECF No. 85. For the reasons discussed below, the court

2

GRANTS BOA’s motion for summary judgment.

3
4

STATEMENT
I. UNDISPUTED FACTS

5

The payments in the lawsuit relate to three mortgage loans on two properties. First, in June

6

2007, Malfatti acquired a $469,000 loan from Countrywide Bank, FSB, secured by a deed of trust to

7

property located at 9527 Granada Avenue, Oakland, CA 94605. Joint Statement of Undisputed

8

Facts (“JSUF”) #1, ECF No. 80 at 2. Second, in June 2007, Malfatti acquired a $164,464 home

9

equity line of credit from Countrywide secured by a deed of trust to the Granada Avenue property.
JSUF #2. Third, in March 2008, Malfatti took out a $116,000 loan secured by a deed of trust to

11

properties located at 1650-1652 Fifth Street in Richmond, California. JSUF #3.2

12
For the Northern District of California

UNITED STATES DISTRICT COURT

10

Malfatti began making payments on the three loans in August 2007 and May 2008. JSUF #18.

13

His loan payments totaled $59,495, which is the alleged unjust enrichment and the damages amount

14

he requests. See JSUF #4, #12.

15

On April 27, 2009, Malfatti filed for Chapter 7 bankruptcy in the U.S. Bankruptcy Court for the

16

Northern District of California. JSUF #5. In the schedules filed with his bankruptcy petition,

17

Malfatti represented that he possessed no contingent or unliquidated claims of any nature. JSUF #6.

18

Malfatti listed his liabilities in his Chapter 7 bankruptcy petition. See JSUF #7. These included the

19

debts owed to Countrywide Home Lending on his three loans in the total amount of $698,491.00.

20

Id. The bankruptcy court discharged Malfatti’s debts on August 6, 2009. JSUF #8.

21
22

In June 2011, Malfatti filed this lawsuit, and in or around July 2011, he stopped making
payments on the loans. JSUF #13; see Complaint, ECF No. 1.

23
24
25
26
27
28

2

Bank of America asks the court to take judicial notice of the three recorded deeds of trust
securing the properties, as well as the docket, petition, and discharge order from Malfatti’s Chapter 7
bankruptcy case. See BOA Request for Judicial Notice, ECF No. 75. These are public-record
documents that support the facts in the JSUF. Malfatti does not object and the court may take notice
of the public records at issue. See Fed. R. Evid. 201; Lee v. City of Los Angeles, 250 F.3d 668, 689
(9th Cir. 2001). Accordingly, the court takes judicial notice of them.

C 11-03142 LB (ORDER)

2

1

II. RELEVANT PROCEDURAL HISTORY

2

This suit was assigned first to one district judge, who dismissed without prejudice Malfatti’s

3

three claims against Mortgage Electronic Registrations for cancellation of deeds and his claim

4

against BOA for constructive trust. See 11/29/11 Order, ECF No. 21. The case was transferred to

5

another judge, who dismissed with prejudice the same claims in an amended complaint, leaving only

6

the claim for unjust enrichment. See 2/10/12 Order Dismissing Claims, ECF No. 34 at 6. With the

7

parties’ consent, the case was assigned to the undersigned on April 16, 2012. 4/16/12 Order, ECF

8

No. 41.

9

In November 2012, the court continued the trial date from April to September 2013 based on the

before they could prepare their summary judgment motions. See ECF Nos. 58-59. Neither party

12
For the Northern District of California

parties’ explanation that they needed additional time to resolve outstanding discovery disputes

11
UNITED STATES DISTRICT COURT

10

sought judicial resolution of any discovery dispute. See generally Docket.

13

On January 2, 2011, BOA filed its first motion for summary judgment. See ECF No. 60.

14

Malfatti responded that he needed even more time to complete discovery. See ECF No. 67. The

15

court granted his request for additional time, set a schedule for the additional discovery, and denied

16

BOA’s summary judgment motion without prejudice. See ECF No. 73. The revised scheduling

17

order provided deadlines for Malfatti to request discovery and BOA to respond and produce it. Id.

18

It also provided a deadline for the parties to file a joint letter seeking judicial resolution of any

19

discovery disputes. Id. at 5. Malfatti did not object to BOA’s subsequent discovery responses, and

20

the parties did not bring any discovery disputes to the court’s attention. See, generally Docket;

21

JSUF #22-23.

22
23

On May 16, 2013, BOA filed its pending motion for summary judgment (“Motion”), ECF No.
74.

