Mora v. U.S. Bank, N.A. et al

Filing 34

Order by Hon. Samuel Conti granting 24 Motion to Dismiss with Leave to Amend Certain Claims. (sclc2, COURT STAFF) (Filed on 6/7/2012)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE NORTHERN DISTRICT OF CALIFORNIA

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For the Northern District of California

United States District Court

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TARCICIO MORA and REMEDIOS MORA,

)
)
Plaintiffs,
)
)
v.
)
)
U.S. BANK N.A., as Trustee for the )
holders of the First Franklin
)
Mortgage Loan Trust Mortgage Pass- )
Through Certificates, Series 2005- )
FF9, SELECT PORTFOLIO SERVICING,
)
INC., NATIONAL DEFAULT SERVICING
)
CORPORATION, and DOES 1 THROUGH
)
20,
)
)
Defendants.
)
)
I.

Case No. 11-6598 SC
ORDER GRANTING DEFENDANTS'
MOTION TO DISMISS CORRECTED
FIRST AMENDED COMPLAINT

INTRODUCTION
Plaintiffs Tarcicio and Remedios Mora (collectively,

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"Plaintiffs") seek postponement of the pending non-judicial

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foreclosure sale of their home at 1264 San Rafael Drive in

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Petaluma, California (the "Property"), as well as compensatory

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damages of $65,000.

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("CFAC")) at 14.

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N.A. ("USB"), who allegedly is the beneficiary of the deed of trust

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on the Property; Select Portfolio Servicing, Inc. ("SPS"), who

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allegedly is the mortgage servicer; and National Default Servicing

ECF No. 17 (Corrected First Amended Complaint

Their lawsuit names three Defendants: U.S. Bank

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Corporation ("NDSC"), who allegedly is the foreclosure trustee and

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agent for USB (collectively, "Defendants"); as well as twenty

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unnamed "Does."

CFAC ¶¶ 2-5.1

The CFAC asserts four claims: (1) against all Defendants,

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violation of California Civil Code Section 2923.5 ("Section

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2923.5"); (2) against USB and SPS, violation of California's Unfair

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Competition Law, Cal. Bus. & Prof. Code § 17200 ("UCL"); (3)

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against SPS, breach of contract; and (4) against all defendants,

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promissory estoppel.

Defendants move to dismiss the CFAC in its

ECF No. 24 ("Mot.").2

United States District Court

For the Northern District of California

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entirety.

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suitable for determination without oral argument.

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("Opp'n"), 28 ("Reply").

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Court GRANTS Defendants' Motion and dismisses the CFAC.

The Motion is fully briefed, and
ECF Nos. 26

For the reasons set forth below, the

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II.

BACKGROUND

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For purposes of this Rule 12(b)(6) motion, the Court takes all

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the well-pleaded allegations of the CFAC as true and construes them

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in the light most favorable to Plaintiffs.

Lee v. City of Los

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Angeles, 250 F.3d 668, 679 (9th Cir. 2001).

On June 29, 2005,

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Plaintiffs originally filed this case in California state court.
Thereafter, Defendants removed to federal court on the basis of
diversity. Following a series of motions, as well as amendments
and corrections of Plaintiffs' pleading, this Court retained
jurisdiction and determined that the CFAC is the operative
complaint in this case. See ECF No. 23.
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Concurrently with their Motion to Dismiss, Defendants filed a
Request for Judicial Notice of several documents. ECF Nos. 25
("RJN") Exs. 1 (Deed of Trust ("DOT")), 2 (Assignment of Deed of
Trust, recorded December 14, 2010 ("Dec. 14 Ass."), 3 (Notice of
Default ("NOD")), 4 (Notice of Substitution of Trustee ("Not. Sub.
T.")), and 5 (Notice of Trustee's Sale ("Not. T. Sale")). None of
these documents were attached to the CFAC. Nevertheless, the Court
takes judicial notice of them because the CFAC depends on their
contents and neither party disputes their authenticity. Knievel v.
ESPN, 393 F.3d 1068, 1076 (9th Cir. 2005).

