MAZZONE-URIE v. OneWest Bank FSB et al

Filing 100

ORDER by Judge Edward M. Chen granting 65 Defendant's Motion to Dismiss; and denying 94 Plaintiff's Motion for Extension. (emclc2, COURT STAFF) (Filed on 11/25/2024)Any non-CM/ECF Participants have been served by First Class Mail to the addresses of record listed on the Notice of Electronic Filing (NEF)

1
2
3
4

UNITED STATES DISTRICT COURT

5

NORTHERN DISTRICT OF CALIFORNIA

6
7

FLORENTINA MAZZONE-URIE,

8

Plaintiff,

9
10

United States District Court
Northern District of California

11

Case No. 21-cv-06075-EMC
ORDER GRANTING DEFENDANTS’
MOTION TO DISMISS

v.
ONEWEST BANK FSB, et al.,
Defendants.

Docket No. 65

12
13
14

Plaintiff Florentina Mazzone-Urie initiated this foreclosure-related action back in August

15

2021. Plaintiff is an elderly woman. Her husband owned certain real property and applied for a

16

loan modification in 2009. He died in 2012, allegedly without getting a decision on the

17

application for a modification. Plaintiff was the beneficiary of the estate. Since her husband’s

18

death, Plaintiff has been trying to get modification of the loan. As of date, the property has not

19

been foreclosed on, although foreclosure proceedings were initiated in 2021.

20

Plaintiff has sued the following entities: (1) OneWest Bank, FSB; (2) Ocwen Financial

21

Corporation; and (3) PHH Mortgage. Plaintiff asserts various causes of action against Defendants,

22

including claims for violation of the Homeowner Bill of Rights (“HBOR”). Now pending before

23

the Court is a motion to dismiss filed by one of the defendants: PHH Mortgage Corporation

24

(“PHH”). In the caption of its motion, PHH states that it is the successor by merger to Ocwen

25

Loan Servicing, LLC (“Ocwen”) and was sued erroneously as the entities listed in (2) and (3).

26

There is nothing to indicate to the contrary.

27

Having considered the papers submitted, the Court hereby GRANTS PHH’s motion to

28

dismiss. The Court also DENIES Plaintiff’s motion for an extension of time to find counsel to

1

represent her.1 See Docket No. 94 (motion for extension).
I.

2
3

A.

Complaint

4

In her complaint, Plaintiff alleges as follows.

5

Plaintiff owns certain real property located in Pacifica, California. See Compl. ¶¶ 5, 12.

6

There is a deed of trust on the property, reflecting a $600,000 loan made by Indymac Bank FSB.

7

The loan was originally taken out by Plaintiff’s husband (before she married him) and his daughter

8

in 2006. See Compl. ¶ 12.
In 2009, Plaintiff married her husband. See Compl. ¶ 15. That same year, the husband

9
10

applied for a loan modification. See Compl. ¶ 15.
In 2010, the daughter relinquished her interest in the real property so that the husband was

11

United States District Court
Northern District of California

FACTUAL & PROCEDURAL BACKGROUND

12

the sole owner. See Compl. ¶ 16.

13

The husband never heard back on his loan modification application. In March 2012, he

14

died. See Compl. ¶¶ 17-18. Plaintiff was named the beneficiary of the estate. See Compl. ¶ 18.

15

There are three different defendant entities: OneWest Bank, FSB; Ocwen Financial

16

Corporation; and PHH Mortgage. It appears that OneWest became the servicer of the loan related

17

to the real property in July 2008. See, e.g., Compl. ¶ 14. It appears that Ocwen later became the

18

servicer of the loan. See, e.g., Compl. ¶ 19. In 2019, PHH, which is a subsidiary of Ocwen, took

