McNEIL et al v. Wells Fargo Bank, N.A. et al

Filing 23

ORDER by Judge Samuel Conti granting in part and denying in part 13 Motion to Dismiss (sclc1, COURT STAFF) (Filed on 7/1/2014)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE NORTHERN DISTRICT OF CALIFORNIA
TROY L. McNEIL and TRICIA A.
McNEIL,

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For the Northern District of California

United States District Court

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Plaintiffs,

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v.
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WELLS FARGO BANK, N.A., U.S. BANK
NATIONAL ASSOCIATION, CAL-WESTERN
RECONVEYANCE, LLC, and DOES 1-10,
inclusive,

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Defendants.

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) Case No. 13-5519 SC
)
) ORDER GRANTING MOTION TO
) DISMISS
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I.

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INTRODUCTION
This is a mortgage foreclosure dispute.

Defendants Wells

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Fargo Bank, N.A. ("Wells Fargo") and U.S. Bank National Association

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("U.S. Bank") (collectively, "Defendants") now move to dismiss.

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ECF No. 14 ("MTD").

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motion, ECF No. 18 ("Opp'n"), 1 and Defendants have declined to file

Plaintiffs Troy and Tricia McNeil oppose the

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Plaintiffs' opposition brief exceeds the page limit set forth in
the Civil Local Rules. In the interest of fairness, the Court
considers the excess pages filed by Plaintiff. However, Plaintiffs
are advised to comply with the Local Rules going forward.

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a reply brief.

The Court held a hearing on the Motion on April 4,

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2014.

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part and DENIED in part.

For the reasons set forth below, the Motion is GRANTED in

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II.

BACKGROUND
Plaintiffs are residents of the property at issue in this

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case, which is located on Senger Street in Livermore, California

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(the "subject property").

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April 2004, Plaintiffs borrowed $536,000 from Wells Fargo Home

ECF No. 1 Ex. A ("Compl.") ¶ 3.

In

United States District Court

For the Northern District of California

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Mortgage, which later merged into Wells Fargo.

Compl. Ex. A.

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loan was secured by a deed of trust on the subject property.

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The deed of trust included an "Adjustable Rate Rider," which

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allowed for an increase in the interest rate on the loan.

The
Id.

Id.

In 2011, Wells Fargo transferred its beneficial interest in

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the deed of trust to U.S. Bank through a Corporate Assignment Deed

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of Trust (the "Corporate Assignment").

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allege that the Corporate Assignment shows that the deed of trust

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was transferred to a mortgage backed security trust, and that this

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trust was governed by a Pooling Services Agreement ("PSA").

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¶ 21.

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Defendants lack standing to foreclose on the deed of trust because

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Plaintiffs' promissory note was not transferred to the investment

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trust prior the trust's closing date.

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Compl. Ex. B.

Plaintiffs

Compl.

Plaintiffs further allege, upon information and belief, that

Id. ¶ 23.

In December 2011, a notice of default was recorded against the

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subject property, indicating that Plaintiffs were $24,848.53 in

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arrears.

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trust recorded a notice of trustee's sale, scheduling the sale for

Compl. Ex. C.

In March 2012, the trustee on the deed of

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April 4, 2012.

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unpaid balance on the loan was $522,493.45.

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Compl. Ex. D.

The notice indicates that the total

In May 2012, Plaintiffs entered into a loan modification

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agreement with Wells Fargo.

Compl. ¶ 26.

The modification

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agreement created a secondary principal balance of $34,212.59, on

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which no interest accrues, and dropped the interest rate on the

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remaining balance to 2.5 percent for six years.

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Ex. 6 ¶¶ 1-2.

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make monthly principal and interest payments of $2,424.62 starting

ECF No. 14 ("RJN")

Pursuant to the agreement, Plaintiffs promised to

United States District Court

For the Northern District of California

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on July 1, 2012.

Id. ¶ 2.

Plaintiffs also promised to make

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monthly escrow deposits "as defined in the Note."

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agreement states that escrow deposits may be subject to change in

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the future.

Id.

The

Id.

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Plaintiffs allege that the monthly escrow charges initially

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amounted to $800, bringing Plaintiffs' total monthly payments to

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$3,224.62.

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Plaintiffs for additional charges, increasing the total monthly

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payments to $4,400.

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brief, Plaintiffs asserted that Defendants improperly applied

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Plaintiffs' payments, resulting in the additional charges.