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Plaintiffs took out a $400,000 adjustable rate mortgage loan,

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repayment of which was secured by a Deed of Trust recorded against

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the Property.

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residence.

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"Occupancy").

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Trust was recorded in Sonoma County, naming USB as its beneficiary.

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CFAC ¶ 18; Dec. 14 Ass.

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2011, another assignment of the Deed of Trust was recorded.

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CFAC ¶ 17; DOT.

The Property was and is Plaintiffs'

CFAC ¶ 40; see DOT at 9 (paragraph captioned
On December 14, 2010, an assignment of the Deed of

Plaintiffs allege that, on October 24,
CFAC ¶

Plaintiffs further allege that their loan was pooled into a

United States District Court

For the Northern District of California

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mortgage-backed security called the First Franklin Mortgage Loan

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Trust Mortgage Pass-Through Certificates, Series 2005-FF9.

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20.

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does not identify the date on which the trust pool allegedly was

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created.

Plaintiff identifies USB as the trustee.

Id. ¶ 21.

Id. ¶
Plaintiff

See id. ¶ 20.

Since at least June 2009, SPS has acted as USB's servicing

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agent for the loan.

Id. ¶¶ 24-25, 76, 85.

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SPS "has continuously represented to Plaintiffs that they will

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obtain a loan modification."

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SPS has repeatedly denied Plaintiffs' applications for a loan

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modification while asking Plaintiffs "to 'apply again.'"

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(quotation in original).

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refer to permanent loan modification, as opposed to temporary.

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That is because Plaintiffs go on to allege that, in June 2006, SPS

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put them on a "Trial Period Payment Plan," under which Plaintiffs

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would make monthly payments of $1,500.00.

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Plaintiffs allege that SPS told them "that the Trial Period would

Id. ¶ 59.

Plaintiffs allege that

But, Plaintiffs allege,

Id.

The Court construes these allegations to

Id. ¶¶ 27, 76.

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Plaintiffs do not allege how this assignment changed the previous
one.

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lead to a permanent modification on their loan."

Id. ¶ 27.

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Plaintiffs allege in conclusory fashion that in reliance on SPS's

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promise to permanently modify the loan they performed all their

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obligations during the Trial Period, including making their $1,500

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monthly payments.

Id. ¶¶ 27, 77.

On December 14, 2010, NDSC recorded a Notice of Default which

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indicated that Plaintiffs were $54,956.30 past due on their loan.

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Id. ¶¶ 28, 42, 88; NOD.

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is exempt.

The Notice of Default states: "This loan

Compliance with California Civil Code § 2923.5 and

United States District Court

For the Northern District of California

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2924.8 is not necessary to proceed with preparing and processing a

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notice of default. "

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Notwithstanding the purported exemption from Section 2923.5

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appearing on the face of the Notice of Default, Plaintiffs allege

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that Defendants violated the statute by failing to contact, or

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attempt to contact, Plaintiffs prior to filing the NOD or

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commencing foreclosure proceedings," in violation of Section

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2923.5.

NOD at 2; see also CFAC ¶ 29.

CFAC ¶¶ 31-32, 46, 52.4

On November 7, 2011, two documents pertaining to the Property

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were recorded in Sonoma County, California.

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Substitution of Trustee in favor of NDSC.

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of Trustee's Sale scheduling the foreclosure sale of the Property

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for November 30, 2011.

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that the foreclosure sale has not yet occurred.

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(Plaintiffs praying for postponement of sale); MTD at 2 (Defendants

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seeming to acknowledge that sale has not yet "go[ne] forward").

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///

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The first was a

The second was a Notice

See Not. Sub. T., Not. T. Sale.

It appears

See CFAC at 14

The Court later addresses the apparent contradiction between
these allegations and others which describe extensive contact
between Defendants and Plaintiffs. See infra Section IV.A.

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III. LEGAL STANDARD
A motion to dismiss under Federal Rule of Civil Procedure

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12(b)(6) "tests the legal sufficiency of a claim."

Navarro v.

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Block, 250 F.3d 729, 732 (9th Cir. 2001).

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on the lack of a cognizable legal theory or the absence of

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sufficient facts alleged under a cognizable legal theory."