19
20
21
22
23
24
25
26
27
28

1

In September 2024, the Court continued the hearing on the pending motion to dismiss because
Plaintiff represented that she might be able to get counsel to represent her. See Docket No. 86
(minutes). Plaintiff subsequently asked for additional time to find counsel, and the Court gave her
an extension. See Docket No. 91 (order). Plaintiff then moved for a second extension of time; the
Court granted her relief again. See Docket No. 92 (order). Under that order, Plaintiff had until
November 7, 2024, to find counsel to represent her. On November 6, 2024, Plaintiff a third
motion asking for an extension of time.
Plaintiff has now had approximately two months to find counsel. The Court cannot
indefinitely grant her extensions. This lawsuit needs to move forward, especially as multiple
attempts at settlement have not been successful and Plaintiff’s bankruptcy case has now been
dismissed.
To the extent Plaintiff asks for leave to file an opposition to the motion to dismiss in her
pro se capacity, that request is also denied. The Court has already given Plaintiff two different
opportunities to file an opposition to dismiss, but she failed to do so.
2

1
2

As noted above, in March 2012, Plaintiff’s husband died. At the time of his death,

3

OneWest was still the servicer. It gave Plaintiff a forbearance period for the loan. Subsequently,

4

Ocwen became the servicer and advised Plaintiff not to send any payment on the loan until the

5

loan was modified. See Compl. ¶ 19. Plaintiff submitted documents required to modify the loan

6

and was told that she would be the successor to the loan. See Compl. ¶ 20.

7

United States District Court
Northern District of California

over servicing. See Compl. ¶ 21.

Apparently, nothing happened for some seven years. In 2019, PHH (as noted above, a

8

subsidiary of Ocwen) took over the servicing of the loan. It told Plaintiff that she would need to

9

start the process of applying for a loan modification over again. See Compl. ¶ 21. In June 2019,

10

Plaintiff sent documents to support an application, including the husband’s death certificate,

11

documents from probate, the application, and a hardship letter. She spoke to a PHH representative

12

who confirmed that the documents were received and was told “to continue withholding payments

13

while the loan modification was under review.” Compl. ¶¶ 22-24.

14

For some two years, Plaintiff did not hear back on her loan modification application.

15

Because she had not heard from PHH, Plaintiff reached out, in February 2021, to an organization

16

called Housing & Economic Rights Advocates (“HERA”). In March 2021, a HERA staff attorney

17

assisted Plaintiff in sending in documents to support the loan modification application. In the

18

following months, the attorney contacted PHH several times to check on the status of the

19

application; each time, the attorney was told something new (e.g., that there would be a decision

20

by the end of the day, that documents were still missing, that the decision was still pending). See

21

Compl. ¶¶ 26-31.

22
23
24

At some point, Plaintiff received a notice of trustee’s sale. The sale was first scheduled for
July 23, 2021. See Compl. ¶ 25.
On July 8, 2021, i.e., about two weeks before the trustee’s sale date, PHH informed

25

Plaintiff that the loan modification application had been “denied because in order for her [i.e.,

26

Plaintiff] to assume the loan, the loan would have to be current.” Compl. ¶ 32. At some point, the

27

trustee’s sale was postponed to August 13, 2021. See Compl. ¶ 25; Plaintiff Decl. ¶ 15. There is

28

no dispute that, currently, the property still has not been foreclosed upon.
3

United States District Court
Northern District of California

1

B.

Litigation

2

Plaintiff initiated this lawsuit on August 6, 2021, after her loan modification application

3

was denied. On the same day, Plaintiff filed her first ex parte application for a TRO, seeking to

4

restrain the foreclosure sale. PHH filed an opposition to the motion, but no hearing was held

5

because it postponed the sale, and thus Plaintiff withdrew the motion. See Docket No. 13 (notice).

6

Plaintiff did not thereafter file a motion for a preliminary injunction. Nor is there any indication

7

that she appealed the July 8 decision denying her loan modification application. However, the

8

parties did engage in settlement discussions.