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Complaint itself is silent on the issue.

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do allege that they could not afford the additional monthly charges

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assessed by Defendants.

Compl. ¶ 85.

Id.

Defendants subsequently assessed

At the hearing and in their opposition

The

In any event, Plaintiffs

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On February 4, 2013, the substituted trustee on the deed of

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trust recorded yet another notice of default against the subject

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property, indicating that Plaintiffs were $29,644.95 in arrears.

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Compl. Ex. F.

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6, 2013, setting the sale date for May 28, 2013.

Another notice of trustee's sale was recorded on May

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At the hearing,

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Plaintiffs suggested that the foreclosure was the direct result of

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the unauthorized charges assessed by Defendants after they executed

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the first loan modification agreement.
In June 2013, Plaintiffs contacted Wells Fargo about obtaining

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a second loan modification.

Compl. ¶ 31.

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on the grounds that the "investor" lacked contractual authority to

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modify the loan and Plaintiffs had exceeded the number of

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modifications allowed by the investor.

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that neither reason is accurate.

Id.

Id.

The request was denied

Plaintiffs contend

Wells Fargo subsequently

United States District Court

For the Northern District of California

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denied Plaintiffs' appeal of the denial of the modification

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request.

Id. ¶ 33.

The trustee's sale was apparently delayed during the

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application process for the second loan modification, and a new

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notice of trustee's sale was later recorded, setting the sale date

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for October 16, 2013.

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trustee's sale was postponed yet again to April 14, 2014.

RJN Ex. 11.

According to Defendants, the

Based on these facts, Plaintiffs assert causes of action for

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(1) lack of standing to foreclose, (2) violation of California

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Civil Code section 2923.55, (3) promissory estoppel, (4) breach of

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the implied covenant of good faith, (5) intentional

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misrepresentation, (6) violation of the Unfair Competition Law

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("UCL"), Cal. Bus. & Prof. Code § 17200, and (7) cancellation of

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instruments.
Defendants now move to dismiss pursuant to Federal Rule of

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Civil Procedure 12(b)(6).

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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)).

However, "the tenet that a court

Threadbare recitals of the

Id. (citing Bell Atl. Corp. v.

Claims sounding in fraud are subject to the heightened

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pleading requirements of Federal Rule of Civil Procedure 9(b),

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which requires that a plaintiff alleging fraud "must state with

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particularity the circumstances constituting fraud."

See Kearns v.

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Ford Motor Co., 567 F.3d 1120, 1124 (9th Cir. 2009).

"To satisfy

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Rule 9(b), a pleading must identify the who, what, when, where, and

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how of the misconduct charged, as well as what is false or

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misleading about [the purportedly fraudulent] statement, and why it

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is false."

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Inc., 637 F.3d 1047, 1055 (9th Cir. 2011) (quotation marks and

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citations omitted).

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///

United States ex rel Cafasso v. Gen. Dynamics C4 Sys.,

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IV.

DISCUSSION

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A.

Lack of Standing

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Plaintiffs allege, upon information and belief, that

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Defendants lack standing to foreclose because their promissory note

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was not transferred to the mortgage backed security trust prior to

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the closing date established by the PSA.

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argue that Plaintiffs lack standing to enforce the terms of the PSA

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because they are third parties to the agreement.

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(citing Jenkins v. JPMorgan Chase Bank, N.A., 216 Cal. App. 4th

Compl. ¶ 44.

Defendants

MTD at 4-5

United States District Court

For the Northern District of California

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497, 511 (Cal. Ct. App. 2013)).

Defendants further argue that

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Plaintiffs may not bring a preemptive action challenging their

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authority to foreclose.

Id.

Plaintiffs respond that the promissory note and deed of trust

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are inseparable, and that production of the note is essential to

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determining whether Defendants are entitled to exercise the power

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of sale.

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have consistently rejected the theory that California's nonjudicial

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foreclosure scheme (Cal. Civ. Code §§ 2924-2924k) requires a

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foreclosing party to have a beneficial interest in or physical

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possession of the note. 2

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Code are also unavailing, as the California nonjudicial foreclosure

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scheme controls in this context.

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Nat. Tr. Co., 204 Cal. App. 4th 433, 440-41 (Cal. Ct. App. 2012).

However, California appellate courts

Plaintiffs' citations to the Commercial

See Debrunner v. Deutsche Bank

Moreover, Plaintiffs' theory is barred by the California Court

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Opp'n at 12-13.

of Appeal's decision in Jenkins.