24

ANALYSIS

25

Malfatti’s claim for unjust enrichment is based on his allegations that BOA failed to transfer to

26

his lender the amounts Malfatti owed to the lender on his real property loans. JSUF # 9. The loan

27

payments that Malfatti identifies as the basis for his unjust enrichment claim are the loan payments

28

that he believes should have been paid to the creditor/owner of the mortgage. JSUF # 10. In other

C 11-03142 LB (ORDER)

3

1

words, Malfatti does not claim the right to retain these payments. JSUF #11.

2

BOA moves for summary judgment on the following grounds: (1) Malfatti lacks standing

3

because he is asserting a claim that belongs to his lender or, alternatively, the Bankruptcy Trustee;

4

(2) judicial estoppel bars his claim; and (3) he lacks facts to support liability or damages. See

5

Motion at 7. Malfatti counters that (1) he has standing, (2), his Chapter 7 Bankruptcy does not bar

6

his claim, and (3) disputed issues of material fact preclude summary judgment. Opp’n at 2-3. The

7

court first addresses BOA’s threshold standing and judicial estoppel arguments and then turns to the

8

merits of Malfatti’s claim.

9

I. STANDING AND JUDICIAL ESTOPPEL

Rule 12(b)(1). See United States v. Hays, 515 U.S. 737, 742 (1995); Chandler v. State Farm Mut.

12
For the Northern District of California

Standing is a jurisdictional requirement that cannot be waived and is properly addressed under

11
UNITED STATES DISTRICT COURT

10

Auto. Ins. Co., 598 F.3d 1115, 1122 (9th Cir. 2010). The party asserting the claim has the burden of

13

establishing standing. See Colwell v. Dept. of Health and Human Servs., 558 F.3d 1112, 1121 (9th

14

Cir. 2009). The standing doctrine encompasses constitutional requirements and prudential

15

considerations. See Valley Forge Christian College v. Americans United for Separation of Church

16

& State, Inc., 454 U.S. 464, 471 (1982); Sahni v. American Diversified Partners, 83 F.3d 1054, 1057

17

(9th Cir. 1996).

18

From a constitutional perspective, Article III’s case-or-controversy requirement requires the

19

following for each claim: (1) the party invoking federal jurisdiction must have suffered some actual

20

or threatened injury; (2) the injury must be fairly traceable to the challenged conduct; and (3) a

21

favorable decision would likely redress or prevent the injury. See Friends of the Earth, Inc. v.

22

Laidlaw Envtl. Servs. (TOC), 528 U.S. 167, 180-81, 185 (2000); Lujan v. Defenders of Wildlife, 504

23

U.S. 555, 560–61 (1992); Valley Forge Christian College, 454 U.S. at 472; Sahni, 83 F.3d at 1057.

24

The prudential limitations on federal court jurisdiction require the following: (1) a party must

25

assert his own legal rights and interests, not those of others; (2) courts will not adjudicate

26

“generalized grievances;” and (3) a party’s claims must fall within the zone of interests that is

27

protected or regulated by the statute or constitutional guarantee in question. See Valley Forge

28

Christ. College, 454 U.S. at 474–75; Stormans, Inc. v. Selecky, 586 F.3d 1109, 1122 (9th Cir. 2009).

C 11-03142 LB (ORDER)

4

1

A. Whether Malfatti is Asserting the Claim of His Creditor

2

BOA first argues that it is entitled to summary judgment because Malfatti suffered no injury and

3

thus lacks standing. See Motion at 12-14. “Plaintiff’s allegations that ‘[BOA] has not been sending

4

any of plaintiff’s payments to any actual creditor/owner of the mortgage’ do not assert any actual

5

harm suffered by Plaintiff, but rather attempt to state a claim for his lender.” Id. at 13 (quoting

6

Complaint ¶ 32). Malfatti does not directly respond to this argument. See Opp’n.