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Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir.

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1988).

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should assume their veracity and then determine whether they

"Dismissal can be based

"When there are well-pleaded factual allegations, a court

United States District Court

For the Northern District of California

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plausibly give rise to an entitlement to relief."

Ashcroft v.

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Iqbal, 556 U.S. 662, 679 (2009).

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must accept as true all of the allegations contained in a complaint

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is inapplicable to legal conclusions.

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elements of a cause of action, supported by mere conclusory

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statements, do not suffice."

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Twombly, 550 U.S. 544, 555 (2007)).

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complaint must be both "sufficiently detailed to give fair notice

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to the opposing party of the nature of the claim so that the party

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may effectively defend against it" and "sufficiently plausible"

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such that "it is not unfair to require the opposing party to be

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subjected to the expense of discovery."

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1191, 1204 (9th Cir. 2011).

However, "the tenet that a court

Threadbare recitals of the

Id. at 678 (citing Bell Atl. Corp. v.
The allegations made in a

Starr v. Baca, 633 F.3d

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IV.

DISCUSSION

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A.

Claim One (Section 2923.5)

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California's Civil Code provides a comprehensive framework for

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non-judicial foreclosure.

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of default.

First, the lender must record a notice

Then, after three months have elapsed, the lender must

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give notice of the planned foreclosure sale.

Cal. Civ. Code §

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2924.

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the "mortgagee, trustee, beneficiary, or authorized agent" seeking

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to file a notice of default to first contact the borrower in person

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or by telephone "in order to assess the borrower's financial

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situation and explore options for the borrower to avoid

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foreclosure."

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default may not be filed until thirty days after this initial

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contact or the statute's due diligence requirements are satisfied.

Section 2923.5 concerns the notice of default.

Cal. Civ. Code § 2923.5(a)(2).

It requires

The notice of

United States District Court

For the Northern District of California

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Id. § 2923.5(a)(1).

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to file a notice of default must advise the borrower that he or she

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has the right to request a subsequent meeting and, if requested,

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schedule the meeting within fourteen days.

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During this initial contact, the party seeking

Id. § 2923.5(a)(2).

The rights provided to borrowers under Section 2923.5 are

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solely procedural in nature; the statute does not provide a

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substantive right to a loan modification.

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185 Cal. App. 4th 208, 231-32 (Cal. Ct. App. 2010).

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statute obligate the lender "to become a loan counselor itself."

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Id. at 219.

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"assess" the borrower's financial situation and "explore" options

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to avoid foreclosure can be satisfied by simply asking the borrower

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"why can't you make your payments?" and "telling the borrower the

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traditional ways that foreclosure can be avoided (e.g., deeds 'in

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lieu,' workouts, or short sales)."

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See Mabry v. Super. Ct.,
Nor does the

The lender's obligations under Section 2923.5 to

Id. at 232.

Ortiz v. Accredited Home Lenders, Inc., 639 F. Supp. 2d 1159

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(S.D. Cal. 2009), demonstrates the limited scope of a lender's duty

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under Section 2923.5.

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that their lender had "failed and refused to explore" alternatives

In that case, plaintiff borrowers alleged

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to foreclosure with them.

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specifically allege that the borrower had failed to contact them,

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and the borrower had filed a declaration of compliance with Section

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2923.5 along with the notice of trustee sale.

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court found that plaintiffs failed to state a Section 2923.5 claim

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because the declaration of compliance, in conjunction with the

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allegation that the lender "refused to explore" loan modification,

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implied that the borrowers "were contacted as required by the

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statute."

United States District Court

For the Northern District of California

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Id. at 1166.

Plaintiffs did not

Id.

The district

Id.

This case is similar to Ortiz.

Plaintiffs allege that "SPS,

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on many occasions and for a long period of time, has misrepresented

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and misled Plaintiffs to believe that they will provide Plaintiffs

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with a loan modification to help them keep their home."

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Plaintiffs allegedly responded to requests for documents initiated

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by SPS.

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Plaintiffs "on a Trial Period Payment Plan" -- that is, SPS gave

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them a temporary loan modification, in effect if not in name.