9

Presumably because settlement discussions were not successful, PHH set a new trustee’s

10

sale for October 8, 2021. Plaintiff then filed a second motion for a TRO on October 5, 2021, i.e.,

11

just days before the sale. See Docket No. 17 (motion). A hearing was never held on the motion

12

because the parties stipulated to Plaintiff withdrawing the motion. See Docket No. 24 (stipulation

13

and order).

14

In May 2022, counsel for Plaintiff filed a motion to withdraw due to medical reasons. The

15

Court permitted the withdrawal in July 2022, and, since then, Plaintiff has since been litigating

16

this case pro se. See Docket No. 28 (order, filed on 7/1/2022). Since Plaintiff has been

17

representing herself, no real litigation has taken place in the case. There was an attempt at

18

settlement, with Plaintiff having the assistance of counsel through the Federal Pro Bono Project

19

(limited to representation for mediation purposes), but that attempt was not successful. See

20

Docket No. 59 (order, filed on 3/1/2024) (terminating limited scope representation). The Court

21

thereafter referred the parties to a settlement conference with a magistrate judge (with no

22

representation for Plaintiff).

23

In April 2024, following a scheduling conference with Judge Cisneros (the magistrate

24

judge assigned for the settlement conference), PHH filed the pending motion to dismiss. Plaintiff

25

did not file an opposition to the motion and instead, in May 2014, initiated a bankruptcy

26

proceeding (Case No. 24-30350 (N.D. Cal. Bankr. Ct.)). PHH was listed as a creditor in the

27

bankruptcy proceeding. This led Judge Cisneros to cancel the settlement conference. See Docket

28

No. 68 (order). The Court temporarily vacated the hearing on the motion to dismiss in light of the
4

1

bankruptcy filing and asked for the parties’ input as to how that proceeding impacted the instant

2

case. See Docket No. 69 (order). PHH filed a response; Plaintiff did not.

3
4

gave Plaintiff a second opportunity to file an opposition to the motion to dismiss. The Court also

5

gave an opportunity for the “bankruptcy players” (i.e., the trustee, Plaintiff’s bankruptcy counsel,

6

and the bankruptcy court) to file statements if they had any views as to how the case at bar might

7

impact the bankruptcy proceeding or vice-versa, whether the hearing on the motion to dismiss

8

should proceed in this case, and whether the bankruptcy trustee would have an interest in

9

participating in this case or a settlement conference under the auspices of this Court. See Docket

10

No. 73 (order). The Court started the settlement process again with Judge Cisneros.

11

United States District Court
Northern District of California

Subsequently, the Court reset the motion to dismiss for hearing in September 2024 but

Thereafter, Plaintiff failed to file an opposition to the motion to dismiss. Plaintiff’s

12

bankruptcy counsel, however, did file a declaration “to advise [the Court] of the actions being

13

taken in the bankruptcy court to address the claim of the defendant.” Docket No. 79 (Voisenat

14

Decl. ¶ 3). The declaration indicated that Plaintiff’s bankruptcy case was referred to the

15

bankruptcy court’s Mortgage Modification Mediation Program in July 2024. See Docket No. 79

16

(Voisenat Decl. ¶ 5 & Ex. A). Plaintiff’s bankruptcy counsel cited to one case in support of his

17

assertion that a “non-debtor’s filing of a motion to dismiss a complaint initiated by the debtor is a

18

violation of the automatic stay.” Docket No. 79 (Voisenat Decl. ¶ 8).

19

A settlement conference was held before Judge Cisneros in early September 2024, but the

20

case did not settle. See Docket No. 87 (minutes). In mid-September, the Court held the hearing

21

on PHH’s pending motion to dismiss but continued it after Plaintiff represented she might be able

22

to locate counsel to represent her. See Docket No. 86 (minutes). Plaintiff has not been successful

23

in finding counsel. See note 1, supra. In early November 2024 and again in mid-November 2024,

24

Judge Cisneros conducted additional settlement conferences, but still the case did not settle. See

25

Docket No. 96 (minutes).