7

In support of its argument, BOA cites cases affirming the general rule that a party cannot enforce

8

the legal rights of third parties. See McCollum v. California Dep’t of Corr. & Rehab., 647 F.3d 870,

9

879-80 (9th Cir. 2011) (“a litigant may assert only his own legal rights and interests and cannot rest

Professors v. Bush, 310 F.3d 1153, 1163 (9th Cir. 2002) (same); Tileston v. Ullman, 138 U.S. 44, 46

12
For the Northern District of California

a claim to relief on the legal rights or interests of third parties”); Coal. of Clergy, Lawyers, &

11
UNITED STATES DISTRICT COURT

10

(1943) (same). But those cases do not dispose of the standing issue here. BOA provides no

13

authority for the proposition that a bank who retains loan payments that it has no right to (and

14

instead belong to a different loan servicer) can defeat the borrower/lender’s claim for lack of

15

standing. Not only would that reward someone with no right to the payments, but also, it implicates

16

Malfatti’s obligations to the alleged third-party servicer. At least on this record, and in the absence

17

of case law to the contrary, the court finds that Malfatti has standing. See also Restatement (First) of

18

Restitution § 126 (1937); Restatement (Third) of Restitution & Unjust Enrichment § 64 (2011)

19

(“When a claimant asserts a right to restitution from identifiable property in the hands of the

20

recipient, it is not a defense to show that the claimant’s rights to the property in question are inferior

21

to those of a third person.”).

22

B. Post-Bankruptcy Standing

23

BOA next argues that Malfatti lacks standing because he filed for Chapter 7 bankruptcy in 2009,

24

which transferred his current right of action to the Chapter 7 bankruptcy trustee. Motion at 14-16.

25

Malfatti responds that his current claims are “post-petition property” unaffected by the bankruptcy

26

estate and that BOA provides no evidence that his unjust enrichment “claim herein existed, or that

27

Malfatti knew about it, prior to the filing of the bankruptcy and the creation of the bankruptcy

28

estate.” Opp’n, ECF No. 85 at 9. Based on the record presented, the court grants summary

C 11-03142 LB (ORDER)

5

1

judgment to BOA to the extent Malfatti seeks to recoup his pre-petition payments, but denies BOA’s

2

motion to the extent Malfatti’s claims are based on payments made after April 27, 2009.

3

The Bankruptcy Code provides that, with some exceptions, a bankruptcy estate is comprised of

4

“all legal or equitable interests of the debtor in property as of the commencement of the case.” 11

5

U.S.C. § 541(a)(1). In order to ensure a precise accounting, the debtor has an ongoing affirmative

6

obligation to file and update a schedule of assets and liabilities to the bankruptcy court, including all

7

pending and contingent claims. Fed. R. Bankr. P. 1007(b)(1); 11 U.S.C. §§ 521(a)(1), 541(a)(l);

8

Hamilton v. State Farm Fire & Cas. Co., 270 F.3d 778, 785 (9th Cir. 2001). At the conclusion of

9

the bankruptcy proceedings, all assets properly scheduled by the debtor, and not otherwise

10

Assets, including causes of action, that a debtor fails to properly disclose in bankruptcy remain

12
For the Northern District of California

UNITED STATES DISTRICT COURT

11

administered by the trustee, are “abandoned to the debtor.” 11 U.S.C. § 554(c).

the property of the bankruptcy estate even after the case is closed. See Dunmore v. United States,

13

358 F.3d 1107, 1112 (9th Cir. 2004); In re Lopez, 283 B.R. 22, 28 (B.A.P. 9th Cir. 2002); Cusano v.

14

Klein, 264 F.3d 936, 945-46 (9th Cir. 2001). In such cases, the bankruptcy trustee, as the

15

representative of the estate, succeeds to the debtor’s right to pursue causes of action that are the

16

property of the estate. 11 U.S.C. § 323(a); see In re Alcala, 918 F.2d 99, 102 (9th Cir. 1990). “[A]

17

chapter 7 trustee can . . . prosecute [an action], settle it, abandon it, or arrange for [the debtor] to

18

prosecute it in exchange for the estate receiving a share of the proceeds.” See In re Lopez, 283 B.R.

19

at 28. Thus, “[w]hen a party fails to schedule a claim in bankruptcy, that claims remains the

20

property of the bankruptcy estate even after discharge, and the debtor lacks standing to pursue it.”

21

Holland & Knight, LLP v. Deatley, 357 Fed. App’x 83, 85 (9th Cir. 2009) (citing Dunmore, 358

22

F.3d at 1112)).