As in this case, the plaintiff in

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See, e.g., Shuster v. BAC Home Loans Servicing, LP, 211 Cal. App.
4th 505, 511 (Cal. Ct. App. 2012); Debrunner, 204 Cal. App. 4th at
440-41; see also Lane v. Vitek Real Estate Indus. Grp., 713 F.
Supp. 2d 1092, 1099 (E.D. Cal. 2010).

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Jenkins challenged the defendants' standing to foreclose because

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her home loan was pooled with other loans in a securitized

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investment trust without compliance with the trust's PSA.

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App. 4th at 505.

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promissory note was not transferred to the trust with an unbroken

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chain of endorsements and that the trustee did not have actual

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physical possession of the note prior to the closing date of the

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trust.

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dismissed, reasoning that even if the nonjudicial foreclosure

216 Cal.

Specifically, the plaintiff alleged that the

Id. at 510.

The court found that the claim was properly

United States District Court

For the Northern District of California

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statute was interpreted broadly, it did not provide a right to

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bring such a preemptive action.

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Id. at 513.

As Plaintiffs point out, another California Court of Appeal

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reached a contrary holding in Glaski v. Bank of Am., N.A., 218 Cal.

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App. 4th 1079, 1099 (Cal. Ct. App. 2013), where the court found

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that the plaintiff could state a claim for wrongful foreclosure

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where he alleged that the entity claiming to be the noteholder was

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not the true owner of the note.

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District, including the undersigned, have held that Glaski is the

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minority view, and have joined with the majority view set forth in

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Jenkins.

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2014 WL 718463, at *3 (N.D. Cal. Feb. 23, 2014) (Tigar J.);

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Subramani v. Wells Fargo Bank N.A., C 13-1605 SC, 2013 WL 5913789,

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at *3 (N.D. Cal. Oct. 31, 2013) (Conti J.).

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However, many judges in this

See, e.g., Gieseke v. Bank of Am., N.A., 13-CV-04772-JST,

In light of the weight of authority, the Court once again

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adopts the reasoning of Jenkins.

For these reasons, Plaintiffs'

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claim for lack of standing is DISMISSED with prejudice to the

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extent that it is predicated on a violation of the PSA.

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The Court

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grants Plaintiffs leave to amend to extent that they can plead an

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alternative theory.

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B.

Civil Code Section 2923.55

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Section 2923.55 provides that a mortgage servicer may not

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record a notice of default until a number of requirements are met

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and sets forth a list of information that the mortgage servicer

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must send to the borrower in writing.

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Plaintiffs' claim for violation of section 2923.55 fails because

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the Complaint does not specify how Defendants ran afoul of the

Defendants argue that

United States District Court

For the Northern District of California

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statute or which particular provisions are at issue.

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The Court agrees.

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verbatim, without highlighting any particular provisions, and then

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recites some general facts without explaining how those facts

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relate to the claim.

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MTD at 6.

The Complaint merely quotes the statute

See Compl. ¶¶ 56-68.

In their opposition brief, Plaintiffs suggest that Defendants

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violated section 2923.55(b)(1) (though Plaintiffs do not cite to

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this particular subsection), Opp'n at 16-17, which provides that a

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mortgage servicer may not record a notice of default until it has

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"contact[ed] the borrower in person or by telephone in order to

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assess the borrower's financial situation," Cal. Civ. Code §

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2923.55(b)(1).

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they spoke with Defendants about a loan modification before either

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of the notices of default were recorded.

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Plaintiffs argue that the loan modification discussions did not

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satisfy the statute.

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California Civil Code 2923.5 includes a similar provision requiring

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a lender to contact a borrower about his or her financial

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situations prior to the recording of a notice of default, and

However, according to Plaintiffs' own pleading,

Opp'n at 17.

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Compl. ¶¶ 26, 31.

The Court disagrees.

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California courts have held that this requirement may be satisfied

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through loan modification discussions.

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Am., N.A., 219 Cal. App. 4th 1481, 1494-95 (Cal. Ct. App. 2013).

See Rossberg v. Bank of

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Plaintiffs further argue that Defendants violated section

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2923.55(c) "by using incompetent and unreliable evidence which the

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mortgage servicer claimed to review to substantiate the borrower's

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default and right to foreclose."

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to be asserting that Defendants violated the statute because their

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denial of Plaintiffs' application for a second loan modification

Opp'n at 17.