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¶ 27; see also id. ¶¶ 59, 76, 86.

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2009 and the Notice of Default was recorded roughly eighteen months

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later -- well after the thirty-day period required by Section

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2923.5.

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amount to a concession that they received all the "assess[ment]"

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and "explor[ation]" required by Section 2923.5.

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See id. ¶ 26.

Id. ¶ 76; NOD.

CFAC ¶ 25.

Plaintiffs even acknowledge that SPS placed

Id.

This trial period began in June

Essentially, Plaintiffs' allegations

The Court notes that the CFAC also contains boilerplate

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assertions that Defendants "neither contacted, or attempted to

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contact Plaintiffs," id. ¶ 46, and that Defendants "failed to

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contact Plaintiffs . . . ," id. ¶ 52.

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(same).

See also id. ¶¶ 31-32

The Court does not take these allegations as true because

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they are merely legal conclusions couched as factual allegations.

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Iqbal, 556 U.S. at 678; see also id. at 679 (when ruling on motions

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to dismiss, district courts may "begin by identifying pleadings

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that, because they are no more than conclusions, are not entitled

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to the assumption of truth").

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Plaintiffs' blanket denials of contact from Defendants are nothing

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more than "formulaic recitation[s] of the elements of a cause of

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action" -- in this case, a Section 2923.5 claim.

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Specifically, paragraphs 31 and 32 of the CFAC state:

United States District Court

For the Northern District of California

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The Court determines that

Id. at 678.

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At no time did the mortgagee, trustee, beneficiary, or
authorized agent contact Plaintiff [sic], in person or by
telephone, to assess the borrowers' financial situation
and explore options to avoid foreclosure as mandated by
California Civil Code section 2923.5. At no time did the
mortgagee, trustee, beneficiary, or authorized agent
attempted [sic] to contact Plaintiff [sic] in accordance
with the due diligence requirements of California Civil
Code section 2923.5.

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These paragraphs merely recite the language of Section 2923.5.5

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Plaintiffs' other blanket denials are similar.

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states:

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Contrary to the requirements of Cal. Civ. Code § 2923.5,
Defendants USB, SPS and NDSC, as an agent for USB and
SPS, neither contacted, or [sic] attempted to contact
Plaintiffs prior to filing the NOD or commencing
foreclosure proceedings, and as such the non judicial
[sic] foreclosure in [sic] not being conducted in
accordance with of [sic] Cal. Civ. Code § 2924.

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Paragraph 46

Paragraph 52 states:

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Defendants USB, SPS and NDSC, as an agent for USB and
SPS, failed to contact Plaintiff [sic] to satisfy the
detailed requirements of Cal. Civ. Code § 2923.5(a)(2),
or the due diligence requirements of Cal. Civ. Code §
2923.5(g), and did not adhere to the mandates laid out by
the
legislature
before
commencing
a
non-judicial

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"A mortgagee, beneficiary, or authorized agent shall contact the
borrower in person or by telephone in order to assess the
borrower's financial situation and explore options for the borrower
to avoid foreclosure." Cal. Civ. Code § 2923.5(a)(2).

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foreclosure.
Accordingly[,] they are precluded from
proceeding with non-judicial foreclosure pursuant [to]
Cal. Civ. Code § 2924 until the requisite contact is made
with Plaintiffs.

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If the Court were to take these paragraphs as factual

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allegations, it would have to wrestle with the contradiction

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between, on the one hand, Plaintiffs' denial of "the requisite

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contact" from Defendants within the portion of the pleading devoted

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to the Section 2923.5 claim and, on the other hand, their frequent

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acknowledgement of contact elsewhere, including in their opposition

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brief.

Opp'n at 9, 11.

Indeed, Plaintiffs rely on the existence

United States District Court

For the Northern District of California

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of numerous conversations between themselves and SPS for their

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breach of contract and promissory estoppel claims, which center on

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Defendants' alleged failure to make good on promises to give

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Plaintiffs a permanent loan modification.