23

In opposition to BOA’s motion, Malfatti does not dispute that he did not disclose his current

24

claim to the bankruptcy court. Instead, he contends that his unjust enrichment claim is not property

25

of the bankruptcy estate because he did not file suit until more than two years after filing for

26

bankruptcy. Opp’n, ECF No. 67 at 3-7. He also contends that summary judgment is not warranted

27

because BOA has not presented evidence that his claim existed or he knew about it before filing for

28

bankruptcy. Id. at 4. The court disagrees with Malfatti’s analysis. A claim is not “post-petition

C 11-03142 LB (ORDER)

6

1

property” merely because the debtor did not file suit until after the bankruptcy case is closed. And

2

the court’s own research shows that the Bankruptcy Code broadly defines a pre-petition claim as a

3

“right to payment, whether or nor such right is reduced to judgment, liquidated, unliquidated, fixed,

4

contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured or unsecured.” 11

5

U.S.C. § 101(5)(A).

6

But BOA’s argument fares no better. BOA contends that Malfatti lacks standing to bring his

7

unjust enrichment claim because he failed to disclose it to the bankruptcy court. Motion at 14-16.

8

BOA relies on state court precedent for the proposition that a debtor must disclose potential claims

9

that accrue prior to filing for bankruptcy. Id. at 15 (citing Bostanian v. Liberty Savings Bank, FSB,

accrued prior to his filing for Chapter 7 because he had been making payments and could have

12
For the Northern District of California

52 Cal. App. 4th 1075 (1997)). Relying on California law, BOA contends that Malfatti’s claim

11
UNITED STATES DISTRICT COURT

10

brought suit before filing for bankruptcy. Id. at 15-16 (relying on Collins v. Los Angeles County,

13

241 Cal. App. 2d 451, 454 (1966). Because Malfatti’s cause of action accrued under California law,

14

BOA contends Malfatti breached his duty to disclose the claim to the bankruptcy court and lacks

15

standing to assert it now.

16

BOA’s argument fails. First, state law determines the existence of a claim, but federal law

17

determines when the claim arises for bankruptcy purposes. In re Cool Fuel, Inc., 210 F.3d 999,

18

1006 (9th Cir. 2000); Johnson v. Home State Bank, 501 U.S. 78, 83 (1991). Second, the Ninth

19

Circuit has rejected the “accrual test” because it defines a claim more narrowly than 11 U.S.C. §

20

101(5)(A). See In re Cool Fuel, 210 F.3d at 999 (9th Cir. 2000) (“It is well-established that a claim

21

is ripe as an allowable claim in a bankruptcy proceeding even if it is a cause of action that has not

22

yet accrued.”); In re Hexcel Corp., 239 B.R. 564 (N.D. Cal. 1999); see also Gottlieb v. Kest, 141

23

Cal. App. 4th 110 (2006) (analyzing applicable federal precedent). Instead, federal courts apply

24

different tests depending on the circumstances. See, e.g., In re Storek, 355 B.R. 187 (2006) (N.D.

25

Cal. 2006) (discussing the accrual test, conduct test, relationship test and fair contemplation test and

26

quoting the discussion in Gottlieb); see also In re Zilog, Inc., 450 F.3d 996 (9th Cir. 2006) (applying

27

the fair contemplation test in a discrimination case); In re Cool Fuel, 210 F.3d at 1006-07 (applying

28

fair contemplation test in a tax case); Hassanally v. Republic Bank (In re Hassanally), 208 B.R. 46,

C 11-03142 LB (ORDER)

7

1

53 (B.A.P. 9th Cir. 1997) (negligent construction claim). The strong trend of in-circuit authority

2

suggests that the court should apply the fair contemplation test.

3

Regardless, Malfatti persuasively counters that he made most of the payments at issue after he

4

filed for bankruptcy and after his bankruptcy was discharged, and thus, his claims to recover these

5

was not subsumed within the bankruptcy estate. See Opp’n at 10. BOA argues that California

6

courts have rejected the “so-called continuing violation doctrine, including as it applied to claims for

7

unjust enrichment based on receipt of mortgage payments.” Reply, ECF No. 86 at 9. But BOA

8

relies on the California case of Vaca v. Wachovia Mortgage Corporation, which is inapposite. 198

9

Cal. App. 4th 737, 744-45 (2011). First, that case dealt with accrual for statute of limitations

payments on a continuing basis, like Malfatti alleges. Instead, the court considered whether the

12
For the Northern District of California

purposes – not for bankruptcy. Second, that court did not involve unjust enrichment of mortgage

11
UNITED STATES DISTRICT COURT

10

“continuing wrong doctrine” postponed the limitations period of a fraud claim and the complaint

13

“contain[ed] no allegations defendants did anything wrong after making the fraudulent mortgage

14

loans in 2000 and 2001. Id. In contrast, Malfatti alleges that BOA wrongfully withheld separate

15

mortgage payments both before and after his bankrtuptcy proceedings. In the absence of any

16

persuasive argument for why Malfatti lacks standing, the court denies the motion for summary

17

judgment on this basis as to the post-bankruptcy payments.