Plaintiffs appear

United States District Court

For the Northern District of California

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was in error and because Defendants lacked standing to foreclose.

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As to the first theory, Section 2923.55 merely requires that the

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lender "explore options" to avoid foreclosure.

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the borrower to a loan modification, even if he or she is well

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qualified.

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entitles a borrower to challenge the standing of a foreclosing

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entity.

It does not entitle

As to the second theory, nothing in Section 2923.55

Accordingly, Plaintiffs' second claim for violation of 2923.55

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is DISMISSED with leave to amend.

The amended complaint shall

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explain exactly how Defendants allegedly violated the statute.

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C.

Promissory Estoppel

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"Promissory estoppel applies whenever a promise which the

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promissor should reasonably expect to induce action or forbearance

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on the part of the promisee or a third person and which does induce

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such action or forbearance would result in an injustice if the

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promise were not enforced."

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4th 1179, 1185 (Cal. Ct. App. 1998).

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must be clear and unambiguous."

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Lange v. TIG Ins. Co., 68 Cal. App.

Id.

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"To be binding, the promise

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Plaintiffs copy and paste a number of general factual

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allegations into their promissory estoppel section, but fail to

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explain how these allegations have anything to do their claim.

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Court DISMISSES the promissory estoppel claim to the extent that it

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is based on these allegations. 3

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dismiss to the extent that the claim is premised on Plaintiffs'

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allegation that Defendants breached the loan modification

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agreement.

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modification contract specifies that Plaintiffs were to make

Compl. ¶ 86.

The

However, the Court declines to

Plaintiffs allege that the loan

United States District Court

For the Northern District of California

10

monthly payments of $2,424.62, plus escrow deposit payments which

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initially totaled $800 per month.

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allege that Wells Fargo later added other previously undisclosed

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monthly charges, raising Plaintiffs' monthly payments from $3,224

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to approximately $4,400 per month.

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be clearer, it appears that Plaintiffs are alleging that they

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relied on the agreement to their detriment, resulting in the

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foreclosure proceedings at issue now.

Id. ¶ 77.

Id.

Plaintiffs further

Though the pleading could

Defendants argue that the promise lacks sufficient

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definitiveness and clarity to justify the application of promissory

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estoppel.

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Plaintiffs is set out in the terms of the modification agreement. 4

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MTD at 7.

The Court disagrees.

The promise alleged by

In their opposition brief, Plaintiffs also claim that their
promissory estoppel cause of action is based on the theory that
Defendants promised Plaintiffs a fixed interest rate at loan
origination, and later raised that interest rate. Opp'n at 18-19.
The argument lacks merit. As an initial matter, Plaintiffs did not
plead this theory. More importantly, an adjustable rate rider was
attached to the deed of trust. Plaintiffs cannot state a claim for
promissory estoppel based on actions that were entirely consistent
with the terms of the loan.
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The Complaint does make vague reference to oral representations
made by Defendants. Compl. ¶ 70. The Court agrees that these oral
representations cannot form the basis of Plaintiffs' claim for

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Next Defendants argue that the claim fails because Plaintiffs have

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not alleged that they made all their modified payments.

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However, Plaintiffs allege that the payments assessed by Defendants

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added charges not agreed to through the loan modification

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agreement.

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the additional charges were merely the escrow payments disclosed in

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the agreement.

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based on the facts alleged or the judicially noticeable documents

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provided by Defendants.

United States District Court

For the Northern District of California

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Compl. ¶ 27.

Id. at 8.

At the hearing, Defendants suggested that

But the Court cannot make such a determination

Accordingly, Plaintiffs' claim for promissory estoppel remains

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undisturbed to the extent it is based on Defendants' alleged

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violation of the executed loan modification.

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leave to amend in all other respects.

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D.

Breach of the Implied Covenant of Good Faith and Fair
Dealing

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It is DISMISSED with

Plaintiffs' claim for breach of the implied covenant is hardly

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a model of clarity.

Plaintiffs merely recite the definition of the

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term and then copy and paste factual allegations from other

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portions of the Complaint, without explaining how they relate.

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Plaintiffs' opposition does nothing to clarify the matter, and it

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appears to assert new legal theories that are not alleged in the

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pleading.

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theory that Defendants assessed them for additional charges in

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violation of the executed loan modification agreement, the claim

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remains undisturbed.

