Harry Wong v. Fay Servicing, LLC

Filing 38

ORDER GRANTING 14 MOTION TO DISMISS. Signed by Judge Beth Labson Freeman on 10/14/2016. (blflc4, COURT STAFF) (Filed on 10/14/2016)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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SAN JOSE DIVISION

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HARRY WONG,

Case No. 16-cv-03074-BLF

Plaintiff,
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v.

ORDER GRANTING MOTION TO
DISMISS

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FAY SERVICING, LLC,
Defendant.

United States District Court
Northern District of California

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Defendant’s motion to dismiss Plaintiff’s First Amended Complaint was heard on October

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13, 2016. ECF 14. The Court has considered the parties’ briefing and oral argument presented at

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the hearing. For the reasons stated on the record and below, the Court GRANTS the motion with

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leave to amend.

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This case relates to Plaintiff Harry Wong’s right to appeal Defendant Fay Servicing, LLC’s

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determination on his loan modification application, and Defendant’s alleged misrepresentation

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pursuant to the loss mitigation procedures set forth in 12 C.F.R. section 1024.41. The Court first

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finds that Plaintiff has failed to joined indispensable parties – Maryanne Wong and Philip Wong,

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who were listed as co-borrowers on the “Loan Modification Agreement” along with Plaintiff.

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Request for Judicial Notice ISO Mot., Ex. 2; Fed. R. Civ. P. 19(a). Without their participation,

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Defendant would be at risk of multiple and potentially inconsistent obligations. E.g., Patera v.

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Citibank, N.A., 79 F. Supp. 3d 1074, 1083 (N.D. Cal. 2015). On this basis, the motion is granted.

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In his opposition and at the hearing, Plaintiff requested leave to amend to add these required

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parties. Accordingly, the Court GRANTS Plaintiff leave to add these required parties.

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Second, the Court finds that Plaintiff has not adequately pled Claim 1, violation of 12
C.F.R. section 1041(h) related to his right to appeal Defendant’s denial of certain loan

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modification options. Specifically, Plaintiff alleged that the decision “included several denials of

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other foreclosure alternatives, including other modification programs,” but failed to identify the

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specific loss mitigation options that Defendant denied Plaintiff. Compl. ¶ 18. In amending his

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complaint, Plaintiff shall allege facts or attach documents showing the loss mitigation options

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denied for which he would have had plausible grounds to appeal. Moreover, Plaintiff must allege

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facts to support a plausible basis for his eligibility for those options. 12 C.F.R. § 1024.41(h)(1)

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(stating that “a servicer shall permit a borrower to appeal the servicer’s determination to deny a

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borrower’s loss mitigation application for any trial or permanent loan modification program

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available to the borrower”) (italics added).

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Accordingly, the Court GRANTS with leave to amend Defendant’s motion to dismiss

United States District Court
Northern District of California

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Plaintiff’s First Amended Complaint. Any amended complaint must be filed on or before

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November 3, 2016.

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IT IS SO ORDERED.

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Dated: October 14, 2016
______________________________________
BETH LABSON FREEMAN
United States District Judge

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