18

C. Judicial Estoppel

19

BOA also makes the related argument that Malfatti failed to list his current claims on the

20

schedules accompanying his Chapter 7 petition so that he is judicially estopped from asserting them

21

now. Motion at 16-17. Malfatti does not specifically address BOA’s argument, but seems to rely on

22

the contention previously discussed that his claims did not arise until after bankruptcy. See Opp’n at

23

9-11

24

Federal law on judicial estoppel governs cases in federal courts regardless of whether they

25

involve state law claims. Johnson v. Or. Dep’t of Human Res. Rehab. Div., 141 F.3d 1361, 1364

26

(9th Cir. 1998); Rissetto v. Plumbers and Steamfitters Local 343, 94 F.3d 597, 603 (9th Cir. 1996).

27

Judicial estoppel is an equitable doctrine that prevents a party from benefitting by taking one

28

position but then later seeking to benefit by taking a clearly inconsistent position. Hamilton v. State

C 11-03142 LB (ORDER)

8

1

Farm Fire & Cas. Ins. Co., 270 F.3d 778, 782 (9th Cir. 2001). Judicial estoppel may be invoked by

2

the court at its discretion. Morris v. California, 966 F.2d 448, 453 (9th Cir. 1991). It is intended to

3

protect the integrity of the judicial process by preventing a litigant from “playing fast and loose with

4

the courts.” Russell v. Rolfs, 893 F.2d 1033, 1037 (9th Cir. 1990).

5

In the bankruptcy context, where the plaintiff fails to disclose potential claims in his bankruptcy

6

schedules and thereafter sues on them, judicial estoppel serves to protect the bankruptcy system,

7

which depends on full and honest disclosure by debtors of all their assets. Hamilton, 270 F.3d at

8

785. When a debtor’s disclosures are incomplete, they impair the interests of the creditors (who

9

plan their actions in the bankruptcy proceeding based on information in the disclosures) and the

10

Several factors help determine whether judicial estoppel applies. Id. at 782 (citing New

12
For the Northern District of California

UNITED STATES DISTRICT COURT

11

bankruptcy court (which decides to approve a plan based on the information). Id.

Hampshire v. Maine, 532 U.S. 742, 750-51 (2001)). “‘First, a party’s later position must be ‘clearly

13

inconsistent’ with its earlier position.’” Id. (quoting New Hampshire, 532 U.S. at 750). In the

14

bankruptcy context, this inconsistency may result “from asserting a cause of action not raised in a

15

reorganization plan or otherwise mentioned in the debtor’s schedules or disclosure statements.” Id.

16

at 783. Second, the party must have “‘succeeded in persuading a court to accept that party’s earlier

17

position.’” Id. at 782 (quoting New Hampshire, 532 U.S. at 750). “‘Third, the party seeking to

18

assert an inconsistent position would derive an unfair advantage or impose an unfair detriment on

19

the opposing party if not estopped.’” Id. (quoting New Hampshire, 532 U.S. at 751). These factors

20

are not “‘inflexible prerequisites or an exhaustive formula’” because “‘[a]dditional considerations

21

may inform the doctrine’s application in specific factual contexts.’” Id. (quoting New Hampshire,

22

532 U.S. at 751). Another factor is whether the party to be estopped acted inadvertently or with an

23

intent to defraud the court or creditors. Johnson, 141 F.3d at 1369 (“If incompatible positions are

24

based not on chicanery, but only on inadvertence or mistake, judicial estoppel does not apply.”).

25

Here, BOA argues that Malfatti took inconsistent positions by representing to the bankruptcy

26

court that he had no contingent or unliquidated claims. Motion at 17; see JSUF #6. Based on these

27

representations, the bankruptcy court discharged Malfatti’s debts. Motion at 17; see JSUF # 10.