26

On November 18, 2024, the bankruptcy court dismissed the bankruptcy case after the

27

trustee filed a motion to dismiss. The trustee had moved to dismiss based on Plaintiff’s failure to

28

attend multiple creditors’ meetings. The bankruptcy court’s dismissal order noted that Plaintiff
5

1

failed to oppose the trustee’s motion to dismiss.
II.

2
3

A.

Legal Standard
To overcome a Rule 12(b)(6) motion to dismiss after the Supreme Court’s decisions in

4

United States District Court
Northern District of California

DISCUSSION

5

Ashcroft v. Iqbal, 556 U.S. 662 (2009), and Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007),

6

a plaintiff’s “factual allegations [in the complaint] ‘must . . . suggest that the claim has at least a

7

plausible chance of success.’” Levitt v. Yelp! Inc., 765 F.3d 1123, 1135 (9th Cir. 2014). The court

8

“accept[s] factual allegations in the complaint as true and construe[s] the pleadings in the light

9

most favorable to the nonmoving party.” Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d

10

1025, 1031 (9th Cir. 2008). But “allegations in a complaint . . . may not simply recite the

11

elements of a cause of action [and] must contain sufficient allegations of underlying facts to give

12

fair notice and to enable the opposing party to defend itself effectively.” Levitt, 765 F.3d at 1135

13

(internal quotation marks omitted). “A claim has facial plausibility when the plaintiff pleads

14

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

15

for the misconduct alleged.” Iqbal, 556 U.S. at 678. “The plausibility standard is not akin to a

16

probability requirement, but it asks for more than a sheer possibility that a defendant has acted

17

unlawfully.” Id. (internal quotation marks omitted).

18

B.

Plaintiff’s Causes of Action
Plaintiff has asserted seven causes of action against Defendants, including PHH.

19

(1) Violation of 12 C.F.R. § 1024.41. This regulation2 is related to loss mitigation

20
21

procedures. See, e.g., 12 C.F.R. § 1024.41(b)(2)(i) (providing that, “[i]f a servicer

22

receives a loss mitigation application 45 days or more before a foreclosure sale, a

23

servicer shall” review the application to determine if it is complete and notify the

24

borrower in writing within 5 days as to whether the application is complete or

25

incomplete); id. § 1024.41(c)(1) (providing that, “if a servicer receives a complete

26

loss mitigation application more than 37 days before a foreclosure sale, then within

27
28

2

The regulation is a part of the Real Estate Settlement Procedures Act (“RESPA”).
6

United States District Court
Northern District of California

1

30 days the servicer shall “[e]valuate the borrower for all loss mitigation options

2

available to the borrower” and “[p]rovide the borrower with a notice in writing [as

3

to] which loss mitigation options, if any, it will offer to the borrower”); id. §

4

1024.41(g) (providing that, “[i]f a borrower submits a complete loss mitigation

5

application . . . more than 37 days before a foreclosure sale, a servicer shall not

6

move for foreclosure judgment or order of sale, or conduct a foreclosure sale,

7

unless,” e.g., the servicer notifies the borrower that “the borrower is not eligible for

8

any loss mitigation option” and the appeal process is over).

9

(2) Violation of California Civil Code § 2923.6. This is part of the HBOR and bars

10

dual tracking. See, e.g., Cal. Civ. Code § 2923.6(c) (providing that, “[i]f a

11

borrower submits a complete application for a first lien modification . . . at least

12

five business days before a scheduled foreclosure sale, a mortgage servicer . . . or

13

authorized agent shall not record a notice of default or notice of sale, or conduct a

14

trustee’s sale, while the complete first lien loan modification application is still

15

pending”).
(3) Violation of California Civil Code § 2923.7. This is also part of the HBOR and

16
17

relates to a single point of contact (“SPOC”). See, e.g., id. § 2923.7(a) (providing

18

that, “[w]hen a borrower requests a foreclosure prevention alternative, the mortgage

19

service shall promptly establish a single point of contact and provide to the

20

borrower one or more direct means of communication with the single point of

21

contact”).