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Even resolving all reasonable doubts in favor of Plaintiffs, the

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inescapable conclusion is that Plaintiffs' blanket denials of

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having been contacted by Defendants exist simply to state the

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elements of a Section 2923.5 claim, and are the sort of "naked

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assertions" that do not satisfy Rule 8's pleading requirements.

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See Iqbal, 556 U.S. at 678.

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more specific allegations set forth in the CFAC as well-pleaded

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factual allegations entitled to the presumption of truth.

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general "allegations" are conclusions of law couched as facts.

See infra Section IV.C.

The Court therefore takes only the

The more

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Once shorn of Plaintiffs' legal conclusions, the CFAC's

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allegations amount to an admission that Defendants complied with

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Section 2923.5.

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Moreover, the Court determines that additional amendment could not

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save the claim.

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clear fashion that they have received all the process to which

Plaintiffs' Section 2923.5 claim therefore fails.

Plaintiffs already have alleged in adequately

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Section 2923.5 entitles them.

Accordingly, the Court DISMISSES

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Plaintiffs' Section 2923.5 claim WITH PREJUDICE.6

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B.

Claim Two (Cal. Bus. & Prof. Code § 17200 ("UCL"))

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The UCL "establishes three varieties of unfair competition --

fraudulent."

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App. 4th 322, 351 (2004).

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not alleged the facts supporting their UCL claim with enough

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specificity to put Defendants on notice of the bases of the claim.

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United States District Court

acts or practices which are [1] unlawful, or [2] unfair, or [3]

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For the Northern District of California

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Neither have Plaintiffs consistently represented the legal theories

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under which they intend to proceed.

Bernardo v. Planned Parenthood Fed'n of Am., 115 Cal.
The Court concludes that Plaintiffs have

The CFAC is no model of clarity, but Plaintiffs appear to

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bring their UCL claim under only the UCL's "unfair" and

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"fraudulent" prongs, not the "unlawful" prong.

CFAC ¶ 58; but see

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id. ¶ 72 (cursory mention of "unlawful" acts).

Plaintiffs' only

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specific allegation pertaining to the UCL is paragraph 59:

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SPS has continuously misrepresented to Plaintiffs that
they will obtain a loan modification.
And yet [SPS]
repeatedly has denied him [sic] for the same[,] not
providing reasons for the rejection but rather continuing
the deceit by further misleading Plaintiffs asking to
"apply again" [sic] with no real good faith intention of
helping Plaintiffs save their home and avoid foreclosure.

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Leaving aside that this paragraph misstates the scope of

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Though the Court rules in Defendants' favor on this claim, one of
their arguments bears further discussion because it borders on the
frivolous. See Fed. R. Civ. P. 11(b)(2). Defendants urge
dismissal of Plaintiffs' Section 2923.5 claim on the novel theory
that, because the Notice of Default says Plaintiffs' loan was
"exempt" from compliance with Section 2923.5 (as well as Civil Code
Section 2924.8), Plaintiffs bear the burden of showing the loan is
not exempt. See MTD at 7-8. Defendants cite no authority for this
remarkable proposition, i.e., that a loan is presumptively exempt
from California's statutory foreclosure procedures whenever the
foreclosing party says it is. Nor do Defendants address the
obvious issue that they, not Plaintiffs, bear the burden of
persuasion in connection with the instant motion.

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Defendants' obligation to Plaintiffs, which falls significantly

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short of a duty to "help[] Plaintiffs save their home," see supra

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Section IV.A, Plaintiffs fail to allege when or where SPS's

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promises to Plaintiffs took place, specifically what SPS promised,

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or how these promises constituted "deceit."

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explain, beyond offering mere "labels and conclusions," Iqbal, 556

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U.S. at 678, how denying Plaintiffs' application for a loan

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modification was "unfair," as that term is used in UCL

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jurisprudence.

Neither do Plaintiffs

See, e.g., Cel-Tech Communications, Inc. v. Los

United States District Court

For the Northern District of California

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Angeles Cellular Tel. Co., 20 Cal. 4th 163, 186-87 (1999); Scripps

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Clinic v. Superior Court, 108 Cal. App. 4th 917, 939-40 (2003).