28

BOA does not address the other judicial estoppel factors like whether Malfatti would derive an

C 11-03142 LB (ORDER)

9

1

unfair advantage if not estopped and whether he had an intent to defraud.

did Malfatti’s claim arise for bankruptcy purposes? As discussed, BOA does not address any of the

4

cases discussing when claims arise for bankruptcy purposes. Nor does BOA discuss whether the

5

analysis is different for pre-petition and post-petition payments. See In re Stroh, 34 Fed. App’x 562,

6

565 (9th Cir. 2002) (bankruptcy court did not abuse its discretion in determining that Chapter 7

7

debtor’s disclaimer of partnership interests in bankruptcy court proceedings barred subsequent

8

claims for either pre-petition or post-petition partnership earnings); but see In re Ryerson, 739 F.2d

9

1423, 1426 (9th Cir. 1984) (where, after filing his bankruptcy petition, debtor received payment

10

pursuant to the termination clause of his employment contract, the bankruptcy estate owned the

11

portion of the termination payment based on the debtor’s pre-bankruptcy services but not the portion

12
For the Northern District of California

BOA’s judicial estoppel argument invokes the same question as their standing argument. When

3

UNITED STATES DISTRICT COURT

2

based on post-bankruptcy services).

13

On this record, the court declines to invoke judicial estoppel. There is no evidence that Malfatti

14

acted intentionally. And given the court’s ultimate disposition, Malfatti will not derive an unfair

15

advantage from his position in this litigation. The court denies this portion of BOA’s motion

16

without prejudice because the court would reconsider the issue based on further briefing.

17

II. MALFATTI’S UNJUST ENRICHMENT CLAIM

18

Having rejected BOA’s standing and judicial estoppel arguments, the court turns to the crux of

19

the dispute: the evidentiary support for Malfatti’s unjust enrichment claim. BOA moves for

20

summary judgment, arguing that Malfatti has no evidence to support his allegations that his

21

payments were not applied to his loan or that he suffered damages. See Motion at 17-19. In

22

response, Malfatti argues that disputed issues of material fact preclude summary judgment.

23

See Opp’n at 4-9.

24

A motion for summary judgment should be granted if there is no genuine dispute of material fact

25

and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a); Anderson v.

26

Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986). Material facts are those that may affect the

27

outcome of the case. Anderson, 477 U.S. at 248. A dispute about a material fact is genuine if there

28

is sufficient evidence for a reasonable jury to return a verdict for the non-moving party. Id. at 248-

C 11-03142 LB (ORDER)

10

1
2

49.
The party moving for summary judgment has the initial burden of informing the court of the

interrogatories, admissions, or affidavits that demonstrate the absence of a triable issue of material

5

fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). To meet its burden, “the moving party

6

must either produce evidence negating an essential element of the nonmoving party’s claim or

7

defense or show that the nonmoving party does not have enough evidence of an essential element to

8

carry its ultimate burden of persuasion at trial.” Nissan Fire & Marine Ins. Co., Ltd. v. Fritz

9

Companies, Inc., 210 F.3d 1099, 1102 (9th Cir. 2000); see Devereaux v. Abbey, 263 F.3d 1070, 1076

10

(9th Cir. 2001) (“When the nonmoving party has the burden of proof at trial, the moving party need

11

only point out ‘that there is an absence of evidence to support the nonmoving party’s case.’”)

12
For the Northern District of California

basis for the motion and identifying those portions of the pleadings depositions, answers to

4

UNITED STATES DISTRICT COURT

3

(quoting Celotex Corp., 477 U.S. at 325).

13

If the moving party meets its initial burden, the burden shifts to the non-moving party, which

14

must go beyond the pleadings and submit admissible evidence supporting its claims or defenses and

15

showing a genuine issue for trial. See Fed. R. Civ. P. 56(e); Celotex, 477 U.S. at 324; Nissan Fire,

16

210 F.3d at 1103; Devereaux, 263 F.3d at 1076. If the non-moving party does not produce evidence

17

to show a genuine issue of material fact, the moving party is entitled to summary judgment. See

18

Celotex, 477 U.S. at 323.

19

In ruling on a motion for summary judgment, inferences drawn from the underlying facts are

20

viewed in the light most favorable to the non-moving party. Matsushita Elec. Indus. Co. v. Zenith

21

Radio Corp., 475 U.S. 574, 587 (1986).

22

Courts in this district have generally3 held that California law permits unjust enrichment claims,

23
24
25
26
27
28

3

Some California courts have held that there is no stand alone cause of action for unjust
enrichment; rather it is “a general principle, underlying various legal doctrines and remedies.”
Herrington v. Johnson & Johnson Consumer Co., Inc., No. C 09-1597 CW, 2010 WL 3448531, at
*13 (N.D.Cal. Sept. 1, 2010) (listing cases)); see also McBride v. Boughton, 123 Cal. App. 4th 379
(2004) (“Unjust enrichment is not a cause of action, however, or even a remedy, but rather a general
principle, underlying various legal doctrines and remedies. It is synonymous with restitution.”)
(internal citations and quotation marks omitted). Because BOA does not make this argument, the
court need not address it.