22

(4) Negligence.

23

(5) Breach of contract.

24

(6) Elder financial abuse.

25

(7) Violation of California Business & Professions Code § 17200.

26

C.

Plaintiff’s Failure to Oppose the Motion to Dismiss

27

As an initial matter, the Court notes that Plaintiff has had two opportunities to oppose

28

PHH’s motion to dismiss but failed to do so. Because she failed to oppose, the Court could grant
7

1

arguably the motion to dismiss on that basis alone. In the interest of justice, however, the Court

2

still considers the merits of the arguments made in PHH’s motion.

3

D.

4

United States District Court
Northern District of California

5

RESPA Claim
In her complaint, Plaintiff alleges that Defendants violated three provisions in RESPA:
•

12 C.F.R. § 1024.41(b)(2)(i), which states that, “[i]f a servicer receives a loss

6

mitigation application 45 days or more before a foreclosure sale, a servicer shall”

7

review the application to determine if it is complete and notify the borrower in

8

writing within 5 days as to whether the application is complete or incomplete. 12

9

C.F.R. § 1024.41(b)(2)(i). According to Plaintiff, this provision was violated

10

because she “never received a written notice until 15 days before her scheduled

11

Trustee Sale.” Compl. ¶ 38.

12

•

Section 1024.41(c)(1), which provides that, “if a servicer receives a complete loss

13

mitigation application more than 37 days before a foreclosure sale, then within 30

14

days the servicer shall “[e]valuate the borrower for all loss mitigation options

15

available to the borrower” and “[p]rovide the borrower with a notice in writing [as

16

to] which loss mitigation options, if any, it will offer to the borrower.” 12 C.F.R. §

17

1024.41(c)(1). According to Plaintiff, this provision was violated because she

18

“never received a description of other loss mitigation options she may be available

19

for nor a list of steps [s]he should take to be considered for those options.” Compl.

20

¶ 38.

21

•

Section 1024.41(g), which provides that, “[i]f a borrower submits a complete loss

22

mitigation application . . . more than 37 days before a foreclosure sale, a servicer

23

shall not move for foreclosure judgment or order of sale, or conduct a foreclosure

24

sale, unless,” e.g., the servicer notifies the borrower that “the borrower is not

25

eligible for any loss mitigation option” and the appeal process is over. 12 C.F.R. §

26

1024.41(g). According to Plaintiff, this provision was violated because Defendants

27

“proceed[ed] with foreclosure prior to Plaintiff’s being denied” for loss mitigation,

28

“making a possible appeal,” or “reject[ing] . . . all possible loss mitigation options.”
8

1
2

PHH argues first that the RESPA claim lacks merit because Plaintiff complains about not

3

getting notices “after 12 years,” Compl. ¶ 38, but the regulation did not even take effect until

4

January 2014. This argument is not persuasive. To be sure, Plaintiff does suggest she has a claim

5

because her husband first applied for loan modification back in 2009; however, as alleged, she

6

also applied for loan modification in 2019.

7
8

United States District Court
Northern District of California

Compl. ¶ 39.

PHH argues next that, even if there is no timing problem, Plaintiff has failed to state a
claim for relief. Here, the Court agrees.

9

One of Plaintiff’s RESPA theories is that Defendants (including PHH) violated §

10

1024.41(c)(1) which provides that, “if a servicer receives a complete loss mitigation application

11

more than 37 days before a foreclosure sale, then within 30 days the servicer shall “[e]valuate the

12

borrower for all loss mitigation options available to the borrower” and “[p]rovide the borrower

13

with a notice in writing [as to] which loss mitigation options, if any, it will offer to the borrower.”