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Neither do Plaintiffs provide any specific facts supporting their

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blanket assertion that they were injured or lost money or property

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as a result of the alleged unfair or fraudulent practices.

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Clayworth v. Pfizer, Inc., 49 Cal. 4th 758, 788 (2010).

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See

Challenged on these points by Defendants, Plaintiffs provide

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no meaningful response.

They merely point to generalized

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allegations of "multiple violations" of the UCL.

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(citing CFAC ¶¶ 64-67).

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678 (Rule 8 "demands more than an unadorned, the-defendant-

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unlawfully-harmed-me accusation").

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not only fails to clear up any ambiguities in the CFAC, it

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introduces a new one by addressing UCL unlawfulness when the CFAC

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appears to proceed on unfairness and misrepresentation theories.

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Compare CFAC ¶ 58 with Opp'n at 9.

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of which legal theories Plaintiffs actually intend to invoke.

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Finally, as regards standing, Plaintiffs merely gesture in the

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general direction of the CFAC and say "it is clear" that Plaintiffs

This will not do.

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Opp'n at 9

See Iqbal, 556 U.S. at

Plaintiffs' opposition brief

This leaves open the question

1

have satisfied the standing requirements for private UCL

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plaintiffs.

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Opp'n at 9.

Plaintiffs have not approached the minimum requirements for

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pleading a UCL claim, or even consistently identified what type of

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UCL claim they assert.

Accordingly, the Court DISMISSES

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Plaintiffs' UCL claim.

Because the Court cannot determine at this

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juncture that amendment would be futile, the Court grants

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Plaintiffs LEAVE TO AMEND this claim.

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be consistent with the guidance in this Order.

Any amended pleading shall
Additionally, given

United States District Court

For the Northern District of California

10

Plaintiffs' previous amendments, any future requests for leave to

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amend shall be disfavored.

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C.

Claims Three and Four (Breach of Contract and Promissory
Estoppel)

"To state a cause of action for breach of contract, a party

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must plead the existence of a contract, his or her performance of

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the contract or excuse for nonperformance, the defendant's breach

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and resulting damage."

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App. 4th 299, 307 (1999).

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has been reduced to writing, "the terms must be set out verbatim in

20

the body of the complaint or a copy of the written agreement must

21

be attached and incorporated by reference."

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Harris v. Rudin, Richman & Appel, 74 Cal.
Additionally, if the alleged contract

Id.

Here, Plaintiffs assert the legal conclusion that they formed

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a contract with SPS, but they do not allege: the basics of contract

24

formation; what the terms of the contract were; or under what

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circumstances SPS allegedly breached the contract.

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not even say whether the alleged contract was oral or written.

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Additionally, Plaintiffs seek specific performance of the contract

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but do not allege, among other things, sufficiently definite terms

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Plaintiffs do

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that would allow the Court to determine whether the requested

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performance is substantially similar to that required under the

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contract.

4

165 Cal. App. 4th 129, 134 (2008).

5

legal remedy they seek -- postponement of the foreclosure sale

6

pursuant to Section 2923.5 -- would be inadequate.

7

short, Plaintiffs have not pled enough facts for the Court to

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determine what the contract allegedly was or to state a plausible

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claim to the type of relief they seek.7

United States District Court

Neither do they explain how the

See id.

In

Plaintiffs argue that they may satisfy Rule 8 simply by

10
For the Northern District of California

See Union Oil Co. of California v. Greka Energy Corp.,

11

pleading the "legal effect" of the contract.

12

Constr. Protective Services, Inc. v. TIG Specialty Ins. Co., 29

13

Cal. 4th 189, 198-99 (2002)).

14

can provide the framework of a complaint, they must be supported by

15

factual allegations."

16

citation to a California state case elaborating a pleading standard

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applicable in a California state court is inapposite in the context

18

of the instant motion, which is governed by the Federal Rules and

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Iqbal.

Not so.

Opp'n at 9 (citing

"While legal conclusions

Iqbal, 556 U.S. at 679.

Plaintiffs'

Plaintiffs' promissory estoppel claim fails for the same

20
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reason as the contract claim.