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Defendants breached the PSA or that Defendants were under some

To the extent Plaintiffs' claim is premised on the

To the extent it is based on the theory that

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promissory estoppel, since the representations are neither clear
nor definitive.

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obligation to offer Plaintiffs a second loan modification, it is

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DISMISSED with prejudice.

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Plaintiffs lack standing to enforce the terms of the PSA.

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Moreover, the Court is aware of no authority or contractual

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provision that would require Defendants to grant Plaintiffs' second

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request for a loan modification.

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DISMISSED with leave to amend.

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Defendants and the Court with clarity as to the basis for the

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claim.

As set forth in Section IV.A supra,

The rest of the claim is
The amended pleading shall provide

United States District Court

For the Northern District of California

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E.

Intentional Misrepresentation

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The elements of intentional misrepresentation, also known as

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fraud, are: "(1) misrepresentation (false representation,

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concealment, or nondisclosure), (2) knowledge of falsity (or

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'scienter'), (3) intent to defraud (i.e., to induce reliance), (4)

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justifiable reliance, and (5) resulting damage."

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Ct., 12 Cal. 4th 631, 638 (Cal. 1996).

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impermissibly vague as to the basis for their fraud claim.

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again, Plaintiffs merely copy and paste random factual allegations

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from other parts of their complaint and leave Defendants and the

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Court to guess at their legal theory.

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Plaintiffs assert several new grounds for fraud, all of which have

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a tenuous connection to the fraud claim actually pleaded in the

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Complaint.

Lazar v. Sup.

Plaintiffs' pleading is
Once

In their opposition brief,

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To provide some guidance, the Court addresses the various

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theories of fraud raised in Plaintiffs' opposition brief and at the

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hearing.

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fact that their interest rate was adjustable, Opp'n at 22, but the

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deed of trust attached to the pleading includes an adjustable rate

Plaintiffs assert that Defendants willfully concealed the

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rider which discloses that Plaintiffs' interest rate might

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increase.

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did not make any reasonable responses to Plaintiffs' request for

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explanations of the terms and other repayment plan [sic]";

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Defendants mishandled mortgage payments; the deed of trust was

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flawed at the outset; Defendants did not comply with legal

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requirements for securitizing the loan; and Defendants failed to

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give Plaintiffs' loan modification agreement a good faith review.

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Id. at 23.

Plaintiffs' other theories of fraud are that "Defendants

To the extent that any of the conduct identified above

United States District Court

For the Northern District of California

10

is actionable, it is not actionable as fraud.

Plaintiffs have yet

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to identify, among other things, a misrepresentation or reasonable

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reliance.
At the hearing, Plaintiffs argued that their fraud claim is

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premised on theory that Defendants misrepresented that they had a

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beneficial interest in the loan, even though the loan had been

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transferred to an investment trust.

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had a duty to disclose that the loan had been securitized or how

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the securitization harmed Plaintiffs, as it did not affect

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Plaintiffs' obligations under the loan agreement.

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allegations regarding damages and reasonable reliance, this theory

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also fails.

It is unclear why Defendants

Absent plausible

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For the reasons set forth above, Plaintiffs' claim for

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intentional misrepresentation is DISMISSED with leave to amend.

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The amended complaint shall specifically identify the basis for

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Plaintiffs' claim and allege specific facts to support the claim in

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compliance with Rule 9(b).

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///

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///

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F.

Violation of the UCL

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The UCL prohibits acts of "unfair competition," including any

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"unlawful, unfair or fraudulent business act or practice."

Cal.

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Bus. & Prof. Code § 17200.

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disjunctive, it establishes three varieties of unfair competition—

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acts or practices which are unlawful, or unfair, or fraudulent."

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Berryman v. Merit Prop. Mgmt., Inc., 152 Cal. App. 4th 1544, 1554

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(Cal. Ct. App. 2007).

"Because [the UCL] is written in the

Plaintiffs do not specify which prongs of the UCL form the

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United States District Court

For the Northern District of California

10

basis of their suit, though it appears they are alleging unlawful

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and unfair practices.

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engaged in deceptive business practices by: (1) instituting

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improper foreclosure proceedings, (2) executing and recording false

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and misleading documents, (3) executing and recording documents

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without authority to do so, (4) failing to comply with California

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Civil Code section 2923.5, and (5) failing to comply with the Home

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Affordable Modification Program ("HAMP").

Initially, Plaintiffs allege that Defendants

Defendants argue that Plaintiffs cannot predicate their UCL

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claim on violations of section 2923.5 or HAMP because they have yet

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to allege what those violations are.