14

But there is no indication that PHH did not evaluate Plaintiff for all loss mitigation options

15

available to her. Also, PHH did provide notice to Plaintiff in writing that it was not offering her

16

any loss mitigation options. As alleged, on July 8, 2021, i.e., about two weeks before the trustee’s

17

sale date, PHH informed Plaintiff that the loan modification application had been “denied because

18

in order for her [i.e., Plaintiff] to assume the loan, the loan would have to be current.” Compl. ¶

19

32. In any event, the prior initiation of a foreclosure sale is now moot.

20

Another RESPA theory is that Defendants violated § 1024.41(g), which provides that, “[i]f

21

a borrower submits a complete loss mitigation application . . . more than 37 days before a

22

foreclosure sale, a servicer shall not move for foreclosure judgment or order of sale, or conduct a

23

foreclosure sale, unless,” e.g., the servicer notifies the borrower that “the borrower is not eligible

24

for any loss mitigation option” and the appeal process is over. But here, as noted above, Plaintiff

25

was told on July 8, 2021, that she was not eligible for a loss mitigation option. It is not clear how

26

long the appeal process is, but there is no indication that Plaintiff did appeal. Furthermore, even

27

though a foreclosure sale was set at one point for October 8, 2021, ultimately, no foreclosure has

28

taken place and thus, as noted above, is moot.
9

1

Dual Tracking Claim (Cal. Civ. Code § 2923.6)

2

As noted above, the dual tracking claim is based on § 2923.6(c) which provides in relevant

3

part as follows: “[i]f a borrower submits a complete application for a first lien modification . . . at

4

least five business days before a scheduled foreclosure sale, a mortgage servicer . . . or authorized

5

agent shall not record a notice of default or notice of sale, or conduct a trustee’s sale, while the

6

complete first lien loan modification application is still pending.”

7

United States District Court
Northern District of California

E.

PHH contends the dual tracking claim lacks merit because Plaintiff is not a “borrower”

8

under the statute; that was her husband. See Cal. Civ. Code 2920.5(c)(1) (defining “borrower” as

9

“any natural person who is a mortgagor or trustor and who is potentially eligible for any federal,

10

state, or proprietary foreclosure prevention alternative program offered by, or through, his or her

11

mortgage servicer”). PHH adds that any rights Plaintiff had as a successor in interest have been

12

repealed. PHH is referring to California Civil Code § 2920.7, which was repealed in January

13

2020. Prior to repeal, § 2920.7 provided that, upon being notified by a purported “successor in

14

interest that a borrower has died, and where that claimant is not a party to the loan or promissory

15

note, a mortgage servicer shall not record a notice of default pursuant to Section 2924 until the

16

mortgage service” requests “reasonable documentation of the death of the borrower” and

17

“reasonable documentation . . . demonstrating the ownership interest of that claimant in the real

18

property.” Cal. Civ. Code § 2920.7(a) (2019). Section 2920.7 also provided that “[b]eing a

19

successor in interest . . . does not impose an affirmative duty on a mortgage servicer to alter any

20

obligation the mortgager has to provide a loan modification to the successor in interest. If a

21

successor in interest assumes the loan, he or she may be required to otherwise qualify for available

22

foreclosure prevention alternatives offered by the mortgage servicer.” Id. § 2920.7(b)(3) (2019).

23

In addition, the statute provided that the mortgage servicer had to allow the successor in interest to

24

“[a]pply to assume the deceased borrower’s loan” or to “simultaneously apply to assume the loan

25

and for a foreclosure prevention alternative.” Id. § 2920.7(d) (2019). And the statute provided

26

that, if a trustee’s deed upon sale has not been recorded, a successor in interest could seek

27

injunctive relief to enjoin a material violation of, e.g., § 2920.7(a), (b), and (d). If so, then the

28

successor in interest could seek damages. See id. § 2920.7(e) (2019).
10

Section 2920.7 clearly provided a successor in interest with rights. But, as PHH contends,

1

United States District Court
Northern District of California

2

the repeal of that provision precludes Plaintiff’s HBOR claim for dual tracking.