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plausible allegations of "(1) a clear promise, (2) reliance, (3)

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substantial detriment, and (4) damages measured by the extent of

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27
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Plaintiffs are required to set forth

Defendants argue that, "to whatever extent they are attempting to
do so, Plaintiffs cannot premise their breach of contract claim on
an alleged failure to give Plaintiffs a Home Affordable
Modification Program ('HAMP') modification" because HAMP provides
no private right of action. MTD at 5. Defendants are correct.
See Cleveland v. Aurora Loan Servs., LLC, C 11-0773 PJH, 2011 WL
2020565, at *4 (N.D. Cal. May 24, 2011) (collecting authorities).
However, Plaintiffs specifically deny basing their breach of
contract claim on HAMP. Opp'n at 10.

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the obligation assumed and not performed."

Poway Royal Mobilehome

2

Owners Ass'n v. City of Poway, 149 Cal. App. 4th 1460, 1471 (2007)

3

(internal quotation marks omitted).

4

the first prong.

5

as unnamed Does): "made a promise that Plaintiffs would be approved

6

for a loan modification on or about June 2009," CFAC ¶ 85;

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"promised Plaintiffs would receive a permanent modification of the

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account after the third Trial Period payment was made," id. ¶ 86;

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and/or asked Plaintiffs to make monthly payments of $1,500 and

Plaintiffs' claim falters at

Plaintiffs allege, variously, that SPS (as well

United States District Court

For the Northern District of California

10

represented that making these payments "would lead to a permanent

11

modification on their loan," id. ¶¶ 27, 76.

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are reasonably clear about SPS requiring Plaintiffs to make three

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trial payments, they are unclear about what would follow these

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payments: did SPS promise to agree to a permanent loan

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modification, or merely to review Plaintiffs' application for one?8

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Plaintiffs' briefing does not clarify the matter.

17

("Under term [sic] of the agreement, . . . Plaintiffs would be

18

reviewed for and receive a permenant [sic] loan modification.").

19

In addition to failing to illuminate the terms of the alleged

20

promise, Plaintiffs fail to identify who made it ("SPS and Does 1-

21

20") or when ("on or about June 2009").

22

than "conclusory allegations about an unspecified individual

23

agreeing to a loan modification with unspecified terms at some

24

point in the unspecified future . . . ."

25

Inc., C 11-01765 LB, 2011 WL 2197534, at *13 (N.D. Cal. June 6,

26

8

27
28

While the allegations

See Opp'n at 9

Plaintiff has made no more

Melegrito v. CitiMortgage

The Court notes that the former promise would be unenforceable
under California law. See Copeland v. Baskin Robbins U.S.A., 96
Cal. App. 4th 1251, 1257–58 (Cal. Ct. App. 2002) ("agreements to
agree," unlike agreements to negotiate, are unenforceable).

14

1

2011).

These cannot sustain a promissory estoppel claim.

Id.

2

Accordingly, the Court DISMISSES Plaintiffs' promissory

3

estoppel claim, as well as the breach of contract claim discussed

4

above.

5

determine at this time that further amendment would be futile, and

6

therefore grants Plaintiffs LEAVE TO AMEND Claims Three and Four in

7

a manner consistent with the guidance in this Order.9

8

requests for leave to amend will be disfavored.
D.

9

United States District Court

Further

Final Matters

Because Plaintiffs have the Court's leave to amend their

10
For the Northern District of California

As with Plaintiffs' UCL claim, the Court is unable to

11

complaint, in the interest of judicial economy and narrowing the

12

issues for trial, the Court will provide further guidance in

13

connection with arguments that the parties have repeatedly raised.
1.

14

Tender

Defendants challenge Plaintiffs' right to a postponement of

15
16

the foreclosure sale on the ground that Plaintiffs have not offered

17

to tender the amount in default.

18

that stating a claim under Section 2923.5 would permit Plaintiffs

19

to seek postponement without tender, because Plaintiffs would be

20

seeking postponement as a statutory (i.e., legal) remedy rather

21

than an equitable one.