C 11-03142 LB (ORDER)

11

1

in which “restitution may be awarded either (1) in lieu of breach of contract damages, where an

2

asserted contract is found to be unenforceable or ineffective, or (2) where the defendant obtained a

3

benefit from the plaintiff by fraud, duress, conversion, or similar conduct, but the plaintiff has

4

chosen not to sue in tort.” Oracle Corp. v. SAP AG, No. C 07-1658 PJH, 2008 WL 5234260, at *8

5

(N.D. Cal. Dec. 15, 2008) (citing McBride v. Boughton, 123 Cal. App. 4th 379, 388 (2004)); see also

6

Wolf v. Wells Fargo Bank, N.A., No. C11-01337 WHA, 2011 WL 4831208, at *8 (N.D. Cal. Oct. 12,

7

2011) (“Restitution [under an unjust enrichment theory] may be awarded in lieu of breach of

8

contract damages when the parties had an express contract, but it was procured by fraud or is

9

unenforceable or ineffective for some reason.”) (citing McBride 123 Cal. App. 4th at 388). “To state

benefit at the expense of another.’” Walters v. Fid. Mortg. of Cal., No. 2:09-cv-3317 FCD/KJM,

12
For the Northern District of California

a claim for restitution, a plaintiff ‘must plead receipt of a benefit and the unjust retention of the

11
UNITED STATES DISTRICT COURT

10

2010 WL 1493131, at *12 (E.D. Cal. Apr. 14, 2010) (quoting Lectrodryer v. SeoulBank, 77 Cal.

13

App. 4th 723, 726 (2000)).

14

Here, Malfatti’s theory of unjust enrichment is that BOA received his mortgage payments even

15

though it was not the actual servicer of his mortgages and retained the payments rather than passing

16

them along to the lender. See JSUF #9-10. BOA meets its initial burden to demonstrate that

17

Malfatti’s evidence is insufficient to establish two essential elements of his claim – unjust retention

18

and damages. See High Tech Gays v. Def. Indus. Security Clearance Office, 895 F.2d 563, 574 (9th

19

Cir. 1990).

20

As to the evidence of unjust enrichment, BOA first points out that Malfatti has no evidence to

21

support his allegations that his payments were not applied to his loans. Motion at 18. BOA served

22

an interrogatory on Malfatti requesting “all facts that support your allegation at paragraph 24 of the

23

COMPLAINT that ‘BAC Home loans . . . is . . . not a mortgage servicer for any actual

24

creditor/owner of the mortgage.” Richardson Decl. Ex. B, ECF No. 77-4 at 2. Malfatti’s response

25

provides no factual support other than that BOA is not identified in his loan documents and that

26

BOA has provided no evidence proving it is the servicer. See id. at 2-3.

27

Second, BOA points out that Malfatti has no evidence showing that BOA was not entitled to

28

C 11-03142 LB (ORDER)

12

1

receive his mortgage payments.4 See Motion at 18. Another of BOA’s interrogatories requested “all

2

facts that support your allegation . . . that [BOA] ‘had no contract or agreement for collecting

3

payments with any actual creditor/owner of the mortgage.’” Richardson Decl. Ex. B, ECF No. 77-4

4

at 3. Malfatti’s response just referenced the interrogatory response discussed above. Id.

5

Third, BOA points to the same interrogatory responses to show that Malfatti lacks evidence that

6

any servicer other than BOA had the right to service the Properties. See Motion at 18. When asked

7

to “[i]dentify the entity that you believe to be the servicer” of the loans, Malfatti did not identify

8

another service and objected that the question was immaterial. See Richardson Decl. Ex. B, ECF

9

No. 77-4 at 4.

itemized loan histories documenting the date, amount, and application of each payment. See Abbott

12
For the Northern District of California

All of this is in the context of the discovery that Bank of America produced to Plaintiff including

11
UNITED STATES DISTRICT COURT

10

Decl., ECF No. 82, Exh. B. Also, BOA stated in its interrogatory responses that “[p]rior to

13

November of 2012, the servicing rights belonged to Defendant Bank of America, N.A. and its

14

predecessor in interest, Countrywide.” See Abbott Decl. Ex. A, ECF No. 82-1 at 3-4.