3

Moreover, PHH correctly argues that, for Plaintiff to get relief under the HBOR, she must

4

show a material violation of the statute. See Cal. Civ. Code § 2924.12(a)(1) (providing that, if a

5

trustee’s deed upon sale has not been recorded, then a borrower may bring an action for injunctive

6

relief to enjoin a material violation of, inter alia, § 2923.6). The dual tracking statute is intended

7

to prevent a foreclosure from taking place while a loan modification application is still pending.

8

Here, the loan modification application was rejected on July 8, 2021. It does not appear that

9

Plaintiff appealed the denial. Thus, based on the allegations of the complaint, there would be not

10

be a bar to foreclosure because no application is pending anymore.

11

F.

SPOC Claim (Cal. Civ. Code § 2923.7)
Plaintiff contends that the extended delays she faced with her loan modification application

12
13

was a result of the failure to appoint a single point of contact (“SPOC”). The SPOC claim also

14

lacks merit because of the repeal of a successor in interest’s rights.

15

In addition, as above, PHH validly asserts that Plaintiff has failed to show a material

16

violation. Even assuming that there was a failure to appoint a SPOC (it is not clear that the delays

17

were attributable to such), at this point, Plaintiff has had her loan modification application denied.

18

G.

19

Negligence Claim
Like her statutory/regulatory claims, Plaintiff’s negligence also fails. “The elements of a

20

negligence cause of action are the existence of a legal duty of care, breach of that duty, and

21

proximate cause resulting in injury.” Castellon v. U.S. Bancorp, 220 Cal. App. 4th 994, 998

22

(2013). Here, the allegations in the complaint do not support a duty of care. To be sure,

23

California Civil Code § 1714(a) provides that “everyone is responsible . . . for an injury

24

occasioned to another by his or her want of ordinary skill in the management of his or her

25

property or person.” Cal. Civ. Code § 1714(a). But, “[e]ven if California law provides that a legal

26

duty of care runs between a plaintiff and a defendant, courts have the power and obligation to

27

examine whether considerations of public policy warrant limiting that duty.” Shalgoun v. North

28

Los Angeles County Regional Center, Inc., 99 Cal. App. 5th 929, 946 (2024) (emphasis added).
11

United States District Court
Northern District of California

1

And in Sheen v. Wells Fargo Bank, N.A., 12 Cal. 5th 905 (2022), the California Supreme Court

2

held that a lender does not owe a borrower a tort duty to process, review, and respond carefully

3

and completely to a borrower’s loan modification application (i.e., “so as to avoid causing [a]

4

plaintiff pure monetary loss through a lack of care in handling his applications”). Id. at 919.

5

In her complaint, Plaintiff suggests that Defendants had duties to her pursuant to the

6

HBOR – i.e., §§ 2923.6 and 2923.7. See Compl. ¶ 67 (alleging that these statutes “set forth

7

specific duties a beneficiary and loan servicer must uphold for a loan in default and a borrower

8

seeking a foreclosure prevention alternative or loss mitigation option”). But there do not appear to

9

be any authorities suggesting that a plaintiff could have a viable negligence claim based on those

10

statutes if a direct claim based on the statutes was not viable – i.e., a negligence claim should not

11

be used as an end-run around the statutes.

12

H.

Breach of Contract Claim

13

The breach of contract claim is also subject to dismissal. It does not appear that Plaintiff

14

was ever a party to any contract with Defendants, including the deed of trust. See Compl. ¶ 80

15

(alleging that the contact was the deed of trust). To be sure, the deed of trust suggests that a

16

successor in interest can stand in the shoes of the borrower, but this is only in limited

17

circumstances. See RJN, Ex. 1 (Deed of Trust § 13) (“Subject to the provisions of Section 18, any

18

Successor in Interest of Borrower who assumes Borrower’s obligations under this Security

19

Instrument in writing, and is approved by Lender, shall obtain all of Borrower’s rights and

20

benefits under this Security Interest.”) (emphasis added).
It also is unclear how PHH allegedly breached the deed of trust. In the complaint, Plaintiff

21
22

suggests that there was a breach because Defendants violated her rights under the HBOR. See

23

Compl. ¶ 83. (“Defendant breached the contract when it violated Plaintiff’s rights under the

24

Homeowners Bills of Rights, and violated California Law.”). But a breach of the HBOR is not a

25

breach of contract. She fails to identify another basis for her claim of breach of contract.