22

not and cannot state a Section 2923.5 claim, supra Section IV.A,

23

the Court determines that to continue to seek postponement of the

24

foreclosure sale Plaintiffs must satisfy California's tender rule

See id.

MTD at 11.

Defendants concede

Having found that Plaintiffs do

25
26
27
28

9

Plaintiffs assert their promissory estoppel claim against all
three Defendants, but the allegations relate only to SPS and the
aforementioned Does. Any further amendment of this claim must
contain clear allegations that support a plausible claim against
USB (as well as NDSC, see infra Section IV.D.2) or this claim will
be dismissed against USB and NDSC WITH PREJUDICE.

15

1

or show that this case fits into an exception from the tender rule.

2

Plaintiffs argue that the tender rule does not apply in this case

3

because "Plaintiffs both attack the validity of the debt and assert

4

counterclaims and set-offs."

5

explain, "Plaintiffs are not challenging irregularities in the

6

foreclosure proceeding.

7

comply with [C]ivil Code section 2923.5 and the underlying debt

8

occurred as a result of fraud, misrepresentations, false promises

9

and deceit."

United States District Court

For the Northern District of California

10

Opp'n at 6.

"In fact," Plaintiffs

Rather, they argue that Defendants did not

Id.

Because the Court dismisses Plaintiffs' Section 2923.5 claim,

11

it passes over Plaintiffs' assertion that that claim somehow did

12

not "challeng[e] irregularities in the foreclosure proceeding."

13

But Plaintiffs' argument still troubles the Court.

14

describe themselves as challenging the "underlying debt," but the

15

"fraud, misrepresentations, false promises and deceit" alleged in

16

the CFAC do not relate to the underlying debt; they pertain to

17

SPS's alleged promise to provide Plaintiffs with a permanent loan

18

modification.

19

debt in any fashion.

20

suggest the existence of) "counterclaims and set-offs."

21

Plaintiffs continue to seek postponement of the foreclosure sale,

22

their amended complaint must: offer to tender; contain allegations

23

attacking the underlying debt; or provide some other colorable

24

reason to exempt Plaintiffs from the tender rule.
2.

25
26

Plaintiffs

The CFAC does not appear to challenge the underlying
Neither does it allege (or even fairly
If

Claims Against NDSC

Defendants seek dismissal of Claims 1, 2, and 4 with respect

27

to NDSC.

MTD at 12.

Defendants argue that Plaintiffs have pled no

28

facts that could subject NDSC to liability, given that California

16

1

law shields foreclosure trustees from liability for certain good

2

faith errors.

3

Props., Inc. v. Quality Loan Serv. Corp., 170 Cal. App. 4th 579,

4

583 (Cal. Ct. App. 2009)).

5

entirely fail to respond to this argument.

6

Accordingly, the Court DISMISSES all claims against NDSC without

7

prejudice.

8

complaint to state viable claims against NDSC.

9

so within thirty (30) days, the Court will deem Plaintiffs' claims

Id. (citing Cal. Civ. Code § 2924(b); Pro Value

As Defendants point out, Plaintiffs
Reply at 11.

Plaintiffs may, consistent with Rule 11, amend their
If they do not do

United States District Court

For the Northern District of California

10

against NDSC dismissed with prejudice.

As discussed earlier,

11

additional requests for leave to amend shall be disfavored.

12
13
14

V.

CONCLUSION
For the foregoing reasons, the Court GRANTS Defendants' Motion

15

to Dismiss the CFAC.

The Court dismisses Claim One (the Section

16

2923.5 claim) WITH PREJUDICE.

17

claims WITHOUT PREJUDICE.

18

consistent with the guidance in this Order.

19

file an amended complaint within thirty (30) days of the signature

20

date of this Order, the Court will dismiss this case against all

21

Defendants with prejudice.

22

case, additional requests for leave to amend are disfavored.

The Court dismisses the remaining

Plaintiffs may amend their complaint
If Plaintiffs do not

Given the procedural history of this

23
24

IT IS SO ORDERED.

25
26
27

Dated: June 7, 2012
UNITED STATES DISTRICT JUDGE

28

17