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opposition brief entirely ignores their section 2923.5 claim.

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to HAMP, Plaintiffs generally argue that Defendants misrepresented

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their eligibility for the program, but decline to go into any

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specifics.

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impermissibly vague. 5

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5

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Opp'n at 26.

MTD at 11.

Plaintiffs'

The Court finds that both claims are

As

Plaintiffs' citation to Loftis v. Homeward Residential, Inc.,
SACV 13-00467-CJC, 2013 WL 4045808 (C.D. Cal. June 11, 2013) is
unavailing. In that case, the defendant lender offered the
plaintiffs a loan modification and then initiated foreclosure
proceedings. Id. at *1. The plaintiffs asserted a claim for

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As to the other UCL violations alleged in the Complaint,

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2

Defendants argue that Plaintiffs lack standing because they have

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failed to allege causation.

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cite to Jenkins, where the court rejected a similar UCL claim.

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Cal. App. 4th at 520-24.

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plaintiff defaulted on her loan prior to the alleged wrongful acts,

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she could not assert that the impending foreclosure of her home was

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caused by the defendants' conduct.

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yet to allege the basic elements of causation with respect to their

United States District Court

For the Northern District of California

10

MTD at 11.

In support, Defendants
216

The court reasoned that because the

Likewise, here, Plaintiffs have

theory that Defendants breached the PSA.

Id. at 523.

Plaintiffs' UCL claim also appears to be predicated on their

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allegation that Defendants raised their monthly loan payments in

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violation of the executed loan modification agreement.

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124.

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finds that it can support a claim for unfair practices under the

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UCL.

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it is predicated on this allegation, but is DISMISSED in all other

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respects.

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deficiencies identified above.

Compl. ¶

Defendants do not address this allegation, and the Court

Plaintiffs' UCL claim remains undisturbed to the extent that

The Court grants Plaintiffs leave to amend to cure the

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G.

Cancellation of Instruments

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Plaintiffs' final claim seeks to cancel the notices of

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default, notice of trustee's sale, and other instruments recorded

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in connection with the foreclosure proceedings commenced against

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the subject property.

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Defendants' violation of the PSA, it is DISMISSED with prejudice

To the extent that this claim is premised on

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breach of contract, which the court declined to dismiss because
there was an offer and acceptance. Id. at 2. Here, Plaintiffs
appear to be asserting a UCL violation in connection with a
rejected loan modification application.

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1

for the reasons set forth in Section IV.A supra.

To the extent

2

that it is based on the allegation that Defendants assessed

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Plaintiffs additional monthly charges in violation of the loan

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modification agreement, it remains undisturbed.

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V.

CONCLUSION
Defendants' motion to dismiss is GRANTED in part and DENIED in

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part.

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•

Plaintiffs' claim for lack of standing is DISMISSED with

United States District Court

For the Northern District of California

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prejudice to the extent is predicated on a violation of the

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PSA and otherwise DISMISSED with leave to amend.

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•

is DISMISSED with leave to amend.

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Plaintiffs' claim for violation of Civil Code Section 2923.55

•

Plaintiffs' claim for promissory estoppel remains undisturbed

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to the extent it is predicated on violation of the loan

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modification agreement and is otherwise DISMISSED with leave

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to amend.

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•

Plaintiffs' claim for breach of the implied covenant remains

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undisturbed to the extent it is predicated on violation of the

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loan modification agreement and is otherwise DISMISSED with

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leave to amend.

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•

DISMISSED with leave to amend.

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Plaintiffs' claim for intentional misrepresentation is

•

Plaintiffs' claim for violation of the UCL remains undisturbed

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to the extent it is predicated on violation of the loan

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modification agreement and is otherwise DISMISSED with leave

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to amend.

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///

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1

•

Plaintiffs' claim for cancellation of instruments is DISMISSED

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with prejudice to the extent it is predicated on a violation

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of the PSA and remains undisturbed to the extent that it is

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predicated on a breach of the executed loan modification

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agreement.

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As set forth above, the amended pleading shall clearly

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identify the basis for each claim asserted.

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shall be filed within thirty (30) days of this Order's signature

United States District Court

For the Northern District of California

10

date.

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The amended pleading

Failure to do so may result in dismissal with prejudice of

certain claims.

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IT IS SO ORDERED.

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July 1, 2014
UNITED STATES DISTRICT JUDGE

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