26

I.

27
28

Elder Abuse Claim
The elder abuse claim also is not viable. Under California Welfare & Institutions Code §

15610.30,
12

1
2

“[f]inancial abuse” of an elder or dependent adult occurs when a
person or entity does any of the following:

3

(1)

Takes, secretes, appropriates, obtains, or retains real or
personal property of an elder or dependent adult for a
wrongful use or with intent to defraud, or both.

(2)

Assists in taking, secreting, appropriating, obtaining, or
retaining real or personal property of an elder or dependent
adult for a wrongful use or with intent to defraud, or both.

(3)

Takes, secretes, appropriates, obtains, or retains, or assists in
taking, secreting, appropriating, obtaining, or retaining, real
or personal property of an elder or dependent adult by undue
influence, as defined in Section 15610.70.

4
5
6
7
8
9

Cal. Wel. & Inst. Code § 15610.30(a). “A person or entity shall be deemed to have taken,

10
secreted, appropriated, obtained, or retained property for a wrongful use if, among other things,
11

United States District Court
Northern District of California

the person or entity takes, secretes, appropriates, obtains, or retains the property and the person or
12
entity knew or should have known that this conduct is likely to be harmful to the elder or
13
dependent adult.” Id. § 15610.30(b).
14
Plaintiff claims elder abuse because
15
16
17
18
19
20
21
22
23

Defendants systematically obscured its [sic] actions and motivations
to gain ownership of the Property. Defendants spent years leading
on Plaintiff that her loan modification was under review only to be
told 15 days before the Trustee Sale that she was not allowed to
assume the loan because it was not current. Clearly, Defendants
were never intending to allow Plaintiff to assume the loan, and were
biding time to strip the Property of its equity.
Compl., 6th Cause of Action, ¶ 4.
But it is not clear how Plaintiff can claim elder abuse when nothing has actually been taken
from her as of yet. As PHH points out, the foreclosure has not happened.
Furthermore, it is not clear that there is a risk of elder abuse. Nothing suggests an intent to

24

defraud by PHH. To the extent Plaintiff is asserting wrongful use, that is not a tenable position

25

given that the loan has been in default for years and the amount owed appears to be substantial.

26

See RJN, Ex. 6 (notice of default, dated 5/31/2019) (stating that the unpaid balance is

27

approximately $411,000 as of June 2019). Also, nothing suggests PHH is obligated to modify the

28

loan at issue, and PHH issued the denial of the loan modification application back on July 8, 2021.
13

1
2
3

J.

Section 17200 Claim
The § 17200 claim is essentially a derivative claim. Because the claims above all lack

merit as pled, the § 17200 claim also fails.
III.

4

United States District Court
Northern District of California

5

CONCLUSION

For the foregoing reasons, the Court grants PHH’s motion to dismiss in its entirety. The

6

Court, however, shall give Plaintiff leave to amend her complaint because it is not clear that

7

amendment would be futile. Plaintiff’s amended complaint shall be filed by January 3, 2025.

8

PHH shall then have until January 31, 2025, to file a response to the amended pleading. Plaintiff

9

is advised that, if she fails to file an amended complaint by the date specified, then her case

10

will be dismissed with prejudice. Also, Plaintiff is advised that the Court will not entertain any

11

additional requests for extension of time if the only basis for the request is more time is needed to

12

find counsel. Of course, if Plaintiff finds counsel to represent her, they may make an appearance.

13

This order disposes of Docket No. 65.

14
15

IT IS SO ORDERED.

16
17

Dated: November 25, 2024

18
19
20

______________________________________
EDWARD M. CHEN
United States District Judge

21
22
23
24
25
26
27
28
14