15

As to evidence about damages, BOA argues that Malfatti lacks evidence that he was damaged

16

based on the undisputed fact that “Plaintiff is not sure if he is alleging that he has been harmed at all

17

by [BOA].” JSUF # 17.

18

In sum, BOA has provided ample evidence to meet its initial burden of identifying the absence of

19

a triable issue of material fact. Accordingly, the burden shifts to Malfatti to produce evidence

20

sufficient to create a genuine issue of material fact. See Nissan Fire & Marine Ins., 210 F.3d at

21

1102-03.

22

Malfatti fails to meet his burden. The crux of Malfatti’s argument is BOA’s discovery responses

23

were evasive and that the evidence produced is insufficient. See Opp’n at 5-8. Malfatti’s objection

24

to the sufficiency of the discovery responses is unpersuasive. Malfatti filed this case in 2011 and

25

has had ample opportunity to conduct discovery. Even after the close of discovery, when the first

26
27
4

28

Malfatti did not dispute his lack of evidence on this point. See Joint Statement of
Undisputed Facts, ECF No. 70 at 5.

C 11-03142 LB (ORDER)

13

1

summary judgment motion was fully briefed, the court denied the motion and let Malfatti conduct

2

even more discovery. See Order, ECF No. 73. He did not object to BOA’s April 10, 2013 discovery

3

responses and did not challenge their sufficiency with the court. JSUF #22-23. At this point, if the

4

responses are insufficient, the blame lies with Malfatti.

5

Malfatti also argues that BOA has not provided him with “direct evidence of how it came to be

6

the servicer, and on whose behalf it is acting as servicer.” Opp’n at 6. But – as stated above –

7

BOA’s interrogatory responses say that “[p]rior to November of 2012, the servicing rights belonged

8

to Defendant Bank of America, N.A. and its predecessor in interest, Countrywide.” See Abbott

9

Decl. Ex. A, ECF No. 82-1 at 3-4. Malfatti cites additional evidence that he contends is insufficient

entitled to receive them.” Opp’n at 8. But these purported insufficiencies do not constitutes a

12
For the Northern District of California

to prove that BOA was his loan servicer or that it ever “forward[ed] the payments to the person

11
UNITED STATES DISTRICT COURT

10

dispute of material fact that actually supports Malfatti’s affirmative case. Essentially, Malfatti asks

13

the court to infer evidence of liability based on purported weaknesses in the evidentiary record.

14

While the court resolves reasonable inferences in Malfatti’s favor, his failure to obtain discovery

15

does not mean he can withstand summary judgment.

16

Finally, Malfatti in essence acknowledges that he has not identified any evidence to counter

17

these facts. BOA proposed that Malfatti’s lack of evidence should be an undisputed fact. See JSUF

18

14-16. In the initial summary judgment briefing, Malfatti stipulated that his lack of evidence was

19

undisputed. See ECF No. 70. Here, Malfatti was ordered to provide legal citations to the evidence

20

supporting his dispute of any proposed undisputed facts. See Order, ECF No. 79 at 2 (“If Plaintiff

21

disputes a specific fact, the response shall include legal citations to the evidence supporting

22

Plaintiff’s position.”). He did not do so.

23

Instead of identifying actual evidence, Malfatti disputes these facts “on the grounds that [BOA’s]

24

evidence is ‘squishy,’ and raises doubts about who [BOA] has been providing payments to.” But

25

Malfatti has the burden to provide the evidence and cannot resist summary judgment based on the

26
27
28

C 11-03142 LB (ORDER)

14

1

perceived weakness (or the squishiness) of his opponent’s case.5 Accordingly, the court GRANTS

2

BOA’s motion for summary judgment.

3

CONCLUSION

4

The court GRANTS Defendant’s motion for summary judgment. This disposes of ECF No. 74.

5

IT IS SO ORDERED.

6

Dated: June 20, 2013

7

_______________________________
LAUREL BEELER
United States Magistrate Judge

8
9
10

12
For the Northern District of California

UNITED STATES DISTRICT COURT

11

13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

5

Malfatti seems to acknowledge that his claims against BOA are more of a fishing
expedition and do not arise from any evidence that BOA has been unjustly enriched. For example,
he states that he “filed this action to determine who is the proper payee of the notes, and if the proper
payee(s) was receiving his payments.” Opp’n at 3.

C 11-03142 LB (ORDER)

15